So a few months ago I posted (per the the Jan update below) that I joined the meme stock frenzy and bought 250 of AMC stock. This was in lieu of missing the GameStop frenzy so I picked the next best, and cheapest, option. After I bought the stock (around $15), it went up to $19. I didn’t sell and held on.
A few days later I watched in horror as the stock, along with all other meme stocks crashed. AMC went down to $5. I just lost over 75% of my original investment. But I held on and figured I would take the tax loss and/or may get a post vaccine bounce as AMC would be a strong post-pandemic beneficiary as people returned to the movies.
Over the next few weeks I stopped paying attention (and instead bought some Crypto), until late last week when I saw the stock surge and online chatter pick up significantly.
The stock zoomed late last week to $20 and I was back at the original high and my $3,833 investment was now worth $5,000! Not a bad return after a few months. But I kept my “diamond-hands” mentality and didn’t sell. Then Tuesday the stock jumped again to over $35. And then today it doubled to $70, finishing up in the mid-60’s. My investment of 250 shares was now worth a whopping $16,250! Up over a staggering 300%.
The best broker? Robinhood without a doubt. Open up a free account now and get one free stock to start.
I am tempted to sell some part of the stock, maybe up to $10,000 worth to cover the initial investment and some profit/taxes. But on other hand, what if this goes to $200, like GameStop did? At $200 my holding would be worth $50,000. Crazy money from a ~$3800 investment.
What do you think I should do?
[January 2021 Update] As everyone has probably read, heard and seen there is a major battle taking place between Wall Street and Main Street, via some heavily shorted stocks as the weapons of choice. Reddit’s r/WallStreetBets, Twitter and StockTwits were the information sharing forums for Main Street with the battle is taking place real time on Trading Apps and the Stock Exchange. Its fascinating to watch and I am rooting for Main Street after years of Wall Street greed. So much so that I decided to join the fray and a couple of days ago bought into one of the stock horses in this trading frenzy. Here is what happened:
I bought 250 AMC Shares at around $15.30 ($3,833.95). GameStop (GME) was too expensive for me and BlackBerry (BB) had run too much for me to buy after the AMC purchase. I was nervous and refreshing my stock app every 2 min as the stock prices swung wildly. I was also checking the forums non-stop and the surge of comments was nuts. People were saying to keep buying and not to sell to ensure we “squeezed” the short sellers. Others were freaking out. Then there were those people showing how much money they were making. Even if 90% of these were fake, some people were making more in 2 days then 2 years! A user called Deepvalue on Reddit, who had been posting his GME buys for several months was up $22 million from an an initial $50,000 investment. It was scary and yet exhilarating. Here is how the day ended for me:
What a day! AMC was up 300%! That was so ridiculous. I made over $1,000 in literally 3 hours. Feeling very chuffed and confident I didn’t sell and thought this run would continue. But as always, Greed got me and this is how things ended the next day,
AMC was down to $8.63 and all my profits were wiped out and I was in a big hole! What the Heck (I used much fouler language)!. Easy come easy go. I must admit I did panic a bit and sold about 100 shares at $12 – meaning a small loss. But I did keep 150 shares. Mistake or not?
So far afterhours, AMC is up 30% to $11.29 as trading apps like Robin Hood and Etrade allowed purchases to resume on these stocks after blocking it for most of the day, to the chagrin of millions of Main Street traders (that’s another story).
Did I make the right call or get caught in the frenzy?