This Gamestop situation has taken the U.S. by storm. People have gotten together to run up the stock price, causing hedge funds to lose millions of dollars.
While most people are happily looking at it as a way to make money in spite of the hedge funds, I’m looking at it from a slightly different perspective. What I see is the 2nd major revolt against the establishment by U.S. citizens in 2021.
One group stormed the U.S. Capitol, the other stormed Wall Street.
And its just January.
Think about it: The attack at the Capitol was by a group of people who thought the election was being stolen. Many of them also feel the country is turning into a socialist country and are NOT happy about it. Plus they want the former president back in office.
Whether you agree with their stance or not is not the focus. I’m trying to look at the big picture. People are mad and are acting out.
Now 2 weeks later, we have a TOTALLY DIFFERENT DEMOGRAPHIC angry at the “greedy capitalists” who make billions of dollars selling overpriced crap made for pennies on the dollar in China, while they can barely pay their bills. Not to mention many of them may have lost their jobs, have thousands in student loan debt, living with their parents, or are working as hard as they can and barely getting by.
In the movie Trading Places, Billy Ray Valentine (played by Eddie Murphy) told Louis (Dan Akroyd) “the best way to hurt rich people is to make them poor people…”
Just like the first group, whether you agree or not isn’t the point. People are ANGRY.
(Please note: I’m not saying I personally agree or disagree with either revolt, I’m just analyzing these events and calling them like I see em.)
And let’s be honest, Wall Street has been HEAVILY manipulated for DECADES:
1. Companies have been buying back their own stock to inflate the share price.
2. J.P. Morgan was fined $900 MILLION by the SEC and U.S. government for manipulating silver prices for almost 10 years.
3. The Fed is printing trillions of dollars to keep the stock market up.
4. The “pump and dump” strategy has been used for years to get people excited to buy a stock, only so people who bought it at lower prices can sell to the newest recruits to the “Ponzi scheme…”
Think about it: we are in the middle of a GLOBAL pandemic. Businesses have gone bankrupt, we have state sanctioned lockdowns, and many are FORCED not to work. And while all this is happening, these CEO’s are making MORE MONEY than ever, thanks to the shares of their company stocks reaching all-time highs.
And what about the little guy? He has to wait on Congress to scrape up $600. And some people can’t even get that. What The entire F.
So when you look at it this way, hell yeah people are trying to make money in the stock market. People NEED MONEY. You took away their jobs, you BARELY want to give them a stimmy, and they still got bills to pay. Someone please tell me what people are supposed to do? “Play” the stock market. that’s what. They want to achieve wealth and success too.
So now, if you think about it, we have two separate groups that are MAD AS HELL for different reasons. One stormed the capitol, the other stormed Wall Street. Does anyone else see this as a troublesome trend and the problem this could cause?
What other groups are ready to snap next?
What if the pension market says they don’t have the cash to pay the retirees? Will the retirees revolt?
What if the stock market crashes? That will open an entire new can of poisonous worms, snakes and leeches.
All of these issues could have been avoided if people weren’t repeatedly told to just go to school and get a job. If people were educated about money at a young age and how the stock market works, and how there are other investment opportunities OUTSIDE the stock market, we wouldn’t be in this mess.
If our government never got off the gold standard in the first place and created BALANCED budgets instead of borrowing trillions we wouldn’t be so deep down the rabbit hole.
So now, when the market crashes (and it will), people will NOT know what to do. They will all flood BACK into bitcoin, but what if they start manipulating bitcoin? I know people will say it can;t be manipulated, but I disagree. EVERYTHING can be manipulated in some way. What if bitcoin doesn’t work out as will as people think?
The Essence of Short Selling
It should also be noted that “selling short” is a way for investors to make money in a down market. This isn’t taught in school. The average investor is taught to buy a stock at a low price and sell at a higher price. They get angry when a stock is going down, but not all stocks go up. They also go down to zero, so short sellers find those companies and “short” them. Perfectly legal, and unfortunately this isn’t taught in school.
In other words, some people buy stock when they expect it go up, others sell short when they expect it to go down.
Where Do We Go From Here?
People are ANGRY. They are FRUSTRATED. This is a dangerous combination because the economy is a mess and what we are seeing is years of frustrations starting to come out.
What’s the solution? First off, we need to stop waiting on the government to help us. Start creating multiple streams of income. Become a producer. Sell a product or service of some sort. Get an OF if you have to. lol
As producer, you have more control. You can raise your prices to match inflation or maintain your standard of living.
Take a portion of your stock profits and enjoy yourself, but the bulk of that money should be invested in items that retain their value and could even generate revenue for you. Take some of your stock profits and buy ASSETS. Examples of assets include gold, silver, rental properties, etc. Another popular option is to buy cryptocurrencies like bitcoin. Why? because they are OUTSIDE of the stock market and existing monetary system.
To see a previous post on assets, click HERE.
The economy is in BAD SHAPE. We haven’t really seen inflation yet. Just wait till prices start going up. People are angry and frustrated, but this is the time to come up with a plan to protect yourself from an economy that’s VERY shaky and on the potential verge of falling apart.
I’m sure people don’t believe me or think I’m just talking crazy, but after the last 12-14 months, does anything surprise you anymore?
No matter what happens with this Gamestop situation, we can rest assured they will continue having a direct impact on the market. At this point, only two things can stop them:
- Individual accounts getting suspended from further trading activity, or
- The stock market crashes.
How will this story play out? Time will tell.
It’s critical we learn about other investment strategies and how to make money outside the stock market.
As the world changes, we must be ready, willing, and able to change along with it. It’s critical you don’t rest on your laurels and continue learning about the economy and stay abreast of current events that pertain to money and the economy. Start now before its too late!
Get more great tips in my book Invest For Success: Winning Wealth Strategies Not Taught in School. Available on Amazon.
Teach your kids about money and business as well. They will have to live in this world as well. Many of the most important topics on business and entrepreneurship are not taught in school. Pick up a copy of Planting Seeds: The Children’s Guide to Entrepreneurship today. We owe it to our kids to give them the best opportunities to excel. This book is available on Amazon in English, French and Spanish.