Time to Declare Stock Market Councils

 | Jul 09, 2013 | 8:10 AM EDT  | Comments
  • Comment
  • Print Print
  • Print
Stock quotes in this article:

goog

,

tsla

,

aapl

,

isrg

Sometimes I wish there were an analyst Council, perhaps by stock, where everyone can come together and agree that certain stocks must go higher.

Consider this morning with Google (GOOG). Deutsche Bank raises its price target to more than $1000. Piper says self-driving cars are a $200 billion opportunity.

I think the Google Council should just declare that everyone should have a Buy on Google and they should leave it at that. Only group moves toward $1200 targets should be allowed. No ranks broken until Google disappoints. Then the silly charade can end because it sure is tiresome to read these price bumps every day. Maybe we should just mandate that all firms must own some Google the way they owned Apple (AAPL) and that Google stays in the portfolio until it starts hurting people?

Why not? The Council has spoken.

Right now there's another Council that's acting in a very confused way: the Intuitive Surgical (ISRG) Council. For months the ISRG council has struggled with some of the revelations my friend Herb Greenberg brought to light. Councils always issue edicts that go like this: "This weakness is a buying opportunity" or "the news is old news and the stock should be bought on it" or "the Council has looked these issues over and pronounced them minor."

They issue them until the company actually admits that revenues are slowing.

Now, old habits with Councils die slowly as we saw with Apple. There will be plenty of rearguarders who will talk about how this is a transitional moment for ISRG and that it's just a revenue miss and the earnings are still coming in. We will hear that it is a timing issue or that it is a one-time issue. The council always has lots of ways to explain away things.

Needless to say, it's a finished issue, they just don't know it yet.

Occasionally you get an honest-to-Betsy disagreement among analysts. We got one ahead of Microsoft (MSFT) when we caught three downgrades by people trying to make a statement that the quarter would be weak. It was very strong. The Council breaking there was brutal, made worse by my decision to pound the Council-Breakers endlessly.

And then there are the sell Councils. There was a truly straight-jacketed coalition of Tesla (TSLA) bashers, I write as I watch its inclusion into the somewhat indexed-Nasdaq 100.They were convinced that it was a fraud or overhyped or just a phenomenon that would quickly dissipate and then disappoint.

It hasn't happened and the Council's been splintered.

But these are rarities and the guilds don't take lightly to them.

Keep it in mind when you buy Google today, something that everyone has to do and accept, that at a certain point the Council will pull its Buys, way too late, of course. But in the interim, if you don't own Google for this quarter, you will have a lot of explaining to do because the Council's a mean taskmaster when it is united and it, of course, must be obeyed.

Oh, and here's the clincher.

I like Google, too.

Columnist Conversations

With just less than an hour til the close of trading the S&P 500 is trading nearly 4 points off of that 2,...
This is the pullback I would be looking at for a possible entry against the setup in my article. If you want ...
Market basically flat as we approach 2pm EST. Two of my favorite large cap growth plays, Apple (AAPL) and Gile...
The big-picture chart pattern in Nat Gas shows indicates a potentially meaningful Double Bottom formation in t...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.