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And we’re usually talking about individual investors.
Usually… but not always.
Wall Street analysts are now falling prey to FOMO.
Analysts make their bones on their predictions — for company earnings, corporate share prices, and even targets for market indices like the Dow Jones, S&P 500, and the Nasdaq Composite.
So they look great when their predictions come true. But they look tepid or risk-averse when those targets for a stock get leapfrogged. Once that happens, these sell-siders are forced to play “catch-up” — to “chase” stocks or the market. It’s a true “fear of missing out” — so they have to create new price targets.
It’s happening right now.
The rope-burning speed that saw the S&P 500 transition from bear to bull market on June 8 caught those investment-bank sell-siders by surprise.
Their targets have been leapfrogged — and the “FOMO” pressure is spooling up.
They seem out of touch with the markets.
They’re “leaving money on the table.”
They’re getting calls from angry clients.
And, rest assured, they’re being pilloried by their bosses.
We’re now watching as analysts race to (in the jargon of Wall Street) “upwardly revise” their forecasts, with the S&P 500 already surpassing previous projections for the entire year.
On July 20, the S&P 500 was higher than 22 out of the 23 year-end projections made in January that Bloomberg tracked.
In a new round of revisions, one of the most bullish projection changes in terms of percentage came from the Switzerland-based global financial services firm Credit Suisse, hiking its 4,050 end-of-year S&P 500 target by 16% to 4,700.
Research provider Fundstrat already had a bullish outlook for the S&P 500 with a year-end target of 4,750. But even those folks felt an upgraded target was warranted. Fundstrat’s new end-of-year target for the S&P 500 is 4,825.
It’s not a bad thing to have extra confirmation of bullish outlooks, but there’s a bigger lesson here.
No matter what is going on, there are always bullish opportunities to make money… and you have an edge if you know where they are while everyone else is waiting on the sidelines for “confirmation” that now is the right time to invest.
We’re here to give you that edge.
Because we didn’t have to wait for investment bankers to get bullish in the middle of 2023.
We knew where to look for moneymaking opportunities way before that.
Always a Market for Making MoneyUnlike other “financial research” firms — which copy-and-paste headlines as a substitute for real advice — the TradeSmith team provides actionable insights.
Opportunities based on quantitative analytics.
Opportunities that pay off… that put real money in your pocket.
In a September 2022 Special-Situation Central report, I discussed the arbitrage opportunity between Microsoft Corp. (MSFT) acquiring Activision Blizzard Inc. (ATVI). At the time, Activision Blizzard was trading for $76 per share.
With the deal nearing the finish line, ATVI is trading for $92.55 — a 21% return.
In our August 2022 Special-Situation Central feature, I outlined the investable clues of why the World Wrestling Entertainment Inc. (WWE) was wearing a “buyout bullseye.” On the day of that report, the stock opened at $72.81 per share. On April 3 of this year, the WWE and the parent company of the UFC — Endeavor Group Holdings Inc. (EDR) — announced a merger.
Today, the stock price is trading for $106.42, a 46% jump.
And in our September 2022 Buy This, Not That, TradeSmith Daily feature, I highlighted On Semiconductor Corp. (ON) as a “Buy This” stock when it was trading for $66.10.
Trading for $97.69 as of this writing, ON is up 47%.
I’m sharing this not to boast, but because it demonstrates our data-based, action-first, stay-ahead-of-the-crowd mindset.
We don’t succumb to FOMO like most investors because we act first — and let others chase us.
And we’re not resting on our laurels.
We are constantly sharing new opportunities.
Like the opportunity in Delta Air Lines Inc. (DAL).
And the opportunity in elf Beauty Inc. (ELF) and DoubleVerify Holdings Inc. (DV).
And the opportunity to own a real “AI winner.”
Each morning, we will continue to bring you those types of opportunities and separate the noise from what matters.