Minyan Mailbag: Analyst Ratings
Editor's Note: Minyanville is a community of people who share an interest in fiscal literacy. As perspective is an important aspect of our daily routine, we share this exchange with hopes that it adds balance to your process.
Prof. Succo -
Looking at it from an outside view, is it possible that the El Paso (EP) analyst you mentioned earlier has simply been wrong for three years in how the fundamental picture has played out as a function of a number of moving parts? We've had all kinds of supply issues, huge demand from a previously dormant China / India, weather / Katrina, and geopolitical issues and war.
Sticking with the "dynamic is always changing" theme, how is this any different from being wrong for three years on the bearish macro view? If El Paso trades back to 20, 30, 40, 50, or 75 (not saying this will happen) - is this analyst making a bad call here?
The analyst is more likely to be feeling the pressure of the rally in the stock than all of a sudden changing minds and recognizing something new. Maybe things changed right after Katrina, but then the call should have been then. I think this is a great example of herd mentality.
The thinly disguised criticism of my macro call over the last few years is not a good analogy. I have never said to short stocks, knowing full well how markets work. Especially in these special times. I never made a timing call and the writer misses clearly my motivation for writing for Minyanville. My macro call is in educating our readers as to what is going on, which has not changed and I believe to be the truth, supported by much evidence. Never was there a time where I have advised any trader to take any position to sell the market, although I have advised frequently as to the risks involved. This is my main concern.
And finally, I have not changed my mind just because everyone else has.
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