This Just In: Upgrades and Downgrades

At The Motley Fool, we have our fun with the Wall Street analysts.

We mock their pinstripe-and-wingtip attire. Their multimillion-dollar bonuses. And, not unrelated, their failure to recognize the tech bubble -- or, worse, their recognizing it, and then putting lipstick on the pig and pimping it to the individual investor. What's more, their ceaseless stream of upgrades and downgrades, sometimes on one and the same stock and just days apart, make Jim Cramer look like a poster boy for the "long-term buy-and-hold" movement.

Thus, it may look a bit out of place for us to introduce this newest occasional feature: "This Just In." Here, I'll be taking an ad hoc magnifying glass to some of the hottest analyst upgrades and downgrades of the hour.

Isn't that a little hypocritical?
Guilty as charged -- if that were all I'd be doing. Because the fact of the matter is that an analyst's upgrading or downgrading a stock means little when viewed in isolation -- all the more so when you consider the heft of the firms doing the "analyzing." When a Bank of America or a JPMorgan Chase (NYSE:JPM) issues a downgrade, the mere publication of the news often suffices to spark a selloff, thereby "proving" the analyst right -- in the short term.

What's more significant is the analyst's record over the long term. And that's what we'll be focusing on in this column.

Mr. Market? Meet Mr. CAPS.
Witness the debut of Motley Fool CAPS, a new tool for rating everything from stocks to investors to analysts to the long-term durability of the Toyota Corolla (give us some time on that last one). With CAPS, we'll be tracking the long-term performance of Wall Street's best and brightest -- and the worst and sorriest, too.

And speaking of the best ...
Early Friday morning, banking powerhouse JPMorgan issued a pair of downgrades; it went "neutral" on both DVD-by-mail concern Netflix (NASDAQ:NFLX) and bricks-and-clicks renter Blockbuster (NYSE:BBI). JP said the former was likely to miss its year-end target for subscriber growth; in a related opinion, the bank suggested that Blockbuster's by-mail offerings had siphoned away some of Netflix's business but that Blockbuster's slow in-store rental business had weakened enough to suck all of the good news out of the stock.

How much weight should you give to JP's opinions? More than most, maybe. The firm's analysts, whom we're tracking in CAPS, have a combined rating of 96.40. That puts them in the top 4% of CAPS players. Reviewing the firm's recent recommendations, we present a few of the companies that have helped to earn JP the coveted rank of "CAPS All-Star":

And one that's holding the firm back:

JPMorgan's record of success speaks for itself, so perhaps you should give its opinions on Netflix and Blockbuster real weight. But guess what? Every day on Motley Fool CAPS, nearly 20,000 investors duke it out with the likes of JPMorgan and its Wall Street peers to see who's the most Foolish of us all.

On Netflix and Blockbuster, two individual investors have proved themselves even better gauges of the stocks' worth than has JPMorgan. To find out who they are -- and what they think -- just click here.

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 26 out of nearly 20,000 raters. Netflix is a Stock Advisor pick. The Knot is a Rule Breakers selection. Bank of America and JPMorgan Chase are Income Investor choices. The Fool has a disclosure policy.