▸ It would be an understatement to say that the past two years for the stock market has been a roller coaster ride. We’ve had a sudden bear market combined with a recession, followed immediately by the strongest bull market in recent memory. All three major US indices are hitting fresh new all-time highs on a weekly basis, as our economy continues to recover from the worst pandemic in centuries. Oh yeah, and a trending Reddit-fueled retail investor movement that is single-handedly changing Wall Street forever.
▸ In one of the most impactful shifts of investing strategy in recent memory an alarming number of traders are now using social media sentiment over company fundamentals. That’s not to say it is a criticism. We have all seen the screenshots of Redditors who have made a staggering amount of money by playing meme stocks. Some of these Apes, as they liked to be called, have made more than long-term investors have made over the past decade, in one session.
▸ It seems to go against everything we have learned about the long-established investing doctrine: hold great companies for a long period of time. Now, new traders are holding failing companies in hopes of a short squeeze. Benjamin Graham must be turning in his grave. But hey we need to evolve with the times and stay agile with the ongoing modernization of investing. It’s why ChatterQuant specifically follows the sentiment and trends of both Reddit and Twitter: quite frankly it is the single most efficient indicator of which stock is about to head to the moon.
▸ So how did we get here? We all know the story behind the short squeezes of GameStop (NYSE:GME) and AMC (NYSE:AMC). At some point over the past year, there has been a significant alteration of how the markets are viewed. It is no longer an efficient market, it is now Us Versus Them. Reddit groups like r/WallStreetBets flipped the narrative of the markets into a battleground between retail and institutions.
▸ Think of it as a pump and dump scheme, minus the dump. Redditors quite clearly hone in on a stock and tell all of the Reddit army to buy up shares. It falls short of market manipulation according to r/WallStreetBets founder Jaime Rogozinski, who is no longer a part of the popular subreddit. Rogozinski claims that fraudulent claims about a company or stock that are deceitful can be considered manipulation but r/WallStreetBets is just about millions of Apes saying let’s coordinate the squeeze of this stock.
▸ Truthfully, short squeezes are a natural part of an efficient stock market, although most of the time they occur organically rather than being contrived. Buying into a short squeeze can be volatile, but there is a perceived blanket of safety if millions of others are doing it along with you. If you have dismissed the Reddit movement as a temporary fad, you may want to think again.
▸ The r/WallStreetBets group has created some abnormal price performances over the past year. GameStop is up over 960% year to date and AMC is up over 1,600%. For comparison, JPMorgan (NYSE:JPM) has returned just under 1,900% since its IPO over 40 years ago. We won’t even go into the gains that are being made in the crypto space with meme-driven alt coins like DogeCoin and Shiba Inu Coin. r/WallStreetBets and other social media groups are simply becoming too powerful to ignore their impact on the markets.
▸ So how can you find out exactly which stocks r/WallStreetBets tracks? ChatterQuant comes with fully integrated sentiment trackers that will alert you when sentiment for a stock is heating up so you can find trending reddit and wallstreetbets stocks! Just ask the users who were able to capitalize on the chatter around the Trump-related meme stocks DWAC and PHUN. Those were two of the biggest runners in recent memory, with both stocks gaining over 1,500% within 48 hours.
▸ Rather than being forced to scroll through feeds or read through pages and pages of discussion boards, ChatterQuant provides it to you in one easy-to-read screen. Check out how often a certain stock ticker is mentioned on Reddit or Twitter, or how often they are upvoted to create positive sentiment.
▸ But ChatterQuant is not just a glorified r/WallStreetBets tracker. You can customize alerts to follow the tweets and posts of the biggest influencers that are directly impacting the markets.
▸ The Reddit retail movement is directly altering the way the stock market is operating. While you may not agree with their focus on short squeezes and nostalgic, floundering businesses, you cannot deny the impact that this movement is having. Financials and balance sheets are a thing of the past. Who cares about a price to earnings ratio when you can see the short float percentage?
▸ If you want to stay on top of the market sentiment and track r/WallStreetBets trending Reddit chatter without constantly scrolling through comments, ChatterQuant has you covered. Sure, you could invest in companies like JPMorgan, or you could simply follow the Reddit sentiment and make those gains in a matter of hours. We know which option we would choose.