The Upside of Our National Stonkmare
The takeaway from the Reddit-fueled stock mania isn’t a moral lesson — it’s a practical financial lesson
“We are all investors now,” Robinhood, the investing app, declares in its Super Bowl ad that will run this weekend. It’s a gauzy, feel-good spot, making the fintech company’s usual pitch as a democratizer of individual investing. This takes some moxie, given Robinhood’s controversial image at the moment — on Tuesday, its Google app store rating plummeted to one star for the second time in less than a week. And of course, it’s not true in any meaningful way to announce we’re all investors now; about half of Americans have money in the market, a figure that’s held steady for decades.
Still, it’s true that we’ve just lived through a singular chapter in the history of the stock market as something close to a pop-culture phenomenon: the white-hot story of the Reddit-fueled run-up of GameStop and other equities. Our brief, national stonkmare seems to be winding down; something else will fill the Trump-sized hole in our collective attention span. Fortunes have been made; hedge funds have been hurt. And perhaps there was actually a silver lining to it all — perhaps we genuinely learned a thing or two in the process.
The GameStop Fiasco Proves We’re in a ‘Meme Stock’ Bubble
What the new dynamic between Redditors and Wall Street reveals about the stock market in 2021
I realize many will be skeptical of this argument. And I concede that some casual observers of the GameStop fiasco will come away with all the wrong conclusions, seeing a story of a righteous and thrilling populist uprising that somehow spells the end of Wall Street, and who will “learn” just enough from that to leap into stocks and lose a lot of money. I understand that a little knowledge can be a dangerous thing.
But outright ignorance can also be a dangerous thing, in which case a little knowledge is a step in the right direction. And the GameStop affair has accidentally taught an unprecedented audience about how short-selling (and short squeezes) work; about the murky role of hedge funds in the market; even about technical arcana like trade…