Summary
Q. Whenever I hear corporate earnings reports, there's inevitably a comment about the reports' meeting or not meeting "analysts' expectations." Who are these analysts, and why is so much attention given to their opinion?
Wall Street analysts often study companies, issuing reports on their investing merits for their employers and clients. Since these reports are often widely circulated, many people pay attention and watch to see how companies fare relative to analyst expectations. If a company doesn't do as well as expected, its stock can falter. An irony is that many of these analysts are "guided" by executives at the companies themselves, who furnish their own projections in earnings reports and elsewhere. (Thanks to the SEC, companies can no longer disclose key information just to analysts - it must be shared with the public.) Too much attention is given to quarterly results. For long-term investors, the most important thing is how a company will perform over the coming years or decades, not what analysts expect will happen in the next three months.See the full content of this document
Extract
Go Ahead - Ignore Expectations
* ...
See the full content of this document
Sponsored links
