Making sense of City-speak

I receive a lot of investment research from City analysts on listed pub companies, and jolly useful it is too, helping me to form my 'world view' of the biggest operators in the business.

Professional stock watchers offer a detailed financial and economic insight into listed pub and brewing businesses that you just can't get anywhere else.

That said, I'll admit to being occasionally bemused by the terminology used by some analysts when recommending an investment decision.

Now, before members of the City community fire off angry emails to me or remove me from their mailing lists, please be assured I'm not being deliberately obtuse here. I would just like to understand what determines the various stances taken on a company.

In my day you bought shares in a company if you saw it as an investment, and if this wasn't your view of a stock you already owned you sold. If you owned shares but couldn't decide for the time being whether to buy or sell them, well, you held them.

These days things are different. For example, when is a 'buy' not a 'buy'? When it's an 'add', seemingly. Then there's 'reduce', which surely means 'sell'. Apparently not.

There is a school of opinion that suggests such prevarication serves to highlight a lack of conviction in an investment call, while others see something like 'reduce' as a way to subtly disguise an exit from a stock when its potential upside doesn't warrant an outright 'sell'.

Some brokers are even using a numeric scale to indicate the recommendation, '1' being a buy, '4' being a sell.

Confusing, isn't it?

Does this inform an existing or potential investor? Not a bit of it, according to one fund manager I spoke to this week. It would seem there are some who are more convinced of their view than others.