Learning from the stock market experts
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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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Learning from the stock market experts
- 1. Learning From The Experts Shane Leonard, CFA
- 2. What we’re going to cover 1. Who are the experts? 2. The brokers 3. The investors 4. The talking heads 5. Learning from the experts
- 3. 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
- 4. Who are the experts? • 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
- 5. Who are the experts? • Everyone has an angle • Remember, its their job • They aren’t being nice
- 6. Learning from the experts 1. Who are the experts? 2. The brokers 3. The investors 4. The talking heads 5. Learning from the experts
- 7. The brokers • 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
- 8. Learning from the experts 1. Who are the experts? 2. The brokers 3. The investors 4. The talking heads 5. Learning from the experts
- 9. The investors • 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?
- 10. Learning from the experts 1. Who are the experts 2. The brokers 3. The investors 4. The talking heads 5. Learning from the experts
- 11. The talking heads • 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
- 12. Learning from the experts 1. Who are the experts? 2. The brokers 3. The investors 4. The talking heads 5. Learning from the experts?
- 13. Learning from the experts: the brokers • 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
- 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 don’t 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 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
- 16. Learning from the experts • Brokers - forecasts - what the market thinks • Investors - source of ideas • But neither are a replacement for doing your own thinking
- 17. Learning From The Experts Shane Leonard, CFA