I Played GameStop... And GameStop Won.

 Some of us are not the brightest crayons in the box.

The recent brouhaha about GameStop and other stocks-in-play caught my attention. Have a stock account? Buy a bunch of shares and make a big profit --Yay!!!

It sounded great. I wouldn't mind making big bucks...but just to be safe, I'd only hold onto the stock for a day or so, then sell quickly.

And I wasn't going to be grabby-- just one share. (After all, that was all Robinhood would allow you to purchase, anyways.)

I set the buy up on a Friday after hours, so the share would purchase first thing Monday morning. It did, for $316 and change. Time for the money to start rolling in.

By the end of Monday, GameStop stocks were down to $90. But there were still investors on Reddit saying the stock would go back up. They were hanging onto their shares, knowing that was true.

By the end of Tuesday, GameStop was down to $60.

I sold my share. Glad I did -- because shares have stayed in the $49 range ever since. (I just checked -- and it's down to $40, as of 2/18.)

At least one expert thinks we came very, very close to a complete meltdown in the stock market, thanks to GameStop and other speculations. I'm not so sure about that. It seems more that a lot of greedy hedge funds got their comeuppance by holding "shorts," waiting for GameStop prices to fall so they could cash in. 

Meanwhile, I lost more than $250 in less than 24 hours. Why in the world would I think I could do this and make big bucks, particularly when GameStop was being advertised so heavily as a 'sure thing?'

Because I got greedy too, that's why. Disregarded all the rules I'd set up to follow when investing in the stock market:

*Research -- then wait at least 48 hours before you buy. 

*Buy shares a few at a time, rather than all at once. If you're really not certain, buy just one test share.

*Stick to stocks that are considered blue-chip...or have a reasonable price-to-earnings ratio. Or were dependable before, but have suffered because of recent events. (Airlines, for example.)

*Buy stock of companies whose products you use -- and like. I read Peter Lynch's statement about this decades ago, and have used it ever since. It's also why stock like Red Robin and Apple has been among my stock purchases. And Southwest. 

     My stocks often emphasize things people will continue to buy, no matter how hard the times get. Toilet paper (Johnson & Johnson). Birthday cards and potato chips (dollar stores). Discount stores -- especially places like Wal-Mart. Cheaper food products -- after all, everyone has to eat and drink. And they may still go out to eat, just to cheaper places. (Covid has affected this viewpoint, of course, but restrictions are easing up. Sort of.) 

     So I buy Wendy's and Burger King.  (McDonalds stock is way too high at present -- I'm waiting for it to go down.)  But I've had some major purchases in Coke and Coke Europe. We saw so much Coke sold during our world cruise that it just made sense.

*Buy stocks that pay dividends. This has eased the sting, when a stock goes down... I still make some money, even though it's less.

*Sell the stock when you'll make at least 20% profit. You can always buy more later, when it inevitably goes down. This has worked extremely well for me -- except in the case of Apple. (Stupid, stupid, stupid. I should have kept it.)

*Buy a LOT of index funds. These are much less volatile; Warren Buffett said he would have invested primarily in these, if he was starting over. I may buy more than one type -- a conservative version, plus a more 'iffy' emerging markets fund. But I try to buy at least a few extra shares every month.

*Keep a sizable amount in cash -- so you can purchase quickly when the stock market is really down. I really wish I could have been around last year in March, when everything tanked so quckly -- I would have really made a killing then. But we were on the cruise ship, with nonexistent internet...

*NEVER buy on a Monday. (Stocks tend to move around a lot first thing in the week, and it's often negative. At least that's what I've noticed.)

*NEVER buy when the stock is shooting up like a rocket. Because it will come down just as quickly.

This plan has worked very well for me over the years. Before You Know What, I was up about 25% or more for 2020 til now.

So what did I do with GameStop? No research. Bought quickly. On a Monday. When the stock had just spent the previous week sizzling up the price range. 

    In other words, I broke all my self-set rules, and knifed out a chunk of earlier profit, in less than a day. Because I got greedy. The only smart thing I did was to buy only one share --and that only because I was forced to.

Serves me right.

Better a live piggy -- and a chastened one -- than completely broke. I do feel sorry, though, for those who got caught up in the excitement, though, and are still grimly hanging on, hoping to recover their investment. 

Stupid, stupid, stupid.