Should I follow stock market analyst predictions? // Stock trading strategies Options basics 101


Should I follow stock market analyst predictions? // Stock trading strategies Options basics 101 welcome to looking at the markets with
David Moadel today I’d like to discuss analysts stock analysts should we follow
their recommendations and predictions well just a quick observation have you
ever noticed how after a earnings miss a really bad earnings miss stock will just
stock for a particular company will go down 57 sometimes ten percent and then
after that all the analysts or most of the analysts will downgrade the stock or
the company they will lower their price targets they’ll say that their
recommendations are underweight meaning that you know they don’t recommend buying
that stock they suddenly don’t like the company anymore they downgraded and and
also have you noticed that after a particularly good earnings report after
an earnings beat all all of a sudden the analysts most of
them are all of them love the company and they love the stock and they’re all
bullish and they raised their price targets and they’re overweight on that
stock meaning they really like it and they recommend buying it or they you
know that they say that it’sit’s upgrade the upgrade the stock or the company well to me it seems like that’s not
forward thinking that’s just chasing the price action ok the big move has already been made
and they’re just following there just yet you know if the price goes down five
eight ten percent suddenly they’re there bearish on it but that’s after the fact it doesn’t take a lot of predictive
ability to be able to say that a stock is trending downward after an earnings
Miss or it doesn’t take much predictive prowess to be able to say that a stock
is your company’s doing well after earning speed and the stock already went
up ten percent or eight percent 5% whatever so if you’re following analysts
predictions then you’re going to be following people who are chasing the
price around and I think you know how that oftentimes ends up when you chase
after the price move a lot of times that doesn’t end up too well and so I really
don’t i do not recommend just following analysts predictions because they
usually make their predictions after the fact alright and their track record at least
according to these sources is not very good and it was not difficult at all for
me to find articles discussing how bad analysts predictions are here’s a wall
street journal article entitled why market forecasts are so bad analysts predictions are frequently less
accurate than random guesses that’s pretty bad alright and if you
want to you know go back and read these articles the web address is right here
at the top here’s another one barons analysts poor predictions Baron takes
the wall street analyst community to task for its poor aggregate performance here’s the economist the accuracy of equity research
consistently wrong what does that tell you alright here’s
Bloomberg China’s stock analysts were among the world’s worst amid surprise
route and this is after the this was during a time recently when
when the shanghai composite index went down alright and they have a nice graphic here that says
not even close forecasts for China’s stocks were way
off alright so those are just a few examples so do i think that analysts no more than
everybody else well read these articles you know you can either you know type in the web
address yourself or just google the the title of these articles and a lot of
times you can find the article articles that way and I think it’s pretty clear
that at least to me that if your trading plan is based on following analyst
recommendations you know that that’s not much of a trading plan personally I i almost think that these
analyst recommendations upgrades downgrades and so on are there almost
contrarian indicators yeah you can almost go the opposite way and and do
pretty well because of their poor performance overall alright so hopefully
that’s not your trading plan to to just follow what these analysts are doing all
right or what they’re recommending and if you want to put together a real
trading plan one that is geared toward thinking for yourself okay feel free to contact me my name is David Modell and you can
contact me at David Modell @ gmail.com whether you’ve lost money in the markets
consistently in your sick and tired of that and you want to do better you want to be more consistent you want
to have a plan that that you know is based on what you think makes sense and
what the data and the information that’s presented to you is telling you to do
rather than just following somebody’s recommendations to buy this or sell that
you contact me please and if you like this video by all means
give it a thumbs up on YouTube leave a comment i like i like the comments a lot
and you can subscribe to my channel that would be great because then you can get
the latest videos that I’m putting out alright so again feel free to contact me
anytime and thank you so much

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