Unless you’ve been living under a rock for 2021 you have heard of GameStop. This dying company came back harder than any company ever before and it had nothing to do with the company itself, rather the stock as a means of sending a message to the upper-class.
For a quick recap, back in January, hundreds of thousands of retail investors opened bullish positions on GameStop, AMC, and other stocks that institutions were shorting. All of this was done in hopes of forcing the Wall Street elite and Hedge Funds shorting the same positions to lose billions while making Average Joe a winner for once. Whether or not this really hurt hedge funds is debatable, but the sentiment was real and is far from gone, to this day Reddit’s r/wallstreetbets continues to engage in plots like this, although none of seen the same success as the GameStop event. Some notable runners-up were AMC and other meme stocks.
Recently a very famous investor and one of Warren Buffets’ closest colleagues have spoken up about the entire idea of retail investors and their new approach to investing. Munger, who is 95 has lived through every single recession and depression since the Great Depression, multiple wars (including two world wars), and much more. With all this experience in life, the GameStop chronicle was still one of the most unique market events in the past century. However, Munger is not a fan at all. In fact, he has condemned the actions of retail investors and said, “That’s the kind of thing that can happen when you get a whole lot of people who are using liquid stock markets to gamble the way they would in betting on racehorses”. Do you agree with Munger? Or is what happened with GameStop not comparable to gambling?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.