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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: kech who wrote (53943)5/2/2003 11:13:33 AM
From: Mike Buckley  Read Replies (1) of 54805
 
Tom,

When companies appear highly valued in some key financial measures ..., financial community members seem to come out with all the negative news that is fit to print, all at once.

I've noticed that the same tends to happen when good news renders a stock under valued. (It hasn't happened in a long time to most of the stocks we follow for obvious reasons.) I think the reason is that once a sell-side analyst initiates a change in thinking, everyone else tends to pile on with the same thinking because few analysts want to be perceived as having a tremendously different opinion from that of the consensus.

Remember that when you mention the "financial community," we rarely have access to the opinion or basis of opinion of the buy-side analysts whose primary concern is that their clients' investment portfolios do well. If there is anything retail investors should have learned in the last two years, it's that the sell-side analysts don't necessarily have the same motivation.

--Mike Buckley
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