Recent Blog Posts
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The $4.5 Billion Dollar Bank Run
Nov 07 201111:20 am EDT -
The Times' Rorshach Geithner Story
Apr 27 20099:26 am EDT -
Sinking Animal Spirits
Apr 27 20098:45 am EDT -
Counter-cyclical Urban Policy
Apr 26 200910:00 am EDT -
Be Your Own Counterfeiter
Apr 26 20099:36 am EDT -
Being Tim Geithner
Apr 25 200912:37 pm EDT -
Notes From a Press Conference Naif
Apr 25 20099:41 am EDT -
What Good is the News?
Apr 25 20098:32 am EDT -
Stressful Enough
Apr 24 20092:29 pm EDT -
Not Regretting the Pound
Apr 24 20091:09 pm EDT
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What is the Point of a Price Target?
What is a price target, and what is it for? Eric Savitz and David Gaffen report today on all the new price targets being put on Google: with the stock trading around the $650 level, Credit Suisse has upped its price target from $600 (which I guess would imply a "sell" rating) to $800 (phew! the "buy" rating can remain!), while Pacific Crest Securities, trying to stay ahead of the curve, has a price target of $850.
Investopedia reckons that a price target is "the price at which the trader would like to exit his or her existing position so that he or she can realize the most reward" – but that's clearly not the case here, since every time the target is reached, the goalpost just gets moved, and there certainly seems to be precious little exiting going on. So if it's not that, what is it? What's the difference between Pacific Crest's $850 target and CIBC's $700 target? Is it just a way of showing degrees of bullishness? Is there anything that an investor can actually do with these numbers?
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