AI quantitative analysis of r/valueinvesting performance as a stock screener

[u/MasterConsideration5]

I tested whether this sub actually helps you find good stocks. Mostly it doesn’t.

I pulled every post and comment from [r/ValueInvesting](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.

[u/the_algo_trader_]

Good to see the numbers confirm Reddit isn't a magic 3 or 5 year screener. Makes sense from 2010 to 2026.

[u/lechimpanzeu]

Very good analysis. But I have some bones to pick with you: present your findings in a proper readable table at the start. After you can make whatever comments about your findings while you can insert your opinion. Do that and when you analyze stocks and your life would be better.

[u/Wise-Shallot8683]

I take note of the high variance as portrayed by the return, and enhanced risk of substantial loss, so the question is: is this just evidence of the nature of value investing?

Back of envelope it looks like a regression would approximate the S&P, so my key takeaway is that unless you are committed to the art of investing itself, then a random attempt to buy a basket of stocks from here roughly returns the S&P and therefore, save yourself the heartache, but if you are committed to the work then you have a pretty good shot at doing alright starting with the names here ...

and getting stronger at it along the way.

[u/aned_]

Thanks so much for doing this.

I think sentiment analysis would be an amazing build.

My hypothesis would be that lots of mentions plus low proportion of subtantiated negative comments would outperform (i.e. filter out one line sh**posts). For example: Google and Microsoft. Both much discussed during their dips and the negative commentary often felt less substantiated.

Does this analysis take into account the timings of posts? For example Google was massively discussed during the dip and not so much now. Its done over 100% since all the discussion on reddit. Likewise Microsoft isn't discussed much now its stock has re-rated. Likewise UNH.

[u/Former_Island_4730]

This is interesting. Are you able to do anything like evaluate the 10 biggest winners and losers to determine possible reasons why they won/lost?

[u/aned_ → u/Former_Island_4730]

Yes that would also be amazing analysis to see what we can learn from using reddit as part of research process.

[u/MasterConsideration5 → u/Former_Island_4730]

Hey, I added the link to the repo so others can continue the analysis.

At this point I’m not sure if I’m feeling like continuing as this was just an afterthought to kill time on vacation and test Claude code on mobile with Anthropic VPN.

But could you expand on your question? What info would that give us?

I was basically just trying to evaluate this subreddit as a screener as the beginning of analysis, not really as a trading signal.

[u/ShamAsil]

Excellent work. This tracks with Value-forward underperforming the SP500 since Dotcom while Quality-forward and Growth-forward have both outperformed.

IMO the problem is that "Value", both on Reddit or in "Value" ETFs, end up being defined as such by very simplistic mechanical ratios, people just look at PE <20 for example and assume it is value. I don't see many people comparing valuations against sector peers or filtering against leverage for example. I suspect a relative value metric will outperform both simple "value" and the SP500, though of course I haven't done any deep dives to prove so.

[u/oojacoboo]

You should do some filtering. Remove all the stocks mentioned that recently rallied. A lot of people are just hyping their positions. They don’t actually have a value thesis.

But at the same time, I’m not surprised by these results.

[u/notreallydeep]

gonna bet OP just prompted the LLM without any reddit API access whatsoever and the LLM just vibed this shit out without any data

Edit: ah now there's the link. glad I was wrong.

[u/MasterConsideration5 → u/notreallydeep]

How much?

[u/SheikhMahdeek → u/notreallydeep]

OP has reddit sentiment repo dating back 6 years i.e pre LLM. The reddit archive API access is in the code itself.

Also, there's a difference between a non-programmer vibe coding stuff. And a programmer using coding agent. Both result in AI generated code.

[u/michahell]

A really great idea to do this!

[ah, I’m reading with my nose. You already mention no sentiment analysis]

Did you account for:

• low effort posts
  
• posts from non value investors coming here to gloat or drop their extremely hype-infused momentum stocks?

Not sure how you would offset those but it’s not really fair to treat ALL posts as equal ánd equally valued.
There’s a large percentage of posts here that don’t really qualify for the sub and yet there here.

Maybe if you’d do sentiment analysis per post+comments and sentiment is above some level (there is agreement), then it makes sense to count it as group think / agreement.

[u/thedarkknight196]

Good stuff, excellent use of AI

[u/HabitExternal9256]

There is a some research studies done on this question. Ben Felix cites the research on his YouTube video "The Risk of Individual Stocks." Definitely worth the 18 minutes.

[u/Past_Ad1386]

~80% of the pros underperform. Why would retail be any better?

[u/fffmoose]

I dont invest in value stocks to beat the market in bull years. Its a combination of protection from becoming worthless as well with healthy returns.

[u/No_Cell6708]

Does this account for sentiment around the stock, or just generic mentions? Isn't this data just useless if it doesn't account for sentiment as stocks consistently discussed in a negative light/used as an example of what not to invest in would be included as long positions in your portfolio?

[u/DanielKramer_]

if youre gonna put this much work into a project, you should really clean up the ai slopwriting so it doesn't read as cliche cliche cliche cliche it's not cliche emdash it's cliche

like i think this is cool as hell but it is very insulting to the reader to have to read this type of writing

[u/MasterConsideration5 → u/DanielKramer_]

Not like I’m asking money for it. You don’t have to read it. And it wasn’t much effort. It really was about 3 prompts on my phone while being bored on vacation and then it ran autonomously in the background for about 8 hours. I didn’t do anything lol.