Equity analysis is a detail-oriented profession. Analysts look into the most complex details, examine and evaluate the performance trends of a company and come with a recommendation for investors to buy, hold or sell the shares. The result may seem simple, yes. But it’s a very complex process resulting in a very simple conclusion. That’s actually what makes equity analysis or stock analysis more difficult.
Analysts dive into huge amounts of data, distinguish the valid data from the misinformation and try to keep focused on the data that matters. Just like digging deep into a mine, shifting a whole mountain of dirt and coming up to the surface with a single piece of gem. They delve into economics articles, analyst commentaries, inflation reports, working papers, research bulletins. And there are also charts and spreadsheets. Which analyst wouldn’t love a good old pie chat or a wide spreadsheet full of numbers and ratios?
Although most analysts are detail-oriented, they also struggle to have a grasp of the whole story before they come to a conclusion. And it’s easy to get lost in the details sometimes. It’s hard to keep focused while switching between spreadsheets, finance articles, performance charts or analyst commentaries. Add the distraction of switching between the data and the news and commentaries for the economic developments to the concern about the validity of the information.
Distraction is not the only enemy in this context. There is also the risk of having tunnel vision. As people tend to lose their peripheral vision when they focus on something for a long time, the mind of a stock analyst can get tunnel vision when it’s focused on the details for a long time.
Tunnel vision and distraction. These are serious risks for analysts which may lead to a bad decision.
The Answer to The Analysts’ Problems
So, what is the solution to alleviate these risks? To find the answer, the problem should be handled by the mindset of an equity analyst. What are the challenges?
- Gathering sufficient amount of data.
- Being able to access the publications that contain the latest information on economic conditions, industry dynamics, government regulations and key forecasts.
- Ensuring the validity of the data.
- Making sure the referred publications are from the trusted sources..
- Not becoming victim to tunnel vision.
- Not being distracted while achieving all of the above.
Still, a challenge but determination of the problem is the halfway to the solution. And the solution here seems to be a platform that would provide the data and information for the analyst. The data it provides should be sufficient and abundant. To zoom out and see the whole picture, we believe that analysts need an access to;
- A collection of bulletins, reports, thematic analysis, working papers…
- Economic commentaries, weekly wrap-ups and monthly reports of the experts evaluating local and global developments in the markets.
- Monetary policy reports from the Central Banks, and reviews on the recent economic developments and financial stability.
- Timely commentaries and articles covering important economic trends and policy issues shaping globally connected economies.
And finally, it is prerequisite to collect all this data in a compact, easy-to-understand interface that wouldn’t distract the analysts. While it sounds like a utopia for analysts, EquityRT aims to be one of such ideal platforms.