Wall Street might think they run the show when it comes to who controls the stock market…
But they’re wrong.
Especially when it comes to 2 certain types of stocks that have surged since Robinhood’s ‘army’ of traders burst onto the scene.
Robbing the Rich to Feed the Poor?
Even seasoned professionals have been caught with their mouths open.
They, like all of us, have witnessed the meteoric rise of the stock market since the Covid-19 driven March 2020 lows. But what no one anticipated was that the surge overlapped with a massive surge in Robinhood App usage?
It seems investors on the mobile-powered trading platform have taken to heart the adage to “buy the dip.” Even when more seasoned investors, including multi-billionaire Stanley Druckenmiller, stayed on the sidelines (paywall).
When all hell broke loose in March as the economic and coronavirus impact began to hit home Robinhood investors stuck to their plans and even bought more stocks at cheaper prices to pad their portfolios.
It’s a strategy that has paid off. With some of the most popular stocks on Robinhood happen to be some of this market’s biggest winners, including Tesla (TSLA), Apple (AAPL), Amazon (AMZN), and Zoom (ZM).
But big-name tech isn’t the only winner from Robinhood’s rise as a force-to-be-reckoned with. A pattern is emerging and taking into account the types of stocks Robinhood traders are favoring could benefit anyone’s portfolio.
Robinhood Likes Value Stocks as a Hedge on Tech?
It turns out Robinhood’s March-dip buyers bought airline, and cruise stocks, as they fell, like United Airlines (UAL), Delta Airlines(DAL), Carnival(CCL), and Disney(DIS) in addition to tech favorites like Amazon (AMZN), Tesla(TSLA) and Apple (AAPL).
The Robinhood app even allows fractional purchases of shares if your favored stock is a bit too rich, thus removing many of the barriers to investing in the hot sectors that at one time seemed out of reach.
Even today, what some might consider ‘value stocks’ are among the app’s most popular stocks:
|
Stock |
Robinhood Popularity Rank |
|
New Residential Investment (NRZ) |
#9 |
|
Nike (NKE) |
#13 |
|
Visa (V) |
#14 |
|
General Motors (GM) |
#16 |
|
Coca-Cola (KO) |
#18 |
Source: Robinhood.
This above table, compiled with data from Robinhood, overlaps nicely with the names of stocks that have been market leaders as of late.
Your Bottom Line
Making money in the stock market not only requires being right about a stock but the rest of the market realizing you’re right.
By checking out Robinhood’s stock-popularity data as well as other socially-influenced sources of trader behavior (Think Twitter and Reddit) you can gain valuable insights as to how other traders are viewing your favorite stocks.
