Just Became A Meme Stock Millionaire

What's up, Bitcoin? It's Paper Hands here. So, I'm not sure if I should be proud of this or if this is an example of what not to do. But let me ask you a question: If you had to invest your entire savings right now, where would you put it?

After all, you could take the tried and true advice from one of the wealthiest people on the planet and throw it all in an index fund earning 8% a year. You could use that as a down payment to go and buy your first property, or you could—ah, who am I kidding? That takes too long. Instead, we could listen to Reddit and triple our money in a few days by investing in AMC.

Okay, but seriously, it's one thing to get really lucky once with the well-timed stock, but it's another thing entirely to do it again and again and again with the hopes of turning $50,000 into a million-dollar fortune. And that is what we're going to be talking about today! Some say he's a representation of a new type of retail investor who doesn't play by traditional rules, and other people call him a sideshow.

But either way, he's yolowed everything he has into a series of winning investments that just makes you wonder: Is he insanely smart? Is he insanely lucky? Or does he have access to a time machine that we just don't know about? So, we got to cover exactly how he was able to do this, his strategy behind investing, exactly what he's buying into now, and then I'll share my own thoughts in terms of his performance.

Because lately, we've been seeing more and more stories come out similar to this, where people are making a considerable amount of money by going against the grain, costing hedge funds billions of dollars, and doing exactly what people tell you not to do. Except this time, it's probably a good idea. You go all in on that like button by smashing it until it turns blue! Best of all, if you actually hit the like button in the next 5 seconds, I'll give you a mini aquarium tour at the end of the video.

So, thank you guys so much, and now with that said, let's begin the video. So this all starts with a man named Andrew DeWood, a flight attendant who turned his life savings of $50,000 into $7 million in just three trades. And now he's risking it again in an effort to reach a millionaire, at which point he'll sell out, diversify, and invest in something a little bit more stable like real estate or build a bear.

But before I lose my mind, we got to go back to the very beginning and break this down just a little bit further. Andrew was able to save $10,000 a year working as a flight attendant by keeping his expenses as low as possible. That allowed him to accumulate $40,000 over a four-year period, at which point most people would probably count their blessings, diversify, use that money as a down payment on their first property, or invest back into a business.

But not Andrew. He dumped all of it back into Bitcoin when it was at $200 in August of 2017. But back then, through the end of that year, Bitcoin did absolutely nothing but go up in price. And that's when Andrew ran into his first mistake. He attempted to sell as it went up in price to be able to buy back in lower and increase his position, but that didn't work. As he said, "Every time I sold, it just went higher, and I bought again." Quickly, he kept repeating and thus reduced down to 5.76 Bitcoin.

Now, eventually, he was able to sell his remaining Bitcoin for $100,000, working out to an average price of $17,513 each, which is sale number one in perfect timing. Because just weeks after that, the price fell and eventually bottomed out almost a year later. And again, this is where things just start getting crazy.

Then, after sitting on the sidelines for a little bit, he eventually settled on NEO, where he bought 15,500 shares at $4.64 on January 23, 2020. Shortly after, he purchased another 6,500 shares at $4.1 and then a final purchase of just over 2,000 shares a few months later at $2.79. In total, he owned 24,000 shares of NEO at an average cost of $3.18 for his entire life savings of $50,000.

Now, even though they say that lightning rarely strikes the same place twice, in this case, it did. He was able to exit his entire position less than a year later at $66 each, netting $4,000 in the process. Which, in hindsight, just like with Bitcoin, he sold near the peak of the market because just two months later, NEO declined in price and reached a recent low of $3.1 a share.

But after selling all of his NEO holdings, you would think that he would take a step back, take it easy, and diversify. But nope! He wasted no time and, on the same day he sold NEO, he dumped it all into the riskiest of them all—GameStop. He was able to purchase 50,500 shares on December 28th for an average price of $2 each.

Now, it's really important to take a step back from this for a second and talk about the methodology behind this. For Andrew, he's on record saying that too few of his friends and people his age are investing, and he believes that savings isn't enough to grow wealth. As a flight attendant, he was able to save $10,000 a year, which is not a small amount by any means. But if you wanted to grow that to a million fortune, it would take 40 years of investing consistently for that to happen, while earning an 8% return adjusted for inflation.

