« Retail Stocks Show Relative Strength | Main | Q1 Earnings Growth Better Than Expected So Far »


tom brakke

Research into the predictive capabilities of analyst ratings has shown that the "level" of analyst ratings don't provide much (if any) information of value, but changes in average ratings are worth watching and incorporating into stock evaluations.

K. Nadgir

I find this rather insidious. It seems to me that analysts have their hands up to their elbows in the market and buy stocks in a rally contrary to their own recommendations so that the prices go up and they offload the stocks at the highest possible prices. The overall market, according to me, is heading for a major breakdown and that point of time the sell-recommended stocks will be at their highest and the buy-recommended stocks will be at their lowest. The perfect opportunity for an expert to sell the duds at a huge profit and buy the gems at the lowest possible rates. This market is rigged (without prejudice to all my legal rights).

K. Nadgir

To explain it a bit further, the regular Joe and his broker don't look at the analysts ratings; they just look at the movement of the stock prices and buy into those that are going up. So if experts know the market is headed for certain crash and even if they publish accurate ratings, they can exploit the average Joe's ignorance by pumping up the sell-recommended stocks and selling at a high when the market does crash. This appears, on the surface, contradictory to ratings and it seems the analysts are terrible, but in fact it's a strategy to maximize profits at the cost of the guy on the street. Once again, without prejudice.

The comments to this entry are closed.


Our View

Bespoke Premium

In The News

Premium Site

  • Morning Lineup
  • Short Interest
  • Upgrades/Downgrades
  • Sector Snapshot
  • Daily ETF Trends
  • Weekly Review
  • Economic Indicators
  • Trade of the Day
  • Bespoke Stock Scores
  • Daily Market Model
  • Daily Strategy
  • Daily Stock Odds
  • Market Studies