• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Fat Tail Daily

Investment Ideas From the Edge of the Bell Curve

  • Menu
    • Commodities
      • Resources and Mining
      • Copper
      • Gold
      • Iron Ore
      • Lithium
      • Silver
      • Graphite
      • Rare Earths
    • Technology
      • AI
      • Bitcoin
      • Cryptocurrency
      • Energy
      • Financial Technology
      • Bio Technology
    • Market Analysis
      • Latest ASX News
      • Dividend Shares
      • ETFs
      • Stocks and Bonds
    • Macro
      • Australian Economy
      • Central Banks
      • World Markets
    • Small Caps
    • More
      • Investment Guides
      • Premium Research
      • Editors
      • About
      • Contact Us
  • Latest
  • Fat Tail Series
  • About Us
Latest

3 Important Tips for Retail Investors from the GameStop Short Squeeze

Like 0

By Lachlann Tierney, Wednesday, 03 February 2021

You should takeaway these three lessons or tips for Investors from the GameStop short squeeze. Most financial media outlets aren’t there to educate investors… rational greed is valuable…

In today’s Money Morning… most financial media outlets aren’t there to educate investors… rational greed is valuable… rational fear is valuable too… and more…

The ASX is on course to tack on more points today as the US market rally resumes.

As everyone and their dog (myself included) sounded off on a unique financial event, the underlying reasons for the rally remain the same.

The money printer’s power is phenomenal.

Until, of course, the concept of money changes.

But until that happens, you should takeaway these three lessons or tips for Investors from the GameStop short squeeze.

Here they are.

Lesson #1: Most financial media outlets aren’t there to educate investors

CNBC, Bloomberg, Reuters, choose your poison.

It’s a constant churn of narratives that last one day, two days tops.

The GameStop phenomenon revealed just how deficient these outlets are.

Remember, these big outlets are not there to educate your average investor.

Not that you can’t learn something from them.

It’s more that you need to read between the lines — when a big fundie gets on the camera and gives a supposedly well-reasoned view on a stock or the appropriate asset allocation for a portfolio, have a think.

I’m not saying there’s a cabal out there coordinating schemes via the media.

But there are always implicit motivations for the public pronouncements.

And even pockets of the media that market themselves as being in the corner of everyday investors frequently disappoint.

Case in point is Jim Cramer of Mad Money fame in the US.

Now if you haven’t watched Mad Money before you are certainly missing out on some serious entertainment.

The show starts with a little intro about how Jim Cramer is looking out for the little guy and brings Wall Street insights to Main Street.

But just watch this absolutely golden clip for a taste of how Cramer operates.

It’s an impassioned plea to Fed Chair Bernanke to save his Wall Street buddies from losing their jobs at the early stages of the GFC.

This is the same person who said there was nothing wrong with Bear Stearns before it all went down the drain.

Point is, financial media outlets should be there for picking up little diamonds in the dross, but definitely not to get a real insight into how to invest.

Four Innovative Aussie Small-Cap Stocks That Could Shoot Up. Click Here to Learn More.

Lesson #2: Rational greed is valuable

The old quip ‘greedy when others are fearful and fearful when others are greedy,’ always has relevance.

In the constant greed/fear churn the key is to insert some reason into the process.

From the March market low, Money Morning writers have stressed the power of low rates and various central bank shenanigans.

Many retail investors have done well in this environment.

In hindsight, this looks like valuable and rational greed — despite the negative connotations the word greed carries with it.

Maybe call it a rational risk appetite increase instead.

But if you’ve done well you should also listen to the following…

Lesson #3: Rational fear is valuable too

The internal chatter within the business is starting to get increasingly bearish.

We have a whole range of editors with different ideas, even two algorithmic products that aim to take the ‘human’ out of the investment equation.

Each had their own take on the recent sell-off.

The key insight from the GameStop mini-panic might be that you need to harness the power of rational fear.

I’m not sure when the excesses of the rally will result in a correction, but at some point, the worm will turn.

If you’ve done well, consider taking some money out of the market if you think the market is looking a bit stretched.

GameStop and the Reddit forums that ignited its rise are symptomatic of a certain investment culture.

They frequently greet each other saying, ‘Sup gamblers’.

This is not a well-reasoned approach to investments.

Consider balancing your investment media diet with some rational fear as well.

When I mean fear, I’m talking about a rapid decay in the value of fiat, the potential for vaccines to lose their efficacy, and the prospect of a prolonged global economic slump.

My instinct would be to say, go long crypto and long medtech.

However, there’s a book that you’ll hear about in the coming weeks that makes a case for a ‘long COVID’.

It’s crucial to pay attention to if you are more geared towards wealth protection than say, gambling.

It’s written by a guy who has been around the traps far longer than most.

His name’s Jim Rickards and you’ll hear more about him soon.

Regards,

Lachlann Tierney Signature

Lachlann Tierney,
For Money Morning

Lachlann is also the Editorial Analyst at Exponential Stock Investor, a stock tipping newsletter that hunts for promising small-cap stocks. For information on how to subscribe and see what Lachy’s telling subscribers right now, please click here.

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Comments

Subscribe
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments
Lachlann Tierney

Lachlann’s Premium Subscriptions

Publication logo
Fat Tail Investment Research

Latest Articles

  • America on a War Footing: Implications as US Mineral Strategy Turns to Africa
    By James Cooper

    Geologist James Cooper examines the potential implications of America’s heavy focus on West Africa. Why is the US becoming deeply involved here? And what could the consequences be?

  • The biggest quarter on record for this share
    By Callum Newman

    We can see why the stock market didn’t react much to the RBA holding rates steady last meeting. Everyone expects rates to go down. It’s just a question of when. Fixed rate loans, and refinancings, are withering away as the market positions for more rate cuts. This is what you and I want to see as investors…

  • The US$2 Trillion Stablecoin Tsunami
    By Charlie Ormond

    These developments could transform the US$250 billion stablecoin market into a US$2 trillion juggernaut within years.

Primary Sidebar

Latest Articles

  • America on a War Footing: Implications as US Mineral Strategy Turns to Africa
  • The biggest quarter on record for this share
  • The US$2 Trillion Stablecoin Tsunami
  • Trump Sparks Rare Earth Rally
  • Copper Breaks Out: Are You Positioned?

Footer

Fat Tail Daily Logo
YouTube
Facebook
x (formally twitter)
LinkedIn

About

Investment ideas from the edge of the bell curve.

Go beyond conventional investing strategies with unique ideas and actionable opportunities. Our expert editors deliver conviction-led insights to guide your financial journey.

Quick Links

Subscribe

About

FAQ

Terms and Conditions

Financial Services Guide

Privacy Policy

Get in Touch

Contact Us

Email: support@fattail.com.au

Phone: 1300 667 481

All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.

Fat Tail Logo

Fat Tail Daily is brought to you by the team at Fat Tail Investment Research

Copyright © 2025 Fat Tail Daily | ACN: 117 765 009 / ABN: 33 117 765 009 / ASFL: 323 988