Every year, fans of Warren Buffett bid for the chance to win a private lunch with the world’s most famous investor. Since the charity auctions began in 2000, winners have included Ted Weschler, now a portfolio manager at Buffett’s company Berkshire Hathaway (US:BRK.A), and hedge fund manager David Einhorn.
But, in 2019, the top bid came from someone a long way from Wall Street. Justin Sun, a Chinese cryptocurrency entrepreneur, shelled out $4.6m (£3.3m) to share a table with Buffett, a man who once derided bitcoin as “rat poison squared”.
On one side a millennial crypto bull, on the other a pertinacious 89-year old stock picker. The Sage of Omaha may not have realised it, but he was now dining on steaks with one of the biggest challengers to his messianic hold on the investment community.
Sun, 60 years Buffett’s junior with 1.2m more followers on Twitter (US:TWTR), is at the forefront of a new generation of celebrity investors. More at home on TikTok than Wall Street, these upstarts have amassed a global following that the star fund managers of yesteryear could only have dreamed of.
The financial press has taken to calling them ‘finfluencers’, or financial influencers and they are a diverse bunch, ranging from Reddit’s most prominent champions of GameStop (US:GME) to bitcoin astrologists on YouTube.
Most have a knack for condensing investment tips down to a tweet or a 15-second video. While this bitesize wisdom can limit the scope for detailed financial analysis, it is gobbled up by young traders used to being constantly entertained by a stream of digestible content. Videos tagged #finance have now clocked up 2.9bn views on TikTok.
The finfluencers are rarely professionally qualified so largely free from the constraints which dictate what city advisers can and cannot recommend. Investors’ Chronicle’s Instagram posts are inundated with comments from various 20-somethings (or people posing as 20-somethings?!) claiming that they made a “profit of about $270k” in crypto investing or left their job to make “$16,750 weekly” through day trading.
The lack of regulation is rightly raising concerns, but trusting star investors with your money has always come with risks. In decades past, aspiring traders would scour national newspapers and business channels for pearls of wisdom from the likes of Neil Woodford. Those who banked their money on his ‘genius’ paid the price when his fund empire collapsed in 2019.
Some young people are much less likely than their parents to trust these professionals with their savings. Having grown up amid the wreckage of the subprime mortgage crisis and the coronavirus pandemic, many now feel that the financial system is rigged against them. Inspired by hip-hop stars who hustled their way to financial security, they want to learn how to make the system work for them.
Some in the city appear to be taking note. Fund manager Alpesh Patel, a regular talking head on the BBC, started posting lighthearted quicktakes on TikTok last year and has since picked up nearly 37,000 followers.
“I’ve not had that level of engagement [before],” he told Business Insider. “So I love it – I’m addicted.”
As the bulk of capital shifts to the next generation, star fund managers who rely on maintaining their formidable reputation to raise cash may need to take note.