I won't lie, that's a long time. And investing that same amount every single year consistently takes a lot of sacrifice and discipline. And yeah, it's a lot easier to want to yolod everything into something that could potentially make you decades' worth of returns in just a few months. But you have to be willing to lose everything to make that happen. And evidently, that's what he did.

Then, shortly after buying his 50,500 shares of GameStop at $2 each, he sold at $3, growing his account to $1.7 million in just a few months. Now, sure, in hindsight, his GameStop shares today would be worth $10 million if he just held on. But in the moment, in a highly volatile stock like this, it could have just as easily gone the other way.

Although after that was when his winning streak began to suffer. After selling out of GameStop, he then moved all $1.7 million back into NEO at $66 a share, with the expectation of being able to sell at $100 a share, which would give him $2 million in the process. But unfortunately, his investment in NEO is now down about 30%, working out to a loss of $646,000. Today, he's supplementing his income by selling covered calls against his portfolio, which is pretty interesting.

And if you don't know how that works, here you go. When you own enough stock in a company, you could sell other people the right to buy your stock at a predetermined price at a specific point in the future for an upfront fee. And if it never hits that price, you get to keep the original fee and you get to keep your stock without losing any money.

Now, I know that sounds really confusing, and I did a horrible job explaining that. So instead, here's one of my cartoon photoshops to show you exactly how this works with some really easy round numbers. Let's say that I have 1,000 shares of NEO, which is currently trading at $38 a share. Realistically, I don't think there's any way it will hit $80 per share by July 2nd. So I could sell a covered call to a buyer who thinks the price will be worth $80 or more by July 2nd, and they'll pay me $1 for the option to buy all of my shares at $80 each by that date, regardless of where it's trading at.

In that case, by July 2nd, if the price of NEO is trading for more than $80, the buyer gets to keep the difference and that $10 option could be worth thousands of dollars depending on how much it goes up. But if the price of NEO doesn't reach $80 by July 2nd, the option expires worthless, the buyer loses the money, and I get to keep the fee.

In this case, Andrew doesn't believe the price of NEO is going to increase beyond a certain point, and he's willing to take a bet on that by selling a covered call option and collecting money upfront. Now, according to the article, he earned tens of thousands of dollars using this strategy, and he lived some of it while investing the rest back into buying more NEO.

Now, as long as he knows what he's doing, and the price of NEO doesn't skyrocket beyond that price, he'll probably earn some consistent income. But there's still a small risk. If the price of NEO skyrockets past his price, he's forced to sell early. And just like the experience with GameStop, anything could happen, which could throw his plan into disarray.

So, I have my own take on this because I have to say, let's talk about the positives here. Because, believe it or not, there are some things that Andrew is doing which I believe everyone can learn from. First, his savings from the very beginning. He was able to consistently stash away a good portion of his income every single year. Like being able to save $10,000 in the first four years of his career is incredible! Instead of squandering it with an expensive lifestyle and Starbucks coffee, he chose to save it for a bigger purpose.

Second, his lifestyle. Even though he saved up a significant amount of money and then was able to turn that into a $1.7 million fortune, he didn't spend any of it increasing his lifestyle. In fact, he still drives the same 2011 Ford, and he reinvests everything he makes back into the market. The third is he's willing to take risks. Maybe this one could be a negative, and we'll talk about that shortly, but being able to turn $50,000 into $7 million over a few years takes a considerable amount of dedication with the risk of losing all of it.

Even though I think it's kind of shortsighted, he was able to take that risk at an age where he could afford it and he would be able to recover from it in the event it all went to zero. Lastly, I believe he got his free stock down below in the description because now for a limited time, it's worth all the way up to $70! And I just got one of my free stocks, so we should open it up and see what it is.

Wow! Okay, it's $8 of Apple! I kid you not, it's right here. Jeez, you may as well do it. It's pretty much like free money! It takes you just a few minutes, and let me know which free stock you get.

In terms of how others feel, the national security chief marketing analyst said that there are literally thousands of stories that worked out the other way and that it's a great sideshow story that really has nothing to do with investing whatsoever. But it's the nature of what's happening right now. But this is not investing; it’s gambling. And even though that's an unpopular opinion, I would say he's right. These were all highly calculated speculative investments which just as easily could have lost a lot of money extremely fast.

