The veracity of a recent housing and economic forecast from a population of affluent men begs the question "How do you think they got so rich?"
Theoretically, because property is a popular key investment portfolio component, it does make sense to survey the wealthy about their outlook on real estate. Real estate can make or break a fortune. If you don't know when to hold it and when to flip it, you could lose your shirt.
But a survey of 3,000 playboys from the dating site SugarDaddie.com?
"This is exactly what the founders of SugarDaddie.com have done in order to create a snapshot of big picture economic and personal finance opinions," according to a release extolling the virtues of soothsaying sugar daddies. Sugar daddies are supposedly high-income men on the make who believe perhaps money can't buy love, but it can land them some mutually beneficial relationships. These older guys head to SugarDaddie.com and flash cash to hit on younger, well, sugar babes -- gold diggers looking to be kept.
Take Survey with a Big Fat Grain of Salt
"Sugar daddies" and "sugar babes" are actually misnomers that connote wealth. Unlike similar sites SugarDaddies.com doesn't verify incomes so anyone can be bankrupt and pose as a millionaire. How this makes sugar daddies respected real estate and economic prognosticators isn't clear. The survey expects you to trust the real estate and economic forecasting acumen of a group of guys whose cheesy online dating portfolio focuses on unverified wealth and the desire to put out financially.
Here's the gist: SugarDaddie.com received survey responses from about 3,000 of its purported tens of thousands of members. Only sugar daddies were surveyed during the first 5 months of 2013. Here's how they responded to several questions.
Do you believe the real estate market is entering another bubble?
The vast majority of sugar daddies (85 percent) said yes. Only 10 percent said there's no bubble inflating and another 5 percent were undecided. meanwhile, reputable economists like Jed Kolko of Trulia, Mark Fleming of CoreLogic and Lawrence Yun of the National Association of Realtors say that the housing recovery is just getting off the ground and relatively sound. Homes are still undervalued relative to rent, Kolko said, and a full housing recovery is a few years away, and that there are no signs of over-building and little sign of over-borrowing. "Prices would have to rise at current rate for several years to return to bubble territory."
Do you believe the stock market is in a bubble phase?
Similarly, 82 percent of sugar daddies are concerned that the latest improvements in the stock market indicate bubble conditions have pushed the Dow above 15,000. The remainder said either there's no bubble concerns or they were undecided. However, the Dow didn't jump over 15,000 overnight. Nearly three dozen economists surveyed by the Associated Press say that while stocks are high (up 19 percent since November), they're not in bubble territory.
Will general economic conditions improve in 2014?
There's little chance, according to SugarDaddie.com. Some 82 percent of sugar daddies seem to think economic conditions are stymied and won't improve next year. Only 18 percent said economic conditions will improve in 2014. Ask William Strauss, senior economist and economic advisor at the Federal Reserve Bank in Chicago, however, and you get a different story -- in his summary of a recent Automotive Outlook Symposium, he says that real economic growth is expected to improve from this year's 2.3 percent to 2.9 percent in 2014.
Infotainment Does not Equal Information
"What does this mean for the rest of us? While economists may argue for and against economic theories, citing economic models and general statistics, the Sugar Daddie Index reflects a true affluent demographic," according to one of the stranger economic forecast reports from Sugar.
What does it really mean for the rest of us? That you should choose your sources of financial information and forecasting very carefully.