The Wisdom of the Robinhood Crowd

46 Pages Posted: 21 Sep 2020 Last revised: 5 Apr 2021

See all articles by Ivo Welch

Ivo Welch

University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: April 5, 2021

Abstract

Robinhood (RH) investors increased their holdings in the March 2020 COVID bear market, indicating an absence of collective panic and margin calls. This steadfastness was rewarded in the subsequent bull market. Despite unusual interests in some “experience” stocks (e.g., cannabis stocks), they primarily tilted towards stocks with high past share volume and dollar-trading volume, itself mostly big stocks. From mid-2018 to mid-2020, an aggregated crowd consensus portfolio (a proxy for the household-equal-weighted portfolio) had both good timing and good alpha.

JEL Classification: D9, G4, G11

Suggested Citation

Welch, Ivo, The Wisdom of the Robinhood Crowd (April 5, 2021). Journal of Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3696066 or http://dx.doi.org/10.2139/ssrn.3696066

Ivo Welch (Contact Author)

University of California, Los Angeles (UCLA) ( email )

110 Westwood Plaza
C519
Los Angeles, CA 90095-1481
United States
310-825-2508 (Phone)

HOME PAGE: http://www.ivo-welch.info

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
518
Abstract Views
2,451
rank
41,138
PlumX Metrics