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To: Hawk who wrote (121293)	12/8/2000 3:37:03 PM
From: 2maclean	Respond to of 186894

Hawk, I think GVTucker has, as a practitioner, mentioned a few times how little he values analysts' buy/sell recommendations. Let me add a couple of observations: 1) The market is a discounting mechanism, that, on average, looks out about 6 months (in times of extreme uncertainty, maybe a week, in times of euphoria, forever). This means that the market often anticipates events. However, while many analysts know what has happened, and maybe what is happening, when it comes to anticipating changes, they tend often to be trend-followers: when it is clear that things have changed, the damage has already been done. 2) Recently, the WSJ (no, I don't have a post) noted a study that suggested that analysts at firms with little or no investment banking business had better track records than those at large investment banks. To a degree, this may be due to the old "conflict of interest" issue. It could also be, however, that what the "name" analysts at the big firms are being paid for is more bringing in deals (where the money is made) than making winning calls (the institutional brokerage business in an era of negotiated rates is not a big money maker). To be sure, the "name" analysts had to make some good, high profile calls (usually "buys") to become "names", but once established, that becomes less important (although certainly not trivial- they can't go on making bad call after bad call). Also. bear in mind that, for a variety of reasons, good "buy" calls are more highly valued than good "sells". Stuart