Commission-Free Day Trading
Рет қаралды 47,722
Күн бұрынDay trading has become a popular pastime. Being stuck at home during the pandemic probably played a role, but the explosion in price from a handful of so-called meme stocks is what got everyone’s attention; it was like a modern day gold rush.
Timestamps:
0:00 Trading with Today’s Tech
2:00 Robinhood Investors
4:23 The Impact of Trading on a Mobile App
5:58 The Perception of Free Trades
9:50 Final Thoughts
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Referenced in this video:
Sensation Seeking, Overconfidence, and Trading Activity - www.nber.org/system/files/wor...
Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors - faculty.haas.berkeley.edu/ode...
Robinhood Has Lured Young Traders, Sometimes With Devastating Results - www.nytimes.com/2020/07/08/te...
Smart(Phone) Investing? A within Investor-time Analysis of New Technologies and Trading Behavior. - www.nber.org/papers/w28363
Robinhood Markets, Inc. S-1 - www.sec.gov/Archives/edgar/da...
Predictable behavior, profits, and attention - www.seasholes.com/uploads/3/2/...
All That Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors - academic.oup.com/rfs/article-...
Attention Induced Trading and Returns: Evidence from Robinhood Users - papers.ssrn.com/sol3/papers.c...
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Follow the Rational Reminder on:
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Visit PWL Capital: www.pwlcapital.com/teams/pass...
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@hitmongg 2 жыл бұрын
GME got me into investing but Ben got me into rational investing :)
@Nierez 2 жыл бұрын
Did you make money though?
@sleepless2541 2 жыл бұрын
@@Nierez i think they lost it all, hence the no reply due to shame 😔
@onitholope8969 2 жыл бұрын
This was a very educational, polite, and merciless brutalisation of day trading app culture. I can see you had a lot of fun with this video.
@drsgme69 2 жыл бұрын
Investing is for boomers, trading is for alphas
@DekarNL 2 жыл бұрын
Been listening to a lot of RR podcast episodes. The more I learn, the more comfortable I am with my low cost ETF portfolio. Especially Love the episodes with studies to happiness and lifestyle are incredibly insightful!
@sombra2 2 жыл бұрын
Absolutely. Same here. I actually took the plunge and swapped my entire portfolio to low cost etfs partially thanks to Ben’s videos
@SoCal209 2 жыл бұрын
As always, we appreciate your words. BTW--love the Rational Reminder podcast.
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@PMA65537 2 жыл бұрын
About 21 years ago I read a magazine article where someone had been day trading for a year and only recently started to break even. I decided that was all I needed to know.
@rasmuswinkler353 2 жыл бұрын
Finally another video from a great creator
@tanjoy0205 2 жыл бұрын
Amen
@gregoryunderwood4121 2 жыл бұрын
You need to follow them on Spotify, they post lots of stuff on there.
@SgtPayneX 2 жыл бұрын
Just look up the rational reminder podcast here on KZfaq
@rasmuswinkler353 2 жыл бұрын
I have listened to a couple of podcasts but I enjoy the use of graphs and charts. No offense to @benfelix but the podcasts are too long but 15 minute videos are just right for me
@SgtPayneX 2 жыл бұрын
@@rasmuswinkler353 yeah that's understandable!
@alankoslowski9473 2 жыл бұрын
In summary, new technology doesn't improve cognitive shortcomings, rather it probably exacerbates them.
@gregmanderson78 2 жыл бұрын
It intentionally exacerbates them by design. As the comedian Jim Gaffigan would say, "Its all mcdonalds."
@alankoslowski9473 2 жыл бұрын
@@gregmanderson78 Yes, most of the ap creators are well aware many, maybe most investors aren't rational and design their aps to exploit this.
@drsgme69 2 жыл бұрын
Investing is for boomers, trading is for alphas
@alankoslowski9473 2 жыл бұрын
@@drsgme69 In other words, too much dopamine leads alphas to make poor decisions?
@georgeschneider8778 2 жыл бұрын
I am glad I found your channel in the beginning of my investment career. I don’t own individual stocks. I only hold etf and index funds. Thanks 🙏
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@drsgme69 2 жыл бұрын
Investing is for boomers, trading is for alphas
@SaveTheRbtz 2 жыл бұрын
Thank you for the high-quality data-driven content you produce. It is a pleasure to be subscribed to you.
