People Are So, So Mad at GameStop Investors and FinTok Influencers

Social media influencers are giving bad financial advice within a bad financial system. Traditional investment advisors are asking people to be rational in a market that isn't.
People Are So, So Mad At Tik Tok Investors
Screengrab: Stonks

One of the stranger parts of the eternal stock market boom (totally not a bubble, by the way) has been the anger directed at people on social media giving personal finance or investment advice.

TikTok, Reddit, YouTube, and Twitter are full of STONK influencers and investment bros who are constantly talking about their gains. In this world, everyone is getting rich, and traditional investment advisors, financial gurus, and institutional investors are corrupt and/or idiots. The people who are scared to YOLO their money into single stocks like Tesla or GameStop are cowards. The prevailing strategy of many of these influencers is to buy stocks—a lot of them, right now, with all of your money. And for most of the last two years, that strategy has, against the odds, actually worked.


Take the recent outrage directed at a couple on TikTok, Chad and Jenny, who bragged that they fund their lifestyle by trading stocks on Robinhood, a popular free app for investing. 

"Here's my strategy in a nutshell,” Chad says in the video. “I see a stock going up and I buy it and I just watch it until it stops going up. And then I sell it and I do that over and over and it pays for our whole lifestyle.” In a follow up video, Chad told the tens of thousands of people accusing him of giving bad advice that they should “suck a butt” and said that he would now create a channel called Crappy Wall Street Advice to actually give advice and grow his profile from it.

There are plenty of things to get upset with “FinTok” influencers and their Reddit and YouTube cousins. Their “advice” is risky as hell, they are gambling, and some of them are likely presenting a skewed version of their lifestyles and their finances. Their advice is also in direct contradiction with that of more traditional investment advisors, FIRE community folks, and financial influencer-types, who suggest you cut your expenses, put a reasonable percentage of your money into broad index funds that mirror the entire stock market, and wait for a very long time until you become rich enough to quit your job or retire at 65.  


“There are some runaway stocks that are causing incredible irrational exuberance,” financial podcaster Paula Pant said on her Afford Anything podcast, adding that there’s a “cognitive dissonance between the state of the stock market and the overall economy.” 

“If you go to Twitter, if you go to TikTok, you will see TikTok-ers who are bragging about putting their $600 stimulus checks, which they refer to as ‘stimmies’ into Tesla stock, and turning it into a bajillion more bucks. It is irresponsible investment advice. In fact, I would not call it investment advice. That is investment-tainment.”

We have been living in a world and a country where the Barstool Sports owner Dave Portnoy has been buying stocks based on the letters he pulls out of a Scrabble bag and the popular mantra is that “stocks only go up.” And yet, for most of the last 24 months, that has been very close to true. Broadly speaking, the stock market is skyrocketing (save for a major dip last March at the start of the pandemic), and many, many idiots are getting rich overnight while “safe” investors continue to play the long game.

Over the last two weeks, GameStop stock has skyrocketed. The WallStreetBets subreddit is currently getting very rich (for how long, who can say), while short sellers and investment research firms like Citron Research (which is shorting GameStop stock), are calling them all idiots: “Everyone on Twitter never has a losing trade. Everyone on Reddit is a genius,” Andrew Left of Citron said in a much-anticipated video about why GameStop investors are wrong. He suggested the people buying GameStop stock are going up against hedge funds who know much more than them, and that GameStop investors are losers who are trying to hack his Twitter account, are ordering pizzas to his house, and signing him up for Tinder.


Pant, Left, Vox, and all of the people who are mad at investment influencers are not wrong. FinTok gives advice that is often questionable and occasionally illegal. Most of these videos are wrong, and possibly harmful. But they are all symptoms of a larger problem—FinTok is bad, but the stock market is worse. 

The stock market, the personal finances of millions of Americans, and the real economy are all growing increasingly unmoored from one another. Stocks are thriving irrationally, millions of people are incredibly desperate, and it’s entirely possible to make money (or lose it all) amid the chaos. 

Look at Tesla. Despite only selling 400,000 vehicles in 2019, Tesla achieved a market capitalization larger than if Volkswagen and Toyota were combined—two companies that sold 21.8 million cars together that year. Ahead of Tesla's inclusion to the S&P 500 in December, JPMorgan advised its clients to avoid investing because its stock was "in our view and by virtually every conventional metric not only overvalued, but dramatically so," and revealed it would only buy the stock after a nearly 86 percent drop from its early December price of $650 to $90. 


We see the same sort of uncoupling from economic reality anywhere you look, as capital without anywhere else to go pours into nonsensical stocks. The stock of Live Nation, which is the largest concert promoter in the U.S., hit an all-time high in January, nearly a year into a deadly pandemic that has made in-person concerts both dangerous and illegal. In the technology sector, we’ve seen companies skyrocket precisely because the pandemic has made them more essential, or because of speculative fervor, or because they are not actually technology firms (e.g. WeWork) but rather use the label to foster exuberance and burn enough capital to become essential in daily life.

Now, amid all of this speculative madness, average people are getting in on the action and stock traders are mad. Many seem to be mad because wantonly investing in volatile stocks is dangerous and usually ill-advised, and they are not wrong, but that is what the stock market fundamentally is. Hedge fund managers, analysts, and successful day traders are all gamblers in a casino built on a sandy ledge teetering over an ocean. Normally, though, the biggest payouts are reserved for the biggest players because they can afford to gamble. Take Bill Ackman, whose firm made $2.6 billion by March by betting $27 million that companies would struggle to pay back debts during the pandemic; eight months later in November, Ackman was making the same bet again.

Despite the volatile environment, or maybe because of it, people are now chasing the sort of returns regularly enjoyed by those sitting on gluts of capital. Take the Redditors who guessed GameStop stock was being shorted by investors, bought the shares to push up the price, and forced short sellers to buy up the stock to cut their losses—pushing up the stock price even further. Some of these Redditors were able to realize as much of a 900 percent return like this. GameStop stock is up 20 percent today alone.

This is not necessarily a “good” thing—daytrading is a pretty risky enterprise and at times indistinguishable from gambling. But there is no safe, responsible, idealized form of the stock market that this behavior is somehow abrogating. The stock market is best understood as something like the Yeerk pool from Animorphs—a home away from home for parasites to rest on their laurels in between various plots and attacks. The fact that stocks are skyrocketing while millions are out of work and facing eviction, restrictions are still in place around the nation, and thousands of people are dying daily, illustrates that perfectly. 

It’s not hard to understand why people would try to realize their own outsized returns when all around them investors, financiers, and institutions are able to do so regardless of what reality is like on the ground for most workers. What’s harder to understand is why rage is directed against them and not, say, the financial system itself.