Let Your Social Apps Assist Your Trades

• Posted by scheplick
• on August 28th, 2012

Peter Lynch invested in stocks that he found useful in his everyday life. He often found great ideas when he went shopping with his wife in the mall. He’d see something she liked, and look into it as an investment if it appealed to him. Wikipedia explains this investment strategy,

“Throughout his two classic investment primers, Lynch has outlined many of the investments he found when not in his office – he found them when he was out with his family, driving around or making a purchase at the mall. Lynch believes the individual investor is able to do this, too.”

For young student investors out there today, we suggest a similar methodology although with a bit of twist: Use the social web.

Urban Outfitters ($URBN) is a great example of how the social web can help your investment strategy. Last week Urban Outfitters crushed earnings as EPS increased by 20% year over year and the stock subsequently hit a 52-week high. Who would have been best positioned to ride this earnings beat? Our guess is the students – the ones across the country plugged into the social web. Urban Outfitters has perfected their social media strategy and specifically on Instagram. Here is the number of followers that Urban Outfitters has on Instagram versus their competitors (Note: includes all company brands):   For fashion stocks, this is bigger than Gisele as your spokesperson. Each day Urban Outfitters posts several photos onto Instagram and nearly 900,000 people are connected to interact with those photos. Its no brainer that their online sales jumped year-over-year.

In conclusion, the main purpose of this post is to push awareness onto student investors. Do not only consume social data. Make sure to use it to your advantage in the markets.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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