The Wall Street Journal, or have just seen on CNBC. Never buy a stock based on an analyst upgrade, or sell a stock based on an analyst downgrade. I’ve seen analysts finally downgrade a stock only once it has fallen 50%. Analysts are lagging indicators. They tend to upgrade stocks that have already moved up, and downgrade stocks that have already moved down. There is also a strong selection bias among analysts. The best analysts get hired by hedge funds, and you never hear from them again. The worst analysts stay at the banks or brokerage houses, and continue to dispense their mediocre advice.
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