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December 11, 2021

Billionaire investor Chris Sacca has cheered on day traders, warned them about the dangers of debt, and revealed he owns crypto. Here are his 12 best tweets from the past year.

chris sacca, lowercase capital, sv100 2015 — Chris Sacca.
Steve Jennings/Getty

Chris Sacca championed amateur traders but urged them not to use borrowed money.
Sacca ended up $4 million in debt as a college student by trading on margin.
The billionaire investor said he owns several crypto tokens, and underlined the importance of NFTs.

Billionaire investor Chris Sacca has cheered on meme-stock buyers, warned rookie traders about the dangers of debt, and trumpeted non-fungible tokens (NFTs) in tweets over the past year.

The Lowercase Capital founder and former “Shark Tank” star — who shifted his focus to tackling climate change and social-justice issues in 2017 — also reflected on his ill-fated day trading as a college student, and revealed he owns a variety of digital tokens.

Here are Sacca’s 12 best tweets about meme stocks, crypto, and day trading over the past year:

1. “To everyone who got into trading stocks this year, I have a little hard truth for you: You’re not actually that good at it. You just caught a wild bull market. Take some money off the table.” (December 23, 2020)

2. “To the angry Robinhood bros who got into trading stocks this year: I was wrong. You’re amazing. This has nothing to do with the market. It’s all you and your mad skillz. Don’t take profits off the table. Double down, on margin. Borrow everything you can. Stonks never go down!” — responding sarcastically to backlash from day traders. (December 24, 2020)

3. “What percent of retail ownership of crypto is supported by leverage? What about stocks? I am beyond worried about the debt lessons that a generation of app traders weren’t around to learn a cycle ago.” (December 26, 2020)

4. “It’s fun to read about home traders making bank. 20 yrs ago, I was one of you. Today I’m here to tell you: *Don’t trade with money you don’t own.* I know because I did that. I kited my student loans, YOLO’d them to $12m, and then, in an f’ing blink, I woke up $4m in debt.” (January 28, 2021)

5. “Debt has no fucks to give when the price collapses. Debt doesn’t care who gets the last chair when the music stops. Debt haunts, lingers, & binds. Debt doesn’t care about your green paper gainz screenshot, because two weeks later it sees the all-red screen that you never post.” (January 28, 2021)

6. “I have axes to grind against a lot of the guys you’re wrecking, and I love to hear about real people stacking chips. But, please, from someone who has been there and knows the hopelessness and depression ahead: Don’t trade what you can’t afford to lose.” (January 28, 2021)

7. “I get what’s going on with NFTs. Very cool and I am a collector at heart. But I have a feeling this is going to be the tech that finally turns me into the ‘Yeah, but I only listen on vinyl’ guy.” – Sacca added that he doesn’t believe NFTs are in a bubble. (February 21, 2021)

8. “Wow. @beeple. $69m for a purely digital work. No matter how you feel about NFTs, don’t look away from this. It’s okay to not get why someone would pay that, and it’s okay to be bummed about the climate impact. But don’t be willfully ignorant about what’s happening.” — (March 11, 2021)

9. “Only invest what you can lose. Don’t borrow. Spread it around multiple investments. And, overall, assume you are going to lose your money and be pleasantly surprised if you get back more than you put in. Good luck.” — (March 16, 2021)

10. “My only strong crypto opinions: 1) the climate impact bums me out 2) but that is the market impetus for a lot of clean energy innovation, 3) it’s exciting, and 4) I have a lot more to learn. Disclosure: I own a broad basket ranging from early BTC/ETH to shitcoin lottery tickets.” — (May 15, 2021)

11. “Oh, Stanford would’ve never accepted the likes of me. Those were Georgetown Law student loans levered all over the online brokerages. And, to be clear, I lost my face in the end. Seven figures in debt with nothing to show for it. I don’t recommend it.” — recalling how he traded on margin as a college student. (September 20, 2021)

12. “I got so much shit for this tweet. It’s not fun to be right about it. I have been long this market and taken my lumps with everyone else. Just tried to help people not trade with money they don’t own. Now my inbox is filling up with requests to bail strangers out of margin debt.” — referring to the first tweet on this list. (December 3, 2021)

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October 22, 2021

Day trading is for experienced investors who can make quick decisions about fast-moving securities

A man with his hand on his chin while looking at investing charts on his computer screen. — Day trading is all about taking advantage of quick movements in the market and profiting off of buying and selling securities.
AndreyPopov/Getty Images

Day trading is the practice of making several trades of a security within a single day.
Day traders hope to use market volatility to make money on small gains by trading stocks.
While there’s significant money to be made with day trading, there’s also significant risk.
Visit Insider’s Investing Reference library for more stories.