@safetyfirst2417 2 жыл бұрын
Another well structured analysis. Thanks Ben.
@jw8392 2 жыл бұрын
I am glad, you are finally back! :)
@Martin-qb2mw 2 жыл бұрын
Another great video Ben! Your channel is easily the best finance related channel on KZfaq.
@Catch22iscrazy 2 жыл бұрын
Agreed
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@aidanandcristiestevens8639 2 жыл бұрын
Ben! I’m not sure how I came across this but amazing to see you on KZfaq! Keep up the good work and hello from back home!
@moon8canoe 2 жыл бұрын
Love your approach, Ben!
@Omar-et7sb Жыл бұрын
Ben's smirk when he is about to destroy irrational investing behavior is my comfort food. LOL
@scottshafer9813 2 жыл бұрын
Well done Ben 👍. Thank you for all that you do!
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@Phyloraptor 2 жыл бұрын
Thank you Mr Felix once again for this life changing informations
@flip931 2 жыл бұрын
Ben crushing it as always!
@robinimpey101 2 жыл бұрын
Another great video, thank you!
@julientousignant9652 2 жыл бұрын
It made me smile to see you giggle throughout the video. Very well summarized at the end too! Best videos out there in the morning with a coffee :)
@abrararifify 2 жыл бұрын
exactly what im doing right now haha
@aeriagloris9323 2 жыл бұрын
I was missing your videos, as always great content 👍
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@michaelmackinnon1198 2 жыл бұрын
Good stuff as always Ben!
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@overheyen5911 2 жыл бұрын
keep it up Ben doing great work
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@peoriaos6627 2 жыл бұрын
Nice video. I think many of us need to understand the difference between investing and trading. I personally agree with your mindset of index and other ETFs and wish I could hire you, but as an American, I can't. I have very little in quality speculations, however I'm very selective on those and tend to get out as quickly as possible. Thanks for keeping it real Ben!
@dav0625 2 жыл бұрын
Another great video, thanks Ben. Looks like those so called commission-free brokers just brought casinos to our smartphone, what a gift !
@EpicFinance 2 жыл бұрын
Ben gives me hope. Awesome video man!
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@ajrobbins368 2 жыл бұрын
Thank you!
@michaeljamescollins6800 2 жыл бұрын
The hero we need
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@richbulena8847 2 жыл бұрын
“Every crowd has a silver lining.” - P. T. Barnum
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@sharonminsuk 2 жыл бұрын
Hah hah, nothing surprising here, but I love how Ben starts by piquing your interest with the admission that his previous arguments were based on completely out-of-date data, only to rip those hopes to shreds by looking at the new data. And I love his ability to deliver something this funny in such a dry, straight-faced style. It was almost a relief the couple times he actually let a little chuckle escape!
@simpleandfree4243 2 жыл бұрын
Ben felix, my ultimate personal advisor... hello and thanks ftom France!
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@MaxBreedlove 2 жыл бұрын
Ben Felix... your videos are awesome
@TheChemist2159 2 жыл бұрын
Another banger!
@clifcody 2 жыл бұрын
Great video!
@robertopaulobotelho9207 2 жыл бұрын
Great content
@SageFinance 2 жыл бұрын
I could never be bothered with any sort of trading. Passive index investing for me plus brokerage costs are still a joke here in Australia so trading would be even more difficult to make a profit after short term capital gains tax.
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@davidchen5661 2 жыл бұрын
Well said
@aaroncurtis8175 2 жыл бұрын
Can you please do a video on fixed income asset allocation? Especially treasuries vs corporate bonds. Thank you so much for everything you do Ben!
@Mzert805 2 жыл бұрын
best financial youtuber ever
@msthing 2 жыл бұрын
Would be intetesting to hear your view on the sensitivity of markets to changes around the world, like recent dips due to Evergrande in China. Or, what happens to markets during wartime? Love the big picture topics!
@ironcito1101 2 жыл бұрын
I was reading yesterday about how the US stock market could drop by ~30% if the government defaults on its debt, which appears to be a possibility due to Congress failing to reach an agreement on the debt ceiling. Surely, markets around the world would also fall sharply. I don't know if that's within Ben's purview, but it could be worth a video.
