Why Everyone in r/WallStreetBets Seeks Fun Over Profit

Shreyas Hariharan's insightful post, Investing as Entertainment, delves into the psychology behind r/wallstreetbets and why many individuals find options trading and other financial activities more like a sports game or an e-sport rather than a traditional investment. Hariharan argues that the true differentiator lies not in the methods, but in the mindset.

Investing Mindset: Passive vs. Active

Real Investing:
According to Charlie Munger, true investing is a slow, deliberate process aimed at slowly accumulating wealth through the power of compound interest. This kind of investment is about strategy and patience, not immediate gratification. Real investors are the ones who prioritize stability and growth over quick wins. They understand that making money slowly and steadily is the key to long-term wealth accumulation.

Betting:
On the other hand, betting in the financial world is often more about being part of the action. It's a way to engage with the markets, participate in memorable stories, and feel like a part of something larger than yourself. This aligns closely with the mentality that drives many fans of e-sports and entertainment. Gambling on stocks is similar to placing bets on sports or playing video games; the thrill and excitement come from being part of the action, rather than from the potential outcomes.

Entertainment in Finance

Hariharan makes a compelling point by noting that financial products like Robinhood and DeFi are not competing with traditional investment platforms like Interactive Brokers and Charles Schwab. Instead, they are competing with entertainment giants like Netflix and TikTok. For many users, these new financial tools are seen as a form of entertainment, a way to engage in the world of finance on a more active and exciting level.

These platforms have transformed financial markets into something more akin to an e-sport or a live event. Users can make trades, keep track of market movements, and share their insights with a global community, creating a sense of community and camaraderie. This engagement can be incredibly thrilling and entertaining, making financial activity more akin to sports betting than long-term, strategic investment.

The Rewards of Being Part of the Story

For many, the primary reward is not financial, but psychological. Just as movie fans enjoy the excitement of watching their favorite films, or sports fans the thrill of witnessing the drama of a championship game, financial enthusiasts find satisfaction in being part of the unfolding story. They may not be able to meet their role models in person (like Elon Musk or LeBron James), but they can connect with them financially and feel like they are a part of the larger narrative.

Angel investing is another example of this phenomenon. Investors who put their money into startups often do so not just for the potential returns, but because they want to be a part of the startup ecosystem. They enjoy the process of nurturing new ideas and sharing in the journey, even if it means taking on larger risks.

The Future of Investing

The trend towards investing for fun highlights a significant shift in how people approach financial markets. While passive investing remains a viable and effective strategy for many, the rise of active participation suggests that the future of finance may incorporate more elements of play and engagement. This shift could lead to new platforms and tools that make investing more accessible and appealing to a broader audience.

So, the next time you see individuals pouring their time and money into r/WallStreetBets, remember that they are not just trying to make a quick profit. They are engaging in a thrilling, community-driven activity that satisfies a deep-seated need for involvement and excitement. In the end, the true value of financial investments may lie not just in the numbers, but in the stories they help us tell.