Recently, the stock of GameStop, a brick-and-mortar video game retailer, temporarily soared, pitting day traders from the Robin Hood app against Wall Street hedge funds, who had shorted the company's stock. Today, Rick Bloom is joined by Scott Whyte of Bloom Advisors. They break down the story, including many teachable moments that came from it.
There are risks to buying stocks and investing. It's not the same as gambling in Las Vegas. When done right, it's more about using research and data than a simple game of chance. And investing is about the long haul, not how a stock is going to do 2 weeks from now. We learn more from our mistakes than our successes, which is why "beginners luck" can be a dangerous situation for investors.
Scott and Rick explain the Robin Hood app, day trading, shorting a stock, and the dangers of buying on margin. Also, there's more to this story than David vs. Goliath - especially the risk to "David."
In the end, it's about diversification and investing for the long term.
Finally, as always, Rick answers listener emails. Today he covers land contracts versus mortgages, as well as the need for estate planning.
Note: Bloom Asset Management is now Bloom Advisors. Find Rick and the team at https://www.bloomadvisors.com/ or call (248) 932-5200.