Robert Kennedy, GameStop and the myth of rigged markets

GameStop has a new champion – US presidential candidate Robert F Kennedy. Kennedy has bought $24,000 (€22,100) of GameStop shares and promised to support the “retail rebellion”, saying he will “punish predatory short selling” and “enact aggressive Wall Street reforms” if elected president.

Kennedy won’t become president, but this guff about heroic retail investors batting against a rigged market is nevertheless damaging.

Just days before Kennedy’s announcement, American businessman and occasional day trader Dave Portnoy tweeted the stock market is “one big casino” where those in charge “rig it” to screw “the little guy and make all the money for themselves”.

On X, formerly Twitter, billionaire money manager Cliff Asness put the boot into Portnoy and Kennedy.

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Famously pugilistic, Asness did himself no favours in some of his language – calling Kennedy a “whack job” was abusive and juvenile – but he is right in saying it’s “gross and quite harmful to society” when politicians stoke “distrust and paranoia”.

A US survey during 2021′s meme stock mania found that more than half of retail investors believe the market is rigged against them. A 2022 study involving 53,000 respondents found people who subscribe to conspiracy beliefs are up to 20 per cent less likely to invest in stocks.

Trying to beat Wall Street by buying meme stocks will make you poorer, as will avoiding long-term investments due to misperceptions of rigged markets. Sowing distrust and peddling market fictions causes real damage.

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