Analyst Recommendations

Question: do you think all these analyst ratings that are produced to be worth any weight?

My take: they're mostly self-fulfilling prophecies. An analyst issues a sell rating for $X, the sheep in the market react and eventually bring the actual price down to $X. Next day, or a few days later another analyst issues a buy or hold rating, sheep react accordingly. What's the point? Some analysts look at fundamentals and others technicals (some maybe both), the ratings become subjective rather than objective, hence moving the stock price. It's an endless cycle, unless the company itself actually provides relevant information about a M&A, or new business venture, I believe that is something worth moving the stock price for, but not ratings.

TLDR; do you place any weight on analyst ratings of stocks? If so, why?

 
Best Response

I agree that analysts can have a minor impact on the market. But I'm not sure if investors who rely on analysts stick around when things get rough. I can't say whether all analysts ratings are worth their weight or not. I just know we - as investors - are only as good as the management tools that work for us. What I've observed is that regardless of what any "expert" says, we tend to make emotional decisions about when to buy and sell, and even how much to buy. Early on, I was more likely to buy more of what I was excited about. So if an analyst is preaching and I'm the choir, I'm ore likely to lose..

While I do keep an eye on ratings, I've noticed that I tend to do better when I buy more of what I find boring or unexciting … and also buy just the right amount of speculative opportunities.

What works better for me is looking at historic volatility. Less volatile investments get more of my money and more volatile investments get enough of my money to get me in the game.

 

Qui eos nihil tempore. Et libero itaque quia tempore officiis a aut. Et voluptates nesciunt sint necessitatibus error sed quod. Non vitae ab et. Ab fuga ut sint ad saepe aliquam molestiae tempore. Eveniet quia soluta voluptate qui quam ut laborum.

Quo voluptatem omnis commodi aut nostrum. Est consequatur possimus tenetur voluptatem aut earum reiciendis. Quae et est rem aut ullam consequuntur. Veniam autem provident veritatis ab fugiat. Perspiciatis accusamus beatae sed quia earum quasi. Dolorem delectus atque qui optio suscipit et occaecati.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
dosk17's picture
dosk17
98.9
6
DrApeman's picture
DrApeman
98.9
7
kanon's picture
kanon
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”