Why you shouldn’t buy stocks based on ratings
The “Lake Wobegone” Market
A quick reminder that you should completely ignore analyst BUY and SELL ratings.
Catalpa Capital Advisorshas gone through all the analyst ratings on S&P 500 stocks that are found in Bloomberg, and averaged them together to find that a stunning percentage of stocks are seen as being BUYS or OUTPERFORMS.
According to Wall Street analysts, 92.6% of the companies in the S&P 500 Index are above average. Compared to the children in radio’s famed fictional town of Lake Wobegon, all of whom are above average, the stocks in the index come up short. But just barely.