Mistakes Newbies Make and How You Can Be Profitable in the Stock Exchange.
If 2020 wasn’t a wild year on the stock market, which in early 2021 turned out to be the sister of 2020 except with red hair and bangs.
I had already contacted colleagues, friends and acquaintances in February and asked what my plans were for buying GameStop and AMC shares.
“I have no plans,” I replied.
Everyone seemed surprised.
“I believe in investing, not gambling” is usually my standard answer.
I hate bursting anyone’s bubble, but all meme stocks (or pump-and-dump stocks) are just speculative, trendy games of chance – just like Dogecoin in the cryptocurrency world.
All of the speculative “investments” and “attempts to outperform” last year remind me of the bet Warren Buffet made a little over a decade ago.
Back in 2007, Warren made a bet against hedge fund manager Ted Seides that the Vanguard S&P 500 index fund would outperform a basket of hedge funds over 10 years.
Well, I know the teenagers on Reddit most likely didn’t plan to hold the meme stocks for a decade, but when do you sell the stocks? When do you buy it Here the water becomes cloudy.
Warren’s “for the market” bet is one of the most powerful lessons for investing, and it’s a shame we don’t talk about it with young investors.