GameStop And AMC Stock Speculations – FAST Graphs

2021-07-23

Introduction – GameStop and AMC

In this video I am going to look at GameStop and AMC, this is all about the speculation/feeding frenzy instigated on Reddit.  There has never been a better opportunity utilizing GameStop and AMC for me to illustrate the difference between investing versus speculating.

There is a critical difference between investing versus speculating.  The venerable Ben Graham father of value investing put it this way: “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”

Stated more directly, investors focus on the intrinsic value of a business driven by its fundamentals and cash flows.  In contrast, speculators focus on price action, especially in the short run.  Therefore, the greatest distinction between investing versus speculating is thinking about the business versus thinking about the price.  Importantly, price is not a synonym for value.  As Ben Graham’s student Warren Buffett stated: “price is what you pay value is what you get.”

The key point here is that distinguishing speculation from investing is not an exercise in morality.  In other words, there are no value judgments.  The key point is to make sure that the investor recognizes whether they are speculating or investing.  Investors should not delude themselves into believing that they have safety of principal and a built-in adequate rate of return when they are focused on price action.  Go ahead and speculate if you might because speculation has sometimes paid off.  Original speculators in GameStop literally got rich over a very short period of time.  On the other hand, speculators coming in a little later got hurt badly.  Always proceed with your eyes wide open.  If you want to gamble, then gamble.  If you are more conservative, invest.  But always know which is which and what you are doing.

FAST Graphs Analyze Out Loud Video:

Disclosure: No positions at the time of writing.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.

Try FAST Graphs for FREE Today!

SUBSCRIBE to our YouTube Channel

Click here for our Research Articles

Unlock data on thousands of companies

Disclaimers: F.A.S.T. Graphs, Inc. is not a broker-dealer or a registered investment adviser. Under no circumstances does any information on Fastgraphs.com constitute a recommendation to buy or sell a security, nor does it give investment advice. This is to include any publications or articles on Fastgraphs.com. Fastgraphs.com is a research tool to be used by its subscribers in conjunction with the subscribers’ additional research and due diligence. The information on this site is in no way guaranteed for completeness or accuracy.