Jeffrey Gundlach Says Surge in Day-Trading "Downright Terrifying"

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Hedge fund billionaire Jeffrey Gundlach believes the surge in day-trading and retail investing is "downright terrifying"

Hedge fund billionaire Jeffrey Gundlach believes the surge in day-trading and retail investing is "downright terrifying," according to Markets Insider.

"We just see how much trading is going on in retail," Gundlach said. Robinhood has been the main contributor to the day-trading boom. In June, the trading platform record 4.31 million daily average revenue trades, nearly double the amount in the first quarter.

Charles Schwab, Interactive Brokers, Etrade, and TD Ameritrade all saw increases in trades as well. Gundlach stated that the government stimulus has helped retail investors get involved in the stock market. Gundlach compared amateur investors to strangers offering candy to kids. "It looks like people are kind of re-gifting the candy the con has given them ... they are throwing that candy into this retail investment fervor," he said. 

He continued, "this is a terrible sign for the condition of the market for anybody who's experienced a significant number of cycles, which I've definitely experienced." Day traders have attempted to take advantage of the extreme volatility throughout the pandemic. Dave Portnoy, the founder of Barstool Sports, became the face of day trading as he live-streamed his trades.

The market has been selling off in the past few sessions but is still up more than 50 percent since the March low. Gundlach has been accurate with many of his calls and even earned himself the nickname of "the bond king." He also predicted the subprime mortgage crisis in 2007.

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