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I have been seeing a lot more apocalyptic forecasts lately…in my social media feeds. Previously, most forecasts were created and distributed by market strategists and economists working at a financial firm. But lately, I am seeing a lot of these forecasts, which have been entirely apocalyptic in my social media feeds. What gives?
I’ll Pay to Have You Read My Forecast
Well, it is because these forecasts are sponsored. These firms are paying social media companies to get you and I to click and read their doom-and-gloom forecast. Why? What’s in it for them? Frankly, that is the question every investor ought to ask themselves about every single piece of research, opinion, etc.
So what’s in it for them? Well, if you search through their website their sole purpose is to sell you a newsletter. Apparently the revenue they will make on your subscription is of greater value than trading on their own recommendations. If they really were prescient or had a highly predictive model/algorithm, they wouldn’t sell it. They would use it themselves and make a ton of money.
When Wrong, Just Change the Date
In May, I saw a forecast that looked very familiar to me. I know I had seen this same forecast before, but not recently. I did a bit of searching and found that the exact same forecast was made in January. But when it didn’t come to pass, they just updated the forecast with a new date and no mention that their prior forecasts were way off.
Perhaps they figure that no one would look into their past forecasts and track record. And they are probably right.
These are comical and eye opening. After viewing this, every investor ought to know that this is nothing more than fear-based marketing. It is not much different than ads for gold, survival kits, or other doomsday profiting businesses. They are just using the stock market. And since the media leads with negative stories (if it bleeds, it leads), apocalyptic forecasts can seem credible.
In January 2023, I saw the following forecast:
In April 2023, I saw this ad. Same forecast – just updated the date:
And 3 days after that deadline came and went, I saw this forecast:
Why pick a date…just make it for the entire year of 2023. Now they won’t have to update their forecast until 2024!
The Devil is in the Fine Print
Let’s say an unsuspecting investor, who also believes all the negative headlines and that the market is going to tank, signed up for this newsletter. How much does the company and research department believe in their own forecasting abilities? Well, we already know that they don’t believe their own predictions will be profitable because they are selling them in a newsletter. But if you read the fine print, you may come away even more disillusioned.
When you read the fine print, you realize that their forecasts, stock picks, etc… are for informational purposes only and not to be relied upon for investment decisions. Then why should we read them? The same way we may a horoscope – for entertainment purposes only. Interesting how marketing works. Say what is needed to get the “sale,” and then make sure the attorneys tell the truth in the small print – after all, people (investors) don’t read the small print. But maybe they should!
As in all aspects of life, let the buyer beware. You have been warned!
Related: The ‘Machine Learning’ Threat