The Academy of Financial Services 35th Annual Meeting

Reddit, Robinhood

This study focuses on exploring what retail investors talk about in WallStreetBets on Reddit posts and its association with Robinhood holdings.

I found that the retail investors:1. focus mainly on several large firms and also driven by attentions from large movements (daily gains over 30%) 2.stocks are mentioned more when they have good historical returns, it is consistent when compared along time or peer groups. The relative weights of tickers are most responsive only to returns within two days. 3. High attention as measured in this study also leads to good future returns within two days (winning not losing). 4. Strong positive association between attention from Reddit and Robinhood ticker weights. 5. Significantly outperform the market based on hypothetical portfolios that weighted and rebalanced on monthly, weekly, and daily Reddit posts. 6. Those outperforms are not captured by traditional three-factor models due to strong bias and variations of concentrated allocations.