Wed. Jan 26th, 2022

The letter from Daniel Mauro (“$ 50 costs will limit frivolous speculation”, December 17) shows exactly the contempt of retail investors for institutional investors and borders on what many would call “boomer logic”.

Why invest in a mutual fund that has been underperforming the S&P 500 index for a decade? Research by SPIVA shows that more than 90 percent of fund managers have failed to beat the S&P Dow Jones over 15 years.

What Mauro does not understand is the meme rage that began with GameStop after it was revealed that the stock had been shortened to more than 100 percent of the shares, implying naked shorting that violated the rules of the US Security and Exchange Commission.

Sharp-eyed retail investors have noticed and capitalized on this market failure caused by institutional investors. All Mauro’s “original” approach does is make market access less democratic and force retail investors to pay management fees to underperforming executives.

A better option would be greater scrutiny by regulators of market mechanics, such as naked shorting, payment for order flow, or how users may submit false, new opinions about stocks to manipulate the price.

This intervention would make a start in changing the culture of the meme-rage saga.

Aditya Aggarwal
Watford, Hertfordshire, United Kingdom

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