Would Kim Kardashian make a good investor?
The new website Likefolio.com believes Kim might just be better than we think. The website tracks Facebook and Twitter comments, and then sorts them into publicly traded companies that you can track and follow.
The idea isn't without precedent. In the book One Up on Wall Street, former mutual fund manager and investing great Peter Lynch posited that individual investors commonly make the mistake of trying to beat Wall Street at its own game and invest in companies they aren't familiar with. He advised instead that investors buy into companies they know and understand. Lynch gave the example of a tire salesman buying Firestone stock. That makes sense: Who has more of an edge on Firestone than someone who sells tires?
Lynch's theory isn't perfect, though. In many cases, people aren't even aware that the phone they use every day, the social media outlet they love to connect with, and their morning coffee are all publicly traded companies. Moreover, just because the individual likes to drink a certain type of coffee, that doesn't mean the company is doing well. Likefolio attempts to solve both of those problems.
So, with that in mind, let's put Likefolio's theory of, "We're actually better investors than we think" to the test. I'll do this by using Likefolio's "Celebrities' most mentioned companies" page to find the five most-mentioned stocks by celebrities, and look back at how well the companies have done.
After you see what Kim Kardashian and her fellow celebs are tweeting about, you might be tempted to immediately click over to your broker's site and start buying up these celebrity stocks. I must ask you to resist this urge, though. Use this instead as a potential starting point for more research.
With that, check out the slides below -- you're not going to believe what I found.
Your next stock market home run
The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!