Wall Street Never Saw the Redditors Coming
A big new player with lots of money and sophistication has entered the game and is probably not going away.
Wall Street has been overrun by a new player.
Photographer: Spencer Platt/Getty Images
Wall Street should have seen the GameStop Corp. saga coming. Easier access to information, the proliferation of trading apps, zero-fee commissions, the ability to buy fractional shares, and U.S. government stimulus checks to individuals have all led us to this moment. And let us not forget the actions by the Federal Reserve and government during the early days of the pandemic crisis that not only supported financial markets, but made everyone forget that investing does carry potential risks.
The rise and newfound clout of retail investors has been evident for all to see if they just opened their eyes. First, this cohort of investors embarrassed Warren Buffett after he sold his airline stocks in May and “wished them well.” Led by Dave “Davey Day Trader” Portnoy, airline stocks almost doubled the next month and are still well above the levels when Buffett exited his positions. The retail investor tugged on Superman’s cape and won. Which is why Buffett should understand what is happening.