Question: Who are retail investors looking to for guidance in 2021? Today, I'll answer
that by giving you some of the most popular names out there…including one that you might
not have thought of...at least until recently. And for these names, I’ll share some of
the reasons why people are flocking to them and some of the more recent investments they’re
focusing on. Now, I’ve been investing for a long time…
almost 25 years and I’ve seen a lot...the irrational exuberance of the 90’s, the popping
of the dotcom bubble, the financial crisis, and then 2020 happened, which I still don’t
know how to label. And I have to say that investing has gone mainstream in a way that
I had never seen until recently. With the proliferation of the retail investor, enabled
by low to no cost trading from a disruptor like Robinhood, there’s a momentum that’s
pushing back on Wall Street with a fervor that’s almost unbelievable. And within this
growing retail investor class, there’s been a thirst for getting information to help guide
them. My name is Kevin, and today, I’m gonna share where a lot of these newer investors
are looking to find that advice; I’ll give you 5 names they’re turning to and most
importantly why. As you watch the video, let me know which name you’re most interested
in learning more about in the comments and there’s a good chance I'll make a dedicated
video on the one with the most votes. So let’s start off with a strategy that’s
been used forever…and that’s following the people that have done really well at investing.
For years, and I mean years, one name stood out among them all, and that was Warren Buffett.
The proclaimed Oracle of Omaha. This man stood at the top of the mountain when new investors
were looking for whom to pattern themselves after and then listened to every word as gospel
when he spoke about where he saw the market going. Now over the past few years, Buffett
along with Berkshire Hathaway haven’t been exactly blowing it out of the water in comparison
to the broader markets in general, so many new investors, and particularly millennials,
have been looking for another great investor to emulate. And while there’s a few popular
names to choose from, I have to say, very few, if any, seem to match the current enthusiasm
I see for Cathie Wood, the founder and CEO of Ark Invest. Cathie Wood, with one eye on
the present and one on the future, she’s become a leader of a new breed of retail investors
who look to follow her every move…and to her credit, she makes it easy, by being very
transparent in posting her trades daily. And you have to give her her due, as her extremely
popular ARK Innovation ETF had big returns in the last year, over 150% from January 1st
to the end of 2020, just one of 5 ARK ETF’s that had over 100% gains for the year. And
a major part of that was due to her big position in a company that retail investors love, and
one that many institutional investors just don’t seem to properly appreciate and that’s
Tesla, which holds about a 10% weight in the fund. Tesla is a prime example of a company
that Cathie Wood and Ark Invest targets; a company that falls within ARKK ‘s cornerstone
strategy aiming to capture new products or services within areas such as energy storage,
the increased use of autonomous technology, next generation internet services, DNA technologies,
and technologies that make financial services more efficient. The common theme in this strategy
is investing in technology and technology is the sector that has led the pack of all
sectors over the past 5 years and holds a lot of interest by investors of growth stocks,
so ARKK, with its holdings and objectives, and with its recent success, has very understandably
caught investors’ eyes. And now when Cathie Wood speaks, people listen. When ARK Invest
adds a company to its list of holdings, you can expect that stock will rise, as a lot
of investors will follow her lead and buy into that company as well. In fact one of
the big catalysts for Palantir stock taking off after an initial lackluster first month
of being public was Cathie Wood adding the company to the ARK Next Generation Internet
ETF (ARKW). And something else, she’s also a proponent of Bitcoin and crypto as a hedge
and been talking more and more about it, and we see where Bitcoin’s at compared to a
year ago. So, at this point, I think it’s fair to say that any discussion of who the
next Warren Buffett will be, has to include Cathie Wood.
