The Robinhood-mania: Daring Amateurs to conquer the stock exchanges

Within just three trading days, the share price of Kodak last week rose by almost 2157 percent. In Japan, the share of the Pharma group Tella shot in may to 120

The Robinhood-mania: Daring Amateurs to conquer the stock exchanges

Within just three trading days, the share price of Kodak last week rose by almost 2157 percent. In Japan, the share of the Pharma group Tella shot in may to 1200 per cent in Malaysia, Supermax Corporation, a manufacturer of medical gloves, increased their value since the end of March to 1500 per cent.

Such strong increases are going to happen this year, more often in the stock market than otherwise. Netflix, for example, with nearly 42 000 percent rate in 2002 growth since the stock market is one of the steepest rising values of this Millennium, required for the first 1500 percent, a whopping eight years. And even since the last low point last September, the share price has risen by a comparatively modest 118 percent. FOCUS-MONEY - buying-Alarm! The new Corona a buying opportunity

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Simple Investing attracts thousands of young-Trader

Behind the rapid climbs in this year also not speculate on the stock exchange professionals to get that. It is mainly the laity who move currently the courses. In the UK, for example, the number of stock Exchange accounts of young people between 25 and 34 years of April increased by June to 238 percent. In the United States, the Commission-free Börsenapp "Robinhood", which is regarded as the Symbol for the stock market mania has been little interested in Millennials has doubled in the second quarter sales compared with the previous year.

"With all the news and Social Media has become a Trading the talk of the town," says David Friedland, Asia Director to the provider Interactive Brokers to Bloomberg, "the easier accessibility, low cost, and the large stock market movements since March, the main drive springs are."

The many new stock market investors to move as a flock, driven from their own actions. The website Robin track, for example a measure of how many Robinhood-users now buy and sell stocks. In the process, as a rule, develop mass movements, which led to a rapid rise in Kodak stock. Is acting according to the Motto: "If now all of the Kodak buy, it must be good."

swarm-waves rates are rising

The hazards: involves The Kodak stock peaked around 29. July, however, as the course is already a lot, bought a 37,000 Robinhood-users of the share. Since then, she has lost per day, on average, 10 percent of its value, more than 50 percent of the total. How many have been sold at a loss, is uncertain, but without a new swarm-buying wave is expected to reach Eastman Kodak to its old maximum value in the near future.

For the majority of the Amateur investors have been well worth the fashion trends but: Tella, the rally began with the message that the Japanese group had been in Mexico a Corona-drug in clinical Tests, this year, the largest increase in the share on the Asian island. Who would have invested on new year's eve, 150,000 Euro, now would be a millionaire.

stock market professionals are watching Amateur Trader divided

In the case of stock market professionals, the so-called institutional investors such as Fund managers and Bank traders, the Robinhood-mania around the Globe, with mixed feelings. "The interest of the Newcomer in the stock market is likely to remain high, and thus in 2021 and thereafter for the rising classes," says Julian Emanuel, equity strategist at BTIG in New York.

"The super-Skillful Day Trader can take advantage of the very large," says the Strategist Margaret Yang of DailyFX. By that, she means both current professionals as well as talented Amateurs. But: "There is no free meal in this world. With the larger returns, the risks grow.“

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The Trouble with the Hobby-Trader to pull, however the fact that they ignore fundamental data of the company as much as possible. - Timer of the Kodak rally around the message that the group get a 765-million-Dollar loan from the US government, pharmaceutical intermediate products, which have been in the Corona-crisis was scarce. The loan is not in any Relation to the almost two billion dollars, Kodak added within a few days to his market value – especially since the necessary factories are rebuilt once again.

Overvaluations on the stock exchange are nothing rare, but in times of low interest rates, you fast this year, especially after the top. This is due to the fact that young Trader perhaps Fundamental-data, but not to invest the principle, only in companies you are familiar with or whose business model you understand. Such as Apple, Microsoft and Tesla are in the Top10 of the most popular shares in the event of Robinhood-users. The latter two were bought in the last week, most requested. The fits to the since the beginning of the year sustained Tech rally, which has led the Nasdaq to a record high.

"This will be the new normal until there is a correction," said Jeffrey Halley, an Analyst at the Investment firm Oanda, "the Hobby-Trader have to learn the hard way that prices in the stock market can shoot in two directions. And the longer the rally continues now, the harsher the Wake-up will be.“

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Updated Date: 09 August 2020, 22:26

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