The Wisdom of the Robinhood Crowd

Ivo Welch

NBER Working Paper No. 27866
Issued in September 2020, Revised in December 2020
NBER Program(s):Asset Pricing

Robinhood (RH) investors collectively increased their holdings in the March 2020 COVID bear market, indicating an absence of panic and margin calls. Their steadfastness was rewarded in the subsequent bull market. Despite unusual interest in some “experience” stocks, their aggregated consensus portfolio (likely mimicking the household-equal-weighted portfolio) primarily tilted towards stocks with high past share volume and dollar-trading volume. These were mostly big stocks. Both their timing and their consensus portfolio performed well from mid-2018 to mid-2020.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w27866