@nickdoyle-achievefinancial2464 2 жыл бұрын
Great video! Hopefully, these investors find your channel.
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@Ar_3141 2 жыл бұрын
great vid
@melvinnahun521 2 жыл бұрын
Ben great video, please do a video about trading RIA 🙏 thanks.
@ryann8348 11 ай бұрын
The problem with most individual investors is they chase stocks as they go up. Chase good stocks that have taken a beating
@johnpreston230 2 жыл бұрын
We missed you Ben!!!!!!
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@kalenbogdan9270 2 жыл бұрын
The hero we need, but not the one we deserve
@pwsiegel 2 жыл бұрын
Great video as always! Can you elaborate (ideally in a future video!) on your point at the end, about how the quality of the information built into market prices doesn't matter? My naive belief is that if we know that a change in trading behavior is causing people to systematically overbuy a particular cohort of stocks (e.g. whatever is featured on Robinhood in a given day) then there is probably a strategy for profiting from this knowledge. Then again, if there's convincing evidence that these stocks are overbought then other traders will put proportional downward pressure on prices - is that what you mean when you say that it's a bad idea to second guess market prices?
@drsgme69 2 жыл бұрын
Investing is for boomers, trading is for alphas tbh
@firstfast733 2 жыл бұрын
Love your podcast. I have to ask if you set your mind to trading how would you go about it? Thinking A year out not day trading. Asking for a friend lol
@oladimejiakintaro221 2 жыл бұрын
Ben Felix......making sense since 1975👍🏽
@lography6917 2 жыл бұрын
I rarely give ppl advice but when I do it’s to watch Ben Felix
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben!🤴🏿🇳🇬
@lography6917 2 жыл бұрын
@@Mosesusorer Good work!
@jeremywoodman2454 2 жыл бұрын
I love how Ben almost loses it laughing when he uses phrases like "meme stonk", "to the moon", "thrill seeking", or is addressing ideas like 'we broke your efficient markets with our smartphones'.
@georgezuwala7075 10 ай бұрын
the one with the dog riding the rocket is the best of that clown show :-)
@MatthewBester 2 жыл бұрын
From what I've seen these easy access apps don't have "tax wrapper" so the cheapness of it may be severely effected if revenue department ever finds out.
@shenry25 2 жыл бұрын
Interesting analysis, as always! But aren't we forgetting the entertainment value of day trading on a mobile device? If these people were not doing this, wouldn't they be "wasting" money on magic swords, armour or spells? You can value this entertainment cost - the amount of money they lose. To know whether this cost is high or low, you'd have to measure the enjoyment traders get from their activity, just like a cinema ticket is too high if you don't like the film and vice versa.
@sentfromgeemail302 2 жыл бұрын
Have you tackled the age-old question of whether it's better to invest in real estate or shares? Would love to see your take on it.
@djayjp 2 жыл бұрын
Ben Felix, the definitive source.
@lunarmodule6419 2 жыл бұрын
Well he's probably bias a bit without knowing himself. And this is normal. But he really seems like an honest Canadian good guy. Thx
@NATOnova 2 жыл бұрын
Doesn't commission-free trading benefit us who only make a couple trades a year and stick to rational investing? Thanks as always for your useful and well researched videos!
@kkean1954 2 жыл бұрын
Is the 1.5% fee wealthsimple charges related to currency conversion when buying US equities, etc? And, is that the same amount all brokerages charge when there is currency conversion in equity purchases? Look forward to your reply.
@likemysnopp 2 жыл бұрын
I would like to see a video about investment saving accounts and other account types in countries where the tax is super low on investments. I myself live in sweden where we pay 0.0035% or so on our investments no matter what we do thru the year (if we have a ISK, investment savings account in english). And I dont know if you made a video on Jim Simmons yet but sure, he has plenty of advantages and he doesnt do his trade stuff alone.. so maybe its not a good idea to compare anything to him
@Hickenn 2 жыл бұрын
Maybe just a typo but the tax on an ISK would be about 0.35%, or a factor of 0.0035. So 100x higher, but still great :)
@YourKabardianMate 3 ай бұрын
If you created a video that guarantees profits in day trading, you would receive 500k views and dozens of affiliate offers. Thank you for being honest! 🙏
@lunarmodule6419 2 жыл бұрын
Very happy about this video because I'm following this RHood story. I'm older and horrified to see young adults mismanaging their money. RHood is playing the over confidence to the max and kids are by definition over confident because of the lack of experience. RHood play heavily on the teenager mantra "We golden kids get it - You old babyboomers are 'out of it' and senile - We will be rich before being 30". And so kids over trade and mismanage the little money they have. Thx
@justStardust940 2 жыл бұрын
The boomers were the same way with their own technologies of the day. History repeats itself every generation and every generation thinks they're special
@lunarmodule6419 2 жыл бұрын
@@justStardust940 Ya I guess ;-)
@ivanreii 2 жыл бұрын
can you please make video analysing Hedgefundie portfolio?
