So what do you suggest? That anything goes?
Comparing Lebed to columnists or analysts misses the point for several reasons. Note - when I say that analysts "don't do" the following, I am speaking of the vast majority of them, and know there are occasional abuses, such as the "Heard on the Street" fiasco a couple years ago.
First of all, Lebed created many aliases to pump this stock, as well as sending out hundreds of no doubt "official-looking" e-mails (from his website? I don't know...) If you want to blame a journalist later, at least you have his name and the company he works for. They are not anonymous and their record as stock pickers can be judged.
Second, the scale is much different. Analysts don't spin such an elaborate web of deceit, and don't look to hold these stocks for only a couple days. They also don't focus on thinly-traded BB stocks. They can back up their picks with some form of logic, whether you agree with them or not.
They don't make picks exclusively to rip people off, unlike Lebed. They may often hold positions in the stock, and think the stock is great, and have some profit motive (i.e., they think a recommendation "wouldn't hurt" the stock and they could certainly benefit).
But they don't buy stocks they know absolutely nothing about. They don't buy stocks only because they plan to hype them. Lebed knew two things about his "picks" - they were BB stocks and ripe for manipulation. That's it.
In your example, the journalist predicting "XYZ" would go up 10,000% would be predicting a move from $15 to over $1500 per share. Has any respectable analyst ever predicted this type of move for any stock?
No, I am not excusing analysts from brokerages holding positions in a stock from blame. They should not only list that they have a position in the stock, but how large, and when they bought it. A law mandating this would be welcome.
But comparing Lebed to Merrill Lynch is ridiculous. |
