No, Really, TikToks and Tweets Could Make You a Smarter Investor
How Lily Francus, Kyla Scanlon, and other breakout stars of financial social media are cutting through the noise.
Lily Francus
Photographer: Sasha Tivetsky for Bloomberg Businessweek
When you think of the places where Internet culture mashes up with finance, you might imagine Reddit boards where bro-ish posters who call themselves “ apes” gang up to push shares of AMC Entertainment Holdings Inc. to the moon. Or YouTube personalities pumping crypto coins and get-rich-quick schemes. But there’s also a loose circle of posters on Twitter—affectionately known to its denizens as FinTwit—trading real ideas, along with plenty of jokes and esoteric memes, plus links to their Substack newsletters and TikTok skits.
FinTwit isn’t new, but it’s become required reading for anyone who wants to understand a market that’s increasingly influenced by what’s happening on social media. (That’s one reason many journalists, including this writer, spend perhaps a little too much time there.) Many of the posters work in finance, and it’s turning out to be a place where younger voices and women can build huge followings and further their careers.
Lily Francus, a former Ph.D. student turned quantitative researcher at Moody’s Analytics, joined Twitter in January to post intraday market predictions generated by her NOPE model. That stands for the Net Options Price Effect, and it tracks movements related to something called delta hedging. If that’s a head scratcher to you, don’t worry—FinTwit can be a nerdy place.
Francus built an audience on Twitter for her quantitative analysis.
Photographer: Sasha Tivetsky for Bloomberg Businessweek
But Francus’s model was hugely topical, thanks to what was happening over on Reddit. The WallStreetBets crowd was piling into options on stocks such as GameStop Inc., which spurred a bullish feedback loop of sorts. NOPE helped explain what was going on. “More people started taking what I was saying seriously,” Francus says. “?’Cause you know, when a 25-year-old is like, ‘Yeah, I developed an intraday trading model on the most competitive market in the world,’ most people were like, ‘Yeah, that’s adorable.’?”
After GameStop, Francus was written up in the Financial Times and interviewed on Bloomberg Television and for the finance podcast Infinite Loops. Francus had earlier been active on Reddit and Discord, but moving to the bird app brought a whole new audience. “It was really encouraging in both good and bad ways,” she says of her Twitter experience. “You’re perpetually surrounded by this environment where not only do people have a lot more experience than you, but if you post something, you pretty much get immediate feedback if you were right or wrong.”
As Francus’s following exploded, she used the platform to promote her research blog. The finance world began to notice. She joined Moody’s Analytics in July. “Pre-Twitter, I would never, ever have interacted with or come across Lily,” says Infinite Loops co-host Jim O’Shaughnessy, a veteran money manager. “What I love about Twitter is that yes, there’s a lot of noise—and I think you have to be very aggressive in the way you curate—but there’s a lot of signal. And I see that signal emerging more and more.”
O’Shaughnessy, a self-described “old” at 61, recently hired Bengaluru-based Vatsal Kaushik to work on the podcast, after following him on Twitter nine months earlier. O’Shaughnessy Asset Management associate Jamie Catherwood, who joined the firm in March 2019, was also found on the site. “One of the things I think is brilliant about Twitter is that it’s becoming a real-time résumé, a proof-of-work résumé,” O’Shaughnessy says.
That was the experience of Caitlin Cook, 23, who joined Onramp Invest, a crypto-asset platform for financial advisers, after crossing paths with Chief Executive Officer Tyrone Ross on Twitter. While exchanging messages, Cook asked to be kept in mind if Onramp was hiring. It was, and Cook landed a job as the firm’s head of community. She’s now vice president of operations for its Onramp Academy. “I’ve learned more on Twitter than most anywhere else probably, more than college,” Cook says. “But the networking part is the biggest for me.”
FinTwit, like Reddit, has its share of self-described “s---posting” and “loss porn”—people bragging about how much money they’ve burned on foolhardy trades. Women and people of color often face harassment on Twitter, and FinTwit’s no exception. But the platform has some advantages. “It’s so much easier to find what you’re looking for, through hashtags, groups, lists,” says Callie Cox, senior investment strategist at Ally Invest. “Twitter is also easier to curate what you’re looking for, because many accounts aren’t anonymous, and it incentivizes you to not be anonymous—you can get verified.”
That the majority of FinTwit users post under their real names helps create an atmosphere that’s less foul than other parts of the internet. For the most part. “I think in general, there’s reduced toxic-ness from accounts that are non-anonymous, because you do have career risk, especially in finance, so people tend to play nicer,” Francus says.
But one of the most amusing and mysterious parts of FinTwit is the quality of its anonymous accounts. In addition to wildly popular meme accounts such as “ Ramp Capital” and “ Dr. Parik Patel, BA, CFA, ACCA Esq.”—which each command more than a quarter-million followers—is a population of pseudonymous accounts run by investing pros. They may be silenced by their company’s social media policies or worried about damaging their careers with a careless or perhaps too honest tweet.
“You really have a ton of alpha on the platform,” says Kyla Scanlon, a 24-year-old from Los Angeles with a growing FinTwit profile. (“Alpha” is Wall Street jargon for the ability to beat the market.) “If you can pin it together, connect the dots on it, you’re like, ‘Oh my God, I can’t believe this little account is this big, big name in the space.’ If you look at the quality of their tweets, usually it’s just super top-notch. The best accounts are under 2,000 followers, probably.”
Scanlon in some of her TikTok videos.
Source: Kyla Scanlon/TikTok
Scanlon, like Francus, experienced firsthand the flywheel effect Twitter can have on someone’s influence. A trader and finance blogger since college, she began posting short clips on TikTok explaining things like lumber shortages and decentralized finance. In late March she posted a 57-second video about the Archegos Capital blowup to Twitter, where it received more than 5,000 likes. She followed that up a week later with a video about a New Jersey deli with a $100 million market value, and she’s seen her number of followers balloon since.
In a recent video, Scanlon performs, with the skill of an improv star, a conversation among Federal Reserve Chair Jerome Powell, fund manager and Bitcoin evangelist Cathie Wood, Tesla Inc.’s Elon Musk, and Twitter CEO Jack Dorsey. “Bitcoin is hedge against all the -flations,” says her version of Wood. “Inflation, deflation, stagflation.” (To anyone who follows Wood, that’s a pretty dead-on joke.) To play Dorsey, she ties her hair in front of her chin to mimic his wild beard.
It’s not just jokes. Promoting her work on Twitter helped bring eyeballs to Scanlon’s Substack newsletter, where she deconstructs financial topics in greater detail and sophistication than a one-minute video can allow. Those pieces include an analysis of the dollar-store business, an explainer on the reverse repo market, and a reflection on the role of meme culture in raising equity valuations.
But Scanlon’s success on Twitter and TikTok has brought a degree of unwanted attention as well, whether it be the man who direct-messages her with updates about his day or threats of stalkers. “Especially because I’m on there with my voice and my face, people think they know me a lot more than they do,” she says. “And because, of course, I’m out there being silly with my skits, people feel even more room, I think, to objectify me.”
But Twitter is undeniably a powerful tool, Scanlon says, and she makes a habit of only following people who provide in-depth analysis: “People who kind of take it seriously, but then they have fun with it, too.”
bloomberg.com |
