Goldman Sachs released a list of undervalued stocks positioned to outperform in the third quarter. The third quarter started two weeks ago. This is like getting a weather forecast for yesterday.
The firm's analysts spent thousands of hours building models and running screens to identify companies trading below intrinsic value. They could have just sorted by P/E ratio in Yahoo Finance. Would have taken eleven seconds. But that wouldn't justify the fees.
Retail traders will read this headline and think they've stumbled onto insider information. They haven't. Goldman published this for clients who pay seven figures annually for research access. By the time CNBC picked it up and some guy named Derek in Michigan saw it on his Reddit feed, the smart money already traded it. Derek is now the exit liquidity.
The stocks are "well positioned" according to Goldman. Well positioned for what exactly? To go up? That's the whole f*cking point of stocks. Saying a stock is well positioned to outperform is like saying water is well positioned to be wet. It's definitional emptiness wrapped in finance speak.
Here's what actually happens. Goldman puts out the list. The stocks pop for three days on momentum from people who can't read a balance sheet. Then they drift sideways for eight weeks. Then in November some associate writes a new report saying those same stocks are now overvalued. The circle of life.
Technical analysis says none of this matters. The charts don't care what Goldman thinks. Support and resistance levels existed before their analysts got their MBAs and they'll exist after. But sure, let's all pretend a PDF from a bank that needed a taxpayer bailout is actionable intelligence.
Those "well positioned" stocks will do exactly what they were going to do anyway, which is probably nothing, while Goldman collects fees for having an opinion.
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