From I heart Wall Street comes a good point about taking Wall Street research reports with a grain of salt:
For all of the recommendations & observations that are made in Wall Street publications it’s what you need to read between the lines that’s the most crucial.
See, the way most of the big banks are set up they have an equally impressive bench of bears & bulls. This is not an accident. Depending on what foot the bank wants to insert into their mouth, they selective pull from their analyst/economist/strategist quiver whenever the markets are towing the line of whomever is right or will resonate for the day.
What is their objective?
The point in either case, with retail investors or institutional clients, is to get you to do something, anything, or at the very least fill your head with mantra-like talking points (Insert: “buy when there is blood in the streets”, “overdone”, “compelling valuation”) for why the market is doing what it’s doing.
This highlights one of the important reasons for using systematic relative strength models: subjectivity is removed from the process and buy and sell decisions are driven by models where price is the sole input.
HT: Abnormal Returns
