Taylor Swift or Cristiano Ronaldo? And Their Hidden Investing Lesson
Here’s a fun question from friend-of-the-blog CJ:
“I was hanging out with family and friends around Thanksgiving, and I wanted to gauge their opinion on something interesting:
Who is more famous globally: Taylor Swift or Cristiano Ronaldo?
Almost everyone I asked [for reference, readers: CJ is about 30-years old and lives near me in Western NY] quickly said, “Taylor Swift.”
…but I’m not so sure. Because when I pressed them Why?, the answer usually came down to, “Because she’s more famous to me.”
Hmmm. Very interesting!
What do you think, reader? Who is more famous globally: Taylor Swift, or Cristiano Ronaldo?
The Answer Is…
I can’t be positive about the correct answer, as “fame” is a bit ethereal. But if I had to pick, it’d be easy: I’d choose Cristiano Ronaldo. And it’s not that close.
Whether we look at Time Top 100 lists, subscribers on various social media apps, or “mentions” across traditional and web-based media outlets, the numbers all skew in Ronaldo’s favor.
If you personally aren’t as familiar with Ronaldo, read this Reddit comment I found about this very topic:
In America, I’m sure the answer is Taylor Swift. In the world outside of America, it’s unequivocally Ronaldo.
Football is the most popular sport on earth and he’s one of the 3 or 4 best players ever to have lived. There isn’t a single football fan alive that hasn’t known the name Christiano Ronaldo since at least 2008 when he won the Ballon d’Or (worlds best male player) the first time and most of us knew about him in 2003 when he transferred to Manchester United.
There are an estimated 3.5 billion football fans on earth, all of whom know who Ronaldo is. Plenty of non-football fans know him too.
No matter how big Taylor Swift’s fanbase is, I don’t see a way that it’s possible for her to be as famous globally as someone who has been known as one of the 2 greatest players of his generation and possibly ever, in the biggest sport in the world, for 20+ years.
Sorry Tay Tay but you lose this one. Shake it off.
In other words: if you visited just about any other country than the USA – especially a non-English speaking country – they’ll be more familiar with Ronaldo than Taylor Swift.
The Powerful Investing Lesson Here
There’s a powerful Investing lesson in this story.
If you recall, CJ’s original question asked about global fame, but most people’s answers were based solely on what I’d call “local fame.” They thought, “If Taylor is more famous to me, or to my friends, or in my culture, then surely she must also be more famous globally…right?”
Well, no!
And far too often, people make investing decisions based on “local knowledge” instead of trying to think more neutrally about “global knowledge.”
It’s like my Starbucks client: “Jesse – there’s a Starbucks on every corner in America. Why would we sell it?” Well, just because you see Starbucks in your life does not suggest it’s a good investment at its current stock price. There is no
Or, equally as dangerous, far too many investors make critical decisions based on only a tiny fraction of all available information, and too often, they remain ignorant of their own lack of knowledge. We hear something like, “Stocks return 10% per year, on average,” and stupidly decide to throw our life savings into QQQ. Don’t do that!
It’s crucial – both in investing and in life – to consider what we don’t know, what we haven’t been exposed to, how the “other half lives,” etc. But it’s so hard to do! Removing yourself from your own frame and seeing the world impartially is hard. Check out my early monologue in this podcast episode if you’re curious what I mean:
There’s probably a “selection bias” at work, too. CJ was mostly quizzing 20-to-40 year old Americans, reasonably educated, suburban, etc. In other words, the exact people who either listen to and love Taylor Swift themselves or at least have friends and family who are obsessed with her.
Selection bias, like many of the famous cognitive biases underlying behavioral economics, also causes investors to do dumb things with their Money. In a (quite literal) “local vs. global” case of selection bias, just think of the stories throughout history of investors losing their shirts by overweighting their portfolios to the “local” company (Enron, Kodak, Palm, etc).
It’s the same faulty logic! I completely understand how a person in the mid-1980’s here in Rochester would think, “How could Kodak ever get toppled from it’s mighty throne?!” It’s the same reason why so many Americans can easily think, “How could Taylor Swift not be the most famous person on Earth?” They’re both wrong. It’s just that one of those two mistakes has some devastating financial consequences.
To end, as you think about your investing choices, I want to leave you with this tried-and-true Mark Twain quote:
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so. “
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-Jesse
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