The tiny number of maverick analysts issuing sell recommendations in these fervently positive times on Wall Street must remember to do one thing -- be right, or face being trampled by contemptuous bulls.

One analyst who is keenly aware of this is Michael Mayo, who heads up banks research at

Credit Suisse First Boston

.

On May 24, Mayo advised investors to sell four big names in the banking industry:

Citigroup

(C) - Get Report

,

Chase Manhattan

(CMB)

,

Bank One

(ONE) - Get Report

and

J.P. Morgan

(JPM) - Get Report

.

What's happened so far? Each of these institutions posted impressive second-quarter numbers in the past week that contain little concrete evidence to support the main pillars of Mayo's bearish analysis: a Y2K-related slowdown in business, lower efficiency gains and a deterioration in credit quality.

Mayo's move was brash -- and the lack of bad news in Q2 numbers makes his negative stance stand out even more. Few other high-profile sell-side analysts at bulge-bracket firms have told clients to offload a raft of big names at a time when they are posting some of their best-ever earnings. If Mayo is proven right over the next few six months -- and earnings do slow significantly -- he could earn a prophet-like status. If not, his reputation could suffer.

For a while after his sell recommendation was published, the four banks' shares fell. But anticipation of strong Q2 earnings generated a recovery and a deeper questioning of Mayo's position.

"I don't understand why he made this call at all," says Mark Davis, head of research at the

(BANCX)

Banc Stock Group fund, which doesn't hold any of the four banks.

"We don't necessarily disagree with some of what Mayo says, but he seems early and more aggressive than we are," says Scott Edgar, a manager on the

(SIFEX)

SIFE financial services fund, which owns each of the four banks except J.P. Morgan.

However, Mayo, who was ranked the top banking analyst in last year's

Institutional Investor

survey, says he's making "no change whatsoever" in his bearish appraisals. And he points out that he didn't expect the second quarter to be bad. Instead, he was early with his sell recommendations in order to give investors "a chance to sell into good news." (First Boston has no equity underwriting relationship with any of the four institutions.)

Anyone trading on Mayo's advice would be slightly ahead through Friday afternoon. While Bank One and J.P. Morgan are down 6% and 4.1%, respectively, since May 21, the trading day that preceded Mayo's call, Chase and Citigroup are up 4.1% and 3.6%.

Mayo believes the Q2 profits are unlikely to be bettered in the second half. He notes that Citi and Chase both mentioned in conference calls this week that Y2K could cause something of a slowdown later this year. Speaking about Citi, he says: "This is the first time the company has publicly indicated that Y2K could be a problem."

BancStock Group's Davis responds that even if the banks suffer from a Y2K-related slowdown in business, they will benefit from a surge of business in the first half of 2000 as they meet pent-up demand.

"It's entirely possible that something could happen regarding Y2K, but it'll be a one-time event," says SIFE's Edgar. "But it's really only an issue to investors with a time horizon under six months."

In addition, Q2 results for the four banks contain little to suggest worsening efficiency or credit quality. Expenses were reined in at Chase and J.P. Morgan in Q2, while merger-related savings seem to have boosted efficiency at Citi and Bank One. Asset quality indicators also aren't flashing any red lights.

And some remain suspicious of Mayo's timing. One rival New York-based analyst who requested anonymity says that Mayo's sell recommendations were "just a grab for airtime" designed to raise his profile in a bid to gain votes for the

Institutional Investor

rankings. (The rival analyst's institution hasn't done any equity underwriting for any of the four banks.)

But Mayo responds that his first place in

II

rankings, awarded well before the May sell notes, shows he doesn't need to resort to such tactics to do well.

And some investors are glad he's speaking out. "We don't have enough analysts making calls like Mayo's," says Dave Ellison, manager on the

(FBRFX)

FBR Financial Services fund, which owns Citi and Bank One. "There's too many analysts on one side of the fence."

This is undoubtedly so. Out of the 20-plus analysts covering Bank One, Citi and Chase, Mayo is the only one with a sell, according to

First Call

. On J.P. Morgan, he has the sole sell out of 13 analysts.

And Mayo's not a permabear who's been down on bank stocks while they have rallied. Indeed, his previous bullishness would have made investors money. He concludes: "It makes sense to take profits at a certain point. I think we're going to be proven right."

At the moment, Mayo's a heretic among sell-side analysts. But if the market moves his way, he would be venerated -- and, in the herd-like fashion of the Street, mimicked.