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The Organization of Analysts seems to have a "shoot the messenger" code of honor.

Here's a short summary of a story in today's WSJ
(Ex-Analyst at BNP Paribas Warned His Clients in August About Enron

In August 2001, a bond analyst, Daniel Scotto, for BNP Paribas in New York told his clients that Enron was lowered from "buy" to "neutral". (ENE was at about $40 at that time, it started its crash in mid-October; Skilling quit 2 weeks before Scotto's note.)

He also said that ENE could be considered "a source of funds" (i.e., a good place to pick up some $$$ to put into real stocks).

Scotto said that if he'd given a "sell" recommendation, he'd have been fired the same day. (But the WSJ article also says that Scotto told his clients they should sell ENE at any cost, and sell now.)

The firm denies everything and says they're surprised by the whole thing.

Firms want their analysts to say good things about stocks, because then the firms have a good chance at becoming advisers to the companies, which translates into income for the firms.

The WSJ article mentions the Enron conference call back in April, in which Skilling called one of the questioners an a**h*le.

My conclusion: Analysts are used car salesmen. Believe nothing they say, unless it's "sell", in which case you're probably way too late.

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