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Meme Stocks

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Eric Ash asked 3 years ago
Dear Pat and Owen and Team,  Can you explain your thoughts on "meme stocks?" I am talking about the longing and shorting of stocks like GME, AMC, HOOD. I am being told also MRNA and even this recent AMD run have been dubbed meme stocks. I think also UBER had a meme run. I think I remember Kodak doing this for a few days as well a couple years ago. I guess bitcoin, too, this past new year's timeframe. That thing BIT me in the @__! Lesson learned.  Supposedly it started with commission-free stock buying lowering that barrier to entry for retail investors. I read that retail investors can command as much as 20 to 25% on some stocks' trading. As well as social media and/or community platforms where online discussion generates surges for a certain stock.  My question(s) is (are) what is your experience or thoughts with this meme stock trend? Have you experienced other "fads" of patterns of buying stock or other jumps of a certain activity that sort of take institutions a step back and say, "Hmmm." I love history. I know history repeats itself, but in different waves of style. Is this similar to anything in stock market history?  Thanks in advance! I hope you had a fun and fulfilling time this past week!  ☁ Eric 🌩
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Avatar photoOwen Staff answered 3 years ago

Hi Eric,
The short answer to this is really... We make every effort to stay away. Not only would we avoid 'stuff' like this for ourselves, there is absolutely no way we would ever, could ever, in good conscience lead our team into these wild moving products. You'll hear Pat say, from time to time, "We need to be careful here because of the whippy action." We simply avoid it.
Fads? Yes. Constantly and forever. The internet is jam-packed full of fads. (to use your vernacular) Run Forest Run!
We focus on what we know works and teach that. Once our members have a solid foundation of what works, I'm sure an experimental stage can be in order. But, we hope everyone gets the fundamentals down first. Chasing winds on the internet can easily become a full job time that doesn't pay very well. ;-)
Owen

Eric Ash replied 3 years ago

I totally agree! If the greed is that extreme, then the panic can be just as extreme. Whippy action like you say. Thank you for the answer. And for your time. I think of the dot com era. People were buying businesses that were not understood, but the masses and momentum whipped it up without any value to fall back on…? And rest on as support.