{"id":226333,"date":"2021-04-14T01:00:59","date_gmt":"2021-04-13T22:00:59","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/jordan-belfort-has-investing-advice-for-the-reddit-crowd\/"},"modified":"2021-04-14T01:00:59","modified_gmt":"2021-04-13T22:00:59","slug":"jordan-belfort-has-investing-advice-for-the-reddit-crowd","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/jordan-belfort-has-investing-advice-for-the-reddit-crowd\/","title":{"rendered":"#Jordan Belfort has investing advice for the Reddit crowd"},"content":{"rendered":"

“#Jordan Belfort has investing advice for the Reddit<\/a> crowd<\/strong>”
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Jordan Belfort, the infamous stockbroker\u00a0who inspired the hit 2013 film \u201cThe Wolf of Wall Street,\u201d is hosting a new documentary for the Discovery+ streaming service about the wild rise and fall of Game<\/a>Stop\u2019s stock.<\/p>\n

Discovery took notice when Belfort weighed in as the GameStop saga unfolded, telling news<\/a> outlets that the \u201clittle guy\u201d can \u201cplay the same game\u201d as the Wall Street overlords. He also\u00a0posted\u00a0a video to YouTube\u00a0in which he reenacted a scene from\u00a0Martin Scorsese\u2019s Oscar-nominated \u201cWolf of Wall Street,\u201d which was based on his 2007 memoir of the same name. <\/p>\n

Belfort recently sat down with The Post to chat about the meme stocks, how the Reddit rally took hold and what investors should do now. <\/p>\n

New York Post: <\/strong>You tweeted out that video that was very similar to \u201cThe Wolf of Wall Street\u201d speech, and seemed to be urging the WallStreetBets guys to hold onto their investments. How would you compare the Reddit crowd to the traders at your old firm, Stratton Oakmont?<\/p>\n

Jordan Belfort<\/strong>: So that, that video was a joke. That was meant to be a funny thing. And just to be clear, I never invested in GameStop because I figured if I put a video like that out, I was investing, people might say I\u2019m trying to do something. The comparisons are interesting between what happ<\/a>ened at Stratton because in some respects when I first saw the whole thing going on, I thought, oh, it\u2019s like a pump and dump, right? I mean, it seemed pretty obvious to me like when it first started. But when I started to dig more into it, [I saw] they\u2019re not dumping. There\u2019s no dump on the pump. It\u2019s an oddity in the sense that there\u2019s this really strong emotional attachment to the stock and they\u2019re really ultra long-term players, and for many of them, it\u2019s not even about making money as much as making a point. I think they want to make money as well. But it\u2019s a very interesting thing. I\u2019ve never seen anything like it before.\u00a0<\/p>\n

NYP:<\/strong> Why are hedge funds in a panic right now?\u00a0<\/p>\n

JB:<\/strong> Panic is not the right word as much as, like scratching their heads maybe. Some of them were probably panicking at the time that they were on the wrong side of it. It\u2019s because there\u2019s a certain set of rules, like how stocks act. One of the most basic rules of all is that fundamentals do eventually matter. At any given time, stocks can be much higher or lower and, like a Warren Buffet would use that as an opportunity. It is value investing. This is diametrically opposed to value investing. Now, this is sort of like momentum investing, but there are rules to that, too, and the rules to that are when the stock flies up, that it has to come back down because people are going to start to bail. <\/p>\n

When your Uber driver is telling you he\u2019s investing in GameStop and your haircutter, you think OK, it\u2019s been out there for too long and it\u2019s almost over. But with this particular paradigm, it\u2019s a bit different because these people are really not selling. There\u2019s an emotional attachment and the nervousness is that there\u2019s an unfamiliarity. What are the rules of this game now? That\u2019s the concern that the bigger firms probably have now with this sort of stuff.\u00a0<\/p>\n

NYP: <\/strong>At the time you painted the rally as a revolution, but what are the dangers for amateur investors? <\/p>\n

JB: <\/em><\/strong>My message to everyone was \u2014 good for you, but be careful. I\u2019ve always said history would say this is probably not going to end well. A stock that has a book value of, pick a number, $10 a share and is trading at 20 times that with no reason why other than emotion, it probably is not going to end well. I think that if you\u2019re playing in this game, it\u2019s more like gambling than investing and you need to be really, really careful. There\u2019s so much spoiled from watching things like Bitcoin go up so they have this false sense of security, that things can go up and if they go back down, they\u2019ll always go back up again. But Bitcoin is not a stock. It\u2019s a very different animal. And what drives Bitcoin up and what keeps it up and makes it come back has nothing to do with stocks.\u00a0I guess my biggest concern would be that if everyone thinks this is just the easiest way to get rich, freaking everyone is putting all their money in. It can get very ugly.<\/p>\n

NYP: <\/strong>Do you think apps like Robin Hood are dangerous to amateur investors?\u00a0<\/p>\n

