LONDON — HSBC Private Bank has declared that American equities are not as expensive as they appear, and to prove it, the firm has ordered its entire global research division to abandon discounted cash flow models and instead value companies by squinting at them until they look reasonably priced.
«The market has simply failed to grasp the magnitude of AI-driven productivity gains,» announced Willem Sels, the bank's global chief investment officer, during a mandatory all-hands meeting held in a darkened auditorium with a single spotlight on a framed portrait of a server rack. «Our analysts have been instructed to add a flat 40 percent to every price target, then subtract their personal doubts, then add it back again for good measure.»
As part of the new «Valuation Through Conviction» initiative, each of the bank's 1,200 equity analysts has been issued a pair of specially tinted glasses that make all stock charts appear to slope gently upward. Those who still see a decline are required to attend twice-weekly re-education seminars where they chant the phrase «the robots are making us rich» until their screens stop looking scary.
The bank has also replaced its quarterly earnings models with a single spreadsheet cell containing the formula «=AI*EVERYTHING», which Sels described as «mathematically robust and spiritually unassailable.» Junior analysts have been banned from mentioning historical price-to-earnings ratios, which Sels called «a relic of the pre-artificial-intelligence era, like fax machines or caution.»
«Our clients are not paying us to be right,» Sels added, adjusting his glasses. «They are paying us to be confident. And we have never been more confident about something we cannot possibly know.»