BRF #56 Retail is still dumb
I was looking through some older data from the height of the bull market back in 2021 and there was some stunning sections that stood out to me that I wanted to share with you.
Before we do that, lets all share a laugh with the latest narrative shift from bitcoin maxi’s
“Yield doesn’t matter, hold it forever”
Duh! Why would you ever want to generate yield on your investments? That is just silly pants crazy!
I am going to reference survey data from Magnify Money around July-August 2021.
Many consumers have taken on debt to invest, with Gen Zers leading the charge. 40% of investors said they have taken on debt to invest, including 80% of Gen Zers, 60% of millennials, 28% of Gen Xers, and 9% of baby boomer investors.
Personal loans were the most popular choice among those who took on debt to invest, followed by borrowing from friends or family. 38% of those who went into debt to invest took out a personal loan, while 23% borrowed from friends or family.
When it comes to taking on debt to invest, many went big. Of those who took on debt to invest, nearly half (46%) borrowed $5,000 or more.
Most outline counter party risk that is inherent in all leverage trading and CEX platform trading.
66% of investors have made an impulsive or emotionally charged investing decision they later regretted. This is more common for Gen Zers (85%) and millennials (73%) than Gen Xers (60%) and baby boomers (54%).
32% of investors have traded while drunk. This includes 59% of Gen Z investors who have bought or sold an investment while inebriated — more than any other age group.
Consumers who manage their portfolios generally have a harder time keeping emotions out of investing than those who rely on a financial advisor. Those who self-manage their investments report higher rates of lost sleep and regrettable decisions than those who use an advisor.
Most investors (58%) agree their portfolio performs better when emotions are left out of the equation, but that’s easier said than done. Nearly half (47%) report difficulties keeping emotions out of investing decisions.
37% of investors have lost sleep worrying about the stock market, and 30% have cried over investing. The top reasons for tears include losing money in the stock market (43%), feeling overwhelmed (36%) and selling too early (34%).
And you wonder why the fallout was so bad with literally every single lending platform in trouble?! Sure we can blame 3AC but that fire was already started once again by greed, a new generation of retail that thinks they are invincible. Hey, “everyone else was doing it” right?
Lets check in on peoples personal savings rate (this is the latest from the Fed by the way, last update was May 2022 which measured at the lowest since the GFC. They will often times sandbag data like this so you can’t see how bad it is now)
Here is the most recent consumer credit data, which shows that people are over extended on credit, this is revolving debt which is credit cards.
I mean the state of things now is these clowns on TV trying to redefine what a recession is, I mean they literally changed the definition of it in wikipedia just yesterday! Hahaha!
Learn from this, apply it to the next cycle- take time to build now during the bear market!
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