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Home / US Business / How Elon Musk Became the New Oprah – And Why It Matters to You

How Elon Musk Became the New Oprah – And Why It Matters to You




For many years, the so-called "Oprah effect" was very real.

Books selected for "Oprah & # 39 ;s Book Club" had a major impact on the bestseller lists. Most immediately became bestsellers, and at least 20 titles hit No. 1 on the USA Today list. (Toni Morrison's books received a bigger sales bump from Oprah than from winning the Nobel Prize.)

For experts, a regular segment on Oprah's show was the guarantee that a career could take off. Dr. Oz. Dr. Phil. Deepak Chopra. Suze Orman. Rachel Ray. Oprah's "best friend", Gayle King.

Even seemingly niche products got a boost. In 2002, Oprah fantasized about aromatherapy slippers made by DreamTime, and sales immediately jumped from 3,000 pairs per month to more than 20,000.

So yes: the Oprah effect was real.

And so apparently is the Muscle Effect.

On Tuesday, Musk tweeted, "I love Etsy."

Sales of Marvin helmets are unlikely to increase.

record, and for a period at least add $ 1

billion to Etsys market value. (At the end of the day, the Etsy stock was down 2 percent.)

Possibly not. Etsy shares have risen by about 600 percent since March. Also on Tuesday, stock research firm Jefferies raised its price target on Etsy from $ 205 to $ 245. Jefferies rates the stock as a "buy," writing that it is a "long run to add buyers."

Nevertheless, most stocks do not skip 8 percent above an analyst's rankings.

Similarly, the stock price of the Signal Advance stock increased after Musk tweeted "use Signal." When buyers made a mistake by the nonprofit provider of medical devices to the messaging app Musk actually referred to, the stock increased more than 5,000 (yep, 5,000) percent, and Signal Advance's market value increased from $ 55 million to more than $ 3 billion dollars.

Asked the non-profit organization to tweet this:

So yes: Musk's tweet put a bigger spotlight on Etsy. And inadvertently a big spotlight on Signal Advance.

But should you respond to that kind of spotlight?

"Quality" of source versus quality of information

Most of us focus much more on the "quality" of the person providing information about ourselves about the quality of the information.

If Warren Buffett gives you a stock tip, listen. If the same advice comes from the teenager who is bagging your groceries, do not do it.

Nevertheless, we naturally add extra weight to advice we hear from the people we admire and respect, and we naturally draw some weight from – or even ignore – advice we hear from people we do not admire, do not respect or not knowing.

That is completely understandable.

And yet it can also be a big problem.

19659002] Why? Say you come across Musk. You tell him about your company. He gives you advice.

In seconds you have decided to turn. Or take on investors, even if you were dead against giving up equity. Or hire a CEO to take your company to the next level.

Maybe Musk is right. Maybe you should swing, or should take on investors, or should give up the operational reins.

But maybe Musk is not correct. He does not really know your business or your customers. And he really does not know you . He is Elon Musk for greeting – but his opinions are based on his background, his experiences and perspectives.

What is right for him may be far from right for you. Musk liked a purchase he made on Etsy, and said so. But that does not mean that the company will continue to grow. (Nor does it mean that it will not.)

Given in some ways – apparently, at least when it comes to stock picking – Musk may be the new Oprah.

But it should only serve to mark a larger point.

Never accept a message just because you admire the messenger, and never reject a message just because you discount messenger. as long as it is based on data and analysis and significant thought – always more important.

Opinions expressed herein by Inc.com columnists are their own, not those of Inc.com.


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