Keeping a close eye on Reddit’s WallStreetBets forum has been a good idea for investors.
The 11 million-member Internet community led the charge during GameStop’s two-week 1,500% short-squeeze in January and is largely responsible for AMC Entertainment’s massive 1,800% year-to-date run-up.
Those incredible gains have led to the downfall of several hedge funds that made large leveraged bets against the companies in question, ultimately getting caught on the wrong side of the trade.
But what’s the next opportunity for retail investors?
In a recent interview with Stansberry Research, WallStreetBets founder Jamie Rogozinski discussed a few ideas — including the Trump-linked SPAC — that might provide the next set of big short-term returns.
Some of these suggestions are particularly volatile. So be sure to do your due diligence before making any moves.
Digital World Acquisition Corp (DWAC)
GameStop and AMC aren’t the only stocks that have shot to the moon this year.
In late October, shares of Digital World Acquisition Corp skyrocketed from less than $10 apiece to as high as $175 before giving up some of the gains.
DWAC is a special purpose acquisition company that plans to merge with a social media company linked to former President Donald Trump.
Trump’s SPAC is clearly “a new stock on the menu” for the WallStreetBets crowd, Rogozinski told Stansberry.
When asked about which stocks he thought the forum would ride next, he answered, “I think it’s clear that this one is next and I think it’s going to be a while before they move on to the next one.”
“This is not a short squeeze situation. I believe the move is based off of inherent demand for this thing. There’s a lot of excitement and I think the price speaks for itself.”
Today, DWAC trades at around $57 per share, marking a near 500% return in just a few short weeks.
‘Nancy ETP’
Famed investors like Warren Buffett and Cathie Wood are widely followed by retail investors.
But Rogozinski believes that investment moves made by House Speaker Nancy Pelosi’s husband Paul are also worth following.
In an interview with Business Insider last month, Rogozinski discussed the potential of a Pelosi-themed exchange-traded portfolio geared towards retail investors.
“I got this idea, somewhat of a joke, but I can’t shake it so I’m probably going to start pushing for it, which is this ‘Nancy ETP,’” said the WallStreetBets founder.
And in his interview with Stansberry, Rogozinski explained that the idea is to “capture some of these really exciting returns from the Pelosi family portfolio.”
A Nancy ETP might never become a reality. But investors can still keep a close eye on the family for possible ideas. Some of their largest investments include tech giants Apple and Microsoft, which account for about 17% and 14%, respectively, of the Pelosi portfolio.
To be sure, shares of both Apple and Microsoft currently trade in the triple-digits. But a popular investing app allows you to buy fractions of shares with as much money as you are willing to spend.
ETFs
This one might come as a surprise.
As the founder of a subreddit known for “yolo-ing” on out-of-the-money call options, Rogozinski’s personal investments aren’t exactly exciting.
For his own personal portfolio, Rogozinski likes the peace of mind that comes with diversified, low commission exchange-traded funds.
“If I’m actually investing,” Rogozinski explained in the interview, “I’m doing it correctly.”
“I’m diversifying, buy and hold, leave it in there, collect dividends. I’m happy with that.”
These days, investors have dozens of low-cost ETF options to choose from when it comes to achieving broad diversification.
For instance, the SPDR S&P 500 ETF tracks the price and yield performance of the S&P 500 Index and has a gross expense ratio of 0.0945%.
Another example is Invesco QQQ Trust Series 1, which tracks the Nasdaq 100 Index and has an expense ratio of 0.20%.
A little-known alternative
With inflation rising at a breakneck pace, it would be tough to blame investors for completely ignoring Rogozinski’s words.
The good news? You don’t need to limit yourself to the stock market at all.
If you want to invest in something that has little correlation with the ups and downs of the stock market, you might want to consider an overlooked inflation hedge: fine art.
Contemporary artwork has already outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.
Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultra-rich. But with a new investing platform, you can invest in iconic artworks, too, just like Jeff Bezos and Bill Gates do.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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