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Robinhood traders get a lot of flack for their wild bets on speculative stocks.

But that reputation may be unwarranted – the data suggest traders on the Robinhood platform are a lot smarter than they look.

Looking at the most-bought names on Robinhood between the end of the COVID-19 crash that gave way to upside starting in April, and mid-August, when Robinhood discontinued its stock popularity data, the best stocks to own took a disproportionate share of the buying activity during the rebound…

These are the 25 biggest position increases on Robinhood during that April to August stretch:


As we’ve already talked about this year, buying what’s working is a sound strategy for avoiding downside in crisis market regimes. And it’s been especially effective in 2020’s rebound.

Looking at the top buys on Robinhood during that stretch, there’s a huge representation from many of the stocks that were working the best:

Big winners Apple  (AAPL) - Get Apple Inc. Report, Tesla  (TSLA) - Get Tesla Inc Report, Amazon  (AMZN) - Get, Inc. Report, Microsoft  (MSFT) - Get Microsoft Corporation Report are all in the top ten.

Of course, Robinhood users also bought up plenty of more speculative plays: big bets on COVID-19 impacted travel stocks like airlines and Carnival  (CCL) - Get Carnival Corporation Report, a turnaround bet on General Electric  (GE) - Get General Electric Company Report, and some flyers on biotech plays.

But the position data show that Robinhood users were much more conservative – and much better at smartly trading the crisis environment earlier this year – than most folks give them credit for.

Ironically, the media’s hyper focus on the speculative plays happening on Robinhood appears to be what prompted the company to shut off the popularity endpoint on its public API last month.

But the key takeaway here is that, despite its simplicity, buying what’s working continues to be a market beating strategy 2020 -- owning what’s working does a better job of selecting winners, but almost more importantly, it does an incredible job of disqualifying losers.

(Not owning stocks with negative 6-month relative strength steers you clear of 97% of the names that shed 10% or more in the next month.)

The data suggest that’s a trend that Robinhood users have picked up on – and that makes them a whole lot smarter than everybody gives them credit for.