Does Twitter have the power to move markets?
Published on 17th December, 2019 at 10:47 am
If your name is Elon Musk, the answer is yes. The Tesla boss’s tweets have sent his stocks rocketing in both directions with a simple 140-character statement, ranging from personal insults against one of the Thai cave rescuers to tweeting “Am considering taking Tesla private at $420. Funding secured”, which sent stock prices skywards. Two weeks later, he backtracked – again on Twitter – leading to shareholder lawsuits and investigations.
But is a CEO on Twitter all bad? Not if they use it wisely. A Brandfrog study revealed that 82% of respondents said they were more likely to trust a company whose CEO is on Twitter. A CEO who is brilliant on Twitter will help build connections, boost the brand and manage PR.
Apple’s Tim Cook is an example of a CEO showing the humanity behind the corporate facade, while Airbnb’s Brian Chesky uses the platform to crowdsource ideas. Richard Branson and Bill Gates use Twitter to promote philanthropic issues, and the CEO of Buzzfeed, Jonah Peretti, is predictably entertaining on his feed.
5 Things to know about financial Twitter
1. #FinTwit is a useful tool
Searching #FinTwit tweets (the short, hashtag form of financial Twitter) will lead you to a wealth of knowledge, from financial planners and stock-market fundis to money mentors and financial journalists.
As CNBC writer AJ Horch wrote earlier this year: “[Twitter] has become a go-to forum for Wall Street’s wisest, from banking elites to hedge fund billionaires and financial advisors, all of whom freely share their views on the markets and investing. If you actively manage your money in the market — or just want to increase your financial literacy — Twitter is a free resource to follow leading money minds, and even interact with them. FinTwit is an online community that primarily uses the social network to discuss investing.”
2. Be selective about who you follow on Twitter
Writer for financial media company, The Trade Risk, Evan Medeiros, suggests that you “follow wide but listen narrow”.
Medeiros says that Twitter is amazing because everyone is there talking, but it’s precisely that reason that you’ll want to weed out that chatter and focus only on people and accounts that actually bring you value during the times you are looking for it. “The people and accounts I follow range from personal to business to professional and if I were to try and listen to that firehose all mixed together at the same time, it will probably just frustrate me depending on what I’m looking for in that moment. For that reason, I recommend building lists and adding related accounts together so you can effectively zoom into your stream when you’re searching for specific conversations or ideas.”
3. The first to know
News often breaks on Twitter before being reported by agencies and trusted media sites. Twitter is immediate, and reporters regularly head to the social media site to share important news with the world instantly. Business Insider covered this in an article earlier this year, where they reported that a reputable Twitter feed had announced the Greeks reform deal before the news broke anywhere else. This instantaneous information allowed astute traders to make money before the rest of the market caught wind. Just be careful to do a quick fact-check – as quickly as real news breaks on Twitter, so does fake news.
4. Twitter can be entertaining as well as insightful
Twitter doesn’t have to be all work and no play. The Wall Street Journal’s investment columnist Jason Zweig put it succinctly: “Twitter isn’t just a megaphone for bragging about yourself and insulting your enemies, real or imagined. All investors should appreciate that some financial thinkers have turned the social-media site into a force for enlightenment and fun—if you follow the right people.”
Parody accounts may not provide real financial advice, but they do offer some light-hearted respite on bad market days – and chances are, you’ll be able to relate to many of the tweets.
5. Keep your wits about you
Medeiros warns, “the drawback of an open-access, free-to-use platform is that anyone can create an account and start broadcasting to the world without any qualifications. That means there’s a tremendous amount of noise to sift through and you shouldn’t blindly trust anyone’s research or analysis without doing some due diligence of your own”.
Who to follow – start here…
Closer to home:
Sanlam Investments: @SanlamInvest
FA News: @FAnews_online
Warren Ingram: @WarrenIngram
Maya Fisher-French: @mayaonmoney
Garth Mackenzie: @TradersCorner
Simon Brown: @SimonPB
Karin Richards: @Richards_Karin
Nerina Visser: @Nerina_Visser
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