Re-writing History on Wall Street

No wonder many people have lousy opinions of Wall Street folks.
Read on:

Written in Barron’s March 5, 2007 issue, Bill Alpert noted that nearly 20% of “Analyst Recommendations” over a ten year period from 1993-2002 were changed — after the fact.

Twenty Percent!

As a result of the changes, the recommendations seemed to be 15% to 42% better than what actually happened.

In my experience, it made me sick to watch analysts make changes to their recommendations — then see them use the closing price from the night before — rather than the open price (which would be the first chance you could buy or sell the stock).

For example, if a company releases terrible news after the market closes, the downgrade would often cite the previous day’s 4 pm closing price — rather than the lower opening price the next morning — when the downgrade was actually issued.

This is another reason why we want to eliminate the “noise” surrounding a stock…and just follow the supply/demand in a stock or mutual fund.  If there are more buyers than sellers, prices must rise.

Simple.

Tom

Thomas Mullooly
Mullooly Asset Management LLC
Our Only Business Is Fee-Only Investment Advice
www.mullooly.net
support@mullooly.net

If You Found This Article Helpful, We Have A Free Report We’d Like To Share With You:

3 Questions You Should Ask Your Money Manager TODAY. 

(simply include your name and email to get the report,
along with market updates from Mullooly Asset Management)

Name:

Email:

We respect your email privacy

Related posts:

1. Are We OK?
2. Am I the Only One Losing?
3. Less Than One Percent
4. ETF Explosion, part II
5. Here’s The Signal

Tagged as: Mutual Funds, NYSE, supply and demand, Wall Street