They Are Outperforming Hedge Funds, And This Is What They Are Buying

After years of trying and failing to sucker in retail investors into the stock market to allow a long-overdue distribution from top shareholders (BofA's high net worth clients have been patiently selling for 6 consecutive weeks for a reason) to mom and pop bagholders, as has been the trend heading into every prior recession...

.... the Fed finally succeeded in igniting a retail stock buying frenzy...

... with some help from zero-cost brokerage accounts and billions in "stimulus checks" which as we first reported last week, were promptly "invested" into a stock market trading at 24x forward PE multiples.

And not only have retail investors emerged as the most vocal factor in the market, but in a remarkable, twist they are now outperforming hedge funds as Goldman pointed out, with the basket of retail trading favorites outperforming the hedge fund VIP basket on both a YTD basis and since the start of 2019...

... even as hedge funds refuse to chase the current bear market rally sparked by a tsunami of central bank liquidity.

So in this brave new world where the "dumb money" is up for the year, and where most "smart money" entities are still well in the red, what is one to do? Well, since the Fed is now exclusively catering to WFH millennials, the prudent thing - and we use the term with infinite sarcasm - is to chase the retail herd.

Conveniently, we have access to that information: for those seeking to recreate the Goldman basket of "retail favorites" we have listed the 50 most popular retail stocks below:

What if one want front-row seats to the real retail daytrading frenzy which these days is best captured by Robinhood? We have the answer there to. The table below shows the 30 most widely held stocks by Robinhood investors, starting with Ford at #1 with 855,853 longs, and ending with MRNA with just under 200K.

What if that too is not enough, and instead of the "stock" approach to investing one prefers the "flow" (with good reason: after all if these names already have a ton of retail investors, odds are that any new bagholders buyers will be more difficult to come by) we have the answer there too: below are the 30 stocks in the Robin Hood universe that have enjoyed the biggest absolute jump in popularity in the past day...

... and past week.

Considering there is (or at least was) a cottage industry of financial professionals tracking every single hedge fund move, it now appears more prudent, in this market catering to and driven by millennial bros, to do the same with retail traders. Of course, when doing so, it is also probably prudent to avoid the big glaring ad on the website that tracks robinhood activity which, well, may explain everything in this "market."