By Mark DeCambre
Barstool Sports founder Dave Portnoy can’t tell you precisely the moment to venture into stocks, amid the carnage taking shape in U.S. equity indexes this year, but says he maintains one belief on investing now: Suppress the urge to be fearful.
“It is human nature not to invest at a time like this,” Portnoy said during an interview with MarketWatch on Wednesday afternoon.
“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.”
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 /zigman2/quotes/203755179/composite GME +11.37% and AMC Entertainment /zigman2/quotes/200235402/composite AMC +0.33% , 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 /zigman2/quotes/210599714/realtime SPX +0.75% down more than 20% year to date, the once high-flying Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.13% off more than 28% this year and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.55% 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 /zigman2/quotes/209264611/composite PENN -1.02% 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.