June 10, 2016

Wrong analysis, right stock



Both beginners and professionals are afraid of making errors when analyzing stocks.

How justified is this fear?

That’s a good question. Last week, Obermatt had a stock on its Top 10 List of Safe Stocks that was no longer trading on the market because we had old data in our system.

Is this a problem?

No, I don’t think so. If a stock analysis is wrong or the information is old doesn’t have any influence on the price you pay for the stock. That’s why there’s no danger for investors when purchasing the stock.

As a matter of fact, there are many cases when multiple professional investors buy the same stock at the same price and at the same time, based on assumptions that are likely wrong.

People who think that the stock analysis is important also believe that they know better than anybody else. At Obermatt, we don’t believe that. If it were true, then the majority of professional investors wouldn’t underperform the market, which has been empirically proven many times over.

If the professionals don’t know better than the market, then who does?

In this regard, we are thankful to the Obermatt user who spotted our error. Swissmetal was on the Top 10 Swiss Safety stocks last week even though it was no longer on the market. And I want to thank him even more for the article he published on this subject in the Swiss French press.

Such discoveries help us eliminate the errors in our algorithms and programs. We are glad for any such input.

Why then should you use Obermatt finance research at all? Because, in most cases, it presents the reality of the situation and provides the help needed to make investment decisions in good consciousness.


All Insights

Collections with all insights
per topic
Top 10 Stocks

No judgments - Just financial facts
For 10,000 stocks from 100 markets