Five High-Profile Strategists Already Gave Up, but They’re Still Looking for Capitulation
These are the strategists:
Julian Emanuel, Evercore ISI
David Kostin, Goldman Sachs
Savita Subramanian, BOA
Lori Calvasina, RBC
Mike Wilson, Morgan Stanley
For the past few months, they’ve been lecturing Wall Street about their perfect all-clear signal. As a group, Emanuel, Kostin, Subramanian, Calvasina, and Wilson believe that:
analysts will slash earnings estimates
households and individual investors will panic sell
or, that volatility will spike toward record highs
They say that stocks can’t bottom until people give up. They are waiting for capitulation.
But here’s the funny thing. If they just re-read their research reports, they’d realize that their capitulation signal already went off.
Rewind to January, Emanuel, Kostin, Subramanian, Calvasina, and Wilson thought that, on average, stocks would end 2022 at 4,800. But all five threw in the towel. During the past eight months, they chased stocks lower and slashed their 2022 predictions down toward the S&P 500’s spot price.
Scroll through these charts. The pics show two lines 1) strategists’ rolling 2022 S&P 500 target 2) The S&P 500’s closing price.
Emanuel, Kostin, Subramanian, Calvasina, and Wilson abandoned their overly optimistic 2022 targets. They all capitulated.
And don’t forget that these strategists have been scaring us about just how low stocks could sink.
I've been spending years listening to these people, and they do have value, but not if you take them at face value. You have to listen in a certain way; you have to understand what they’ve said.
I don’t get it. These five strategists seem completely unaware that they already capitulated; and that their target cuts may have called the market bottom.
Paul Newman expressed it like this:
"If you're playing a poker game and you look around the table and can't tell who the sucker is, it's you."
Best, Jim
