Thursday, July 13, 2006
motley fool finally blows the whistle on wallstreet
note they are also part of the problem,, use their readership to pump stocks.
anyway..today and for several weeks anals have been upgrading REITS,,, they are hoping traders chase the toppy charts knowing full well that 'value investors' can do math,, and have left the building. today MS puts out a 'buy rating on several' because retail 'investors' like them, jim cramer pumped a few on madmoney last night,,,, i dont think he did his 1 hour of homework-----does he ever do real homework? no matter tonight he will find a new pony for traders to switch too.
back to motleyfOOL
So is Wall Street just stupid?
No. On the contrary, the analysts working on the Street are pretty bright -- but that doesn't necessarily work to your advantage.
You see, just because a sell-side analyst believes a stock is a dud, that doesn't necessarily mean he's going to clue you in to this fact. Think back to that 2002 TV ad from Charles Schwab, where the pinstriped broker tells his analyst: "Let's put some lipstick on this pig!" That's how the game was played pre-millennium. Analysts might have had private reservations -- heck, they might have had a private case of the giggles -- about the prospects for a stock. But that certainly didn't mean they were going to rate it a sell.
Remember, these people have commissions to earn. And they don't make commissions by telling people who don't own a stock that they shouldn't own it. They make commissions by telling people who don't own a stock that they need to buy it right now.
(((my note: anals have hinted/noted to pulling the pump&scalp game on cnbc tv,, even 1 anal noted a couple of months ago that dd isnt even done, this issue came up during a 'paid research' issue that slammed some company NO SUPRISE!! ))
And of course, if their private belief that the company is doomed turns out to be right, there's plenty of time down the road to make a second commission by opining that the circumstances have now changed, and it's time to sell that stock they told you to buy three months ago.
,,,,
Gurus gone mild
But the desire to make sales and earn commissions is only half the story. The other reason that Wall Street analysts tend to make bad calls in public -- even when they're right in private -- is the fact that they are (not to put too fine a point on it) a bunch of desk-bound, paycheck-driven bureaucrats.
,,,
Herd mentality
To see why that's so, let's turn for a moment to legendary investor and former head of the Fidelity Magellan fund, Peter Lynch. He summed up Wall Street analysts' thinking on questions such as the Intel/ADM dilemma thusly: "Success is one thing, but it's more important not to look bad if you fail."
Sure, an analyst could have made his clients a lot of money by seeing the value inside ADM, the potential for outsized returns just waiting to be unlocked. But what if the analyst was wrong? When all of your colleagues are pointing out a company's problems, do you go out on a limb and say: "I beg to differ"? Probably not. Because if you're wrong, you'll be begging -- begging for your job.
Now contrast that with what happens when an analyst puts a "buy" recommendation on a stock such as XM Satellite Radio (Nasdaq: XMSR), which in February announced a widened loss and the resignation of a board member -- and has been falling ever since. And yet in the current month, analysts have 24 "buy" ratings on the stock, 10 "holds," and just a single sell. Now if everyone is sure that a stock will go up, and it does, it's all good. On the other hand, if the stock somehow tanks, everyone just gasps in mock amazement: "Wow. XM really made a mess of things."
See the change in emphasis? If an analyst is right in a crowd, he's just right. But if he's wrong in a crowd, the analyst -- and everyone else who was wrong along with him -- chants in unison: "We didn't do anything wrong. The company screwed up." Or, as a Merrill Lynch analyst wrote back in February, "We hope that an insider disagreement could force a shift in strategy."
Thus, analysts have learned that there's safety in numbers. The cow that wanders from the herd gets eaten by wolves (or thrown to them by an irate mutual fund manager). But as long as the analyst sticks with the rest of the cattle, it doesn't much matter whether the herd's moving in the right direction or the wrong -- the analyst's job is safe.
