This is a short post as I am just watching some sectors bounce around like crazy from day to day.
And every day some analyst upgrades or downgrades stocks in all of these sectors. A lot of the times in the upgrade the analyst mentions that risk has already been priced into the stock, thus making it a less risky buy. And in the downgrades the vice versa is stated.
However, just where are these analysts coming up with the fact that risk is priced into the stock? A lot of companies, even sectors, have refused to issue earnings guidance for the coming year. Their reasoning is that it would be imprudent to do so. And I get that. But without such guidance, just how do we know where the true risk numbers lie?
It seems to be getting riskier to look at the upgrades and downgrades when the analysts are making these decisions with even less transparency than before.
Any readers have more insight into how they are assessing this risk with less information?
I'm MLR. After graduating from college debt free, I decided to write a blog encouraging people to adapt responsible and sensible personal finance rules.
February 26th, 2009 at 9:40 pm |
Sadly, I have no ‘insight’ to give you. Frankly, I think that most stock analysts are full of hot air, even at the best of times.
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February 27th, 2009 at 3:46 pm |
Indeed, some are good at technical analysis, some at industry analysis, etc… but in the end past history is just that, history.
Take it all with a grain of salt.
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