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Analysing Equity Analysts by Satyajit Das (Must read)

A wonderful, simply incredible post by Satyjit Das. A Must read. Check here


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According to George Will: "The future has a way of arriving unannounced". That was before equity analysts.

In dense, jargon-infected prose splattered with spurious statistics, many analysts are trumpeting that the worst of the credit problems are behind us. Major equity markets have recovered a substantial portion of their losses; even bubonic plague stricken financial stocks have rallied. It is time to buy for the new equity "bull market".

The following guide to the calls of equity markets seers may be helpful:

Weak data - Fed eases, stocks rally.

Strong data - Strong economy, stocks rally.

Consensus data - Lower volatility, stocks rally.

Bank loses $8bn - Bad news all out of the way,stocks rally.

Oil price up -Good for energy producers, stocks rally.

Oil price down - Good for consumers, stocks rally.

$US down - Good for exporters, stocks rally.

$US up - Lower inflation, stocks rally.

Inflation up - Good for commodities, stocks rally.

Inflation down -Fed eases, stocks rally.

Climate change -Soft commodities up, stocks rally.

World ends - Good for disaster recovery companies, stocks rally.

Most analysts, it seems, share Eleanor Roosevelt’s view that: "The future belongs to those who believe in the beauty of their dreams."

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