The arguments always come up over 'Recommendations' don't they...
Ok, I'll put my hand up. I'm just an ol' fashioned boy, in an ol' fashioned world (dreaming of one day being a millionaire)..
...and as an old-fashioned boy I had to study Latin - which in fact I was cr*p at-
...But to begin to get anywhere understanding a sentence of Latin, you need to be able to be able to tell a noun from a verb, and both from an adjective.
Let us start with a few basic facts:
BUY and SELL are verbs...They are therefore by definition and ACTION recommendation...
ADD and REDUCE are also verbs and therefore can also be used as an action recommendation...
OVERWEIGHT - Is actually an adjective, but in market jargon and the slurring of nouns/adjectives that can occur in languages - eg. to hoover- could just concievably make it to the 'bastard' verb status...
...although only in the context of 'weighting' a portfolio.
But there is no way that UNDERPERFORM or OUTPERFORM can in any shape or form be described as ACTIVE VERBS. They are not an ACTION recommendation. They are at best a 'prediction' and they refer to the expect action of the share, not a call to action from the reader.
You can shout 'Buy!' in the imperative form and it means something. Try shouting 'Underperform!' and you can see it is meaningless...
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So why do we use a mixture of these terms in published recommendations?
The reason is clear - to 'obfusticate' to 'cloud' and 'confuse', to give us a smokescreen to hide behind.
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So please, please, please, please....do not let anyone drag us down the route of having a 'logical' recommendation system...certainly not one which goes beyond 'Buy', 'Sell'' 'Hold'
Analysts will always pull that one, because deep down they do really know that it is a bit like debating the number of angels that you can get on a pin-head...a great way of wearing you down... and basically a brilliant 'fillibuster' to keep anything from changing.....
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