Mark Zuckerberg legitimately cares about your right to free speech! 

Or at least that was the gist of the 5 minute and 18 second video he just posted.

Ha!

You can’t see my face as I’m typing this, but I can assure you I have a smirk on it. The only thing Zuckerberg legitimately cares about is the quarterly earnings numbers for Meta, the company he founded and the parent of Facebook and Instagram.

As a guy trying to earn a buck myself, I respect that. But that doesn’t mean I trust Zuckerberg, Elon Musk, or anyone else to safeguard my free speech rights, particularly when it goes against their economic interests. We’re on our own. 

Speaking of Elon Musk, what is the world’s richest man up to these days?

Despite running the world’s largest electric vehicle company, planning to send rockets to Mars, building out a global satellite internet company, and a premier tunnel boring company, he still seems to have time to deliver an endless stream of hot takes on his social media platform X (formerly Twitter).

Are all those tweets putting his business empire at risk?

And as investors, how should we trade it?

To help me sort through it, I pulled Freeport Society friend Andy Swan onto a video chat.

Andy is the founder of LikeFolio.

That’s software that Andy and his brother, Landon, developed to discover and analyze shifts in consumer behavior by scanning social media for mentions of brands and products that publicly traded companies own. I’ve personally watched him profitably mine social media for trading clues since 2016, giving investors like you and me an edge in the market.

It’s essentially a 24/7 multi-million person focus group in real time.

During our time together, Andy and I focused our attention on two stocks you undoubtedly have in your portfolio, whether you realize it or not: Tesla and Apple.

Whether you own them outright or indirectly via some fund or ETF, knowing what to expect from these two behemoth’s could set the tone for your investment experience this year.

We also dug into what social media is forecasting for these two companies in 2025.

You’re going to want to hear this.

Click on the video below to watch now.

As you’ll hear, this is about taking advantage of what’s going on on Main Street before it becomes news on Wall Street. That’s an incredibly powerful edge in an industry that relies so heavily on backward looking data.

How do they do it?

Watch to find out.

To life, liberty, and the pursuit of wealth.

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P.S. This morning, Keith Kaplan unveiled TradeSmith’s 2025 Breakthrough software that empowers investors to take advantage of seasonality in the markets. In this Age of Chaos, you need every advantage you can get. If you missed the 10 a.m. ET presentation, I urge you to watch the replay here.

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Transcript

Charles Sizemore: Hello, and Happy New Year! This is Charles Sizemore, Chief Investment Strategist of The Freeport Society.

And today we’re going to talk about two stocks that you almost certainly have in your portfolio, whether you own them outright, or you just have an S&P 500 Index fund, or really any index fund of any index at this point, they’re going to have Tesla (TSLA) and they’re going to have Apple (AAPL).

These are two of the biggest companies in the history of the stock market. We all have exposure. Let’s figure out what 2025 holds for these companies. And to do that, we’re going to look at social media data.

Now, I have talked to a lot of people about social media data over the years. I have found very few that actually know how to make good solid actionable advice. One who does is Mr. Andy Swan, my guest today, who is the founder of LikeFolio. Andy, welcome.

Andy Swan: Yeah, thank you for having me.

Charles: Now, I’ve been following your stuff for a long time. I first became acquainted with LikeFolio back in 2016, so it has been a minute. I remember the very first time I saw you speak that I realized you were really onto something, because anybody can do a very superficial dive on what’s trending, hashtag fill in the blank, right?

But actually turning that into something actionable, turning that into something that an investor can buy or sell, that has proven to be a challenge for pretty much everybody else. So why don’t you give us the summary of what exactly it is LikeFolio does, like how it operates.

Andy Swan: Yeah, thanks.

So, what we saw with what you’re talking about, other people mining social media data, they were doing it at a very surface level. They were looking for mentions of the ticker symbol. They were looking for which hashtags were getting popular, things like that, and trying to tie that back to a stock.

That didn’t work for a lot of reasons, but what we saw was something different. We saw that on social media, whether it’s Twitter, Reddit, Google searches, you name it, what is happening when people have conversations or when they take action is they’re tipping their hand into what brands and products they’re interested in. And if you dive deep enough and you build up a big enough library, which we did – we cover I think it’s 500,000 brands and products, and we have those tied up to the publicly-traded companies that own them – then what essentially you’re running is a 24/7 multimillion focus group or polling system in real time all day, every day, 365 days a year.

