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Analysts Knew They Were Hyping Junk Stocks
from the no-big-surprise-there dept
While I'm sure it comes as no surprise to most people that Henry "Hype 'Em Up" Blodget was hyping up stocks that were worthless, it is surprising that he and his fellow analysts at Merrill Lynch were stupid enough to admit that in emails to each other. The emails have come out thanks to an investigation concerning exactly what these analysts were doing. They show that analysts referred to certain stocks as "a piece of junk" or "a piece of crap" while the firm was still promoting them as "strong buys" and making lots of money off of related trading. They even have an email where an analyst admits that many retail investors are probably "losing their retirement" thanks to their advice. Merrill Lynch's response is that these phrases were "taken out of context". Indeed. I think the necessary "context" is that they were raking in crazy amounts of cash.
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Analysts Knew They Were Hyping Junk Stocks
I don't know about anyone else, but when tech stocks were hot, I always had the uneasy feeling something was amiss. My thinking was along the lines that much of it was not backed by anything tangible. It seemed to me that people were investing emotionally, rather than logically.
I know this may be too simplistic (and yes, I was blonde at one time), but was my take on tech stocks.
Lea
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