Then, think about what these three important people have said about the stock market. Many on Wall Street are beginning to ask that question. One of them is Arthur Levitt, chairman of the U.S. Securities and Exchange Commission. As the nation's top cop for the securities industry, his recent comments about Wall Street predictions are worth noting. Before I relate the chairman's comments, a little background is in order.
Stockbrokers tell their clients which stocks to buy and which to sell.
Analysts study companies to see how well they're doing, to determine whether the company's stock is worth buying. Brokers, who constitute the third division, are the workhorses of the three. They're a team. As you can imagine, companies don't like it when a brokerage firm's analyst issues a sell signal on their stock. The brokers start calling their clients, who start dumping the stock.