Author ftwiki

At this time of acute uncertainty and high anxiety, how do investors behave? Some worry and trade; some worry and do nothing. Either behavior is entirely normal, behavioral finance pioneer Meir Statman argues in an interview with ThinkAdvisor.

Every so many years, it seems, the stock market is flooded with mindless cash, an influx of inexperienced traders looking for a quick buck and a thrill. It’s happening again. Consider the weird saga of Hertz, the long-respected car rental brand. Undone by debt, it’s not clear the company will survive. They’re dumping cars online…

Recently, billionaire investor Mark Cuban compared the current stock market to the dot-com bubble of the late 1990s. The reason? Easy-to-use trading apps, commission-free stock trading, and a lack of other ways to gamble right now have led to a surge in day-trading activity.

Few, at least so far, appear to be listening — and that is unfortunate. There is nothing good, and much bad, to be said for day trading in stocks. This will end badly for almost everyone who tries it.

(Hint: It’s not Robinhood.) The #retailbros era of Robinhood day trading is upon us, led by dangerous man-children like Barstool founder Dave Portnoy. Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

The new-age investors who joined the stock market during the lockdown will adapt quickly as they are not used to high leverage trading products. Sebi’s guidelines on upfront collection of margins won’t affect their trading much, Tejas Khoday, Co-Founder & CEO at FYERS, says in an interview to Moneycontrol’s Sunil Shankar Matkar. Edited excerpts:

Alex Kearns was an ordinary 20-year-old. He played the trombone, studied at the University of Nebraska and, like millions of other Americans, traded stocks to pass the time or make some money when coronavirus shut down schools and workplaces. Unfortunately, his youthful dabbling ended in tragedy.