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Further Proof: You Can't Believe Brokerage Research

August 30, 2012 | About:
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.”

josb-barronscom-update-aug-29-2012-sourc

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-reuters-report-aug-29-2012-source-r

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.

josb-5-day-chart-source-morningstar.jpg

About the author:

Dr. Paul Price
http://www.RealMoneyPro.com
http://www.TalkMarkets.com
http://www.MutualFunds.com

Visit Dr. Paul Price's Website


Rating: 4.1/5 (20 votes)

Comments

superguru
Superguru - 2 years ago
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?

Dr. Paul Price
Dr. Paul Price premium member - 2 years ago


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.
Cogitator99
Cogitator99 - 2 years ago
Good find.
motivator
Motivator - 2 years ago
Wow, average people being hustled by the powerful/better informed. I'm stunned! >.<

Please leave your comment:


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