how low can it go?????, page-7

Universal broker downgrades (or upgrades for that matter) of a stock or sector usually only mean one thing, that the herd has formed and already run in the one direction. With bank stocks especially, it is normally in the wrong direction.

Here is an example. Only 3 to 4 weeks ago, what started as one analyst's view (at CSFB I think from memory) that NAB was about to sell all its UK banks, suddenly became a market fad with nearly every broking firm in the country pushing the same idea. Where on earth did they get the idea? NAB management have always suggested they are not interested in selling. How did the analysts all get so bullish and start 'marketing' $35 to $40 price tags on the back of pure speculation. How did a bunch of highly paid analysts all come to the one (specualtive) view?...only to all get it so wrong????

Be careful, the herd will soon be running the other way!! Mark my words, within the next 2 weeks, we will see new broker research released on the banks with upgrade jargon like "BUY" or "Outperform" or "Add" - primarily based on the recent underpeformance of recent share price weakness. What absolute crap! It will come from the same analysts who created the same underperformance recommendatios over the last 2 weeks.

Upside potential is starting to emerge. Do not underestimate this fact. Check your charts if you have access to them. Every time over the last 10 years that bank shares regitered sub 30 RSI readings, it was not long after that substantial rallies followed. Check CBA's chart, ou should see what I mean.

Remember one thing, by the time the mums and dads (and most of us included) get their hands on broker research, the smart money has already been made!!!

Time to take a contrarian approach!!

Cheers