June 20, 2024


Peter Mallouk, president and CEO of Creative Partners, spoke with Quartz for the latest installment of our “Smart Investing” video series.

Watch the interview above and check out the transcript below. The transcript of this conversation has been lightly edited for length and clarity.

ANDY MILLS (AM): GameStop last week was way up. This week RFK Jr. says he’s investing $24,000 or something into GameStop. Is this something that serious investors should also follow him into?

PETER MALLOUK (PM): Robert Kennedy buying GameStop stock to me is hilarious and somebody on his team is telling him to do this to keep himself inserted in the headlines. But should the average investor or any investor of any kind invest in GameStop? The answer is no. This is totally ridiculous. There is no value there. This is a company that is not worth putting a dollar in. I hope some people took a lesson from the last go round. Companies have to have earnings for the stock price to go up. You are not sticking it to the man. The man is sticking it to you. I promise. So keep the money, invest in something that’s got real earnings.

AM: No on GameStop, no on AMC No on meme stocks in general, right?

PM: Yeah, that’s right. So meme stocks are not speculating. They’re just a hundred percent gambling. You’re totally buying something that’s got no earnings, maybe negative earnings, no expected earnings. Most people think the company’s gonna go bankrupt and you’re investing in it supposedly to catch some hedge fund manager off balance. And maybe you do along the way, but it’s not about the hedge fund manager, it’s about you. The most likely outcome if you’re playing in that pool is you’re gonna lose your money.

AM: The best thing to do right now, the advice I’m seeing is to get out, like get your money back and go.

PM: This is like being at the casino table, right? If you’re winning, the endorphins are going off, you feel good. So what do you do? You keep winning ‘cause it feels good. Then you’re losing. You go, well I’m not gonna leave. People don’t leave. They go, oh, I don’t feel good. I want those endorphins back. I’m gonna stay at the table until I get back to break even. Right? This is what’s happening with GameStop. You’re in it, you wake up, you made a thousand dollars, you go, why the hell would I get outta this? I’m gonna double down or I’m gonna stay in. It pulls back a little bit. You search online, somebody reassures you, don’t worry. This is normal. There’s always setbacks. And so you just, like the casino table, you stay, you want those endorphins back. So you’re looking for it to go to a high. And the only way this game ends is you’ve lost all your money.

AM: Yeah, that makes sense. And I love this slight shade you throw on it. Like, it’s not even speculation with meme stocks, it’s just gambling. That sounds true to me. Thank you.



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