Shares of GameStop (NYSE:GME) rewarded investors very well in 2021. Shares gained about 250% last year with a closing price of $ 128.06 on January 12, 2022. On the other hand, GME shares have already lost 15% in 2022. Irregular stock movements with a 52-week range of $ 33.05 to $ 483 were driven by the meme stock trend.
I wrote two articles on GameStop “GameStop serves bear food” in “Without a solid business plan, GameStop is not worth it” and my thesis was, “I don’t like the stock, its fundamentals, or definitely the high price. “I also wrote, ‘Don’t confuse a discounted price for a good price.’
In this article on GME shares, I will mention some quotes about investing from two iconic movies, “Wall Street” in “The Wolf of Wall Street.” It seems to me that these quotes are not only useful for the true story behind this meme mania, but are also valuable as advice.
10 investment quotes from GME stock movies
- “I don’t throw an arrow at the board. I bet on certain things. Read Sun-tzu, The Art of War. Every battle is won before it even begins. “
- “If you need a friend, get a dog”
- “Mother of all evil is speculation”
- ‘I look at a hundred jobs a day. I choose one “
- The point, ladies and gentlemen, is that greed, for lack of a better word, is good.
- “The most precious good I know is information”
- “Money never sleeps”
- “97% of people who quit too soon are 3% employed who are not.”
- “People don’t buy stocks; is sold to them. Never forget that. ”
- “Risk is what keeps us young.”
Why did I choose these 10 GME stock offers? They are perfectly connected to the main catalyst that led Gamestop to $ 483, quickly created a fortune for some daring and lucky investors, and then dropped to $ 128 per share.
I’ll add another bonus quote: “Okay, Wall Street’s first rule. No one – and I don’t care if you’re Warren Buffet or Jimmy Buffet – no one knows if the stock is going up, down or sideways, least of all the brokers, but we have to pretend we know. ” It was a great quote from “The Wolf of Wall Street” and the power of popular Wall Street bets Reddit social media forum.
Quotes from the movie: Trendy but powerful
Let’s think about what the real intentions behind these quotes are. Were GME shares a reliable investment?
Investors and traders who believed in fear of delay (FOMO) and fear, uncertainty and doubt (FUD) raised GME shares to an irrational price. These social media forums seemed to provide the hottest investment advice at one time, people with no knowledge of how to analyze stock bases were speculating, and some were lucky, some weren’t.
Speculation is always a key driver of the stock market. What about greed?
The unfortunate investors who bought GME shares at high prices now have big losses. Greed is fast and making decisions at the speed of light.
Information is also another invaluable commodity. Without proper information, investment decisions are based on happiness and are unlikely to be optimal. Money certainly never sleeps, let’s take the cryptocurrency market, for example, it’s open all day. There is too much information about the stock market on a daily basis, so it’s hard to keep track of everyone.
Meme stocks like GME stocks have been a trap
Hurrying to stop the rat race, the 9-5 job is very attractive. GME stocks seemed to be a trade for decades. The forums that supported him were most likely on the buying side, although stocks were falling rapidly from a high of 52 weeks. After all, it may seem like a small fix. Why stop with this winner?
Well, it turned out to be not a small fix, but a huge one.
In the end, when you have very limited information, it’s probably better not to go crazy about “meme” stocks. You can very easily be fooled into buying a stock with poor fundamentals. Just because it seems to be a hot stock “on the moon”.
Investing in stocks is about risks, more precisely about the balance between risk and return. The rush to earn money, get rich quick, retire early is intense. This could lead to poor investment decisions. If you don’t respect the market and follow important concepts like risk-reward ratio or stop loss, the market won’t respect you either. You are just another investor, one of many, why would the stock market respect you? Money is an endless migration from unhappy and undemanding investors to happier and wiser ones.
“Greed is good …” Sometimes
I love all of these quotes, but if I had to pick one, I would choose “greed is good”. Provided you know what you’re doing, then yeah, it’s good. Otherwise, it is a deadly weapon that can lead to large capital losses in the hands of novice investors.
GME shares in 2021 led to an irrational rise in prices and a rational sale. Is it a meme party at the end of 2022?
I argue that yes, meme stocks should be in disgrace. Money isn’t sleeping and is already looking for other investments in a year that is likely to be challenging.
At the date of publication of Stavros Georgiadis, the CFA did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are the opinions of the writer who are the subject InvestorPlace.com Guidelines for publication.
Stavros Georgiadis is a CFA Charter holder, equity research analyst and economist. It focuses on U.S. stocks and has its own stock blog at thestockmarketontheinternet.com/. He has written various articles for other publications in the past and is available on Twitter and others LinkedIn.