Bank of America released its third-quarter top picks. Visa made the list. Walmart made the list. Spotify made the list with a projected 40% upside.
Forty percent upside. Not 39%. Not 41%. Exactly 40%. You know how they got that number? They didn't. Someone in a conference room said "feels like 40% to me" and everyone nodded because the meeting was running long and they wanted lunch.
Spotify streams music. People pay for it or they don't. The stock goes up when buyers outnumber sellers. It goes down when sellers outnumber buyers. Bank of America's opinion on this process affects the process exactly zero percent. But retail traders will read "40% upside" and think they've discovered actionable intelligence. They haven't discovered sh*t. They've discovered a bank's marketing department knows how to use percentages that end in zero because those percentages sound more official than percentages that end in seven.
The firm picked Visa and Walmart too. Visa processes payments. Walmart sells things to people who need things. These are not bold calls. These are "we picked the three least embarrassing names we could defend if we're wrong" calls.
Third quarter. That's the quarter that already started. Bank of America waited until Q3 began to tell you their Q3 picks. Imagine a weatherman who waits until it's raining to predict rain. You'd call him a f*cking moron. But when Bank of America does it with stocks, retail traders print out the report and highlight it with yellow markers like it's the Rosetta Stone of getting rich.
Spotify's chart will do what it does regardless of whether Bank of America thinks it should go up 40%. The stock doesn't care. The market doesn't care. Only the guy who just bought 12 shares in his Robinhood account cares, and he'll care a lot less in three months when he's down 18% and blaming algorithms.
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