This chart of publicly made “Hold” and “Sell” recommendations by Wall Street analysts, quite honestly, made me laugh out loud.

Optimism, whether real or perceived, is a key component that financial institutions rely upon to bring in new business (e.g. to make money off of you by buying and selling stocks).

If those analysts, who often work for the same institutions as the brokers, investment bankers, etc., took a decidedly bearish viewpoint and told you that the stock market was going to tank, that a majority of the stocks within the S&P 500 were going to yield a zero ROI over the next year, or at worst, lose value after you made your original investment, the amount of investors transferring new money into their accounts (so brokers can make money from management fees, commissions, etc.), would be reduced to say the least.

Perhaps it’s my cynical, misanthropic nature, but given that the highest mean average of “Hold” and “Sell” ratings during such a rampant boom and bust period was only around 5%, much of Wall Street’s modus operandi over the course of the Bubble Decade appears to have been:

-  Give the first impression that all is well…
-  Brush the dirt under the rug whenever possible…
-  When in doubt, sell the hope baby!

Not the rosiest of conclusions, but when you have a system based on making money off of transactions rather than long term wealth building, the results aren’t all that surprising.