Worshiping celebrities is a big no-no when investing stocks.
A celebrity bought that stock
When discussing and sharing experiences with many investment friends, I most often hear that someone said a celebrity also bought that stock, that celebrity said that investing in this stock can make money, a well-known scholar said that it is right to invest in that stock, there is a report said that even the high-ranking official buys that.
But the problem is: hey friends, the stock will not rise because a certain celebrity bought it or was blessed or endorsed by a certain celebrity!
The media fueled the flames
In addition, our media (TV, newspapers, magazines) often publish reports on the stocks of a certain celebrity or a famous people in a certain industry that have invested in that company’s stock, and carry out special reports. This is just a marketing method that is just to warm up each other, which is only helpful to media sales and celebrity popularity, but not necessarily beneficial to you. Everyone has the instinct to spy on others (especially celebrities), so of course the media and celebrities will enjoy it-but this will not help your investment performance, or even harmful.
Because you may unknowingly be mistaken by celebrities. The worse thing is influenced by the adverse effects of financial management concepts from these celebrities.
I think every investor must have experienced the phenomenon described above. The reason for these phenomena is, of course, because these people have the aura of stars and celebrities, they have many followers and fans, and they have a strong influence. But the investing public have forgotten:
Rich Celebrities are not because of investment success
The celebrities are famous because they have a very professional and respectable performance in their respective professions (the point is that their money is earned from their professions, not because they have outstanding investments performance and they were interviewed. This is the point. Very important). But investment is a profession. When these celebrities invest, they are average retail investors like you and me. At most, they are relatively wealthy retail investors.
This is the biggest myth of the crowd, and celebrities are not necessarily very rich (you can think about this sentence if you are smart). Investors should understand that they may be very rich, but we should understand that their money is earned professionally, and most of it is not earned from investment. Their professional achievements cannot be transferred to investment, nor can they represent that their investment will be as prominent as their original profession. This is a very basic logical problem. But the masses are blind, especially for celebrities. They always think that everything about celebrities is beautiful and that they are successful in all aspects of their lives – This is the very basic psychology, halo effect.
Stock doesn’t care who bought it
Of course, some celebrities may also perform well in investment. But what I want to write this article is to say that investors, after all, your investment is your hard-earned money, don’t be blindly like idols or star chasers. To get the bottom line, investment performance is nothing to do with socioeconomic status, IQ, background, popularity, and industry. It doesn’t matter if you have all the academic qualifications. This is why I wrote a blog article before, “Why successful managers are usually not a good investor? “
No matter who he is, as an investor, you should first find out whether the person you are talking about is really worthy of reference in investment, because we are talking about investing in the stock market, not making movies, acting, academic achievements, sports, official positions, appearance, work you do, work in that famous company, how much a month’s salary is, what car you drive, the noble school that your child goes to, do you live in a mansion? The success of the investment has nothing to do with all these things.
Figure out these things first
Even if the celebrity claims that the investment is very successful, we should only figure out the following things:
- In Sections 1-5 of my book “The Rules of Super Growth Stocks Investing”, I listed 3 conditions to help investors select trustworthy and successful investors. Please use these three conditions first to help you filter.
- Was this person’s investment very successful? It’s not asking how much money he or she makes, because it may not be earned by investment. What is the annual return on investment? “Investors should pay attention to the annualized rate of return (IRR), How to calculate?“
- How was his performance achieved? Is it luck? How long is his investment experience? You can refer to “Whether a successful investor can be sustained?” Let’s check it out?”
Why are many fraudulent groups easy to succeed, and many of the deceived officials are high ranking government officials, highly educated intellectuals, professionals who have been rolling around in shopping malls for many years, or retired people with rich life experience; one of the reasons is that they use the halo of celebrities.
Many investment advisers make a living by selling the touted stocks, rather than relying on their own investment skills. Why do these people have the opportunity to take advantage of it? Because most people don’t know how to verify, and don’t bother to verify; but most people believe in fame, which is fatal.
Don’t bother with media celebrities speaking
To define it first, I am not referring to the CEO or the chief financial officer of a company, because they dare not speak indiscriminately, and the securities regulatory commissions of various countries will supervise them.
We often see an outspoken celebrity in the media, with a posture similar to the ancient national teacher, speaking to the stock prices of almost all companies, recommending touted stocks, or “indiscriminately” accusing certain companies of belittling certain companies, obviously being a certain company. Long time he has been playing the cheerleaders of specific corporate consortia are often quoted by the media everywhere.
The point is that he criticizes companies in all countries and all industries, but if you carefully track his speech and subsequent developments, most of them are completely contrary to his comments or predictions, that is, they are not worthy of your attention. I have always wondered about this phenomenon. There are still people in the world who really think he knows everything. His basic logic is self-inflation and whitewashing peace; in the terms of stock investors, it is a counter-indicator. And because one’s own ideology is hostile to a specific country or a country’s enterprises, it is obviously a double standard that treats others strictly and discriminates against others.
In the past 20 years, I haven’t heard anything good from him, and the white can be said to be black. It is obviously an achievement of others, but the content of the whole article can be completely denied, as if the company will go bankrupt tomorrow. Even though they are already among the top ten in the world by market value, they deviate from the facts and slander without basis or reason, and even go with the collapse theory of politicians.
But these slandered business people are still alive and growing all the way, and they can be repeatedly beaten by his bad business achievements, but he did not see him apologize to investors for his ignorance. I would say this because many media celebrities do not know that the media is a public tool and have a strong influence on society, but they have repeatedly spread prejudice, hostility, and untrue remarks and opinions; they will indeed mislead many investors.
Investing based on media investment is extremely dangerous
Investment is subjective. Everyone agrees. But as a media operator, you should do at least two things: “based on facts” and “standards that are consistent for all companies.” If financial media personnel cannot meet these two basic requirements, investors should stay away from their speeches and comments and do not have to take it seriously (fact verification is the basic moral standard for the existence of the media).
The starting point is not based on facts, and the comments and opinions generated are not of reference value; if investors listen to his fallacy, they may have to pay for it. Just as I have repeatedly reminded investors in my book and in this tribal article, all investment research must be based on facts. The inferences that do not have facts or deliberately ignore facts are called prejudices. At best, they are only in line with personal expectations, if used as investments judgment, will be dangerous.
I would like to remind everyone again: What investors need to learn from is their successful investment experience and methods, not the halo of celebrities in other professions. After all, investors don’t want to learn to make money from media exposure. This sentence sounds very plain, but it is not easy to implement.
Please review the investment performance of the people you want to learn from over the years, and let the numbers speak for themselves, not popularity. Find out that their money is made by successful investments? Distinguish the cause and effect relationship. The truth is actually very cruel, but investors must be clear. If investors do not understand the rationale and blindly follow the trend, they just help these celebrities and media to increase their visibility, increase their clicks and ratings, you will get nothing, and will also be misled or lose your pocketbook.
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