Jordan Belfort, The Wolf Of Wall Street, Hails GameStop Investors But Warns ‘Be Careful’
Real-life Wolf of Wall Street Jordan Belfort has hailed amateur investors for buying GameStop shares, though he has warned those involved to ‘be careful’.
Belfort knows all about the US market from his time working as a stockbroker, though the business ultimately landed him in jail after he admitted fraud over stock market manipulation in 1999.
His memoir on his years in the business inspired the Leonardo DiCaprio-led Hollywood film The Wolf of Wall Street, and he has now shared his thoughts on the chaos surrounding the stock market this week, when amateur investors schemed against hedge funds and other Wall Street titans and ended up costing them huge amounts of money.
Hear Belfort speak below:
In an interview with Sky News, Belfort admitted that the plan to invest in GameStop was a good one – even one he wished he’d thought of himself – though he also offered some words of warning.
It’s shocking, and really amazing and gratifying, to see a little bit of the pain going on the side of the hedge funds. The hedge funds have been beating up little investors since the beginning of time pretty much.
While this will be short-lived… everyone’s got to be really careful, because it’s going to be like catching a falling knife when it unravels.
Belfort expressed his belief that hedge funds would eventually put a stop to the actions of smaller investors – who have already hit back at stock-trading app Robinhood’s efforts to prevent them buying stocks.
The former investor explained that Wall Street and hedge funds are ‘experts at identifying what we call ‘inefficiencies in the market”. He identified the surge in GameStop’s stock as one of the inefficiencies, and said Wall Street and hedge funds will ‘look to close that inefficiency very quickly’.
Though many Redditors are enjoying watching their wealth increase thanks to their investments, Belfort likened the moves to the Wall Street scheme he was famously involved in, commenting: ‘This is 1999 all over again and that’s why I’m begging everyone to please be careful here.’
He went on:
When the average person gets in, that’s the time it’s going to actually crash. You never know when that moment’s going to come. It’s going to come, of course, because things will eventually see their fundamental value.
It’s a wonderful opportunity for people to make money – everyone’s bored and locked up – but just be careful and make sure whatever you invest in these type of hot stocks, make sure you invest only what you can afford to lose.
Belfort advised those who have made money from stocks to ‘pull the original investment out’ and go on playing with ‘the house’s money’ in an effort to decrease losses if it all goes bust.
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