Discussion in 'Stocks' started by ASusilovic, Feb 4, 2010.
Goldman upgrades Janus to buy from neutral
Goldman ups Franklin Resources to conviction buy
02-04-10 10:30 AM
Market down more than 200 points shortly after open.
GS may be "setting the stage" for some type of merger for those companies in the near future.
Anyone done any backtesting on Goldman upgrades?
I keep wishing Goldman recommends another GE long option position
why do people still follow what GS upgrades or downgrades? They are bunch of financial hooligans, I been around for a while and I have seen many times GS upgraded a stock and a month later, they downgraded the very same stock, honestly, there was not any fundamental changes in those companies. I guess there are still stupid asses everywhere who trades following those upgrade and downgrade, man, wise up, there are all just bullshits....
ANALysts are a lagging indicator whose purpose is to serve their paying clients. The following dramatization is based on ACTUAL ANALYST EVENTS:
11/30/09: Goldman Sachs upgrades X to Conviction Buy, saying steel prices have bottomed.
1/5/10: Analyst clients: "Hey, nice job helping X run up! We're aware that AKS and STLD became profitable last year, and are expected to be profitable this year and are trading at a fraction of the price of X shares. We also realize that X hasn't posted a profit in a year and isn't expected to be profitable this year either. But you know we started buying in early July 2008 when it dropped from $194 to $149 and now have 10 million shares at an average price of $75. We're so close to break even and really need to dump this pig. Can you give it another good push?" Goldman Sachs: "We can't do any better than 'conviction buy', but we'll make a few calls and see what we can get going."
1/8/10: J.P. Morgan raised its target on U.S. Steel (X) to $75 from $55.
1/12/10: BofA Merrill upgrades US Steel (X) to buy from neutral. Hikes X target to $80 from $45.
1/19/10: Deutsche Bank upgrades US Steel (X) to buy from hold. Firm also downgrades AK Steel (AKS) to hold from buy, citing lower margin potential vs peers, unlikelihood of a buyout in near term and rising Street sentiment.
This final upgrade on 1/19 pushes X near its previous high, but it fails to reach it, leaving behind a (gasp!) lower high.
1/20/10: X opens gapped down and closes even lower.
1/20/10: Analyst clients (frantically): "You gotta do something, this is looking bad. You KNOW a lower high is the kiss of death. We were so close. Help!" Goldman Sachs: "OK, we'll try to dredge up a few more upgrades..."
1/21/10: US Steel Raised To Buy From Neutral By Longbow > X
1/21/10: X opens a few pennies ahead of the previous day's close, tries to rise and sells off rapidly into the close, losing 9% in one day.
1/21/10: Analyst clients: "You #&%@ bastards! We dropping your services!"
1/22/10: United States Steel Corp. Cut To Buy From Conviction Buy By Goldman Sachs (Translation: "Dump your shares as quickly as possible before earnings without inciting panic.")
1/26/10: X opens gapped down 6% on (surprise) a much larger than expected loss and closes down nearly 6% more.
1/27/10: U.S. Steel Cut To Neutral From Buy by Goldman Sachs > X
To be continued...
Here's a possible scenario based on typical analyst ratings:
3/17/10: In an eerie moment of deja vu, US Steel (X) comes within pennies of its 52-week low of 16.66 and rapidly finds support as buyers come in on unusual volume.
3/18/10: U.S. Steel Cut To Sell From Neutral by Goldman Sachs > X
Separate names with a comma.