Why do analysts publicly post their upgrades /downgrades ?

Discussion in 'Trading' started by Peter_Nellise, Jul 23, 2006.

  1. alanm


    I thought the key was the word "clients", and that they were not required to disclose proprietary research to the general public (i.e. people that are not their clients).

    It's certainly routine for a stock to get bid up after hours before an analyst upgrade hits Briefing and/or the DJ wire the next morning. Happens almost every day. Hard to imagine that such a common leak could be unlawful in the current regulatory environment.
    #31     Jul 24, 2006
  2. yeah big whoop; happens regulary; i see so many controversial trades day in day out...if u chase 'em all down...mkts begin to dry up pretty quick.
    #32     Jul 24, 2006
  3. Just wanted to say that I agree, to a great extent, with what Suss has been posting.

    Suss, you have been very patient and transparent trying to explain the logic behind why the vast majority of broker calls are legit based on what their research suggests. The responses of some of the people on here highlight that these 'traders' just love to think they are one step ahead of the game and street wise beyond belief.

    If you have worked anywhere near the corporate world, you would understand that analysts live and die by their reputation and calls and that they do have to fully disclose what they think and why, not only to prove their worth but also to protect themselves against tipping Joe Public off one way and private clients another.

    Where you may be a bit sceptical and squeeze extra out of an analyst is that if you know them, they may say that they over/under emphasised the effect they truly felt oil or something was going to have in order to be conservative for the audience. If you have a mate who is an analyst and he tells you that he really believes that BHP will be outgunning a lot more than his estimates for outperform already suggest, I'd listen to him.

    You have to remember, also, that your time frame vs the analyst may be very different.

    Dont all sit there and act like you're smart because you think you know that broker forecasts are a conspiracy
    #33     Jul 24, 2006
  4. of course, conspiracies exist only in your head...if u do your due diligence and study [maybe even trade] upgrades/downgrades imbalances u'll see that there's a pattern to be exploited and that those recommendations are taken seriously by institutions and traders.
    #34     Jul 24, 2006
  5. jerryz


    consipiracy or no conspiracy, there is a lot of truth in this.

    and this applies to just about anyone who works in the investment advisory or investment management fied on a salary.

    #35     Jul 24, 2006
  6. The implication appears to be that those who don't take a salary - perhaps you are thinking of traders - are whiter than white? Reading between the lines one could interpret the message as being that analysts and investors are corporate weasels with neither soul nor morals whereas traders are rugged, incorruptible frontier souls. Think of Hemingway and the Old Man and the Sea - just you (the trader) and the ocean (the market).


    Then again, maybe I'm getting a little cynical in my early middle age, but I have trouble reconciling that image of traders as lofty souls with the vituperative exchanges that I regularly see on this board. :) I suspect you would find that trading and equity research tend to each generate their own problem types. I certainly don't believe that your worth as a human being boils down to whether you draw down a salary or whether you work as an independent, whatever the industry.

    #36     Jul 24, 2006
  7. Analyst recommend stocks for their client. And when the recommendation open to public, public can track their previous performance. It is good for both analyst and their company coz many big investor will trust them. Anyway, they lose nothing and get everything.
    #37     Jul 24, 2006
  8. well they post it after the fact. They give the heads up to their trading desks and brokers first. Then those guys give it to their best clients or sometimes worsts. And then they are deciminated throught the usual news outlets.

    #38     Jul 24, 2006
  9. That's absolutely right. This is probably why clients like to actually meet analysts and get a feel for their level of confidence on the stocks they cover. "Give me your highest conviction ideas" is probably the question most frequently asked of an analyst during a presentation these days.

    #39     Jul 24, 2006
  10. cc2trade


    Very eloquently put...

    ‘Analyst’ is synonymous with ‘crook’
    #40     Jul 24, 2006