"If these Reddit investors want to be in the market, why aren't they investing in stocks like FAANG?"
I hear this question all the time. And it's a good one.
But here's the deal: They typically can't be momentum plays. There are a slew of reasons for this. Their daily volumes tend to be substantial and they're not easy to move. They are also pricey. In sum, these are generally not stocks to trade.
There's also no reason to take the FAANGs "to the moon," despite their widely celebrated and sought-after services and products. Compare them to Reddit favs like GameStop (GME) or AMC (AMC) , which have their own stories that are the basis for many of the investing theses you've probably heard about by now.
But here's the catch.
As I wrote in my previous column on these "new" investors, they aren't a single group or movement, and some of them do invest in FAANG names, and a number of them will mention FAANGs in their comments on Reddit. It's true that among the Reddit crowd, odds are slim they'll give FAANG the same attention they give favorites like GameStop or AMC on r/WallStreetBets, r/SuperStonk, r/WallStreetBetsNew. But these FAANG names do get mentions on the page. Apple has nearly 500, according to Swaggy Stocks and Amazon has over 150. Apple's positive sentiment is also quite high in comparison to a name such as Nokia (NOK) .
So let's take a look at what WSB users like about a stock such as Apple. Sure, these traders might not follow Jim Cramer's mantra of "own Apple, don't trade it" but that's not stopping them from eyeing the stock.
Here's some of the chatter I've seen on the name from users like HistoricalEdd3243 and JonStowe1:
* Apple is "super predictable and easy to time," which is why it might be more popular on a subreddit, such as r/Investing.
* Focusing on a stock such as Apple could keep you from making "big money on more exciting plays."
* "[AAPL] is the only stock that qualifies that mantra" of own it, don't trade it, so "if you're doing that with something [insert rainbow emoji here] like AMC, then ya you deserve to be played."
You can see there's a mix of views.
All of this is to say that there is nothing wrong with investing in FAANG and, heck, there is an appetite.
But please stop telling the Reddit crowd or any younger investor that they "need" to be in the names. Also, stop shaming them. This goes back to my point about not grouping people together. This is a diverse group and some might be in the names already.
They're Going to Pot
Now, let's take a quick look at cannabis, because I'm seeing that sector pick up steam on both WSB and r/WallStreetBetsNew.
U.S. Sen. Majority Leader Chuck Schumer is kick-starting efforts to legalize marijuana, but I have to note that this is a long shot, even though 18 states have fully legalized marijuana and 37 now permit medical marijuana. President Joe Biden has said that he'd decriminalize, but not necessarily legalize, marijuana. This is important.
A stock that has caught the attention of the younger investors is Tilray (TLRY) . If you look at Swaggy Stocks, you can see TLRY's rise in popularity.
To put this in perspective, on Wednesday, as the positive sentiment skyrocketed, we saw over 230 mentions.
I will also add that in my daily sentiment check, where I ask my Twitter followers and TheStreet's, what they're watching, I didn't see many mentions of TLRY. But I did see cannabis pop up quite a few times.
Maybe, after we see more news shake out and the stocks react, we can circle back to Tilray and cannabis, because I'm itching to talk about this space in more detail.
In closing, I have some honorable mentions here. Here are two posts to check out: First, this post on r/SuperStonk, which I found fascinating about JPMorgan Chase's (JPM) earnings release and why it was good for GME. Second, Trey's Trades shared on Twitter this trailer for Ape Fest, which is pretty chill.