Globalstar Telecommunications Limited GSAT Message Board

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Microcap & Penny Stocks : Globalstar Telecommunications Limited GSAT

GSAT 64.26

+7.3%

11:54 AM EST

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To: Larry L who wrote (129)	11/9/1997 7:53:00 PM
From: John Biddle	Read Replies (1) of 29987

Perhaps you're letting paranoia get the best of you. Think about what you just said: The most highly paid analysts are those that have the most effect on stock prices. You're right. But the critical question under consideration is how they gained this market power. How do you explain how an analyst could gain any investor credibility (what it takes to move markets, after all) if they determined their opinion based on what a big customer of the firm wanted to do? Analysts salaries began to Skyrocket when ML went after the stars by paying them big bucks. Stars were determined by rankings in Individual Investor magazine. Analysts do well who make accurate earnings forecasts, and who consistently produce cogent analysis of their covered companies as well as the underlying market those firms participate in. It is certainly true, as Dougjn pointed out, that there is pressure by the investment banking side of the house, to say good things about the firm's Investment banking clients. There is even more pressure to cover firms (and say good things) in order to win underwriting business (the analyst would probably get a commission for bringing in this business). The best analysts are able and willing to resist these pressures to a great extent because they know that their reputation is based on their personal credibility. A lot of the hatred and disgust with which analysts seem to be held on this thread (and all other threads I read), has more to due I suspect, with the different investing horizons held by the analysts and the SI posters. Most analyst recommendations have time horizons of a year or more and most frequent SI posters seem to have time horizons much, much shorter. This can often make even a good analyst's predictions painful to follow, and we all know that not all analysts are good. If you don't find analyst's recommendations useful, then don't read them, or bet against them if you think that will be rewarding. But imputing disreputable motives to people whose opinions disagree with yours without any evidence is illogical. And if you have evidence, I suggest you take it to the SEC who would love to arrest a major analyst for such illegal activity. Good luck in your investing

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