Investors have paid analysts from Wall Street to evaluate mines of data and come up with the right ideas of which stocks are going to increase and which should be avoided. Although analysts have predicted that certain stocks will be successful, the stocks have failed and brought frustration in the minds of financial researchers and investors.
"Owning the most loved stocks has been a losing trade in the current market environment," Bespoke Investment Group has stated in one of their special reports.
According to Bespoke, the 50 stocks indicated in the S&P 500 as the ones predicted to have the best analyst ratings, have decreased to an average of 2.4% in the months since the Nasdaq hit high on March 5. During that time frame, the 50 stocks that have received the most negative ratings, increased with stable 3.5%.
This outcome has been surprising for numerous financial professionals and Wall Street experts, who have also attributed the current fluctuation in the financial markets to the lack of interest in booming industries such as bio and Internet technologies, and the increased interest in ''dull'' markets such as household utilities.
"With the benefit of hindsight, it's clear we are paying the price this year for the tremendous gains of last year," according to Ed Yardeni, president of the investment advisory company Yardeni Research.
One example of a Wall Street ''mis-prediction'' is the social media giant Facebook. The company has tumbled around 17% after March 5, though analysts have forecast 44 buy ratings in comparison to the outcome of nine hold ratings, without any sales calls.
Priceline.com's shares have decreased 17% after Nasdaq hit high although the predictions for these stocks have been remarkably good.
The discrepancies between predictions and results show the current instability of the stock market and its lack of predictability. In this current economic and political setting, it becomes hard to predict which which stocks will hit high on the market and which ones will go down.
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