Learning from the stock market experts

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Post on 07-Jul-2015

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Who are the stock market experts? How should you take their advise? And who should you be ignoring.

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  • 1. Learning From The ExpertsShane Leonard, CFA

2. What were going to cover1. Who are the experts?2. The brokers3. The investors4. The talking heads5. Learning from the experts 3. What were going to cover1. Whos are the experts?2. The brokers3. The investors4. The talking heads5. Learning from the experts 4. Who are the experts? There arent any true experts- 8,000 companies alone in the US But there are lots of professionals who you can categorise as- specialists, who know a lot abouta very narrow area- generalists, who know a littleabout a wide range of issues 5. Who are the experts? Everyone has an angle Remember, its their job They arent being nice 6. Learning from the experts1. Who are the experts?2. The brokers3. The investors4. The talking heads5. Learning from the experts 7. The brokers Whats their motivation?- more trading equals more profit- more volatility equals more trading Even so, they produce detailedresearch on companies, talk to theCEOs, regulators, the competition They have a view & tell us 8. Learning from the experts1. Who are the experts?2. The brokers3. The investors4. The talking heads5. Learning from the experts 9. The investors Whats their motivation?- they are paid to perform- sentiment is just as important as the fundamentals So when an investor is talking- is he trying to get me to buybecause he owns it?- to sell because hes dumped it? 10. Learning from the experts1. Who are the experts2. The brokers3. The investors4. The talking heads5. Learning from the experts 11. The talking heads Whats their motivation?- CBNC and Bloomberg TV want audiences- they have to entertain Talking heads are usually- sensationalist- trying to predict the short term- of limited insight 12. Learning from the experts1. Who are the experts?2. The brokers3. The investors4. The talking heads5. Learning from the experts? 13. Learning from the experts: the brokers There is no data on the future, so you have to take anyforecasts with a pinch of salt Broker recommendations are a key driver of sentiment Broker reports are- a great way to research- useful sense check Not a substitute for you own view 14. Learning from the experts: the investors Investor actions are more insightful than their words What they say on TV can be different to what they are doing They publish their top ten holdings, so if you like an investor- look at his holdings- any names you dont know But do your homework 15. Learning from the experts: the talking heads Watching financial TV is a great way to lose time and money Most of the time, the right action, is inaction CNBC reports, it doesnt get you the inside scoop before- your stock tanks- a stock idea becomes hot Occasionally they talk to a legendlike Buffett, but whats YouTube for 16. Learning from the experts Brokers- forecasts- what the market thinks Investors- source of ideas But neither are a replacement fordoing your own thinking 17. Learning From The ExpertsShane Leonard, CFA