Retail investors: the new lords of misrule
The Hertz share sale saga has baffled many in the industry, but it has illuminated a new type of feral retail investor that is winning grudging respect from some of the financial industry’s aristocrats.
Retail investors have played a big role in a rebound in global equity markets that seems bizarre in the context of Covid-related economic challenges, but makes more sense given the determination of central banks to support asset values.
Analysts from banks and asset management firms are increasingly shifting from bemusement at some of the antics of the new breed of retail investor to grudging respect for the collective wisdom of a crowd that seems willing to back any long shot in the hope of a profit.
Much of the attention to the boom in retail investor demand has been on the occasional excesses of customers of Robinhood, the commission-free trading app that is popular in the US.