The Unstoppable Retail Investor – A Look Ahead
Happy Sunday.
I consider the late 1990’s to be the birth of the retail investor. I was there. The retail investor (me) was on Yahoo Finance, The Motley Fool and Jim Cramer’s The Street. We had Etrade, Datek, Scottrade and a hundred other brokerages light up to take our trades. We thought it was nirvana having 20 minute delayed quotes, the Yahoo message boards to yell at each other and Jim Cramer telling us what to buy.
We were right and wrong. We were right that retail investors wanted to invest and trade and speculate, but we also had a lot to learn.
Twenty minutes delayed information was a lifetime and when the bubble popped, we got crushed and we scattered.
The Birth of The Real-Time World:
In July 2006, Twitter launched to little fanfare, especially to retail investors. I too did not get it immediately. At the time, we lived on our Blackberries. There were no ‘smartphones’, no app store, and there was no ‘cloud’. But, by 2007, I was hooked on Twitter, likely because I was born of the Yahoo finance generation. I recognized the monumental shift of moving from 20 minute delayed information to real-time information from the eyes of the retail investor. I pitched Jack and Ev both on Twitter and in person on why Twitter Finance was something to take seriously but they did not get it or seem to care. I was sending tweets with $ cashtags on my Blackberry and my friend Fred Wilson immediately got it and pushed me to start Stocktwits in 2007. Fintwit was born of this too.
The real-time world was good to me and had a spectacular effect on markets. We got Etoro (2008), The Bitcoin Whitepaper, Crypto, Coinbase (2010), Robinhood (2013) and now prediction markets.
Flash forward to 2025 and the real-time economy is dead.
Elon, Zuckerberg and China (Tik Tok) tell you what real-time is. Real-time was too hard to monetize at scale so they slowed it down and jumbled it up.
Uber tells you your driver is 5 minutes but you know its more like 7-10 minutes. I take taxis’ from airports again.
Not to worry…
There is no need to mourn the real-time world. We could not handle it. We probably did not need it. For those that still want the real-time world you must cozy up to the White House or Elon Musk. If you do, many have…it is raining money and profits but you sold your soul.
Before the ‘real-time economy’ died, crypto was born and so were hundreds of other products and networks that in the winner take all world of real-time did not achieve the scale of Twitter, Facebook or Tik-Tok.
Most importantly, the real-time world helped commoditize the transaction.
Today, retail investors use these products and networks to do for stocks and crypto what the institutions used to…find ideas, share ideas, build narratives, tell stories, argue and move markets.
Crypto was and still is a ‘retail first’ world of distribution and profits and now $4 trillion in size…the good, the bad and ugly of it.
The public company executives and their IR departments have taken notice. I know because we see this everyday on Stocktwits.
The Post Real-Time World:
If I had only known in 2007, what I know now 🙂 .
We live in what I call the ‘post real-time world’.
Twenty minutes delayed information of the 1990’s internet was far too much time between institutional world and retail world and real-time was just too much information in need of filtering and curation for most to make sense of it all.
The ‘post-real time world’ of 1-3 minutes delayed information is one where everyone can find more sanity and profits.
Luckily, AI serves this market and platforms/networks/products like Stocktwits very well.
Even the financial media recognizes the death of ‘real time’ as they come to Stocktwits in greater numbers to get a better, clearer sense of what is trending and what the retail investor is thinking and doing.
This subtle shift by financial media only enforces the strength of a post real-time world of financial information flow.
And this is how we are continuing to build Stocktwits as we aim to be at the center of this world of investing, ‘speculation’ and dare I say ‘degeneracy’.
I look forward to sharing more at Stocktoberfest this week.
