There Are No Gurus

If there was ever an argument that you should rely on independent newsletters for guidance about financial markets, such as The Diary of a Mad Hedge Fund Trader, and not traditional brokerage houses, take a look at the chart below from JPMorgan.

It shows that despite all of the reforms passed after the dotcom crash and the Great Financial Crisis, less than 3% of broker reports come with “sell” or “hold/sell” ratings. If an investment bank’s analyst dislikes a stock, they will simply drop coverage or lose the file behind the radiator, rather than lose potentially lucrative business or risk potential lawsuits.

If individual investors are going to have a prayer of keeping their heads above water in the “new normal,” it will only be through studying truly unbiased sources and drawing their own conclusions. Despite many pretenders, there are no real “gurus” out there, no matter how hard you look.

If this reality is too hard to face, get used to the 3.90% you get with 90-day US Treasury Bills.

No risk equals no gain.