Quote:
Originally Posted by KC911
I'm not naive enough to think that a "little player" can beat the "big boys" in this "game", but like running from a bear in the woods, I'm just trying to be faster than "the lemmings", not the bear  |
The "big boys" don't necessarily have any advantage over a "little player" -- there are plenty of historical examples to demonstrate that. Consider, for instance, Enron; from:
http://www.forbes.com/2002/02/27/0227analysts.html
Despite their independence and the variance in their techniques, nearly every sell-side analyst reached the same conclusions about Enron in 2001, right up to the brink of its bankruptcy on Dec. 2. As of Oct. 18, all 15 analysts tracked by Thomson Financial/First Call rated Enron a "buy"--12 of the 15 called it a "strong buy." Even as late as Nov. 8, the date of Enron's disclosure that nearly five years of earnings would have to be recalculated, 11 of the 15 recommended buying the stock. (There were three "holds" and one "strong sell.")
from the same article:
Howard Schilit, president of the Center for Financial Research & Analysis, an independent research house (which did not follow Enron) testified that in a one-hour review of Enron's public filings before the start of the collapse, he found several red flags: $1 billion in related party revenues: two thirds of company profits in one quarter coming from unconsolidated affiliates; and negative cash flow despite more than $1 billion in reported profits.
"For any analyst to say there were no warning signs in the public filings, they could not have been reading the same public filings as I did," Schilit said.
"Bigness" is not the equivalent of "competent."