Do you think the 'guidance' provided by Wall Street (viz. earnings projections, stock price projections etc.) should be the primary tool on which investors should rely when making investment decisions? Why/Why not? Post: I don't believe that "guidance" provided by Wall Street should be the primary tool on which investors should rely when making investment decisions. Not all "guidance" is correct and investors shouldn't invest without doing their own research about the company they want to invest in. Earnings projections or stock price projections usually involves a broker, agent or CFA (certified financial advisor). All of them make a commission based on the guidance they provide others (investors) and unfortunately, for some, greed sometimes overshadows their fiduciary duties to the public. Potential investors obtain and read the company's most recent Annual Report. The Annual Report contains company information, financial statements and notes to the financial statements. A potential investor should read through the Annual Report, especially the financial statements and notes to the financial statements. They should compare to previous years to look for trends. You should understand how the company earns revenue. What do they do? Potential investors should also research what other sites are publishing about the company. Some suggested sites are Yahoo finance and Google finance. These sites will contain a wide variety of information about the company. Some sites have a company outlook as well as historical data. Calculate or look up the company's Price Earnings ratio. This ratio tells you a lot about the company's current market price relative to their earnings per share. To calculate the P/E ratio, divide the market price of the stock by the earnings per share (found in the financial statements). The potential investor should also look at the market price of the stock over the last 5 years. Reply #1 There are a lot of unethical practices involved with forecasting on Wall Street. For that reason primarily, investors should consult a variety of sources of information before deciding to invest. Other sources they might consider are the company's annual reports or Yahoo finance. An investor could also consult a reputable Certified Financial Planner. In the end the investor is responsible for doing their own research. Reply #2 Relying on the the feedback from a Wall Street analyst as your sole investment research tool is foolish. Before investing in company A, investor should also look at the financials of some of the company's competitors. If company A's financials are drastically different, an investor needs to ask why. What variable(s) caused the difference? They may decide that like Bernie Madoff's investment deals, this deal is too good to be true.