The problem with Analyst Reports

For one, they don’t really “analyse” anything …

I never met an analyst report I couldn’t ignore. Most aren’t worth the paper they are printed on with many simply regurgitating numbers off financial statements with a laundry list of industrial and economic talking points fitted neatly into a formatted template. There is very little actual “analysis” involved and next to no understanding of emerging business practices and evolving market dynamics (digital disruption, asset-light models etc..). Expediancy and churning out reports like clockwork to satisfy their own biases (or hidden agendas) often takes precedence over putting out an intelligent and thoughtful piece of work.

Despite these reports being worthless, the problem is that many, especially retail and new investors give too much prominence to what is said in them — especially if they come from a broker they trust or have regard for. So in essence the targets they put out become self-fulfilling prophecies, and at least in the short term, the market struggle to correct itself due to the push-pull nature of avid investors vs. novice traders but this is no reason to lose hope, for in the medium to long term, everything finds its true value, and the ones with patience and perseverance to hold on will be duly rewarded.

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