Dude: by definition "outperform" means "do better than the average." It's impossible for most stocks to outperform the average. Yes, most stocks have risen, but not by MORE THAN THE AVERAGE of all stocks. So, yes, MOST ANALYSTS are wrong. In other words, it's not that most stocks are predicted to rise - it's that ost stocks are predicted to rise faster than the average of all stocks. By freaking definition, if one stock rises FASTER than the average, another stock must rise more slowly. (And i'm talking median, not mean, so it's not that one can just fall a ton and the rest can rise slowly).
Heck, look at all the analysts who were putting buy recommendations on Enron. Then, go look at WHY they were putting buy recommendaations on Enron. Then go look look at the conflicts of interest (analysts pumping up the stock so that other arms of their firm can get the company's securities business for new issues, mergers, etc.)
What do you think sarbanes-oxley was all about?
Seriously, if you don't see the inconsistency you really need to think about it.
This is a very well known paradox among securities theorists.
I've also personally seen piper jaffrey analysts make announcements about a company that i worked for that were not only garbage, but were so far off they may as well have been science fiction. To make it even worse, it's not like the real information was secret - everyone I ran into at industry functions knew the real information. It was like the analyst was just making stuff up because it sounded interesting. And, due to securities regulations, the company couldn't correct the moron.