Market On Open, Friday 12 September
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Will It Be Different This Time?
by Alex King, CEO, Cestrian Capital Research, Inc
2025’s market has been remarkable in a number of regards, but chief amongst them in my view is the reported outperformance of retail vs. professional investors. I have no independent data that attests to this but let’s say that this narrative is true. There are two reasons why it could be true.
- Retail investors have learned that since 2009, all dips are buyable dips, even if you have to wait a long time to get back to value, so the Liberation Day lows played as an opportunity not a threat, or:
- Retail investors are drunk on euphoria as the stock price gains since the April 7 lows have been in inverse correlation with the quality of the underlying asset. The lousier the company, the more the stock has mooned. The UnBuffett Buy The Dip strategy.
I think, by the way, that either which way this is great news. Usually Big Money just continually helps itself to money formerly owned by the folks they deem the Little People, so it is pretty entertaining to see pro after pro decry the only-up market we’ve seen since April. I can think of only one human pro who has really called this in public as an only-up market, and that’s the pseudonymous “Lord Fed” on X. (If you don’t follow him yet, you really should - here.). As for machines, the algorithmic signal services we provide from Yimin Xu (here) and Jay Urbain (here) have also been extremely reliable all year. Personally I have found the hedge-and-overhedge method that we teach in our Inner Circle service has continued to work well for me. Many ways to succeed in this market as long as you accept it for what it is - which is to say, as long as you trade the market in front of you, not the market in your head or the market as explained to you on TV.
The test for retail isn’t right now - it’s when the market turns, whenever that may be. The Internet has provided retail investors with absolutely everything they needed to succeed in this bull market. Research, data, brokerage platform, margin capital, everything. You can be your own hedge fund, if you do it right, and without pesky LPs too. The Internet also has on offer everything that retail investors need to succeed whenever the market turns bear. Hedging methods, rotation methods, shorting methods, research, data, everything. It’s not a coincidence that Robinhood is now launching the ability to short stocks on their platform; yes, many will rush in and be broken by this most treacherous of tools, but those who learn to use it well can see their wealth rise as the fortunes of others evaporate.
I think there is a tremendous moment happening right now in retail investing; and I don’t mean the ~75% pop in $OPEN stock yesterday, as remarkable as that was, I mean, any retail investor who takes it upon themselves to learn how markets really work, and uses that knowledge to prepare for the next bear and then execute correctly in the next bear, this is the golden opportunity afforded by the Internet today. Most won’t bother and will be rekt like they were in 2000-2, 2007-9, 2022, and so forth. But some, the few (or should that be Few), will see their accounts live long and prosper.
If you run your own capital? Time to decide. Are you just along for the hot-money yucks, or do you really want to make money from money whatever the weather?
Let’s get to work with our daily market analysis. Available every day to our Inner Circle members.