Every morning, my broker sends me a "market pulse" report, which contains a discussion of latest market developments and, additionally, a couple of BUY, SELL, or HOLD recommendations.
On 7 Aug 2018, analyst Carmen Lee from OCBC had a BUY rating on DBS:
Maintain OVERWEIGHT on Banks, with BUY for both DBS [FV: S$31.83] and UOB [FV: S$32.09]
If you had bought DBS on 7 Aug at $26.79 on Carmen's recommendation, you would have lost about 15% of your investment.
How did we get from OVERWEIGHT to the current correction in a matter of 2 months? We went from DBS hitting stratospheric highs to now precariously hovering over the $23 precipice.
Every trade comprises two willing parties, each believing themselves to be making a good deal. Did the institutional clients offload DBS stock at a good price? Would they have been able to do so without a buyer willing to pay historically high prices for DBS? Were these unwitting buyers persuaded into paying such sky high prices based on Analyst Reports?
So many questions. No answers.
Personally, I give almost no weight to these analyst reports. Indeed, the worst-performing counter in my portfolio (95% losses) - Ezion - was an analyst darling back in 2015-17. As late as Dec 2014, where the O&G crisis was unfolding, Low Pei Han of OCBC securities was optimistically touting a TP of $2.05 in 2015 for Ezion. The rest, as they say, is history.
The common refrain is of course: DYODD. Do your own due diligence. And I could not agree more. However, if the professionals engaged to perform such analysis can't even get it (remotely) right, why does the layman think DYODD is the panacea?
If anything, I now actively avoid any stock that Low Pei Han rates as a BUY.
Who says analysts aren't useful.
On 7 Aug 2018, analyst Carmen Lee from OCBC had a BUY rating on DBS:
Banks: You can bank on it!
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Despite
recent volatility, the three local banks reported a relative good set
of 2Q18 results. More importantly, the guidance is still fairly
positive. With more rate hikes ahead, NIM
is likely to stay at current or higher levels. Based on current
consensus estimates, net earnings growth is projected at 21% in FY18 and
11% in FY19 – record earnings for the banks. This underlines optimism
in terms of growth expectation for both the Net Interest
Income and Non-interest Income. The bumper crop of higher dividends
also meant that on an annualized basis, dividend yields range from
3.5%-4.5%. With lower allowances, improving margins and healthy dividend
payout ratios and yields, we remain fairly optimistic
on the outlook for the banks. We have BUY for both DBS and UOB.
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Maintain OVERWEIGHT on Banks, with BUY for both DBS [FV: S$31.83] and UOB [FV: S$32.09]
If you had bought DBS on 7 Aug at $26.79 on Carmen's recommendation, you would have lost about 15% of your investment.
How did we get from OVERWEIGHT to the current correction in a matter of 2 months? We went from DBS hitting stratospheric highs to now precariously hovering over the $23 precipice.
Every trade comprises two willing parties, each believing themselves to be making a good deal. Did the institutional clients offload DBS stock at a good price? Would they have been able to do so without a buyer willing to pay historically high prices for DBS? Were these unwitting buyers persuaded into paying such sky high prices based on Analyst Reports?
So many questions. No answers.
Personally, I give almost no weight to these analyst reports. Indeed, the worst-performing counter in my portfolio (95% losses) - Ezion - was an analyst darling back in 2015-17. As late as Dec 2014, where the O&G crisis was unfolding, Low Pei Han of OCBC securities was optimistically touting a TP of $2.05 in 2015 for Ezion. The rest, as they say, is history.
The common refrain is of course: DYODD. Do your own due diligence. And I could not agree more. However, if the professionals engaged to perform such analysis can't even get it (remotely) right, why does the layman think DYODD is the panacea?
If anything, I now actively avoid any stock that Low Pei Han rates as a BUY.
Who says analysts aren't useful.
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