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Ok, name a dependable public stock analyst, one who accurately portrays companies and makes good predictions. One of the better analysts I know of is Warren Bu
by qdog 14y ago
Ok, name a dependable public stock analyst, one who accurately portrays companies and makes good predictions. One of the better analysts I know of is Warren Buffet, but he doesn't share his analysis publicly, nor does he make his money based on publishing his analysis. He's also wrong sometimes, but his his right moves have far outweighed the wrong moves.
Most analysts are not Warren Buffet, or even close to it.
My favorite example: Costco. I love Costco, shop there all the time, the CEO is Mr. Fantastic as far as giant corporate CEOs are concerned in my book. Cashiers make too much money there, according to analysts. (Quoting from Wikipedia, but originally from the Houston Chronicle)
In an interview published in the Houston Chronicle on July 17, 2005, he told Steven Greenhouse that he was not interested in Wall Street analysts who took issue with his care for employees and customers rather than happier shareholders. Investors might want higher earnings, but Sinegal stated, “We want to build a company that will still be here 50 and 60 years from now." A favorite saying of his is “you have to take the shit with the sugar”. Investors who bought $10,000 of Costco stock in 1992 had $43,564 ten years later, a return of 354% (or 15.855% annually).
So it's not just "Computer Programmers" who are skeptical of stock analysts. I have a minor in Mathematics, I can compute earning ratios just as well as the analysts. I don't paint them with a broad brush because I know little about what they do, I paint them with a broad brush because I know A LOT about what they do.
And what they do is akin to "reading the bones", unless they have insider information, based on past performance. I mentioned Buffet before, but he only makes decisions when he's almost certain(and still stometimes wrong) he knows about he company he invests in. The talking head analysts I see have no such certainty requirement.
So I suppose you are an Analyst?
- walshemj 14y agoer Warren Buffet learned from a guy called Benjamin Graham who's books are still in print and considered clasics the K&R or Kunth of investing if you will. Try "the intelligent investor."
- joezydeco 14y agoTotally agree, but Buffet's angle was that you play for the long haul, right? To me that's not what an "analyst" does. It what an "investor" does. Research research research. He's not trying to figure out what exact earnings-per-share are going to be for companies every quarter. In fact, he was trying to discourage companies from giving earnings guidance.
- qdog 14y agoWell, we know Buffet knows what a company's earnings are and has his private projections. One of the way he picks a stock is based on its earnings and potential earnings to price ratio, ie: is the stock "cheap". So, whether a stock is making $.32 or $.33 a quarter he doesn't say, but I bet he has his own estimates based on his research, but probably only on the companies he's interested in. But yes, your point he isn't what we think of as a typical 'analyst' is correct.