The Stock Market is EASY MONEY | DO THIS NOW

What's up guys, it's Graham here.

So there's always one thing that I mention here non-stop on the channel, so much so that I'm sure many of you guys are tired of me saying it. And no, it's not me asking you to smash the like button for the YouTube algorithm. Instead, it's just the age-old saying: "Don't time the market, buy and hold, invest consistently, and time in the market beats timing the market."

I really believe that everything you need to know about basic investing can easily be summed up in under a few minutes. For 95% of people, that same advice would see them through from now until the very end of retirement. That's why some of my investing videos might seem repetitive from time to time, because the long-term strategies really don't change.

To keep things interesting, I'll talk about other personal finance-related topics or newsworthy events that I might want to comment on. I think it's important to know what's going on day to day, and that's what brings us to now. Some people might find this unbelievable; other people might find this really entertaining, and I'm sure most of you will have your jaw drop on the floor when I bring this up.

But in the last few weeks, there's been a big comeback of a new type of investor. Now I'm not talking about forex traders; it's day traders who are making some incredibly risky investments for some very serious profits. I'm talking about people who have been able to double or triple their money in a matter of hours or days, and this is something we absolutely have to talk about because they've been able to move the market in some really dramatic ways.

Let me show you what I'm talking about because I couldn't believe it when I read it until I realized, like, wait a second, this is actually true! So with that said, if you wouldn't mind just gently destroying the like button for the YouTube algorithm, it greatly helps, man, a lot. I realize you don't need to destroy your phone or computer, just a gentle tap that destroys it enough for it to turn blue. So with that said, thank you so much for doing that, and let's begin.

Okay, so first, I don't even know where to start because we've got a lot here, so we'll just begin with this: CNBC just posted that the market has gone wild. Penny stocks are up nearly eighty percent on average in the last week. They found that recently stocks trading under $1 per share have an average gain of nearly 80% in the last week, and much of that movement was caused by retail investors looking to buy beat-up companies for a quick profit.

In a way, the writing was on the wall for something like this to happen because over the last few months, stock trading brokerages have reported a record amount of new signups, almost doubling from previous record numbers led mostly by millennials. Really, with the increased popularity of free fractional trading, the barrier to entry now to invest is basically nothing. Seriously, with as little as a dollar, you could invest in any company you want to completely free, even Amazon.

I think that's a huge change to the entire industry and made investing accessible to anybody with a phone. That's leading to some really incredible stock market profits. Like this, you know, we cannot talk about the stock market rally without mentioning one of the most perplexing of all of them, and that would be Hertz Rental Cars.

Two weeks ago, the company Hertz Rental Cars filed for chapter 11 bankruptcy, and the famous investing billionaire Carl Icahn sold his entire stake for 70 cents a share, leaving him with a $1.8 billion loss. Now here's the thing: when it comes to chapter 11 bankruptcy, this type of bankruptcy does not mean the company is necessarily gone forever. Instead, it's more about restructuring and reorganization of the company's debt.

But that also means that all of the outstanding stock in the company could be rendered completely worthless if they have to sell those stocks to pay off their debt. The company from there would then be delisted from the stock exchange and then listed later on as a penny stock. See, when it comes to bankruptcy law, the stockholders are always going to be last in line to receive any sort of payout.

They're behind the lawyers, they're behind the lease obligations, you name it. So really, as a shareholder, recovering any sort of money from a bankrupt company is going to be highly unusual. Or in other words, the company has a very high likelihood that the stock is gonna be worth absolutely nothing very soon.

But that apparently does not discourage people from investing within the company to try to make a quick profit, driving up the price by five hundred percent in a few days. Hertz was not the only bankrupt company to do this. CNBC mentions that several other bankrupt companies saw their share prices skyrocket.

They mentioned that Hertz, Whiting Petroleum, Pier One, and JCPenney all saw their share prices surge at least 70 percent, some more than doubling after declaring bankruptcy. The logic behind this is that people think the worst is over. They've already declared bankruptcy; how much worse can this get? I'm gonna buy in! I'll take a bit of a risk that things eventually improve, and then I could sell it off for a profit.