Be the cowboy, not the cow
As an individual investor, however, you don't have to be part of the herd. Like a cowboy circling on the outside, you can watch as the cows shamble to and fro, yet move independently yourself. When the analysts are all chanting "buy, buy" and charging toward a cliff, you can just step out of the way. And when they're bellowing "sell, sell" and rushing off to greener pastures on the other side of some fence, you can wait until they're gone and examine what they're leaving behind. Could be that you'll find it right tasty.
http://www.fool.com/news/commentary/2006/commentary06070805.htm?source=eptyholnk303100&logvisit=y&npu=y
http://biz.yahoo.com/ap/060712/telerate.html?.v=2
Wednesday's Money Rates
Wednesday July 12, 5:08 pm ET
NEW YORK (AP) --
Money rates for Wednesday as reported by Telerate:
Prime Rate: 8.25
Discount Rate Primary: 6.25
Discount Rate Secondary: 6.75
Broker call loan rate: 7.00
Federal funds market rate:
High 5.25 Low 5.25 Last 5.25
Dealers commercial paper:
30-180 days: 5.20-5.34
Commercial paper by finance company:
30-270 days: 2.14-2.55
Bankers acceptances dealer indications:
30 days, 5.32
60 days, 5.36
90 days, 5.38
120 days, 5.41
150 days, 5.41
180 days, 5.42
Certificates of Deposit Primary:
30 days, 2.19
90 days, 2.91
180 days, 3.13
Certificates of Deposit by dealer:
30 days, 5.34
60 days, 5.42
90 days, 5.48
120 days, 5.53
150 days, 5.56
180 days, 5.59
Eurodollar rates:
Overnight, 5.19-5.25
1 month, 5.30-5.32
3 months, 5.47-5.49
6 months, 5.59-5.63
1 year, 5.70-5.75
London Interbk Offered Rate:
3 months, 5.50
6 months, 5.61
1 year, 5.70
Treasury Bill auction results:
average discount rate:
3-month as of July 10: 4.925
6-month as of July 10: 5.105
Treasury Bill annualized rate on weekly average basis, yield adjusted for
constant maturity, 1-year, as of July 10: 5.27
Treas. Billmarket rate, 6 Mos: 5.09-5.08
Treas. Notemarket rate, 10-year as of 5pm :5.10
Fannie Mae 30 year mortgage commitments:
30 days, 6.71
60 days, 6.73
Fed Home Loan 11th District Cost of Funds:
As of June 30: 3.884
Money market fund:
Merrill Lynch Ready Assets:
30 day average yield: 4.42
x - holiday
n.a. - not available
anyway..today and for several weeks anals have been upgrading REITS,,, they are hoping traders chase the toppy charts knowing full well that 'value investors' can do math,, and have left the building. today MS puts out a 'buy rating on several' because retail 'investors' like them, jim cramer pumped a few on madmoney last night,,,, i dont think he did his 1 hour of homework-----does he ever do real homework? no matter tonight he will find a new pony for traders to switch too.
back to motleyfOOL
So is Wall Street just stupid?
No. On the contrary, the analysts working on the Street are pretty bright -- but that doesn't necessarily work to your advantage.
You see, just because a sell-side analyst believes a stock is a dud, that doesn't necessarily mean he's going to clue you in to this fact. Think back to that 2002 TV ad from Charles Schwab, where the pinstriped broker tells his analyst: "Let's put some lipstick on this pig!" That's how the game was played pre-millennium. Analysts might have had private reservations -- heck, they might have had a private case of the giggles -- about the prospects for a stock. But that certainly didn't mean they were going to rate it a sell.
Remember, these people have commissions to earn. And they don't make commissions by telling people who don't own a stock that they shouldn't own it. They make commissions by telling people who don't own a stock that they need to buy it right now.
(((my note: anals have hinted/noted to pulling the pump&scalp game on cnbc tv,, even 1 anal noted a couple of months ago that dd isnt even done, this issue came up during a 'paid research' issue that slammed some company NO SUPRISE!! ))
And of course, if their private belief that the company is doomed turns out to be right, there's plenty of time down the road to make a second commission by opining that the circumstances have now changed, and it's time to sell that stock they told you to buy three months ago.
,,,,
Gurus gone mild
But the desire to make sales and earn commissions is only half the story. The other reason that Wall Street analysts tend to make bad calls in public -- even when they're right in private -- is the fact that they are (not to put too fine a point on it) a bunch of desk-bound, paycheck-driven bureaucrats.
,,,
Herd mentality
To see why that's so, let's turn for a moment to legendary investor and former head of the Fidelity Magellan fund, Peter Lynch. He summed up Wall Street analysts' thinking on questions such as the Intel/ADM dilemma thusly: "Success is one thing, but it's more important not to look bad if you fail."
