GameStop vs. Beyond Meat: What Can These Meme Stock Rallies Teach Us?

• GameStop was 1 of the archetypal meme stocks, experiencing a crisp emergence successful worth acknowledgment to the enthusiasm of tiny investors.

• AMC followed on for the meme banal ride, which has notably included a steep terms diminution aft a large rally.

• One of the astir caller meme stocks to summation wide attraction was Beyond Meat.

• 10 stocks we similar amended than GameStop ›

The moniker "meme stock" was lone created a fewer years ago. It was however Wall Street described GameStop (NYSE: GME), a struggling video crippled retailer that abruptly gained the attraction of tiny investors chatting successful online concern forums.

The crisp emergence and consequent diminution of GameStop's banal terms service arsenic a informing to investors that has not been heeded, arsenic evidenced by the caller terms enactment of Beyond Meat (NASDAQ: BYND). What lessons tin meme stocks similar GameStop, AMC (NYSE: AMC), and Beyond Meat thatch us?

Warren Buffett, 1 of the astir celebrated investors successful Wall Street history, has explained that investing doesn't necessitate thing much than mean intelligence. After that point, what an capitalist needs is the close temperament. In different words, the quality to power your emotions is much important than being smart. He apt learned this from his mentor, Benjamin Graham.

One of Benjamin Graham's astir enduring creations is the conception of Mr. Market. This fictional quality was utilized to explicate conscionable however fickle investors, arsenic a group, tin be. Some days, Mr. Market is excited and volition bargain astatine precocious prices. Some days, Mr. Market is moribund, and helium volition merchantability astatine debased prices. An investor's extremity is to recognize Mr. Market's temper and, frankly, instrumentality vantage of it by buying stocks erstwhile they are cheap.

However, there's a counterpoint to Graham's Mr. Market analogy. Yes, you privation to instrumentality vantage of Wall Street erstwhile investors are exuberant. And, astatine the aforesaid time, you besides request to marque definite you don't get caught up successful the exuberance. It is casual to travel bullish investors similar a lemming erstwhile the marketplace is rising. That's wherever the communicative comes to meme stocks similar GameStop, AMC, and, much recently, Beyond Meat.

Graham is often referred to arsenic the begetter of cardinal investigation due to the fact that helium pioneered the thought of examining a concern and its finances successful item earlier making an investment. The thought was to find the worth of what you were buying and past to comparison that to the terms Mr. Market, Wall Street, was offering you.

When it came to GameStop and AMC, which were among the archetypal meme stocks, the concern communicative was and inactive is reasonably weak. GameStop is simply a struggling video crippled retailer, and AMC is simply a struggling movie theatre operator. And yet their stocks rallied to exceptional levels successful 2020 and 2021.