The Guest Speaker, Miss Allison Peart, presented the winning trophy to Mr. Richard Gordon from NCB Capital Markets Limited. Please read her presentation below.
Writing and presenting good analysis for investors
In today’s society and especially those economies that have been severely affected by the global financial meltdown, both institutions and individuals have become very skeptical of the securities market and the credibility of market information. This would imply that the role of Broker Analysts or persons who conduct research to provide information to the investing public, has become more significant and the quality of their work subject to greater scrutiny. In essence, you have now become the eyes and ears of investors and your research is an important factor that investors rely on for insight to make informed financial decisions. The reliance on the information you provide brings into sharp focus the responsibility that you are entrusted with.
When writing or presenting as a Broker Analyst, one must take into consideration more than the immediate target audience. One has to remember that the target audience will not only be existing investors, but also potential investors. One has to consider that investors fall into different categories, some are sophisticated investors, while some are average investors and others may be first time investors with limited knowledge. Therefore, along with providing accurate and timely data, you should bear in mind four other guidelines when creating your presentations. These are:
Ø Write with clarity;
Ø Write in simple but not simplistic language
Ø Ensure that data presented is explained and substantiated
Ø Findings and recommendations are in keeping with information
Writing with clarity
Your analysis must be deep and clear. Investors are not looking only for statistics, (I can attest to this as I am also an investor) – we can find statistics from a myriad of books, magazines, newspapers and websites. However, what we do need is meaningful and clear analysis of these statistics. Being clear in your thoughts and your words—saying what you actually intend to say, and doing it in such a way that your reader understands you—is your highest duty as an analyst, writer and presenter. It is more critical than eloquence or even originality. Without clarity you’re not really communicating. When writing and or presenting you have to ask yourself: “will my audience understand what I am saying and most importantly will they continue to listen or read what I am presenting?”
To keep your audience engaged at all times, expand your vocabulary. The best way to do this is by reading widely and paying attention to the way good writers use words. You’ll discover words that are lively, provocative, precise, colorful, and entertaining. Make these words your own by using them in your writing. Avoid clichés, slangs and colloquial language and most importantly avoid repeating yourself.
Write in simple not simplistic language
Simple is defined as readily understood or performed, while simplistic means the act or an instance of oversimplifying; especially: the reduction of a problem to a false simplicity by ignoring complicating factors. The definition speaks for itself, being simple means getting the point across with compelling, thought-provoking words which are also a true reflection of the facts. Over-simplifying means that you are merely deleting pertinent and relevant details. The beauty of simplicity is that it’s so inherently complex, yet so easy to understand; according to Albert Einstein “Make things as simple as you can, but no simpler”. He went on to state that “any fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage — to move in the opposite direction”. I know Broker Analysts have that touch of genius within them to make the information simple and to captivate the minds of their audience.
Thus, the use of industry or financial jargon should be properly explained to allow persons outside of the industry to understand the information. By doing this it will help to allay any fears that potential investors may have about the need to understand the meaning of these words and the context in which they are used.
Explaining and substantiating information
Time and time again, we see information presented with no explanation, whether it is a graph or a chart or just data. Furthermore, there is often no reference to the information in the notes being presented. Therefore, it is not surprising that there may be some questions as to the meaning and relevance of this information. If there are no references being made to the data, graph or chart, it is best they are not presented in your material. Once the material is given the necessary explanation it must also be substantiated. Therefore, when you take a position in your presentation, remember to back it up with relevant evidence in the form of data. It is not enough to make a point and leave your audience with questions – references will justify your conclusions and put your arguments above board.
Findings and recommendations are in keeping with information
Findings and recommendations must be in line with the information presented. Therefore if you are recommending a buy, sell or hold to your audience, it is important that you do proper technical and fundamental analysis of the company. Remember your technical analysis should be based on published market data and focus on internal factors by analyzing movements in the aggregate market, industry average, or stock price. In contrast, fundamental analysis focuses on economic and political factors, which are external to the market itself. Analysts sometimes focus primarily on the technical analysis and leave out the fundamental analysis. We have to remember that companies do not operate in a vacuum and they are affected by external factors such government policies, climatic conditions, seasons, political conditions and economic trends. Presenting only technical information can render findings and conclusion out of sync with the prevailing reality; often the information presented contradicts the findings and conclusion. It is very important that analysts do not make this mistake as this can damage one’s credibility. Recommendations must be clear and not sheepishly implied. For example, “buy this stock but…!”.You should stand firmly behind your recommendations. Remember you have done a lot of hard work to arrive at this stance so if you are not confident about your recommendations then you are leaving investors in a vulnerable position.
Therefore in conclusion, analysts play a critical role in the stability of the financial industry and what you present to the public will be used to make decisions that can either enrich the lives of individuals and by extension the country or in the reverse, bring potential harm for many. Therefore, care must be taken in presenting information to the public. Please remember to:
Ø Write with clarity;
Ø Write simple but not simplistic
Ø Ensure that data presented are explained and substantiated
Ø Findings and recommendations are in keeping with information
Allison Peart (Miss)
Tax Partner; Ernst & Young
