Populism is everywhere. Our world is rife with politicians and activists eager to explain away hard problems with conspiracy theories and easy solution. So it's no surprise that populists forces have also upended the world of finance, and that meme lord "finfluencers" on social media now hold more sway than Jim Cramer and other TV era investment gurus. What does this mean for the markets? And what does it mean for the fortunes of millions of Americans who have turned to Reddit and YouTube in a bid to build wealth?
These questions are at the forefront of The Trolls of Wall Street: How the outcasts and insurgents are hacking the markets, penned by former New York Times journalist Nathaniel Popper and released today by William Morrow. The book is the most ambitious attempt yet to decipher the implications of platforms like r/WallStreetBets, which spurred an irrational rush into beat down stocks like AMC, and YouTube personalities like Roaring Kitty—the GameStop cheerleader who, in an exquisite bit of timing for Popper and his publisher, resurfaced this month for the first time since 2021.
The broad strokes of Popper's story will be familiar to most people: In the depths of the pandemic, bored retail investors flush with stimulus checks piled into meme stocks and, in some cases, took down big hedge funds that spend billions betting against them. The book, though, goes much deeper. It takes readers inside the frenetic chat rooms of Reddit and Discord to show how exactly this army of retail investors came together, and the often dark forces—particularly troll sites like 4Chan—that shaped their culture.
The Trolls of Wall Street is loosely structured around the rivalry between two young men, Jamie Rogozinski and Jordan Zazzara, who built the highly influential r/WallStreetBets Reddit forum and engaged in ceaseless internecine fights with various pseudonymous personalities and with each other. Unsurprisingly, the men's backstories are dreary ones. Lacking strong real world personal connections, they spend untold hours on Reddit, where they and others swapped tips and delighted in posting pictures of the losses they racked up through bad investment choices.
The protagonists are not particularly likable. It's hard to root for people who spend their waking hours glued to screens in search of dopamine hits from trading stocks, and embrace communities that delight in casual sexism and racism. Nonetheless, Popper does a good job of humanizing his characters, and reminding us that so much of their social media bravado is just an outlet for young men struggling to find a place in a society that prizes emotional intelligence over raw masculinity. He also points to the emergence of male role models in finance who delight in emulating the antics of Donald Trump—the greatest troll of our age.
"The popularity of online celebrities like [GameStock CEO] Cohen and Musk and the dangers they introduced were symptoms of a new cultural landscape in which people had stopped trusting the old institutions and leaders who used to guide American life ... These suspicious attitudes exercised a deep influence on the way the youngest investors approached trading and investing. Gen Z investors were most likely to list social media as their top source of information when it came to investing," Popper writes.
The passage is a smart assessment of how broader cultural forces are informing the once-pedestrian world of stock buying. It is also a reminder that market trolls arose as an extension of our internet culture, meaning they are unlikely to go away anytime soon.
This is not necessarily a bad thing. Contrary to the intuition of traditional investors, the arrival of these obnoxious newcomers—who are prone to mashing Robinhood buttons as part of a YOLO herd—is likely to benefit both these novices and the market as a whole.
One of the strengths of Popper's book is it relies on data, rather than easy narratives, to make conclusions. And the data he presents shows that, while many of the first-time investors who plowed into GME or Dogecoin (or whatever) lost their shirts, most of them learned from their mistakes and, instead of getting out of the market altogether, stuck around and gradually made wiser bets. They also learned to stay away from high risk products like options, which should not be touched by any retail investor who lacks a PhD in mathematics. The upshot is that social media investing has meant that millions of young Americans, including an unprecedented number of women and racial minorities, are accumulating wealth earlier than ever before thanks the greatest money spinner in history: the U.S. stock market.
Meanwhile, Popper points out that the Reddit crowd has been ahead of the hedge fund set on numerous occasions, both when it comes to individual stocks and to buying shares when the market is down. This may not offset the alarm many of us feel upon looking at what seems like financial nihilism among the country's youth, but it's still something.
Overall, The Trolls of Wall Street is not a page-turner in the same way as Popper's first work, Digital Gold, which recounts the early days of Bitcoin and remains the best crypto book to date. This is primarily due to the challenge of telling a story about socially maladjusted young men whose social life is entirely online—the main characters of Digital Gold, by contrast, included swash-buckling figures who traveled the world. Nonetheless, Popper is able to gin up plenty of fun moments, in part thanks to his fluency in the bizarre argot of his subjects such as "tendies" to signify "chicken tenders"—the preferred term for profits in Reddit land.
The book also describes advanced financial topics such as gamma squeezes (a particular type of short squeeze) in approachable language and, at its best, reads like vintage Michael Lewis. Its account of the showdown between the hedge fund overlords and the Reddit misfits who bested them also provides a satisfying David vs Goliath tale that is hard to resist.
The primary events in The Trolls of Wall Street, including the birth of r/WallStreetBets—which grew out of the Occupy Wall Street movement—and the GameStop saga, will in time be seen as transient flickers rather than moments of big historical significance. But these descriptions are not the most important element of the book. Instead, the significance of Popper's work lies in its astute and sympathetic account of a troubled generation looking for community and meaning—and finding it in unexpected corners of the financial market.
