Who Needs a Formal Education When You've Got Youtube and Podcasts?

 My Daily Market Reflection - The Market is an Ecosystem:

On Friday the market saw one of the worst pullbacks since October. My portfolio was not immune to this. In fact, my stocks dropped a whopping 5.5% (this is a lot for one day) and continued to do so in the aftermarket. The reason? Reddit users and their quest to screw over the rich man. Believe me, I get it and I’m all for knocking the rich down a peg but the stock market is like an ecosystem and when there is a disruption to the system, it creates a ripple effect. If you don’t know about the whole Reddit scheme, I’ve included an image that explains it quite well (I did not make this image). Here’s why it’s problematic not only for the rich: When the rich lose, we all lose and the rich will never lose for long. These Reddit users’ main intention was not to make money, but to take revenge on rich investors and hedge funds that do in fact manipulate the market for their own personal gain all the time (I’ll come back to this). Sounds like a good idea right? I mean, they deserve it if they do it to us all the time. Right? Well, here’s why it’s actually not. If rich people are afraid of retail investors trying to get revenge on them all the time, they’re going to be afraid to put their money into stocks. They’ll sell their stocks, pull their money from the market, and invest it somewhere more conservatively (like bonds) for a while until they feel safe again. THIS IS VERY BAD FOR EVERYONE INVOLVED. Without the rich’s cash flow, stock prices will drop and stagnate and the little guy will not make any money until the rich return. This will change our fun and exciting bullish market into a lame bearish one. While the rich won’t make as much as if they were invested in stocks, their wealth will still grow steadily and we will all remain poor. We got a taste of this on Friday when big hedge funds had to sell off some of their stocks to make up for their losses from the Reddit users’ shorts squeeze. Because hedge funds have millions and billions in the market, when they sell off, the whole market drops (yet another disruption to the ecosystem). That’s why everyone’s portfolio dropped on Friday.

Now back to how wealthy investors manipulate the market. They basically do the same thing reddit users did. However, they only do it by like 5-10% at a time, whereas Reddit users made Gamestock soar to around 1000% in the matter of days. You might be thinking in your head that this shouldn’t matter. Manipulating the market is wrong no matter to what percent, and yes, you are correct. But look at it like this: If I’m on the highway and I’m going five miles over the speed limit, chances are I will not get noticed if passing a cop. Also, five miles over is most likely not going to result in an accident. However, what if I was going 100 miles over the speed limit? I am FOR SURE going to get caught and pulled over (that is if I don’t kill several people first). Both are illegal and risky, but one has a greater chance of me being caught and/or hurting myself and others. That’s how the rich get away with it, that’s why reddit users won’t if they continue. I believe laws and regulations need to be in place to prevent ALL investors from doing this. Hopefully this major event has opened up a much needed, long overdue conversation that leads to real change. But looking at our nation's history, it probably won't. Either way, I'm not holding my breath.

Now, at this point, you might think I’m a class trader and I can assure you that I am not. But sometimes it can be hard for people to see the forest through the trees and I’m just trying to look at the bigger picture here. I have goals, BIG ONES. And if rich people pull their money from the market, I won’t be able to realize those goals and neither will anyone else like me because like it or not, retail investors just don’t have the cash flow to move the market like the wealthy do. 

And for inquiring minds, I have no intentions of dropping Robinhood after what happened on Friday because I really believe they were trying to protect the future of their company by limiting trades. I don't think an app designed to to help everyday people would find themselves somehow protecting the rich in all of this (this is a narrative that has surfaced and resulted in many people calling for Robinhood boycotts). Do some research on how trading and funding works with Robinhood and you'll understand why they found themselves forced to limit trades for a limited time.

If you are interested in how my portfolio has fared today, it’s rebounded some. Though I haven’t regained all my losses from Friday, I believe it’s on its way. For now, the opulent haven’t allowed their fear to totally take over. With that being said, if retail investors keep targeting them, we can expect a lot worse pullback than we saw on Friday. 

First came the Apps and Books, Then Came the Youtube Videos and Podcasts

If you’ve done your homework this past week, you get a gold star and you’re ready for your next step! After I gained all my savvy stock knowledge from the MyWallSt. Learn App, I headed over to youtube to watch a video tutorial on how to use my brokerage app. As you know, I primarily use Robinhood but dabble in Fidelity. Go to Youtube and type in how to use (insert brokerage name here). There will probably be several different videos. Pick the one that looks most useful.

I also started to really get into stock related podcasts. I went from binge consuming true crime podcasts to listening to Motley Fool Money. My life was changing even before I had made any money because how I chose to spend my time was changing. There was no professor breathing down my neck, telling me to do these things in exchange for an A. I was doing this all on my own. And it wasn’t just for some silly A that no one really cares about. It was for my future. Here’s how I know this is different for me: I have never in my life worked so hard to learn about something that wasn’t directed by a teacher and that I wasn’t going to receive a good grade for a job well done for. The only thing motivating me was my excitement about the possibilities and my need for a change. So anyway, I digress. Here are some of my favorites stock podcasts, not in any particular order:

• Motley Fool Money

• Stock Club

• Snacks Daily

• Snacks Minute

• Industry Focus 

• Market Foolery

• Stock Stories

• Let’s Talk Stocks

• The Stock Market Secrets Podcast

These are all accessible on Spotify and I'm sure on almost every other place where one listens to podcasts. Some are lengthier than others so pick the ones that work for you. I generally listen when I’m in the car, folding laundry, making dinner, etc. I tend to not listen when I’m just lying in bed because my mind wanders and I lose focus (or I fall asleep). For some reason, when my body is occupied by a task such as folding laundry, my mind is more attuned to what I’m listening to. Everyone is different though so do what works for you. 

Well that’s all I have for today and you have some listening to do! Check back for another post in about a week. Happy trading!