Social Media Trends: Does Mania Give Insight Into Investment Decisions?

While I am personally not a huge fan, social media can be a good thing. It’s good for connecting with old friends, sharing pics of the kids with family separated by distance, and for both networking and entertainment purposes. And while it very well may have its strong points when it comes to information sharing, social media trends and fads are often viewed as gospel, to the point of being used in investing strategies. My intention in this series is to discuss why this is not a good idea.

Let me start by giving you a recent, practical example of what I’m talking about, unrelated to investing.

Colorado College Football Mania

How about Neon Deion, also known as Coach Prime, and his Colorado Buffaloes football program?

Deion Sanders was one of the greatest cornerbacks and punt returners in football. That’s not hyperbole. It’s a fact. He turned his football prowess and flamboyant personality into a multi-million-dollar marketing empire, becoming a household name and using his brand in a coaching career that has landed him a coaching gig for a University of Colorado football program that had gone from powerhouse to doormat in just two decades. The team won just one game last year and lost all the others by an average of four touchdowns.

Enter Coach Prime and load up the Buffaloes hype train. In less than six months, he has gutted the program down to the studs, giving the pink slip to over 80% of his original roster. Critics said what he was doing was suicidal and that he would fail miserably. But Deion is a master showman and social media genius, and he immediately began sucking all the offseason air out of Athens, Tuscaloosa, Ann Arbor, and Columbus smack dab into Boulder, Colorado.

Coach Sanders brought vision and discipline to a floundering program. He brought life to a team on life support and hoped that Colorado could return to their glory days of the 70’s and 80’s.

Social media hype created tangible results

The Buffs sold out their spring game. With an impressive win over a sleepwalking Texas Christian team in brutal heat, Deion and the Buffaloes are playing to larger audiences than Alabama-Texas or Tennessee-Florida. Every gameday podcast and college football article leads with Colorado. Fans and non-fans just can’t get enough. And now the notorious basement dweller has suddenly become the hottest ticket in football. 50-yard line seats for the Nebraska game were around $4,000 before kickoff. Deion’s original ditty, “We comin’,” has quickly turned to “We here.”

It’s Buffalo mania everywhere. And social media is giving it all they have to hype them into the stratosphere. Even Deion himself is getting in on the action. Three weeks into the season, he launched his very own line of sunglasses that brought in almost $2 million in one day.

How long will the CU football social media trends last?

Folks, this is craziness. People are going nuts over Colorado, and it can’t last. The mania that this team is a BCS playoff contender or that he is going to bring the PAC 12 to its’ knees this year is hyper-hype, and a clear head and common sense say to fade that dream.

I’ve seen this movie before, many times. Human nature makes us want to jump onboard mania trains, and this is no different. I predict the Colorado Buffalo social media inferno will be a quick burn, and if I bet on sports, I would be taking the under on this phenomenon.

Getting past the hype to analyze reality

This one’s pretty easy. Despite all the flash and euphoria surrounding the Buffs, several overriding facts about this team are circling high above Folsom Field and will descend like vultures to dine on Ralphie’s carcass before the 2023 season is over:

The program has zero depth. Though many starters are talented, a twelve-game schedule against PAC 12 opponents will wear them down, if not get them injured by playing so many snaps. And no offense, the backups just can’t hang with the big boys.

Outside of the skill players, who are really good and very exciting to watch, football is won and lost in the trenches, and inside the ends, the Buffs have more of a gorge than a trench, and it will only get bigger as the season rolls on and fatigue and injuries inevitably arrive.

They are one quarterback injury away from disaster. Deion’s son is a fine player, but have you seen his backup? I have, and it ain’t pretty. Two true freshmen and two walk-ons, none with any collegiate experience, are next on the lack of depth chart.

The 2024 recruiting class is weak. If the Colorado program is to become a top program in the country, they would be piggybacking on their early success and enjoying a top-ranked recruiting class for 2024, as high schoolers would be lining up three deep to play for Coach Prime. Want to guess their ranking? Top 10? Try again. Top 20? Not even close. Top 50? Try 80th. Out of 130 FBS programs, they are in the bottom half, ranked below powerhouses like Florida Atlantic, Coastal Carolina, UNLV, and even their in-state rival, Colorado State. Colorado has eight commits in this cycle, with just a handful of kids left on the board. Despite the mania, kids aren’t buying.

The front of this year’s schedule is a walk in the park compared to the latter third. Oregon, USC, UCLA, Oregon State, Washington State, Utah. That’s murderers’ row. Six Top 25 programs. And do you think for a minute any of the opponents will let up on these guys after all the publicity they’ve been reading? These teams are going to play like it’s the National Championship. They won’t talk smack, and they won’t provide any quotes Deion can use. Each team is simply going to tag team the Buffaloes, hitting them in the mouth on every play to the whistle and back to their locker room, tagging out to the next opponent who has their game with Coach Prime double-circled on their calendar.

I could go on, but you get the point. So despite all the hysteria and lunacy surrounding the Colorado football program, make no mistake, sometime in the next couple of months, good old Ralphie will be back out to pasture. The Colorado season and all the silly mania surrounding it will end, and social media trends will quickly move on to chase the next grand illusion it can obsess into oblivion.

So, if I were a betting man, I would bet that the Buffaloes don’t win more than eight games this year and that they end the season outside the Top 25. Let’s see how I do.

Social media trends and investment strategy

So, can you profit from social media mania in your investments? Here’s the bottom line: the amount of hype surrounding a topic or trend does not substantiate the investment. The very definition of hyping something is to “promote or publicize intensively, often exaggerating its importance or benefits.”

Over the next couple of articles, I will provide some more good examples of how social media can make the wrong investments look good, and vice versa. If you’re looking for a game plan with an analytical investment strategy, schedule a meeting with a Good Life Asset Strategies advisor.

The views expressed represent the opinion of Good Life Asset Strategies, LLC. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness.