Lets talk about the Robinhood Investing Platform, how they use your data, and how people are making easy money shorting their Top Movers Section - Enjoy! Add me on Instagram: GPStephan - CLICK SHOW MORE FOR SALES
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Full Robinhood Article Here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3715077
This study argues that the simplicity of this design SUBCONSCIOUSLY directs their users to invest in the stocks that just happen to catch their attention…and what’s more likely to catch your attention than the TOP MOVERS?
In terms of how big of a deal this is…the study goes further to say that Robinhood users are MORE LIKELY to be influenced by those choices because:
One, half of Robinhood users are first time investors, who are heavily influenced by chasing returns without developing their own method for selecting stocks.
Two, the Robinhood app directs users attention to the SAME subset of stocks, while offering limited additional information that might lead to a different choice.
Third, the simple design makes it EASIER to rely on Robinhood’s information than on their own critical thinking.
Fourth, the app is SO EASY to use that it allows users to place trades nearly instantly…without the time to fully consider and think through what they’ve just done…
And fifth, because Robinhood users are more likely to buy and sell stocks within a short window of time - they’re more likely to trade speculatively, rather than invest diligently or the long term.
In other words, a large enough portion of Robinhood users are simply investing in the Top Movers Section without doing much research, and those stocks tend to see a 14% HIGHER Price than they would’ve seen, otherwise…with a subsequent 5% loss over the next month.
This is ESPECIALLY common in the companies with less than a $1 Billion Dollar Market Cap featured on Robinhood, which are much more easily influenced by investors buying in and driving up the price. This study analyzed almost 4,900 of these “herding events,” and found that 63% of the time, selling right after the price goes up, and then buying back in 5 days later, resulted in a 3.5% above market return.
First of all, DON’T EVER jump into a stock just because you see it going up in price. There’s enough research that suggests, at this point - jumping into a hype stock is a bad idea, prone to a quick reversal, if you jump in too late…which, chances are, by the time you see it on the top movers list - it’s already too late.
Second, NEVER buy into a stock without having researched the company to the point where you know how they make money, you understand their basic fundamentals, and you invest an amount where you still have enough left over to be properly diversified.
Third, yes - there ARE a small subset of people who are profiting from this information by shorting stocks and then buying them back at a lower price, but for 99.999% of people watching - I don’t recommend it.
Robinhood is still a good platform to use and they changed the game with $0 stock trades….but, their easy, game-like design also poses a threat to people who have no clue what they’re doing and just buy into the trends.
Instead, I’d just recommend people stick with the basics: smash the like button, invest diversified funds long term, keep buying consistently, and hold for as long as you can.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
LIMITED TIME: Get 4 FREE STOCKS ON WEBULL when you deposit $100 (Valued up to $1400): https://act.webull.com/k/Vowbik9Tm5he/main
BLACK FRIDAY SALES - ENDING SOON:
The Graham Stephan Mentorship Group: $30 PER MONTH OFF WITH CODE BLACKFRIDAY
We meet 2x per week on Zoom and Facebook Live and work on whatever you'd like!
https://the-real-estate-agent-academy.teachable.com/p/graham-stephan-mentorship-program/?product_id=2647294&coupon_code=BLACKFRIDAY
The YouTube Creator Academy: $200 OFF WITH CODE 200OFF
Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source:
https://the-real-estate-agent-academy.teachable.com/p/the-youtube-creator-academy/?product_id=1010756&coupon_code=200OFF
The Real Estate Agent Academy: $200 OFF WITH CODE 200OFF
Learn how to build your start and expand your business as a real estate agent from the ground up: https://the-real-estate-agent-academy.teachable.com/p/the-real-estate-agent-academy/?product_id=503039&coupon_code=200OFF
Full Robinhood Article Here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3715077
This study argues that the simplicity of this design SUBCONSCIOUSLY directs their users to invest in the stocks that just happen to catch their attention…and what’s more likely to catch your attention than the TOP MOVERS?
In terms of how big of a deal this is…the study goes further to say that Robinhood users are MORE LIKELY to be influenced by those choices because:
One, half of Robinhood users are first time investors, who are heavily influenced by chasing returns without developing their own method for selecting stocks.
Two, the Robinhood app directs users attention to the SAME subset of stocks, while offering limited additional information that might lead to a different choice.
Third, the simple design makes it EASIER to rely on Robinhood’s information than on their own critical thinking.
Fourth, the app is SO EASY to use that it allows users to place trades nearly instantly…without the time to fully consider and think through what they’ve just done…
And fifth, because Robinhood users are more likely to buy and sell stocks within a short window of time - they’re more likely to trade speculatively, rather than invest diligently or the long term.
