Time Magazines “Person of the year” (also known as man or woman of the year in the past) is Elon Musk for 2021. I was interested in finding out how the stocks of corporate leaders named in this honor have fared after their awards. Sometimes, the market will have already “built in” the wonderous achievements of corporations by the time the corporation, and its leader, is recognized as an influencer. Many years ago, I wrote an article for Investors Digest on how the Financial Post’s CEO of the year award is often a more negative indicator of neartermed performance than positive. Unfortunately, I don’t have a link to that study. Perhaps I will update it in 2022 when the new award comes out. Meanwhile, I do want to look at the Time Person of the year award winners to see if there are stock performance indications after the award.
For the record, here is the complete listing of the winners sine 1935, according to Wikipedia. Clearly, you don’t have to be a positive world leader to win the award. You just need to be a leader – positive or negative. Adolf Hitler and Joseph Stalin were past winners of the award – clearly in the “negative camp”. Martin Luther King Jr. and Mikhail Gorbachev were also past winners, two individuals who represented positive change in their time. Today, we’ll just focus on corporate leaders of publicly traded firms.
This list of corporate winners and founders include:
- Ted Turner of CNN won the award in 1991. CNN was sold to AT& T in 1996, and was not publicly traded prior to that date – too long after the award to be of influence. Thus, the stock performance after the award is not relevant for this blog.
- Andrew Grove of Intel received the award in 1997.
- Jeff Bezos of Amazon fame was awarded in 1999.
- Mark Zuckerberg of Facebook received it in 2010. The stock wasn’t listed until 2012. It carries the original ticker despite its name change to Meta Platforms this year.
- Elon Musk of Tesla got it this year – 2021.
That’s a pretty small sample size (4) to draw many conclusions. Still, for kicks and giggles, I proceeded with the exploration. I’m a curious kinda guy. So, lets look at the stocks and see how they did following the award, which is given at the end of a calendar year. I’ve drawn a trophy to represent the end of the year on each chart where the award was presented – and looked at the chart 2 years forward. Is a “Person of the year” award positively or negatively correlated to performance in the 2 years following the award? We shall see…
Intel (1998 +)
Clearly, Mr. Grove’s success in receiving the Time award didn’t do any damage to the stock price of INTC – noting the positive performance leading up to the general technology crash in 2000.
Amazon (2000 +)
You may have to forgive Amazon’s performance after Jeff Whats-his-name’s (ha ha) receiving of the award. As seen on the INTC chart, there was a nasty stock market crash in 2000 that particularly affected technology stocks. But I have some thoughts in the conclusion section below that might stir some thoughts…
Facebook/ Meta Platforms (2010 +)
FB wasn’t public in the year of Mark Z’s award in late 2010. For what its worth, when he brought the company public 18 months later, the stock fell like a brick. Not sure if this counts, given the time gap—but its probably not a sign that the award was a positive indicator.
Tesla (2021 +)
We could forgive the lousy performance of AMZN and INTC after the award – given the tech crash. But, then again – as technology stocks – they were part of the problem. These companies were held in very high esteem in the 2-3 years leading up to the stock market crash. The Financial Post awarded their CEO of the year to John Roth for his work at Nortel in 2000 – yikes! Everyone was handing out awards to the tech leaders just before the crash.
The Facebook (Meta Platforms) award was prior to the arguably overpriced new issue release of the stock. Again, this was a sign of hype and built-in expectations.
Which brings us to Tesla. I like Elon Musk. He’s smart, he’s innovative, and has a vison that extends beyond himself. That, and he takes no nonsense from the wingnuts like Bernie Sanders and Elizabeth Warren. It always kills me how some of the more far-left voices want environmental solutions like electric cars and clean energy sources …. but if somebody dares to get rich & famous creating the very solution they want, he becomes demonized. Save the world, but do it for free, please. Now, there’s an incentivization plan!
Still – lets face it…Tesla is one very hyped stock. Its trading at 160 x estimated 2021 fiscal earnings, and its chart shows a mega-parabolic move over 2020 that is still trying to work its way out. So – just like the other three stocks behind the Time Magazine award – perhaps now is the time where investors might exercise a bit of caution when considering a TSLA trade.
I’m going to be out of the office for most of next week (week of Dec. 20). “I’ll be back” (aka Arnold Schwarzenegger) on the 27th. Sometime around that time, I will be posting my yearly off-topic rant. I’ll give plenty of heads up before I post it.
Meanwhile – I am anticipating the Technical Analysis course to be completed in the next three weeks and posted online by the middle of January. I’ll keep you posted on that too.
In the meantime – I wish all of my readers a very happy holiday season, and a prosperous 2022!