Millennial Airline Investors Are Up Double Since Buffett's Departure
One year ago this month, our world changed in some pretty dramatic ways.
Take the stock market. Stuck at home and $1,200 richer thanks to the first coronavirus relief bill, millions of millennials and Gen Zers tried their hand at investing for the very first time. It’s estimated that some 10 million new brokerage accounts were opened in 2020, a record. Robinhood, the commission-free trading app, signed up 3 million new users in the first four months alone.
There are signs that these “amateur” investors aren’t going away any time soon. According to Credit Suisse, retail investors now account for a third of all U.S. stock trading volume, or almost as much as mutual funds and hedge funds combined.
The Reddit-fueled “meme stock” rally is proof positive that this new formidable army of tech-savvy traders has the firepower to move markets and even kneecap multibillion-dollar hedge funds.
Early on in 2020, I think a lot of seasoned, more “sophisticated” market participants were too quick to dismiss these first-time millennial and Gen Z investors. More educated than past generations and well connected, they saw the pandemic-triggered stock pullback as an opportunity to buy shares of distressed travel and tourism companies.
That includes airlines. Before the pandemic, the combined weekly trading volume of American, United, Delta and Southwest averaged about 100 million shares. At the end of March 2020, weekly volume hit 660 million shares. By early June, after Warren Buffett announced he had sold all his airline positions, it was a massive 1.8 billion shares.
But Were They Good Trades?
See for yourself.