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Proprietary Data Insights Financial Pros Top Social Media Stock Searches This Month
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Short Week, Lots Of Data It’s Good Friday, Friday. The market closes on that day to observe Easter Sunday. However, it’s a busy week for investors, even if Elon Musk manages to keep his mouth shut (more on that in today’s main story)! On Tuesday morning, the Bureau of Labor Statistics reports inflation data. Anybody can tell you how much a dozen eggs costs, we’ll make sense of the numbers tomorrow morning in The Juice. On Wednesday, we get retail sales and mortgage application data. On Wednesday and Thursday, a handful of big name banks report earnings. This will help us get a read on the intersection of interest rates and housing. Expect The Expected As investors, we’re paying as much, if not more attention to interest rates, inflation, and housing data than we ever have. And for good reason. That said, we’re not expecting major shocks this week. Anticipate another increase in inflation, though probably more modest than in previous months. With mortgage applications, we’ll probably see another decrease, thanks largely to interest rates. This signals a cooling housing market, something we’ll cover later this week in The Juice. The Game Plan For The Short Week Admire your long-term portfolio. Isolate your favorite long-term stocks. Set aside some cash. Like, do that right now. Then… Add to these positions on any whiff of downside if the market overreacts to the expected or we end up with the unexpected. That’s always a possibility in the present environment. Eat ham with pineapple rings on Sunday if that’s your thing. |
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Social Media |
If Only Elon Musk Was More Like Taylor Swift |
Key Takeaways:
His act is wearing thin. I have a difficult time believing Elon Musk cares as much about Twitter (TWTR) and free speech as he says. But, more importantly, why should we care as investors? In case you missed it, here’s what Musk tweeted over the weekend.
Source: Twitter But in a twist most didn’t see coming, Musk declined to take a seat on Twitter’s board of directors. Can you believe the ego on this guy!? Wasting all of our time. What’s Musk’s Point Here? Do we need a massive celebrity presence on Twitter to make it viable, as a daily social media stop or investment? Probably not. However, it’s easy for Musk to look at it this way, particularly if his push onto Twitter’s board amounts to little more than a billionaire’s need to further boost his ego. As investors, this – and pretty much everything Musk says on the matter – is simply noise. Social media stocks – by and large – are good for nifty trades and short-term buy and holds. Get them while they’re hot. Get out before they’re not. Sure, you could have made money holding Twitter and Facebook (FB) for the last five years. They’re up roughly 216% and 55%, respectively, over that time frame. However, both stocks tanked over the last year, down approximately 35% and 29%, respectively. Plus, with the bullets you had to dodge along the way, who says you would have had the guts to hold? The story’s not the same with Apple (AAPL) (up 378% over 5 years and 28% in the last year) or even Starbucks (SBUX), with a 35%, five-year return and a butt-whipping of 28% over the last year. Despite the numbers, I feel a heck of a lot more comfortable holding Starbucks on downside than any social media stock. If I’m confident buying scary dips anywhere, it’s on these sticky, strong ecosystem stocks. Why? Because Starbucks has and will continue to stand the test of time. Like Apple. This only makes sense if you view investing with a long-time time horizon you measure in decades, not a handful of years. Social Media User Numbers Are Nothing If Not Predictable Consider Facebook’s stalling growth.
Source: Statista / Facebook Monthly Active Users, as of Q4/2021 Witness TikTok’s ascent.
Source: Statista / TikTok Monthly Active Users, Jan 2018 to Sept 2021 Growth at Snapchat and Twitter, like Facebook, continues to slow. Snapchat’s daily active users increased by just 4.25% between Q3 and Q4, 2021. Twitter’s daily monetizable daily active users increased by only 2.8% between September and December, 2021. Adding “monetizable” in front DAUs is a fancy way for Twitter to say, users it can sell something to. Anybody with a smartphone and an eye into which platforms Generation Z and millennials are using can see the writing on the wall. This doesn’t mean Twitter has no utility. People of all ages – though skewing older – find Twitter useful to explore their niches and brag about how much they know. They’ll do this for as long as it’s around. When Twitter fades – or goes away completely (like MySpace) – these users look elsewhere. Just like younger people do. They abandoned Facebook and Twitter for Snapchat and now, TikTok. The Bottom Line: As we discussed last week in The Juice, the best long-term – and maybe lifetime – investments are often names with the stickiest ecosystems. The Apples and Starbucks of the world that offer you something – be it utility, an experience, or both – you feel like you can’t get elsewhere. Social media doesn’t do this. Yes, we use it – sometimes obsessively – multiple times a day. However, at day’s end, you can get the same dopamine rush from endless sources. This will likely remain the case when Twitter, Facebook, Snapchat and eventually TikTok give way to something else. |
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