Strong Buy

It’s a rating. “Buy buy buy this stock.” That’s what the sell side stock broker’s analyst will publish. There will likely be a price target along with it. And the stockbrokers who work for the company will bang a tambourine, telling all their clients to buy, baby, buy.

The historical frame on this rating is that “in the olde days” (think: pre-2000-ish), practically every stock and bond was rated Strong Buy by pretty much everyone. Why? Because analyst bonuses were paid by the investment Bankers who ran their group. And how did bankers get paid? They get paid by banking work, i.e., when companies hire them to buy companies for them for a small fee (think: 1% of total transaction cost).

So...what company would hire an investment bank that didn’t have a Strong Buy rating on their stock? Answer: nobody. A corrupt system that finally got called on the carpet for being so. Then things changed, and it became a published thing that analysts who had more than, say, 30% of their coverage rated Strong Buy, were, more or less, shamed.

Strong Buy shaming. It was a Thing back then.