When you check in from the road and read the headlines and ask for the relevant reports, you're struck by one thing right now: How analysts feel they have to raise their price targets because the market has overrun them. Case in point -- fintech stocks.
I wrote on Tuesday that you could do no wrong if you just bought financial-technology companies like Square (SQ) and PayPal (PYPL) and watched them go higher -- even if there was no new thesis behind their "up" moves. And sure enough, we got a number of price-target boosts on fintechs since I wrote that column and the stocks zoomed higher.
Now, it's painful for me to have to revive my dictum from the 1980s when I worked at Goldman Sachs, but here it is: "Stocks that go to $80 do go to $90, and stocks that go to $90 do go to $100."
I learned about those kind of moves the hard way in August 1988. We had had a gigantic move in stocks that summer, and we started to get this same sort of action.
I remember thinking at the time: "Here we go again. Stocks that go to $80 are going to $90." But then I decided: "No, I've had it. After what happened in 1987, that dictum has to be off of the mark." So, I shorted the PayPals and Squares of the time ... and got run over.
Never forget that stocks that go to $80 do go to $90. It's why price-target boosts keep working -- and why the methodology of picking $80 and $90 stocks that just got to those hallowed levels is working once again.
Consider all of this a case of "Fantasy Stock Ball." That pretty much sums it up.