And so, what that gives us is the ability to say not, “Do more people care about Apple than care about Lululemon.” That is irrelevant to us. What matters to us is, “Are more people talking about Apple products this quarter than they were in the same quarter a year ago or two years ago or last quarter,” and looking for those breakout opportunities where all of a sudden you can tell that something very organic and very real is going on with the company in terms of the popularity of its products, which we have proven through studies translates into accurate correlation with the company’s top line.

We don’t know how much they spend to get that revenue, but we’re very good at correlating to top line revenue growth or decline. And so that’s where we get our big edge, is really understanding what the consumer on Main Street is doing before it becomes news on Wall Street.

Charles: Well, that’s interesting, and I know Freeport Society readers will find this aspect interesting, that the old media model is very top-down.

Some journalists, some analyst has identified a trend or they think they have identified a trend. They do a little research, they write an article, they write a paper, and then they push it down. But by the time they do that, the data’s already old. It’s not exactly real time at that point.

Whereas in the social media model, what you guys are doing, this data mining as almost real time here, this is very much bottom-up, it’s more organic. You are measuring the intent of someone to buy something or their interest in it before it shows up in the data, before it shows up as a ring at the cash register. That what’s interesting to me.

Andy: Yeah, absolutely. It goes beyond that too.

We look for purchase intent. If someone says, “I just applied for a lease for a new Tesla,” that’s pretty important. That’s a very important data point. And if 1,200 people say that on social media in one quarter and only 800 people said it in the prior year quarter, then that’s a real signal, because that’s a sample size and you understand what’s going on there. That’s purchase intent.

The other thing that we’re looking at is just the overall consumer sentiment. How happy are people with the new iPhone? How disappointed are they with their AirPods, et cetera. So we can kind of measure that consumer happiness level, that sentiment level, that really gives us a really good clue into the likelihood of recurring purchases, the virality, word of mouth type of advertising that a lot of these companies really rely on.

And so, we think it’s very powerful. We think it’s a great tool to have in an analyst set. If you think back, you were talking about what analysts would do, it wasn’t that long ago that analysts would literally sit in the mall and count how many shopping bags came out of a specific store, or they would buy satellite imagery data to see how many cars were in the parking lot of Kohl’s this holiday season versus last holiday season.

So, it’s not a new thing to try to track what the consumer’s doing, we just, I think, found a much more efficient way to do it.

Charles: Much more efficient, much more scalable. It’s not so easy to have people parked outside of retail stores, whereas with social media, you can use the power of big data to do this at scale, which that part’s really impressive.

Let’s get into Tesla. So this is, of course, one of the biggest success stories of the last 20 years. It’s, of course, led by one of the more iconic superhero, superhero villain, I don’t know, depending on who you ask, but a larger-than-life American capitalist… Actually not. I guess naturalized American capitalist, Mr. Elon Musk.

So the story with Tesla has, of course, been that the product has generally been more popular with left-of-center buyers, whereas Musk himself has sort of evolved into a very iconic right-wing figure, particularly over the last year. He’s become a very strong ally of incoming President Trump. So there’s been this fear on Wall Street that perhaps Musk’s political activism would hurt the brand, it would actually tarnish Tesla, it would affect sales. What’s the data show?

Andy: Well, I think that the data shows the exact opposite.

I do think that he has alienated himself from the traditional granola hippie EV market. I think that’s a really small market. I think if he would’ve contained Tesla to that market, then Tesla would be somewhere in the vicinity of the Nissan Leaf or the Chevy Volt in terms of popularity.

He didn’t, and instead he built a high-performance car. It tries to be luxury. I won’t give him that because I think the production quality is not quite there in terms of the feature sets, but he’s built an incredibly powerful car that is really fun to drive and very fun to own at a very, very reasonable price. He has the number one selling car in the world in the Tesla Model Y, and very few people really know that because you don’t see that many of them in the United States, but it is the number one selling car in the world.

