Don't Be a Lemming on Goldman Sachs

Updates to add further information about contents of note, fresh stock price.

NEW YORK (TheStreet) -- It is a sad truth of today's market that some investors might have benefited from betting against Goldman Sachs (GS) stock Tuesday, without having any idea why.

Word emerged early Tuesday morning that influential bank analyst Meredith Whitney had cut her rating on Goldman shares to neutral from buy. It was the only stock on which she held a favorable rating.

But while Whitney provides details of her ratings decisions to clients who pay for her research, she provides the media with a blank note headlined "GS: Downgrading Shares To Neutral From Buy."

TheStreet.com, however, has obtained a copy of the report, which based the downgrade solely on valuation. Goldman shares slumped 2.7% to an intraday low of $185.10 by noon. More recently, the stock had regained some ground, trading down 2.1% at $186.24.

"At $190, shares have exceeded our $186 12-month price target, and we believe upside could be limited over the medium term," Whitney wrote in the report. "Specifically, we invoke a 'why be greedy' rationale with such a stunning move in shares over such a short period of time."

Since Whitney earns her keep with her insightful calls, it makes sense that she'd want to give her clients more and better access. But, since her calls are so influential, they can dramatically affect a stock's movement over the short term; a reality that leaves ordinary retail investors blindly chasing the movements of the big guys.

Though not as discriminatory as controversial practices like flash trading, which allows some traders to obtain information and make bets before the rest of the market, proprietary analyst research that spurs huge market swings tends to have the same effect.