Analysts No Better Than Groundhogs Predicting Future

Discussion
Feb 03, 2003
George Anderson

By George Anderson


A column in the Pittsburgh Post-Gazette contends that when it comes to predicting the future, Wall Street analysts and groundhogs looking for their shadows have a lot in common.


The columnist, Lauren Rudd, wrote, “After last week’s State of the Union message by President Bush, Wall Street lost no time in moaning about how poorly markets are going to do going forward.” She added, “You (investors) should refuse to engage in that sort of discourse, preferring instead to spend your time uncovering those companies whose fundamentals and past record of accomplishment indicate that they are destined to do well.”


Moderator’s Comment: What are your thoughts on analysts
and their influence on a company’s valuation? How does the system of rating
and reporting need changing, if at all?


Last week, the stock price of Wild Oats jumped eight percent
in a day because a single analyst changed the retailers rating from sell to
neutral.
[George
Anderson – Moderator
]

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