And so, what that tells me, first of all, is that Tesla, Elon Musk is not reliant upon the environmentally green peace left to buy the cars. That was a very small market, and yes, he’s alienated some of those. But what he’s opened himself up to is a much broader swath of the country, not via his politics necessarily, although I think that helps get him penetration into more rural conservative type of markets, but because of the quality of the product that he puts out and the price point that he’s putting out and the charging stations and et cetera that he’s built.

He’s built a great network. And so when we look at Tesla data, we’re trying to look at it not through any real political lens, but what is the data showing us? And it’s showing us that at this point, Tesla is at or near all-time highs in web visits.

And so, web visits we found have been the number one indicator of future revenue for Tesla by far. So like you said, he’s a lightning rod, so there’s a lot of conversations, there’s a lot of social media chatter around Tesla and Elon Musk. That stuff doesn’t seem to matter as much as web visits.

Our algorithm says web visits are predictive of future top line revenue for Tesla six to 12 months out, because people are researching the car that they’re going to buy next, and that’s not something that happens just today. So that’s near all-time highs at this point.

The other thing that I think that’s really interesting with Tesla, and I did not expect this, I was like you, I was like everyone else that said, “Man, he’s getting really heavy into this very nasty political campaign here. This could turn out very unfavorable for the company in terms of consumer happiness or sentiment ratings.” But we actually found just the opposite. Tesla’s consumer happiness rating is up 10% year over year, mostly due to the quality of the product that’s coming out. There were some problems a year ago that aren’t there now.

And adding on top of that, we have a new component that we call kind of that “emotionality,” so how emotive, how strongly convicted is the person when they’re talking about this brand, this company? And that’s gotten more emotive or more emotionally charged or more invested just a little bit.

But when you combine those two, a 10% increase in consumer happiness with a more emotional, more emotionally invested fan base, client base, cult customer base, whatever you want to call them, that is a powerful, powerful indicator that Tesla’s growth, while they’re now running into the… It’s tough, they’re running into comps that are much tougher than they used to run into, but that growth story is far, far from over, and we think Tesla has a lot of room to run here.

Charles: Now, that’s a contrarian view because Tesla just reported their quarterly results, and they weren’t great. They had kind of a rough quarter, so the contrarian move here would be to ignore that earnings release and look forward 12 months.

Andy: Yeah, and that’s what we’ve done with Tesla since 2018. We’ve been bullish on Tesla since 2018, and essentially what we’ve said is that the consumer data is going to have to be the thing that shakes us out of this trade, not the volatility of the stock, not the analysts, and not the quarterly sales numbers because those can fluctuate quite a bit.

I think that in the fourth quarter what happened was there was a paralysis, I think, on big purchases because of the election for a lot of people. I think it happened in homes, I think it happened in cars. I think that that’s going to go away very quickly in 2025. And all indications are that Tesla is in a position with all-time high consumer interest to really benefit from that unfreezing phase of the consumer if we can get the macroeconomic conditions right.

But it really doesn’t matter to us that much what happens in early 2025. Tesla for us is kind of an infinity story. We think of it as an infinite hold, infinite price target until proven otherwise. This is the best entrepreneur in the world with one of the biggest visions that we’ve ever seen and a consumer base that seems to continue to be very excited about what he’s putting out.

Charles: One of my favorite stories is that when Robert Downey Jr. was trying to capture the Iron Man character for the Avengers movies, he needed a real-world person to help him get the personality right. He chose Elon Musk. Elon Musk is Iron Man/Tony Stark, which I’ve always found that to be hilarious.

But no, I mean, the guy is… I’m going to spend most of February at a very kind of remote beach where internet service is terrible. So I bought a Starlink. That’s another one of Musk’s products, and it’s great. Why would you own anything else? He really has no competition on that. His product is by far better than everyone else’s. And over time, a better product at a reasonable price is always going to win. So that’s how that goes.

Andy: I also think you’re right, and I think it is good to look at that. He’s launching rockets into space and then catching them with a fork or whatever you want to call it, landing them right side up on a raft in the ocean after deploying satellites that power his Starlink service.

