It is always nice to have unique indicators to market sentiment that no one else has. In a world full of analysts this is difficult.
At InvestorsHub, the site owned by the company I run, we have a couple of good ones. They are traffic and new registrations.
InvestorsHub has been going for more than a decade and has millions of unique visitors a month. As such, traffic and registration are more a reflection of the market conditions in general than any marketing that might be going on in particular. It’s a market barometer in its own right, something that any big financial site will be too.
Sadly, however hard you market, it seems there is nothing like market conditions to determine the fate of a stock market site from week to week. As you would expect, business is good in a boom, great in a crash but not so hot when the market is quiet.
Investing, like most things, has its seasonal component. If you look at traffic over a year, a correlation appears and that is, investing and dieting have a lot in common. Traffic for InvestorsHub follows the same shape as Alexa traffic for MyFitnessPal.com. Clearly fighting flab has the same seasonal triggers as getting serious about finances.
While people are gobbling up all those Christmas goodies it seems they are worrying about their retirement. Perhaps it’s just New Year’s resolutions that create the spike. The correlation is more obvious than the causation.
This year has been no different, except for one thing; whereas a new year has historically been good for us acquiring a new batch of customers, this year has been tremendous. It would be easy to simply congratulate ourselves for a sudden flush of genius, but we aren’t that kind of organization. We worry why we are doing so well. Instead we’ve searched for why the private investor is so hot to trot this new year.
Initially the theory was: it’s down to the legalization of marijuana. There are plenty of pot stocks out there and it has to be said, discussions threads about investing in weed have been red hot. Is the market hitting a whole new set of highs?
Without a doubt, private investors are excited at the prospect of the legalization of pot and it seems that this could be an economic driver for the U.S. for a significant period of time. However, I don’t buy this as the sole reason. I just don’t see stoners as trader types.
Another take is that the market has been extremely strong for what amounts to years now. Could the private investor finally be waking up to the benefits of investing in stocks? Certainly there must be an element of jumping on the bull market bandwagon adding to this New Year jump.
So it could be the long bull market and it could be the legalization of dope adding up to a good start to the year – but no, there is something else going on.
The cherry on top for the sudden rapid interest in stocks by private investors turns out to be none other than Leonardo DiCaprio and Martin Scorsese and their Hollywood blockbuster The Wolf of Wall Street.
Now you would have thought that a movie about the dark side of Wall Street and its sleazy frauds against private investors would drive people further away from considering investing in the stock market. Instead of seeing this movie as a giant warning to steer clear of Wall Street and penny stocks, it appears that The Wolf of Wall Street is having the exact opposite effect.
The Wolf of Wall Street, far from dissuading people from thinking about investing in stocks is instead promoting stocks in the same way as The Hangover movies are promoting weekend trips to Las Vegas.
So there you have it, an expose of the beating heart of the stock market. All traders want to do is have a wild ride, even if they think that crazy criminals are in the driving seat.
Then in addition to global distribution, of course, off goes The Wolf of Wall Street to pay per view,
Thank you Hollywood.
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Clem Chambers is the CEO of leading private investors Web site ADVFN.com and author of Letters to my Broker, out now in paperback and on the Kindle.
