The WSJ has a must read on how a new generation of investor is getting investment advice. Youtube channels and discord groups run by folk with no formal background or knowledge of investing have apparently taken the place of licensed professionals . What could go wrong?
Below are some of the highlights, but the full article is well worth your time. This is the belief system and behavior we start to see near market tops. An entire generation of young investors doesn’t know what a bear market looks like. Sadly prudence and skepticism have gone out of favor.
You can read the entire article here.
Rule 3: All bulls, no bears
Like most internet content, influencer videos thrive on popularity. And in the midst of a long-running bull market, what’s popular is success stories and hot tips only.
Many influencers report that when they hype an investment, they get the page views they crave. When the message is bearish, however, viewers turn away, or worse, attack the messenger with vicious trolling.
“For their entire adult life, the market has gone up. If you say otherwise, you just don’t get it,” said Scott Galloway, a marketing professor at NYU who has been trolled himself after posting skeptical videos about companies.
The real danger in the social-media finance world, he says, is that younger influencers tend to believe the market only goes up. Their followers reinforce this message.
“There is a surrender-to-the-narrative-or-else attitude online, and it’s really frightening, because if you say bitcoin is overvalued, or Tesla is overvalued or whatever popular SPAC is overvalued, these trolls in anonymous accounts come out of the woodwork and start attacking you,” Mr. Galloway said.
Critics of cryptocurrency investments are dismissed as spreaders of “FUD” (“fear, uncertainty, doubt”) in comment threads by trolls, a way of labeling an influencer as untrustworthy. Female online finance gurus have described sexual harassment in response to negative posts.