# Democratization of Retail Trading: Can Reddit's WallStreetBets Outperform Investment Bank Analysts?

arXiv: https://arxiv.org/abs/2301.00170 · HTML: https://mlsanity.com/paper/2301.00170/

## Key facts

- Cited by 2 papers in the map (data through 14 Oct 2026).
- First posted on arXiv 31 Dec 2022.

## Built on by (most cited first, 2 of 2)

- [HedgeAgents: A Balanced-aware Multi-agent Financial Trading System](https://mlsanity.com/paper/2502.13165/) (2025)
- [QuantAgents: Towards Multi-agent Financial System via Simulated Trading](https://mlsanity.com/paper/2510.04643/) (2025)

## Abstract (arXiv)

The recent hype around Reddit's WallStreetBets (WSB) community has inspired research on its impact on our economy and society. Still, one important question remains: Can WSB's community of anonymous contributors actually provide valuable investment advice and possibly even outperform top financial institutions? We present a data-driven empirical study of investment recommendations of WSB in comparison to recommendations made by leading investment banks, based on more than 1.6 million WSB posts published since 2018. %enriched with stock market data. To this end, we extract and evaluate investment recommendations from WSB's raw text for all S&P 500 stocks and compare their performance to more than 16,000 analyst recommendations from the largest investment banks. While not all WSB recommendations prove profitable, our results show that they achieve average returns that compete with the best banks and outperform them in certain cases. Furthermore, the WSB community has been better than almost all investment banks at detecting top-performing stocks. We conclude that WSB may indeed constitute a freely accessible, valuable source of investment advice.