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Dang it, Bloomberg beat me to it !!
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I was doing my evening research and, wouldn't you know it, Bloomberg had a very good article on the very subject I alluded to in my last post. The article was actually on the difficulties analysts have in placing a "sell" rating on a stock. However, in the article, there was information related to the topic of my last post. I thought my SLO colleagues would appreciate reading this: This quote is directly from Bloomberg.com and please refer to that site for the complete text. I did not want to copy more than this because of copyright concerns: "Rating cuts have a bigger impact during bear markets because investors are more easily spooked, according to professors Xia Chen and Qiang Cheng at the University of British Columbia in Vancouver, who are working on a paper on the subject. They have concluded that sell and hold recommendations have about twice the impact during periods when stocks are sinking. ``When markets decline, people are looking for where's the stock with the real problems, and research has more value at that time,'' Credit Suisse's Natella said. Hedge funds that employ computer-driven trading strategies are known to exploit short-term movements in stock prices caused by analyst rating changes, said Ross Miller, a finance professor at State University of New York at Albany. Managers study the trading patterns after analysts change stock recommendations and program their computers to benefit from them, he said. Trading the Blips ``Although there seems to be more attention paid to analyst reports these days, these tend to be temporary impacts on stock prices,'' Miller said. ``A lot of hedge funds will trade the blips triggered by such changes.'' | ||
Comments (3)
Doc, We are side by side some pretty knowledgeable and successful investors. I have noticed this trend before and I see how some SLO
vets play this swings.
Thanks for bringing it up,this is way I like this contest and forum.
I bet we will hear from Viking Warrior as well as others about this shortly.
While watching RIMM the last couple of dazs I thought that DuffBeer had more then my 2 brew limit. Maybe it was just those tasty but strong Christmas Barley Wine Stout cured in those old whiskey barrels.
Oh guess who purchased RIMM just before the avalanche ---- oops
Speaking of avalanche try Breckenridge Avalanche Ale great brew for you newbees to the crafted beer scene.
Cheers, DuffBeer
Posted by duffbeer | December 4, 2007 9:22 AM
Diamond Jimbo -
People need Re-inforcement to 'excuse' their behavior - and most everybody wants to run with the Pack - and not to be thought of as 'wrong', 'outside ( the Main Stram or anything else ). It's all the functional equivalent of " Hand Holding " for the Weak minds who don't think for themselve ( too HARD ) and prefer to be 'told' by Charismatic ( & sometimes pretty or famous or certified, interesting or 'experienced' ) Leaders - people who are otherwise not accountable, reportable, or responsible on the other side of the Transaction.
Were you amazed by the results of this Scholarly endeavor or just surprised that you could actually 'hang' real numbers on the phenomenon ? Iquiring minds want to know.
Don Ferk ( aka VikingWarrior )
PS - " I've known IT all along; you're finding out these days " - Bob Dylan / song : 'Idiot Wind' --- album - " BLOOD on the Tracks "
Posted by don ferk | December 4, 2007 9:22 AM
DuffBeer.
OK - you be the Re-Actionary THIS time.
I'll settle for being the RAD-ical Rascal.
Let's take turns. Keep 'em guessing & Leave 'em laughing when you GO.
VW
Posted by don ferk | December 4, 2007 9:27 AM