Devoted to understanding the basics and fundamentals of investing

TechTrader writes that the world has changed since Len Zack did his research on earnings estimates in the late '70s and that it also changes during the business cycle.  The analyst coverage waxes and wanes depending on whether bull or bear conditions prevail.

TechTrader, your observations are true, but I differ with your conclusions.  I included the last 5 year returns to show that the recommendations produce alpha.  I don't have sufficient data to calculate the Sharpe ratio, but it is probably higher than for the overall S&P 500.  The Zack website includes 18 years of results.  As Yogi Berra said, "You could check it out."

Tomorrow I'll write up another organization who makes their bread and butter in a similar fashion.  They have similar research and also produce alpha.  Time and more data may prove me wrong, but for now, I'm a believer.