FIGURE 1. Performance of Analyst Recommendations and Investment Newsletters: 1986 through 2000

Note: The analyst bar for each year reflects the difference in that year between the performance of the roughly 20% of stocks with the highest consensus recommendation from analysts and the roughly 20% of stocks with the lowest analyst ratings.

The newsletter bar for each year reflects the difference between the average newsletter performance for that year and the gain of the Wilshire 5000 value-weighted total return index.

Source for analyst recommendations: “Can Investors Profit From the Prophets?,” by Brad Barber, Reuven Lehavy, Maureen McNichols, and Brett Trueman, Journal of Finance, April 2001; updated in a more recent working paper.

Source for newsletter performance data: The Hulbert Financial Digest.