The Notebook: Does the Gamestop and AMC surge signal a memestock comeback?
Where the City’s movers and shakers have their say. Today, Max Rofagha, CEO and founder of Finimize, takes the pen to talk memestocks, the FTSE 100, and how ChatGPT became a flirt
Memestock renaissance? Not quite
Roaring Kitty’s first online post in three years saw shares of Gamestop and AMC jump, leading to suggestions that we may be entering a new meme-stock era for retail investors. However, our own research of over 2,400 modern investors shows this is unlikely.
Our Modern Investor Pulse revealed significant changes in investment behaviours and attitudes, including a sense of distrust and fatigue toward social media. We found 42 per cent of retail investors are using social media significantly less than they used to for investing, and that it is one of the least trusted sources of information and news to inform their investments.
Coupled with this, we’ve seen a rise in retail investors seeking financial education and guidance amid economic uncertainty. But meeting this need in a way that resonates is proving a real issue for institutions, fintechs and wealth managers alike. Hundreds of executives have come to us to help them navigate how to better engage with their customers via content in a way that understands them and meets them where they are on their investment journey, and our data shows over 65 per cent of investors are more interested in this advice and information than ever before.
Our research also shows modern investors are adopting long-term approaches over short-term strategies, and are turning to more diverse products such as ETFs. An indication they have learned by doing, employing lessons previously learned, and are far from adopting the behaviours that contributed to the 2021 meme-mania.
With the great wealth transfer imminent, which will place Gen Xers and Millennials in control of half the world’s wealth by 2030, big changes are coming in the retail investor landscape.
So while Roaring Kitty’s comeback captures attention as it plays out in movie-style drama, the last time I checked it had already started showing signs of fizzling out, highlighting why not to get caught up in the hype and mistake the behaviours of a few as a reflection of the many.
Is the FTSE coming back?
The UK economy is picking up speed, growing faster than it has since 2021 thanks to a booming auto industry and a general uptick in service-related businesses. This boost is also breathing new life into UK stocks, which are starting to show some promising signs after a long slump.
For a while, UK stocks seemed cheap but kept getting cheaper, frustrating even die-hard bargain hunters. Typically, undervalued stocks need something special to happen to start climbing, like interest from big investment firms. The UK market lacked this spark and has seen major money withdrawals since 2020.
But things are looking up. Analysts at the likes of Goldman Sachs are feeling optimistic, pointing to higher commodity prices, a weaker pound and likely interest rate cuts as reasons to expect better days for the FTSE 100 index.
This index benefits from the rise in commodity prices and makes more from overseas sales when the pound is weak. Right now, every UK sector is cheaper than similar sectors in the US, making them an attractive trading opportunity, which suggests that we might see a FTSE resurgence soon.
Chatted up by ChatGPT
OpenAI has unveiled its latest version of Chat-GPT called GPT-4o, which is touted as being both faster and flirtier than its predecessor. Not only can it process and discuss images, translate languages and identify emotions from visual expressions, but it now has built-in memory so it can remember previous prompts. I’m genuinely astounded and excited by the capabilities of AI and I know in my industry alone it has the power to, and will, revolutionise how we create and consume content in ways we can’t comprehend yet.
The podcasts I’ve been listening to
Lately I’ve been tuning into Rick Rubin’s podcast Tetragammaton and his interview with Golden Harper (lifelong runner, biomechanics expert and the creator and founder of Altra Footwear) made for a fascinating and inspiring listen.
I’ve also been enjoying our new Finimize podcast Generation, which interviews the smartest minds changing how financial services engage with modern investors. With the great wealth transfer coming, it aims to help leaders in financial services get ready to navigate the seismic shift and is a must listen for anyone in financial services wanting to get ahead.