On ethics, it says to avoid 1dimensional rating system. What does it mean by that? what is 1 dimentional
For instance, “Like” in FB. It communicates your view only in one dimension, e.g. there is no time period attached, no relative comparison features, and so on. Remember that a good stock is not always a good company. Saying that something is simply good, is not enough.
So that means a good rating system should includes under what circumstance A, B, C, should recommand a buy rating, correct?
If you provide a buy rating, you have to provide a target price, time period, as well as closing price on the last trading date. If the price jumps above your target, your buy recommendation doesn’t make a lot of sense anymore.
I undertand standards recommend 3-dimensional rating ie rating, time horizon and risk category to any researched stock.