Thank you, Google. (And thanks, Vox.com for reporting on it.) One of my pet peeves is end of year compilations that are compiled before the end of the year. Google listed the top searches in 2021, already. Hey, what would happen if the aliens dropped by for a visit, huh? Back on track, Tom. Vox mentioned items that were I’ve been watching too. I just didn’t know anyone else cared. Two of them touched on personal finances: the lottery and meme stocks.
“Meme stocks like AMC and GameStop were also newly popular searches in 2021. They were also, incomprehensibly, well-performing on the stock market this year.
Trending searches for Mega Millions lottery and stimulus checks suggest regular revenue streams weren’t quite panning out.” – Vox
And, no, I did not win the Mega Millions lottery jackpot – but that doesn’t mean I’ll quit trying!
And, what they call ‘meme’ stocks I call ‘story’ stocks; something I’ve been writing about for over a decade. (Lottery Ticket Stocks)
Cue conventional wisdom, cliches, knee-jerk reactions. Or, know there’s a different perspective on such things.
“Lotteries are a voluntary tax on the poor.“
“Risky stocks are where fools throw away their money.“
Or, as Vox also reported;
“Perhaps undergirding this newfound interest in the stock market — and alternative assets as a way to get rich quick — is the persistent economic uncertainty in the US.“
They use nicer words. I call it desperation strategies.
When a person has more than enough money to pay the bills, a lottery ticket can be solely entertainment, a ticket to dream of luxuries – with a slight chance of seeing it happen. The cost of a ticket doesn’t impact a budget or a retirement plan.
When a person doesn’t have enough money to pay the bills, or is only paying some bills while ignoring other necessities, a lottery ticket is a ticket to dream of covering all of the necessities, and maybe more. Instead of buying a new Mercedes, they may envision finally scheduling a surgery, or fixing a foundation, or paying for school or day care or insurance. And it can only cost a dollar for a ‘normal’ jackpot, or a few dollars to reach that over-the-top dream money. The budget impact might be (barely) noticeable, but minimal compared to the price of a gallon of gas or even a bus ticket. (Though one thing nice about Whidbey Island is that the bus rides are free; which is a story in wisdom, insight, and practicality mixed with compassion.) As for retirement plans…ha!
A few years ago I heard an economist put lottery ticket prices in a different perspective. A lottery ticket costs a dollar or so, and provides an entertainment benefit while the purchaser exercises their imagination with a phenomenal upside potential. A movie costs much more, is over in under two or three hours, and has an upside limited to a few memories – and maybe a few more calories from the butter on the popcorn. (Another thing going for Whidbey where The Clyde is a bargain in both over the mainland theaters.)
I have an additional perspective. Eventually every lottery is won by someone. For that someone, it could life-changing, even life-saving. For a few dollars I contribute to someone’s very good day – with a chance that it will be me. Why wouldn’t I do that?
Ah, but for bigger budget items: stocks.
The big news that Google and Vox described was about AMC (the mega-plex movie theater company) and GAME (for Game Stop, the video game company). (Gamestop And Moving Smaller Stocks) Their stories were where I first heard the term ‘meme stocks’. The ‘meme’ made the companies sound like Internet Bubble companies, companies that had vaporware instead of real products and services. Popups that will vanish within years, maybe months. I used the term ‘story stocks’ to describe the startups that I invest in which have stories but no products or services, yet. Every company starts that way. Buy in early when the company is being laughed at or ignored, sell when the company becomes the must-have stock. (Details in my approach and my history are in my book, Dream. Invest. Live.) Some consider them get-rich-quick stocks. The irony is that AMC was founded in 1920, GAME in 1984, and MVIS in 1993 (the one I’ve owned since 2000). Quick? Meme? These companies existed far before the term became so popular.
All three stocks have been laughed at. All three were heavily shorted by investors who thought the stocks would become worthless (or could be manipulated to become worthless according to those who know more than I do.) Some bought the stocks because they like the companies. Some bought the stocks because they liked the stock. Some bought the stocks because the companies could be bought out. Some bought the stocks because they hoped to attack manipulative shorts by driving up the prices while tying up the shares to create a short squeeze. Every stock has an community of investors with a variety of motivations, but this year has been ridiculous as new players learned the old rules and tested new tactics and strategies.
It made for a wild year, even for me and my shares of MVIS. For reasons complex enough to inspire several other posts, MVIS surged, my expectations were elevated, and my dreams of becoming financially secure again were re-awakened. And, the surge passed, and dreams delayed, again.
The sad? news is that MVIS is ‘only’ up over 120% this year, and ‘only’ up 4260% since Spring 2020. Why am I disillusioned? At one point MVIS was up over 18,000%. Double that stock price, and debts could be gone, or necessities so taken care of that a few upgrades would be possible, or both. I even joined in the speculation that could see the almost-lottery-style odds that would re-retire me. OK, but up 120%. So, maybe I wait another year or two or whatever.
AMC and GAME? AMC up 600%. GAME up 1,094%. [sarcasm on] “Those silly meme stocks. Those people are stupid for investing in them.” [sarcasm off] There were some who bought at the high and watched the fall, but there were also others like the few who emailed me directly to tell me that they are now multi-millionaires. Silly? If it works, it works.
Repeating what Vox reported and commented; “persistent economic uncertainty”. Or my version, desperation strategies.
One reason I’d like to write a sequel to Dream. Invest. Live. is because I’ve been on a roller-coaster through America’s wealth classes. So much of what I hear as conventional wisdom comes from a position of ease that thinks any un-ease or even dis-ease is merely a matter of perception. ‘If poor people only thought right they’d have all the money they needed, and more.’ It is also common to say that it takes money to make money. That’s a wonderful statement, but is rarely extended to the reality that the poor are defined by not having money. No money, no money to be made, and the poor remain poor. But, for the price of a lottery ticket or a cheap stock, there’s at least the dream, the slight hope, and the slim chance that maybe it will be possible to do more than struggle to survive and to actually live.
As for end-of-year summaries, compilations, and reports, I generate several about stocks, as well as for each of my blogs. If you’re interested, check back in early 2022. I always hold out the possibility that Santa will deliver a jackpot to me, or that the aliens might drop by, or both. Stay tuned – but wait a few weeks.