Stock Broking Firms' 'Buy' Ratings: Trustworthiness and Incentives

When big stock broking firms say 'buy', should you trust them?

Not always, says Devina Mehra.

They might not be competent or honest, or they could be pushing an agenda.

Plus, they often say what their bosses or clients want to hear.

Analysts also follow the crowd instead of thinking independently.

Investment bankers care more about how much money they raise than how the stock does later.

And everyone, including regular people, can get carried away and invest too much in hot trends, like NFTs or tulips.

It's not just big companies causing market bubbles.