There s a further reason why most analysts would look bad now, when the market has been heading generally down. Wall Street research has something of a built-in optimistic bias. This is in tune with the investing public s mindset. Outside of a relatively few sophisticated options traders and short-sellers, most people plan on making money by buying stocks that will rise in price. So they want to hear more about stocks going up, not the dogs they should avoid.
Corporate news has the same upbeat slant.
Companies will put out as much good news as they can, and they ll tell only as much bad news as they must. In the old days, companies could keep analysts posted privately on the sales and earnings outlook, so that forecasts and expectations could be quietly adjusted rather than bludgeoned with a news release that takes everyone by surprise. Under new disclosure rules, however, companies can t tell analysts anything important they wouldn t tell the public. The better analysts still may be about to deduce upcoming bad news from their study of income statements, balance sheets and industry data. But the less astute may look even worse without the crutch of quiet corporate guidance.