The Upshot: Investors' Analyst Agita Reaches Market Reporters

The emails are getting angrier.

Previous Upshots

The Upshot: Investors Can't Squeeze Numbers Out of Orange

The Upshot: Intel Finds Honesty Such a Lonely Word

The Upshot Archive

"I'm sick of listening to these s--t-for-brains analysts," wrote one reader, after reading analysts' comments in a recent story on Oracle's(ORCL) earnings. "They are overpaid, incompetent, arrogant a--h---s. So take your pathetic column and shove it. Analysts are as good as the weathermen. Do all of us a favor and shut the hell up."

C'mon, tell us how you really feel.

The same opinions likely could have been slapped on analysts since 1997, but it didn't seem to matter much when stocks were appreciating 25% a year. With the market sliding, individual investors are ratcheting up the hostility all around, creating the byproduct of berating reporters for talking to stock analysts about stocks.

That's a 180-degree turn from last fall. Back then, a story thought to be bearish would elicit emails that threw positive analyst recommendations in a reporter's face. One note, paraphrased, went something like this: "You're negative on VerticalNet(VERT), but what about Goldman Sachs having the stock on its recommended list? Why don't you report that?"

We didn't report on it because being on Goldman's recommended list didn't seem relevant at that point, not to mention that positive recommendations are pervasive on Wall Street. Of course, there's also always our ever-present suspicion that such recommendations are as much about soliciting banking business for their firms as they are about pointing investors to the right stocks.

Investors turning on analysts with such rancor may have dangerous implications. In addition to feeling duped by analysts who put unrealistic price targets on stocks without any fundamental justification, investors are now angry with journalists for simply talking to those analysts. After all, reporting on an analyst's actions or comments lends them credibility, a benefit investors apparently feel is no longer deserved.

It could get worse if the credibility issue spreads to the broader market, extending the ire of investors to the very system that employs analysts. If investors trust no one, it could turn on its head the once-slavish devotion with which they followed, say, Goldman Sachs strategist Abby Joseph Cohen or Merrill Lynch's Henry Blodget.

Will that hurt the overall market? Well, maybe that's a stretch based simply on an angry reader's email. But then again, talking to stock analysts about stocks never seemed that strange before.

>To order reprints of this article, click here: Reprints