"Not Financial Advice"

It has become extremely apparent in recent weeks that individuals with large followings are giving blatant financial advice on X. This is not new, but this phenomenon did die down for a bit between 2021 and now. The recent posts from Dave Portnoy are eerily similar to posts on Twitter during the 2021 “stonks only go up” era. 

Portnoy is an incredibly influential figure with a wildly successful business. He has earned the respect of many and continues to build his impressive business empire. Other influencers have given their takes on crypto and the stock market via X as well. The issue I take with this is that they openly state their opinions, and how they are positioning themselves and then usually leave a little “this is not financial advice” disclaimer on their posts as if people take that seriously and won’t let their favorite influencer influence their decisions financially. 

It is kind of wild to think of the influence these people have on us. They are the trend starters; they have built incredible brands through years of hard work and usually, they have what we sometimes refer to as “F you money.” They use their platforms to engagement bait; drive clicks and further build their businesses.

I believe that someone like Dave Portnoy giving financial advice via X can be detrimental, especially to his young followers who want to be like him. Let’s make one thing clear: these influencers did not gain their wealth by picking stocks or trading options. So, why would we let them give us financial advice?

I’d assume we allow ourselves to be influenced in such a way because of these people’s wealth. If this 1%-er, wildly successful businessman is doing something with their money, why wouldn’t we want to follow that up? 

That is the exact reason why we should not be following the trades these ultra-wealthy influencers are making. They have the money to lose. Dave reportedly has a net worth of $150,000,000. This is incomprehensible to the everyday, working-class citizen. He is a notorious sports gambler and has no issue losing bets that would be considered “life-changing” money for anyone else. He has a completely different mindset when it comes to speculative investments than an average person would. And he should! He’s worth one hundred and fifty MILLION freakin’ dollars!!!

I’m not coming at Dave or trying to single him out. He has incredible influence over his followers. I want to make it a point that what the ultra-wealthy and these highly influential people are doing financially is likely not applicable to us. Be wary of where you are getting your investment advice from. If you want a qualified opinion, work with a professional! Taking an influencer’s advice is probably not the best idea… especially if they are openly telling you not to follow their advice! 

See below for a reference to Dave’s post. He openly tells his 3,000,000 followers that he bought call options (a derivative contract that is very speculative) after he bought them… This option is incredibly speculative, most financial advisors would say this is more of a gamble than an investment. 80% of options expire worthless. This is a game of Russian Roulette, with a small chance for a large payout. 

He tells everyone he is a gambler and not a financial advisor. However, it is more likely than not that tons of young people are following this trade. 

Here’s some speculation for everyone. Do we think that Dave influenced people to purchase the same exact call option as he did? Below is the call option volume on Tesla $240 calls for August, September (the exact options he bought), and November. The clips are from the day Dave posted his position. Is it just a coincidence that the September call option volume was 10 times larger than August and 81 times larger than the November call option volume?

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Have a more specific question or want to get your finances in order? Feel free to reach out to [email protected] for a free consultation!