In the always-online modern era, it’s very difficult to maintain perspective. Whatever is happening now feels like it is the only thing that matters and feels like it’s going to happen forever. In the stock markets, add in programmatic trading and a surge in new investors who have not seen as many changes before, and that effect leads to wild swings in market narrative and in asset prices.
The current moment – with war, inflation, changing central bank behavior, and the ongoing effects and after-effects of the pandemic all in the picture – does feel pretty big, to be fair, so too did the March 2020 flash bear market at the start of the COVID-19 pandemic, and even the meme stock/short squeeze fury of 2021.
A through-line over those years has been the rise of the retail investor, and the sub-reddit WallStreetBets epitomizes that rise as much as anything. A community focused on go big or go home trades, WSB gained a reputation for itself and, at least for some new investors and traders, made the market seem more accessible, even amid all the risks. And in 2022, those risks seem to be growing.
Jaime Rogozinski founded WallStreetBets in 2012, and has had a front row seat to the rise of the community and the emergence of a new generation of retail investors. Over much of that time, including even the pandemic period, markets have gone up and to the right, rewarding investors who get in the game. Now, the game seems to be changing.
Rogozinski spoke with me this week to discuss how he sees the changing market, including the role that retail investors played in that rise. We talk about the supportive nature of the WallStreetBets crowd and also whether it sends new traders to the deep end too quickly. Rogozinski, who is going to be giving a presentation next weekend on how to apply the WallStreetBets mindset to the 2022 market, gave some thoughts on where retail investors can find an edge. And we also talked about whether those retail investors will stick around after what has been a much tougher market environment the past few months.
Check out the full video above, and see the show notes below. If you’re based in the U.K. or other countries outside of the U.S. and Canada, consider checking out Jaime’s presentation next Saturday.
Topics covered
- 1:00 minute mark - Jaime’s take on the state of the market now and how it’s changed
- 4:00 – The WallStreetBets factor and the global nature of that retail investor surge
- 7:45 – Is the WallStreetBets mindset too aggressive?
- 13:30 – Working through the rapid trading style of WallStreetBets and finding edges
- 19:00 – Learning from a community
- 21:00 – Is the anger still there for the WallStreetBets crowd?
- 27:00 – The aim for the XTB event and Jaime’s take on the market, and how the recent events will leave a lasting impact
- 30:00 – How the WallStreetBets style adapts to the current turbulent market
- 34:30 – Specifics on the commodity surge and finding other edges
- 40:00 – Will retail investors stick around?