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I remember when I would talk about the stock market with my grandpa. He would tell me things about reading quarterly reports or potentially seeing the names of the stocks he owned in the newspaper. If you wanted information about a company, you had to wait.
Imagine trying to explain this to a young investor today. Or even a jaded veteran who manages his own account:
“Sorry dude, you can’t read about your stock or its earnings right now. But in three months, I’ll use the USPS to mail you a report about the latest quarter.”
An entire generation of American investors lived like that. All of the information they got about their companies were random sightings in a newspaper, an occasional showing on TV, or a mailed report. That’s essentially it. Nothing else.
I don’t think many investors could live like that that today. I also don’t think many investors really understand how easy it is to get information about any company, executive, or product. It’s all here. Somewhere on the Internet. It just takes skill, and time to dig it up. Breaking news, earnings data, or customer reviews about a company is all at the whim of a router or strong cellular reception.
I want you to think about communication. The simple act of spreading an idea or sending a message from one party to the next. I want you to think about mediums. How do executives, founders, and leaders of company communicate this message with the shareholders who own their company? Those who pay attention to that simple question will win. Those who glance at it, or fall asleep, will fall behind.
First, let’s talk about how things worked many years ago. Or back when my grandpa was an investor. You only had a few ways to get a message about your company to the people who were investing in it or cared about it:
- Newspapers and magazines
- Radio
- TV
- Quarterly reports
It was Marshall McLuhan who said, “the medium is the message.” His quote means a message can be perceived differently simply based on the medium it’s being transmitted from. In the past, most messages spread and disseminated through institutions. You needed a national newspaper to disseminate a message, interview, or ad. Or a local radio broadcast to get a word spread across airwaves.
That game is over.
The medium is now the person. And that’s how it should be. Or it should have been like that all this time. But it took over hundred thousand fiber optic cables and satellites hovering above a blue marble to make it happen. Back in 2011, a mentor of mine said to me, “As more people connect through social, institutional journalism will fade.” I think if you look around at the current landscape, you can see how that comment marinated over time.
Media and institutions no longer control the message.
The middleman has been removed. An entire step is gone. Anyone can send, spread, or communicate any message they want at scale, and across the world. The game changer here is social media. It’s also starting to have its impact on investors everywhere.
Social media for public investors is the end of waiting for a message or a signal. It’s fascinating to me how quickly people forget that just thirty years ago everyone needed a morning paper to find out what was going on in the world. Now, you create, build, and learn from anyone in minutes. The merit is in the message. Followers, and fans are the proof. Social media is the transfer of institutional control over a message, whether it’s a TV network, newspaper, investor relations service or something else, to the actual person.
For investors, this means you need to get good at following the companies, brands, people, CEOs, and founders you care about.
And that brings us to Elon Musk.
I don’t care what you think of him. It might be negative, perhaps he uses Twitter too much, or maybe you think he’s the second coming. I’m not really sure. Instead put your opinions or emotions about him aside for one second. Today, he’s giving everyone a glimpse into the future of investor communication and message dissemination. Musk controls his own message. He wields Twitter like his own TV network. People are far more interested in what he says than what the actual company account does.
People want to hear from people. And for the first time, they can. At scale, too, and open for any investor of any size or interest.
Here’s an example. Reuters writes this Tweet about Tesla:body[data-twttr-rendered="true"] {background-color: transparent;}.twitter-tweet {margin: auto !important;}
Tesla shares skid further on concern over Model 3, report on brake test https://t.co/ja9bJAPBA0
— @reuters
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@aperezposada @Reuters .@Reuters is relentlessly negative about Tesla. They just wrote a bogus article saying S production last week was low by 800 cars. S/X annual prod is set at ~100k, ie 1,900/week. Tesla built 1,913 S/X cars at our standard ~50/50 split last week, which is right on target.
