Posted on December 27, 2021 by Scott Shuda
My biggest winner in business was the retail investor class. Prior to this year, they were always there to trade in the wake of the institutions. But this year, they were able to coalesce and organize, and they made trades that moved the market in really meaningful ways, including breaking several institutions. This year, we learned that retail has power, when organized, retail in aggregate can actually be a stronger force in the markets than institutions. And so the retail investor is my biggest winner for 2021.David Friedberg
I usually enjoy the “All In Podcast,” and this week’s episode featured the 2021 Bestie Awards. Most notable for our purposes was David Friedberg giving his award for the biggest Business Winner of 2021 to the retail investor (link to that portion of the Youtube version).
This is an argument I’ve made myself several times this year — and, unsurprisingly, it is the rationale behind the creation of Breakout Investors. So many forces have coalesced this year — with probably the biggest being so many smart and upwardly people working from home, where they can be easily distracted to a very dynamic market which is rewarding their attention.
It didn’t start with Gamestop, it started with Robinhood. Tens of millions of young people created small accounts, they began trading high Beta names, they began trading options, and they began driving the market. And it’s a different kind of market, I advocate against the “buy-and-hold” approach taught to us for an earlier and slower-paced time — we are not in a parabolic market that rewards swing traders.