Wall Street Analysts are recruited from our best schools and/or companies. Their job is to follow a sector of the economy (like semiconductors) and make stock recommendations to their clients (allegedly anyone with an account at their institution). In case you were wondering, they get paid a lot of money for their insights.
Yet, according to the following study from The College of Business at San Diego State University Wall Streets' "Buy" rated stocks underperform stocks with "Hold" and "Sell" ratings.
In other words, at least during the period covered by the study, it was possible to make money by buying all the "Hold" and "Sell" rated stocks while selling short the "Buy" rated stocks.
Now you know.
The study was featured at Barron's Investors' Soapbox on December 11, 2008.
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