Content adapted from this Zerohedge.com article : Source
The worst week for the stock market in a long time.
Many are asking is this 1987 all over again?
Goldman's response, as delivered by the bank's chief equity strategist David Kostin, predictably was 'don't panic, things are very different than they were 31 years ago.'
BOA disagrees:
In retrospect, and considering the immediate market plunge that followed, what happened next certainly certainly had the feel of 1987, Goldman's clients should have been asking Bank of America , which on payrolls Friday correctly predicted that a 12% plunge was imminent.
This week Goldman Sachs was wrong.
So yes, to all those clients who are wondering how the smartest FDIC-backed hedge fund investment bank could get it so wrong, we suggest you read "Goldman Does It Again: Crude Crashes 11% After "Most Bullish In A Decade" Call."
Here is the reason for maintaining the bullish prediction.
It will probably not shock readers, to learn that once again Kostin - like JPM's Marko Kolanovic two weeks ago - has just one job: to prevent a liquidation panic, and to restore confidence that the 10% correction which just happened seemingly out of nowhere was a one off event, or - in the parlance of Wall Street - a "healthy correction."
More downside on the way?
Some other facts: The typical correction took 70 trading days to trough and 88 days to recover. However, an investor who bought the S&P 500 10% below its peak without waiting for a bottom would have experienced median 3-, 6-, and 12-month returns of 6%, 12%, and 18%.
There answer to the question "how much worse will it get" is not clear at this time. The next couple weeks should reveal if Goldman or BOA is right.
Non-adapted content of this Zerohedge.com article:
https://www.zerohedge.com/news/2018-02-10/what-goldmans-clients-want-know-how-much-worse-will-it-get
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