The capital market will always be filled with stocks whose prices move up and down. Therefore, if you read the news in investment newspapers, or online news, every analyst will always be competing to give the best predictions from the results of their analysis.
Starting from 'wow' analysts to mediocre analysts will always compete to provide the best recommendations. Reputed securities with their respective analysts will compete to provide the best recommendation services in the mass media.
Which begs the question: "How accurate are the analysts' recommendations? Do you believe in the analysts' recommendations? Do you often buy raw stocks based on analyst recommendations? Are the analysts proven to be able to benefit you?"
OK let's start....
Do you remember mid-2014 when the presidential candidate Jokowi was finally elected as the president of Indonesia? Yes, since the election of President Jokowi, the JCI has gone up fast. Take a look at the JCI chart below.
If you pay attention, the 2014 JCI rose steadily. And sure enough, in December 2014 at the close of year-end trading, the JCI was able to sit at 5,226. In fact, in 2014 before the election of Jokowi, the JCI was still in the 4,600 position. This extraordinary increase then brought optimism and extraordinary market euphoria. Analysts are clamoring that the 2015 JCI will be much better. Not infrequently I read investment news, many analysts predict the 2015 JCI will close at the level of 6,000.
Do you believe what analysts say?
"Yes, ... if you look at the momentum of our 2014 JCI, which is extraordinary, I believe it, sir," you answered.
If you pay attention, what is the closing level for the 2015 JCI? It turned out that it was only perched at 4,593, aka the 2015 JCI, down to around 12%. Take another look at the chart above, at the end of April 2015, the JCI suddenly fell due to the economic slowdown and various negative sentiments hit our capital market. Well, with this you still believe 100% in the analyst.
Likewise with stock recommendations given by analysts. I several times followed the recommendations of analysts by swallowing it raw without being based on an objective personal analysis and even buying stocks without looking at the chart. The result? I even lost.
Wow, this gives the impression that Bung Heze is blaming the analysts?
Not. That's not what I meant. This post is in no way aimed at blaming any analyst. So, what is the point of this post?
The point of this post is so that you don't trust analysts too quickly (not to blame). You must have objective and independent observations that are independent of the analyst. Remember, "There are NO smart people in the stock market"
Meaning?
This means that no matter how great the analysts are, they can definitely be wrong. So it is with me, so it is with you. Because analysts are human too, and what is called analysis is based on PREDICTION, not SURE. You said ADRO's stock price rose to 750 tomorrow. By fundamental analysis you say WKST stock will double in the next 3 years. It's all just a prediction not a certainty. Who can predict the future?
Then, how to be proficient in the capital market? The trick is practice, practice and practice. This post even advises you to ALWAYS LEARN from people who are more senior than you in the capital market, usually they are experts, more experienced analysts, traders who are "much older" (trading age), your friends who are more senior, your teachers. and others.. I have also learned a lot from them until now.
However, that doesn't mean you have to rely on and trust analysts too much. Each of you is unique. Each of you has a different way of looking at a problem. In the capital market, analysts can be right, and vice versa analysts also have the potential to be wrong. So, it would be better if you don't swallow it raw and don't easily believe any analyst's recommendations, don't immediately swallow the recommendations of this blog. It's great if you can combine it with your own analysis.
In the capital market, many traders cannot adhere to their own trading plan because they rely too much on analyst recommendations. As a result, the analyst recommendations they followed were wrong and their initial trading plan predictions were correct. Too bad isn't it?
