Investors had no way to bring the two companies more in line with each other because PCCW isn't on the designated list of shares that can be sold short. In Tokyo, shares collapse and then go up in a vacuum. If you get out, you may not be able to get back in and cover yourself. I'd prefer to pick stocks to buy and sell on the basis of earnings. For investors trying to make sense of share prices, information in analysts' reports may be as suspect as valuations.
Investment banks are as dependent on a rising stockmarket as their new clients are.
Today, many investment banks are expanding their private-equity arms and are taking stakes in New Economy companies before they bring them to the market. Moreover, the investment banks are now asking the firms they take public for shares rather than cash fees, further undermining the likelihood of objective research. Even conscientious fund managers at mutual-fund companies are being forced to jump on the bandwagon. Because mutual funds receive inflows when the market is hot and face redemptions when it is not, they are forced to chase the market. Even so some fund managers, such as those at Citibank Private Bank in Singapore believe it is too early to shift to a conservative stance.