Amateur investors are making the U.S. stock market less efficient, Goldman Sachs quant says

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โดย MarketWatch·Read original
Summary · why it matters

A top quant at Goldman Sachs says the rise of amateur investors is making the U.S. stock market less efficient, as fleeting enthusiasm increasingly trumps disciplined fundamental analysis. Osman Ali, partner and co-head of quantitative investment strategies at Goldman Sachs Asset Management, told MarketWatch that the share of total trading activity attributable to retail investors has more than doubled since 2010, with a big spike during the pandemic. Individual investors gravitate toward small-cap, volatile stocks with high valuations and high short interest, and shares of retail favorites tend to underperform more after disappointing earnings. Ali sees opportunities for investors who can recognize patterns and capitalize on deviations from intrinsic value, but warns that AI tools could amplify biases by driving more investors into the same hot names. The trend echoes a 2024 paper by AQR founder Cliff Asness, who blamed social media for pushing prices further from fundamentals.

Impact on stocks 4

Financials▲ · 1 stocks
Goldman Sachs Group Inc
GS
± MixedCapitalrelevance

Goldman Sachs quant is the source of the analysis; the article discusses market inefficiency but does not directly affect Goldman's business.

Communication Services▼ · 1 stocks
AMC Entertainment Holdings Inc
AMC
▼ Negativerelevance

Mentioned as a retail-favorite stock that tends to underperform after disappointing earnings, implying negative impact from amateur investor dynamics.

Consumer Discretionary▼ · 1 stocks
GameStop Corp.
GME
▼ Negativerelevance

Mentioned as a retail-favorite stock that tends to underperform after disappointing earnings, implying negative impact from amateur investor dynamics.

Digital Finance & Tokenization▲ · 1 stocks
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