‘Right now is an awesome time to invest,’ says captain of stock market ‘retail bros’ Dave Portnoy, who made $2 million trading during pandemic’s height

“That’s just how humans work.”

He added, however, that “right now is an awesome time to invest in the stock market.”

“But everyone wants to ride the wave of up-markets,” he said, referencing the stock market’s surge immediately after bottoming in the spring of 2020.

It is, perhaps, ironic that Portnoy appears to be borrowing from an adage most closely associated with Warren Buffett: Be “fearful when others are greedy, and greedy when others are fearful.”

The outspoken Barstool founder, who enjoyed a brief, but apparently lucrative, stint as a day trader at the start of the pandemic two years ago, has referred to Buffett, one of the most revered investors on Wall Street, as “washed up.”

“I’m sure Warren Buffett is a great guy, but when it comes to stocks he’s washed up. I’m the captain now. #DDTG,” he said via Twitter in June 2020.

Back then, worries about the economic impact of the COVID-19 pandemic gave way to a full-throttle burst higher in markets, underwritten by government stimulus checks and endorsed by central bankers who were intent on keeping interest rates low.

As individual investors were stuck at home due to public-health protocols with little else to do, Portnoy became an avatar of a culture of high-risk, high-reward investors who were making massive bets on a rapid recovery from the depths of the pandemic in 2020. The rush of new individual investors is credited with the emergence of so-called meme stocks, such as GameStop GME, +0.91% and AMC Entertainment AMC, +0.03%, which tend to be influenced by social-media sentiment rather than fundamentals.

A 2020 article in the Financial Times dubbed Portnoy the captain of a new breed of investors of the mind that stocks only move in one direction: upward. “Retail bros,” the FT called them.

But what a difference a year — or two — can make: Investors now are suffering through a bona fide bear market, with the S&P 500 index SPX, -0.49% down more than 20% year to date, the once high-flying Nasdaq Composite Index COMP, +13.73% off more than 28% this year and the Dow Jones Industrial Average DJIA, -0.69% down 17% so far in 2022.

Portnoy said that he hasn’t been day trading since early 2021 and said a video depicting him as frustratingly buying and selling stocks over the past two years, including during the heart of this recent slump, is apocryphal, and features erroneous date stamps.

“There’s no semblance of reality” to that video, he said, referring to the dates. “I stopped trading pretty much once the country started to open,” he said. He estimates that his last trades were around early 2021.

Portnoy’s been focused on other things lately.

Penn Entertainment PENN, +2.64% has said it is on track to own 100% of Portnoy’s sports website, Barstool, by February 2023, after acquiring more than a third of it back in 2020.

Portnoy said he has spent some of his day-trading proceeds, which he estimates at around $2 million, on real estate, notably a pair of houses.

“I’m sure if I was trading this year, I would have gotten killed,” he said.

That said, he still challenges the belief held by some that trading should be the sole remit of experts and professionals.

“I do think there is a [segment] of Wall Street who benefit from scare tactics…and it is in their [interest] to make it seem that [individuals] cannot make money in the stock market,” he said.

“I reject the notion that there are a group of superhuman investors out there,” the outspoken founder told MarketWatch.

Portnoy said that the stock market is still one of the greatest mechanisms of creating wealth, if you’re not pressed for time.

“If you need your money tomorrow, you gotta be careful in what you do,” he said.

The majority of Portnoy’s net worth is pegged to Penn’s stock price, which closed at $31.40 on Wednesday but is down over 39% so far in 2022 and off 56% over the past 12 months, according to FactSet data.

Portnoy still believes that stocks eventually rise, with sufficient patience: “It is still my mantra that stocks always go up.”

It is important to note, however, that individual stocks, and assets, can (and do) sometimes languish for longer periods than some investor’s can patiently tolerate.

So it is important to know your appetite for risk, because not everyone has Portnoy’s chutzpah.

In other assets, the Barstool founder said he’s got about 1%, or roughly $1 million, of his net worth in bitcoin BTCUSD, +0.51%, which he believes has a bright future, given the number of institutions supporting its infrastructure.

“Too many important people are behind it,” he said. “I own it and won’t sell it.”