There’s more than one way to make money with securities – and day trading is one such way. With increased access to investment tools and apps, reduced fees for trades, and data relating to securities, many people are becoming more interested in how small moves in the market can deliver profits.

But day trading isn’t for the inexperienced investor. To be successful, you need the right mix of education, experience, and capital – not to mention the discipline to execute a cultivated strategy. Here’s a closer look at what day trading is and what you need to know before taking the leap into these often perilous waters.

What is day trading?

Day trading is when you buy and sell the same security multiple times within the same day. The hope is that in making these trades, you can capitalize on any increases the securities might have gained during the day. Technically, anyone can day trade, though you’ll find this type of investing done by financial services companies as well as individuals.

There’s a lot of risk with day trading, which is why it’s not for everyone. Profit margins are often razor-thin, and you can lose a significant amount of money in a short period of time. You also can expect to devote a significant amount of time researching, planning, and making trades.

“Day trading is a full-time job,” says Vinny Yu, co-founder of JAVLIN Invest. “So if you’re thinking it’s quick and easy money, think again. Day trading requires discipline, patience, and emotional stability.”

Like most kinds of investing, day trading is subject to regulatory oversight by the Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission. This is because day trading involves the purchase and sale of securities. More specific rules apply to day trading when investors buy on margin and make at least four day trades within the span of five days. Those who engage in this kind of activity are known as pattern-day traders.

How does day trading work?

Much of a day trader’s day is spent researching and watching the markets. The goal is to find opportunities to buy securities at a low price and then sell them at a profit – and repeat that to hopefully turn a profit within a single day. This is where a strong education in finance and investment – as well as experience working within the market – is an asset.

“Investors can access equity markets more cheaply and easily than ever before,” says David Keller, chief market strategist at StockCharts.com. “But that easier access also comes with increased risk. Investors should educate themselves on the concepts of risk versus reward, particularly how to manage risk on individual stocks as well as at the portfolio level through asset allocation. By learning about market history using charts and technical analysis, day traders can better appreciate how repeatable patterns in price action can be identified and quantified.”

Because day trading can be so risky, investors who day trade have a lot to consider. “In addition to reading charts and monitoring news, a good day trader can also recognize opportunities from reading the tape,” says Yu. “The goal of a day trader is obviously to make money, but equally as important is to hang on to that money and not lose it.”

Day traders employ a variety of strategies to accomplish their mission:

Breakout trading: Many traders believe stocks trade within a range of values. When a value goes above or below that range, a day trader may decide to buy or sell.
Pullback trading: This strategy looks for opportunities within a long-term trend to capitalize on declines in price. Since most stocks trend upward in value, dips in the market can offer the opportunity to buy shares at a decreased price and then sell when the value goes up again.
Scalping: Scalping is when you make several trades in a day that result in small profits. Day traders hold onto these securities for seconds-to-minutes since trading happens so quickly with this strategy. Trading in large volumes is key for success with this method.
Range trading: This strategy is much like breakout trading. Instead of waiting for stocks to go above or below the estimated range, day traders will buy and sell when prices come near the limits of the range.
News-based trading: Day traders follow the news to look for conditions that could impact the price of stocks. They have to continually monitor news outlets to look for information they can use to make predictions about how stocks will fare, and then base buying and selling actions on that information.
High-frequency trading: This strategy uses automated algorithms to trade securities in large amounts as fast as possible. Special computer systems are needed for this kind of day trading, which is why it’s usually done by institutional investors.

What are the rules of day trading?

A lot of the rules day traders work by have to do with trading discipline and commitment, as well as having the emotional wherewithal to deal with constant market volatility. It takes time to learn what works and what doesn’t with day trading and to develop a methodology that results in the kind of profits you’re looking to achieve.

“In my experience, the most successful traders exercise good discipline in their decision-making by focusing on the weight of the evidence,” says Keller. “It’s good to consider different perspectives, but at the end of the day, your decision process is up to you. Develop a well-articulated checklist for entering and exiting positions, apply that checklist consistently, and find success.”

If you’re a pattern day trader who uses a margin account, you will have additional rules from FINRA to follow. These include:

You must keep a minimum of $25,000 of equity in each account used for day trading at all times.
If the balance falls below that amount on a day you want to trade, you won’t be allowed to make the transaction.
You’re also only allowed to trade up to four times the amount above the $25,000 minimum in your account from the previous trading day.
Cross-guarantees are not allowed to count toward the $25,000 minimum.
Any funds used to meet the $25,000 minimum have to remain in the account for two business days after any day they are required for trading.

Pros and cons of day trading

There are many risks to day trading, and many who step into this area of investing are unsuccessful. Because you’re counting on market volatility to increase the value of stock buys with day trading, you always run the risk of losing money. The best you can do is make educated guesses about what will happen in the market, and that can always lead to losses instead of gains.

