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Setting Expectations

        This is a new exciting experience for myself to start blogging.  I decided to blog because I feel that I have information that I can share with everyone that could be very valuable.   This blog is for people who are trading stocks in the US market or are seriously considering opening a trading account to do so. 

I’ve been gathering stock analyst data, storing it, and then when I have enough data, I can try to make some significant interpretations.  Every business day, there is a long list of analyst upgrades and downgrades for hundreds of different stocks.  I’ve always wondered how I should interpret these announcements.  I haven’t even heard of a lot of the companies.  Without a doubt, I do not fully understand the companies and the way that these analysts reach their valuations and recommendations, however I think that I can provide some statistical analyst to determine some potential trends, and determine the accuracy of these analysts.  In some sense, I am trying to hold their feet to the fire but as an overall goal, I’d like to determine the credibility of these analysts to decide on where I should put my money.   When several analysts have the same recommendation, should investors see it as an opportunity to buy? or do we take the contrarian approach and sell?   Do we use their target prices and determine an average and then determine if it’s worth buying based on today’s price?  Can we choose just one credible analyst to believe in or are they all just throwing darts at a price?   Are analysts reluctant to downgrade stocks?  When a stock recevies an upgrade recommendation, the stock price generally goes up on that day, and when it is downgraded, the opposite happens.   Throughout the year, there are changes in valuations, upgrades and downgrades, and the stock price can be affected dramatically or sometimes not at all.   Some of the questions I’d like to answer are:

  • Which analysts are the most influential?
  • Which analysts are the most accurate?
  • What sectors are these analysts good at?
  • How many upgrades and downgrades are there in a month? in a week? does this tell us the story of how the market performed or will perform?
  • Which stocks are covered the most?

There is a lot that I can do with this data because I’ve put it into an easy to analyze format, and I’d love to hear suggestions!  At the end of the day, the person who cares about your money the most is you!

I’m not a professional trader or investment/financial advisor, I’m a self-employed IT consultant with an Engineering background.   I am hoping to post at least twice a week, once during the weekday and once on the weekend.

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