To find out, I took all firms in the broad-based Russell 3000 index and divided them by quintile of “Z-score,” a standard measure of company solvency. GameStop… AMC Entertainment… Bed Bath & Beyond… do these near-bankrupt companies provide a dependable source of returns? Unless they’re instilling a real motivator (whether fear or greed), they will eventually end up like most broccoli cookbooks - unread and gathering dust on a high bookshelf. It’s what so many investment guides miss the mark. 72% of Millennials are worried about achieving a financially secure retirement, compared to only 43% of baby boomers and 26% of the silent generation. The desire to catch up is often reflected in high risk taking. The average 32-year-old has a net worth of $4,447 after deducting student loans, according to estimates by The College Investor. Reddit investors happily acknowledge their unwillingness to sit on the sidelines as others make money.

The same base emotions have driven millions of first-time investors into the stock market. If you were like my late father, the only way he would get greens on his plate was by fear.įear of high blood pressure… fear of heart disease… fear of gaining weight… Hard work, research, and a willingness to take gains are all necessary factors to becoming a stock market millionaire.īut for those willing to take a closer look, some winning strategies do emerge from these meme stock traders.ĩ Things Meme Stock Investors Got Right About Becoming Millionaires 1. Investments in crypto tokens, penny stocks and NFTs only serve to transfer money from one party to another, often with a hefty “house take” on each transaction.įinally, there’s surprisingly little glamor in the winning strategies of meme stock investors. Third, many popular meme stock strategies are zero-sum games. Newer investors fare even worse a working paper by Californian researchers found that “trades by retail investors with less knowledge, experience, and wealth are more likely to underperform.” Second, the average retail investor underperforms the market, net of trading fees. Those who profit are usually early to enter and early to leave. Many blindly follow others into hyped-up stocks, only to lose everything on the way down. There are, however, several things to make clear.įirst, meme stock investors also get a lot wrong. Momentum, value, swing trading, growth and personal morals heavily feature in their investing ethos.īy jumping headfirst into the stock market’s deep end, these investors are teaching us a great deal about becoming stock market millionaires. Many of these investors have little in the way of “classical” stock training (DCF modeling, accounting, financial analysis, etc.) and make the same mistakes that novices tend to do (holding on too long, investing too much, writing uncovered options).īut many have also stumbled upon strategies that Wall Street has long used. Ask my younger friends about AMC Entertainment (NYSE: AMC), and you’ll see their faces light up with glee over their thousand-dollar wins. Those who bought Shiba Inu ( SHIB-USD) and Dogecoin ( DOGE-USD) early on saw even more percentage gains. r/WallStreetBets superstar Keith Gill (aka “Roaring Kitty”) allegedly earned over $48 million on the GameStop (NYSE: GME) mania. Millionaires have been created virtually overnight in this new economy.

…And taking down short-selling hedge funds that stand in their way. By gathering on social media sites like Reddit’s r/WallStreetBets, Stocktwits and Discord, these younger investors are upending the notion of what “investing” is all about… A new generation of investors has taken over corners of Wall Street.

$nvda stocktwits