Will the new breed of retail investors cash in – or crash out?

‘Feed the ducks when they’re quacking’ sounds like advice from a foie gras farmer — but let’s leave gastronomy till last and focus first on stock market activity. The saying actually comes from Wall Street and means that if investor demand is strong, it’s best satisfied with ample supplies of new stock. What’s wrong with that? Nothing, if the investors understand risk and the offerings are sound. But is that what’s happening in the current retail investment craze on both sides of the Atlantic? Probably not. From its low in March last year, the FTSE 100 index has risen 40 per cent. A hectic London market in new issues since the

Up Crash: why are markets soaring as the economy tanks?

Shops are boarded up. More than four million people are on furlough with little idea of whether they will have jobs to go back to. Global trade has hit levels last seen a decade ago, and government deficits are soaring, while most developed economies have seen output shrink by 10 per cent, a collapse not seen since the Great Depression of the 1930s. On just about every measure imaginable, the global economy has never been in worse shape, and we are all a lot poorer. And yet here is a puzzle. Why can’t we see any evidence for that in the financial markets? Instead we are witnessing a series of

Internet users are the new surrealists, and they keep changing the world

As 2021 continues to progress at a dizzying rate, one of the recurring social phenomenon we’re seeing is the surreal eruption of online activism in the real world. From the recent explosion of GameStop share prices – hiked up by amateur investors co-ordinating online – to the large-scale protests and riots in Washington following the 2020 Presidential election, the communities in cyberspace continue to spill out into the real world. The question is: why are these kinds of actions becoming an increasingly unsettling occurrence in the usual running of society? In the lexicon of web-design, the term UX, user experience, is often used to describe how an individual may interact

What were the GameStop investors actually buying?

Best before The government plans to introduce labels on domestic appliances informing consumers how long they are likely to last. Which appliances have lasted the longest? — In 2017, Sydney and Rachel Saunders of Exeter, both in their eighties, were reported to be getting rid of appliances bought soon after their marriage in 1956 and still working. They included a Baby Belling cooker, bought for £19; a Servis washing machine, bought for £60; and a Burco dryer. — In 2013, a couple from Montgomery in New York state were reported still to be using a General Electric refrigerator which was made between 1929 and 1931. Flu away How many people

Martin Vander Weyer

The Reddit rampage is a sign of market turmoil ahead

The Reddit story — in which a ragtag army of small investors have executed a spectacular short squeeze against hedge-fund goliaths — can be interpreted two ways. Some say it’s another populist citadel–storming in the spirit of the moment, but this time an admirable one because its target is ‘Wall Street’, which everyone hates: the so-called ‘stick it to the man’ version. Others see a fever of price-chasing, part-driven by lockdown despair, akin to crypto-mania and the surge in online gambling; in this version, it has nothing to do with serious investment but is a sure signal of more market turmoil ahead. To recap: several million retail investors connected via

Portrait of the week: Variants, vaccines and goodbye to Captain Sir Tom Moore

Home About 80,000 people in eight places in Surrey, London, Kent, Hertfordshire, Southport and Walsall were asked in door-to-door visits to take tests after the South African variant of coronavirus was found in these areas. Another mutation was found in the Kent variant. At the beginning of the week, Sunday 31 January, total UK deaths (within 28 days of testing positive for the coronavirus) had stood at 105,571, including 8,242 in the past week. Numbers in hospital fell. The Oxford-AstraZeneca vaccine was found to have a substantial effect on the spread of the virus. By Sunday 31 January, 8,977,329 first-dose vaccinations had been given, and 491,053 second doses. All elderly

Why I joined the online army taking on the hedge funds

I spent most of last week drenched in sweat, launching a vicious assault on Wall Street hedge funds which cost them $20 billion. Along with thousands of other ‘degenerates’, I bought shares in GameStop, a struggling videogame shop whose value has recently soared by 2,000 per cent. Behind the surge is an online community called WallStreetBets, where bored young men gamble on barely researched stock tips and crack tasteless jokes. The community, which lives on the social media website Reddit, has a history of hilariously aggressive stock-market bets. In 2019, for example, a 19-year-old member made $700,000 and then lost it all again within two weeks. Last week WallStreetBets became

Who are the Reddit traders?

The anarchic traders of Reddit stunned stock-markets this week, boosting the share price of struggling retailer GameStop by some 400 per cent. It’s the latest stunt from WallStreetBets – an infamous Reddit page for novice millennial traders (which was featured in The Spectator last February). But who are the Redditors behind the great Wall Street coup? Here’s what we know: RoaringKitty The initial interest in GameStop has been credited to YouTuber and Redditor ‘RoaringKitty’ who has been plugging the stock as a value buy since September 2019, just after its shares slumped to an all-time low of $3.32. Having purportedly made 50 per cent on his initial investment of $50,000, RoaringKitty made