Sure, an analyst could have made his clients a lot of money by seeing the value inside ADM, the potential for outsized returns just waiting to be unlocked. But what if the analyst was wrong? When all of your colleagues are pointing out a company's problems, do you go out on a limb and say: "I beg to differ"? Probably not. Because if you're wrong, you'll be begging -- begging for your job.
Now contrast that with what happens when an analyst puts a "buy" recommendation on a stock such as XM Satellite Radio (Nasdaq: XMSR), which in February announced a widened loss and the resignation of a board member -- and has been falling ever since. And yet in the current month, analysts have 24 "buy" ratings on the stock, 10 "holds," and just a single sell. Now if everyone is sure that a stock will go up, and it does, it's all good. On the other hand, if the stock somehow tanks, everyone just gasps in mock amazement: "Wow. XM really made a mess of things."
See the change in emphasis? If an analyst is right in a crowd, he's just right. But if he's wrong in a crowd, the analyst -- and everyone else who was wrong along with him -- chants in unison: "We didn't do anything wrong. The company screwed up." Or, as a Merrill Lynch analyst wrote back in February, "We hope that an insider disagreement could force a shift in strategy."
Thus, analysts have learned that there's safety in numbers. The cow that wanders from the herd gets eaten by wolves (or thrown to them by an irate mutual fund manager). But as long as the analyst sticks with the rest of the cattle, it doesn't much matter whether the herd's moving in the right direction or the wrong -- the analyst's job is safe.
Be the cowboy, not the cow
As an individual investor, however, you don't have to be part of the herd. Like a cowboy circling on the outside, you can watch as the cows shamble to and fro, yet move independently yourself. When the analysts are all chanting "buy, buy" and charging toward a cliff, you can just step out of the way. And when they're bellowing "sell, sell" and rushing off to greener pastures on the other side of some fence, you can wait until they're gone and examine what they're leaving behind. Could be that you'll find it right tasty.
http://www.fool.com/news/commentary/2006/commentary06070805.htm?source=eptyholnk303100&logvisit=y&npu=y
http://biz.yahoo.com/ap/060712/telerate.html?.v=2
Wednesday's Money Rates
Wednesday July 12, 5:08 pm ET
NEW YORK (AP) --
Money rates for Wednesday as reported by Telerate:
Prime Rate: 8.25
Discount Rate Primary: 6.25
Discount Rate Secondary: 6.75
Broker call loan rate: 7.00
Federal funds market rate:
High 5.25 Low 5.25 Last 5.25
Dealers commercial paper:
30-180 days: 5.20-5.34
Commercial paper by finance company:
30-270 days: 2.14-2.55
Bankers acceptances dealer indications:
30 days, 5.32
60 days, 5.36
90 days, 5.38
120 days, 5.41
150 days, 5.41
180 days, 5.42
Certificates of Deposit Primary:
30 days, 2.19
90 days, 2.91
180 days, 3.13
Certificates of Deposit by dealer:
30 days, 5.34
60 days, 5.42
90 days, 5.48
120 days, 5.53
150 days, 5.56
180 days, 5.59
Eurodollar rates:
Overnight, 5.19-5.25
1 month, 5.30-5.32
3 months, 5.47-5.49
6 months, 5.59-5.63
1 year, 5.70-5.75
London Interbk Offered Rate:
3 months, 5.50
6 months, 5.61
1 year, 5.70
Treasury Bill auction results:
average discount rate:
3-month as of July 10: 4.925
6-month as of July 10: 5.105
Treasury Bill annualized rate on weekly average basis, yield adjusted for
constant maturity, 1-year, as of July 10: 5.27
Treas. Billmarket rate, 6 Mos: 5.09-5.08
Treas. Notemarket rate, 10-year as of 5pm :5.10
Fannie Mae 30 year mortgage commitments:
30 days, 6.71
60 days, 6.73
Fed Home Loan 11th District Cost of Funds:
As of June 30: 3.884
Money market fund:
Merrill Lynch Ready Assets:
30 day average yield: 4.42
x - holiday
n.a. - not available
# posted by tagthatstock @ 4:37 AM 