@MrBrainSage 2 жыл бұрын
Day Trader : *exists* BARBER and ODEAN: I'm About to End This Man's Whole Career
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@RamseyKilani 2 жыл бұрын
Can you make an episode on NTSX?
@miked412 2 жыл бұрын
I typically assess the validity of information based off of how many times someone includes rocket ships and moon references. This essentially had neither, therefore the information cannot be credible.
@dumolollen7676 2 жыл бұрын
Innovative in technology doesn't matter people have herding behaviour in the stock market since the time of Tulip mainia upto the GameStop debacle
@Qwuiet 2 жыл бұрын
day trading is gambling unless you have the information advantage like what Jim Simmons did with Medallion funds. Gamble responisbilty. there is no free lunch.
@alankoslowski9473 2 жыл бұрын
If by 'gamble responsibly' you mean invest in index funds augmented by small cap value, then I agree.
@OzHunter 2 жыл бұрын
savage
@RRR20238 2 жыл бұрын
Why is currency conversion is so expensive in Canada?
@BenFelixCSI 2 жыл бұрын
It's not that expensive everywhere, but if you want "free" trades you will pay a markup for other services.
@robertwright8844 2 жыл бұрын
Hi Ben, I have a somewhat unrelated question. For people with a long time horizon, are there any asset classes with higher risk and expected return than stocks? In particular, what are your thoughts on using a small fraction of a portfolio to buy long-term, in-the-money call options on ETFs? Is this a smart way to increase compensated risk?
@llljjj007 2 жыл бұрын
Check out his video on leverage, which is basically what you're proposing.
@bitcoin4life 2 жыл бұрын
Venture Capital
@robertwright8844 2 жыл бұрын
@@llljjj007 I did watch that! But (a) options have very different properties than borrowing money and investing in shares, and (b) you can't use borrowed funds in an IRA but you can use options (I'm a US investor).
@llljjj007 2 жыл бұрын
@@robertwright8844 Deep in the money LEAPs are very similar to simple leverage.
@lunarmodule6419 2 жыл бұрын
@@robertwright8844 Options are super hard. There's riskier stock like small caps or new stock (IPO). "IPO spin-off" investing maybe interesting for you and it's still stocks analysis - so same skills... The IPO guru is Joel Greenblatt - he has many books and vid on KZfaq (he's with Gotham Investments).
2 жыл бұрын
Most people don't realize that commission-free trading is a net negative for retail investors.
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@forrestlayton7447 2 жыл бұрын
How so?
@samsonsoturian6013 2 жыл бұрын
I saw one report that selling options on meme stocks may beat the market as attention based investors mostly buy options, driving their price up.
@JJV7243 2 жыл бұрын
I'm actually really against "free trading". To me, it represents a lack of transparency - as you ARE paying a fee for a "free" trade - it is just collected in a small difference in the stock price that the brokerage gets access to. I think regulators should force these companies to display the total cost difference (i.e. the actual fee) that is used for each transaction. I'm not against a 5 C fee instead of being "free".
@OlleMattsson 2 жыл бұрын
Soooo... what's the rational position on Evergrande?
@larrygranda6447 2 жыл бұрын
Anyone try auto etc? I tried those and c++ code and now switched to pluto io as it is a lot more simple to understand and quicker to test theories.
@PapaCharlie9 2 жыл бұрын
The next excuse will be that the recent studies focused only on stock trading and not options trading. Despite everything detrimental about day trading stocks is present, if not more so, with options.
@williamc4221 2 ай бұрын
The problem with using these sources of data is that they aren't restricted to professional traders. Take poker, for example. Most players who enter tournaments lose it all, but that doesn't mean there aren't professional poker players making a living from the game. So, like poker, there are likely methods of creating an edge in day trading that only professional day traders are consistently utilizing.
