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(Kitco News) Reddit got some free and valuable investment advice from billionaire entrepreneur Mark Cuban in his AMA segment on Tuesday. And the takeaway was that if you believe in an asset and the logic hasn’t changed, hold it.
The perfect example of this is bitcoin, which rallied to nearly $20,000 at the end of 2017 but then tumbled below $4,000 before eventually rising back up and almost hitting $42,000.
“The hard part is to ask yourself if what you believed in has actually changed. BTC holders are a great example to follow. Many bought at the highs in 2017 and watched it fall by 2/3 or more. But they held on because they believed in the asset,” Cuban said in one of the answers to Reddit’s AMA (Ask Me Anything). “When I buy a stock, I make sure I know why I’m buying it. Then I HOLD until I learn that something has changed. The price may go up or down, but if I still believe in the logic that made me buy the asset, I don’t sell. If something changed that I didn’t expect, then I look at selling.”
Holding bitcoin worked, but it did take some big players to join the game first, he added.
Most of the questions Cuban received focused on the GameStop stock, market volatility, manipulation, and Robinhood. This further goes to show that Reddit was either not united in its silver squeeze call or was not behind the play at all.
Cuban said that the investing landscape is changing and encouraged Redditors to keep disrupting the established ways.
“Thanks for changing the game. Thanks for taking on Wall Street. Thanks for making kids around the country, if not the world (including my son and daughter). WSB changed the game far more than everyone on this board will ever get credit for,” Cuban wrote. “That said, you will do all this again. You will go after WS, and the next time you will be smarter.”
Cuban also blamed Robinhood for the GameStop play not working out, for now, stating that the zero-commission brokers don’t have enough capital for the fight against Wall Street.
“There was only one thing that messed you all up: RobinHood and the other zero commission brokers that everyone used didn’t have enough capital to fund the fight. They let you down in a big way,” he said. “When you load back up, fight a broker with TRILLIONS OF DOLLARS in assets on their balance sheet. Someone that can be there when the fight starts and won’t blink an eye. No disruption is easy or happens in a straight line. Stay with it. I am a believer.”
Cuban said he loves the concept of Reddit day-traders because they can pick a spot to focus on and keep hitting it with a united front.
In terms of what to do now, Cuban said to hold GameStop if Redditors can afford it.
“When Robinhood and the other online brokers open it back up to buyers, then we will see what WSB is really…