We won’t bash meme stocks too much.
Except to say they’re dumb.
And you shouldn’t speculate on them… Unless you’re dumb too.
Okay, maybe that’s a bit harsh.
But you really should leave them alone.
Because for all the short-term excitement… you’re more likely to lose money on them than you are to win.
We’ll explain why below. But first…
Market Data
The S&P 500 closed down 0.7% to end the day at 5,205.81… the NASDAQ lost 1% to close at 16,240.45.
In commodities, West Texas Intermediate crude oil trades at $85.06, up $1.14…
Gold is $2,296 per troy ounce, up $32 from yesterday…
And bitcoin is $66,104, down $3,493 since yesterday.
And now, back to our story…
Don’t Buy These Crummy Businesses
Last week Trump Media & Technology Group Corp (DJT) stock went crazy.
The stock price more than doubled in a couple of days.
On the not-so-good side of things, it’s still down around 75% from its record high back in 2021.
Source: Yahoo! Finance
Reddit (RDDT) stock went crazy too. It gained around 60% – give or take – in one day.
Today, it’s back below where it opened after its initial public offering (IPO).
Source: Yahoo! Finance
Look, we’re not saying both stocks are complete dogs (actually, we kind of are saying that), but as we noted a couple of weeks ago, there are plenty of other stocks on the market…
Thousands of other stocks.
And when you have thousands of stocks… that are genuine and viable businesses… why would you mess around with these?
These two aren’t the only ones. Take Rumble (RUM). It’s a video streaming service designed to compete with YouTube. It positions itself as being a better advocate for free speech.
That’s something everyone should support. But the service itself, well… it’s a little clunky. As for the stock and the stock price… it’s a meme stock too.
Source: Yahoo! Finance
The stock price action has been pretty crummy here too. Sure, it’s nearly doubled in the past couple of weeks, but we wouldn’t expect that to hold up for too long.
Here’s the problem with the Trump Media and Rumble stocks. They both have limited shelf lives, and they are integrally aligned with the political fortunes of Donald Trump… and more importantly, his visibility on the scene.
Once Mr. Trump “exits stage left,” the Trump Media and Rumble stocks will spiral into penny-stock obscurity.
Look, we know a great many of our subscribers support Mr. Trump. And we know they’re rooting for him to win the race for the White House this November.
So we could play to the crowd. But that would just be doing exactly that… playing to the crowd. Instead, our job is to give you great investment ideas and try to stop you from making bad investments.
If Mr. Trump doesn’t win this November, that’s it. It’s game over for him. He won’t be back to compete in 2028. And if he does win this November, his political career will end in 2028 anyway, due to term limits.
In that case, Trump Media will serve no further purpose. The proverbial ride will be over. The same will go for Rumble.
As for Reddit, sure, that’s a different story. Its fortune doesn’t rest on a Trump – or anyone else’s – victory. But it’s still a bad business, as we explained two weeks ago.
Getting back to the two other stocks…
Expect them to go up… expect them to go down. They’ll do a bunch of both over the next few months. But if you think you’ve got a chance of making money from either (or from Reddit), we’ll say you’ve got a better chance of picking the Powerball numbers.
Stay clear. There are much better stock stories out there.
More Markets
Today’s top gaining ETFs…
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Global X MSCI Colombia ETF (GXG) +2.5%
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iShares U.S. Oil & Gas Exploration & Production ETF (IEO) +1.6%
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SPDR Gold Shares (GLD) +1.5%
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iShares Gold Trust (IAU) +1.5%
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Energy Select Sector SPDR Fund (XLE) +1.4%
Today’s biggest losing ETFs…
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iShares U.S. Healthcare Providers ETF (IHF) -4.3%
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Siren Nasdaq NexGen Economy ETF (BLCN) -3%
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Invesco S&P SmallCap Consumer Discretionary ETF (PSCD) -2.9%
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Amplify Transformational Data Sharing ETF (BLOK) -2.9%
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iShares U.S. Home Construction ETF (ITB) -2.8%
Cheers,
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Kris Sayce
Editor, The Daily Cut