Since the start of 2021, multiple stock markets have seen rapid increases. The NASDAQ went up 43.64% from 2020, according to the NASDAQ composite index, which compiles almost all stocks listed on the NASDAQ stock market.
With this increase, a plethora of stocks have witnessed great volatility over the new year, such as GameStop, AMC, Palantir, BlackBerry, Nokia and more.
Some Mercer students have taken advantage of this boom by investing in the stock market during the recent volatile exchanges, hoping to cash in on the capital opportunities. Many of them used Robinhood, a stock trading app marketed to young people.
John Pittman, junior accounting major, started investing in the stock market over winter break and has invested in GameStop, AMC and BlackBerry since the beginning of January. Pittman said he started investing as a means to make some extra money, and his investments are seeing great returns.
“I just wanted to have a way to make my money grow when I don’t really have time for an hourly job,” Pittman said. “I wanted to be able to take some trips in the future when I don’t have a lot of money to work with after I graduate.”
Pittman, an avid user of the social news site Reddit, uses the subreddit page Wallstreetbets, where users have posted various trading strategies. One such strategy led to the recent GameStop short squeeze. Many users — and non-users — took notice, cashing in and receiving promising short-term returns.
John Bonner, junior history major and stock enthusiast, said he took note of Wallstreetbets’ previous trends, noting that it has often made bizarre investment suggestions, such as Lumber Liquidators, as well as exceptional suggestions such as Tesla. Because of this, Bonner said he invested in GameStop early in November and saw great returns in a two-month period.
However, by the time the GameStop stock rose 680% at the end of January, many hedge funds began to suffer, including Melvin Capital, which lost 53% of its capital betting against GameStop.
“Hedge funds like Melvin Capital would do massive short bets on GameStop and would bet that the stock is gonna decline, so they would sell off shares they don’t own at a lower price, meaning they make money as the stock decreases,” Bonner said.
Because of this, Melvin Capital’s partner company, Citadel, delivered a $2 billion cash infusion to the company while allegedly telling another partner, the trading app Robinhood, to halt trades in multiple volatile stocks such as AMC and GameStop.
Bonner said he was not a fan of Robinhood’s business strategy and is opting to use the Webull app instead to trade stocks in the future. Other students have also deviated from Robinhood because of the recent stock intervention.
Senior business major and stock analyst Ryan Long said he will stop using the Robinhood app entirely and instead use the Thinkorswim app.
“The app [Thinkorswim] has an overall stronger and faster trading system than Robinhood. Robinhood also only updates its stock every 30 seconds, and Thinkorswim hasn’t halted trading in GameStop or AMC,” Long said.
Ryan has also taken a greater interest in cryptocurrency such as Bitcoin and Dogecoin.
“Bitcoin’s a bit expensive, but will likely see an extensive rise in the future. Now Dogecoin is an interesting [cryptocurrency]. I saw Elon Musk tweeted out a picture and it soon rose up a great deal. It’s such a cheap coin, but percentage-wise, it increased quite a bit,” Long said.
All three investors said that it’s always a good time to start investing in the stock market. Whether you put in a couple of bucks or thousands of dollars, one can likely expect to see a profit with time.
“Time in the market beats timing the market. You can never make any money if you don’t put anything in,” Long said.