/Do you still follow Brokers Research reports?
stock broker

Do you still follow Brokers Research reports?

# YES Bank

Dear Readers, Unlike my other articles this one is going to be a short note. I want you people to leave with mentioning your comments.

Below is a simple compilation all the research reports taken out by broking houses on YES Bank, in last one year.

I can understand the plight of retail investors, who have followed these reports and on trust added stock on the recommendation, the beauty is at the end of each report the researcher do mention in small letters that he/she or his/her family does not own any stock of the Bank. When the dear researcher does not want to get into the skin, how much should you as an investor rely on such reports and are you still following brokers research reports.

I have nothing against anyone of them, but why they didn’t woke up and came with wait and watch report for retail investors.

And this the reason why retail investors loose money in markets

Business Model of Broking Houses

Why I am trying to answer this, to reinforce, that no one will come to rescue specially for the beginners. I know Pro traders and investors have their due diligence mechanism in place.

Any broking house makes money when you buy and sell shares, it is immaterial whether you make profits or not. They charge you a fix charge on each transaction. So it is obvious they would want you to transact as much as possible.

Somewhere around 2008, during global recession when all classes of investors lost money in market there has been huge decline in trading volume. Around that time lot of broking firms have started releasing reports, which use to talk about prospects of stock going up or down, and they started charging for that also.


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Way Ahead

SEBI, should look seriously in this matter and actually ban agencies to get involve in both the activities. Or , accountability has to be fixed.

The best scenario would be when they interact with two independent bodies, one for transaction and another for advising. Although SEBI did take step in the direction of RIA’s ( registered investment Advisors ) and RRA’s ( Registered Research analyst ), but they are missing as of now to be doing any credible work. Majority of them are tippers, instead of creating investing culture, they are also doing things in same direction.

Full-stack developer and research analyst