Don’t Bet Your Portfolio On The Twitter IPO

Twitter Announces Plan To Float On Stock MarketConsider keeping your social media activity on your computer, phone or tablet—and out of your portfolio.

People seem to either love or hate Facebook and Twitter, with emotions ranging high, like rooting for our favorite sports teams.  Personally, I’m unlikely to win any football or basketball office pools because I’m so biased toward my favorite teams.

We can also suffer from some of these polarizing bias issues with individual stock selections—and especially social media stocks bearing the names of the most recognizable thumbnail icons of our time.

There will be winners and losers with Twitter, as with any stock, but I’m content to be an observer.  This is for a couple specific reasons:

1)     I am biased.  Unlike Facebook, which I dumped as a personal social media outlet (for seven reasons that were important to me), I really like Twitter.  I hope Twitter continues to do well so that those of us who are fans will continue to benefit from its many uses well into the future.  In other words, I’m biased.  I’m vested, and that detracts from my ability to be the best investor.

2)     Another reason that I’m tentative about this whole Twitter IPO business is that, well, the company has never made a profit.  One of the reasons for its cult following is that you don’t get slapped in the face by endless ads hunting for the content you seek (unlike some other social media platforms).  You don’t have to be a stock picker to know that Twitter will have to access “as-yet-untouched monetization levers,” according to Jeff Bercovici at Forbes, in order to reach the upper end of its anticipated price range.  That means they’ll have to find new ways to sell us, and if you’re anything like me, you’re probably hoping to be an untouchable monetization lever.

This is not investment advice—it’s gambling advice, because at this stage of the game, it’s anyone’s guess whether or not Twitter is going to successfully remake its loyal followers into a money-printing machine, 140 characters at a time.

TWEETABLE: Consider keeping your social media activity on your computer, phone or tablet–and out of your portfolio. #TwitterIPO

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Facebook Isn’t Always Your Friend: Don’t Get Burned By Social Media

gty_facebook_like_button_nt_130313_wblogWe’ve known for a while now that employers are scanning the social media presence of would-be employees before making a job offer.  More recently, we also learned that our very own credit worthiness could be impacted, not only by the content we put forth, but also by the knuckleheadedness of those to whom we are connected online.  Alternative lenders, such as Lenddo, Kreditech and Kabbage, may track social media activities of you—and your friends—in determining whether you or your business are a worthy credit risk.  So unless you decide to follow my personal path—Facebook abstinence (the only method proven scientifically effective in 100% of cases)—I hereby offer the only slightly less certain way to avoid being haunted in the future by your social media past: Don’t “say” stupid [stuff] online.

Consider this litmus test to be applied before liking, updating, tweeting, sharing, tumbling or pluss-ing:

Only share that which you would be happy to see appearing in BOLD CAPS on the front page of USA Today, the New York Times and your home town paper.

Even if we’ve been duped into believing that social media offered any level of privacy whatsoever, the reality is that it doesn’t.  Its inherent design is to compound, to magnify and to extend the reach of whatever message we communicate, for better and worse.  Privacy settings, if anything, obscure the fact that we are exposed.

It deserves mention that Facebook, contrary to some reports, is not the devil.  Nor are they, or any other social media outlet, an altruistic venture.  They all teeter on the fence between the seemingly opposed realms of Beneficial and Intrusive.  Ironically, however, it is hard to imagine their offering much of a benefit were it not for their intrusion.  It is our input that builds the algorithms in Facebook to direct us to the friends we seek and the artists, brands and personalities we follow.   In the case of these unique lenders, it is individuals and businesses lacking sufficient credit history to receive loans through conventional means who are divulging their online activity to the alternative lenders who find parallels between social media activity and credit-worthiness.  We’re not talking about major credit agencies, banks and insurance companies requiring our social media login information—yet.

Whether we are looking up old schoolmates on Facebook, scanning for trends on Twitter, building our virtual networks on LinkedIn or applying for a loan, it is up to us to determine what information in our possession is worthy of dissemination in these venues.  While it seems that every third person we meet these days is a “Social Media Consultant,” the aforementioned litmus test for online activity won’t cost you an awkward lunch meeting and is simply based on applying the 2,400 year old Hippocratic Oath to ourselves—first, do no harm.

Whether we like it or not, we may need to consider protecting our social media footprint the way we protect our credit score, for the sake of our available credit, our employment and even our reputation with family, friends and colleagues.  As Will Rogers said well before Al Gore invented the interwebs, “It takes a lifetime to build a good reputation, but you can lose it in a minute.”  The advent of social media has given us the opportunity to fast-track reputation building, but it has also shortened the journey to embarrassment and magnified every online misstep.  You can’t delete your past, but you can delete your post. So unless you’re willing to see that post, tweet, status update or email making headline news, consider hitting delete instead of send.

If you enjoyed this post, please let me know on Twitter at @TimMaurer, and if you’d like to receive my weekly post via email, click HERE.

Twitter—A resource, not a popularity contest

If you live in the MidAtlantic, how did you confirm it was an earthquake that shook the ground on Tuesday, the 23rd[i]?  You probably asked someone in your office if they felt that or picked up the phone to ask another scantily qualified source the same question.  That’s what my wife did, and the phones didn’t work, only further exacerbating her fear.  I looked at my phone and checked Twitter. 

In last week’s post, I referenced a pot-stirring discussion I started within the financial planning community via the no-longer-new-fangled communication medium known as Twitter, and I promised to devote this week’s post to this phenomenon-turned-convention that, after a couple years of stumbling and bumbling through, I’m finally learning how to use effectively.

