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On Second Opinion analysis for a stock I read the following:

OPINION: LONG

RECOMMENDATION:
If you are long, hold current position. Do not initiate new position.
Stock is Not a Short Sell Candidate

COMMENT:
Here there are several points explaining how the stock shows a bullish trend...

Let's say that I'm interest in this stock and assuming that I blindly trust 'Second Opinion', what should I do in this case? Should I buy the stock?

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    Personally, I find this kind of advice oxymoronic: 1. If it's worth holding, shouldn't it be worth buying? 2. If I shouldn't be buying it, then why should I bother holding it? – Chris W. Rea Aug 2 '11 at 15:05
  • @Chris W. Rea - don't sell due to the cost of selling, which would be a loss? Just guessing. – MrChrister Aug 3 '11 at 1:25
  • Selling might also have tax implications, which reduce if held till gains become long term instead of short term, which might be another reason to hold. (especially if the price was lower relatively recently and they advised to establish new positions at that time.) People often fail to take taxes into account, and that can have an effect where the net gain is better in the long run to stick with something you own that only goes up x, rather than move to something that goes up x plus a little more but you are earning on a reduced balance (after taxes and comissions). – Chuck van der Linden Aug 3 '11 at 7:40
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In Second Opinion's opinion, they say "Do not initiate new position." This means do not buy the stock if you do not already own it.

Since they also say to hold if you do own it, this is a very "who knows what it will do" neutral position (IMO).

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    reinforced by 'not a short sell candidate' meaning they don't think the price is likely to go down in the near future. Another way to put their advice is 'not good enough to buy, not bad enough to sell or sell short." a VERY neutral position. – Chuck van der Linden Aug 2 '11 at 8:03
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This is analyst speak for "the stock isn't going anywhere anytime soon". Remember these guys are offering advice to the entire universe in a few lines, so the advice gets fortune cookie-like.

When I look at these things, I care more about when the analyst changes their opinion more than what the opinion is.

If you really trust this person, you should listen to the earnings call for the stock (or read the transcript) and listen for the questions asked by the analyst. Usually you'll be able to understand why the analyst feels the way he does.

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No, you shouldn't buy it. The advice here is to keep any existing holdings but not make new purchases of the stock.

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