Another popular name that is a leader of millennial investing is Chamath Palihapitiya. Chamath
Palihapitiya is the founder and CEO of venture capital firm Social Capital. Now while Cathie
Wood is held in high regard due to her stock picking strategy and results, investors who
follow Palihapitiya closely, are often looking to see what private company his firm is looking
to take public as the next big thing. Social Capital has been very much a player in the
resurgence of the blank check company; years ago, they were called shell companies which
had a fairly shady reputation…now they’re known as SPACs, short for Special purpose
acquisition company, and are now considered by many to be the greatest thing since sliced
bread for companies looking to go public. And Social Capital and Chamath Palihapitiya
have partnered with Hedosophia and Ian Osborne to form Social Capital Hedosophia Holdings
with a plan to bring 26 SPACs to market. Right now, they’re pretty early on in their endeavor
with only 6 SPACs having been created so far, and of those 6, 3 deals have been completed,
bringing Virgin Galactic, Opendoor, and Clover Health public, all mergers which have been
considered successful. A fourth one, trading under the ticker IPOE recently identified
SoFi as its merger target, which we did cover on the channel; when SoFi was announced, IPOE
stock jumped, demonstrating that the identified target selected by Palihapitiya was well-received
by investors. Two more SPACs are currently out there, which can be found under the tickers
IPOD and IPOF and investors are waiting to see what companies Chamath Palihapitiya comes
up with next. Based on his past successes, many SPAC investors are buying into those
SPACs without even knowing what companies they’ll ultimately merge with, instead trying
to get in early at a better price betting…and trusting...that Chamath Palihapitiya will
strike gold once again with their money. I mean, investors don’t even know the company
that his SPAC will merge with and they’ll still follow him; that says something. The
man is so well thought of at this time, there’s even talk of him even running for governor
of California. Which really isn’t surprising when you see him in an interview; he definitely
has a way about him that makes people listen, and he often speaks of the respect he has
of the younger, retail investor. So like Cathie Wood, Chamath Palihapitiya is another name
that retail investors definitely stay tuned to.
Another couple of names that hold a lot of influence with new investors are ones that
have histories of not only investing in, but running successful companies, including both
having origins in PayPal, yep the old PayPal Mafia. The first name is one you will definitely
know: Tesla CEO Elon Musk, a man who reached the rarified status of being the richest man
in the world in 2021. Many see him as a visionary, leading the charge to move the auto industry
to an electrified future, as well as someone who is bringing solar to the forefront as
a legit, realistic alternative energy solution...both areas banking on Tesla's innovation in its
battery technology. While everyone knows Tesla, many investors are also eagerly anticipating
some of his other companies going public. The most well known is SpaceX with its successful
Starlink operations...and a potential candidate as spin-off IPO. SpaceX is also the company
that can bring Elon Musk’s vision of colonizing Mars a reality. Other Elon innovative companies
that aren’t yet public include The Boring Company which focuses on digging tunnels and
Neuralink, a company looking to create devices that can be implanted in the human brain to
interface with AI...now that’s something to think about. But even beyond the companies
he runs, just a tweet from Elon Musk can send his followers to take action on a company
or even something like Bitcoin if he just merely mentions it.
Another big name from PayPal that investors have flocked to is Peter Thiel. Other than
PayPal, Peter Thiel has been a part of another popular company you’ve heard of a lot of
recently, yes, Palantir. And back in 2004, he made a big investment in Facebook that
resulted in him holding a 10% stake in the company. More recently, he’s entered the
world of SPACs, partnering with fellow billionaire Richard Li to start 2 new SPACs focusing in
southeast Asia, Bridgetown Holdings and Bridgetown 2 Holdings. The original Bridgetown Holdings
came out in October and there have been rumors of it targeting Indonesia e-commerce giant
Tokopedia, although as of this recording, nothing has been officially announced. When
Palantir was readying its direct listing, we talked a lot about the company on the channel
and Peter Thiel was a common theme in the comments as to why they were investing in
the company; many people believe everything he touches turns to gold. We’ve been focusing
a lot on IPOs on this channel, in fact just about every IPO that’s come out since last
summer, and it’s safe to say Peter Thiel has been the one name that stood out in the
comments from every other founder taking their company public; there’s a lot of reverence
shown to him by people in our community. Okay so there’s a few specific names that
a lot of new investors are looking at and following. But there’s another big one out
there, that has a name, but isn’t a person. Instead, it’s more a collection of people.
No I’m not talking about YouTube…although maybe you can help me out with YouTube and
push that like button. But the collection of people I’m talking about is WallStreetBets,
have you heard of it? I’m sure a lot of you have and if you haven’t, well have you
heard of the Gamestop phenomenon then? Because if you've heard of that, which would be hard
to miss unless you’ve been off the grid, then you should know a lot of that was attributed
to WallStreetBets. For those of you new to the name, WallStreetBets is a subreddit with
about 4 million investors...and counting. Now I remember the days of Yahoo Groups and
other forums in the 1990’s that you could hear a stock “tip” that might move a penny
stock up for a day or two for no apparent reason before falling back. And until recently,
I saw WallStreetBets on Reddit as being an updated version of those forums; a place where
you can get a tip from someone that you have no idea who they are or if they have a clue
what they’re talking about…and it could turn out good...or not so good. But I’ve
never seen two specific phenomena in those old forums that I’ve seen with WallStreetBets.
