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
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