One industry expert thinks she’s come up with a clever way to exploit the barrage of negative responses investment professionals often receive on social media.
Liz Ann Sonders gets blasted by angry tweets and Twitter trolls quite regularly. And the next time it happens she’s going to seize it as an opportunity.
Sonders, Charles Schwab’s chief investment strategist, is a high-profile television commentator with 82k followers on the social media channel.
Often the Twitter barrage to which she’s subjected is in response to her economic forecasts — which she acknowledges are less than 100% rosy.
Sonders recently tweeted: “First decline in productivity in nearly 4 years, & largest rise in labor costs in nearly 6 years.”
In response, Bart Smith, who identifies himself on the social media channel as someone who just likes “to get the latest information,” replied: “And Liz Ann Sonders bearish all year long. How did that work for ya?”
Contrary to Smith’s objection, Sonders says she hasn’t been bearish all year long and is not talking up a broad recession, as many of her Twitter critics accuse her of doing.
But Sonders refrains from correcting her Twitter critics online, or retaliating against them, as so often happens in that sphere.
Scroll down to watch Sonders discuss her Twitter strategy and experiences
Instead, she now plans to track the online griping and use its ups and downs as an economic indicator.
“My relatively new research associate is working on a project of culling together some of the tweets — at certain times that get pretty harsh — as kind of a sentiment indicator,” Sonders told FA-IQ.
Sonders stressed that she hasn’t labeled current economic conditions as qualifying as a recession.
“We’ve not had a recession view. We’ve had a manufacturing is in recession [view],” Sonders said. She has also identified on Twitter and in frequent public appearances “the things to look for to see if it morphs into a broader recession.”
“But we haven’t had a recession call,” she said, noting that Schwab’s not recommending investors underweight equities in their portfolios.
Still, the grousing persists.
Sonders tweeted on Nov. 14: ““Fairly large jump in initial unemployment claims- jumped to 225k from 211k (4w avg still low at 217k, but up from 215k); certainly not a trend yet, but worth watching as claims are a key leading jobs/economic indicator.”
Two hours later, a Twitter participant who uses the handle “Oracle of Wall St” replied: “While it would seem like it’s a leading indicator, how well in fact and statistically has it been a reliable predictor of future downturns?”
Sonders is sanguine about her critics.
“Because on Twitter I’ve pointed out the risks and what we’re keeping an eye on, there are times where I’ve been sort of painted with this Debbie Downer, permabear [economists’ lingo for permanently bearish about the market and economy] — which I’m not at all,” Sonders said.
But the harsh feedback she gets on Twitter has been concentrated “at interim peaks in the market,” Sonders said.
“So that’s why I want to cull together and see if I can actually create an indicator — a sentiment indicator,” she said. For her, the conclusion may be: “Okay, the bullies are out in force, so, you know, we’re going to have a 10% correction."
Sonders added: “There’s so much of this, you know, when are you going to admit that you’re dead wrong, the market's going to go up forever and the economy’s in great shape and, when you get a cluster of those, the little voice inside my head says, ‘Okay, are we in another one of these, you know, September of 2018 environments,’” or prior to when the markets slumped in the fourth quarter of last year.