I am not one of the early adopters, embracing every technological innovation.  For example,  I scoffed at the notion of reading a book on anything other than paper pages, and only became a Kindle convert after my well-read mother showed her own willingness to embrace an e-reader (in her case, a Nook).  I also tried Twitter for the first time about two years ago, prodded by a well-intended arm twister encouraging me, “You’ve gotta be on Twitter!”  The first time, I gave up on it in spirit after about two days.  The Twitter canvas was too broad for me to understand and appeared to lack any depth or genuine import.  I struggled to know why I should care what anyone is doing multiple times throughout the day.  I cancelled my first account after only weeks.

But as the medium started to become more ubiquitous, most of those who I respected as communicators in more traditional veins began to embrace Twitter.  I started to explore the concept more and read how others I respected were using it effectively.  The second time I approached Twitter, then, I came willingly, not out of compulsion.

The result?  Twitter has become my number one source for quality information intake.

For starters, let’s explore what Twitter actually is.  It’s a communication medium in which messages are sent and read—the catch is that these messages are limited to no more than 140 characters.  They’re not captured, like an email, but instead they scroll as they are submitted.  Like me, you might wonder what of much value can be said in little more than a short sentence, but among those 140 characters can (and often is) a link to an external URL—a web address that takes you to a particular article or blog post.  Now, when each of my favorite reporters at institutions like the Wall Street Journal, Forbes, Money, Kiplinger’s Personal Finance or the New York Times, or online outlets like TheStreet.com, writes an article they send a Twitter notification to all of their followers.

The revelation I had about Twitter was that although it can be a very effective tool for sending a message, it’s an even better mechanism for scanning and receiving information—quality information, not just where B celebrities are having lunch.  So, even if you don’t care to say anything on Twitter, you’re welcome to open an account and just start following the people whose writing and preferences interest you.  And, if they start sharing too much information for your taste, you simply stop following them.

If I’ve tempted you to consider Twitter, let me bring you up to speed on the vital Twitter terminology you’ll want to understand to make yours a beneficial experience:

  • Handle:  A handle is the actual string of letters and numbers preceded by an @ sign, with which you’re identified on Twitter.  You can keep it simple, like me, and use some variant of your name—@TimMaurer—or you might use something more creative and clever, like the personal finance blogger I follow, @feedthepig.  Twitter sign-up is free and can be done at www.twitter.com.
  • Tweets:  Tweets are the 140 character messages you create and read.  (I guess that makes those of us utilizing the medium either a Tweeter or a Twit!)
  • Retweets:  When you read something you like or support (or disagree with), you can retweet the original message, as-is or with your comments.
  • Followers:  Whether you’re on Facebook or not, you’re no doubt familiar with their terminology by now.  On Facebook, you collect “friends.”  On Twitter, they’re called “followers.”  When you search a particular person or information outlet, you are given the option to follow them; if you do so, you become their follower.  If you’re broadcasting information, those you attract will be your followers.  Unlike Facebook, however, you don’t need permission to follow someone; but they’re under no compulsion to follow you back unless they choose to do so.  Initially, I was taught to just start following people for the purpose of attracting followers—and indeed, you’ll see a lot of people out there who have thousands of followers, but who follow almost exactly the same number.  I don’t have the time or desire to follow thousands of people, sorting the wheat from the chaff, so I follow only those whom I want to follow.  I view Twitter not as a popularity contest (a conviction more likely to fall on Facebook), but as a resource.
  • Stream:  Your stream is the running commentary of those you follow viewed on your computer or mobile device.
  • Lists: Lists are the way to make Twitter work for you.  Undoubtedly, you have various interests in life—vocational, financial, recreational, spiritual and beyond—and the creation of lists will help you hone what it is you want to read.  For example, create your own newspaper list; a list with reporters from all of your favorite traditional and online news outlets.  Each morning, wake up and see what they’re reporting. For example, I enjoy the Wall Street Journal reporter, Jason Zweig’s, market commentary, so I’m following @jasonzweigwsj.  (Recognize, though, if you follow an entire media outlet, you’re going to get ALL the news they’re sending and that may clutter your Twitter stream.)  Some of the lists I’ve created are “Best of,” “Personal (and other) Finance,” “Writing & Publishing,” “News,” “Music & Art” and “Life & Faith.”  Your lists can be public or private, and you can subscribe to the lists of those you follow and respect.
  • Twitter Terminology:  There is a lot of Twitter code out there, most of which I probably don’t know or understand, but the most common and powerful is no doubt the hash tag—#.  Hash tags can be created by anyone and they are ways for people to track particular discussion threads or trends.  The best example I can give you is that when I attended a recent financial planning conference, many of the attendees were using a common hash tag tweeting out great quotes from various sessions.  The hash tag was a way for all of the attendees to track the conference, even if we weren’t following each other.  This works for everything from #financialplanning to #mozart to #bacon.

Twitter may not be something in which you’ve been able to find value, so I’m not twisting your arm, telling you you’ve got to get involved with Twitter.  You don’t.  But I do think it could bring value to your pursuit of topics relating to money and life.  Enjoy!

By the way, if you’re new to Twitter and have any difficulty applying any of the above mentioned advice, please use the comments section of this post to ask any questions you have.  And some of you are far more adept in the art of Twitter—if that’s you, please feel free to correct or add to anything I’ve said in the comments section!


[i] A very important note here is that earthquakes are not covered under most homeowner’s insurance policies.  We don’t think about earthquakes much on the east coast, but we were reminded yet again recently that we DO actually live on a fault line.  For more information on the importance of adding earthquake coverage to your homeowner’s policy, read this past blog post: “Would your homeowner’s policy cover an earthquake?”