Reddit was up to some shenanigans this week that sent shock waves through the invest-o-sphere. From what I can gather, they hatched some scheme to buy stocks in certain companies en masse to artificially drive the price up, then sell it to cash out and send the stock price crashing down They did this because...I don't know, something about hedge funds; it was weird.
Right out of the gate, I could have told them that this was the wrong play and that they should have, instead, bought some dividend paying stocks, held on to them, and started building those passive income streams. Hindsight is 2020, though, so what's done is done. This would all be well and good, but brokerage firms are now restricting buys on these companies, which has prompted a lot of "the rich won't let us play in their sandbox" caterwauling. That's nonsense, but whatever.
The first company to get hit was GameStop. Now, I was surprised to find out that this was a publicly traded company. I figured they were the sort to operate on a franchise set up. This company's inclusion perplexed me at first, given that GameStop doesn't have the best reputation. They're one of the bigger heels in the retail industry. Giving it further thought, though, it did make sense. I could see people saying "hey, let's buy their stock en masse and sell it because $#^$ em". To my knowledge, that wasn't the driving factor. It might have been icing on the cake, but it seems like hedge funds were the primary target and the bigger adversary.
The second was AMC theaters. This was a missed opportunity. Movie theaters have been hit especially hard and a lot of AMC theaters have had to close as a result of the pandemic. If people had bought the shares as a way to support the industry and ensure that movie theaters were able to open when the age of COVID did finally end, it could have actually been a useful bit of internet activism. Alas, that wasn't how things played out.
Bed, Bath, and Beyond was the final brand in the trifecta. It doesn't seem like there's any rhyme or reason on this one. If there is, I don't know what it is.
While a lot of people are talking about how this is making for a volatile market, that bridge had already been crossed some time ago. On the plus side, this will probably just be a blip in the grand scheme of things. I don't think it's going to be an ongoing endeavor. I could be wrong, but it seemed more like a one and done action. After a couple of weeks, things will even themselves out.
The lesson here is buy and hold. Investing is better than trying the day trading thing; the latter is basically gambling. If you want your cut of the Wall Street pie, go ahead and get it.
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