Robert Johnson, professor of finance with Heider College of Business at Creighton University, describes day trading as the practice of placing “numerous bets on short-term price moves in securities. [Day traders] are properly classified as speculators and not investors.”

“The deck is stacked against the day trader and is stacked in favor of the long-term investor,” says Johnson. “Over the long-term, investing in the stock market is a positive-sum game. That is, over the long run the value of stocks, both individually and collectively, generally rises. On the other hand, over the short-term, investing in any asset class is a zero-sum game.”

Yu says that loss management is important for being successful with day trading. He says preserving capital is paramount in not letting small losses turn into large ones.

“If successful, day traders can make a lot of money in a relatively quick amount of time,” Yu adds. “You can also work as much or as little as you want. Some traders can make money by just trading the open and then [taking] the rest of the day off.”

Is day trading right for me?

Only you can determine if day trading is right for you. Certainly, you’ll want to gather as much information and tools as possible that can help you be successful. These may include:

A thorough education in finance, investing, and world markets
Access to real-time market news, data, and the Electronic Communication Network (ECN), which provides the best-available stock quotes at any given time
Securities price charts, analyses, and other technical data that can help you make informed decisions
A brokerage account that will allow you to make the volume of trades you need to achieve goals
Enough capital to make the kind of trades needed to turn a profit

You can get started day trading with a few hundred dollars, but the returns on trades of that size would be small. Making larger trades can result in larger gains and more in profit.

Some other considerations include:

How much time can you commit to day trading? As Yu stated, the research, monitoring, and trading activity can be a full-time job. However, you may be able to get to a position where you can hit your goals within a few hours. It all depends on your situation and the market.
What kind of risks are you comfortable taking? If you’re a conservative investor, day trading is most definitely not for you. A long-term strategy would work best for your goals. If you are comfortable with potential losses and feel that risk is worth what you could make in profits, then day trading might be something to look into. Again, it all depends on you.

The financial takeaway

Day trading is all about taking advantage of quick movements in the market and profiting off of buying and selling securities. It can take a lot of time and money to be successful in this endeavor, and anyone considering getting into day trading should do so with caution. This is an area of investment that is subject to extreme wins and losses.

If you do want to try your hand at day trading, make sure you thoroughly understand the risks you could be taking and the markets you will be navigating, as well as have a plan to manage your capital through both good times and bad. Seeking out as much information as possible about day trading is also always a good idea.

What are fractional shares and how do they work?What are cyclical stocks? High-profit but volatile stocks whose prices rise and fall as economy grows and declines What to know about swing trading and how to minimize risks of this speculative trading strategy Trading and investing are two approaches to playing the stock market that bring their own benefits and risks

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October 6, 2021

Gambling helplines see nearly 50% surge in day trading-related calls as SEC probes ‘gamification’ of retail brokerages

woman uses cell phone/cellphone — The breach of a major telecommunications company’s systems exposed communications between millions of people.
GABRIEL BOUYS/Getty Images

US gambling helplines are reporting a sharp uptick in calls related to unhealthy day trading, according to the Financial Times.
New Jersey’s helpline has seen calls related to day trading leap almost 50% since the start of the pandemic.
The SEC has recently taken an interest in such concerns about gamification of brokerages.
See more stories on Insider’s business page.

US gambling helplines are reporting a sharp uptick in calls related to unhealthy day trading as the SEC fixes its sights on so-called gamification, according to a Financial Times report.

New Jersey’s 1-800-Gambler helpline has seen incoming calls related to day trading leap almost 50% since the start of the pandemic, Felicia Grondin, an executive on the state’s compulsive gambling council, told the FT.

That trend seems to hold for the wider country, according to Keith Whyte, executive director of the National Council on Problem Gambling.

“The user experience is converging and the line between gambling and investing, which was already pretty fluid, has almost been completely erased,” Whyte told the FT, adding that while compulsive gambling is often stigmatized, self-styled investors don’t see themselves as gamblers.

Grondin said that playful graphics and animations that follow trades on popular brokerage apps like Robinhood and Webull signal to users’ brains to keep trading.

“When you’re reinforcing that activity, it starts to rewire a person’s brain, and translates to habit that for some leads to addiction,” she said.

But even though the addiction dynamics can be similar, Grondin emphasized that day trading helpline calls were still small relative to those about lotteries or sports betting.

The SEC has recently taken an interest in such concerns about gamification, asking for public comment ahead of potential new rulemaking.

That has garnered pushback from the likes of Robinhood CEO Vlad Tenev, who wrote in a September Wall Street Journal op-ed that the portrayal of new retail investors as ignorant gamblers was both offensive and untrue.

