Learning From The ExpertsShane Leonard, CFA

1. Who are the experts?

2. The brokers

3. The investors

4. The talking heads

5. Learning from the experts

What we’re going to cover

1. Who’s are the experts?

2. The brokers

3. The investors

4. The talking heads

5. Learning from the experts

What we’re going to cover

• There aren’t 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 about

a very narrow area

- generalists, who know a little

about a wide range of issues

Who are the experts?

• Everyone has an angle

• Remember, its their job

• They aren’t being nice

Who are the experts?

1. Who are the experts?

2. The brokers

3. The investors

4. The talking heads

5. Learning from the experts

Learning from the experts

• What’s their motivation?

- more trading equals more profit

- more volatility equals more trading

• Even so, they produce detailed

research on companies, talk to the

CEOs, regulators, the competition

• They have a view & tell us

The brokers

1. Who are the experts?

2. The brokers

3. The investors

4. The talking heads

5. Learning from the experts

Learning from the experts

• What’s 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 buy

because he owns it?

- to sell because he’s dumped it?

The investors

1. Who are the experts

2. The brokers

3. The investors

4. The talking heads

5. Learning from the experts

Learning from the experts

• What’s 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

The talking heads

1. Who are the experts?

2. The brokers

3. The investors

4. The talking heads

5. Learning from the experts?

Learning from the experts

• There is no data on the future, so you have to take any

forecasts 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

Learning from the experts: the brokers

• 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 don’t know

• But do your homework

Learning from the experts: the investors

• Watching financial TV is a great way to lose time and money

• Most of the time, the right action, is inaction

• CNBC reports, it doesn’t get you the inside scoop before

- your stock tanks

- a stock idea becomes hot

• Occasionally they talk to a legend

like Buffett, but what’s YouTube for

Learning from the experts: the talking heads

• Brokers

- forecasts

- what the market thinks

• Investors

- source of ideas

• But neither are a replacement for

doing your own thinking

Learning from the experts

Learning From The ExpertsShane Leonard, CFA