AI quantitative analysis of r/valueinvesting performance as a stock screener
I tested whether this sub actually helps you find good stocks. Mostly it doesn’t.
I pulled every post and comment from r/ValueInvesting (2010–2026: 62,000 posts,
360,000 comments), extracted every company mentioned, and tracked what those
stocks did over the following 3 and 5 years.
To make it a fair test, I compared each mentioned stock against stocks that
weren’t mentioned — matched for company size and started on the same date.
That matters, because this sub talks mostly about large companies, and large
companies behaved differently from small ones over this period. Without that
adjustment you just end up measuring “big US stocks did well,” which we know.
I used 2019–2021 picks, because those are the newest ones with 5 years of
results. 193 stocks, each written about by at least 4 different people.
What I found
The typical pick made money — but didn’t beat the index.
Median return over 5 years was +62%, versus +29% for a random unmentioned
stock. So better than picking blind. But only 35% of picks beat the S&P 500,
and for companies that size you’d have expected ~42%. Beating a coin flip isn’t
the bar; beating the index is.
Mentioned stocks were about twice as likely to collapse.
9.8% of them lost 70%+ over 5 years, against 4.8% for similar-sized stocks that
nobody here mentioned. This is the one result that’s statistically solid.
The sub finds 3-baggers at roughly the rate you’d expect by chance.
15% of picks tripled, vs 8.5% expected for that size mix. Sounds good, but the
error bars overlap with “no difference.” Can’t call it a signal.
We show up late. Of the stocks that had a big run, 78% were first discussed
after the run had already started — a median of 225 days after the bottom.
We mention losers slightly more than winners. Of the stocks that tripled, we’d
discussed 40%. Of the ones that collapsed, 47%.
“But surely the most-discussed names were good?”
That was my best hypothesis too, and it doesn’t survive.
The 25 most-discussed stocks did fine — 24% tripled, none collapsed. But buying
the 25 largest US stocks gave the same 24%, the same rate of beating the S&P,
and the 25 largest we never discussed actually returned more (+102% vs +87%).
Even “no blowups” is a size effect: the biggest stocks nobody here mentioned also
had zero. You get that by buying large caps, not by reading Reddit.
One more thing worth knowing
In 2019 this sub mentioned 1.3% of US-listed stocks. In 2025 it was 41%.
As a filter, it’s getting weaker every year — a list of 2,500 names isn’t a
shortlist.
What this doesn’t prove
• No sentiment analysis. “Is X a value trap?” was counted the same as “I’m
buying X.” That’s the biggest gap, and it could genuinely change things.
• Small sample. 193 stocks. Some comparisons come down to 25 names.
• US-listed only, and one specific period (2019–21 entries, measured through
2026).
• Nothing about whether reading here is worthwhile. Learning how people
reason, finding the bear case on something you own, seeing an industry
explained — none of that is tested here, and none of it is contradicted.
What’s tested is narrow: does “it got mentioned here” make a stock more likely
to be a winner? Best answer I can give is no, and it makes it somewhat more
likely to be a disaster.
Happy to be told what I got wrong.
Edit: since you guys seem interested I made the repository public. It contains methodology and dataset. Happy to get you started and excited to see where you take this next.
Link: https://github.com/RedDawe/subreddit-as-a-service
Edit 2: A lot of people are coming back to the sentiment analysis. I think it would be interesting if someone did that and I might get to that at some point, but probably not.
The reason why I don’t consider it important is because the analysis of whether this sub can be used as a signal trading tool was secondary. My main question I wanted to answer was whether it is a good starting point for starting my own analysis. Ie alternative to a stock screener. Or alternative to Peter Lynch’s notice good products around you in real life.
This question was basically answered as no because in 2025 this sub mentioned 40%+ of all US stocks. And looking just at the popular posts didn’t work either as described above. So the way I’m using this sub - might be useful, but not as a screener.
Definitely go ahead with sentiment analysis if you please, I’m just explaining my position and where I come from.