Posts filed under “Sentiment”

Playboy Bunnies, Mila Kunis and the Myth of the Celebrity Stockpicker

Last week, I came across the following headline: “As music sales fall, sax player Kenny G turns to stockpicking.”

My immediate reaction: Uh oh. The last thing any bull market needs is for celebrities to be featured in the financial press. As soon as that starts, it means the bull market must be near a top, right?

Before you nod your head in agreement, let’s do some digging to see if the contrary-indicator idea is right and not just a trading-desk anecdote. A search shows that the stock-trading celebrity is a regular feature of what is obviously a bored financial press. If only there were anything important going on that might be worth their attention, then journalists wouldn’t have to bother with this sort of fluff. But hey, nothing really important has been happening, so why not discuss the Kenny G Long Short Leveraged Alpha Fund?

Where was I? Oh, celebrity stock-picking.

Here is a brief survey of how they have done:

Mila Kunis: Last spring, CNBC featured the adorable Kunis discussing her favorite stocks. I am not being sexist when I call her adorable. When your audience skews heavily male, producers and programmers want to feature as many appealing starlets as they possibly can. (The Wall Street Journal’s Marketbeat blog took the other side of the trade from Kunis, and so far, she has trounced them.)

Rachel Fox: About the same time, the teen actress began dabbling on the side as a stock trader. The star of television’s “Desperate Housewives” and the film “Dream House,” set up a website, Fox on Stocks, with the tagline, “Stock market perspectives from a 17 year old trader.” If ever a line of pop culture screamed market top, this was it. Only not so much.

Shia LaBeouf: When he was filming “Wall Street: Money Never Sleeps,” the sequel to the classic Charlie Sheen-Michael Douglas film, LaBeouf developed an interest in stocks. He started trading in 2010 and turned $20,000 dollars into $300,000. Even if he just bought an index fund in 2010, that would go down as a great bit of market timing.

Kim Kardashian: Here is a headline that should make Tim Cook shudder: “Kim Kardashian Likes Apple.” Only she didn’t exactly say that. She tweeted “Apple Becomes the Most Valuable Company in History” on Aug. 20, 2012, when Apple traded at about $93, adjusted for splits. It topped out the next month at a little more than $100, fell to less than $60, and has since rallied to new highs. Draw your own conclusion about the sex-tape-releasing-reality-star’s stock-picking prowess.

Gisele Bundchen: The supermodel didn’t exactly trade stocks, but she did make waves in November 2007 when she told Marie Claire magazine that she wanted to be paid in euros, not dollars. At the time, her personal net worth was $150 million — or should I say 102 million euros, when the dollar bought 0.68 euros. Since then, that trade has gone against her, as the euro has fallen and the dollar has rallied. A dollar is now worth 0.78 euro, a 12 percent loss of income merely based on her currency choice.

Lenny Dykstra: Then there is the long sad tale of the baseball player Dykstra. In 2005, the former star for the Mets and Phillies started a stock-investment column at It ended in bankruptcy and a host of criminal charges. Last year, the former slugger got out of jail. But the timing of the 2005 column was hardly a market-top indicator, as the bull run that started in March 2003 was only halfway over.

Playboy Playmates: Few stock-picking celebrities got as much attention as the Playboy Playmates who managed to outperform legendary Legg Mason money manager Bill Miller. Miller was on a streak, a triumphant run of outperforming the Standard & Poor’s 500 Index for 15 consecutive years when the Playmates trounced him in a 2006 stock-picking contest. Oh, and the bull market still had some room to run.

There have been many other examples. Fortune told us in 1999 that actress Barbra Streisand was investing in tech stocks, quoting her as saying “If I see red, I sell quickly.” We learned a year after the market topped in 2000 that NCAA athletes liked to dabble in stocks. And just last year, some folks told you that when Houston Texans running back Arian Foster took himself public, it was the height of the bubble. That too was wrong.

My takeaway from all this fluff is that the occasional celebrity who winds up in the press for their dabbling in stocks is a fairly random event, without much significance for valuation or timing. At least, that’s based on what my Google search seemed to show. Maybe some academic might pick up the baton and do a deeper dive into the Lexis/Nexis archives to see if the totality of celebrity stock-picking has any meaning.

Back to Kenny G and his newfound interest in trading stocks. My advice would be to stick to broad indices via low-cost exchange-traded funds and invest for the long haul. When this bull market finally ends, as they all do, it will be for reasons that few, if any, of us can foresee. The mere fact that Kenny G is investing will not be one of those reasons.


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Category: Contrary Indicators, Investing, Really, really bad calls, Sentiment

Too Bullish or Too Bearish?

One of my favorite pastimes is dissecting accepted Wall Street wisdom to see if it contains any value for investors or traders. Often, upon examination, the widely held beliefs turn out to be closer to magical thinking than financial acumen. One of the more recent examples is the way some analysts use data on sentiment…Read More

Category: Markets, Sentiment, Trading

1958: Public Investing in the Stock Market as Never Before

This week in 1958: LIFE Magazine highlights a strange new phenomenon: The public is investing in the stock market as never before. “On the average,” reports LIFE, “500,000 new customers a year have been getting into the market and 8.6 million Americans now own some kind of common or preferred stock…. To an extent which…Read More

Category: Investing, Markets, Sentiment

Household Rotation from Fixed Income to Equities

  Today’s chart comes to us from Torsten Slok, the chief international economist at Deutsche Bank AG. While rumors of an institutional rotation — selling equities and buying fixed income — swirl, we see the opposite behavior from households. Continues here    

Category: Investing, Sentiment

About David Tice’s 60% Crash Call . . .

Earlier this week, Prudent Bear fund founder David Tice warned of an imminent crash — as bad as 30-60% down on the S&P500. One small thing: This is pretty much the same call that Tice made in 2010 and 2012. Apparently, if you make the same crash call every 2 years, most of the media…Read More

Category: Markets, Really, really bad calls, Sentiment, Short Selling

In Stock Market, Anxiety Can Be Good Thing

Source: WSJ

Category: Digital Media, Investing, Sentiment

Mauldin: Bubbles, Bubbles Everywhere

Bubbles, Bubbles Everywhere By John Mauldin August 15, 2014     Easy Money Will Lead to Bubbles Excess Liquidity Creating Bubbles Humans Never Learn Anatomy of Bubbles and Crashes A Few Good Central Bankers Jack Rivkin at His Best Dallas, San Antonio, and Washington DC     The difference between genius and stupidity is that…Read More

Category: Books, Sentiment, Think Tank

Wall St Bullishness vs Equities Complacency

Funny to wake up after yesterday’s selloff to see two such diametrically opposed views from major investment houses:    

Category: Analysts, Sentiment

Edginess or Extrapolating The Unextrapolatable

Edginess. No, I am not referring to the one sought by my daughter by rolling her own and pushing boundaries (fortunately, for a parent, eschewing the tats, for now at least), but as in uneasiness, anxiety, disquietude, restiveness, worry, and an increasing sense of agitation of the type that George Soros wrote about in his…Read More

Category: Sentiment, Think Tank

Where Did All the Bulls Go?

Source: BofA Merrill Lynch, Global Research, Bloomberg   Continues here      

Category: Markets, Sentiment