🎮 Gamestop’s Second Act

What’s on the Menu 🍴

Is it meme stock season again?

Let’s dive into recent market action, and see if things are going to get as crazy as 2021…

Again!

• Gamestop’s Second Act 🎮

• Investing Insights You Can't Afford to Miss 📈

• Food Delivery: Expensive & Still In Demand 🚗

Today’s newsletter is a 5 minute read.

Gamestop’s Second Act 🎮

The infamous meme stock is at it again…

Gamestop (ticker: GME) is up over 200% in the past two trading sessions, as retail traders pile in with dreams of multibagger returns that will make them rich:

It feels like deja vu!

Back in early 2021, GME famously squeezed higher by more than 2000% at its peak.

A retail investor by the name of Keith Gill, aka “Roaring Kitty” as he was known on social media, was a key figure who was later portrayed in the movie “Dumb Money”:

After making tens of millions on GME in 2021, Keith went quiet on social media until this past week when he posted this cryptic image to his X account:

Since that post his account has tweeted a series of movie cuts edited to make it seem like he’s ready for battle.

Retail traders assume he’s back in the limelight and ready to take on short sellers in GME.

However, we have far more questions than answers at this point:

• Is the real Keith Gill tweeting or was his account compromised?

• Are Gill’s tweets related to GME or something else?

• Does Gill retain a position in GME or other meme stocks?

• Will Gill become involved in a more formal role at GME?

• What is the endgame here?

Gamestop’s CEO Ryan Cohen has been involved with several other retail businesses, including a failed turnaround at bankrupt Bed Bath & Beyond.

Cohen was still able to make money for himself in BBBY when he sold his stake during a brief stock pump.

An interesting overlooked angle is that Cohen was given permission by the GME Board in late 2023 to use some of GME’s $1.2 Billion cash pile to invest in public & private stocks.

Could Cohen slowly turn GME into an investment company similar to what Warren Buffett did with Berkshire Hathaway?

Will GME become something much more than a video game & collectibles retailer?

And will Keith Gill be involved somehow?

Those are some potential bullish scenarios…

But there are also bearish scenarios on the table as well.

GME remains a highly shorted stock with 21% of the float shorted, but that is a far cry from the 100% levels back in 2021.

Gamestop’s business fundamentals have not materially improved since 2021.

GME stock has had some gap ups since the epic squeeze in 2021 but all of them have faded with time.

Many retail investors have experienced losses while bagholding GME. Will the current rally turn into yet another disappointment?

If it turns out that Keith Gill’s account was compromised, the downside from current prices could be severe.

What happens with GME could also have broader implications for the overall market.

We’ve seen a number of other former meme stocks and high short interest stocks mooning this week, including AMC, SPWR, VFS, SAVE, PLCE, and others.

No matter what happens, it’s sure to be highly entertaining! 🍿

As always we’ll keep you updated here at the Daily Dough.

Investing Insights You Can't Afford to Miss 📈

After years of rubbing elbows with the sharpest minds in finance and chewing over the gritty details of market mechanics, I’ve distilled a goldmine of insights that could save you from learning them the hard way.

Here are the timeless truths and fresh perspectives that every investor—rookie or veteran—ought to know.

History Repeats... Kind Of

Financial markets love a good drama—crashes, bubbles, you name it.

While the stories fueling these episodes change, the outcomes are strikingly consistent.

Post-crash returns? Usually up.

The aftermath of bubbles? Typically not so rosy.

Remember, the market is a forward-looking beast, constantly pricing in tomorrow’s news today.

Tune Out the Noise

Market forecasts are about as reliable as a chocolate teapot. They stir up anxiety and seldom pan out.

Investing based on these predictions?

That’s a one-way ticket to poor decisions and sleepless nights.

Timing Isn’t Everything

The old adage holds true—time in the market beats timing the market.

Hopping in and out trying to snag the best prices often leads to missing out on the top market-moving days. Stick to a disciplined strategy, it’s less glamorous but more fruitful.

The Fee Factor

Low fees are your best friend in investing. They are a proven predictor of future fund performance.

Complex, high-cost financial products?

They’re generally not your friend. Keep it simple and cost-effective for the best long-term results.

Growth Doesn’t Guarantee Gains

Just because a company or country is growing rapidly doesn’t mean your investment in it will flourish.

Market prices already reflect expected growth, so real gains come only if those expectations are exceeded.

Risk and Reward: The Eternal Dance

Higher returns come from taking on higher risk. If someone promises you sky-high returns with little to no risk, run the other way.

It’s likely too good to be true.

The Hidden Drivers

Whether it’s content creators, financial salespeople, or advisors, always consider the incentives at play.

Understanding these can shed light on why certain products are pushed or why investment "opportunities" are dressed up.

A Solid Plan Over A Fancy Portfolio

Good investing supports your financial goals, but it’s not a plan in itself.

Ensure you’re saving enough, managing taxes efficiently, and planning for the long haul. Your portfolio is just one tool in the toolkit.

Remember, successful investing isn’t about outsmarting everyone else; it’s about making informed, disciplined decisions that align with your long-term goals.

Food Delivery: Expensive & Still In Demand 🚗

Everyone loves to enjoy a meal out at a restaurant every so often, right?

Maybe a good takeout order?

But, when looking at food prices lately while out, it’s no wonder Americans are feeling sour about the economy.

Inflation numbers are even showing that food away from home, is inflating at a much higher rate than food at home:

Everything is so expensive compared to pre-pandemic times. The grocery store has been a real pain point, but now going out or getting takeout hurts more.

Even though it’s painful on the pocketbook, it seems people just can’t get enough of not cooking at home.

They especially are loving food delivery from restaurants or paying extra fees to get groceries delivered.

When we look at Door Dash (DASH) and Uber (UBER) earnings, it’s clear to see that food from restaurants and delivery in general (some grocery) is still in demand.

Healthy double digit revenue growth and total orders for DASH keep climbing.

DoorDash management even said on the call that they’re not seeing the weakness in the consumer that everyone is talking about on the restaurant front:

It’s an interesting place to peek at when we’re looking at if the consumer is weakening or just shifting spending habits.

It may be a spending habit shift.

Looking at Darden Restaurants it shows where the restaurant industry may be seeing weakness. They own mass market chains like Olive Garden and Longhorn Steakhouse.

You can see the weakness in growth (however, fine dining isn’t having any trouble). Prior quarters had high single digit growth rates outside of their fine dining chains.

Here’s a comparison of an earlier quarter to show how the above current quarter is weaker:

So, it’s certainly a strange environment.

It appears convenience and avoiding cooking at home is a place people are continuing to be willing to cough up the dough for… even if it is expensive.

But, certain restaurants may be feeling the consumer pull away.

Food For Thought 🧠

"To stay ahead, you must have your next idea waiting in the wings."
- Rosabeth Moss Kanter

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.