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I Sold My GameStop Stocks




๐Ÿค‘ I sold some of my shares of GameStop $GME last Friday ๐™›๐™ค๐™ง ๐™ฅ๐™ง๐™ค๐™›๐™ž๐™ฉ๐™จ ๐™–๐™ซ๐™š๐™ง๐™–๐™œ๐™ž๐™ฃ๐™œ ๐™–๐™—๐™ค๐™ช๐™ฉ ๐Ÿญ๐Ÿฌ๐Ÿฌ๐Ÿฌ% after I've been holding this stock since September 2019.


๐Ÿงบ The main reason why I sold is because GameStop reached over 40% of my portfolio and ๐™„ ๐™๐™–๐™ซ๐™š ๐™– ๐™ง๐™ช๐™ก๐™š (learned from one of Warren Buffett's old partnership $BRK.B letters) not to put more than 40% of one's portfolio in a single stock.


๐Ÿงช But I also sold because of valuations. Let's look how the ๐™˜๐™–๐™ฉ๐™–๐™ก๐™ฎ๐™จ๐™ฉ๐™จ changed since I've been investing in GameStop:

September 2019: Cigar butt stock, activism from Michael Burry, console cycle

April 2020: Cigar butt, pure value stock, Short squeeze, cycle

September 2020: Value, cigar butt, cycle, activism from Ryan Cohen

January 2021: cycle, short squeeze, activism from Ryan Cohen, speculation


๐Ÿ’ธ Despite the short squeeze which I predicted more than a year ago happening, it is being fueled by ๐™จ๐™ฅ๐™š๐™˜๐™ช๐™ก๐™–๐™ฉ๐™ค๐™ง๐™จ ๐™›๐™ง๐™ค๐™ข ๐™’๐™–๐™ก๐™ก๐™จ๐™ฉ๐™ง๐™š๐™š๐™ฉ๐™—๐™š๐™ฉ๐™จ subreddit. GameStop is not a value stock anymore and it has exceeded its intrinsic value. As a value investor, I have to take profits.


๐Ÿถ For the time being, we don't know the ๐™š๐™›๐™›๐™š๐™˜๐™ฉ๐™จ ๐™ค๐™› ๐™๐™ฎ๐™–๐™ฃ ๐˜พ๐™ค๐™๐™š๐™ฃ on GameStop yet. We cannot account this on the intrinsic value of GameStop. I still believe in GameStop long-term but at current price, the expected returns in 5 years (with the information we have) is negative.


๐Ÿฉณ Why didn't I take all profits? It is because of market sentiments. We have a ๐™จ๐™๐™ค๐™ง๐™ฉ ๐™จ๐™ฆ๐™ช๐™š๐™š๐™ฏ๐™š happening. It will probably continue for sometime. My average buying price of GameStop is less than $4, so I can afford to keep riding this wave and gradually take profits. It is more likely that we're going to see a fast short squeeze like the one with Volkswagen $VOW3.DE in 2008 than with the ongoing RH $RH short squeeze.


Watch the full video on YouTube:

https://www.youtube.com/watch?v=_7SOHnX1GLw&list=UUPO3uUyoXSaFWG-Ldq1mqEQ&index=1


Hereโ€™s the full analysis of GameStop:

https://ishfaaqpeerally.teachable.com/courses/662813/lectures/29877336



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