Quick read in today’s NY Times that shows, once again, how unreliable stock analysts are. When I first joined my firm a few tears back I did a quick screen to see how many of the thousands of companies we covered were rated buy, hold, and sell. Fewer than 10% were rated sell at the time, with the rest split between buy and hold.
Not only does this say something about analysts, I believe it says a lot about stock picking in general. Having spent time reading analyst reports and talking to some of them I can assure you these people are neither stupid nor corrupt. In fact, most likely they are smarter than you and attempting to do a good job. And they still fail as often as not.
This says a lot about behavioral investing, but that’s another (long) post.