I am no fan of influencers. The last time I wrote about them I got some stick for calling them talent-free people with fewer brain cells than the money I have in my bank account. Maybe that was a bit harsh. So, let me revise my opinion based on a new study
In my time at a long-only asset manager, I was often frustrated at how consultants and other fund selectors will wait until a fund has a strong 3-5-year track record before recommending their clients buy it, only to (as probability and statistics would imply) watch it miserably underperform. Why not set up a consultancy that recommends the *worst-performing* funds of the prior year ... assuming, of course the long-term track record was sufficiently positive to demonstrate that the fund managers were in fact skilled stock pickers? Seems really straightforward ... but nobody does it.
Question: The study covers 2013-2017 a period of upward trending markets with very little volatility. How did these influencers perform at the during the downturn at the end of 2018 or during the pandemic panic in 202o or the Fed induced bear market from Jan 2022 to Oct 2023? It would be interesting to see how they fared during difficult times as opposed to good times.
Did you ever see the % of engagement of their posts? Even for a "Chiara Ferragni" is 0,0...%
In my time at a long-only asset manager, I was often frustrated at how consultants and other fund selectors will wait until a fund has a strong 3-5-year track record before recommending their clients buy it, only to (as probability and statistics would imply) watch it miserably underperform. Why not set up a consultancy that recommends the *worst-performing* funds of the prior year ... assuming, of course the long-term track record was sufficiently positive to demonstrate that the fund managers were in fact skilled stock pickers? Seems really straightforward ... but nobody does it.
Apropos your thoights, the much-maligned Jim Cramer on CNBC became so hated for underperforming stock picking https://en.wikipedia.org/wiki/Jim_Cramer#Controversies , that an ETF called "Inverse Cramer ETF" was launched https://alts.co/inverse-cramer-etf-performance-and-holdings/ ... only to eventually shut down https://finance.yahoo.com/news/inverse-jim-cramer-etf-shuttered-140000106.html "Cramer makes a multitude of calls, so deciding which ones to bet against—and when to close those inverse bets—takes discretion. In other words, even if it’s the case that Jim Cramer is a bad stock picker, the sheer number of calls he makes and the speed at which he shifts gears makes it difficult to devise a repeatable blueprint for betting against him."
So the secret to success appears to be "you can't dazzle them with brilliance, baffle them with bullshit" ;-)
Question: The study covers 2013-2017 a period of upward trending markets with very little volatility. How did these influencers perform at the during the downturn at the end of 2018 or during the pandemic panic in 202o or the Fed induced bear market from Jan 2022 to Oct 2023? It would be interesting to see how they fared during difficult times as opposed to good times.