Analyst Calls - Trustline Blog

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Analyst Calls - Trustline Blog

• Analyst Calls
• Are we missing the bigger picture and this is
  happening globally?
• Over the last few quarters, we are increasingly
  seeing analysts being off the mark on quarterly
  earnings estimates. This is not only happening in
  India but also across most other major
  geographies. Recently, we have also seen analysts
  going awfully wrong on estimating the trajectory
  of oil and copper prices. What is the bigger
  picture that is emerging?

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• The Goldman Sachs story
• Recently, Goldman Sachs decided to do a detailed
  analysis of how it got two recent trades awfully
  wrong. The first pertained to its call on crude
  oil prices and the second pertained to its call
  on copper prices. What was surprising was not
  that Goldman got the call wrong. Such bad
  estimates are quite common in markets. The reason
  Goldman is getting to the bottom of the matter is
  that analysts had missed out certain very obvious
  possibilities.

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• When the OPEC had decided to cut its oil supply
  by 1.8 million bpd, Goldman was betting on a rise
  in crude prices. While it did happen initially,
  crude oil prices retreated sharply afterwards as
  stockpiles and higher US output bridged the
  supply gap. Even in case of copper, while Goldman
  was bullish, the sharp correction was caused by
  aggressive de-stocking of copper by dealers at
  higher levels. This sharp crash in copper prices
  was something that Goldman Sachs had really not
  bargained for!
• Is this becoming a trend?
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