Goldman Sachs released a report telling investors that European stocks are actually good. This required dispelling myths. When your sales pitch begins with myth-busting, you're already admitting the product sucks but you need someone to buy it anyway.
The myths in question: European markets underperform, lack liquidity, and nobody gives a sh*t about them. Goldman's rebuttal: actually they're a "secret outperformer." Secret from whom? The people making money? If a stock market outperforms in a forest and no institutional capital hears it, does it generate alpha?
This is the financial equivalent of your buddy insisting his garage band is actually really good once you get past the first eleven songs. European markets fly under the radar because radars exist to detect things worth detecting.
The U.S. markets are larger and more liquid, which Goldman mentions as if it's a coincidence rather than the entire f*cking point. Retail traders who spent 2023 buying QQQ at all-time highs will now pivot to EWG because a Goldman analyst needed to justify his fourth-quarter travel budget to Frankfurt.
Here's what actually happened: Goldman has European exposure it needs to unload. Can't say that in the pitch deck. So instead we get myth-dispelling. We get secret outperformers. We get a valuation argument that requires you to ignore every structural reason the valuation exists in the first place.
The beautiful part? Calling something "unloved" in a headline is just another way of saying "appropriately priced." But that won't get retail money flowing into DAX futures at 9:47 PM on a Thursday because some guy on Twitter said European small caps are the next Tesla.
Goldman Sachs: where myths go to get dispelled and your capital goes to get repriced.
Photo by lonely blue on Unsplash
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