Connect with us


Superstonks, Crypto, And Discord: The Age Of “Gamified” Investment – Forbes



A remarkable amount of focus has been injected into the world of investment through “gamification.” We witnessed the rise of “meme stocks” late in 2020, starting with GameStop (GME), which was famously driven by a swarm of daily investors found in an online Reddit forum and using the Robinhood trading platform. Holders that had short sale positions in this company felt the short squeeze as the situation dominated headlines. To the dismay of many, viral investments have not diminished as the GameStop saga continues and other financial vehicles have begun to see gamification push the boundaries of economic traditions. 

We have recently witnessed enthusiasm for GameStop surge again, especially in Discord chats and Reddit forums. The company has helped this surge with a bevy of tweets supporting the movement and teases regarding upcoming activities, allowing them to cash in on the frenzy. The crew decides whether to move towards a short squeeze and push the stock value as high as possible, and they speculate on when to do it. 

Since the initial run late last year, the share price was roughly $350 in January. By March, it was around $100, and most recently, the price has been around $200. It has been quite the rollercoaster ride. Showing no signs of slowing down, the video game retailer has benefited from some recent renewed positive news—the announcement of new managers, celebrity investors, corporate news and tons of press never hurts. 


The Reddit Revolution turned its attention to AMC Entertainment Holdings, Inc. (AMC), with small retail investors pouring into the stock. The stock surged nearly 100% in trading on one day alone, and it’s now up a whopping 2,650% year-to-date. The Reddit and Robinhood crowd has figured out how to overpower the algorithms on Wall Street through gamification. The Citadel algorithms control most of stock trading, and they have struggled to handle the thousands of orders that pour into select stocks from the Reddit and Robinhood crowds. Shamelessly, the AMC CEO sent an email to customers encouraging this frenzy by offering AMC stockholder free popcorn when they visit an AMC theater. 


GameStop and AMC were not the only seemingly farcical force of alternative investments to witness gamification. Ample interest in the cryptocurrency Dogecoin has been propelled by forces in the Reddit sphere, including activity involving Tesla billionaire Elon Musk. “Superstonk” is the word in this world, alluding to inside efforts to corner and create gamified runs on favorite stocks. Dogecoin has this same sort of momentum, with investors coming out of multiple walks of life. Superstonks rank big on social media engagement, including other crypto topics such as NFTs, Bitcoin, and other alternative coins. 

FOMO in Effect

The Fear of Missing Out, referred to as FOMO, is one of the predominant effects felt in these markets. The direction of the wind carries early and active investors into profitable territory and there appears to be no end in sight. It seems nobody wants to be on the sidelines without making some profit, and the entire channels are heavily in the space of gamified investment. However, if you have been sitting on the sidelines, it is hard to blame you. These are perilous, very real investment situations that have true financial implications. Turning that over to the impetus of an online mob can be very disconcerting. Even worse if that mob is nothing but a zombie army of fake accounts and bots. The power of these investments and the future of these investors is in many ways in the hands of a mobile base of users. Faceless and difficult to quantify, the audience that participates in these investments is somewhere active in the game or on the sideline, waiting for the right time to make their next move. Some investors appear to be fearful of massive pump-and-dump operations and others cannot help themselves, they jump right in. 

The Dark Side

I have delved into the dangers that can come from losing touch with reality. While there is nothing wrong with gamifying stocks and investments, there are inauthentic actors out there attempting to manipulate these volatile markets. Not only are individuals seeking to manipulate in order to gain financially, but automated bots from international and domestic sources are orchestrating fake emotions in any number of pop-investment vehicles. It’s a massive vulnerability. 

Time to Bring Lack of Authenticity into Check

It is difficult to ascertain safety and authenticity when engagements on many platforms are completely anonymous and unauthenticated. Bots and bot-based activity are a significant threat to not only the personal privacy and security of the average person, but also the valuation of well-known companies like GameStop and AMC. There seems to be a lack of will by companies like Facebook, Twitter, and Reddit to put a firm stop to the ability of creating numerous anonymous accounts for the sole purpose of creating a false frenzy, and biasing the “game.”

The impact of an inauthentic audience can be minimized by implementing strict multi-factor authentication and stricter policies that are focused on implementing one identity per validated user. While gamification is a welcome and entertaining notion even in the realm of online investment, there is an opportunity for responsible applications in the marketplace that do a better job of vetting individual accounts and incentivize behaviors in other veins of gamification such as rewards programs, loyalty and social credit.

Adblock test (Why?)

Source link

Continue Reading


A classic investing read for summer (psst … it’s free) – The Globe and Mail



Is there a good book you recommend for retail investors? I have read several that explain how markets and trading work, but I have found very few that discuss the strategies one should use to invest profitably. One of the hardest decisions I have is when to sell, since if I don’t have extra cash the only way to buy another stock is to sell something first.

