'Resist' the urge to buy AMC, Gamestop and Blackberry stocks. Don't be a lemming as their prices soar.
I will go to great lengths to avoid crowds. I have found that they rarely bring out the best in people. Whether myth or not, the notion that lemmings will follow a herd off cliffs — an old Wall Street metaphor — is illustrative. Crowd-think can be destructive.
Enter the meme-stock craze, where investors follow tips from celebrities or message-boards, regardless of the underlying fundamentals of the company. A crowd of traders is buying stocks simply because their peers are buying.
Take Blackberry (BB), for example. I came across my old Blackberry while cleaning out a junk drawer this past weekend. I am pretty sure the last time I saw it was over 20 years ago. That Blackberry was indispensable to me in the late 1990s and early 2000s, which makes my point. When was the last time you saw one in use? Blackberry is now primarily a software company and no longer makes smartphones. Revenue has been declining for years.
Why then is the stock up 142% this year? And why have the price movements been volatile? In January of this year alone, the stock went from $6.63 to a high of $25.10 before closing out the month at $14.10. I’d rather take my chances at the craps table.