Fortunately, Andrew was correct going three times in a row all in. However, unfortunately, I worry his goal of reaching a million clouded his judgment and caused him to preemptively make another very risky investment, like believing NEO would hit $100, which wound up losing money.

The problem is, rarely do highly speculative volatile investments reach an even round number for a sustained period of time, at least at the point where you could safely cash out and then go and retire in Hawaii. Plus, just holding on for a little bit more completely negates the risk involved with continually pressing the boundaries to the point where eventually you will lose.

Most people don’t realize that these numbers could safely and realistically reach them. It's already there; they just got to be patient! From my perspective, $7 million is already worth $10 million if you average an 8% return over 15 years. So had Andrew just cashed out, diversified, and waited, he could continue on his job without contributing another dollar to his account. In seven years, he would have his $3 million goal without really risking his money.

This is also a really strange market because if you look at pretty much any investment over the last three years, chances are it's made money! Like you could literally throw a dart blindfolded, land on a stock, and chances are year over year you’re in profit. And actually, as proof of this, let me show you this website that has a random stock generator, and we're going to be looking up five stocks over the last year to see where they're at.

So first, KTB, and that's up about 450% in the last year. And we got CMPR, up 12%; ADI, up 45%; AMD, up 50%; and one more, KRA, up 2%. And if you don’t believe me, you could do this yourself! The link is in the description just to see that I’m not making any of this up. It's nuts!

Plus, further proof of this: I had a monkey pick 10 randomly generated stocks out of a bucket, and I invested $1,000 into each of those 10 stocks, and guess what? Right now, I’m up 14% in just a few months.

The point I’m trying to make is that over these last few years, it's been very difficult to lose any money as long as you've stayed invested. And I'm really worried that’s painting a very skewed picture as to what it's actually like to invest your money long term.

But in Andrew's defense, it is easy for people to say, "Oh, I wouldn't have sold GameStop, and I would have cashed out at $1.7 million." But let’s be real: Any person saying that probably isn’t the same type of person who would be investing seven figures into a stock without hesitation.

And for returns like this, you have to make outlandish investments for outlandish returns. Of course, if you’re anything like me, you’re probably thinking about taxes. Because most likely, with profits like this, the IRS would come sniffing around because they want their cut.

But for those who don't know, Dubai does not have any capital gains tax, meaning all of these profits are his to keep 100%. Which means my next video is going to be why moving to Dubai.

But no, in all seriousness, it does take a very strong conviction to buy and hold onto these stocks to begin with. Although my biggest concern is that strategies like this are not replicable—replicable? How do you say that? There’s no blueprint to multiplying your money in a matter of weeks, months, or even years consistently.

And lately, it's stories like this that get way more attention because it's fun to think about investing what you have and turning that into a small fortune. But what winds up getting left out are the losses along the way and all the people who bought in here and then sold here.

All I think is this: There are more stories out there from people who have made fortunes and then blown it than there are for people who made a lot of money and then made it last throughout their entire lives. But building wealth doesn’t need to be an all-or-nothing approach.

I agree that he would not have one $1.7 million so quickly investing in an index fund. But that doesn't mean you should start buying lottery tickets if you want to be the next Bill Gates. I’m a firm believer that it does take risks to quickly accelerate your net worth as quickly as Andrew has.

But doing that responsibly is going to be the only way something like that could be sustainable and consistent. There's a blueprint and a formula to build wealth long term, and the more you want to shorten that timetable, the more you risk losing everything in the process.

It's all about weighing your options at this point! And even though it worked for Andrew, I'm not sure this is something that I could recommend as a sound way to invest your money. Even though some people say he's a legend for going all in three times and making money, the real test is going to be when it's over. Is he actually going to diversify and take it easy, or is it too easy to continually place the chips back on the table and YOLO it for another million?

So with that said, you guys, thank you so much for watching! I really appreciate it. As always, make sure to destroy the like button, subscribe button, and notification bell. Also, feel free to add me on Instagram. I post pretty much daily, so if you want to be a part of it there, feel free to find me there!

As for my second channel, The Grst Show, I post there every single day, not posting here. So if you want to see a brand new video from me every single day, make sure to add yourself to that.

Thank you so much for watching, and next time, so I'm editing this right now! And as promised, here's my aquarium tour! Topshelf Aquatics brought over several fish.