Formula One's stock is underperforming. Analysts predict it will outperform. This is called analysis.
The same experts who couldn't predict a single recession in the last decade now see "big gains" for a racing league because the sports sector "remains resilient among consumers." Translation: people still watch cars go in circles when they're supposed to be working. Bullish.
F1 lags other sport stocks. Not because of anything measurable. Not because of declining viewership or collapsing sponsorship deals. It lags because the line went down instead of up. Then analysts looked at the line. Then they said the line might go up. This is worth publishing apparently.
The beautiful part is retail traders will read "poised to race ahead" and think they've stumbled onto alpha. They'll buy calls on Monday. They'll tell their friends about the opportunity. They'll check their portfolio seventeen times before lunch. By Wednesday they'll learn that "poised" is not a binding legal term.
Sports are resilient among consumers. What a f*cking insight. People enjoyed sports last year. They'll probably enjoy sports next year. Someone got paid six figures to determine this.
The chart goes left to right. Sometimes it goes up. Sometimes it goes down. Analysts wait to see which direction it went. Then they explain why it will continue going that direction. Then it goes the other direction. Then they explain why they knew it would do that all along.
Formula One could announce they're racing exclusively in parking lots or that they've replaced all the cars with tricycles. The stock would move. Analysts would explain why they predicted it. Retail traders would lose money finding out.
The racing league is poised to race ahead, which is convenient since racing behind would hurt the brand.
Photo by Isaac Maffeis on Unsplash
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