Ahead of the Market: The Zacks Method for Spotting Stocks Early – In Any Economy

In Ahead of the Market, Mitch Zacks shows that analysts actually provide a wealth of market-moving information that can generate exceptional returns if interpreted correctly. The key is to use the research produced by Wall Street analysts the same way the professional money managers do. Pioneered by the firm Zacks Investment Research and based on more than twenty years of intensive analysis, the investment strategies revealed in this book are indeed the same ones used by successful professional investors everywhere.

Author’s Note:

Ahead of the Market provides you with objective, independent advice, a road map to understanding and profiting from the brokerage research that is now readily available.The advice I detail in this book is based on roughly twenty years of painstaking quantitative research and analysis combined with my practical experience implementing the strategies described. Unlike other investment book authors, I am not going to talk in vague generalities or give you war stories about stocks I have purchased that have doubled in price. Instead, each chapter of Ahead of the Market provides you with actionable advice based on extensive statistical analysis concerning the historical reaction of stocks to analyst activity.

This book is not a history book. It is not a piece of journalism explaining what has gone wrong with the markets. It is not a biography. Rather, this book is about how you can effectively use analyst research to make money. Ultimately, Ahead of the Market is designed to be a handbook for interpreting and profiting from analyst research. The central point of this book is that a single analyst’s recommendation and earnings estimates, in and of themselves, are useless.What is important is the following:

• What all the analysts say about a given stock
• How those views change over time

When you combine the two you have what has proven to be one of the best ways of finding stocks that will outperform the market.

What Will You Learn in this Book ?

The most profitable uses of the research produced by Wall Street research analysts are not widely known. Instead, most individual investors continue to focus on the elements of the research produced by Wall Street analysts that are the most misleading, and so by definition the most useless. By the end of this book you should know the following:

• Why analysts’ earnings estimate revisions occur incrementally over time and how you can profit from this phenomenon
• How you can avoid being misled by analysts’ buy/hold/sell recommendations
• How you can employ the methodologies used by several large hedge fund managers to predict earnings surprises
• How to avoid being overwhelmed by the amount of stock recommendation data available online and in the financial media by instead focusing on the important analyst-related data that you can use to make a profit

For example:

• You will learn whether you should buy a stock after the stock’s price has dramatically reacted to an analyst’s recommendation upgrade. Is it too late, or do even more significant moves follow?
• Similarly, you will learn whether you should buy a company’s stock after the company reports earnings worse than analysts’ expectations. Is the stock likely to bounce, or sink further?
• And more importantly, you will find out if you should even look at brokerage firm recommendations, or if analyst research contains a more powerful piece of information that can help you make money.

Contents:

• The Main Themes
• How the Analyst Got His Bias
• Dissecting the Analyst’s Report
• The Importance of Earnings and Earnings Estimate Revisions
• How to Use Earnings Estimates to Pick Stocks Profitably
• The Earnings Surprise
• Using the Earnings Surprise in Your Investment Process
• It All Comes Together—The Zacks Rank: The Key to Successful Investing
• Effectively Implementing the Zacks Rank
• How to Effectively Use Analysts’ Recommendations
• Analyst Neglect and Long-Term Earnings Growth Estimates
• Valuation, Earnings Uncertainty, and the Fed Model

Ahead of the Market: The Zacks Method for Spotting Stocks Early - In Any Economy By Mitch Zacks pdf