These are indeed strange times. The coronavirus crash and rebound have stumped many professional fund managers, with some suggesting it is the so-called Robinhood investors gorging themselves on whacked-out travel, cruise ship and entertainment stocks.
These were hardest hit during the March crash, and many were priced for bankruptcy. Hundreds of thousands of young retail investors, many of them teenagers who get their stock tips from social media sites such as Reddit, have shredded conventional stock analysis to crest a wave that seems immune to both logic and gravity. Even bankrupt car rental firm Hertz has become a popular speculative stock among a new generation of online investors with just a few hundred dollars to their names.
Research by Goldman Sachs equity strategist David Kostin shows the most popular stocks on the commission-free Robinhood and Robintrack platforms – popular among retail investors – had gained 61% as of mid-June, thrashing the 36% rebound in the S&P 500 over the same period.
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