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Do fundie guys make market calls?

Posted By Barry Ritholtz On September 9, 2003 @ 4:29 pm In Finance | Comments Disabled

If you’ve been paying attention, you may have noticed a lot of the fundamental analysts’ recent upgrades. I get a very real sense that these raises were much more of a market call than legitimate upgrades based upon real fundamental improvements in these companies businesses.

Consider these: Goldman Sachs upgraded Cisco and Software; Cisco Systems was upped to buy from hold at Deutsche Bank; Intl Business Machines(IBM:NYSE) was upped to outperform from neutral at Credit Suisse First Boston; Both Soundview and Smith Barney ups the Chip Equipment stocks;

Are these fundamental analysts making a market timing call? Were their targets too low, and they feared the train was leaving the station without them?

I wonder if this is a classic overeaction . . . Are the fundie guys doing their research and channel checks, and boldly determining that a tech revival is upon us? Or are they playing the market timing game ? (note — unrelated to mutual funds market timing)

I’m not sure, but I thought I should at least raise the issue; It would be ironic that these guys suddenly get Bull Fever after a 40% rise in the Nazz . . .

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