by Larry Swing - July 24, 2005

Education

A recent study published in the Journal of Financial Economics finds that returns on historic analyst recommendations are related to returns on future analyst recommendations by the same analyst.  Unsurprisingly, the extent of this performance persistence is related to the length of the analyst's track record.  Five-year track records are much better than 1-year track records in predicting future performance.

So next time you buy a stock based on an analyst recommendation - look at the returns on historic recommendations.

Reference:
Do security analysts exhibit persistent differences in stock picking ability?  By: Mikhail, Michael B.; Walther, Beverly R.; Willis, Richard H.. Journal of Financial Economics, Oct2004, Vol. 74 Issue 1, p67, 25p

Analyses of HOLDRs

BBH:  Bearish.  (Biotechnology)

SwingTracker
MrSwings Real-Time Stock Charts RISK-FREE TRIAL featuring one-click access to Larry Swing's profit-generating indicators - Force Index, EquiVolume, True Strength Index

BDH:  Neutral.  (Broadband)

BHH:  Neutral.  (Business to Business)

EKH:  Neutral.  (European Stocks)

HHH:  Neutral.  (Internet)

IAH:  Neutral.  (Internet Architecture)

IIH:   Neutral.  (Internet Infrastructure)

OIH:  Neutral.  (Oil Services)

PPH:  Neutral.  (Pharmaceuticals)

RKH:  Neutral.  (Regional Banks)

RTH:  Neutral.  (Retail)

SMH:  Neutral.  (Semiconductors)

SWH:  Neutral.  (Software)

TTH:  Neutral.  (Telecommunications)

UTH:  Neutral.  (Utilities)

WMH:  Neutral.  (Wireless)

Analyses of Individual Stocks

Bullish Stocks

QCOM

• Reverse Head and Shoulders pattern
• Strong volume
• Positive MACD crossover