@Greedyspook 2 жыл бұрын
Ben, I need a brain power RAM upgrade to keep up with you arguments 🤣 (re-watching helps).
@Knightshield 2 жыл бұрын
so the more things change... the more things stay the same
@clintonj.johnson9879 2 жыл бұрын
Investing your time and effort in activities and investments that will yield a profitable return in the future is what we should be aiming for.
@marcofox4249 2 жыл бұрын
You can say that again.
@marcofox4249 2 жыл бұрын
I have achieved many things since I started investing.
@jasmineheidi1427 2 жыл бұрын
What kind of business, or investment would you two motivational speakers suggest to your audience?
@AnRodz 2 жыл бұрын
"payment for order flow" affects only market orders, right?
@I..cast..fireball 2 жыл бұрын
I think it would still influence what prices you can get with limit orders, but i'm no expert.
@gulammohiddin5747 2 жыл бұрын
My thought as well.
@altonliu8007 2 жыл бұрын
it affects limit order as well
@safetyfirst2417 2 жыл бұрын
It affects the entire flow
@muffemod 2 жыл бұрын
Limit orders will not be executed above the limit. but will execute above the market price.
@collin8962 2 жыл бұрын
Got it, buy more VGRO
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben!🤴🏿🇳🇬
@alankoslowski9473 2 жыл бұрын
Exactly. That's why he recommends one decision funds for most investors.
@MoonDesignDev 2 жыл бұрын
Ben, the value that Robinhood has provided me is leverage. I'm invested in low-cost index funds at 2x. That does seem like a new innovation for retail investors.
@niranmojo 2 жыл бұрын
Hit the like folks / for an another excellent educational video
@MadArcher0 2 жыл бұрын
If the definition you give of market efficiency at the end is correct, how can anyone possibly argue against it?
@robertwright8844 2 жыл бұрын
If the market were not efficient, it would be easier to achieve risk-adjusted returns superior to total market returns over long periods of time. That very few people accomplish this is what you would expect from an efficient market.
@mikechan231 2 жыл бұрын
I don’t think any of us should be surprised that day trading results for non-professional traders should be pretty poor. I mean, the average club golfer is pretty bad. So is the average squash or tennis player. In fact any non-professional is going to perform poorly in any activity that requires large amounts of knowledge and experience. The larger question that gets asked is- is day trading even real and/or can non-professionals ever compete along side professionals (although some argue that those don’t exist).
@cparkrun 2 жыл бұрын
You know those click-baity video titles that are written like "abc ANNIHALATES xyz!!!!!"? I feel like a lot of Ben's videos are examples of someone calmly "annihilating" BS claims, but they actually deliver.
@manuelg758 2 жыл бұрын
What do you think of writing puts?
@llljjj007 2 жыл бұрын
It's equivalent to writing covered calls, which reduces your risk and expected return.
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben!🤴🏿🇳🇬
@samsonsoturian6013 2 жыл бұрын
@@llljjj007 Yeah, depending on what you write them on. Using the most volatile stocks or meme stocks changes the risk-reward completely. Then if leverage is used all bets are off.
@llljjj007 2 жыл бұрын
@@samsonsoturian6013 Are you implying that the market misprices options on volatile stocks?
@samsonsoturian6013 2 жыл бұрын
@@llljjj007 meme stocks are often mispriced. Volatile stocks give more option premiums because they are inheritantly more risky. E.G. SPY vs SPXL.
@cirodirosa6752 2 жыл бұрын
But, apps that show more shape thingys and colour thingys... show more trust worthy thingys!
@I..cast..fireball 2 жыл бұрын
I dabbled. Never again.
@lunarmodule6419 2 жыл бұрын
Good call!
@kage-fm 2 жыл бұрын
these canadian burns are polite af
@anaestereo810 2 жыл бұрын
I go to Vegas instead..my DeLorean time machine broke down
@siddhartha_1 2 жыл бұрын
Trading is like a giant poker table. Some do win but they are the most skilled and hard working.
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben!🤴🏿🇳🇬
@samsonsoturian6013 2 жыл бұрын
Not quite. Poker is a zero sum game, while trading is a net positive game. A better way to put it is trading is a casino rigged for success instead of failure.
