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Types of analysts and the differences between them

Types of analysts and the differences between themTypes of analysts and the differences between them are believed that analysts of the stock market are something like independent oracles that help mere mortals to understand the financial future of certain companies. We advise, however, not to rely on analysts, because their goal is not always to protect the interests of an ordinary investor.

 

Scandals initiated by the Attorney General pcs. New York Eliot Spitzer, showed how analysts recommend to the general public the shares of certain companies only to help "their" companies to conclude extremely lucrative deals with investment banks, sending at the same time privately letters same stock "garbage." When you get acquainted with the recommendations of a particular analyst, you should consider whether the analyst is not an interested person who himself trades shares of certain companies, or he is a truly independent analyst whose opinion can be completely trusted.

 

Analysts get a large share of their information as a result of conference calls organized and sponsored by companies. During these conferencing sessions, companies report their income or other important financial information. Nowadays, ordinary investors are increasingly able to participate in such conference calls themselves. While listening to the calls of analysts, you can learn a lot of interesting information about the prospects of the respective company, but the language spoken by experts may be too complicated for you. In this chapter, you will learn about the different categories of analysts, the meaning of analysts, as well as the specific language in which they communicate. We will tell you about resources on the Internet that will make it easier for you to hear the calls of analysts.

If you follow the news that broadcasts cable television channels that specialize in covering the financial world, then you have often seen how numerous industry analysts touted shares of certain companies, very skeptical about the shares of other companies.Do you know whose interests these analysts represent? Maybe they represent the interests of the buyer of shares? Or maybe the interests of the seller of shares? Maybe they are independent analysts? Before following the recommendations of analysts, try to understand who pays for their services and whose interests they represent.

 

Analysts representing stock buyers: you hardly have to deal with them

You rarely have to deal with analysts representing the interests of stock buyers, since they work mainly for large firms that specialize in institutional investments and manage mutual funds or private accounts. Their main role is to analyze the shareholdings purchased by the company for which they work, and not the shareholdings bought by individual investors. The results of their research are rarely available outside the firms for which they work. Analysts representing the interests of buyers of stocks are trying to answer the question to what extent the investment in question meets the investment strategy and investment portfolio of a given firm.Generally speaking, analysts representing the interests of stock buyers often include in their research related to particular investments information obtained from analysts representing the interests of the seller of shares.

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