A: Its obvious what buy and sell mean but other terms they use are less obvious.
It means as a percentage of their portfolios...I think they mean in a balanced portfolio underweight would be hold a smaller amount than your average and overweight more than your average investment. However, the truth is more like underweight = sell and overweight = hold while only buy means buy!
Keep in mind that many of these analysts appear to write complete crap and have their own agenda which mainly seems to be trying to get shares to move the way they want them to move! If you followed broker recommendations I am pretty confident you would be in the poor house quicker than going it alone and thinking for yourself. More information on Analysts Research is available here. Be especially wary of company paid-for research which you should really take with a pinch of salt*.
* He who pays the piper calls the tune, and all that! ;0)
Remember with City analysts you really need to read between the lines - for instance in the last business update Fenner PLC (FENR) announced -:
"There has been a limited initial impact on us from the global financial crisis but we are of course alert to the wider economic effects that are generally expected. These are more likely to be seen in industrial markets although the niche nature of our businesses and the diversity of our markets provide additional strength and resilience. The energy markets remain buoyant with a positive outlook, particularly for coal, notwithstanding the recent reduction in the prices of commodities. The majority of our products and services are consumable supplies and are two therefore driven by usage rather than the price of commodities. Accordingly the output for these remains robust.
"Despite the inevitable challenges, we believe we are very strongly placed to out-perform.
...two things stand out:
"we are of course alert to the wider economic effects that are generally expected"
and
"Despite the inevitable challenges"
...what they really are saying is that trading is OK for now but there could be trouble ahead.
So keep in mind that 'The City' almost never tells clients to sell specific stocks directly - at best they issue mildly neutral notes which leave personal investors confused or in rare cases when the outlook for a company is really bad they might use the adjective 'underperform'. Remember that analysts have specific knowledge they could share with us that would help us profit - but they don't provide it. In fact most of the times it is as if they are hiding it. So although there is almost never an offical sell note recommendation in the City, everyday there are hundreds of buy recommendations. Sell recommendations - virtually never!
Also, be wary of analysts downgrades. A stock can be making perfectly good progress, take SBRY as an example, and whaddya know, it's knocked by a downgrade. Most of the times the downgrade is already priced in but that doesn't seem to stop an immediate downward pull. Seems to make holding anything quite treacherous. In any case don't let broker upgrades/downgrades worry you too much...broker notes are ten a penny...
 |
Lastly do keep in mind that trading is a skill quite apart from being an analyst. You can be the greatest analyst in the world, calling the moves correctly is one thing, taking advantage of your analysis in the market is quite another.
A: Ok, let's take an example -:
Bid 1.56
Bid Size 3,000
Ask 1.65
Ask Size 1,725
The Bid price is the maximum that somebody has made it known they are willing to buy for; the size is the number of shares they are willing to purchase at that price.
The Ask price is the minimum price that somebody is willing to sell for, and similarly the size is the number of shares. The difference between the bid and the ask is known as the spread (which is different to the bid-offer spread in spread betting).
The content of this site is copyright 2013 Financial Spread Betting Ltd. Please contact us if you wish to reproduce any of it.
