Many people seem to be concerned about the “evils” of short selling and how it can drive down the prices of a stock. Various means to limit it or ban it altogether have been proposed.
But what about analysts’ “expectations”? How many times have you heard that a stock went down because a company’s earnings were quite positive but not quite as good as analysts’ expectations? Or how many times have you seen a stock go up because a company lost a ton of money but not as much as expected? It’s a mystery how these expectations can have such an influence on the price of a stock.
And then how many times have you seen a stock fall when a company reports positive earnings but gives negative “guidance” on future expected earnings?
Maybe analysts’ expectations or guidance should come under more scrutiny because of the impact they have on a stock’s price.
