On Tuesday, CNBC’s Jim Cramer urged investors to pay close attention to the range of analyst calls.
“In the crazy world of Wall Street, it’s not enough to just think about companies, sectors, asset classes and macros. [Federal Reserve] We have to consider the reaction and even the reactor itself,” he said.
he used the latest analyst phone Advanced Micro Devices To illustrate his point:
Barclays upgraded the chip maker from equal weight to overweight on Monday, sending its shares up 10%. The next day, Bernstein downgraded the company’s stock market performance from outperforming, citing concerns over his PC market’s deterioration. AMD’s stock fell 2.39% on him.
Cramer says neither analyst is necessarily wrong in this case.
“A bearish analyst [is] AMD’s business is abysmal right now and shows no signs of improving, so right as rain, long term, bullish analysts will be right.
Cramer added that while these trading periods can be confusing, they can also be lucrative for investors if they don’t act rashly.
“We are in the middle of earnings season, so you need to understand that depending on the time frame, the reaction is often correct, but it can also be wrong,” he said. Either way, if you’re a lot of the time, the response can be a great buy, buy, buy, or sell.”
Disclaimer; Cramer’s Charitable Trust owns shares of AMD.