And of course, if you timed it right, you ended up making a lot of money. Now it was suggested that a lot of the trading volume and boost in price actually came from Robinhood, which of course we could see right here with Hertz. As soon as they were announcing the possibility of a bankruptcy, people bought in at record numbers, and then of course it went parabolic.

Same with JCPenney, as you can see right here, and same with Whiting Petroleum. These users are snatching up the stocks higher than ever as soon as there's even a rumor about bankruptcy, driving up the price from there.

Just like I mentioned before in previous videos, stocks with easy to remember ticker symbols tend to do better than the overall broad market. Investors are basically grabbing anything that they could get that looks like it can't possibly get any worse, with the expectation that's gonna be going up in price.

Like this; just look at this stock. They're a relatively small Chinese real estate company with the ticker symbol Fang Diedara. Apparently, that was enough for traders to pour in this company, driving up the price twelve hundred and fifty percent within the day before ending the day with a four hundred percent gain.

It was estimated that over nine thousand Robinhood users owned the stock by Wednesday at noon, more than double the amount the day prior. There's absolutely no rationale, no reason, no fundamentals behind this other than that the stock ticker symbol resembles Fang—that's it!

And if, of course, you're asking yourself why or want to know the mindset behind someone who's doing this, look no further than here. Even though the 84-year-old billionaire legend Carl Icahn dumped his entire stake in the company, that didn't stop Mr. Gerber, a 29-year-old from Seattle, from seeing that as an opportunity. He said the Hertz brand name holds value and the company operates a huge fleet of cars.

The stock was cheap enough to roll the dice. So far, Mr. Gerber has made thousands of dollars from Hertz stock options. Now another trader, 22 years old from Louisville, Kentucky, decided to try her luck investing by investing her $1,200 on her stimulus check. She said it was basically free money, so I made the decision to mess around with it.

You might lose some, you might win some; it's like a gambling game. So far, she's turned her $275 investment into $800 by investing in United Airlines and a double-leveraged ETF of oil. She goes further to say you can make a pretty good amount of money in one day.

And another one of my all-time favorites, Dave Portnoy, who is the founder of the website Barstool Sports and has a Twitter account with one and a half million followers. Now the title of this article I'm about to share with you has been changed since I took a screenshot and shared it on Instagram, but the original title, like I'm about to share with you, is hilarious. Just listen to this.

The title is: "Warren Buffett is an idiot,” says investor who claims day trading is the easiest game I've ever played. "I'm better than he is—that is a fact!" He goes on to say that he made $300,000 on the day with airline stocks but missed out on an even bigger number by getting out too soon. "I am just printing money. Why take profits when every airline goes up 20 percent every day? Losers take profits; winners push the chips to the middle! I should be up a billion dollars now!"

And this is not an endorsement by any means for Dave Portnoy, but I started watching him on Twitter, and he's really entertaining. Now, I can't tell how much of this is an act and how much of this is satirical—I have a feeling a lot of it is, but either way, it’s fun to watch. Apparently, he saw an opportunity to switch from sports betting over to stock market investing somewhere in the middle of March, and since then, he's changed his entire social media presence around that.

With, of course, the disclaimer to be very clear: I had zero clue what I'm doing. Now let me make this very clear. Even though a lot of people find him very entertaining and hang on to his words, these strategies should not be confused with investing at all. And I think it's fun to watch as Dave Portnoy is even mindful that what he is doing is gambling.

According to Business Insider, he did acknowledge the possibility that his legion of fans may follow his lead and attempt to enter the world of day trading, and he followed up with saying, “Do not do it thinking you're gonna make money; do it for entertainment, do it for fun. I would never day trade with money you cannot afford to lose! And if you're looking to invest, it's long-term and not the short term. If you're doing what I'm doing, be prepared to lose!”

Dave is taking his own advice on this as well. He said that he put three million dollars into his E*TRADE account, meant to be money that he was going to play around with. He also says that he has a normal investing account that he doesn't touch, and that is separate.

For him, if he's worth a hundred million dollars, going and putting 3% of his entire net worth in very speculative, volatile stocks is not out of the ordinary for someone with that level of wealth, especially if he has a normal investment account that he doesn't touch that's well-diversified. It would be no different than someone going to Vegas and spending a thousand dollars if that thousand dollars represents 3% of their entire portfolio.

