The End Game
Satish wrote a wonderful post on the “Lessons of the Gamestop Saga”. I thoroughly enjoyed it and especially these golden words “Technology does NOT make investing easy! Technology makes executing transactions easy and cheap. Technology does not “democratize” investing, it “democratizes” transaction execution. There is a BIG difference between these two.”
The key questions for investors to ask are:
a) What is the game I am Playing? Am I speculating/gambling, trading for a few days or investing like a long-term investor?
There are 4 types of players namely Speculators/Gamblers, Professional Traders, Investors and Naïve people (who get sucked into this game). Every player is playing a different game. Do not confuse yours with someone else’s.
b) What is my End Game?
c) Why am I really buying Gamestop? Is it because it is one of the finest investments or a company that I absolutely love?
People love Tesla and invest in it despite its valuation because it has a great product, futuristic tech, and solid potential. Does Gamestop have a great product, and solid potential?
However, for most people, the entire thing seemed to be about bringing someone else down. You can pat yourself on the back for bringing a greedy institution suffer losses but how did this help you.
How did this impact your financial goals? What have you got in the end?
A bunch of loss-making companies on which you are betting your future.
Bringing someone down or teaching someone a lesson is an absolutely a moronic objective of investing. When you play with fire to hurt someone else, you are likely to get burned too. This is exactly what many retail investors experienced too. I have zero sympathy for the hedge funds or any participant who aims to manipulate stock prices even if it is within the boundaries of law.
The important thing to focus on in investing is our END GAME.
What is your End Game?
This means what do I need money for, when do I need it, how much do I need and how will I get there. The answers to these questions are critical and none of the answers I bet will ever include “I will get there by pulling someone down or hurting someone else.”