Veteran Wall Street research analyst Dan Ives with Wesdbush Securities believes the recent trading activity witnessed with the likes of GameStop (GME) - Get Report, BlackBerry (BB) - Get Report and others is something that market participants, particularly large, institutional investors, need to get used to - and consider when their making their bets.
“What you are looking at in a broader perspective on stocks and on sectors is the rise of the individual investor,” Ives told TheStreet.com. “For many years this was an institutional game, and retail participation was something where there would be noise that you would listen to and you would always have your ear out for. But this is a central change.”
The reason: the evolution of trading and technology and the ability of hundreds of thousands of retail investors to review, analyze and comment in real time has allowed them to do what bigger, institutional investors have long done: Confer on a thesis and collectively ride a wave, either by buying a company's shares in big chunks or selling them.
“It's a new market force, and ultimately ignoring is just to the detriment of those who do so,” said Ives. “This is another element of the market that's going play a big role and allow these investors who are very intelligent about these stocks to do what they want to do.”
Indeed, Ives expects it’s a phenomenon that is here to stay – and something that larger and more established players need to factor in to their decisions about which positions to take.
“I do think it's important to understand the psychology and what's going on because it's something that's not a fad,” Ives said.