The problem with that, however, is that it's much deeper than that with retail investors, and it's very easy to get carried away. I'll be honest, this is beginning to remind me a lot of the cryptocurrency bubble in late 2017, except now gambling is justified and disguised under the veil of investing.

Even though a lot of these companies are not worthless and they do have a lot of value, unlike a lot of cryptocurrencies back in late 2017, there's just the common mindset that you should buy into the hype train only because someone else is willing to pay more money later on and you can make a profit.

Now, I do want to make the distinction that going and investing in a hard-hit company with solid fundamentals long-term is not what I'm talking about here. But instead, I want to address the gambler's mentality that's really like a game of musical chairs—knowing that a company is about to be worthless but hoping the price will go up enough to make a profit and leave someone else holding the bag.

I think it's easy to see someone like Dave Portnoy, who is insanely rich, and see him throwing an egregious amount of money at stocks and think to yourself, “Well, if he is investing $500,000, then I should be safe with the money that I have.” Even though he has plenty of disclaimers saying that you should not follow what he's doing, inevitably a lot of people will follow what he's doing.

That's not to say that some of the stock picks are not good because I still see value in some of these companies, so it's not exactly fair to compare that to cryptocurrency. But the problem is at its core still there. This is rationalized gambling; it's not investing.

Unfortunately, I think this is going to burn a lot of people who confuse investing with gambling. And if you find yourself in this position, just understand the risks that are involved—that you could lose a significant portion of your money and only invest or gamble with money that you could afford to lose.

Now in terms of the general investing fundamentals that are going on right now, it's relatively simple. Interest rates are going to remain near zero percent. The Federal Reserve is continuing to support the markets, and because there aren't a lot of places you could go and put your money for a positive return, people are just going and putting it in the stock market and in real estate, which is driving up the prices.

Some companies ended up seeing an overcorrection and have risen a lot over the last two months, but their performance is really going to depend on the next year or so in terms of how much demand comes back. That's why the age-old saying of "buy and hold and invest consistently" still applies here.

The entire market is very unpredictable, and we have no idea what's going to be happening in the short term. That's why it's better just to buy in and then keep buying in on a consistent basis. If prices go lower, then you have a chance to buy it even cheaper, and if prices go up, congratulations, you made a profit, and then you go and buy more.

If you're just going and investing in broad index funds, then none of this really applies to you, and you could just go and get your popcorn, sit back, relax, and then be entertained and watch.

But what's going on with some of these individual stocks like JCPenney or Fang Diedara or even Nikola—it's just gambling. Sure, there's the possibility of making a lot of money, but there's also an even greater possibility of losing a lot of money.

There's a reason why someone like Dave Portnoy is not investing his entire $100 million fortune in these stocks; he's only investing 3% of his entire net worth. He's having a lot of fun doing it, and he has found a way to monetize his entire platform. Even if he goes and loses all $3 million he's put in the market, I guarantee he could make more money from all the publicity and all the new following than he can from the $3 million he's invested.

That's the part that most people don't see. So just remember, even though it might be tempting to throw some money in some of these companies or ride up the train and get like 200% profits in a few days, just realize it's not sustainable.

It really just becomes a game of musical chairs to see who could get out the first with the most profit. And even though some people get very lucky on this, I will go out on a limb and just say that overall, more people will end up losing.

If you have any amount of money that you cannot afford to lose, it's really just as simple as doing this: Max out your retirement accounts, invest in a broad index fund, call it a day. That's really it. After that, if you have money left over and you don't mind risking it, go for it! But do not confuse investing ever with gambling.

And also, never confuse smashing the like button for YouTube's algorithm because, again, it greatly helps a lot! If you wouldn't mind just doing that little click, thank you!

So with that said, you guys, thank you so much for watching. I really appreciate it as always! Make sure to subscribe and hit the notification bell. Feel free to also add me on Instagram; I post there pretty much daily. So if you want to be a part of it there, feel free to add me there.

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And lastly, if you guys want free stocks, use the link down below in the description, and Webull is going to be giving you 2 free stocks when you deposit $100 on the platform, with one of those stocks potentially valued all the way up to $1400!

So if you want free stocks, with one of them potentially valued up to a lot of money, feel free to use that link down below. Thank you so much for watching, and until next time!