Analyst opinions really annoy me! It is obvious they are meant to screw the average trader, not help him. GM is the latest example today. The stock is down 90% year to date. There are currently 11 analysts covering GM.

One has a BUY rating still (so we bought $20, $15, $10, do we buy $3 now?)
Five have a HOLD rating (good way to create tax losses!)
Three UNDERPERFORM (Underperform WHAT, the analysts track record?)
Two say SELL (after the stock has dropped 90%, gee thanks!)

The two brave Sell side analysts have come out with their report TODAY after the stock price has been decimated in the last two weeks. I don’t know about you but I’d prefer to hear the SELL rating two months ago when the stock was $14, not here at $4. Then again the reason for analyst ratings are to suck in fools to buy what their respective brokerage is selling. Think of analysts as Used Car Salesmen. Their rating reports are akin to the sticker you see on a 1984 Chevy; “Just like new, Only one owner! New paint!” Look under the hood and you see an engine with 500,000 miles on it.

2 comments

  1. Anonymous // November 10, 2008 at 9:58 AM  

    That is so true. I always ignore the analysts

  2. Anonymous // November 10, 2008 at 10:09 AM  

    GM problems have been known for a long time. Analysts do us no good unless the stock is going up all the time.