Reasons to Pay Attention to Celeb Stock Index

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Apr 24

If you want a new way to look at the stock market, consider the advantages of the Celeb Stock Index. Will you earn more money? Maybe. Maybe not. Still, there are plenty of reasons to pay attention to the Celeb Stock Index.

#1 Celebrities Are Prettier Than Warren Buffett

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Image via Flickr by KiltBear

Warren Buffett has an estimated net worth of $53.5 billion. When it comes to choosing stocks, he’s a man worth listening to. Then again, would you rather look at Warren Buffett’s old mug or Angelina Jolie?

Sorry, Fisher Investments Ken Fisher, but the same goes for you. The man gives great financial advice, but it’s hard to read his column when you could stare at Jolie.

#2 Some Celebrities Actually Know What They’re Doing

Don’t put a lot of faith in Charlie Sheen. He doesn’t seem to know anything about picking winners.

Some celebrities, however, actually do their research. They prefer acting as the spokespeople for companies that do interesting, beneficial work. Some even do research. Believe it or not, Ashton Kutcher, who’s best known for acting like an idiot on TV and film, knows how to pick great tech stocks.

#3 People Listen to Celebrities

The stock market responds to real-world pressures like international relations and government regulations. But it also responds to how people feel. If they feel good about a stock, they tend to invest in it. That causes the stock’s value to go up. If they feel anxious about a stock, then they sell and the value drops.

Considering that people actually listen to celebrities, it could make sense for you to pay attention to the Celeb Stock Index. After all, 40.3 million people watched the 2013 Academy Awards but 33.5 million watched the State of the Union Address.

#4 Entertainment Makes Money

When a movie earns huge profits, the companies (it’s hardly ever one company) that made the movie should also earn higher profits. Well, then it makes sense to invest in projects connected to celebrities who often appear in profit-making movies.

When Angelina Jolie makes a Tomb Raider movie, there are at least eight publicly traded companies involved, including:

  • DreamWorks Animation
  • General Electric
  • Disney
  • Comcast
  • News Corp
  • Viacom
  • Sony
  • Time Warner

If those companies stand to earn money from Jolie’s work, then you should invest in them.

The same logic applies to sports, music, and other types of entertainment.

#5 Numbers Are Hard

Have you ever tried to pick a stock based on earnings reports and profit projections? It’s not easy. It gets even harder when you consider things like government regulations, the price of fuel, and competition with other companies.

Benoit Mandelbrot thought it was possible to predict stock activity with math. Well, good for him. Most of us aren’t math geniuses who have uncovered new fields of study.

Besides, so much psychology goes into determining stock values that math might not even work that well as a predictor. Why stress out about it. Taylor Swift is pretty, famous, and wealthy. Just follow her.

Have you ever played with the Celeb Stock Index? Do you think it works, or is it just fun and games?