In a Q&A session on Reddit, Mark Cuban provided what may be his best investment advice and his worst in the same session.
Mark Cuban’s Worst Investment Advice
Speaking of GameStop Cuban said, “If you can afford to hold the stock, you hold. I don’t own it, but that’s what I would do,” Cuban wrote. The billionaire investor added that he has no doubt there are funds and big players who have shorted GameStop again, thinking they are smarter than everyone on WallStreetBets.”
If your investment thesis is to squeeze shorts to drive the shares to a price that is so far removed from any rational value that the story makes the nightly news, you aren’t investing. You are speculating. Cuban’s advice may work for traders and speculators, though we would point out there seems to be an awful lot of emotion behind this thesis. Emotionalism is a dangerous foe whether you are investing or trading.
Mark Cuban’s Best Investment Advice
“I learned some expensive lessons when I first started trading stocks. It was painful. But I tried to learn what I got right and wrong. Right now, right here. The game is changing. The hard part is to ask yourself if what you believed has actually changed.”
“When I buy a stock I make sure I know why I’m buying it. Then I HOLD until I learn that something has changed. The price may go up or down, but if I still believe in the logic that made me buy the asset, I don’t sell. If something changed that I didn’t expect, then I look at selling.”