I have friends on both sides of the buy/sell side argument so writing any critical of the industry didn’t go over well with them from a professional perspective (we’re all still friends)

What I’m taking a strong position with are the rampant conflicts of interest (which I’m sure Shank is very aware of) that exist which aren’t something that filter down to retail or institutional investors who are paying directly or indirectly for the information. What we see on TV or in the news is a “dumbed down” version of what many analysts understand about a company or sector. If they went into too much detail people would go cross-eyed and switch the channel – they say what they say because that’s what sells.

You don’t have to be brilliant or at the top of your class to be a successful investor. I’ve lost count on the number of times I’ve discussed a company with a peer and they’re so FOS in their $2500 suit that they forget the significance of gross margins and qualitative factors. That was my motivation for writing about margins in my Coca-Cola analysis. When you look at them the KO competitive advantage stares you straight in the face regardless of what Pepsico attempts to do.

S&P, DBRS, Morningstarr is not included in that group as the research they publish is generally amaturish in nature – as the commenter above pointed out.

I disagree with this statement: “The DIYers, many of whom are bloggers or commentators, probably have a better handle on the company than the analysts do since they are “normal people” and not subject to glass tower syndrome which Brad alluded to…”

I doubt many personal finance bloggers have a better handle on the company. The range and depth of an analysts understanding would surprise many. This doesn’t always translate into making correct buy/sell calls, but think of the smartest people you’ve met and then the top of the class of those people. Those are the analysts you’ll find at the big 6 banks. While some bloggers could rival those analysts, I wouldn’t say many of the bloggers etc. would be better analysts. It’s not as easy as it looks and you’d be amazed at the minute details you get questioned on. Everything from a particular link or # in a financial statement, to the accounting methods, to management strategy in a competitor you don’t even cover, to the macro picture, to potential takeover/M&A candidates, to shifting consumer habits, to changing input costs of the inputs into the costs that the company must bear (i.e. the price of tolume (sp) that goes into mattress foam which is an input cost to a matress manufacture) and so on and so on……most people with non-analyst based jobs would not be able to regualary stay on top and understand the depth of all this material. I say most, not all.

I always have it in the back of my mind when reading analysts research, “OK, who’s paying for you to write this?”
Most analysts reports are too rosy and focus too much on the upside and little on the downside.
I’ve heard at times that some analysts can be outted so to speak if they give a company a sell rating, especially if they are assigned to report on that company by their firm.
All the more reason to follow the above advice of TMWTFF, WDAMMG and TMW.

Good luck Preet!