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 ...
As the Great Internet Bubble Burst of 2000 unfolded, 95% of stocks on the market carried not a single sell rating, even as tech stocks like Yahoo! (NASDAQ:YHOO), Broadcom (NASDAQ:BRCM), and Nortel (NYSE:NT) lost more than 90% of their value.

Over time, Wall Street's reluctance to speak truth to power became the stuff of legend. But on Tuesday, one analyst stepped up and said the unthinkable. Mark Jul. 8, 2008 in your diaries, folks, because it's one for the history books: It was the day Friedman, Billings, Ramsey predicted IndyMac Bancorp (NYSE:IMB) would go to zero.

Brave lad
Granted, this would have been a braver call had FBR made it a year ago, when IndyMac was trading near $30, or two years ago, when it sat north of $45. But still -- an event this rare still deserves notice. Before yesterday, FBR thought IndyMac shares could perhaps command a buck apiece. But: "Given continued home price declines, management's higher loss estimates, recent ratings agency downgrades on the company's mortgage-backed securities and the company's decision to stop new mortgage originations," FBR now doubts "that there is any value left for common shareholders."

The shares' subsequent fall to $0.40 a stub almost certainly has a few novice investors thinking: "If it just goes back to $0.71 ...", or maybe "What if it can go to $1?", or heaven forfend: "Hmm. It used to sell for $50, so if I buy it now and it bounces back up, I make a 12,400% profit! And in the meantime, hey, if it goes to zero I only lose $0.40."

Listen, folks. I've only been investing for 10 years myself, but that's been long enough to teach me: If something sounds too good to be true -- it is. No "probablies" about it. And more importantly, on the downside, you don't "lose $0.40." If FBR's right, you lose it all. Every last penny you sink into IndyMac -- and more. You also lose your trading commissions, both to get into, and then out of, the worthless stock.

Let's go to the tape
So what exactly are the chances that you will lose it all here? A glance at FBR's record on CAPS tells us that this analyst is more often right than wrong. What's more, when it's right, it's really right. FBR ranks just a couple points shy of the top 10% stratum of investors.

Not only has FBR outperformed the market by a good 80 points on its November 2007 sell rating on IndyMac, it's also correctly picked:


FBR Said:

CAPS Says (5 max):

FBR's Pick Beating S&P by:

Wachovia (NYSE:WB)



46 points

SunTrust (NYSE:STI)



46 points

Fannie Mae (NYSE:FNM)



34 points

Foolish takeaway
Suffice it to say that this investment banker knows a bank facing difficulties when it sees one -- as well it should, if it owns a mirror. FBR's own stock is down 72% over the past year. So when FBR tells you IndyMac is going to zero, it is.

Wait for a bump as the shorts close their positions, if you're feeling lucky. But make sure to salvage what you can, and get out when you can.