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Of Market Analysts and fools to strategy …

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Do you want to make quick money?

What do we do to make quick money? Work hard, beg, borrow, steal? Well, Well, there are plenty of ways to do so ūüėČ

Lets see about speculation in shares and research on them and how quick advices leads to leaps into uncharted territories.

One way is to seek analysts who will provide lots of data through business news, which is easy to begin with and fun, indeed analysis done, data provided is making lots of money, but not for common man, it’s for the analysts, by the analysts.

Looking at the data patterns provided, and constant change of thoughts on a particular financial instrument seems ridiculous when a common man ponders about it.  Why? yes of course, one seeks experts because they need some direction and advice to make right decisions, and one would assume that the analysts will do perform thorough research before saying out something.

What happens really is a great misnomer.  Day 1: Say there is a share of a company ACME, analysts will pour their thoughts, oh yes you should buy this now, start accumulating it, this company will do great in the next 6 years and so forth.  Day 2: There is glitch in world, somewhere the oil price rose, somewhere there is an inflation, somewhere there is a deflation reported, now the poor ACME is rated from buy to neutral.  Day 3: The situation worsens and the ACME is facing some tough times, now the rating is sell sell sell, get out  of it.

That’s not what I seek from analysts, ‘coz that’s the trend birds follow “birds of the same feather flock together”, or in other words, in a rat race, all of us just do it with the urge/greed to make more money.¬† Now had the ACME fundamentals been researched, to view the core corporate goals, the charter of the company, past performance, the vision one can take a guess that ACME is strong and then we should continue to buy it for few years and let the company perform over time, ACME would out perform analysts expectations.¬† So the views shared by them are just views, and not information that can be used to make SMART decisions.

Even the best of the breeds could not figure out what is to come, and how the future is.¬† So why share the views that changes¬† so often and make one look like a fool? Ridiculous isn’t it.

In my humble opinion, any business that is out there is like an apple tree.¬† It takes lots of time for a seed to grow and be a tree that it is, nurturing it, feeding it with the right growth hormones, letting the right vision settle in will make things happen, but not in a day or two, rather over a period of time, after which there is supply of fruits.¬† So to get the right apples, one must seek the right trees and have patience and perseverance to see the best come forward, which does not need any analysts views, but analysts “real analysis” which does not change so often and lets the plant succumb and deteriorate even before the first leaf sprouts out.

If you want to invest, do so, but make sure that you give some time for the tree to grow and fruit, weather gets rough at times, but the sun-shine and rain will return.¬† All you need to do is to get the right apples, go for the right trees, watch out, as it can be found just anywhere and investing in tough times is best, as now is the time to find the right trees, ‘coz tree strong enough will not be uprooted by the roughness of the present weather, perhaps just a branch or two will be affected, but the tree will have fruits on time for one to relish.

Analysts are just weather forecasters, not the one who grow trees.

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One thought on “Of Market Analysts and fools to strategy …

  1. Good one dude .
    Quite an insightful reading.
    Presenting a contrary idea just to complete the picture.
    In US, recently many of the baby boomers lost their retirement savings and 401k money after having invested for many years in so called trees.

    My 2 cents, gone are the days of Warren Buffet’s long term investing when there was no globalization , less of innovation, less competition and there was less speculation. Now world is flat and challenges can up come any time from anywhere.

    Buffet’s investing philosophy works for him as he takes 10 % stake usually and can influence the board and markets. Remember he gets out in time.
    He exited companies like PetroChina in a short time for various reasons – social concerns, wrong investment and profit taking.

    For common man of today, welcome to the world of Hedge funds, derivatives and high amount of speculation and so be cautious and carefully select the apple trees. There are still some good apple trees like IBM, Apple, Google, etc .So still believe in trees, but do not forget to pluck the apples too, i.e do start taking profits .

    At same time, it would be nice to extend the definition of investing beyond stocks for example to real estate etc.

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