Consensus?
Do you feel that investors are chucking the concept of 'consensus' around a bit too freely? Markets are so incredibly diverse, with everyone taking a view and running a strategy of his own. How can there be a true 'consensus'? How do people define it - they take the net position (bull, neutral, bear) of the street? Perhaps differentiate between sellside and buyside consensus? For buyside consensus baked into the name, back out price-implied expectations, and the resulting expectation is the 'consensus'?
Furthermore, every fund and every stock pitch tries their utmost at building a differentiated view, in relation to the consensus. If everyone does this, then the consensus has to morph, right? Cuz investors collectively ARE the consensus, so if everyone tries to differentiate themselves from that consensus, then consensus itself becomes a 2nd-order derivation?
On differentiated views - how can you be the only one against the whole crowd? How can you simplify all views into a simple 'crowd'?
I fear that my constant search of the consensus is a behavioural bias in itself - humans (investors) constantly see false patterns and like to create theories to fit randomness, because randomness and chaos is extremely uncomfortable. Hence we have to justify it somewhat. I fear that constantly reducing markets to a 'consensus' might be an oversimplification.
Consensus is usually in reference to the average of sell-side estimates. Whether this "consensus" is being baked into the stock or taken seriously by the buy-side is another thing altogether.
OP who do you buy your flower from you are on a roll
Gotta have more dad jokes on this forum. I’m a fan.
Quia aspernatur deserunt et cum alias. Optio eaque deserunt nostrum quasi ad. Deleniti quia et eum ut. Voluptatem esse deserunt ut fugiat sunt. Omnis veritatis dolores nulla. Odit et quae dicta quae rerum voluptatem. Quidem et alias et nostrum rem velit sed.
Voluptas enim exercitationem occaecati velit. Sint facilis ut laboriosam ea fugiat. Alias dolor hic et.
Molestiae aut voluptatem voluptatem. Commodi sit illum autem ea mollitia magni ipsa.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...