At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." So you might think we'd be the last people to give virtual ink to such "news." And we would be -- if that were all we were doing.

But in "This Just In," we don't simply tell you what the analysts said. We'll also show you whether they know what they're talking about. To help, we've enlisted Motley Fool CAPS, our tool for rating stocks and analysts alike. With CAPS, we'll be tracking the long-term performance of Wall Street's best and brightest -- and its worst and sorriest, too.

And speaking of the best ...
Warren Buffett once famously quipped:

I now have this 800 [telephone] number, and if I ever get the urge to buy an airline stock, I dial this number. And I say, my name is Warren, and I'm an 'air-o-holic,' and then this guy talks me down on the other end [of the line].

In short, Warren Buffett avoids airline stocks, and he's not alone. Nearly as famous friend-of-the-Fool value investor Whitney Tilson devoted an entire column -- a classic, by the way -- in 2002 to the subject of why investors should avoid steel and airline stocks like the proverbial plague. Does anyone like these stocks?

Yes. Credit Suisse.

Swiss chocolate with almonds, or just plain nuts?
On Thursday, the Swiss banker trotted out onto a thin limb in gusting winds, then proceeded to hop up and down upon it on one foot, loudly proclaiming: "Buy Continental Airlines (NYSE:CAL)!" And while this may sound small-f foolhardy to you and me, Credit Suisse boasts an enviable record (if not quite a Buffett-tastic one) of outperforming the markets with its predictions.

Let's go to the tape
Simply put, Credit Suisse is one of the best stock pickers in the business. The analyst calls more than 56% of its picks right, helping it earn a CAPS rating in the top 5% of investors. Over the two years we've tracked Credit Suisse, it has picked numerous "baggers" of various sizes -- Apple (NASDAQ:AAPL), for example, became a two-bagger for Credit Suisse. Mosaic's (NYSE:MOS) verging on three.

When a banker of this caliber reverses its position all the way from "underperform" (sell) to "outperform" (buy) in a single day, without passing "Go," collecting $200, or otherwise traversing a neutral rating in between, my ears perk right up.

... then droop back down
But now we come to the part that trips up so many smart investors: Credit Suisse's decidedly ugly record on airlines. Over the past two years, Credit Suisse has bet one way or the other on nearly every airline that's ever taken flight. Here's how the damage breaks down:

Total losers

  • Recommended in March, Credit Suisse's pick of AirTran Holdings has already cost the analyst 57 points worth of market underperformance.
  • Same with Delta (NYSE:DAL), which lags the market by 38 points.
  • Also JetBlue (NASDAQ:JBLU) -- lagging by 33 points.
  • Even worse is the analyst's record on Northwest and UAL, United's parent. Back-to-back endorsements of these two have cost Credit Suisse 52 points and 53 points, respectively.

Partial losers
US Airways (NYSE:LCC) and Southwest (NYSE:LUV), in contrast, have been a mixed bag for Credit Suisse. Back-to-back endorsements in December 2007 and April 2008 cost CS a combined 56 points on US Air, of which it's since recouped 11 points by "going negative" last month. On Southwest, the analyst treads water, beating the market by just two points over the course of two picks. Finally, on Continental itself, Credit Suisse lost 50 points on an October 2006 pick, but gained back eight of them when it went "thumbs-down" on Continental in April 2008.

And a winner?
In fact, the closest Credit Suisse has been able to get to making money is with AMR, parent of American Airlines. A December 2007 pick cost the analyst 20 points -- quickly recouped when the analyst "switched sides" and gave AMR the thumbs-down in March. That reversal has so far netted it 38 points of outperformance.

Foolish takeaway
Credit Suisse's record shows you why airlines have given even as great an investor as Warren Buffett a severe case of acrophobia. If you go this route, pay close attention to the flight attendant's safety lecture, prepare for turbulence, and keep your airsickness bag handy.