Sunday, April 10, 2016

What's going on with AT+T? [ T]


In this recent SeekingAlpha article, a person with almost 7000 individual followers posted a wandering article about ATT.   I say "wandering" because while the article was given a seemingly straight forward title of "AT&T:Major Sell Signal Just Flashed" the author goes on to say that the stock is up for the year, is a solid dividend performer, etc.  Oh sure, he says, the company is not without challenges but he says his sell signal is the upgrades that occurred because they happened after a big run.  His feeling is that the analysts are really smart and clever and thus they are upgrading in order to sucker people in so they can dump it. 

Still, the author goes on to say he is holding the stock but other people should hold out for a pullback to $35 before adding money.  Again, I say, "wandering".  This article, and most like it, are not actionable. but it is what passes for investing "input" or "advice".  I think it falls into the category of useless noise.

First, the assertion that analysts are some kind of great insiders is wrong.  The buy and sell sides of these houses are supposed to be fire-walled.  Oh sure, there is always a fly by night pump and dump house out there but major analysts have to be very careful not to ruin themselves with the perception that they are behaving illegally.  The authorities are looking for scapegoats on who to blame all the financial issues right now and this will only accelerate going forward as the problems become worse.  If you were going to be a crook in this industry you should have been doing it for the past 30 years, not starting now.  Now that the big societal pendulum has peaked its liberalism and is now swinging conservative, it is getting more and more dangerous to be a crook!

My view is that these analysts were simply behind the curve in calling this run up and they are being affected by herding instinct.  They just don't want to be the outliers; they want to catch up with the herd.  But even if it was a game being played by the analysts, why is the author even bothering to write?  He's not planning on selling!  He's planning on buying more on a dip to $35 which is a mere $3 move - 7%.  How is this in any way a "major sell signal"?  It seems he is worried simply because of the rapid move and he wants to be able to say I told you so to his followers if the shares go down. Of course if they go up then no apologies necessary, everyone is happy.

And this guy has 7k followers!!  He's just spewing emotional, un-actionable nonsense but people don't know any better so they follow along.  So here is the chart.  Feel free to comment.  Is this chart going up?  Down?  Why??

What's your track record for such a prediction?  What's your confidence level in it?  If you are going to bet even a small amount like $1000, will you know when to place the bet?  Bad timing on the purchase could cost you hundreds.  Would you know when to sell?  What criteria would you use?

I've place my Elliott wave model for the above chart on the subscriber's section of the blog.  If you want to get my take, click on the subscribe button for access to a wealth of market timing data which has been proven for years in this blog to be exceptional accurate.

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