Are stock tips from random builders the secret to stock market fortunes? Apparently so, in the case of American football star Rob Gronkowski, who has been in the headlines after talking about his “best investment” – a $69,000 bet on Apple in 2014 that is now worth over $600,000.
The NFL star got the tip from his housebuilder, who told him Apple was “where it’s at”. After repeated urgings to “get Apple”, Gronkowski decided to “go big”, instructing his financial adviser to buy $69,000 worth of stock.
He soon forgot about the purchase, before discovering over two years later that his shareholding was worth about $250,000. He took some profits, but let most of his position run.
Gronkowski admits he had “no idea” what he was doing, but that didn’t stop CNBC publishing a piece suggesting that his strategy “mirrored Warren Buffett’s”. Berkshire Hathaway’s $31 billion purchase of Apple shares in 2016 wasn’t Buffett’s idea, noted CNBC, but that of his lieutenant, Ted Weschler (disclosure: I own shares in Berkshire).
Additionally, Gronkowski’s forgetfulness is “not far off” Buffett’s advice to everyday investors to buy and hold for the long term, ignoring short-term movements.
Is this a stretch? Perhaps. The real moral of the story: you can sometimes make lots of money doing stupid things. Countless studies confirm that acting on stock tips, whether from analysts, financial magazines, or investment newsletters, is a bad idea. Perhaps tips from builders are different, but don’t bet on it.
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