Good news: once I’m done, this will have been the 800th time that I’ve clicked the “publish” button on this blog.
When I started to go through all the previous 799 blog posts in order to give you a list of my all-time favourites, I realised that this task is no longer just a morning’s work.
Which was pleasing, agreed – but also saddening, because suddenly my original blog post plan was gone and I had great fears that the 800th post would be a bit anticlimactic.
As it turns out, I’m actually okay with that.
So instead, here is the new plan:
- I’m going to share Rolling Alpha’s global footprint with you (because I’m very proud of it). And
- Then I’m going to talk to you about my worst ever post.
How Rolling Alpha fares in the world
The redder it is, the more readers that come from there.
#ProudMoment
And how great is the internet?
Moving swiftly along to the awful statistics…
The Worst Performing Post(s)
It’s a tie.
With a grand total of 10 views each:
So before I get back to them, here’s what I’ve learned about life as a blogger:
- Blog posts do not do well on a Friday. No one is interested.
- Write-off December, and most of January. No one is at work, and blogs are really a distract-me sort of thing.
- Dull titles like “Daily News Roundup” are never going to do well.
- But blog posts that involve any sort of a rant are always popular. People love a good complaint.
The “Daily News Roundup 2012: Friday 14 December” has all the hallmarks of a doomed post:
- Boring Title
- Posted on a Friday
- In December
- #Death
Even though I think it had some fun points about the legal pitfalls of inter-office messaging services.
The Analyst post, however, is a bit strange. It was posted on a Thursday in March. The title could have been better, agreed. Perhaps “Analysts will whore themselves out to just about anyone”? But still – has to be better than a December Daily News post, right?
I’m forced to conclude that people hate to hate on analysts.
So I’m petulantly going to re-visit the topic.
Why Analysts Fail
There is an incentive problem.
Investment analysts give opinions on financial assets (mostly shares) – whether they’re “buys” or “sells” or “holds”. They also give price targets.
But the thing is: investment analysts only get into the high-paying jobs when they’re popular and well-regarded.
Allow me to play that logic out for you:
- The market consensus is that the share price is going to go down.
- The analyst disagrees.
- What to do?
- If he publicly disagrees and he’s right, then that’s a win and he’s better than everyone.
- But if he publicly disagrees and he’s wrong, then that’s a sure-fire recipe for being unpopular and not-well-regarded.
- On the other hand, if he publicly agrees with the market consensus and the market is right, then that’s a win.
- And if the market consensus is wrong, then the whole market is wrong, and he’s no worse off.
- Basic conclusion: investment analysts have strong incentives to go with the market consensus.
- And if they’re going with the market consensus, it means that they’re following the market.
- Which makes them largely un-useful.
In my very unpopular post about analysts, I mentioned a 6 March 2013 news article from Bloomberg, in which Adnaan Ahmad, an analyst from Berenberg Bank, dropped his rating on Apple shares down to a “sell”, and cut his price target from $800 to $360. At the time, Apple shares were trading at around $425 a share.
I was uncomplimentary. Because moving a price target from $800 down to $360 is not for real.
Within 3 months of that announcement, Apple shares started climbing. By the end of the 2013, Apple shares were up to $560. Today, Apple shares are trading at the equivalent of ±$760*.
*There’s been a 7 for 1 share split, so each Apple share trading at $108 today is only a 7th of the share we were talking about in March 2013.
Which brings me to one of the big lessons I’ve learned after 799 blog posts:
- Being contrarian can be quite lucrative.
- As long as you’re willing to risk that initial period of time (like that 3 months) being “wrong”.
- But have faith in the fickleness of markets.
- They generally tend to turn.
- At least: they turn often enough that the wins outweigh the losses.
I’m not sure it that helps.
Regardless – thanks for reading 🙂
Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.
Comments
Yoyo (@yoyo_w) November 11, 2014 at 12:02
Congrats on your 800th post!
ReplyJayson November 11, 2014 at 12:59
Thanks!
ReplyCabanga November 11, 2014 at 15:22
Here’s to 800 more.
Reply