Will the social network and fintech change stock investment?

Social network is powerful

The rise of social network now allows news of the investment market to spread to all corners of the world in a short period of time. This has also led to the fact that the investment methods of young people now affect the stock market (such as Game Stop (ticker: GME) case), people may worry about whether the stock market will affect the stability of investment and the rate of return.

Will not affect the fundamentals of the stock market

My opinion is that there will not be any fundamental changes. Because human nature does not change, the stock market reflects the collective behavior of all investors. This has not changed since the stock market. Just as I quoted Jesse Livermore in the introduction to the chapter of the postscript of the book “The Rules of Super Growth Stocks Investing,” Livermore said: “There is nothing new in Wall Street. Whatever happens in the stock market today has happened before and will happen again.”

In Livermore’s era, there were only paper tape machines. Later, they mainly relied on telegrams. 30-40 years ago, investment consultants and celebrities used fax machines to attract retail investors to join, but now the Internet celebrity use the Internet to attract members to tout stocks. The methods are different, but the essence of mass input is the same.

Technology makes stock trading effectively, that’s all

The netizen in the United States use the ancient Reddit (not yet listed) on the Internet to connect stock investors, while the netizen in Taiwan gather on the PTT network, which is older than Reddit, to discuss or chase various stocks or internet celebrity. Blown the story of short-term stock market gains. Robin Hood (US stock code HOOD), which provides a variety of free or low-rate securities services to young retail investors, and vowed to break the long-term Wall Street monopoly, has emerged as a dominate power. PayPal (ticker: PYPL), which has subverted various consumer financial services from traditional banks. Block (ticker: SQ), and SoFi (ticker: SOFI) have indeed greatly lowered the threshold for people (especially young people) to enter stock investment and the convenience of participation.

Human nature not changed

But regardless of social networks or fintech companies, what has changed is the way people participate in stock market investment (20 years ago, there was no mobile phone to place orders, 40 years ago, you must have deep enough pockets to open an account at a securities firm near you, otherwise you are not even eligible to buy shares). It makes the investment method more efficient, but it does not fundamentally change the behavior of people participating in the capital market; “”human” the biggest factor that may affect the stock market.

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