The Wisdom of the Robinhood Crowd

52 Pages Posted: 28 Sep 2020 Last revised: 22 Aug 2022

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: September 2020

Abstract

Robinhood (RH) investors collectively increased their holdings in the March 2020 COVID bear market, indicating an absence of panic and margin calls. Their steadfastness was rewarded in the subsequent bull market. Despite unusual interest in some “experience” stocks, their aggregated consensus portfolio (likely mimicking the household-equal-weighted portfolio) primarily tilted towards stocks with high past share volume and dollar-trading volume. These were mostly big stocks. Both their timing and their consensus portfolio performed well from mid-2018 to mid-2020.

Suggested Citation

Welch, Ivo, The Wisdom of the Robinhood Crowd (September 2020). NBER Working Paper No. w27866, Available at SSRN: https://ssrn.com/abstract=3700694

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