JB:\u00a0<\/strong> I think, like most things, they are good and bad. The danger with Robin Hood is that it makes investors feel like it\u2019s almost a video game. Charlie Munger \u2014 you know, Warren Buffett\u2019s partner \u2014 said he thought it was the worst thing in the world. He said, like, there\u2019s no free trading, that they\u2019re selling your information and your workflow, and that nothing in this world is free.\u00a0The best thing about Robin Hood is that you can trade instantly with no commission and the worst thing about it is you can trade instantly with no commission. You know, it could go either way. If you\u2019re not disciplined, you could become a compulsive gambler on the platform. I didn\u2019t agree with what they did. The way to handle the whole thing, I thought was kind of foolish. But I guess the truth will come out why they suspended the ability to buy it when they did. It kind of seemed a bit odd to me.\u00a0<\/p>\n

NYP: <\/strong>People are stuck at home during the pandemic with nothing to do. Do you think the pandemic has created the perfect storm for the Reddit rally to occur or is this a coincidence?<\/p>\n

JB:<\/strong> You\u2019re kind of hitting all the points here. One thing in this documentary, there\u2019s a funny scene that we do where I use different objects to explain what happened. It\u2019s like a little bit of this, a pinch of that. It\u2019s a devilish cocktail. One of the parts of the cocktail is take a few billion people walking away long enough, and you give them nothing to do and then you put a phone in their hand with an app and you gamify it. You have the reality of social chat rooms.\u00a0Now, you have seething anger at Wall Street institutions. It\u2019s the perfect storm for something like this to happen. The spark in this case was the short squeeze. But it\u2019s far more than that. It\u2019s a bunch of things together that made this happen. <\/p>\n

NYP:<\/strong> Do short sellers deserve the criticism they are getting from the WallStreetBets group?<\/p>\n

JB:<\/strong> I think the biggest myth here for the average person is they don\u2019t distinguish from short selling and these hyper-aggressive short funds that are literally betting and trying to drive companies out of business.<\/p>\n

When someone goes short every day, it\u2019s a healthy part of the market and it makes the market function more smoothly. I don\u2019t think the market could go without short selling. It wouldn\u2019t make any sense. But that\u2019s very different than when a large hedge fund does deep research on something and makes this massive investment on the short side. Because the problem is, is that unlike the long side, is really expensive to stay short and to go short, relatively speaking. So it\u2019s not enough for a short seller of that magnitude to be right. They have to be right at the right time. So we also get massively short. They will actively do things to try to precipitate the immediate fall of the stock. They\u2019ll plant negative articles with journalists. They\u2019ll try to start investigations to get their friends to short it that they\u2019ll create the rumor mill. And that\u2019s the uglier side of shorting. So it\u2019s a very different thing than the normal shorting that people think of.\u00a0<\/p>\n

NYP: <\/strong>What would you say to the average rookie investor?\u00a0<\/p>\n

JB:<\/strong> <\/em>One thing that you owe it to yourself and shame on you, if you don\u2019t do this, is become financially literate. One of the great things about the Internet is that all information that you need to at least understand what you\u2019re buying, why things go on, why things go down, it\u2019s out there. I know it\u2019s not the most exciting read but information is out there. Educate yourself and know what you\u2019re investing in, why things go up, why they go down.\u00a0<\/p>\n

I always say, learn the Warren Buffet-style of things, like the real value. More of your money should be [invested] in that than the high-flying deal of the day, especially as you start to get older. It doesn\u2019t matter when you\u2019re in your 20s. You lose it all you make it back. But that starts to change with your 30s, and you build a family. It\u2019s never good to lose all your money but at least the consequences aren\u2019t as severe. I think that you should look at it that way. It\u2019s a very healthy way. I think there\u2019s a lot of good that comes from this as long as it\u2019s tempered with other research and diversification.\u00a0\n <\/p><\/div>\n

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Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

“#Jordan Belfort has investing advice for the Reddit crowd” Jordan Belfort, the infamous stockbroker\u00a0who inspired the hit 2013 film \u201cThe Wolf of Wall Street,\u201d is hosting a new documentary for the Discovery+ streaming service about the wild rise and fall of GameStop\u2019s stock. Discovery took notice when Belfort weighed in as the GameStop saga unfolded,…<\/p>\n","protected":false},"author":1,"featured_media":226334,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/nypost.com\/wp-content\/uploads\/sites\/2\/2021\/04\/belfort2.jpg?quality=90&strip=all&w=1200","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[101837,72128,71070,75315,5005,70359,75317,70360],"class_list":["post-226333","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-4-13-21","tag-gamestop","tag-hedge-funds","tag-jordan-belfort","tag-reddit","tag-stocks","tag-the-wolf-of-wall-street","tag-wall-street"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/226333","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=226333"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/226333\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/226334"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=226333"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=226333"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=226333"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}