April 13, 2007 – Today in Kaeho’s Corner, I’m going to discuss the lessons that pop culture can teach investors. One can learn a lot about how to become a better investor by observing pop culture. Pop culture and investing share similarities in that both are prone to trends that influence millions of people all over the world through similar distribution channels. With music, major record labels are able to disseminate the hottest records overnight to thousands of major markets — from Tokyo to Sidney to Paris to London to New York to Milan to Berlin, an artist can gain exposure with proper backing from a major record label almost instantaneously and become an “overnight sensation”. In investing, if the internet, blogs, television shows, radio, and newspapers all converge to grant glowingly positive coverage to a popular asset class like oil and energy or technology, or sometimes even to a particular company, millions of investors overnight will plunge money into a specific asset class or stock.
Having traveled through the major markets in Asia, including Japan, Korea, Thailand, Singapore, Malaysia, and China for several years now, with the exception of Japan and perhaps Korea, there was an absence of hip-hop music as recently as five or six years ago. Now, you can’t visit any major market in Asia without hearing hip-hop 24-7. However, even with the widespread penetration of hip hop music in much of Asia, the culture and way of life surrounding hip hop is still largely absent. Throughout much of Asia, only the superficial outer skin of hip hop has been imported — the desire for customized, luxury rides, the fashion, the booming bass and the beats – while the culture, the struggle, the resistance and the politics of hip hop, elements crucial to its birth in the inner cities of America is largely still missing.
Any student of hip hop will immediately recognize the following names – Stephen Biko, Nelson Mandela, Malcolm X, Aung Sang Suu Kyi, and Subcomandante Marcos (aka Delegado Zero), Bob Marley, and even the lone, courageous Chinese warrior that stood in defiance in front of an oncoming tank in Tiananmen Square. These individuals personified the elements that bind those that love hip hop — an unflinching commitment to justice and to freedom, and an unwillingness to compromise their values in pursuit of their beliefs. Even hip hop icon Tupac Shakur, with all his faults, and he had many, spoke openly in his younger years about the need for secondary education to provide knowledge about homelessness, racism, and police brutality versus having mandatory classes about physical education and home making. Awareness, not gym, he claimed, would make the world a better place.
However, ask the neophytes of today that embrace hip hop music because it is trendy and fashionable. Many of these neophytes are likely to stare back at you with blank expressions on their faces. There is no digging beneath the surface to understand what gave rise to a movement so powerful that even as the movement gains more widespread acceptance, there sadly is a very important loss of information and a dilution of meaning that accompanies its greater acceptance by millions. As a practitioner of martial arts for many years, I have personally seen this very dilution at work in the realm of martial arts today. Many schools have demagogues parading as sifus and senseis that are only interested in the monthly fees and thus glaringly omit the most important aspect of martial arts — the spirituality- from their curriculum. The same loss of transference occurs in the world of investing.
Some well known talking head on TV screams, frothing at the mouth, arms flailing, and eyes popping out of his head, that stock XYZ or biotech stocks are booming, and millions of investors follow like an unthinking thundering sheep herd, never taking the time to understand that chances are, the appropriate time to buy has long since passed. And even if the stocks and asset classes that receive the widest attention in the media just happen to still be okay buys, the overwhelming majority of investors will never dig below the surface to understand why they may still be strong buys and therefore will never understand when is the right time to sell. Just as today’s neophytes that embrace hip hop music have absolutely zero understanding of its political history as a movement of resistance against injustice, most investors embrace a hot stock or asset class without any understanding of its “history” as well. It is as if they are “pop investors’, ready to drink in and inhale the next great stock story fed to them without question or examination.
If you understand the struggles of the Stephen Bikos and the Aung Sang Suu Kyis of the world, then you will understand the true meaning of hip-hop. Likewise, if you understand the origins behind a stock’s story or the rise of an asset class, you will truly understand whether or not it is time to buy or sell the stock/asset class. So don’t be a pop investor.
[tags]zen, stephen biko, aung sang suu kyi, tupac shakur, bob marley, investment strategies[/tags]
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J.S. Kim is the Founder and Managing Director of maalamalama, a comprehensive online investment course that uses novel, proprietary advanced wealth planning techniques and the long tail of investing to identify low-risk, high-reward investment opportunities that seek to yield 25% or greater annual returns.
