A Redditor is pitting Australia’s two foremost finance subreddits against each other in a test to see whether a cautious or cowboy approach to personal investing will yield better results.
Not long after Reddit’s r/wallstreetbets grabbed the world’s attention by propelling GameStop and other stocks to the moon, Australian redditor drfreshbatch has begun recording just how much money someone would make if they followed what’s popular with r/ASX_Bets and r/AusFinance’s 230,000 users each day.
To do so, the user has set up a system that scrapes the thousands of posts made each day to the subreddits to determine which stocks were the most mentioned that day.
drfreshbatch then compares both communities’ ‘indexes’ by posting their performance, averaged out over the day.
Round 1: Ausfinance vs Autism Index from r/ASX_Bets
He said he was already tracking stock mentions before he started posting publicly about it.
“A friend and I use a series of algorithms to collect the mentions and interest in tickers across a variety of subreddits (including r/asx_bets) in addition to external stock market forums. I used this data to index the most frequently discussed stocks and compare their performance this week with that of a more conservative investing/finance subreddit (r/ausfinance),” he said.
“I’ve always enjoyed examining market performance, trends and enjoy the rivalry between more aggressive high risk strategy investors and conservative investor.”
A tale of two investing subreddits
Like any online community, the two subreddits that drfreshbatch tracks have developed distinct cultures that are reflected in their dominant investment strategies and the stocks they mention.
r/AusFinance is a traditional, buttoned-down personal finance community that was established to discuss “budgeting, saving, getting out of debt, investing and saving for retirement”. Their conservative, long-term approach to finance is reflected in their favourite stocks, headed up by the big four banks.
In contrast, r/ASX_Bets is a meme-filled, hype centre where users shitpost about their massive wins and losses that happened overnight.
drfreshbatch is a member of the latter and doesn’t hide his disinterest in r/AusFinance’s approach to investing.
“r/asx_bets investors tend to employ an extremely high, but calculated (sometimes), risk strategy with high reward, whereas those perusing r/ausfinance seem to enjoy comparing health insurance premiums and comparing interest savings account rates,” he said.
Which Reddit community is winning?
It’s early days, but the cavalier bets of r/ASX_Bets has already pulled ahead, even with drfreshbatch going so far to calculate the annual dividends to add into the daily change of the indexes.
That matches drfreshbatch’s personal approach. The Melbourne redditor says he isn’t conservative when he invests 75% of the income that he makes working as a doctor.
“Personally I favour a high-risk high reward, but I’m in a unique position in that I have a more-or-less guaranteed high income stream for the rest of my working life so I carry significantly less risk than others. This may not apply for others,” he said.
Ultimately, he said that his Reddit tracking isn’t just about making money.
“I’m just analysing the crowd and for every winner there’s a loser. Certainly while winning it’s much more fun spending time with people with a sense of humour over the boring fucks over at r/ausfinance, but again, this investment strategy suits me at this stage and may not suit everyone,” he said.