It's a sign of conflicted times: A headline saying that Merrill Lynch upgraded Microsoft right above another about the Wall Street broker's smelly disclosure scandal.

"A story on 'techs shaking off an overnight slide,' with the immediate catalyst being an upgrade by Merrill Lynch, right above a story on Merrill (MER) perhaps settling with Spitzer on its nasty habit, along with everyone else, of lying about tech stocks," noted one CBS.MarketWatch.com reader Friday morning. "That's what I call a true sense of ironic juxtaposition."

New York State Attorney General Eliot Spitzer showed impeccable timing, a lot like a consummate trading pro, when he decided to go after Wall Street earlier this month for brokers' double-dealing recommendations of technology stocks during the Internet boom.

Yet, many individuals in this country are still loath to make an investment choice without referring first to Wall Street upgrades and downgrades. I'm in my seventh year here at CBS MarketWatch, and our upgrades and downgrades coverage and guide to Wall Street jargon are more popular than ever. (See CBS MarketWatch for the latest actions, initiations and Susan Lerner's "The Ratings Game.")

Of course, we haven't included some of the foul acronyms used by Merrill Lynch analysts in their back-slapping, back-stabbing memos to one another. But what's a Piece of Stuff between friends, anyway? Fact is, most individuals are still hooked on Wall Street research, or the idea of it, anyway.

Wall Street's pronouncements of "cheap," "fairly valued" and "overvalued" are required reading, it seems. Even as disclosure scandals rock some of the major investment houses. That's because most of us, before we pull the "buy" or "sell" trigger on our Charles Schwab console, want some fat-cat assurance that what we are doing is sane.

In the clubby world of company research, the only alternatives for most ordinary folks on a strict budget are no-strings-attached, independent investment newsletters. The stock market newsletters are a crowded field but one with proven winners and losers. Newsletters are within the reach of most of us: $100 to $1,000 a year.

Independents start to kick tires
Other forms of independent research, applied by seasoned researchers using cash-flow, customer surveys and good, old-fashioned tire-kicking, are getting attention these days from hedge funds, trading desks and wealthy folks. One of them, from Applied Finance Group Ltd., a Chicago research firm, is ranking the quality of corporate earnings based on cash flows.

"We can start to evaluate the quality of a firm's earnings by tracking how much income is coming from cash versus how much is booked as an accrual," says the group's research director, Rafe Resendes. Applied Finance hopes its research points to channel-stuffing by companies that are stuck with growing receivables. More research from the firm will be available later this spring.

Another company, ChangeWave Investment Research in Maryland, uses surveys of 3,500 executives and technology customers as its ammunition in the war against Wall Street hype. Michael Shulman, managing director of research, says he sent clients a negative report on Sun Microsystems at the start of the year.

"In our online surveys, people were abandoning Sun (SUNW) for low-end applications. It was overwhelming," he said Friday. Shulman and his team also released a report on Microsoft last week. In it, a quarter of 502 people who responded to a detailed questionnaire said they were slowing down upgrade purchases of software product Microsoft Office (MSFT). Another 25 percent said they were slowing down purchases of OS products from Microsoft. Shulman says his firm's research sells mostly to hedge funds and wealthy investors for $5,000 to $50,000 a year.

Back on Wall Street, where most research is based solely on comments company executives make to lightly trained analysts, it's often garbage in, garbage out. Charles Biderman at independent researcher TrimTabs often points out that the research arms of big brokers make no direct profit from research reports. Yet, in the funny way Wall Street works, those reports are integral to everything an investment bank does, from generating sales of stock in glass-tower boiler rooms to whipping up corporate business, such as underwriting of securities.

Brokers and their P.T. Barnum researchers have to earn a living, after all. But on Main Street, where independent newsletters are thriving right now, a POS is still a POS.

Thom Calandra's Stockwatch column is available at cbs.marketwatch.com and ftmarketwatch.com.