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The Sell Side Still Says ‘Buy’
Posted By Barry Ritholtz On April 13, 2004 @ 8:57 am In Finance | Comments Disabled
Here’s another interesting news item that slipped in under the radar: The Sell Side Still Says ‘Buy’ .
As the accompanying table (courtesy of Barron’s) makes clear, fundamental Analysts have become somewhat less inclined to say “Sell.” Analysts gave “Sell” or “Strong Sell” ratings to only 9.4% of stocks in March 2004, compared to 10.3% a year earlier.
I’m the last person to defend my Fundie brethren; However, the time to cry “Sell” would not be at an early phase of what many believe (but not me) to be a multi-year expansion. Indeed, it would be silly to have a lot of sells in the midst of a powerful rally.
So what we really are complaining about here is this: People who’s job it is to analyze individual companies within a narrow sector do not have a good ability to determine when the economy’s overall expansion (or contraction) begins to end and subsequently reverse. Phrased differently, these folks cannot tell the difference between a mere Market Rally and a more enduring Bull Market. (Not that its really their jobs to tell)
Of course, there must be some stocks worthy of the “Sell” rating — but more than 1 out of 10? I dunno . . .
Wall Street Bulls Ahead
|As of March 1, 2003||As of March 1, 2004|
|# of Recs||% of Total||# of Recs||% of Total|
Source: Thomson First Call
The Sell Side Still Says ‘Buy’ 
Barron’s Weekday Trader, April 8, 2004
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