Now who is laughing?
I'm talking about all of those people we generalize as being "Robin Hoodies," the ones who buy unconventional, silly stocks who are bound, in the end, to be blown out.
How many times did you hear: Mark my words, it's going to end in tears? That's the punishing, contemptuous refrain we heard so often about these folks.
And you know what? It was wrong. Sure, they might overstay their welcome. Anyone can do that. But the fact is, the so-called great unwashed "investors" got it right and today's a day to celebrate for them, too.
Not long ago, I ran a panel of professionals for the great charity that is Robin Hood -- not to be confused with Robinhood, the commission-free trading platform -- about the power of these new investors, including the 13 million odd people, most of them younger, who have been buying individual stocks, running their own accounts in addition to, or perhaps, without, index funds as a base of investment.
I feared I would hear the same contemptuous claptrap about how these new souls knew nothing and were just a bunch of jokers, who would lose everything like they did in 2000 when the dot-coms exploded.
Not only did I not hear that, I got an earful about how the neophyte investors, while drawn to certain speculative industries and low dollar stocks, did an impressive amount of work before pulling the trigger, often far more than others who have come to fear individual stocks or have been trained to think they are too stupid to run their own money.
Today we find out that not only have they hit paydirt, but many of their choices are twice blessed. That's because their buys are concentrated in a couple of highly speculative stocks that actually came in, to use the race horse term for longshots that work.
Let's go over the typical stocks that younger investors often purchased though Robinhood and then kept, as anyone could tell if you read my Twitter feed.
First, the cruise ships: Again, while there is no "they," lots of these investors clustered around Carnival (CCL) and Norwegian Cruise Lines (NCLH) . The thesis? The Federal Reserve had made it so they weren't going out of business, and it was only a matter of time that we got a vaccine. Today Carnival rallied 37% and Norwegian zoomed 27%. Given that purchases tended to be made pretty much at the bottom, when the Federal Reserve stepped in, that's a heck of a lot better than you would have done in most stocks.
Second, there was a tremendous amount of purchasing of the stocks of Ford (F) and General Electric (GE) at about $6 a piece. For a long time I thought that they were just hoping to get lucky, low-dollar lottery tickets.
These stocks have now burst higher, with Ford up 6.6% after a good run, to $8.30 and GE, $8.77, a 67 cent boost.
Now, I know that you may think that they just got lucky. Here's my two-fold response: First, the investors in these stocks had faith in the brand names, faith in the history of the companies, and, faith that they would survive a pandemic. And, in GE's case, they had faith that it would survive the aerospace debacle that is client Boeing (BA) . Second, as I say in the last line of "Confessions of a Street Addict," sometimes it's better to be lucky than good.
Third group: electric vehicles. They can't get enough of these. There's been tremendous buying of fractional shares in Tesla (TSLA) , which has just had one of the greatest tuns, ever. They love Nio (NIO) , the Chinese Tesla, which has just zoomed an astounding 995%. It's still going higher. And they adore Fisker (FSR) , the latest Tesla challenger, which just jumped 30% on some positive research. The amazing thing? These stocks are now blessed by the president-elect. They aren't done going higher.
There are certainly some misses with these hits, but the fact is that this cohort is misunderstood and derided by those brainwashed by some well-known investors, who think that it's impossible to pick winners. Not only are these winners picked, but if they simply rang the register now, they would do fabulously. It hasn't ended badly, in fact it might just be beginning.