As I discussed in a recent column, I’m not a fan of trying to create wealth by trading. Instead, I believe in building a diversified portfolio of solid companies, or exchange-traded funds, and holding them for the long run. Focusing on stocks that raise their dividends regularly has worked well for me, as a growing payout is usually a sign of a healthy company and provides a powerful incentive to stay invested instead of constantly trading in and out.

When I was starting out, one of the most influential books I read was Lowell Miller’s The Single Best Investment: Creating Wealth with Dividend Growth. It is an engaging and accessible read that will not only give you the tools to identify great dividend stocks, but will help you deal with the 24/7 onslaught of market noise that often leads small investors astray.

I’m not exaggerating when I say the book might very well change how you think about investing.

As Mr. Miller, the founder and now-retired chief investment officer of Miller/Howard Investments, writes in the book’s introduction:

“Investing isnʼt some athletic event where agility and flashes of virtuosity are the secrets of success. Rather, investing really is investing – the methodical accumulation of capital through a sensible and disciplined plan which recognizes that ‘shares’ are not little numbers that jump around in the paper every day.

“They represent a partnership interest in a real and going business. Your plan, very simply, must recognize that you will manage your investments by actually being an investor – a passive partner in a real and going business.”

Even though it’s a U.S. book and the latest edition was published in 2006, the principles are still relevant to Canadian investors. Here’s the best part: The book is now available as a free PDF download from Miller/Howard’s website at:

Prefer a hard copy? Check online or at your local library.

In The Single Best Investment, Lowell Miller writes that a company’s bonds should have a Standard & Poor’s credit rating of BBB+ or better – considered “investment grade” – to qualify as a suitable stock. Is the bond rating something you consider when buying a stock for your model portfolio? Is there an easy way to check this for individual companies in Canada? I have tried scrolling through lists of bonds in my brokerage account but I can’t seem to find bond ratings for individual companies.

Yes, I consider the credit rating when buying stocks personally and in my model Yield Hog Dividend Growth Portfolio ( A lousy credit rating indicates that a company could have trouble meeting its obligations, and in such cases the dividend is often the first casualty. For that reason, I usually stay away from companies whose bonds are rated as “speculative,” or below investment grade.

Mr. Miller’s minimum credit rating is slightly more stringent than the common definition of investment grade, which includes anything rated BBB- or higher by Standard & Poor’s. According to S&P, companies in the BBB family generally have “adequate capacity to meet financial commitments, but [are] more subject to adverse economic conditions” than those rated A, AA or AAA. (Fitch and DBRS use a similar letter rating system as S&P, while Moody’s defines investment grade as anything rated Baa3 or higher on its scale.)

(One exception to the investment grade rule in my model portfolio is Restaurant Brands International Inc., whose debt is rated BB by S&P. However, the agency recently upgraded the owner of Tim Hortons, Burger King and Popeyes to “stable” from “negative,” saying it expects a continued rebound in sales and profitability as the pandemic recedes and the company opens more franchised restaurants. So I’m comfortable giving Restaurant Brands some slack on its credit rating.)

There are several ways to find a company’s credit ratings. One is to check the investor relations section of its website. A Google search of “BCE credit rating,” for example, brought up a company web page with all of BCE Inc.’s bond, commercial paper and preferred share credit ratings from S&P, Moody’s and DBRS. BCE and other companies typically provide additional credit rating information and analysis in their annual reports.

Another option is to go directly to the credit rating agencies themselves. For example, the DBRS website – – lets you search for a company and read detailed reports about its recent credit rating changes or confirmations. This will give you an even deeper understanding of the company’s financial position and outlook. S&P and Moody’s also make credit reports available, but you’ll need to register to get access.

E-mail your questions to I’m not able to respond personally to e-mails but I choose certain questions to answer in my column.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Adblock test (Why?)

Source link

Continue Reading


Condo Smarts: Existing condominium buildings can be good investment – Times Colonist



Dear Tony: We are retiring this year and considering downsizing to a condo. We have started looking at both new and existing properties around Vancouver and Victoria, but we encounter challenges with both options.

New developments are often available only through presales and the time periods for completion would require us to sell, rent until the property is ready, and with few assurances of completion dates would require us to move twice with no guarantees how the properties would be managed or how fees would be structured for long term operations.

article continues below

Existing buildings are more attractive; however, we find most properties are sold within days of listing, and there appears to be more of a concern by realtors to keep strata fees low rather than looking at the age of the buildings and the long-term maintenance to protect owner investments.

Are there any standards or consumer rules we might consider following? As new buyers into a condo lifestyle we would like to avoid a sinking investment.

