What do analysts know? Do they really have the ability to foretell the future of the stock market, the economy or even an individual stock more than you or me? I think the only advantage they have over us is that they get information a little before us but that doesn’t really help in their ratings. Most upgrades/downgrades of stock are too late to do anything about them
Until the housing bubble collapsed, there was no housing bubble. As oil prices continue to rise, today’s opinion is that there is no oil bubble and speculation may (or may not?) play as big a role in rising oil prices. Will Oil hit 200 next or will it hit 100? Are we in a recession? Were we in a recession a month ago? Are we headed towards a recession? Analysts have no definitive answers, you can always find an analysts with contradicting opinions and mostly their guess is not much better than yours or mine.
So what must an investor do? Personally, I’ve stopped listening to analyst opinions. Read the news, separate fact from speculation and you have everything you need. Buy low (I’ve been doing this part correctly for the most part), sell high (this is something I really need to learn, though I am improving). I’m slowly turning into part value investor, buying beated down quality stocks and part speculator investing in emerging markets and small companies with potential.