@siddhartha_1 2 жыл бұрын
@@samsonsoturian6013 true. It's a poker table at which the chips tends to increase in value gradually over time. And, a lot of people don't realize the skill level of the other pro players. I imagine the top 10% win 90% of the hands.
@alankoslowski9473 2 жыл бұрын
While there's some skill, in both day trading and poker success is largely due to luck. You're better off investing in all hands (index funds) rather than a few (day trading).
@egal1780 Жыл бұрын
Does that mean that HFT Firms could use this knowledge to make high Returns?
@justStardust940 2 жыл бұрын
Ben is the real Robinhood by teaching the poor how to build wealth with evidence-based investing
@bendikbendiksen8703 2 жыл бұрын
If the top 0.5% of stocks bought on Robinhood every day lose an average of 4.7 percent the following month, then shorting the top performing stocks for a month should provide a great profit? Isn't that proof of an arbitrage opportunity and inefficient markets?
@BenFelixCSI 2 жыл бұрын
Shorting is extremely risky. It’s easy to see a statistic like this and think you (or a hedge fund) can profit from shorting it, but as some hedge funds learned the hard way the sentiment risk created by social media herding behaviour has made shorting even harder. It’s not an arbitrage. See here papers.ssrn.com/sol3/papers.cfm?abstract_id=3807655 As for market efficiency, there is always going to be both a risk-based and a behavioural explanation for market phenomena. We can say that Reddit investors are irrational or that they require a low expected return.
@nitinmirpuri3313 2 жыл бұрын
Ben can you do a video in which asset class to invest in.
@lunarmodule6419 2 жыл бұрын
Well the classic honest answer would be to evaluate your own personal situation. And from there propose a plan. Best example: if you own an house, you plan should be different from a person whos renting.
@lunarmodule6419 2 жыл бұрын
OK play along. Invest a bit each time you have money, focus on the long term (imaging your young by the question) and diversify. ETF are a great way to do so. Maybe contact Ben's firm to invest with them!
@Toxic-th4si 2 жыл бұрын
If most mutual funds don't beat the market why do people still invest in them? Also why do people invest in hedge funds when most of them do not beat the market?
@chivasowle286 2 жыл бұрын
Why do people do anything that doesn’t make sense? In this case they do it because they think their fund will beat the market or because they don’t know better.
@Toxic-th4si 2 жыл бұрын
@@chivasowle286 sure I get it when it comes to retail investor buying mutual funds but why do so called sophisticated investors invest in hedge funds when they grossly underperform the market.
@llljjj007 2 жыл бұрын
Why do people invest in bonds when most of them do not beat the (stock) market?
@chivasowle286 2 жыл бұрын
@@Toxic-th4si Well I have never had hedge fund money but I suppose it is for the same reasons. Someone convinces them the money is safer or will grow more at the hedge fund.
@iceman.83 2 жыл бұрын
Because they bring higher risk adjust return.
@HitonMusic 2 жыл бұрын
Just noticed how amazing your teeth are. Great video by the way.
@lunarmodule6419 2 жыл бұрын
Haaaa money can buy lots of stuff. Maybe not love...
@Mosesusorer 2 жыл бұрын
@ADMIN .. 🇳🇬🤴🏿 Scam alert! This is a fake Ben 🤴🏿🇳🇬
@stefanoliver9529 2 жыл бұрын
So why can’t you just short hearded stocks. And earn a 4% monthly return?
@BenFelixCSI 2 жыл бұрын
Shorting is extremely risky. It’s easy to see a statistic like this and think you (or a hedge fund) can profit from shorting it, but as some hedge funds learned the hard way the sentiment risk created by social media herding behaviour has made shorting even harder. It’s not an a risk free profit because you can go broke from shorting losses before the trade becomes profitable. See here papers.ssrn.com/sol3/papers.cfm?abstract_id=3807655
@bernitiel 2 жыл бұрын
The only way to outsmart stock prices is insider trading which is illegal.
@alankoslowski9473 2 жыл бұрын
Pretty much. These days it's very difficult to legally obtain unique, important info most other investors don't have.
@toromontana8290 2 жыл бұрын
Or just learn to read charts / sell companies that reach a stupid high P/E or a stupid high valuation and buy something else.
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