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Contrarian Indicator: Analyst Buy Ratings [view article]
...I sold out of my position in ETRADE in late '07 at a loss, because all the experts told me to. On 1-7-08, the stock traded at $2.07, and everyone including Jim Cramer ("I'd rather have a $2 lottery ticket than a share of ETRADE"), the CNBC resident geniuses ("Run from this stock as fast as you can!") . If you had done the opposite of what they told you to do, and put every penny you could beg, borrow, or steal into ETRADE on that very day, you could have sold it roughly 6 weeks later at $5.25, a 254% profit.
That is an annualized profit of 2,209%. I haven't seen any of the stocks Jim Cramer or the other experts recommend to their followers reap 2,200% annual gain for them. I suspect there were none.
Point is, my limited experience in the market suggests to me that the contrarian approach is at least as good as following the analysts' advice. An even better would be to totally ignore them. Mar 06 06:35 AM

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