In other words, a large enough portion of Robinhood users are simply investing in the Top Movers Section without doing much research, and those stocks tend to see a 14% HIGHER Price than they would’ve seen, otherwise…with a subsequent 5% loss over the next month.
This is ESPECIALLY common in the companies with less than a $1 Billion Dollar Market Cap featured on Robinhood, which are much more easily influenced by investors buying in and driving up the price. This study analyzed almost 4,900 of these “herding events,” and found that 63% of the time, selling right after the price goes up, and then buying back in 5 days later, resulted in a 3.5% above market return.
First of all, DON’T EVER jump into a stock just because you see it going up in price. There’s enough research that suggests, at this point - jumping into a hype stock is a bad idea, prone to a quick reversal, if you jump in too late…which, chances are, by the time you see it on the top movers list - it’s already too late.
Second, NEVER buy into a stock without having researched the company to the point where you know how they make money, you understand their basic fundamentals, and you invest an amount where you still have enough left over to be properly diversified.
Third, yes - there ARE a small subset of people who are profiting from this information by shorting stocks and then buying them back at a lower price, but for 99.999% of people watching - I don’t recommend it.
Robinhood is still a good platform to use and they changed the game with $0 stock trades….but, their easy, game-like design also poses a threat to people who have no clue what they’re doing and just buy into the trends.
Instead, I’d just recommend people stick with the basics: smash the like button, invest diversified funds long term, keep buying consistently, and hold for as long as you can.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
Settling up an investment that would benefit you is something one would be aiming towards. I wasn’t really a fan of online business because I have actually been doubting this all my life because I have been taken before by several scammers. But after my encounter with AUSTIN my prospective of online trade changes and I I’m now a millionaire from bitcoin
So basically the best way to make money is to short what the “herd” is buying into or short the next “hype” stocks like gme or amc?
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I had just turned 18 in 2019 and fuel cell energy was pennys so I purchased 40 dollars worth and had forgotten about it. Then I checked it again during the GameStop frenzy of 2021 and it was at 26 dollars. 💰
So how to make easy money shorting the stock market?
I really had to watch that intro like 5x 😂
Can you guys please help me on how to invest ?
So funny to watch these new traders get sucked into these new illiquid platforms. They act like legit platforms don't have the same tools.-always have & better relationship with the government in sticky times.
RobinHood=webull= every other new scam platform.
Wrong title for this video – scanned thru after I heard all the Robinhood app stuff – did not have the patience to look for "shorting the market." SORRY !
Why is that when I look at him, I cant stop seeing a bobble head figure. 🤔 🤷🏻♂️
so uh, whats next Stephan? what is going to be shorted next lol
Jake sent me here to learn about shorting, so here I am.
This video is less about shorting stocks and more about using clickbait titles to plug your own products. Shame on you Graham. There is a reason I don't like your stuff and have not subscribed. You are shaping up to be what I like to call a charlatan.
5% short in a month is crap. Interest will eat you up. Best advice, don't short because you are mostly likely an idiot!
Just watched your interview with that 17 year old millionaire. I know why we enjoy these intros much more than the standard. It is because it is entertaining and captivating. Funny content on this platform just does better. I am no youtuber, but as a consumer of this content I know, generally that funny content is more watchable.
Guys it's what's up your Graham.
I wonder what its like to short and buy, woah, le leouch
This short is nothing I’m not selling till it hits 500 or till I get anoff to get land
"Top movers" sounds like unstable stock to me. Big gamble to invest either way.
And, post GME (or is it still going on?), it turns out Robinhood sells their user data to the hedge funds, and accusations are that they sell the data BEFORE making their users' trades, meaning they see what people like, and then give the hedge funds an edge on that.
Shorting a company is fucking stupid, hope u shorted GameStop lmaoo
This is really disappointing because I really enjoy your videos…. but now we find out your not always right and you didn't even know what you was talking about on this topic….
this didn't age well graham, robinhood users literally just made the market go BRRRR
perfect example NOT to listen to ANY comments and suggestions on how to invest in the market ,, if you listened to this guy and shorted GME, you'd be dead
*2 months later * “how to make tendies on GME”
bro when i watched the intro i thought this video was from today lmao
Listening to a millionaire on how to make money has become obsolete.
This video is 3 months ahead of its time hahaha
Who else is here after the GME and AMC 😏
I find this funny watching this video now for the first time. While GME, AMC…and other stocks are being driven up by traders in Robinhood and other similar apps are driving up the price and screwing over the guys shorting stocks. Just goes to show you that don't put all your money on the word of another, do your own analysis, and be prepared for things to change. Graham, I like the content and the research; no one saw this coming.