I came across a shocking fact this morning: 28% of Americans bought a meme stock like GameStop or AMC in January:
Over a quarter of American adults say they bought GameStop (GME) or another viral stock in January, according to a new survey from Yahoo Finance and The Harris Poll.
All in, 28% of Americans say they bought one of these viral stocks, the Yahoo Finance-Harris Poll found.
AMC was the most popular, closely followed by GameStop and then Blackberry:
In relative terms, 35% of people who bought one of these stocks bought AMC, 33% bought GameStop, and 23% bought BlackBerry.
And they went beyond just buying the stock, getting into sophisticated and potentially risky strategies like options and buying on margin:
Meanwhile, 29% used conditional trading like a limit order, 22% bought call options, and 15% bought with margin — borrowing money to get in.
The people using these sophisticated techniques were largely novice traders:
The survey found that 43% of the people who said they had a brokerage account had signed up within the past month, an enormous uptick that matches Google trends results that showed that more people were googling “how to buy stocks” than ever before.
I see real risk if novice investors buy heavily touted stocks with debt. They could lose a great deal. And the more they lose, the bigger the push for regulations to stop such speculation will be.
For more on the Wallstreetbets phenomenon, check out these posts:
- Congress Is Investigating Wallstreetbets Over GameStop, But the Law’s On Their Side
- There Could Be Another GameStop Short Squeeze, But Beware Weak Fundamentals
- Big Profits And Lots of Short Sellers Could Make Rocket Companies a Winner
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Photo: “Retail GameStop” by ccPixs.com is licensed under CC BY 2.0