Why it is so hard to sell...

G

garfangle

I would like your opinion on why it seems like most financial professional commentators (incl. analysts, strategists, writers, et al) loath to say "sell." I am not referring to analyst recommendations, but rather general investment advice provided by them. Meaning, that during the stock boom of the 90s, most said that to get those great returns, you'd should be fully invested. They had no qualms to tout what great buys were available. When Qualcomm was projected to hit $1000, most declared it was a good buy then. Even when such stocks have fallen precipitously over the past few years, most said to hold on. I remember when the Nasdaq was at ~3000, and yet commentators said it was merely a correction and that investors should hold on. When it reached ~2000, they said to not give up because there might be a decent rebound just around the corner. Now, when it is near ~1300, they say it is too late to sell and that it would be a mistake to get out now. Because you might then miss a bump up in price.

How, can an investor digest these people's advice, especially when they are so unidirectional aka permabulls. Why have I never heard a commentator that instead of buying they should short a particular company instead? Or rather than say what you like what you'd avoid?

Any answers?

Ciao.
 
the system prospers on ever increasing cash flow. easy money, not religion, is the opiate of the masses.

when selling pays as much as buying, they'll be all over it. that's when you start going long.
 
Originally posted by chasinfla
the system prospers on ever increasing cash flow. easy money, not religion, is the opiate of the masses.

when selling pays as much as buying, they'll be all over it. that's when you start going long.
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I have also noticed that the profits from most investment firms almost never come from actual trading, rather its their fees from asset mgmt that keeps them afloat. if some of these firms had to abide by hedge fund rules where you'd only garner income from actual profitable trades than sitting on other people's money, I do not think there'd be many firms in existence.
 
At all the big firms the only thing your boss is concerned about is how much money you have under management. Same goes for CTA's and hedge funds. The management fee is the steady money and if your a CTA or hedge fund manager and you make a profit that is the cherry on the cocktail. Imagine a fund manger at Vanguard or Janus telling clients to sell because the market is going down, there boss would fire them for the loss of fee's. On top of that there brokers pressure them to trade. There broker is usually the firm who raises money for them. There is to much to be lost if you were to tell people to sell.
 
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