You're tuned in to the MBIT podcast led by Seamus Madan, Economic, and Financial topics broken down, educating you on your financial journey. Welcome everyone to the NBAT podcast. I'm your host, and this week, we'll be discussing what meme stocks are, how they work, And what's the deal with the whole to the moon ideology? And finally, some tips on how you can make your money work for you from many billionaire.
Now be sure to subscribe and take that like button to the moon for the YouTube algorithm and quick discover before we begin is essential note this is not investment advice in all opinions expressed on my own. Alright, everyone. Let's jump into it. Now for some quick background, GameStop Bob, AMC, and Blackberry are all examples of Madan stocks. And here's what that means. So mean stocks generally start as stocks that are lowly priced.
And then transition to stocks booming in price with no real reason or change to the company's core values. Now how could this even happen? Well, users on subreddits like Wall Street Best collectively decide which stocks to buy and hold to drive up the price. These types of volatility could definitely show signs of a market bubble, especially in crypto, as we have seen with, Dogecoin in the Bitcoin search.
Now it's also important to keep in mind that these are extremely risky bets and could cause investors to lose a ton of money. That's why the fundamentals of investing never die. Diversification and risking only what you are willing to lose. Alright. So the to the moon Madan, saying originated many years back and has recently been picking up an increased amount of traction with crypto and meme stocks.
The purpose of this meme is to increase awareness of the price hike and continue driving up the prices of these meme stocks, which explains what happens to game top, with the price surging back in January with all the red people piling in and driving up the price. Now with these stocks booming in price, making some people millions of dollars, it can be very tempting to jump into these highly volatile investments. However, What you're thinking about is FOMO, the fear of missing app.
The same was created by Patrick McGinnis to describe a common for market phenomena. In which others are more likely to take high risks if others are successful. And also, the fear of missing out on potential gains. Now although this is very tempting to invest a couple $1000 and possibly make 100 of 1000 of dollars, It is extremely risky, causing way more people to lose money than people getting rich.
Now keep in mind, there's no such thing as getting rich quickly and anyone who has is probably taking extreme risks that could destroy their finances. For example, I believe this is how you pronounce his name, glaubert Conte So to, an example of someone who took out loans in all of his savings to invest in a highly volatile meme coin Dodgecoin.
Hand it up with a portfolio worth over 2,000,000, but the issue with this is obviously the extreme risk, but also the media does not normally report on people who have lost everything because it doesn't really make a good story engagement. Now he is currently planning to hold until 10,000,000 and then cash some out, but the chances of this are extremely small and there's high risk involved and there's a good chance he could lose all of his money.
Again, quick disclaimer, this podcast is not financial advice in investing in crypto. Is extremely risky and volatile. Alright. So you're thinking to yourself, well, how can I then make wealth over time? What should I do? Well, in that case, billionaires, including Warren Buffett and Charlie Munger, has some tips to help grow your personal wealth. Now I know some of you may think that this is boring, but often making money safely is not very exciting.
And if it is, it could be a warning sign that there is a significant amount risk involved. First up, Charlie Munger, beware of the bubbles. Now market bubbles are when prices and stocks or investments skyrocket in price without a change in fundamentals. One example outside the market is a deli that is worth a 100 $1,000,000, even though it's only doing $35,000 in sales from the past 2 years combined.
Although market bubbles seem recent in the past few decades, they've been occurring way before the New York Stock Exchange was even created. This is essential to recognize because despite a change in technology, The mistakes are relatively similar. Tulip mania in 17th century in which Dutch investors place highly speculative bets on tulips Blessingham to exponentially grow in price until the downfall.
Although Tulips are not Bitcoins or websites, the concept and lessons remain the the market does not always react rationally. Alright, everyone. Thank you for tuning into the MBIT Markets business investing in podcast. If you Madan it to the end, hit that like button for the YouTube algorithm and subscribe for more episodes to help you on your journey to financial freedom. Disclaimer. The MBIT podcast is reflecting the opinion of only the host. The podcast is for informational purposes only.
The podcast is also not a research report. It is not a recommendation to purchase or sell any stocks, holdings, or securities. The podcast is also not meant to serve as a basis of any investment decision.