I get a lot of emails and calls from investors that they are in loss because of some calls given by one or the other Stock Analyst…. In my view, 3 most important things to look for in a Stock Analyst should be – Past Performance, Past Performance and Past Performance !!
Friends, Numbers don’t lie… This is true specially in stock markets… Talk is cheap, But Numbers Speak…. It is very easy now a days to make great websites with flashing pictures…. It is very easy now a days to become famous due to social media…. But from where you will bring Past Performance which can be proved?…. Analyst can write any past performance history on their websites… But where is the proof of those calls ?
So if retail investors wants to find really great analysts for stock tips, they should ask ‘Proven’ track record… Retail investors should ask for their Facebook Timeline ID or Twitter ID etc and check whether really those calls were given or not… and if yes, how much profit those calls give….. Also check the success ratio…. If an analyst give 20 calls, one is bound to do good because of law of averages…. So the most important to check in an Analyst’s Track record is – how many total calls he gave in last 3-4 years and out of those how much ‘Average’ returns those all calls gave…. If the Analyst’s ‘Average’ returns of last 3-4 years is significantly higher than Sensex or other analysts’ record, you can be sure that the analyst knows much better about Markets than Others.
Happy Investing !!