Last week’s meteoric rise of GameStop’s shares made headlines, but what should be made of it? And what can we learn from it for marijuana?
What happened with GameStop is a short squeeze. The same thing happened to Tilray in 2018, Volkswagen in 2008 and supermarket operator Piggly Wiggly in the 1920s.
While it is possible to profitably invest by selling whatever is rising at ever-higher prices for nonfundamental reasons, it is a tough zero-sum game where, by definition, someone must eventually lose.
Even the winner eventually loses as well when its trading counterparts run out of money or, as happened at Piggly Wiggly, when someone more powerful changes the rules of the game for their own benefit.
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