Independent analytics you can trust
You are probably wondering where to find these independent analysts, i.e. people who are not related to the provision of investment bank services and whose opinions can be fully trusted. Despite the fact that such independent analytics does exist, it works for wealthy clients or institutional investors and does research for people who manage portfolios that cost far more than a million dollars.
Such people can afford to pay for the services of analysts at the rate of at least 25 per year.
Nobody really knows even an approximate number of independent analysts. The estimates that we have vary widely from 100 to several thousand, but their number has undoubtedly increased today, when the need of individual investors for independent research has sharply increased.
In addition to the results of independent research, which, as you have probably already seen, are distributed by your brokerage firm, you, as a small investor, can use the services of any of the large firms specializing in research in the field of investment. Such firms include, in particular, the Morningtar and tandard & Poor ’mentioned above. These firms provide services to individual investors through their publications and websites, charging more reasonable fees for their services than many of the smaller independent research firms. Nevertheless, it should be remembered that even these analysts provide services to companies or wealthy individual investors who spend a very large share of their costs for this purpose.
Reports from which analysts you use, it must be remembered that the main source of income for analysts is either a brokerage firm or large institutional clients that employ one or another analyst. Analysts evaluate stocks from the point of view of the advisability of buying them, but there is no standardized system for evaluating the attractiveness of stocks in the world.
A is the highest for it, but company B uses the categorically buy recommendation for its highest rating, and company C uses the recommended list recommendation. If you simply see that some stocks are recommended as stocks that need to be “Buy”, then this means little if you do not know which rating rating system was used in this case.
Unfortunately, when it comes to stock analytics, if you are offered free information, then the value of such information is not higher than the nutritional value of a free lunch. Someone must pay the analyst for the work he has done, and if you don’t pay him, then, before using the analyst’s advice, you must find out who actually pays for his work.
The best way to use the reports compiled by analysts is to imagine them only as one of the tools in your trading toolkit. Analyst recommendations are just one of the ways to get information about the industry you are interested in or stocks that you intend to buy, but these recommendations should not be considered at all as the most important factor determining your decision.Only your own research, carried out with the help of fundamental and technical analysis, will help you make a final decision regarding the purchase or sale of shares of certain companies. We discussed fundamental analysis tools in x 5 and 6, and discuss technical analysis tools in Part III.
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