analyst opinions on Yahoo Finance

[linuxtechanal]

I was wondering how reliable the analyst opinions are on Yahoo Finance. So just for fun, I kept track of the opinions on stocks in the Nasdaq 100 index and averaged them together each week. There is a little bit of missing data.

(Strong Buy) 1.0 - 5.0 (Sell)

I inverted the values so that a buy opinion would be higher on the chart than a sell opinion. I think it's interesting how the average opinion stayed between 2 and 3 as the market plummeted. Is 3 neutral? Also looks like a bit of opinion flip flopping was going on from July to October.

 

[linuxtechanal]

 

[rickf]

Over the past 3 years or so I've come to believe that Wall Street 'analysts' with few exceptions are total idiots who do not "know" the companies or industries they cover.

What does a newly-minted MBA know about the telco, pharma, internet, or mining industry? Probably nothing. Have they ever worked in the field? Doubtful. Yet they prognosticate about sector trends, costs, issues, and such and have their comments taken as 'gospel' by funds and the retail investor.

I can't say enough good things about the book last year called 'Full of Bull' -- which really takes on the scam known as wall street analysis.

 

[CET]

The analyst opinions on Yahoo have nothing to do with technical analysis. As far as fundamentals their opinions are better than nothing but probably not much. The timing of too many upgrades and downgrades makes it hard to believe that most of them don't have an agenda.

 

[nutmeg]

I took it one step further. I tracked analysts opinions and ratings (not just yahoo, but morning star, msn, misc brokers) on stocks prior to bankruptcy or that were rumored to go bk.

The results were dismal. Some had issued buy ratings on companies that went bk within weeks.

 

[linuxtechanal]

Quote from CET:

The analyst opinions on Yahoo have nothing to do with technical analysis.

Sure it does. Sentiment Indicator. That is, if the opinions are real, and not some sales pitch.