The funny moments of the investing world
April showers bring May flowers, but rather than rain, let’s hope for a shower of positive stock market gains. In fact, April is one of the best months historically for major indices like the S&P 500 and Nasdaq. Of course, past results don’t guarantee future results. But instead of graphs, we’re aiming for laughs.
In honor of April Fool’s Day today, we’re celebrating funny money. We aren’t referring to the 2006 film where Henry Perkins finds a million dollars inside a briefcase, but rather the comedic stories around investing. We love to praise those who make incredible investment decisions, but this April Fool’s Day, it’s time to sit back and chuckle at some of the ridiculous events that come with the territory.
And if you have any other stories we may have missed, we’d love to hear them on X (@M1Finance).
Here are five stories of investing blunders we thought might make you chuckle today, and maybe give you a blueprint of what to avoid as you build your portfolio.
Story #1: Books live forever, and so do bad stock market calls
A bad prediction in a casual conversation could easily fade from memory. But the minute you publish it, it can become the punchline of never-ending jokes.
After searching around on Amazon (which is up 19% YTD), I found a book titled ““Dow, 30,000 by 2008.” Why It’s Different This Time.” The book cover and headshot of the author exclaims confidence, bringing someone to believe that the author may know something you don’t.
The book was published on December 1, 2001, and the Dow was around roughly 10,000. So the book claimed it would triple in a seven-year span. Well, he was off by a bit as the Dow hit 30,000 in November 2020 – leaving the author’s prediction off by 13 years.
While the author Robert Zuccarro doesn’t mention this wildly off prediction in his bio, the internet hasn’t let this one fade. The comment section on the Amazon page for the book is quite entertaining.
One commenter said, “Makes a great gag gift!” Another said, “I’ll stick with boring, conventional wisdom (Bogle, Graham, Malkiel) and index funds, thanks.”
Story #2: A killer scene turned a notable brand downward
While binge watching the latest Sex and The City series reboot, “And Just Like That”, you likely noticed a key character get killed off, which inadvertently influenced a now-struggling stock.
In the first episode of the series reboot, Carrie’s husband, Mr. Big (Chris Noth), worked up a sweat on a Peloton bike and inadvertently died of a heart attack. Note: this was just in the show, he is alive and well.
The episode debuted on Thursday, December 9th, 2021, at 3 p.m., with Peloton stock price hovering at $46.14. As fans tuned in and saw the shocking death, the quick sell off of Peloton stock began. By the end of the trading day on Friday, the shares fell to $38.51 — a 16% decrease.
After Peloton’s Dr. Suzanne Steinbaum saw what the reboots unexpected product placement led to, she snapped back defending Peloton. She said, “Mr. Big lived what many would call an extravagant lifestyle— including cocktails, cigars, and big steaks—and was at serious risk as he had a previous cardiac event in season 6. These lifestyle choices and perhaps even his family history, which often is a significant factor, were the likely cause of his death. Riding his Peloton Bike may have even helped delay his cardiac event.”
Following the statement by Dr. Steinbaum, rumors began swirling that Peloton would take action against HBO for harming its brand, but it doesn’t appear the workout-brand sought litigation.
The favored brand during the pandemic reached $150 per share but is now down to a mere $4 — an 83% loss since its 2019 IPO. The company’s CEO told investors in its most recent earnings that “our biggest challenge continues to be growth, at scale.”
Hopefully Mr. Big sold off his Peloton shares before his workout.
Story #3: A cringey dance sent one company stock up and to the right
The phrase “guilty by association” is typically a negative correlation, but a familial connection to a viral song sent a largely unknown stock soaring.
2012 may seem like a century ago, but the South Korean hit song “Gangnam Style” by PSY is nearly unforgettable for its quirky dance and peppy beat. The song went viral in August of that year and reigned at the top of music charts in over 30 countries. It only ever reached #2 in the United States, behind “One More Night” by Maroon 5. In fact, it was the very first YouTube video to hit 1 billion views.
As PSY gained global stardom, fans discovered that PSY’s father, Park Won-ho, was the co-CEO of DI Corportation. This led to a frenzy of fans buying up shares of the Korea-based semiconductor company. Over the following 20 months, shares jumped 424%.
The stock remains volatile since the video release, but shareholders of DI Corporation are surely still dancing as shares are up over 300%.
Story #4/5: Nesting on the wrong stock pick
My grandfather has always told me to “measure twice, cut once”, meaning double check what you’re doing before you do it. Well, many investors have found themselves not measuring correctly.
You’re likely familiar with Nest, the home security company that offers smart doorbells and other smart home devices. The company started in 2010 and exploded in popularity. Four years later, it was acquired by Google in 2014 for $3.2 billion.
This sent investors running to buy shares of Nest, and found the ticker “NEST”, and hit the buy button. However, Nestor Inc (listed as NEST) was a defunct red-light traffic camera company that largely sat dormant on the NYSE since 2009. The stock was largely a penny stock, but this mistake by eager investors sent NEST upward by 1,900%.
A similar event happened more recently. As workers were sent home and Zoom meetings became commonplace, investors ran to find Zoom Communications stock. You would think it’s ZOOM, right? Well, the California-based video meeting company ticker is ZM. This mistake sent Zoom Technologies (ZOOM), a China-based manufacturer of mobile phone components, upward. This confusion led the SEC to pause trading of the lesser-known ZOOM.
So before you publish your next bullish or bearish stock market prediction, or hastily buy shares of the next hot stock, it may be worth taking a deep breath. You may find you need to quickly laugh at yourself, like I do more often than I’d like to admit.
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