Karyn and Jerry W.

There are many existing buildings and communities that are an excellent investment. They are easily identified by reviewing the financial reports, investments, a depreciation report completed by a qualified consultant or reserve planner, and by reviewing the minutes of the strata corporation to identify how they address maintenance, planning and funding for the future.

While every building has different amenities, staffing and servicing requirements, an annual budget that identifies all the service contracts for maintenance and operations is a significant asset. An active use of the depreciation report to plan for future renewals and major maintenance components is a healthy indication of a well managed property.

Low strata fees are problematic for strata corporations as they often indicate a community dependent on special levies. Special levies require a 3/4 vote of owners at general meetings and many owners vote against a special levies generally due to affordability issues. The result of failed special levies is deferred repairs that will only rise in cost and damages, and the potential for court actions or CRT orders.

There is also a direct link between low strata fees, deferred maintenance and renewals, and higher risks for insurers. This results in higher insurance rates and deductibles for strata corporations.

Buyers should always request copies of depreciation reports, any engineering and environmental reports, minutes of annual meetings, the bylaws and rules of the property, copy of the strata insurance policy, and a Form B Information Certificate, which will also identify any courts actions or decisions against the strata corporation. Read all documents and discuss any issues with your realtor and lawyer. This should help separate the well managed buildings vs the buildings at risk.

New construction in some ways is easier to manage as the strata corporation is enabled to make the right decisions that will impact funding and future operations. Owners can have a direct effect on their investments by joining and supporting the newly formed strata council and making decisions that ensure a well funded and planned operations plan.

Strata fees for new properties often start low in the first year as there are service contracts included with the new construction that are included in the warranty period and some developers will entice buyers with low costs. Plan on an increase of fees once all units are occupied and the strata corporation is fully serviced for operations and maintenance.

This may be impacted by insurance costs, staffing, and consulting for warranty inspections, legal services and the management of warranty claims, the commissioning of a deprecation report, and operational requirements.

Every building, which consists of endless components, will have failures. The effective management and planning of those issues when they arise is the true test of a well managed property. Product failures and installations are often beyond anyone’s control; however, a well funded property will also be able to respond without a significant crisis for owners.

Tony Gioventu is executive director of the Condominium Home Owners Association.

Adblock test (Why?)

Source link

Continue Reading


Goldman and DWS prepare bids for NN Investment Partners – Financial Times



Goldman Sachs Asset Management and Germany’s DWS are preparing bids for NN Group’s investment management arm as consolidation in the industry gathers pace.

The Dutch insurer said in April it was considering a sale of NN Investment Partners, which has €300bn in assets under management.

The deadline for final binding offers is Monday. GSAM, which has more than $2tn in assets under supervision, and Frankfurt-based DWS are still in the sale process and preparing bids, said people familiar with the situation.

The deal price is in the region of €1.4bn, one of the people said. NN Group, GSAM and DWS declined to comment.

UBS Asset Management, Janus Henderson and US insurer Prudential Financial are among those to have previously registered their interest. All three declined to comment.

Investment managers globally are embarking on mergers and acquisitions designed to shield profits from rising costs and falling fees, while seeking to tap into fast-growing markets such as passive investing, private assets and ESG, and open up new distribution channels.

“The competitive environment for traditional active asset managers has intensified and a smaller group of larger players are now dominating the institutional segment,” said Vincent Bounie, senior managing director at Fenchurch Advisory, a specialist investment bank for financial services.

“It has become complicated to grow and very difficult to have a profitable business, in particular if you have undifferentiated plain vanilla products.”

Asoka Woehrmann, chief executive of DWS, which is majority owned by Deutsche Bank, told shareholders at the €820bn group’s annual meeting last month that it wanted to be “an active player” in industry consolidation. It is seeking further scale to challenge rival Amundi for supremacy in Europe.

Meanwhile for insurance companies, a prolonged period of low interest rates and higher capital requirements under Solvency II rules is prompting groups to weigh up where they allocate their capital, Bounie said. “For many of them, subscale asset management divisions are no longer core activities and there will probably be more divestments.”

NN Group, which is based in The Hague, came under pressure last year from activist hedge fund Elliott Management to improve returns and streamline its operations. It said in April it was considering options including a merger, joint venture or a partial divestment of the division.

NN Investment Partners has about 950 employees. Of its €300bn in assets under management, two-thirds is managed on behalf of its insurance parent company with the remaining third run for external investors.

The division’s range of funds covers fixed income, equity, multi-asset and alternative investment strategies. It has a strong position in ESG investing, notably in areas such as green bonds, impact equity and sustainable equity.

Additional reporting by Ian Smith in London

Adblock test (Why?)

Source link

Continue Reading