All the trading in GameStop over the past few weeks has been quite entertaining. That’s easy for me to say because I am not trading on either side. The WallStreetBets community and hedge funds can duke it out for as long as they want. What they are doing in the stock market is completely different from what I’m doing.
The people moving the stock price of GameStop so dramatically are trading. They are looking to take advantage of inefficiencies in market prices to make money at the expense of others. They serve a role in the markets because they can help set accurate prices. They can also distort things to their own advantage. Either way, what they are doing is very risky. I hope they size their bets accordingly. Some will win big. Some will lose big.
I help my clients to invest. We own a part of over ten thousand companies. As these companies grow and make money, our investments grow. We aren’t looking to make a quick buck, which also means we aren’t as likely to lose a quick buck. We don’t use leverage. And at the end of the day, we sleep quite well (present company excluded – my new daughter is only a month old after all). In our free time we can read about people taking passionate stands with a lot of money as to what the real value of a video game retailer should be. That beats watching politics!
About the Author: John O’Connor
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