Fading the Experts

The (literal) small print: this newsletter is mostly stories, pop-psychology, and half-baked trading ideas. This is NOT financial advice. Best to think of this as a community of like-minded gamblers. If you are having a punt, make sure you restrict your trade size to whatever change you can find down the back of the couch.

Let’s play a game - let’s check some Wall Street analyst ratings from the past.

First up, Enron. In October 2001, the stock was down 80% from highs. CEO Jeff Skilling had resigned, and it was clear something was very wrong with the financials.

Wall Street’s rating? Still a unanimous Buy.

Enron filed for bankruptcy two months later.

Then there’s Signature Bank. Six months before it failed, 100% of analysts covering the stock rated it Buy. Even coming into March 2023, most were still bullish.

Two weeks later, Signature was gone.

And lastly, Carvana. This one’s our favourite:

In July 2023, Jefferies cut CVNA to an Underperform rating with a $30 target. By April 2025, when the stock was $213, they had it at Hold. In June, at $346, still Hold.

Then, in October 2025, with the price at $377, Jefferies finally upgraded it to Buy.

Now, we may not be as smart as Wall Street... but we’re fairly sure you’re supposed to buy low and sell high…?

So, what’s the point of these stories?

We’re not just taking cheap shots at Wall Street (but that’s a nice side-effect). The thing we’re trying to get at here is:

Knowing all this, why are we still influenced by Wall Street’s price targets?

Authority Bias is our tendency to overvalue the opinions of authority figures.

It looks like this:

The problem with this isn’t that experts are useless - they’re not. If someone has spent 30 years trading markets, it makes sense to hear them out.

So we’re not saying all your financial advice and stock tips should come from indie podcasts or Reddit threads.

What we are saying is: there’s a difference between listening to experts vs outsourcing your thinking to them completely.

That’s how we get into trouble:

The backing of an analyst with a good track record can make a degenerate trade feel safe. It can push us out on the risk curve - I’ve taken shorter expiry dates, sized up, and ignored my own price targets in the past. All because one talking head agreed with my trade thesis.

But if you don’t do the work yourself, you don’t really know what you own. And you won’t know how to react when the thesis goes sideways.

The fix isn’t complicated:

Listen to smart people. Read their research. Steal their insights.

But make sure you’re only using them as a guide, and not just blindly following their trades.

Highest IQ in the World

YoungHoon Kim - the world’s highest IQ holder (apparently) - predicted Bitcoin would hit $300k in early 2026. That didn’t happen.

Now he’s at it again - calling for a Bitcoin “Supercycle in 30 days”, with a “100%” chance of happening.

For us here at Market PSYOPs, it’s almost too perfect a setup. How could we not fade this? It’s the ultimate Authority Bias trade.

I’m buying: iShares Bitcoin Trust ETF, IBIT June 30 $44 puts.

We’re long-term bullish Bitcoin, but if it hits $300k before 2027, we’ll retire the newsletter and reopen as a YoungHoon Kim fan account.

FactSet Research Systems Inc. (NYSE: FDS)

If you were hoping for something with (slightly) more of an actual thesis, we’re also looking at FactSet Research Systems.

The company sells financial data and analytics to Wall Street.

And here’s the fun part: Wall Street hates it - analyst sentiment is negative.

Wall Street is bearish on the company Wall Street uses to decide what to be bearish on. Poetic.

The bear case is obvious: AI agents are coming for financial research. Simple.

But Wall Street still needs clean data, workflows, compliance, and audit trails. And the stock’s taken a beating in the last 12 months.

FactSet actually grew revenue 7.1% last quarter, adjusted earnings rose, and management lifted guidance. Doesn’t sound like a business that’s being taken to the woodshed just yet.

I’m buying: FDS outright.

There’s psychological traps everywhere in life. They shape how we think, how we make decisions, and spend money.

But enough exposition. Let’s gamify this:

💲💲Your portfolio’s out of control. You own 47 positions. Some AI. Some tech. Some commodities. Bit of crypto. A random Japanese bank.

You’ve realised you can’t actually follow them all properly.

The answer - and the psychology behind it - will be revealed in the next edition.

Last Week’s Answer:

Okay, so we kind of cheated with last week’s poll - all the answers were the same thing: Authority Bias. So whether you went with Druck, the founder, or the engineer - they all represented authority figures to outsource your thinking to.