The crowd was in its seats half an hour early. About 1,500 people filled a Houston convention hall to hear Robinhood's CEO. Plumbers. Small-business owners. Stay-at-home parents. Many had quit their jobs to trade full time, because their portfolios had grown that big. This was Hood Summit last month, the brokerage's biggest event of the year. On Wall Street, Treasury yields sat at two-decade highs and oil was climbing. In Houston, the Journal's Hannah Erin Lang and Rachel Mendelson found a room with no worries in it.
Sara Brescia O'Rear, 41, was a pharmacist. Six years ago she began putting whatever she could spare into Palantir (PLTR). It grew to about one-third of her portfolio, and the stock is up nearly 2,000% since. She retired in her 40s. Her view of the market is simple. The trend, she said, is “always going to be up and to the right.” Lance Zakrzewski II, 37, runs a business in Michigan. In March 2020 he went all in. Every dollar he had went into the market, and he pulled money early from his retirement account to add more. His net worth tripled in the rebound. If stocks tank, he told the paper, he'd “probably just buy more.”
The stories kept coming. One man bought several thousand IREN shares at about $4, and they trade near $35. Another lost his job 18 months ago and now makes about five times his old salary trading options and stocks. A stay-at-home dad put half his savings into a stock under $1 a share and made more than $13,000. An entrepreneur who made millions on Tesla (TSLA) in 2017 still keeps most of his money in a couple of tech names. His rule for getting rich on a few stocks has a catch. “But you have to be right.”
What the same paper printed on B6
Two things sat near these stories. Monday's insider box showed Robinhood CEO Vlad Tenev sold 375,000 shares on Oct. 5, worth $42.6 million. Executives sell for many reasons, and such sales are often scheduled in advance. Still, HOOD closed at $109.02, down 3.6% this year, while its customers were up big. Tuesday's Page One added the second. Single-stock options volume is near $700 billion a day, the level of the 2021 meme craze, per Carrick Lane. More than half of it is in contracts that expire within two weeks. Bullish sentiment in the AAII survey hit 40.3%, the highest since mid-July. One quieter fact stood out. Schwab customers' top buy in September was a dividend ETF, the first time any ETF topped that list since Schwab began keeping it in 2021.
Our read
This is Behavioral and Investments/Risk, IN04. The Journal met the winners because the winners are who show up. The traders who put half their savings into a stock under $1 and lost don't fly to Houston. That's survivorship. Concentration made these people rich, and concentration can take it back. We hold Palantir at weight in 20 books, nothing added, sized so one bad quarter can't reset anyone's plan. One more thing about March 2020. Early withdrawals from a retirement account usually mean income tax plus a penalty, and that money never compounds again. It worked out once. That doesn't make it a plan.
Here's your check this week. Open your brokerage or 401(k) app and sort by position size. Find the single biggest stock you own, including company stock from work. Figure what share of everything it is. Then write down what a 50% drop in that one name would do to your retirement date. If the answer scares you, the fix is a trim on your schedule, not the market's. Bring the number to your next review. Everyone in Houston has a plan for sunny days. The umbrella's cheap while the sky's still clear.