Don’t trust your analysts:

Don’t trust your analysts:

· CAN'T really trust your analyst, because he may have a stake in his bullishness, his employer may have some kind of arrangement with the company

· The trouble is the analyst is working for the firm that gives him that fat paycheck, and not for you, and that creates complications and conflicts.

· Analysts must earn their keep by being on good terms with the firms they cover, and that usually means pressure for supportive commentaries. Keep this in mind the next time you receive a glowing report on one or another company, with that disclaimer saying, "The information contained herein is based on sources believed to be reliable, but is neither all-inclusive nor guaranteed by our firm . . ." but ends with words like this: "We have been an underwriter, manager, or co-manager, or have previously placed securities of the company within the last three years, or were a previous underwriter of this company."

· "The analysts just started out way too optimistic, possibly because they are pushing stocks or have investment banking relationships with their companies."

· Being negative makes enemies of managements; switching customers deal. "If you put out a negative on the stock, people who own the stock hate you. Management hates you. And the people who don't own the stock don't care,"

· Another problem securities analysts have to guard against is the tendency to fall in love with the firms they are following.

Most analysts depend upon the company as their prime source of information. Often