“Investing isn’t a game, but must it be grim and difficult to understand?” Tenev wrote.

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August 14, 2021

Warren Buffett wrote to Congress in 1982 to voice his concerns about futures trading – and many of his fears have come true

Warren Buffett has warned against speculating on options, and accused Robinhood of encouraging it.
The investor expressed similar concerns about futures trading in a letter to Congress in 1982.
Buffett predicted mass gambling, heavy losses for investors, and damage to the stock market’s image.
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Warren Buffett has warned people against speculating on options and accused Robinhood of encouraging users to gamble on them instead of investing for the long term. The billionaire investor and Berkshire Hathaway CEO predicted derivatives would lead to risky trading and reckless brokers nearly 40 years ago.

Buffett penned a letter to John Dingell, the late Democratic politician who served in the House of Representatives for nearly 60 years, in 1982. The investor’s missive resurfaced this week courtesy of 10-K Diver, a Twitter user who teaches finance and investing concepts on the platform.

The Berkshire chief wrote to Dingell to warn against introducing futures tied to the S&P 500 index. Buffett noted that investors could short the contracts to hedge against short-term volatility, but he cautioned that virtually everyone buying them would be gambling on stocks rising in the near term – not betting on the long-term performance of the underlying companies.

“The propensity to gamble is always increased by a large prize versus a small entry fee, no matter how poor the true odds may be,” Buffett said. “That’s why Las Vegas casinos advertise big jackpots and why state lotteries headline big prizes.”

“The unintelligent are seduced” by low prices and huge upside, he added, pointing to promoters of penny stocks and brokers who allow trading on minimal margin. Similarly, gamblers would use S&P 500 futures to bet on the short-term direction of the index while avoiding margin requirements, he said.

Buffett also explained why introducing futures would lead to rampant speculation, and result in a net loss for investors.

“Since the casino (the futures market and its supporting cast of brokers) gets paid a toll each time one of these transactions takes place, you can be sure that it will have a great interest in providing very large numbers of losers and winners,” he said.

Moreover, transaction costs would make futures trading a “negative sum game” for investors, he said. In contrast, investing in stocks is a “positive sum game” as the underlying companies grow and generate more money for their shareholders, he continued.

Buffett predicted that at least 95% of the activity involving futures would be “strictly gambling in nature.” People would use small sums of money to bet big on short-term stock movements, and brokerages would encourage them to trade more and more to maximize their cut, he said.

Brokers would do better over time if they didn’t let their customers fritter away their cash, but they’re too short-sighted to care, Buffett continued. “They often have been happiest when behavior was at its silliest,” he noted.

The Berkshire chief also warned that futures would tarnish the stock market’s image, as many people would get “burned” by them and blame their losses on stocks.

Finally, Buffett argued the country needed more people investing for the long term, not more gamblers egged on by brokers. Large volumes of future trading would be “overwhelmingly detrimental to the security-buying public” and markets as well, he added.

Buffett’s warnings about futures nearly four decades ago could easily be written about options today, as a new generation of traders continue to buy them based on memes and social media.

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August 6, 2021

Short-seller Jim Chanos blasts meme-stock traders as greedy and entitled – and says they cry and point fingers when they lose money

Jim Chanos accused meme-stock traders of being greedy, childish, and entitled.
The short-seller said they were chasing profits, not punishing Wall Street’s avarice.
Chanos’ recent shorts include Elon Musk’s Tesla, Warren Buffett-backed DaVita, and Beyond Meat.
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Jim Chanos blasted meme-stock traders as immature and petulant in a tweet this week. The veteran short-seller also accused them of only caring about money, dismissing their grand claims of taking on Wall Street and democratizing finance as false narratives.

“$GME is up 780% and $AMC is up 1,470% this year. $AMC has tripled in the past three months,” the Kynikos Associates boss tweeted from his WallStCynic account, using the stock tickers for GameStop and AMC Entertainment – two of the most popular meme stocks.

“This is not outrage, it is greed,” Chanos continued. “The newest generation of entitled retail ‘investors’ must win all the time, or they cry and blame ‘them,'” he added, referring to the hedge funds and shadowy institutions that some meme-stock buyers accuse of rigging markets.

The Kynikos boss tweeted in response to another user suggesting the GameStop and AMC short squeezes had exposed Wall Street crooks’ manipulation of stock prices. Chanos has repeatedly mocked meme-stock buyers for their ignorance in recent months, and warned the scale and extent of market speculation today is far worse than during the dot-com bubble.