function notifyResize(height) {height = height ? height : document.documentElement.offsetHeight; var resized = false; if (window.donkey && donkey.resize) {donkey.resize(height); resized = true;}if (parent && parent._resizeIframe) {var obj = {iframe: window.frameElement, height: height}; parent._resizeIframe(obj); resized = true;}if (window.location && window.location.hash === "#amp=1" && window.parent && window.parent.postMessage) {window.parent.postMessage({sentinel: "amp", type: "embed-size", height: height}, "*");}if (window.webkit && window.webkit.messageHandlers && window.webkit.messageHandlers.resize) {window.webkit.messageHandlers.resize.postMessage(height); resized = true;}return resized;}twttr.events.bind('rendered', function (event) {notifyResize();}); twttr.events.bind('resize', function (event) {notifyResize();});if (parent && parent._resizeIframe) {var maxWidth = parseInt(window.frameElement.getAttribute("width")); if ( 500 < maxWidth) {window.frameElement.setAttribute("width", "500");}}There examples like this across Twitter. Here’s Raj Mathai posting a video showing what he believes is the current state of Tesla manufacturing:body[data-twttr-rendered="true"] {background-color: transparent;}.twitter-tweet {margin: auto !important;}
The future of #Tesla hinges on this gigantic tent. Overflow production line added in back lot of @tesla HQ. @elonmusk wants to pump out 5K #TeslaModel3 per week. @Teslarati https://t.co/KhPtPHerzB
function notifyResize(height) {height = height ? height : document.documentElement.offsetHeight; var resized = false; if (window.donkey && donkey.resize) {donkey.resize(height); resized = true;}if (parent && parent._resizeIframe) {var obj = {iframe: window.frameElement, height: height}; parent._resizeIframe(obj); resized = true;}if (window.location && window.location.hash === "#amp=1" && window.parent && window.parent.postMessage) {window.parent.postMessage({sentinel: "amp", type: "embed-size", height: height}, "*");}if (window.webkit && window.webkit.messageHandlers && window.webkit.messageHandlers.resize) {window.webkit.messageHandlers.resize.postMessage(height); resized = true;}return resized;}twttr.events.bind('rendered', function (event) {notifyResize();}); twttr.events.bind('resize', function (event) {notifyResize();});if (parent && parent._resizeIframe) {var maxWidth = parseInt(window.frameElement.getAttribute("width")); if ( 500 < maxWidth) {window.frameElement.setAttribute("width", "500");}}Here’s Elon Musk responding, clarifying, and providing what he thinks is true about the situation:body[data-twttr-rendered="true"] {background-color: transparent;}.twitter-tweet {margin: auto !important;}
@rajmathai @Tesla @Teslarati No standard automotive solution could be built in time, so we created a new solution. It is working & has slightly higher quality than the more traditional general assembly line. Perhaps most surprising is that the total cost of production in the Sprung tent is lower.
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If you’re an investor in Tesla, a fan of the cars, or someone who thinks Musk is a fraud, this real-time conversation is unlike anything seen before. Currently, almost no other company has anyone like this. The only other name that comes to mind is the CEO of T-Mobile.
The CEO of T-Mobile is John Legere, and you can find him doing posts like this almost daily:body[data-twttr-rendered="true"] {background-color: transparent;}.twitter-tweet {margin: auto !important;}
Well, @Verizon results are in & just as I expected: full of buzz words to avoid their 📉 in postpaid accounts, 📉 in prepaid wireless lines & 📉 on wireline rev & profit. Oh, & let's not forget they lost even more Fios video cust.... #yikes Did they even mention the #Go90 failure?
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In five to ten years, I believe the biggest winning companies will operate like Legere and Musk. Investors, fans, and followers will no longer want to hear from companies. They will want to hear directly from the people who run the companies. They will want them to use the social media tools in front of them to connect. To engage in free debate, and to transmit something to everyone instantaneously without prejudice or bias.
When Musk tweets, the big bulge bracket banks, the ones with billions of dollars under management, or more than 10,000 employees, get the exact same information as me, the guy who moved to New York City a year ago, manages his own account, and lives in an apartment the size of some closets.
This is a new paradigm.
I hope you enjoyed reading about. I hope to expand on it further down the road. And I hope you’ll follow me on Twitter where I talk about stocks, investing, and the future of finance.
Thanks for reading! If you enjoyed it, subscribe to my email here and I’ll send you some of my other writings and notes. Make sure you’re also following me on Twitter and StockTwits. I also invite you to read some of the other posts I’ve written:
- A Simple Hack To Stop Making Dumb Investments and Regretful Trades
- How the Founder of the 5th Largest Cryptocurrency Learned About Long-Term Investing
- What I Learned From the Investor Letter Warren Buffett wrote after the Financial Crisis
Elon Musk, Twitter, and What It Means For Future Investors was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.