Folks, we are on our own.

I have always contended that analysts' ratings are crap. I've written and talked about this for years. Yet, somehow, I am supposed to care what some backroom number cruncher thinks. So here is a thought experiment. I decided what the average rating was for each constituent of the NASDAQ 100 on November 19, 2021. The date is important because that is when the NASDAQ hit an all-time high.

The average rating for the typical NASDAQ was a “Strong Buy”. Since then the average total loss for each company is -9.88%. 63 companies were rated as “Strong Buy” and 37 were rated as “Buy”. No were rated as “Hold”, “Sell”, or “Strong Sell”.

If one were to look at the “Strong Buy”, those companies averaged a total loss of -11.44%, while the 37 “Buy” stocks averaged a loss of -7.22%.

If we were to go back one full year, the “Strong Buy” stocks averaged a loss of -3.48%, while the “Buy” stocks average a total gain of 4.59%. Please note, that none of these differences are significant. Having said that, my experience tells me to only pay attention to ratings if they are “Sell” or “Strong Sell”, and don't avoid companies that have a “Hold” rating.