GameStop… Hmmm?

GameStop, how do I really feel?  Typically, I think through the legal, ethical and moral issues around events.  As of this morning, I can honestly say I’m not sure where I stand.

I certainly believe in investing money in stocks to increase your wealth.  Purchasing companies that you believe will increase market share, companies trading as a “value”, or pure speculation.  I also believe if you think a company will be losing market share or faltering, placing a short position to profit or hedge the stock for your portfolio is sound investing.

When a bunch of investors get together for the pure purpose of profiting from forcing people to cover their short positions…. I’m not sure yet how I feel.

This morning as I’m typing, GameStop is trading in the pre-market at $325/share.  The stock has increased 399% in the last 5 trading days alone, with a 52-week range of a low of $2.57, to a high of $483/share.  Take a peek at their financials and you’ll see that GameStop will need to actually start doing an abundance of business to justify a value anywhere close to $325/share!

I’ve made a note that GameStop will report earnings on 3/24/21.  Perhaps then, I’ll know where I stand.

We, the United States, need our massively large and talented Millennial generation to innovate.  We need you to help the US compete with China, Japan and other countries who so badly desire to take global market share from us.  We need innovators, such as Gates, Jobs, Zuckerberg, Musk and so many others who were the originators of technologies that changed and continue to improve our lives.

Stocks Falter – Presidential Cycle?

Last week was not pretty for non-GameStop investors, as the major United States and International Stock indexes were down 3 to 4% for the week.  Hey, we are so overdue for a pull-back, however I’m not predicting a full correction is eminent.

Typically, the 1st year a President is elected is the weakest for stock market performance as the theory suggests.  It takes time for the new policies to take effect and have impact in the economy.  Will this hold true with President Biden?  As always, time will tell!!

Investors are now absorbing a lot of information, very quickly.  Reports of our Coronavirus Vaccine progress, additional stimulus, a proposal for increasing income taxes, businesses and individuals who are still bleeding, politics, and now add to the pile — GameStop!

Market Volatility may be heightened for awhile.  Please, do not let the news or social media deter you from maintaining your diversified, personalized investment strategy based on the specifics of your situation.

As always, if you’re a non-client who would like to discuss your situation, please do not hesitate to reach out.  We continue to offer complimentary consultations.  Please click here to schedule yours!

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Paul Levin CFP®, ChFC®, RICP®

Retirement Income Certified Professional®