Chanos is best known for calling out Enron’s massive accounting fraud and shorting its stock before the energy giant collapsed into bankruptcy in 2001. His more recent shorts include Beyond Meat, Elon Musk’s Tesla, and DaVita – a kidney-dialysis specialist that counts Warren Buffett’s Berkshire Hathaway as its largest shareholder.

The short-seller is one of several high-profile investors to sound the alarm on the day-trading boom. Buffett, Michael Burry, Mark Cuban, and several others have cautioned amateur stock-pickers and options traders not to get carried away.

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July 1, 2021

Robinhood has publicly filed its long-awaited IPO documents

GettyImages 1291817095 — Robinhood is hugely popular among day traders.
Justin Sullivan/Getty Images

Robinhood publicly filed its stock prospectus with the SEC on Thursday.
The company confidentially submitted a draft registration with the SEC in March.
The startup was founded in 2013 and has taken the investing world by storm.
See more stories on Insider’s business page.

Robinhood, the popular retail investing app, publicly filed to go public on Thursday.

The company’s S-1 document filed with the Securities and Exchange Commission revealed plans to be listed on the Nasdaq stock market under the ticker symbol HOOD.

The Silicon Valley-based company was founded in 2013 by Vlad Tenev and Baiju Bhatt, and took the investing world by storm by enabling users to trade stocks and ETFs for free on its mobile app. During 2020, its popularity rose to new heights as amateur investing surged amid the coronavirus pandemic.

In the filing, Robinhood revealed it had 18.5 million funded accounts as of March 31, more than double the prior years. Over 50% of the users are first-time investors.

Robinhood makes money through a practice known as “payment for order flow,” in which retail brokers route trade requests to other firms to execute in exchange for a commission. Last year, Robinhood derived 75% of its total revenue from payment for order flow and transaction rebates.

The company said that a majority of those revenues go through just 4 market makers, a potential risk if one decides to invest in the startup.

The filing is one of the public’s first comprehensive looks at Robinhood’s financials. In 2020, its revenue grew 245% to hit $959 million, while it reversed losses to post a $6.3 million profit.

Robinhood said there is tremendous regulatory risk for its stock. On Wednesday, the company was fined $70 million by the securities industry’s self-regulator, FINRA, for misleading customers and system outages that the agency said hurt Robinhood’s customers. The startup said it will likely to incur similar fines in the future.

Goldman Sachs and JPMorgan are leading the offering.

This is a developing story. Check back for updates.

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April 30, 2021

Warren Buffett will discuss stocks, deals, and the pandemic at Berkshire Hathaway’s annual meeting on Saturday. Here are 18 questions he might answer.

Warren Buffett will answer questions at Berkshire Hathaway’s annual meeting on Saturday.
The famed investor is expected to discuss stocks, deals, the pandemic, and the economy.
Here are 18 questions he might answer on the day.
See more stories on Insider’s business page.

Warren Buffett will be quizzed for several hours at Berkshire Hathaway’s annual shareholder meeting on Saturday.

The billionaire investor and Berkshire CEO has kept an extremely low profile over the past year. Investors, commentators, and other market-watchers will be especially eager to hear from him as a result.

Buffett will be joined by Charlie Munger – Berkshire’s vice-chairman and his right-hand man – as well as Ajit Jain and Greg Abel, who head up the conglomerate’s insurance and non-insurance divisions respectively. Insider will be liveblogging the meeting from 1:30 p.m. ET.

Here are 18 questions Buffett might answer:

1. Is he still bearish on the airline industry? Berkshire exited its positions in the “big four” US carriers in April 2020, as Buffett was concerned about fewer passengers, debt repayments, buyback restrictions, and other issues.

2. What does he think about the US government modeling its airline bailouts on his financial-crisis deals? Sen. Jack Reed told Insider he got the idea to demand stock warrants from Buffett’s Goldman Sachs rescue.

3. Does he regret being so cautious when markets crashed last year? Buffett was widely expected to deploy a chunk of Berkshire’s cash reserves, but instead he focused on protecting his shareholders’ money.

4. Has Berkshire closed any of its businesses? Buffett’s right-hand man, Charlie Munger, said last year Berkshire has a “a few bad businesses” that “won’t reopen when this is over.”

5. Is he worried about the boom in day trading, meme stocks, SPACs, and cryptocurrencies? Buffett has warned against speculation and derided crypto in the past, and flagged the dangers of promoters in his latest annual letter. Munger has slammed Robinhood and bemoaned the “speculative frenzy” in markets.

6. What does he think about President Biden’s tax and infrastructure plans? Buffett and Biden, who spoke before the election last year, have both called for higher taxes on the wealthy, criticized short-termism in corporate America, and trumpeted the nation’s bright future.

7. Does he think Apple is overvalued? Berkshire’s Apple stake has tripled in value since 2018 and now accounts for over 40% of its US stock portfolio.

