One Minute Economics: 'Retail Bros' (Dave Portnoy) vs. 'Suits' in One Minute: (Why) Do Most Retail Traders Lose Money?
After the March 2020 crash across a wide range of assets (including US shares), something interesting happened over in the United States: an aggressive "recovery" was fueled, among other things of course, by remarkably high retail trading activity.
To put it differently, the so-called "suits" or professional investors were pessimistic, yet retail investors aka "retail bros" to use 2020 slang were optimistic, with perhaps the number one example to that effect being represented by Dave Portnoy.
From memes to more or less troll-ish hashtags such as #stocksonlygoup, two things are certain: one, that retail traders/bros are a LOT more vocal in 2020 than in the past and two, that retail speculators did better than the so-called suits after the March 2020 crash.
This begs an interesting question: have traders such as Dave Portnoy outperformed the pros because they are genuinely better or is it rather something attributable to pure luck and the fact that as the saying goes, everyone's a brilliant trader in a bull market.
In just one minute, it's time to answer a simple yet loaded question: (why) do most retail traders lose money?
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