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Gamifying investing can have real-life consequences
Jan 28, 2021

Gamifying investing can have real-life consequences

The GameStop, AMC and other short squeezes on their own aren't necessarily that disruptive, says one business school professor. He said there's a broader trend about the "gamification of finance" that's more alarming. Plus, what Fed Chair Jerome Powell had to say about the stock market, the housing market and more.

Segments From this episode

What's interesting about the GameStop short squeeze is how amateur investors are organizing

“Marketplace Morning Report” host David Brancaccio speaks with Ciamac Moallemi, a professor at Columbia Business School. “The long side, the buyers of the stocks, are being organized in kind of a decentralized way amongst a group of relatively unsophisticated investors on social media platforms like Reddit,” Moallemi said. “Usually these are two groups of sophisticated investors who would be competing against each other. But here it seems the mass of uninformed investors has sort of taken over and beaten the pros.” But Moallemi said a handful of short squeezes “isn’t necessarily that disruptive.” What’s most concerning, he said, is the broader phenomenon of amateur investors delving further into risky derivatives, which feeds the “gamification of finance.” “This is the type of strategy, where, quite often, you will lose everything that you invest,” he said.

Music from the episode

What's the Use? Mac Miller

The team

Victoria Craig Host, BBC
Stephen Ryan Senior Producer, BBC
Jonathan Frewin Producer, BBC
Daniel Shin Producer
Jay Siebold Technical Director
Brian Allison Engineer
Meredith Garretson Senior Producer
Erika Soderstrom Producer
Rose Conlon Producer
Alex Schroeder Producer