8. Why did he dump Goldman Sachs, JPMorgan, and Wells Fargo? Berkshire exited its Goldman position and sold its JPMorgan holdings last year, and has drastically reduced its Wells Fargo stake.

9. Why is he so bullish on Bank of America? Buffett plowed $2.1 billion into the stock over 12 days last year.

10. What was Berkshire’s reason for selling its Costco stake? The big-box retailer had been Munger’s favorite company for years.

11. Does he still see value in BYD? Shares in the Chinese electric-vehicle company have skyrocketed since Berkshire invested in 2008.

12. Were his pharmaceutical investments spurred by the pandemic? Berkshire added AbbVie, Bristol Myers Squibb, Pfizer, and Merck to its portfolio in the third quarter of 2020.

13. What does he think about Berkshire betting on Barrick Gold and Snowflake? The uncharacteristic investments in a gold miner and a loss-making technology startup’s IPO, ostensibly by one of Buffett’s deputies, surprised many Berkshire watchers last year.

14. What appeals to him about Chevron and Verizon? Berkshire built multibillion-dollar stakes in the energy group and telecommunications company in the fourth quarter of 2020.

15. Is he still a fan of the Buffett indicator? The investor’s namesake market gauge, which he lauded two decades ago, has surged to record highs in recent months.

16. Why is he betting big on natural gas? Berkshire struck a $10 billion deal to buy Dominion Energy’s natural-gas assets last summer, and has proposed an $8 billion plan to build reserve power plants in Texas to prevent another power crisis.

17. Does he have any international partnerships in the works? Buffett invested in five Japanese trading companies last year, and cited potential tie-ups as one reason for his interest.

18. Why did he decide Whole Foods wasn’t a good fit for Berkshire? Buffett turned down the chance to buy the premium grocer in 2017, its CEO revealed last year.

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April 12, 2021

GameStop short-seller Melvin Capital suffered a 49% loss in the 1st-quarter after being hit by the Reddit-fanned trading frenzy

Melvin Capital founder, Gabe Plotkin.
Alex Flynn/Getty Images/Bloomberg

Gabe Plotkin’s Melvin Capital extended its first-quarter losses to 49%, Bloomberg reported, citing sources.
Melvin declined 53% in January, reversed some of that loss with a 22% gain in February, but slid 7% again in March.
Reddit traders hammered the hedge fund’s short positions against GameStop earlier this year.
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Melvin Capital, the hedge fund that dug itself into a hole during the GameStop saga, extended its first-quarter losses to 49%, according to a Bloomberg report.

The firm, founded by portfolio manager Gabe Plotkin, saw a 53% decline in January, reversed some of that loss by gaining 22% in February, but slid another 7% in March, Bloomberg said, citing sources.

Melvin was among a handful of short-sellers that got torched by the Wall Street Bets army that bid up GameStop’s shares, leading to massive losses for those that wagered bearish bets against the video-game retailer.

“51% to go,” a Wall Street Bets user posted on Reddit in response to Melvin’s first-quarter decline.

The fund closed its short position against GameStop on January 27. It started out this year with $12.5 billion in assets under management, but ended January with about $8 billion. Steve Cohen’s Point 72 and Ken Griffin’s Citadel injected a $2.75 billion investment in Melvin to support its battle against the Reddit army.

Plotkin racked up about $860 million through 2020 after his firm returned 53%, but January’s deep decline left him with an estimated personal loss of $460 million, Bloomberg reported.

Plotkin was grilled before a congressional panel in February, where he defended his short position and said it was never part of an effort to “artificially depress, or manipulate downward, the price of a stock.”

A spokesperson for Melvin didn’t immediately respond to Insider’s request for comment.

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March 24, 2021

Indian millennials are taking to the stock market, as the bored and young start driving markets worldwide

india stock trading — Young investors in India are turning to the country’s stock market.
Mayur Kakade/Getty Images

Millennials in India are driving the country’s stock market, Bloomberg reported.
They are likelier to take risks than their elders, departing from the asset investments typical in India.
Worldwide, young investors are shifting investing trends – and economies along with them.
See more stories on Insider’s business page.

Millennials in India might be changing the country’s stock market.

Driven by quarantine boredom, many 20- and 30-something Indians have turned to stock trading during the pandemic, reported Bloomberg. The stock market rally and rise of trading apps and social media has lured these young investors, Bloomberg wrote, many of whom are day trading for the first time.

The influx of young investors is a similar story around the world, but an especially positive sign for India’s economic development, as active investor accounts increased to a record 10.4 million in 2020. Only 3.7% of the country’s 1.36 billion people invest in equities, per Bloomberg, compared to 12.7% in China and 55% in the US.

