Morgan Stanley put out a note. Mike Wilson thinks quality stocks will do well. He's their chief U.S. equity strategist. The firm is overweight on names that pay dividends.
Overweight. That's the word they use when they want you to buy something but can't legally say "buy" without triggering compliance. It's like calling a garage a "motor coach storage facility." Everyone knows what you mean but you get to bill an extra hour for saying it fancy.
Wilson says the market rotation bodes well for quality. Bodes well. Not "guarantees returns" or "will make you money." Bodes. As in portends. As in suggests. As in maybe. The man built an entire career on conditional verbs and retailers still think he's giving them the secret handshake.
Quality stocks that pay dividends. You know what that screening criteria pulls up? Every boring company your grandfather owned in 1987. Johnson & Johnson. Procter & Gamble. Companies that make soap and Band-Aids and haven't moved fifteen percent in either direction since the Carter administration. Revolutionary stuff.
The market rotation. That's code for "the garbage we told you to buy six months ago stopped working so now we're pivoting to the other garbage." Rotations don't predict anything. They describe what already happened. It's like a weatherman taking credit for yesterday's sunshine.
Retail traders will read this note. They'll see Morgan Stanley's letterhead. They'll think Mike Wilson has access to information they don't. They'll buy the quality dividend payers at exactly the moment the rotation ends and growth stocks rip for eight straight months. Then they'll blame the market for being rigged instead of blaming themselves for taking investment advice from a bank that makes money whether you win or lose.
Morgan Stanley gets paid in fees. You get paid in bodes.
Photo by Sven Piper on Unsplash
Leave a Comment