Have you heard of FinTwit? It's Twitter's version of StockTwits. It's a place you go to see what other's are watching and/or trading.
However, it doesn't seem to have the manipulation StockTwits has become known for. At least not yet anyway.
What Is Fintwit?
- When you first hear it, FinTwit may sound like an insult or a piece of fishing equipment. In reality, it is one of the most useful tools in an investors’ arsenal. FinTwit, stands for Financial Twitter (NYSE:TWTR). It's a very active and very helpful community of generally amateur investors who post their ideas, due diligence, and research, onto Twitter for all to see.
Some FinTweeters post their own investing ideas. Some tweet their research into specific companies. And some even tweet their own personal trades. It may just seem like another sub-community of tweeters.
Howver, some actually have enough of a following to influence the market either positively or negatively (more on this later).
Much like other instant social media platforms like Reddit, Twitter has become a center for information in this new digital world. Truth be told, one can find information about nearly everything on Twitter.
As a result, it should come as no surprise that something as time-sensitive as financial information, would also be available at your fingertips.
Do you feel shy about posting your own investing thoughts in FinTwit? No problem at all. In fact, the ongoing conversation is led by a small group of FinTweeters and a majority of people who listen are purely observers.
No matter where you get your investing information, it is incredible to see how much investing has evolved since the days of looking up ticker symbols in the newspapers.
2. Who Are FinTweeters?
This is an important part of this whole equation. If you're going to trust the information of random strangers on Twitter, you should at least hope that they are reliable.
Can we say that FinTweeters are completely trustworthy and honest about everything they say? Of course not. A free social media platform should never be the end-all be-all of your research into any subject. Let alone one that involves your hard-earned money.
But many people who post on FinTwit are legitimate. They're either involved in the investing industry in some capacity or have made a living working for a popular investing site.
In fact, they may even host their own site or blog where they can provide more in depth coverage than Twitter allows. Chances are if they have a nice following and openly communicate with other FinTweeters, they can be considered slightly more trustworthy than your average Joe.
How Do I Find FinTwit?
- It's easier than you may think to tap into this community. All you really have to do is search for the right keywords or hashtags. Normally on Twitter you can follow a topic by searching for hashtags using the #-symbol. You'll know when you are on FinTwit because the ticker symbols will have a $-symbol instead. So if you're searching for information on Facebook (NASDAQ:FB) or Tesla (NASDAQ:TSLA), you would type into your Twitter search $FB or $TSLA.
From here it's fairly easy to follow the breadcrumbs. You can even create your own customized list of FinTweeters. Then you get instant notifications whenever they post a tweet.
Then you have your own unique Twitter feed bringing you all of the information you want in real-time. That saves you from combing through hours of tweets.
Or paying a subscription for investment advice from a company like Bloomberg or the Motley Fool.
You can also set alerts for when your favorite FinTweeters post something. And just like that, your mobile phone becomes the most important tool you have as an investor.
1. Is There Anywhere Else Like FinTwit?
I am glad you asked. FinTwit may be the most easily accessible community for amateur investors. However, it certainly isn't the only place you can get valuable information.
There are multiple other sites you can use that are just as easy to access. And they won't cost you an arm and a leg for an annual subscription for investing advice. Here is a look at a couple of the top sites that are similar to FinTwit.
A similar idea to FinTwit, StockTwits is a site that was created by Howard Lindzon. He's a hedge fund manager who actually first realized Twitter could be used as an investing community before FinTwit was born.
StockTwits actually came up with the idea of putting a $ in front of a ticker symbol. It's often referred to as cashtags rather than hashtags.
Then Twitter incorporated the idea in 2012. As of 2020, StockTwits has over 3 million active users and is one of the premier investing dedicated sites around.
There are few sites on the internet that have as many levels of information as Reddit does. And investing is on a different level. Like with any free platform, you do need to be wary of whose advice you choose to follow.
But at the very least Reddit does have some verification of users by how often they post. Should you listen to everything as gospel? Absolutely not.
But at its core Reddit is a bunch of people trying to help each other solve problems. If you have a question about investing, the odds are that there are others like you who have already posted it on Reddit. And lots of Redditors willing to help.
But FinTwit Can’t Be That Influential, Can it?
- You'd be surprised at how quickly people believe what others have to say when it comes with an opportunity to make quick, easy money. And herein lies the malicious side of Twitter. And any other platform that people may use to seek financial advice. As many contributors and FinTweeters as there are that want to help people, there's another sinister side of Twitter that wants to capitalize on the platform they have.
1. Beware of the Pump and Dump
Pump and dump schemes are notorious on Twitter. And are actually dangerous to novice investors who think they are just following a good lead.
These pump accounts will often cite either false or redundant data points to attempt to boost a stock price up. Then they can capitalize on the rise and sell their shares at a profit.
This leaves the new investors with a stock that keeps dropping in price. These are most commonly done through low volume penny stocks; which are appealing to investors at their cheap stock price, and easy to manipulate due to low trading volumes.
But it's not all negative. The FinTwit energy community made headlines earlier this year after collectively shorting some U.S. shale companies to zero; predicting their bankruptcy before it actually happened.
These FinTweeters are energy industry workers or former workers turned investing experts that have in depth knowledge and experience within the sector.
One prominent energy tweeter revealed he had made over $4 million shorting the shale industry in just one week. The information and advice is real. You just need to filter out the noise and do your own research to compliment what you find on Twitter.
2. Do Your Due Diligence
At the same time, as an investor you need to do your own due diligence and research to supplement the advice and information you extract from FinTwit.
For as many posters there are with good hearts, there are just as many with malicious intentions who want to steer you wrong to capitalize off of your mistakes.
It's your hard-earned money that you're trying to invest, so you need to make sure you put the time into knowing which trades are right for you.
In this day and age, investors are looking for every advantage and every small piece of news that could help them make a decision on buying or selling a stock.
Information is 24/7 now and is always available in the palm of your hands. FinTwit may be one of the most powerful yet underutilized tools in an investor's toolbox.
The accounts that are supporting this community are legitimate and if you find a good one to follow, it is well worth the information you can get from it.
So is FinTwit worth looking into? Absolutely. In fact, it is many investors’ first stop for market news and even real-time data and trades. Like StockTwits and Reddit, the people who post their opinions and ideas are real and for the most part are doing their best to help others like them.
If you're new to investing or a seasoned trader who just wants to listen to what others in the space are saying, head over to FinTwit and have your eyes opened to how much free information there is available right at your fingertips.