Shares of GameStop and AMC found another stage to run on Wednesday, posting their strongest trading day since a short month fueled by the internet sent stock prices into the stratosphere last month.
Shares of AMC closed up 18 percent, to $ 9.09, and GameStop doubled to $ 91.70 weeks after the so-called “meme stock” frenzy cooled. Retail investors got a basket of recommendations on the Reddit Wall Street Bets forum in hopes of exposing an unusually high short interest by hedge funds in various stocks.
While the rally was short-lived, CNBC’s Jim Cramer advised Wednesday that young traders who take advantage of commission-free transactions in brokerage applications like Robinhood should rely less on speculative trading and return to the fundamentals of investing.
“If you really want to win big institutions in your own game, don’t do it with GameStop and AMC. Do it with split shares and do it well,” the “Mad Money” host said. “The $ 500 club … is how you make real wealth.”
The comments come after major US averages also picked up their best trading day in weeks. The Dow Jones Industrial Average added 424 points to reach a new closing high of 31,961.86, 1.35% more than on Tuesday. The S&P 500 and Nasdaq Composite closed up about 1% more.
While individual investors continue to take cues from Reddit to flood stocks like GameStop, Cramer warned against the dangers of group thinking in the marketplace.
“At the end of the day, this is not a team sport,” Cramer said. “Instead of chasing these risky meme plays, instead of getting spliced into a problem, why not try to invest in the long run?”
After closing the market, Cramer’s name dropped 12 proven shares that are trading above $ 500, a price that is not normally available to investors who do not have much capital to work with. Thanks to fractional shares, where you can buy a portion of the shares, it is possible that stocks with high dollars like Amazon or Chipotle are not too out of reach, he added.
“A little bit of [these stocks] “They are still out of their highs, even after today,” the host said. “I want you to choose three and start buying.”