Analyst Sponsorship

Most brokerages employ analysts. (See sell-side analyst for details.) Despite being wrong quite often, these analysts continue to write opinions about stocks and publish financial models. And Wall Street still listens, even though they know their track record. Stock brokerages even pony up money in trading dollars and commissions for these guys—much like your local weather channel continues to pay for the meteorologist who's only right about 30% of the time.

Analyst sponsorship happens when an analyst gives a thumbs-up, positive review of a stock. When that happens, the stock usually goes up. If the sell-side analyst works for a big brokerage like Goldman, he or she can have an especially big impact on a stock. Dolla dolla billz, y'all.