Good discussion concerning the value of what "analysts" have to say about company valuations.
Here's my c2:
Most investors today are so new to the market that all they know of it is that it pretty much goes up all the time. By definition, this lack of experience also hampers their ability to decide for themselves where a company is headed, never mind a whole sector, or even a whole market. Commodities, metals, money supply... what are those?
It follows that a lot of today's "internet generation investors" generally rely on the analysis generated by someone else. What has saved most of these investors' butts up to now is that most newbies only invest long and we are in the midst (read at the end) of a bull market. Period. There is no difference between this type of investing pattern and that which ocured in th mid eighties and in the 20's. Back then, newbies invested based on leads, better known as tips. The best tipsters (call them analysts if you want) are revered the most. One can only be "hot" for so long since most of these oracles base their thinking on a favored pattern. The markets will change, as they always do, and will nullify their current investment strategies. They will go "cold" and fizzle out!
Well, one day soon, a lot of people are going to painfully realize that investing based on what other people say leads to failure. If an investor can't do his own research, the only reason for his/her success is the bull market. Take away the bulls and a lot of investors and so called analytical gurus are going to find something else to do. No one likes a bear market, or even worst, a flat one.
In the end, and I can't say this often enough, don't invest on tips. If the markets are going to pay off for you in the long run, it'll be because you did your own homework and were prepared to accept change and move with it.
#29
PS: "You" in this post is not meant to be directed at anyone person in particular. |