There are people that you just don’t bet against, and Elon Musk is one of those. I don’t care what the forward P/E is, I don’t care what the analysts think the margin compression is going to be over the next six months. Am I going to bet against Elon Musk? No. I mean, he got into politics one time and he won.

Charles: Batting a thousand!

Andy: I think he is batting a thousand in almost everything that he does. And so we think Tesla is going to be a really good hold if you can handle the volatility. If you can’t handle the volatility, yes, it could go down 40% in one year and shake a lot of people out. So you have to be prepared for that, you have to have a five-year, ten-year time horizon, I think, for Tesla.

Charles: Not just can fall 40%, it has. This is not hypothetical.

Andy: Yes. And will again, at some point. It’s just whether it crashes to 500, 1000 or 200 is what’s up for debate right now.

Charles: So let me ask you something, and I don’t want you to give away the secret sauce or anything like that, but when you say you measure emotionality, walk us through what that looks like. Do you look for certain search terms? Do you look for certain phrases, punctuation? I mean, how do you determine that in your data mining?

Andy: Yeah, it’s really certain words and phrases. It varies by product.

One of the things, for example, if you’re talking about a Tesla, if you talk about how much you love driving the Tesla, then that’s pretty emotive. If you just say, “I bought a Tesla,” that’s one thing. But if you say, “I love driving my Tesla” or “I am so excited for my next Tesla update,” that tells me that you are very invested emotionally into this product. And again, it varies by different product types, but that’s what we look for, is just that.

And it can go the other way. Hate can be in there. There’s obvious ones, there’s not so obvious ones, but it is pretty much based on the words that are within range in terms of linguistically of the brand name itself or product name itself. It tells us that the person is highly charged in what they’re saying from not just a logical level, but from an emotive level.

Charles: See, I assume you guys have spent hours just looking through feeds for certain words that caught your eye and then from that you built your model and then you systematize it.

Andy: Yep, that’s exactly right. And we still do. Manual calibration of models is a huge part of what we do.

Charles: Yeah, your model’s never going to be finished. It’s always going to be a work in progress. As the human language evolves and products evolve, so will your model. That is the reality there.

Andy: Yeah, no doubt.

Charles: So, let’s pivot. I mentioned we’re going to talk about Apple as well. Apple is, of course, the world’s leading consumer electronics brand anyway. Virtually everybody in North America owns at least an Apple product. Many of us own many Apple products. I actually just bought one at Christmas myself.

So what are you picking up on Apple these days? What’s the social media banter?

Andy: Yeah, it looks really good.

Again, web visits are pretty key. We see those near all-time highs, which is really good. What really matters for Apple in terms of LikeFolio data is the period in September, they’ll go on stage and announce their new products or their upgrades to their products at the Apple Keynote event. That happens almost every year in September.

And then you have the holiday season after that. So from September to the new year is an extraordinarily important time to measure consumer interest, consumer sentiment around Apple products, because it’s people showing excitement for what’s coming out, they’re talking about what they bought for their nephew for Christmas, et cetera. And it really kind of drives the remainder of the following year.

So, in 2024, we were very excited to look at that keynote to January 1st period that just ended. And so to see Apple’s year-over-year web visit growth at or near all-time highs and higher than it was last year is fantastic. And then especially when we break it down by product in terms of people searching for these products and how to buy them, iPad up 26% year-over-year, AirPods up 16%, iPhone up 15%, MacBook up 9%. The only thing in the product lineup for Apple that was down in this critical period was the Apple Watch, which is no surprise because they didn’t make any huge advancements to the watch.

But what this tells us is, going into the upgrade cycle where people say, “All right, my iPad’s getting a little bit old. I might need a new computer for class next year. It’s about time to get a new phone,” what the data is telling us is that going into 2025, Apple is extraordinarily well-positioned to capture a huge portion of the consumer wallet.

There’s not much more waiting around for the next version because that’s what a lot of people do, they’ll say, “Well, maybe I can make it one more year and then get a new phone.” I think this year we’ve hit the tipping point and people aren’t going to be doing that. So everything we’re seeing from Apple extremely positive and it’s at an extremely important time.

Charles: Yeah, I do that with my phone, by the way. I’m not that guy that’s waiting in line to get the newest best phone or whatever. No, mine usually has smoke coming out of it by the time I decide to upgrade, but I’m just cheap.

