Investment

Institutional Investors Are Using Reddit to Make Investment Decisions. Here’s Where They Lurk.

Published

2 years ago

March 1, 2023

At long last, the Reddit retail investors may finally be enjoying their day in the sun: Major institutional investors are taking note of what they do — and they’re making investment decisions based on it.

A new survey shows that 58 percent of the institutional investors polled have made an investment decision based on information they found on Reddit.

Since 2020, when retail trading began to take off, the social media forum site has become a haven for retail traders interested in both meme stocks like AMC and plain vanilla passive investing.

The Brunswick Group surveyed 257 institutional investors in North America, the United Kingdom, and the European Union about how they use social media and other digital tools to inform their investment decisions. The majority of the respondents — 94 percent — were either portfolio managers or buy-side analysts.

“It’s kind of impressive year over year, not only how much they’re absorbing the information, but also [that they’re] making decisions based on it,” said Janelle Nowak-Santo, a partner at Brunswick.

The survey pointed out a convergence between institutional and retail investors, with institutions tapping into sites like Reddit and traditionally retail-oriented newsletters and podcasts for information.

In fact, according to the survey, 49 percent of respondents consider Reddit to be of “high importance” when it comes to evaluating a stock. This result is similar to TikTok’s ranking, and trails sites like YouTube and Instagram by about 10 percentage points.

“There’s an inundation of information from all sources,” Nowak-Santo said. “I’d have to guess that in order to be prudent in their research, they’re actually using more of that information to make their decisions.”

So where on Reddit are these investors finding this information? The survey showed that popular investor subreddits include r/investing and r/cryptocurrency, with over half of all respondents saying that they follow those forums. Others that are commonly referenced include r/WallStreetBets and r/personalfinance. And their popularity may grow in the months to come, with 46 percent of respondents saying that they plan to increase their use of the platform.

“I think that’s just another interesting insight that [shows that] this gap between institutional and retail is narrowing,” Nowak-Santo said.

But Reddit is less important when it comes to data harvesting via machine learning, AI, and natural language processing. Just 23 percent of those surveyed said their firms are harvesting data from the social media site.

Google search results, perhaps not surprisingly, are the most popular place to harvest data. YouTube, however, ranks second, with 47 percent of investors tapping into the video platform’s data.

The survey also showed that investors are turning their focus from traditional mediums to newsletters and podcasts. In fact, 61 percent said they plan to increase their use of e-mail newsletters for equity evaluation in the coming year, while half of respondents said the same for podcasts.

These platforms are also considered to be more trustworthy than social media, ranking fourth and fifth, respectively, among those who took the survey, after investor relation sites, Google, and LinkedIn.

Among those surveyed, the Robinhood Snacks newsletter was most popular, tied with Value Investor Insight. Meanwhile, The Economist’s Money Talks is the favorite podcast among investors, with Invest Like the Best trailing close behind.

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Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

3 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

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Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

4 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

4 weeks ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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