Tag Archive for: stocks

Should stock analysts use Twitter?

If you’re an analyst, should you consider using Twitter for research?

Check out “Should Analysts Use Twitter?” by Jeremiah Owyang, a senior analyst at Forrester Research, for three key questions that’ll help you decide. Basically, it depends on what industry you cover and whether the people in your industry are Twittering. To see if people are Twittering on your topic, search key words at http://search.twitter.com/.

You may also enjoy Owyang’s post on “How crowdsourcing helps some–but not all research activities.”

Susan B. Weiner, CFA

Check out my website at www.InvestmentWriting.com or sign up for my free monthly e-newsletter.

Copyright 2008 by Susan B. Weiner All rights reserved

Optimism watch: "Could Bear Talk Be a Contrary Signal?"

“Doing the reverse of the crowd has often worked well,” as New York Times columnist Floyd Norris points out in “Could Bear Talk Be a Contrary Signal?

So the fact that consumers feel unusually gloomy about the stock market, according to the Conference Board’s latest consumer confidence report, may bode well for stocks.

More than half of those polled expect stocks to decline over the next 12 months. However, as Norris reports:

In the past, there have been only six market cycles when the proportion of bears reached 36 percent. Five of them were excellent times to buy stocks, and the other one was followed by a decent return.

If you only want to read an optimistic spin on these numbers, do NOT read Mark Hulbert’s “The Stars Have Yet To Align For Stocks,” also published in The New York Times.

This blog post is part of a recently launched “Optimism watch” series on this blog.

Are buy-side analysts inferior?

Buy-side analysts aren’t as good as sell-side analysts. At least not in the opinion of some researchers.

“…buy-side analysts made more optimistic and less accurate forecasts than their counterparts on the sell side,” according to “Buy-Side vs. Sell-Side Analysts’ Earnings Forecasts,” an article by Boris Groysberg, Paul Healy, and Craig Chapman of Harvard Business School in the July/August issue of the Financial Analysts Journal.  

“The performance differences appear to be partially explained by the buy-side firm’s greater retention of poorly performing analysts and by differences in the performance benchmarks used to evaluate buy-side and sell-side analysts.”

Do you buy the authors’ conclusions?  

As of August 19, there’s a poll on the right-hand side of this blog that will let you vote on the accuracy of buy-side vs. sell-side analysts. It’s a temporary poll, so vote now! If you think the issues are too complex to be addressed by a poll, please add your comments below.

What Jason Zweig does right–and wrong–in his inaugural column

Stop Worrying, and Learn to Love the Bear.”

I love the title of Jason Zweig’s inaugural “The Intelligent Investor” column for The Wall Street Journal. With this title, Zweig follows advice I give to writers of investment commentary. He takes something that’s viewed as negative and finds the positive side. That’s a great way to grab your reader’s attention.

Zweig says, “…if you are still in your saving and investing years, a bear market is a gift from the financial gods — and the longer it lasts, the better off you will be. Instead of running from the bear, you should embrace him.” So that’s his thesis. 

But Zweig falls short in explaining how the bear market will help investors, other than offering the opportunity to buy good stocks cheaply. He gives the example of how the last long bear market—1969-1982—set the stage for stocks to return 18.5% a year for the 18 years following the bear market’s end.

Let’s assume—and it’s a big assumption—that scenario will repeat. Then, sure, folks who are just starting their saving and investing would end up better off. But what about those who are in the midst of their saving and investing? Will they ever make up their losses?