The Earnings Results: Best Since 2006

LOL!

• The 2Q results season improved as expected over 1Q09, with Upgrades exceeding Downgrades for the first time since 2Q07. The Banks did well, and we have accordingly upgraded the sector to an Overweight on improving earnings going into 2010. We have also upgraded Autos to Overweight since sales volume is expected to pick up going forward. Nonetheless, although we remain optimistic for 2010, we believe the better 2009 earnings have been priced in and that the market will continue to remain range-bound for the next few months. The better showing by Small Caps in 2Q09 reinforces our view that investors would do well to Trade Smaller Cap sectors such as O&G, Rubber Glove, Steel and Construction.

Gee whiz!

So the 2Q results season improved. Why? Because their upgrades exceeded downgrades!

My oh my!

Time to pick up the phones yo! Call me broker and ask them to buy, buy, buy!

Hang on just a minute.

They gave more upgrades than downgrades......

But... but... but.... butttt...... what if their upgrades were based on flimsy reasonings???

How then?

Hmmm.... take for example, Featured Report: OSK On Perwaja II

Didn't Perwaja lost more money. And despite losing more money, Perwaja Holdings price target was upgraded!!! Flimsy reasoning?

And some got upgraded because they lost less money!

Or how about the other reports mentioned in Featured Report OSK?

Yeah... best since 4Q2006!

You know.. when the brokers starts giving rather questionable upgrades left, right and center and starts cheerleading on it, perhaps it's time to start looking for the exit door!