I always thought GS used their conviction buy list recommendation to get them and their biggest clients out of a long position in those stocks. (in effect generating a top whilst being out of the stock.)
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1092744 Analyst Recommendations, Mutual Fund Herding, and Overreaction in Stock Prices February 13, 2008 From the abstract: "Specifically, mutual funds "herd" (trade together) into stocks with consensus analyst upgrades and (especially) herd out of stocks with consensus downgrades, controlling for common investment signals that affect both analyst revisions and mutual fund herding. Further, upgraded stocks bought by herds initially outperform, then underperform their size, book-to-market, and momentum benchmarks, while downgraded stocks that are heavily sold exhibit the opposite pattern."
Interesting. Thanks for posting that abstract. Its a very interesting tug of war going on behind the financials/housing and energy/ag.
Analysts can recommend anything. It is up to the discerning trader to know which ones are worthwhile and which aren't.