Mark Gilbert of Bloomberg has a good column up echoing some of my puzzled prior posts about the essential absurdity of defrocked equity analyst Henry Blodget freely opining (for practical purposes) on stocks:
Henry Blodget, who paid a $4 million fine in 2003 to settle allegations that he published “`materially misleading” research, is back peddling Internet moonshine. Never mind that the National Association of Securities Dealers, the U.S. Securities and Exchange Commission and the New York Stock Exchange barred him for life from the securities industry. The former Merrill Lynch & Co. analyst is free to pen “securities research and opinions so long as the conclusions are not tailored to the circumstances of particular clients,” according to the Web site of Blodget’s Cherry Hill Research firm. Sure, the rules may allow it. Reading Blodget’s views on the likes of Yahoo! Inc. and Amazon.com Inc., though, is akin to hearing former Enron Corp. Chief Executive Officer Kenneth Lay lecture on accounting, or former Tyco International Ltd. CEO L. Dennis Kozlowski comment on executive perks. The skin crawls. The hackles rise. It all seems a bit surreal. …The key distinction — as long as he’s not making “buy” or “sell” recommendations to particular clients, he’s free to say whatever he likes — may seem pretty marginal to anyone who lost a chunk of their savings in the irrational exuberance Blodget was partly responsible for stoking. Shouldn’t “banned from the securities industry for life” have a broader meaning?
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I think your assessment of Blodget is a bit unfair.
Given that he no longer hangs his hat at Merrill Lynch, he has little if any incentive to cheerlead for companies with dubious prospects. After all, as an independent writer/analyst, Blodget is not beholden to the investment banking department of his former employer.
Also keep in mind that Blodget secretly disparaged the companies he covered, as revealed in the e-mails subpoenaed by Spitzer. Most of those stocks subsequently crashed, consistent with Blodget’s private opinion. Perhaps I’m being too charitable, but I think that indicates he has at least a modicum of analytical ability.
I find his writing interesting and educational. His is allowed to write what he wants on his blog just like you. If you don’t like it, then don’t read it.
and personally I would like to hear what ken lay had to say on accounting.. if he was employed by the SEC and used his knowledge of the loopholes to close them down it would stop alot of other companies from embezlement.