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Strategies & Market Trends : Value Investing

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To: Bob Rudd who wrote (14159)	3/23/2002 10:53:20 AM
From: Dale Baker	Read Replies (2) of 78688

A while back I ended up on the mailing list of the fiber optics analysts at a major Wall Street firm. When the sector was hot they were major cheerleaders; they reflected none of the skepticism that Sanford Bernstein and others were putting out then (which proved to be 100% correct). Once Reg FD cut off their inside access, my main impression of this group's work product is "blindsided". They react to public pronouncements by the major FO and networking companies but rarely or never have a useful forward looking prediction in their periodic updates. They are constantly surprised by revenue and earnings warnings from the companies they cover. I'm sure that the many millions spent on analyst salaries produce some useful information now and then. On balance, however, I have found doing one's own DD based on the public filings and publicly available info works as well or better than the inherent institutional biases in analyst reports. Here is an idea - instead of just asking analysts if they own a stock they cover or do investment banking for them, CNBC should pull the analyst's last 10 public calls and post them on the screen to see how many were right. I bet most would have hard a time batting .300 at best.

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