Don't Chase Analyst Calls, Chase Your Own Edge

Stock randomly pumped or dumped? 90% chance it’s some Wall Street analyst either upgrading or downgrading. Here’s the real talk:

Analyst ratings are just noise with a fancy suit. Yes, they’ve done homework. Yes, they know more than you. But at the end of the day, they’re still guessing about the future. Look at Hormel (HRL) — a month ago, the breakdown was 7 holds and 4 underperforms. Now it’s shifted bullish with upgrades flooding in. Which narrative is right? The market will tell you in 12 months.

The actual move: Don’t blindly follow rating changes. Instead, use them as a mirror to challenge your own thesis. If you bought a stock for reason X, and an analyst downgrade hits you, ask yourself: “Does this new info invalidate my case? Or am I just anchoring on sentiment?”

Here’s where most retail traders trip: analysts think in 6-12 month windows. You might be holding for years. A turkey flu scare matters to them this quarter—but historically, that kind of noise gets priced out over time.

The move that actually works: Read the why behind the call, compare it to your edge, take what’s useful, ignore the rest. Rating changes are just more data. Your job is to filter signal from noise.