GameStop's Rally Is Not the Way to Invest
Many of us like to gamble. It's a pretty big thrill to throw down some cash and get a fast win out of it. This week, we're seeing a lot of gambling.
Shares of GameStop (NYSE: GME) recently climbed over 800% in the span of five days, as retail investors, with help from a passionate group of people on Reddit, pulled off one of the most fascinating short squeezes ever seen. Without getting too complicated, some hedge funds were short GameStop shares, and as retail investors bought it up, the companies were forced to cover their positions, driving the stock even higher. If one ever wanted a textbook example of an artificial bubble, this is it!
The crazy gains this week are surely tempting many to see if they can eke out a few percentage points in the chaos. I admittedly put a few hundred dollars into some of the other stocks seeing wild volatility. Let me reiterate. I said a "few hundred dollars." Like so many, I took a small gamble on the off chance that market reasoning doesn't take hold, and these names manage to rise to the levels that GameStop has so implausibly given us. It's not investing, and a few hundred dollars isn't going to impact my portfolio.
Source Fool.com
