Michael Jordaan is well known as the founder of Montegray Capital and an investor in a range of startups, including Rain and Bank Zero.
The former FNB CEO is highly respected in the South African business environment, which is why he is one of the most followed business people on Twitter.
To look to Twitter for investment advice or business guidance is not advised, but sometimes information is shared which can save you a lot of money.
This was the case with a post by Jordaan on 13 September 2018, when he said:
The most difficult thing to do in markets is to buy low and sell high. For example, right now markets are historically high (based on most valuation metrics) but only few investors are moving to cash.
When I read this post, I thought Jordaan had a point and that it may be a good time to sell some of my technology stocks.
After all, I received a good return on my investments in leading tech companies like Amazon, Apple, Google, Microsoft, Alibaba and Tencent.
Many of these companies were trading at an all-time high, with inflated valuations, and facing regulatory and political uncertainty.
However, two of the most powerful and destructive psychological forces held me back – greed and the fear of losing out.
This cost me dearly. Less than a month after Jordaan’s prophetic Twitter post, the markets started to tumble – and technology stocks were particularly hard hit.
Over the next three months I lost all my gains from the past year, and most of my portfolio turned blood red from the previous soothing green.
Jordaan’s tweet now serves as a reminder that I am as bad an investor as anyone, and that I have an inability to listen to good investment advice – even if it comes from a top businessman.
So, should you start to take investment advice from people on Twitter?
The answer is provided by Jordaan in a more recent post:
Those who predict, don’t know and those who know, don’t predict.
Technology share declines
The graphs below show the NASDAQ and S&P 500’s decline after Jordaan’s Twitter post in September.