JPMorgan Chase is approaching a $1 trillion market cap. Wells Fargo analyst Mike Mayo says the next milestone is $2 trillion. This passes for insight on Wall Street.
Mayo gets paid to predict that a line will continue going up. The line has gone up for fifteen years. He studied the line. He determined the line will keep going up. They gave him the title "Top Analyst" for this.
Retail traders are refreshing their brokerage apps right now. They're reading "several tailwinds" and nodding like they know what that means. They don't. It means nothing. The stock goes up because it goes up. The stock goes down because some algo sneezed. None of this has anything to do with tailwinds.
JPMorgan could hit $1 trillion tomorrow. It could hit it never. The technical chart doesn't care about Mayo's price target. The 200-day moving average has never read a Wells Fargo research note. Support and resistance levels form because traders click buttons, not because analysts believe in tailwinds.
Here's what actually happens. JPMorgan reports earnings. The number is good or bad compared to another made-up number. The stock moves 3% in a direction. Seventeen million retail traders try to explain why. They all cite different reasons. They're all wrong. The stock moved because a pension fund rebalanced and a hedge fund needed to cover a margin call and some kid in Singapore fat-fingered a zero.
But sure, Mike. $2 trillion. Write that down. Put it in the research note. Collect the bonus. Someone's buying this garbage, and it's the same people who think market cap milestones mean their calls will print.
Photo by on Unsplash
Leave a Comment