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WallStreetBets founder explains how his subreddit ‘speaks a language’ that makes finance accessible

WallStreetBets Founder Jaime Rogozinski joins Yahoo Finance Live to talk about meme stocks, his hugely popular subreddit and why it's been so successful with retail investors.

Video transcript

[MUSIC PLAYING]

SEANA SMITH: Meme stocks all the craze, moving higher. Once again, today's retail traders search for potential short squeezes. Bed, Bath & Beyond-- look at that-- closing up just around 29%, although that's well off the highs of where we were trading earlier in the afternoon. GameStop up just around 6%.

Here to talk about this, we want to bring in the founder of the Reddit channel where the madness began, WallStreetBets founder Jaime Rogozinski. Jaime, it's great to have you back here on Yahoo Finance. Bed, Bath & Beyond seems to be the favorite as of late. Just your reaction to the resurgence and the activity that we've seen over the last couple of weeks.

JAIME ROGOZINSKI: I mean, it's clear that the-- that summer session is over and like we're back in school. And Bed, Bath & and Beyond seems to take the cake for that. In fact, this morning, I was talking to a reporter from a different publication. And as we start the phone call when the market was opening, I'm talking about, well, Bed, Bath & Beyond hasn't quite done what it did last time. But by the time we were done with the call, they already halted it because it was up, like, $28 or something like that. So clearly, it's the favorite here among the meme stock or the retail traders.

DAVE BRIGGS: Are you in on any of these plays at the moment?

JAIME ROGOZINSKI: I'm not. No, I--

DAVE BRIGGS: Why?

JAIME ROGOZINSKI: --covered this before. I tend to do-- well, for various reasons. Number one, I live in Mexico. So for me to be purchasing stocks is a logistical headache. Number two, I have a very particular style for trading. And it's not the meme stock trading. I never quite figured that one out. My time was in the early 2010s. And it works for me. But I definitely enjoy what's happening. And it's definitely a very new phenomenon that I'm not sure a lot of people have actually mastered.

SEANA SMITH: Yeah, Jaime, I want to ask you a little bit more about that because it's interesting you, the founder of WallStreetBets, coming out and saying that you might not necessarily on board with what we're seeing play out or maybe how these retail traders are identifying the meme stocks. Why?

JAIME ROGOZINSKI: No, no, no, careful. I didn't say that. Just because the stock's going to go up, just because you predict that it's going to go up does not, by any means, means that you're going to make money, right?

SEANA SMITH: Oh.

JAIME ROGOZINSKI: These aren't investments. These are trades. And so if you want to get into an extremely volatile trade like GameStop or like a meme stock, you need to know how to trade it properly. I very much am on board with it. You know, all the signs are in. You can see that it has a lot of similarities to GameStop, the high short float. It's obviously being talked about. The volume is through the roof. You're starting to get halts. We're getting a lot of reminiscent ingredients that we saw during GameStop.

DAVE BRIGGS: So let's move beyond GameStop, Bed and Bath, AMC. How do you identify the right play? You talk about those signs. What are they, and how do you find them?

JAIME ROGOZINSKI: Oh, if I only knew. Look, the question has been coming around forever. And it's nobody's guess. One of the things about retail traders, WallStreetBets, is it's a collective. It's not an individual that says, today, we're going to do this, right? The people come together, and they collectively decide. And they can make efforts, and it's a democracy. And sometimes people want to go for one particular stock, and it works. And sometimes it doesn't.

But that said, there is some common elements that popular stocks, even before GameStop, have in common. Back when AMD was popular and Tesla and Microsoft, you need to have a stock for a company that is tangible that retail traders can relate with, not some obscure-- I don't know-- chemical materials company. This is a store you can go to. This is a car you can drive. This is a chip you can put in your computer.

Oftentimes, it also has-- not always, but a quirky CEO, someone you can actually make memes with. That's part of the fun with meme stocks. It's in the name. Then you have typically low price per share, all right? I'm not going to use the word "cheap" because it doesn't mean the same thing. But low price per share makes it a lot more accessible. The stock options are also more affordable, and so more people can participate in it. And then finally, the volume tends to be-- sorry, the market cap tends to be slightly smaller, but that's not always the case.

SEANA SMITH: Jaime, what do you think WallStreetBets resonates with so many retail traders? Because we certainly have seen retail traders flock to it, flock to the platform. Certainly has been the driver of a lot of this activity. What is it that you found that has just resonated with so many people out there?

JAIME ROGOZINSKI: No, I think that the younger generations, the retail generation, the millennials, the Gen Zs, they're very hands-on. They're born in the gig economy. They do influencers. They do TikTok videos. You know, it's, I'm going to do this myself. I'm going to figure out how to do this myself. And so it's only natural for them to also want to try and take control of their finances and learn about the stock market on their own as well.

But on Wall Street, that's what it permits them to do is to learn about this in a fun sort of way, speaking a language that makes it accessible. I oftentimes say that the things, the concepts that CFAs, Certified Financial Analysts, have or master's degree, they just have a lot of jargon for concepts that are not actually that complicated. On WallStreetBets, you have the exact same concepts, but they have easier words, or they'll have different words that sometimes make it more cartoonish, more fun, more meme-like.

DAVE BRIGGS: Jaime, what did you learn from your experience? And what would you like these aspiring retail traders to know?

JAIME ROGOZINSKI: Oh, boy, I've learned a lot from my experience. You know, but here's what I think. Like, I wouldn't want them to avoid any of the mistakes. When it comes to learning about the market, I wouldn't want them to avoid. I wouldn't say, hey, don't do this because you're going to lose money, because my advice with them-- to them would be, go ahead and lose money.

There's one thing about the stock market that no book can teach you with, which is the getting control of your emotions and being able to think rationally when you're in a trade. That only comes with experience. And oftentimes, these retail traders are using smaller amounts of money. They can afford to lose 100% because we're talking about $100 or $50, you know? And it's the price of tuition. They can go through, get their hands dirty, and find what it is that they like.

And then eventually, people will go down the same trajectory as I did. And they'll end up reading about modern monetary policy, like these macroeconomic concepts that, in some way or another, affect the actual stock market in their investment decisions.

SEANA SMITH: Jaime Rogozinksi, we always love having you here on Yahoo Finance. We hope to have you back, founder of WallStreetBets. Thanks so much for joining us.

JAIME ROGOZINSKI: Thank you very much for having me.