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Forum List » Value Ideas and Strategies Share and discuss value investing ideas and investing strategies.  
Further Proof: You Can't Believe Brokerage Research
Posted by: Dr. Paul Price
(IP Logged)
Date: August 30, 2012 08:33AM
Brokerage analysts are always looking for an edge to show they offer "value-added" information. If you’re not paying strict attention you might think they did. Here’s yet another example of how the cheating occurs.
Sterne, Agee & Leach made a bold call early Wednesday morning. They predicted Jos. A. Bank (JOSB)'s earnings would rise and they loved the shares at the current $41.63 price. As Will Shakespeare’s Hamlet once said, “Ay, there’s the rub.” 
As it turned out, JOSB had already reported, and Reuters had broadcast JOSB’s much better than expected earnings and same store sales. Their shares were up 13.5% in premarket trading. 
JOSB had a gap opening at $48.00 – up $6.37 or 15.3% from Tuesday’s close. Nobody could buy the stock today at anywhere close to the price where Sterne, Agee & Leach will take credit for putting on their recommendation. Anyone silly enough to act on their research blurb by buying at the open was down 1.17% by 4 p.m. Why did Barron's lend their good name to this deceptive press release? The day’s range was $47.29 to $49.48 with the intra-day low coming with just minutes to go. The chart speaks for itself. 
Re Further Proof You Can t Believe Brokerage Research
Posted by: superguru
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Date: August 30, 2012 11:11PM
But if analysts are making such big bucks, then some one is finding their work useful and paying for it. Correct? Who are their clients?
Re Further Proof You Can t Believe Brokerage Research
Posted by: Dr. Paul Price
(IP Logged)
Date: August 31, 2012 11:41AM
The analysts' real clients are their employers. That's who pay them. Fudging performance numbers makes them appear more successful and can lead to bigger salaries.
Re Further Proof You Can t Believe Brokerage Research
Posted by: Cogitator99
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Date: September 3, 2012 08:34PM
Good find.
Re Further Proof You Can t Believe Brokerage Research
Posted by: motivator
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Date: September 5, 2012 04:05PM
Wow, average people being hustled by the powerful/better informed. I'm stunned! >.<
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