Druss...
>>Roger--My vote is that 99.1% of analysts ratings are meaningless<<
I just found this related article in The Street.Com from Herb Greenberg.
I suspect that a lot of people including me always felt this way. Interesting to say the least.
Bob T.
>>As this market goes through its gyrations, take a few minutes to go back and read Cramer's Manifesto for a New Market: Part 5. It was both telling and disturbing.
It was telling in that it did something nobody -- nobody -- has done: It told what we all knew but nobody dared write: that analysts, in the end, serve the big mutual funds (and I say hedge funds) by pushing stocks that are down (so the funds can sell or so the stocks in their portfolios can show better returns). Another version of this story, which he didn't mention, is that analysts push stocks higher so execs in those companies can dump their shares at artificially high prices -- but try to prove that. This is how Wall Street really works, and it's something every reporter (including me) has heard for years but can't write because its' virtually impossible to come up with the proof.
Wall Street, as large as it is, is also very small. Whenever I've gone after "what everybody knows to be true," I've been met with such resistance as, "Sorry, I've signed a nondisclosure agreement" or "Sorry, I'd love to help but I also need a job and this is a very small industry."
Without documents or on-the-record sources, it's virtually impossible to report; it gets thrown on the hearsay pile. Jim, on the other hand, can get away with it because he has nothing to lose. He didn't name names or rely on documents. Instead, he told what he knows to be true based on what he sees every day from his front-row seat. (And he's already so loved or despised that what he says isn't about to make or break his relationships with anybody.)
It's disturbing, though, in what it represents: That, as you have read here repeatedly, this is a very gamed market, and the "game" is what has played and in all likelihood will continue to play havoc with prices in the future. This isn't the same game that has ruled the latest leg of this bull market -- the "greater fool-theory game" in which the savviest traders like Cramer and others use their smarts, research and instincts to trade ahead of the Johnny-come-lately daytraders. (Cramer talks of leveling the playing field, but no matter how level it is there will always be a greater fool.) This isn't the game of investing in stocks just because they have big short positions. (The goal of that game is to squeeze the shorts, which in turn causes a stock's price to rapidly rise as shorts rush to cover, or buy, their positions.) And this isn't the game ruled by the message board maniacs who congregate in online alleys to orchestrate attacks (long and short) on stocks. (Such collusion is illegal but the Securities and Exchange Commission and other regulators will have a tough time controlling it.)
All of these games are detested by "purists" (that would be me and many of my sources) because they make a mockery of investing and fundamentals, they make a mockery of discipline (at least for those who believe in holding something for longer than a day) and they make a mockery of the notion of risk.
Cramer will tell you that being a purist, right now, won't make you money. Opportunistic traders like him worship at the Church of What's Happening Now. It's hard to argue with that kind of logic because that kind of logic is what generates instant lottery-like returns. But by the same token, the drive to make "who wants to be a millionaire" returns, no matter what game is being played, is not sustainable, especially as more people play the same game.
Which brings us back to Cramer's Manifesto No. 5. As he points out, in not so many words: the Street is rigged. Always has been. Always will be.
The only way to beat a rig is to know the facts. Facts equal fundamentals. In the end they win the game every time. Seen MicroStrategy (MSTR:Nasdaq - news - boards) lately? << |