Anyway, I think it is interesting how the calculus you do for Apple is very different than Tesla. Tesla is kind of a one-way road, they’re still on the kind of the hyper growth stage, whereas with Apple, it’s more about measuring the upgrade cycle, because Apple hasn’t really had a new product or a significant new product in years. Actually, I guess the watch was their last… I don’t think the over-the-ear headphones really count, that’s kind of a niche product.

So you’re measuring when is that marginal consumer going to upgrade that iPhone, when are they finally going to toss the one like mine that had smoke coming out of it and finally, finally upgrade. Your data there gives some intel as to when they’re actually going to do that long before it shows up in the data, and I think that’s a really cool aspect.

Andy: And it works the other way too. I can’t remember the exact year, I should be able to remember this because it was so important for our company, but there was one year Apple came out with its new iPhone and within 48 hours of the keynote address, we were able to say with very high conviction that Apple was going to have a terrible upgrade cycle and that consumers were simply yawning at the new phone.

And this was kind of the breaking point of that it used to be you had to get the new iPhone every year. For most consumers, that was the way they thought. This was the year that it broke. Again, I can’t remember the exact year, but within 48 hours of the keynote, we saw that people were essentially yawning about this and there was going to be no super upgrade cycle this year for the first time for Apple.

We put out that note. We were actually mocked quite a bit by some folks on Wall Street because nobody bets against Apple. But by January of the following year, Apple had warned that iPhone sales were going to be much slower than expected. You’re getting the reports from the suppliers that they were not selling as much through to Apple and the stock had tumbled 38% or 40% in that timeframe.

So it works both ways, and I think that’s a very important thing to keep in mind is that you have these stocks in your portfolio, you want to know the health of the company going forward, and you want to know, “Should I be adding shares here when I get my annual bonus, or should I be trimming down shares here to get it back down to 2% or 3% of my portfolio because maybe this next year isn’t going to be so hot.” So it does go both ways. Right now for Apple though, we’re seeing very positive indicators going into 2025.

Charles: No, but I love that. What has Wall Street traditionally done? They look at the quarterly earnings reports, they look at the data as it comes in, they try to project that going forward, but unless they’re buying it from you, they don’t have this organic bottom-up data showing what real people in the real world are actually planning to do.

So, I love that, outsmarting Wall Street by going Main Street.

Andy: Yeah, that’s what we attempt to do. I think that we’ve proven to give investors a statistically significant edge, and that’s what you can ask for. I think anybody that claims to have a crystal ball, you can kick them out of your email inbox. We should be going with people that have some sort of edge, and there’s a lot of us. There’s people that have an edge via technical analysis. There’re people that have an edge, you guys, through a lot of different lenses.

People have different edges and if you can get those together, you can make much more informed investment decisions and have the confidence and conviction to hold some of these volatile stocks through different media cycles. I think that’s the key thing, is for investors to have that confidence, that conviction to not get shaken out of the greatest trade of their lives because of a bad headline cycle.

And like we’ve had with Tesla and the data since 2018, you’ve had that conviction to say, “No, consumers are flocking to this. The ones that have it love it. They’re telling their friends. It’s going to keep getting bigger.” You can ignore the concerns about P/E ratios and burning batteries and all the things that the headlines like to shove down your throat and focus on what the consumer’s doing. I think you’ll be well-positioned into the future.

Charles: I agree. And the proof’s in the pudding. You’re getting signals before everybody else does. So fantastic.

Andy, this was really good. I love this. Like I said, I’ve been a fan of your work since 2016, so keep it up.

Andy: Well, likewise, I think us and you guys and your readers, we have similar mindsets about the world. We’re not caught up in a zero-sum type of thinking about things and that there’s opportunities in a lot of places. And so I always love talking with you and look forward to doing it again sometime.

Charles: Yes, sir. All right, let’s look forward to a very prosperous 2025.

Andy: Yes.

Charles: And with that, we’ll sign off.

This is Charles Sizemore, Chief Investment Strategist of The Freeport Society.

To life, liberty, the pursuit of wealth, have a happy and prosperous 2025.