By Mark DeCambre
Trying to bet against stocks like AMC Entertainment Holdings (AMC) and GameStop Corp. (GME), may be a fool's errand and particularly dangerous in a climate of a meme-stock revolution that has helped to propel the value of socially driven assets into the stratosphere.
Thomas Peterffy, the founder of Interactive Brokers on Monday, during an interview on CNBC's "Squawk Box" (that while it might be extremely tempting to short shares of AMC and others, he would recommend avoiding those stocks altogether.
Shares of AMC were up more than 19% early Monday and have gained 120% so far in June. GameStop shares are up 9.8% on the session and have enjoyed a 22% climb in the month to date.
The investments in AMC and GameStop originally started out as organized short-squeezes by a clutch of individual investors who had identified that a number of companies were heavily shorted by hedge funds and surmised, correctly, that those stocks could be pressured higher if enough buyers collectively swooped in.
The momentum for those assets has continued at an unprecedented level. In the year to date, AMC shares are up 2,555% and those for GameStop have climbed over 1,300% over the period.
By comparison, the Dow Jones Industrial Average is up over 13% far this year, the S&P 500 has climbed more than 12%, and the Nasdaq Composite Index has gained more than 7%.
On Friday, Peterffy warned investors, in an interview with MarketWatch (), that investors could lose considerable money betting on meme assets.
Traditional investing, even trading tenets, have been tossed out the window amid the hype over meme stocks, leaving many veterans and strategists to caution that a liquid market, supported by the Federal Reserve's easy-money policies, may be helping to inflate bubbles in parts of the market and promote FOMO, or fear of missing out.
That atmosphere is representative of a quote often attributed to financier J.P. Morgan. "Nothing so undermines your financial judgment as the sight of your neighbor getting rich."
-Mark DeCambre; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
June 07, 2021 11:40 ET (15:40 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.