I have been using you for a while now but have never been able to work out what I am meant to do with stocks I hold that I bought based on broker recommendation on your site when they don’t work out.
E.g. I bought SYR with a recommended target of about $3.00. Instead of going up it went down. Way down. It then disappeared off the recommendations as you would expect.
But there is no other mention of it and I am not sure what I am supposed to be doing in this scenario. If I am on a stock, am I to assume that the upside is still there? Should I have been putting in stop losses?
I guess what I am saying is that I thought the recommendations were general advice/guidance on stocks that research has been done on, but if I buy based on the recommendation and the stock fails, am I supposed to know whether it is a dip in the market or whether the analysts have changed their views?
Or is there somewhere to see what the analysts view is once it disappears off the recommendations list? How long do I hold on to see if it is a dip or change in direction?
A: I think I would use a stop loss, particularly when investing in speculative stocks in the next big “thing” such as graphite or lithium.
The brokers can get things terribly wrong. That’s why we tend to look more at the consensus target price, and in particular, the reasoning the brokers use to substantiate their recommendation.
There is still an enormous divergence of opinion on Syrah Resources (SYR). Macquarie has an underperform and a target of $0.50 (current price is around $0.52), while Credit Suisse has an outperform and a target price of $2.30. The consensus target price is around $0.98.