Be Wary of Consensus

Investors should be cautious in reacting to “consensus” opinions and investment strategies.  For example, running up to, and immediately after, Apple’s new iPhone announcement, analysts, both financial and technical, were somewhat less than enthusiastic about the phone’s prospects.  Comments included, not enough new stuff, taking out the headphone jack is a mistake, etc.  As a result, the shares sold off.

Once the customer became aware of the product changes, including better battery life and an improved camera, everything changed.  Early indications suggest that demand is running well ahead of expectations and the shares are trading up.

Of course, Apple may also be benefiting from Samsung’s new, too hot to handle, phone.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®