To all,
I have found that full service brokers rarely come to their own conclusions regarding the merit of any particular company. Instead, they often blindly rely on the in-house analyst's recommendations. This might be okay, but if you examine analyst's recommendations, particularly on volatile stocks like high-tech (e.g., the networkers like Cisco, 3Com, etc.), then you have to come to the conclusion that most analysts are followers rather than leaders. By this I mean that analysts downgrade en masse on bad news, but only after a big drop in price, regardless of the long, intermediate or even short term outlook, and then upgrade en masse upon good news but again only after the stock has already risen substantially (they make excellent contrarian indicators). A few analysts are more visionary and make relatively consistent good calls (or so I have heard; let me know of sime) before the major moves are over, but they are few and overshadowed by the herd. In light of their dependency on unreliable analysts, I believe that many or even most brokers today are better classified as asset allocationists/financial planners rather than stock pickers.
I know there are notable exceptions (unfortunately, not my broker!!), and these are merely my opinions based on limited experience.
Good investing,
Jim |
