Trading with Broker Recommendations

Hi Barry,

Thanks for the positive feedback much appreciated. Its our intention to be clear and concise and you clearly have been successfully using our “calls” on a different level to there specific intention, well done!

In terms of “Broker Recommendations” we assume you are referring to the section on the Analysis Page of the MM Site, e.g. BHP Group (BHP).  Broker Calls & Target Price Forecasts are influential in the short term only when brokers make large changes to their calls, and the influence depends on how well the analysts is regarded. One specific trend we see playing out, is on the day when a major broker either upgrades or downgrades a stock to a buy or a sell, flows that day will generally be in the direction of that call, as many institutional followers will trade over the day orders. In our experience though, if this ends up creating an outsized move on the day, the next day, the stock tends to snap back. More widely, while we keep abreast of broker forecasts, we like to use them more for assessing market positioning, and like it more when a stock is underappreciated by brokers, or all brokers sit on one side of the fence. i.e. we are more concerned if all analysts are universally positive a stock.