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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: JPitcairn who wrote (43272)	6/7/2001 12:28:29 PM
From: Knight	Read Replies (1) \| Respond to of 54805

Here's another article on analysts recommendations from James Glassman (of FOLIOfn). Glassman cites research going back beyond 1997, and comes to a somewhat different conclusion: While analysts should tell us a lot more about their own holdings and other conflicts of interest, their judgments, overall, should be treated with respect - even though it can be tough to profit from them. One interesting observation from the article: But, write the authors, "After a string of years in which security analysts' top stock picks significantly outperformed their pans, the year 2000 was a disaster. During that year, the stocks least favorably recommended stocks by analysts earned an annual market-adjusted return of 48.66 percent while the stocks most highly recommended fell 31.20 percent, a return difference of almost 80 percentage points.* What happened? It seems to have been just one of those years. A true outlier, as economists say, 2000 produced returns for the highest-rated and lowest-rated stocks that were 'five standard deviations' lower and higher than the returns for the prior 14 years studied. Think of the worst hurricane in 1,000 years, and you'll get the idea. foliofn.com