“India could easily equal China’s market cap in the next five to 10 years because going forward, growth in India’s market will probably be faster,” emerging-market investor Mark Mobius told Bloomberg. “China, because of its size, will probably grow more slowly.”

It also signals that internet adoption is extending to areas of the country beyond the big cities of Mumbai and New Delhi. Securities firm Angel Broking told Bloomberg that more than 50% of its new customers in its fourth quarter were from “smaller cities and towns.”

Indian millennials are more likely to take market risks, a departure from other investors’ traditional investments in bank deposits and physical assets like real estate and gold, the latter of which served as an “insurance policy and a retirement plan in a country that lacks robust social welfare systems or widespread access to formal credit,” Bloomberg wrote.

This appetite for risk-taking is common in other markets’ experience of millennial investing, though, pointing to a more volatile economy as younger participants join the stock market.

Millennials are driving big investing trends

Worldwide, the bored and young fueled a big shift in investing in 2020.

Bitcoin was buzzing, surpassing its previous peak from December 2017, a year when it had a “wild run,” rising by more than 1,300% and going mainstream before tumbling the next year as it and other cryptocurrencies slumped.

But substantial millennial interest brought the hype alive again. The conditions of the pandemic and resulting search for an investing hedge against potential inflation, more widespread availability on PayPal and Square, and new Wall Street regulators, could be contributing to its rally.

Stock-trading startup Robinhood also saw explosive growth during the pandemic thanks to a new generation of novice traders flocking to the stock, options, and cryptocurrency platform, Insider’s Graham Rapier reported. The free-trading investing app, whose average user is 33 years old, added 3 million users to its current total of 13 million this year alone. The company even raised $200 million in funding in December.

But the boom hasn’t been entirely positive: It’s triggered outages and angry customers, and amateur traders have lost thousands of dollars through high-volume day trades.

More recently, a group of day-trading Redditors from The WallStreetBets forum used the platform to incite frenzied trading in the shares of GameStop in response to hedge funds “shorting” the stock. Their trades sent GameStop soaring, causing an estimated $19 billion of losses for short sellers in the company as of January 29.

As the young come into both money and access to day trading, their investment trends are ultimately shaping economies across the globe, from the US to India.

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February 18, 2021

GameStop millionaire Keith Gill is testifying before Congress on Thursday. Meet the investor who upended Wall Street with cat memes, reaction GIFs, and fundamental analysis.

GameStop millionaire u/DeepFuckingValue — GameStop investor u/DeepF—ingValue.
Roaring Kitty

GameStop millionaire Keith Gill is testifying before Congress on Thursday.
Gill goes by u/DeepFuckingValue on Reddit and Roaring Kitty on YouTube.
The value investor, who loves cat memes and reaction gifs, was a leading figure in Wall Street Bets’ clash with short-sellers.
Ten of his Wall Street Bets peers shared their views of him with Insider.
Visit Business Insider’s homepage for more stories.

A retail investor who goes by u/DeepFuckingValue on Reddit and the name Roaring Kitty on YouTube is set to testify before Congress on Thursday.

The man behind those usernames is Keith Gill, a 34-year-old marketer and financial educator at insurance firm MassMutual. He shot to fame last month for turning an initial $54,000 investment in GameStop in 2019 into a $48 million fortune at the height of the GameStop boom, according to screenshots he posted on Reddit that Insider was unable to verify.

DFV is one of several witnesses set to appear in front of the House Financial Services Committee to discuss their roles in the GameStop saga.

Members of Wall Street Bets – a retail-investing subreddit – led the charge in driving GameStop shares up as much as 2,000% in January. They also worked in concert to spike the stock prices of AMC, BlackBerry, Bed Bath & Beyond, and other heavily shorted stocks. Their goal was to score quick profits and squeeze short-sellers into covering their positions, sending the stocks even higher.

DFV didn’t respond to multiple requests for comment from Insider. However, several of his peers on Wall Street Bets shared their insights into his character and explained why he’s earned their respect and admiration.

Cat memes and cash flow

DFV is a far cry from the stereotypical day trader many associate with Wall Street Bets. Rather than flitting from hot stock to hot stock, his only posts on Reddit have been screenshots showing the value of his GameStop position, dating from September 2019 to February 3.

His Reddit comment history and Twitter feed may be littered with cat memes and reaction GIFs, but DFV has repeatedly stressed that his goal is to invest shrewdly and maximize his long-term returns.

He’s calmly and confidently defended his GameStop investment thesis since his first post about it. He’s dismissed daily price moves, trumpeted the video-game retailer’s free cash flow, touted its cheap shares, highlighted its competitive moat, underscored the opportunity for share buybacks, and celebrated its shareholder-aligned management.

