By Charlie Hobin, Staff Writer
As Boomers transitioned into adulthood, finance and investing in the stock market was a far-off, complex world that only existed in sleek skyscrapers and unwieldy flip phones. 35 years later, teenagers now have access to buy and sell any stock in any company on a small rectangular screen in the midst of a boring Zoom english class. New simplified, easy to use trading apps such as Robinhood give millions of young people access to buy and sell any stock they desire. This absurd amount of power and opportunity has led the next generation to find ways to multiply their money from the comfort of their bed, sparking a change in the world of investing that we saw most predominantly over the past few weeks with the meteoric rise of Gamestop.
I was an earlier investor in the hype of the “short squeeze” of Gamestop in recent weeks. Due to Covid-19 and poor earnings, Gamestop was the most heavily shorted (which means bet against and a big payout will occur if the stock goes down) on the stock market as hedge funds saw it as a pretty easy way to make a few bucks. Online investors, predominantly millennials and Gen-Z, myself included, began to notice this massive short and began to buy the stock in masses. This is where the squeeze comes in, as the stock rose due to retail investors buying, hedge funds on wall street had to ensure they did not lose infinite amounts of money as the stock continued to the moon and were forced to buy millions of shares. This drove the stock even higher and created more and more hype until it became international news.
Another student who joined me early on in this gamestop journey was Holden Greenfield. “I make content on YouTube so that more young people can catch the potential trade, or at least become aware of the great money making opportunities in the stock market,” said Greenfield, senior at Mountain View High School and YouTube creator who specializes, in finance and cryptocurrencies and has nearly 400,000 total views. Greenfield helps educate the youngest investors, guiding his viewers through trading opportunities and the ways of the market on apps like Robinhood.
“There are many money opportunities, such as future breakout stocks or crypto buying opportunities that I find that I want to share with others,” Greenfield said.
Robinhood gained 3 Million users in the first few months of 2020 and is growing quickly. This mass amount of new Gen-Z traders has been influencing global financial markets and sparking unbelievable growth in companies across the world. Stock prices are a reflection of supply and demand, when more people buy the stock goes up and when people sell the stock goes down. Gen-Z investors at Summit have flocked to new communities of traders on social media sites such as Reddit and TikTok, sharing news and hyping up different stocks. For example, in recent weeks, Gamestop’s stock has become the most frequently traded stock in the world due to an influx of trading and is trading nearly 20x last summer’s price.
When asked about this new type of trading Greenfield said, “I think more bubbles [when a stock inflates to record highs] are being created than ever before.”
‘Hype-Trading’ as many call it has led stocks such as Tesla to soar to record highs and transform Elon Musk’s Net Worth from 24 billion to over 190 billion in 2020 alone. Not everyone is a fan of these new ‘gamified’ trading apps giving off similar vibes to subway surfers as confetti flies across the screen when a stock is purchased.
“You can imagine the chaos when you have a 19-year-old who can’t even buy a 12 pack of Bud Light Seltzers that now has the ability to trade options [complex high-risk trading] with virtually no restriction,” senior Jacob Ashby said. “I mean that’s a recipe for financial disaster. Try as these apps might, finance isn’t a game.”
Ashby with an ever growing passion for economics and financial markets. “I’ve been taking night classes at COCC on the subject because there are no courses in HS on it.” Ashby believes gamified stock trading apps are churning up a storm of financial disaster and warns young investors to do intensive research before putting money on the line.
“My interest in finance and markets was piqued after attending a camp in Portland my freshman year that focused on teaching investing fundamentals like asset classes and basic financial statement analysis (think how to read a cash flow statement), and personal finance,” Ashby said.
Similar to Greenfield, Ashby believes understanding why stocks go up and down and determining the true value of a company can lead to great success in finance and encourages all of his friends to join in on the profits through apps like Robinhood.
The future of personal finance looks stronger than ever as the next generation understands the world of investing and managing money earlier than ever before. I along with many of my friends have joined in on a journey to financial freedom and although it may seem complex, I encourage young people everywhere to understand and embrace the endless opportunities the stock market has to offer.