🤑 GameStop $GME is now a tenbagger in my portfolio with me reaching over 1000% on some trades. Is it time to take profits and sell?
😃 Why GameStop stock doubled in a week?
1. Ryan Cohen and two former Chewy $CHWY executives joined the Board of GameStop
2. Wallstreetbets subreddit pushed stock price higher
3. Start of a short squeeze
😢 The stock fell on Friday since director Kurt Wolf (Hestia Capital) sold half of his shares. He had to do this since GameStop exceeded the limit of one investment according to the rules of his hedge fund. When Warren Buffett $BRK.B started his partnership, his rule was to never have more than 40% of his portfolio in a single stock. I have the same rule. I'll trim my position if GameStop (or any other stock) reaches 40% of my portfolio.
💰 At current price, GameStop is selling at X16 FCF and if in FCF doubles in 2021 (which is very likely), then it is selling at X8 FFCF. GameStop is still cheap. The share buybacks are now proving how good they were. We are not counting the effects of Ryan Cohen yet. We need to wait for his plan before exiting our position. The company has a good balance sheet and holding it is not a dangerous move.
🩳 We don't have the numbers for number of shares short yet. The latest ones we have are for December and they were at 102%. The short squeeze has just started and may last for years like it happened to Tesla $TSLA and RH $RH .
What's important is to focus on the long-term. In the short-term, it can go down/up but in the long-term GameStop is still a good investment.
Watch the full video on YouTube:
My latest analysis of GameStop:
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