trading

Sad Days in Sherwood Forest

As I have been warning, Hertz stock is worth nothing. Today it is back down to $1.20 after being as high as $6.50.

To show you how retail investors buy high and sell low, here is the cumulative loses for Robinhood traders (Assuming 100 shares per position) for 2020.

Cumulative Gain/Loss (assuming 100 shares) of RobinHood Users and No. of Positions

You can see the cumulative loses are now approaching $50 million at a minimum. Of course, the good news is the most that can be lost now is another $15 million or so.

The bottom line is this behavior is pervasive with retail investors and why the average 401k earns way less than the averages.

By Christopher Schwarz, ago

Thank Goodness for No Commissions

Yesterday I documented that the number of Robinhood accounts has soared. Here is the annualized position turnover of Robinhood users.

Annualized Robinhood Position Turnover, red line 30 day average

Before this year, position turnover was somewhere around 100-200%, which is not that much different than most actively managed mutual funds.

However, since March, turnover has soared – hitting close to 1000% annualized. Today the 30 day average is close to 400%.

Again, this is not investing. This is trading. We’ll see later whether the RH users or the house is winning.

By Christopher Schwarz, ago