One is that some of the people that post in there really, and I mean really, are putting
out some detailed information…now, there’s still the type of hyping going on there that
has existed in other forums for years, so new investors need to be careful to take in
everything they read with a very critical eye; it’s just really important to look
at the information and process it versus just taking it as absolute fact. The second thing,
and to me, the really big one, is how this subreddit has significantly and maybe fundamentally
impacted the market on such a big scale. While I know there are some favorite companies on
WallStreetBets and I’m sure that has lead to those companies trading at valuations that
are probably higher than they should be….that is nothing compared to what we’ve seen recently,
which is probably the market story of the year so far, and that’s what’s gone on
with GameStop. This is such a fascinating storyline of where the class of retail investors
have banded together, risen up, and taken on the big establishment institutions and,
at least in the case of Gamestop, have beaten them. So for those of you who might’ve heard
about the insanity of the stock but didn’t completely understand the mechanism behind
it, what happened is that retail investors within WallStreetBets initiated a short squeeze
on GameStop, pushing that stock price up significantly. Now a short squeeze is a big increase in the
price of a stock caused primarily by technical factors versus underlying fundamentals. And
a short squeeze can occur when there is a lack of supply and an excess of demand for
the stock due to short sellers covering their positions. So basically, it was discussed
on WallStreetBets how so much of Gamestop was being shorted, that the users went all
in and pushed their hand. And it worked. In a month’s time, the stock went up from around
$18 to over $350, and most of that was over 3 days. Now my intention is not to talk about
Gamestop, but to talk about how the users of wallstreetbets, where at least in this
one case, came together to beat the establishment through accurate data analysis and a well
thought out strategy, a real-life example of David beating Goliath. And as someone that
has invested for years and has seen what hedge funds have done, I have to say, it was great
to see the little guy come out on top for once. We talk a lot about IPOs here and have
seen the inequality of establishment institutions getting new stock at one price, while retail
investors have to wait for it to start trading, only to see they often have to pay 2 to 3
times more for the stock just 1 day later. And with millions of users now part of the
WallstreetBets subreddit, it’s easy to see that many young investors are looking for
investment advice and guidance within wallstreetbets, and now after the Gamestop situation, those
numbers of investors will likely go much higher. Could it actually be that WallStreetBets…a
group of mostly anonymous people on the internet, be this generation’s Warren Buffett? It
could be. What do you think…again let me know in the comments who you think is the
top choice for the new investor looking for guidance…is it Cathie Wood, Chamath Palihapitiya,
Elon Musk, Peter Thiel….or WallStreetBets? Or do you think it should be someone else,
or not be anyone…again let me know. As I mentioned at the beginning of the video, I’ll
be more than happy to make a video on the one that gets the most votes.
So please in mind that the purpose of this video wasn’t to tell you who you should
listen to or not listen to…just to give you some details on where people are looking
for information in 2021. Obviously, many of you…okay just about all of you…also go
to YouTube to find information, and some of that information like anything, can be of
dubious quality. For those of you who have been with me for awhile, you know I’ll never
tell you what to do…my only goal is to give you the information, share some personal thoughts
at times…always telling you when it’s my opinion…and then hope you make the best
decision for yourself for your situation. The biggest fear I have right now is that
everyone who is new to investing in the stock market is feeling like a genius when they
get into a market that has gone gangbusters over the past 10 months, I mean it’s hard
not to when you’re getting super-solid returns. The last thing I want to do is sound like
a kill-joy, but I feel you have to take a step back once in a while to make sure you’re
not totally getting swept into the current of the momentum. It can be really fun being
swept away with it, until those times come, and they do, where the current takes you straight
to a waterfall. My hope is to keep everyone in this community afloat by making well-informed,
educated decisions. Now if this is your first time on the channel and you’re not yet part
of the community, let’s change that, all you have to do is hit that little subscribe
button...after all it’s totally free. I hope you guys enjoyed the video, and if
you did, please like it, comment on it, and share with your friends and on any of your
social media sites. And speaking of social media, I recently made the leap to Instagram,
so definitely add me there….although you’ll see I’m still learning that platform...nothing
new there, as I’m still learning YouTube, too. Anyways, as always, I hope that we can
all learn from each other on how to take little, easy steps in making big improvements in our
lives. Thank you again for watching and until next time, have a great day!