Bank of America published a list of tech stocks you should buy before earnings. They get paid whether you make money or not. File that under insights you could have had for free.
The pitch goes like this: these stocks have room to run. Room to run. As if stocks are hamsters and the earnings report is a larger wheel. The analyst sits there with a tiny stopwatch timing how fast your portfolio can lose value.
They won't tell you which stocks. That would require me to pay for the report or actually do journalism. But the premise is bulletproof: buy things before they go up. Revolutionary. Someone get these guys a... no wait, they already have your commission.
Here's what happens next. Retail traders see this headline. They think Bank of America knows something they don't. They buy the stocks. The stocks do whatever stocks do, which is anything, because markets are random walks interrupted by liquidation events. Then the earnings come out. Half the companies beat. Half miss. All of them drop anyway because the forward guidance mentioned wage pressure or some other term that means nothing.
Bank of America doesn't care. They published the note. The compliance department signed off. The analyst's bonus is based on client engagement, not your returns. You engaged. You lost. He won.
The funniest part is the phrase "more room to run." Room to run where? To what? The stock price is a number on a screen. It doesn't run. It doesn't walk. It doesn't have legs. It has algorithms and pension funds rebalancing and some guy in Connecticut who got divorced and needs to sell everything by Friday.
But sure. Buy tech stocks before earnings. Right after you buy lottery tickets before the drawing and hamburgers before you're hungry.
Photo by Infrarate.com on Unsplash
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