How Retail Traders Lose Big While Enriching Wall Street
Money For the Rest of Us
J. David Stein
4.5 ⢠1.4K Ratings
đď¸ 17 July 2024
âąď¸ 26 minutes
đď¸ Recording | iTunes | RSS
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Summary
Gambling in the stock market is increasing, with most traders losing money while generating billions of dollars per year for brokerages and wholesalers. Will all this trading lead to big market swoons?
Topics covered include:
- Why sports gambling has grown so much
- How gambling in the stock market is measured, and how prevalent is it
- Why most traders lose money but continue to trade anyway
- How uninformed traders improve market liquidity and encourage trading by informed trading
- Why being an asset allocator is more rewarding and as intellectually stimulating as trading
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Show Notes
America's Sports Betting Boom by Felix RichterâStatista
Day Trading for a Living? by Fernando Chague, Rodrigo De-Losso, Bruno GiovannettiâSSRN
Computer based trading system and methodology utilizing supply and demand analysisâGoogle Patents
Related Episodes
482: Unlocking the Power of Positive Skewness: Strategies for Investing, Business, and Creativity
239: How to Be a Successful Trader
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Transcript
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| 0:00.0 | Welcome to Money for the rest of us. This is a personal finance show on money, how it works, how to invest it, and how to live without worrying about it. I'm your host David Stein. Today is episode 486. It's titled How Retail Traders Lose Big |
| 0:16.2 | while Enriching Wall Street. |
| 0:18.7 | Recently on the Money for the Rest of Us Plus Community Forum. This is our premium membership site where we teach |
| 0:25.8 | investing. A member posted I recently saw a blurb in Bloomberg news that said Americans |
| 0:32.0 | are playing the stock market in record numbers |
| 0:34.7 | with almost three and five investing in stocks. |
| 0:38.0 | The article goes on to say that baby boomers are on average, |
| 0:41.1 | began investing in stocks when they were 35 while the average age that |
| 0:44.9 | Gen Ziers start investing in the market is 19. |
| 0:48.5 | The article pointed out that sports betting has exploded and said that stocks are now also a part of the gambling |
| 0:55.9 | mentality in our country. |
| 0:58.1 | The member wanted to know if this was true. |
| 1:00.2 | What academic studies are there that discuss this? |
| 1:03.5 | Is it only confined to meme stocks or does it involve all stocks? |
| 1:07.5 | The member continued, it sounds like a recipe for a stock market meltdown or at least increased volatility. |
| 1:14.6 | Yet it seems like in recent years the market has been less volatile. |
| 1:18.4 | Should long-term investors be wary of the trend? |
| 1:21.7 | That's what we're going to take a look at in today's episode. |
| 1:24.6 | Let's start with sports betting. |
| 1:27.1 | In 2018, the US Supreme Court struck down |
| 1:29.7 | the Professional and Amateur Sports Protection Act, known as PASPA, |
| 1:35.0 | that act effectively banned sports betting in the US since 1992. |
... |
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