“I’m a fundamental value investor through and through,” he said in a Reddit post in December 2019.

On his YouTube channel, he even described GameStop as a “a roach not a cigar butt a la Warren Buffett,” referring to the famed investor’s analogy that buying cheap businesses in terminal decline can be like picking up a discarded cigar butt and enjoying one final puff.

“GameStop is an established, uniquely positioned player,” DFV said. “Its final puff is a legitimate opportunity to reinvent itself as a premier gaming hub. That last hit might not be the prettiest or the cleanest, but it could get the job done.”

Making the case

DFV laid out his investment case for GameStop in an hour-long YouTube video in July 2019, the month after he made the stock the biggest holding in his portfolio. The shares were trading around $4 then, giving the retailer a paltry $260 million market capitalization (it surged past $30 billion at one point last month).

The retail investor said he was bullish on GameStop because he viewed the threat of an industry-wide shift to digital game purchases as overblown, thought the negative sentiment around the company was overdone, and believed the value of its business was being overlooked.

While DFV takes investing seriously, he also plays to his audience. He often pairs a bandana with sunglasses, and recently dunked a chicken tender into a glass of champagne to celebrate his massive windfall – a reference to “tendies” being the slang for investment gains on Wall Street Bets.

Moreover, he has a self-deprecating sense of humor. When a commenter pointed out he had made a profit on his GameStop position in December 2019, he replied, “SO FAR BUT THAT IS IRRELEVANT YELL AT ME FOR BEING DUMB OR BE DOWNVOTED.”

Yet DFV has been unabashed about the money he wants to make.

“Given the risk I’ve taken on, I’m shooting for at least 10x on the position,” he said in a Reddit comment on November 2019. “15-20x would be terrific. 20x+ is possible but not worth seriously entertaining right now.”

When GameStop shares hit $20 last December, he uploaded a screenshot to Reddit showing he had $1 million in cash and $2.5 million worth of stock and bullish call options.

DFV downplayed the rigorous research behind his lucrative bet in a Christmas Day video.

“When you have a thesis and by and large it unfolds as you hope that it could, that’s nice,” he said. “This was a true YOLO for me. I don’t know what I was doing, I still don’t.”

He also underscored what the gains meant to him.

“When I was building this position last year, we had nowhere close to $1 million,” he said. “I certainly do not drive a lambo, we rent this house that you see, so it’s been a wild ride for us as a family.”

Other Wall Street Bets members praised DFV’s diligence, humility, and unwavering self-belief in interviews with Insider.

They also compared him to Michael Burry, the investor from the book and movie “The Big Short” who was widely ridiculed for making a billion-dollar bet on the US housing bubble to burst in the mid-2000s, but ultimately proven right.

Here’s what 10 Reddit users said about DFV:

“He was never arrogant. He was the quirky guy doing his thing until people started to ask him what he saw.” – SoDakZak

“I don’t see him as a leader. I just see him as a guy who made a decision and stuck to it.” – Auslander

“He genuinely cares about helping people and showing the resources available to individual investors so they can study the market. He’s created the spark and now there’s a lot of momentum behind it.” – Dancinrobot

“DFV ultimately showed people that they can make it in the stock market just like the big hedge funds. He’s started a revolution.” – 360T-Posed

“DFV is the Michael Burry of this story. He believed in GameStop since 2019 and held despite all the bullying he received and all the losses he endured. He became a legend.” – mad-max-308

“A lot of people laughed and thought he would lose it all until a few months ago. He’s basically WSB’s Michael Burry. He had an impact on all of us.” – mEDo4

“DFV is an example of learning the ropes of trading, putting in the hours to gather all the relevant information for an investment thesis, and ultimately having the strength of willpower to stand by your plan.” – BarTendiess

“He’s been harping on about GameStop since it was $4 a share and was being laughed out of Wall Street Bets. He never faltered in his conviction. His ability to take criticism and roll with it is incredible. He would just reply with memes or little quips. I’d say he’s the Michael Burry of this generation. He saw an opportunity and he capitalized on it when no one else would even listen.” – Xylosoxidans

“Most of Wall Street Bets just wants to get a lucky lotto ticket, so when someone like DFV comes along and shows them a different way of doing things, it’s like seeing a shining star in the darkness. People tend to gather around the light and the light DFV gives off can’t be ignored.” – Xylosoxidans

“DFV taught a lot of people in this sub to be patient if they want to play out a thesis. You would think he is some arrogant douche that only flaunts his gains. Far from it. If you see his videos, he might be the most mild-mannered dude you might ever come across. And very humble too.” – GadnukBreakerOfWrlds

“He is the quintessential WSB member that we all aspire to become.” – I_shah

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