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Why is Salt Bae so famous?

I often write on Quora.com, where I am the most viewed writer on financial matters, with over 331.2 million views in recent years.

In the answers below I focused on the following topics and issues

  • Why is Salt Bae so famous? What does this say about how people spend money?
  • Is it time to leave the stock market when “everybody” seems to be buying stocks?
  • How can you short Facebook’s stock? Is it worthwhile to begin with?
  • Are carbon emissions automatically caused by wealthy people?
  • What are some good investment suggestions going into 2022?

If you want me to answer any questions on Quora or YouTube, or you are looking to invest, don’t hesitate to contact me, email (advice@adamfayed.com) or use the WhatsApp function below.

Why is Salt Bae so famous?

Source: Quora

He got famous for putting salt on overpriced food in a very extravagant way:

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More recently, the ridiculous prices, such as a $1,500 gold steak, have caught the attention of people.

Prices like this have given him more social media fame, or notoriety, depending on how you look at it:

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What this shows you is:

  1. The power of marketing. This is him before fame vs after:
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2. You don’t have to be all things to all people. Most wealthy people don’t like spending 1.5k on a steak.

You will notice that most of his famous patrons are highly-paid celebrities. There are few wealthy businesses people, or “old money”, in his places.

That doesn’t affect him though. He is oversubscribed even if only 0.1% of the total population who can afford it are interested in his food and prices.

3. Many consumers don’t make rational decisions when it comes to entertainment.

It is a myth that when people are looking for a special experience they always carefully weigh up the pros and cons.

4. People often mistake price and quality. Many surveys have shown when you ask people to distinguish between two products, which are actually the same, they mistakenly think the more expensive one is better quality.

In other words, if you go out onto the streets and offer free samples to the public, with the same two bottles of wine, and “price” one at $10 and the other at $1,000, people won’t know they are the same.

The pleasure receptors in the brain will “trick” people to assume that the more expensive product is better.

When researchers reveal the truth, many people insist on a second tasting, such is the disbelief.

5. There is no such thing as bad publicity – at least usually with a few exceptions.

Not sure, he hasn’t exactly been accused of murder, but he has got a lot of bad PR.

Some people think it is crash what he is doing. Others don’t care. I am more of the second opinion.

If people have the money and want to “waste” it, good on them, and good on him if he can cater to that need.

Most sensible people though, regardless of wealth, don’t want to spend 1.5k on a product like that.

You could fly business class from London to Istanbul, eat the same food at his restaurant there, and still pay less!

Is it time to leave the stock market when most people are buying stocks?

Source: Quora

You bring up an interesting point. When did most people want to buy stocks in recent decades?

Well in:

  • 1999 after 18 years of a bull market
  • In 2007 after the recovery from 2000–2002 was in full swing
  • After it was clear that Covid wasn’t going to crash the markets forever

When have people typically not wanted to buy stocks? Recent examples include:

  • In 2020, just after the huge falls
  • Early 2019, after falls of 25%
  • 2008 after another 50% price

So, it is a statistical reality that many people buy high and sell low:

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Vanguard’s own research shows that the average investor gets at least 2% less per year than the underlying investments have done, for this reason.

Other research is even more damning:

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However, that doesn’t mean you should leave the market when most people are getting in.

If it was possible to buy low and sell high, and benefit even when adjusted for the taxes and fees for selling, then everybody would.

Yet I have never met anybody who has consistently been able to market time, even though many manage to do it once or two due to luck.

During my webinar, this week with the Shark Tank judge Kevin O’Leary, one of the most memorable moments is when he told me “I tried to market time and failed miserably”.

If a 67-year old man, with an estimated net worth of $400 milllion+ is admitting that, I doubt many newbie investors in their 20s can do it over a lifetime.

Last year should have been the final nail in the coffin for anybody who assumes they can market time.

How many people do you know who:

  • Saw the fastest falls on record happen when stock markets plunged by 50% so quickly?
  • Foresaw how quick the recovery would be – one of the fastest on record?
  • Anticipated in advance that stocks would have an incredible November, even before the vaccine was announced, in the midst of a second European lockdown and a disputed election that so many people were worried about beforehand?

I don’t know one single person, in my network or indeed online, who predicted all of these events.

I know some who saw one of them coming, but not all. Everybody I know who predicted number one and got into cash is now poorer for that decision.

Most major markets increased by over 15% year-on-year last year, and have soared again this year.

It won’t happen forever – markets always rise and fall despite the very positive long-term trajectory.

It is a mistake to assume that we can foresee these events though.

How can I short Facebook stock?

Source: Quora

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Bertil have given the best answer about how you can do this. However, the bigger issue is should you short Facebook’s stock?

It has been called a troubled company by many, and is facing political backlashes on numerous fronts.

When Facebook started, and even as recently as 2010, technology firms were seen as the “good guys”.

Wall Street was seen as public enemy number one. Things have changed dramatically.

Regulators in the US, China and beyond seem to want to clip big-tech’s wings, which has meant some people are pessimistic.

Despite that I would say the answer is no as to whether you should short Facebook.

