According to data released by Charles Schwab, 609000 new brokerage accounts based on online transactions were registered in the first quarter of 2020, of which more than 280000 were registered in March. With its convenient application interface, Robin Hood has become the favorite zero Commission trading platform of millennials in the United States. The platform now has more than 10 million accounts, mostly owned by retail investors, with an average age of 31.
Im greedy when others are afraid, and Im afraid when others are greedy. - Buffett failed to stick to his famous words in this trend, but a new generation of investors and amateur traders are rising. They use investment strategies that are not similar to the conservative buying methods of retail investors in the past, and they do not care about the analysis and guidance of the Wall Street elite. Its not so much a stock market deal as a traditional gamble.
Ignoring Wall Streets crash warning, 26 year old trader lequon Godbot bought a call option on American Airlines in early June. Within a week, the option brought him $200 in revenue. After noticing reports that the airline was planning to increase its flights, he bought another call option and made another big profit.
Rodney Henderson, 27, also invested his sisters $1200 financial aid in pharmaceutical stocks, earning nearly $10000.
Dave Portnoy, founder of Internet company barstool sports, is also a typical trader. Before this year, he bought only one stock, but after Buffett sold the aviation stock, he insisted on buying, making 300000 dollars.
Now Portnoy said: I know Warren Buffett is the God of stocks, but he has been eliminated by the stock market, now I am the main character.
According to the survey, most of these houlang investors are millennials, who have not experienced the bear market in 2008 and are heavy users of technology products and social media. They are active in the emerging trading platforms such as Robin Hood, fast in and fast out of the stock market, dismissing Wall Street research papers and Buffetts teachings.
New entrants to the market like Tesla, as well as technology and biotechnology industries, said Anthony denier, chief executive of Webull financial, a commission free trading platform The top five positions of Robin Hoods investors are Ford, general electric, American Airlines, Delta and Disney - all of which have been hit hard by the epidemic.
There are also some unknown stocks, genius Brands International Inc., a $400 million infant and youth content brand management company, and remark Holdings Inc., a $250 million Internet media company, which have gained dozens or hundreds of times.
Ignorance or fearlessness?
According to media reports, Kearns committed suicide in a leveraged deal with Robin Hood. When he saw that the account had more than $730000 in arrears, it completely collapsed, the family said
However, a screenshot of Kearns mobile phone showed that although his account showed a negative balance of $730165, it was not a real debt. Kearns, who lacks stock knowledge, may not realize that the negative cash balance he displays on Robin Hood is only temporary. Once the relevant stock is credited to his account, the data will change again.
In addition to the worrying business level of investors, the operation mode of online investment platform is also controversial. Kearns tragic death is a warning of the potential risks of these new platforms.
Its sad, said Bill Brewster, a cousin of Kearns and Chicago analyst. In Robin Hoods app, they try to game trading, which is totally different from serious and cold stock market trading.
In response to various queries, Robin Hood replied: we will continue to improve the trading platform and trading methods, and seriously consider all possibilities, in order to provide consumers with the best service and experience. Andrew lapthorne, an analyst at Societe Generale, said: while Robin Hood investors are ridiculed by traditional investors, they are impeccable about the timing of their entry. After the stock market bottomed out in mid March, the platforms stock holdings rebounded significantly.
After Kearns died and sighed, there were still a group of young people chopping in the stock market. When this ignorant and fearless, powerful and young force rushes into the trading market, no financial giant or economic expert can control it at will like in the past.
Time goes back to May 3. Despite the doubt, Buffett still said at this years shareholders meeting that the United States should not be underestimated. In the long run, stocks will rise and the economy will recover.