Finally: A New Take on the Robinhood Generation

Finally: A New Take on the Robinhood Generation

Over the past few years, Robinhood started to rival Instagram for screen time on the phones of young people wading into the waters of investing for the first time.

Never before had investing been so culturally relevant.

Throw in crypto, meme stocks, unrestricted options trading, and a dose of Covid, and we've seen a financial revolution define an entire generation.

Just like every generation before us, the defining moments of the youth movement are dismissed, ridiculed, and misunderstood by popular culture. The '60s had the hippie movement, the '80s gave birth to the first truly tech empathetic cohort, and today's youth is the invest-in-things-old-people-don't-understand generation.

Madison Darbyshire just published a piece in the Financial Times called "Generation moonshot: why young investors are not ready to give up on risk"

Darbyshire presents a refreshingly nuanced case for the psyche of the r/wallstreetbets generation. Rather than follow the crowded line of journalists bemoaning this seemingly erratic and irresponsible investing as nothing more than gambling, for no reason other than deficient morals and a surplus of free time and stimmy checks, Darbyshire's account paints a more honest picture.

Nowhere in the piece is there a dodge of the obvious risk of the growing popularity of speculative investments. Instead, data provides a backdrop that helps connect the dots between traditional investing and the increasingly heterodox strategies of today — making sense of the incentive structure that led us here and, some would argue, provide a sound logical backbone for the 'fuck it' philosophy.

My favorite quote from the piece comes after a long list of financial trends that are headed the wrong way for the "under-40s."

Past generations were able to make risk-averse decisions with their capital and the data told them time and time again it was the right choice. But in a world where a generation of Americans are expected to be worse off than their parents for the first time in history, those same opportunities (home ownership, pension funds, affordable education, etc.) have vanished — leaving the prospect of risk a far more palatable choice.

With the deck stacked against them, what's the difference between betting it all on traditionally safe picks or NFTs?

I've previously written about the worrisome effects of the gamification of investing on young men, and that's not to be overlooked — it actually adds to the idea that these trends are a result of external forces rather than some generational defect.

Darbyshire's piece certainly doesn't endorse this behavior, presenting plenty of examples that would fit into the mainstream narrative — but the acknowledgment that this is due to a societal quicksand makes for a story with far more thoughtful reasoning and consideration than the run-of-the-mill "These Crazy Kids and their Bitcoin" editorials.