The main reasons are

  • Shorting, any stock, is high-risk full stop for any asset class, and especially for beginner or immediate investors. You can make a lot of money short-term, but it isn’t easy to do it consistently long-term
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  • We are only going to use more technology in the future – that doesn’t mean that Facebook will be around forever. Many a successful company has gone bust. The point is though, Facebook are also on top of key trends like VR, which was seen in the Metaverse announcement
  • Advertisement revenues have only gone up since the pandemic and lockdowns.
  • Many analysts think Facebook’s stock could increase a lot for the reasons above. We can’t know that for sure. There is at least some chance that Facebook won’t beat the S&P500 or Nasdaq. Yet the idea that Facebook is destined to be a “loser” is very questionable.
  • Let’s say you make a good decision this time by shorting. You will probably short more firms. The more you try it, the more likely you are to lose out long-term.
  • The vast majority of people who get wealthy investing do it without shorting.
  • When you short a stock, you don’t make dividends, which is a key component of market returns.

So, basically, the likely risk:reward ratio isn’t good when it comes to shorting Facebook.

Are carbon emissions a function of wealth?

Source: Quora

One of my associates/acquaintances is a millionaire teacher. He previously had a corporate job.

However, he has always had a middle-income and didn’t inherit much money.

Yet he is worth about $3m, and living overseas in a relatively cheap place, which means that the income that money could produce goes further than in an expensive place.

So, how has he even became quite wealthy to begin with? Well he has………lived a relatively low carbon lifestyle despite not being a radical eco-person.

He is merely frugal and always liked the idea of having freedom. Even though he likes his job, he always wanted an out in case something happened.

He invested 20%-30% of whatever he made, but still had the odd treat like holidays.

This was in addition to reinvesting a relatively modest inheritance he got , instead of focusing on buying a new car or upgrading to first class on his next holiday.

I would guess that his average carbon footprint over the years has been below the Western (and developed world average), or average at most.

His carbon footprint is certainly lower than the average teacher, and mid-income professional, that I know.

His case isn’t an isolated incident either. I know many wealthy people who are frugal, and a few who are even cheap.

The New York Times did a good feature article on “the millionaires who are frugal when they don’t have to be” which illustrates this point.

This is more common than seeing cars like this in the drive!

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The point is:

  • Wealth doesn’t cause loads of CO2 in of itself. High-incomes do, if that results in loads of excess consumption on the “wrong things”
  • The average middle-income person in a developed country, sometimes produces more CO2 than the average frugal millionaire. Those millionaires only became wealthy as they invested rather than over-consumed.
  • Most frugal millionaires weren’t guided by eco-principles, but still emitted less CO2 than you might expect.
  • Of course, once you get above people who are merely wealthy to the super rich, that is a different story. This is because the super rich can consume a lot and still live below their means, investing the surplus wisely to further increase their wealth.

What is more, investing doesn’t produce much CO2 unless it is directed at certain companies, which is why ESG investing is now becoming a big thing.

It should therefore not be a surprise that an increasing number of wealthy people want to direct wealth towards sustainable companies and projects.

What investment advice do you have going into 2022?

Source: Quora

A few months ago, I was introduced by a mutual friend to a gentleman who has invested in tech stocks.

He inherited some money from his family, and he has made 20–25% per year, for quite a few years, picking his own stocks.

The knowledge he possesses about investing isn’t practically strong, but as he is an IT person, he feels he “knows” some IT and tech stocks.

When we spoke and I calculated the returns, there was one elephant in the room……he hadn’t beaten the Nasdaq, where almost all his stock picks were trading on:

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So, yes, he had:

  • Beaten the S&P500 and Dow Jones
  • Beaten almost all stock indexes in the world
  • Done better than the vast majority of investments in the world – not just stocks

Yet he hadn’t beaten the very index almost all his stocks were trading on. He could have simply bought a Nasdaq ETF, held it, and made more money.

That would have been less risky than picking his own stocks, with less stress and so on.

He might also be beating the S&P500, but on a risk-adjusted basis, it is questionable.

What is more, is he was clearly delusional about this – he was surprised to discover the above fact about the Nasdaq.

We see this every time there is a huge bull market in the whole market or just a sector in the market.

It was seen during the 1990s tech bull market. It was seen to a lesser extent in the early-mid 2000s market, where stocks were recovering from the 2000–2002 falls.

We have certainly seen it after the huge market falls of 2020 resulted in a rebound.

People get overconfident and complacent. Others are on the opposite end of the extreme and are always petrified of the markets falling.

Both types of investors usually suffer long-term. The overconfident stock pickers often panic when there is a market crash.

Studies from Vanguard show net sales from their tech funds were highest during 2000, and there were more buyers in 1999 than at any other period.

The fearful investor never gets in. They wait for a market crash and then one eventually happens, and they still don’t get in.

Both types of investors are spending far too much time allowing emotions to guide them, and watching the news.

The point is don’t get too emotional about short-term fluctuations. That is always a relevant piece of advice.

In moments like this, it is more likely to be relevant, as the chance of big moves is higher when interest rates are lower.

Regardless of whether markets fall hard next year, or soar, it is nothing to worry about for the patient long-term investor.

Pained by financial indecision? Want to invest with Adam?

Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 735.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.

Further Reading

In the article below, I spoke about 

  • Is investing in government bonds still worth it? Bonds are uncorrelated to stock markets, but no longer pay as much as they historically did. I therefore look at the positives and negatives associated with traditional portfolio construction, which emphasises the need to use bonds. 
  • Do US stock markets always beat international ones? This is an interesting question as it comes at a time when US stock markets have outperformed for a long period of time. Will it last?
  • Tesla’s stock has been soaring in recent days. Will Elon Musk become the world’s first trillionaire? 
  • Why do many footballers go broke, despite earning loads of money?

To read more click below



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