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- What Is a Wall Street Securities Analyst?
- Wall Street Analysts Are Bad at Stock Picking
- Opinion Rating Systems Are Misleading
- Research Never Contains an Analyst's Complete Viewpoint
- Wall Street Has a Congenitally Favorable Bias
- Downgrades Are Anguishing, Arduous, and Rare
- Most Downgrades Are Late; the Stock Price Has Already Fallen
- Buy and Sell Opinions Are Usually Overstated
- Wall Street Has a Big Company Bias
- Brokerage Emphasis Lists Are Not Credible
- Stock Price Targets Are Specious
- The Street Orientation Is Extremely Short-Term
- Analysts Miss Titanic Secular Shifts
- Street Research Is Unoriginal; Opinions Conform
- Analyst Research Is Valuable for Background Understanding
- A Lone Wolf Analyst with a Unique Opinion Is Enlightening
- The Best Research Is Done by Individuals or Small Teams
- Overconfident Analysts Exhibiting Too Much Flair Are All Show
This chapter is from the book
This chapter is from the book
This chapter is from the book
This chapter is from the book
Most Downgrades Are Late; the Stock Price Has Already Fallen
Most opinion reductions are “me too,” the fourth or fifth such recommendation on the Street, and all copycats after the dismal outlook has been highly evident for some time. The shares have usually already fallen 25% to 50% or more, and have fully discounted the plethora of bad news. In 2008, such belated, useless downgrades happened over and over with Lehman Brothers, Bear Stearns, AIG, Fannie Mae, GM, and countless other dogs. Almost all downgrades are late and represent the final capitulation. After most of the ratings have been downgraded, it might be a good buying entry point for a patient investor. After most Street analysts are pessimistic, the share price has only one way to go—back up.