William,
You are right, Money managers do not want to be caught flat-footed---they sell when the stock is going down and buy back when the stock is reversing course...As for Analysts, they exist primarily to generate commissions for their firms---timing their Downgrades of the stock in a downtrend and timing their Upgrades in an UpTrend---so as to be right always...Take for instance the Analyst, Erika Klauer---last year, she issued a downgrade while the stock was at 66 (having gone down from 72) and was right when the stock hit less than 60. Forget that the stock went up to 108, what matters to her is that the stock went down to 50 or just over 25 (post split) recently thus proving she is right all along!...by looking ahead...
By taking a longer view, it's easy to be right in AMAT, a company in a cyclical industry that grows and grows---growing in stock price in the upper part of the cycle and growing in market share of its business in the lower part of the cycle...My cousin (an AMAT engineer), relates from time to time about how his co-employee mortgaged his house, invested in AMAT and saw his investment ballooned to 3M (from less than 100K) in just a few years...One of us threaders related last year about how, in the late 70s, he left 10 shares (he sold 90 out of 100) in his account; that 10 shares multiplied to over 3000 (over 6000 post split now)...For us who bought at 54, scratching our heads with 10 fingers as the stock plummeted 50%, may be right after all when the stock hits 60, 80, 90, 100 again... |
