Of Gamestop and Reddit

 It's time to weigh in on the Gamestop story. Apparently a group of people on Reddit decided en masse to buy Gamestop stock. The stock had been quite low as a result of the mall store having trouble competing with the online acquisition of gaming software. Hence the price was quite low. 

I actually remembering going into one of the stores. It came in handy for grandmothers who wanted to buy something for their  grandchildren but didn't want to deal with the exigencies of obtaining computer games online. It was handy. You could buy the game, wrap it up, and put it under a tree. Presumably the adored grandchild would know what to do with the present once it was in his/her hands. 

For fun or revenge or perhaps for a desire for easy money, a group of members of a Reddit group all bought the stock at the same time. The price went from $5 a share to $400 a share in days. Apparently this was painful to some hedge funds who were "shorting" the fund. I am still a little vague about how you make money by "shorting" but it involves borrowing the stock and paying the same amount of shares back but making a profit because the same amount of shares could now be purchased at a lower price. Apparently well connected investors do this regularly. 

The solution to this problem is to tax every purchase of a stock. This will take the fun out of buying and selling stocks at the drop of a hat. 

A new celebrity

With a new group in the White House, America is being introduced to its latest celebrity, Ella Emhoff.  She is an art student and likes to wear unusual clothing, which she designs. Now we can forget about Elonka and all that weird group that was in the White House before and concentrate on America's latest celebrity du jour. 

When should you rebalance your portfolio

In January, most financial analysts recommend rebalancing your portfolio. This means that, since this was a good year for stocks, most of us have more stocks in our portfolio than, perhaps, we should. This means the painful process of selling stocks to buy, typically, bonds or bond funds. Bonds and savings accounts are paying measly levels of dividends and interest so the temptation may be to "let em ride". This works in movies during the roulette table scene but is less successful in real life. What goes up must come down, and that includes stocks. 

The question is when. Ideally you should sell stocks when they are high and buy when they are low. This can be hard to do, however. Most of us buy when things are high and try to sell when the price goes down. It's like buying Elvis Presley memorabilia ten years ago and trying to sell them now, when most Elvis fans are starting to die off. Timing is always important in these things. 

Here are some ways I determine when it is time to sell some of my stocks or stock oriented mutual funds. :

When the flowers are falling off of my Christmas cacti.

When I open a container of milk and it has curdled.

When Channel 13 has another fundraiser.

When I run out of AA batteries. 

When my smoke detector starts beeping.

As you can see, the time to rebalance a portfolio can appear to be somewhat arbitrary. It's easier to buy em and hold em. 

The Inauguration

Tomorrow is Inauguration Day. It should be an exciting day. Being a little nostalgic, here is a blog I wrote about the Kennedy election and Inauguration. 

For the upcoming event, thousands of uniformed men in riot gear are patrolling our state capitals and Washington. It reminds me of when I was going into Mexico City and there were hundreds of armed soldiers assembled at the entrance to the Mexican capital.  Of course the United States has a stable democracy and we have no worries about insurrections. 😕

Our next president

 

The first time I saw him on television I thought he was one of the Capitol rioters or at least the actor who played a terrorist on the latest HBOmax movie. Actually he is John Fetterman, currently Lieutenant Governor of Pennsylvania. Apparently he has his eyes on the Senate, and I predict, will be our next president (after the new guy). 

He has tattoos, which is unusual in politics, although I believe AOC may have some hidden somewhere, and the beard and bald head gives him a menacing look. He is actually quite well spoken, and can appeal not only to the usual liberal constituency, but that elusive demographic, the beer drinking white working class male.