We’re proud to announce that “Why Are Analysts Almost Always Wrong About Apple?,” our latest article for Forbes, was selected as an “Editor’s Pick.”
Despite having access to the most expensive algorithms and predictive models, analysts consistently miss the mark with their predictions. Yet when they publish their reports or appear on CNBC, they can dramatically affect a stock’s price, for better or worse.
Prior to Apple’s most recent earnings report, analysts from Morgan Stanley and Bernstein painted doomsday scenarios: the iPhone X was a dud, they weren’t selling enough phones, growth in China was slowing, etc.
The stock was dragged down to the mid $160s due to all the negativity. After the earnings report revealed that the analysts were dead wrong and Warren Buffett revealed that Berkshire Hathaway purchased 75 million more shares of Apple, the stock surged and hit an all-time high of $190.37 last week.
We’ve long maintained that relying on analyst predictions often does more harm than good when it comes to your portfolio. In this article, Karl Kaufman exposes some of the analyst’s motivations for the calls they make and reveals who really benefits from analyst reports (hint: it’s not individual investors!).
As an individual investor, it’s your responsibility to come to your own conclusion about a stock and the company’s long-term growth potential. Analysts are prone to groupthink and herd mentality, and as we’ve written before, it’s essential for you to think differently from the herd in order to achieve greater success.
This article sheds some light on the role analysts play in affecting your investments. We hope you find it to be a valuable read.
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