Thus, even an analyst with a very poor record of predicting a stock's performance on the markets may not be held directly accountable for his or her poor results.

When the original investor loses trust in an analyst and the analyst's firm, instead of reacting publicly against the firm, he walks across the street to the next largest firm and continues the cycle all over again.

As institutional investors tire of the cycle of poorly performing issues, the inevitable response, of which we are just beginning to see signs, will be characterized by an influx of independent research houses to try to take the place of those brokerage research departments.

Several independents have recently opened shop, but most have not yet cemented relationships with institutional stock buyers, and their research does not have the same broad distribution as does the reporting coming from the major brokerages.

This situation is poised to change, however, as the Web continues to empower investors, both institutional and retail, to find their own information outside of traditional sources.

The Internet also enables independent analysts to find the best channels and create new channels to these investors with much greater ease than in the past.

Be prepared to see an influx of independent research in the near future, but also expect this research to be greeted with skepticism, at least until it can be proven over time that the independents can provide superior stock predictions to their brokerage brethren.

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By Jason Van Bergen
www.hi-tequity.com