After years in GME I finally sold today. The truth is in these numbers
So after many years of owning GameStop I finally sold my entire stake today. Fortunately the stock was cheap when I bought it and is cheap now. Along with some calls I wrote against it over the years I broke even. However I feel holding it going forward the risk/reward no longer tips in my favor.
There are so many reasons why the risk has gone up going forward and fewer reasons for a rewarding outcome. I hate selling any stock but if I can't see a future of some growth I have to make my exit.
I learned the lesson of "tells" many years back in the early internet days. I invested in Exodus, a hosting provider like Rackspace is today. They were the big bad one. I remember having a huge gain in it only to watch it turn into a sizeable loss. I deserved it because the data was right in front of me buy I remained "hopeful" that what was right in front of me would change.
I visited their data center and saw cages that were once jam packed to now be half empty. I figured just a temporary slowdown in business soon to recover because after all, the internet will be huge! This never happened. I saw with my own eyes what was happening and chose to ignore it. This is a major investing mistake I never made since.
I see GameStop now as I did Exodus. The writing is on the wall for all to see. I've written up an article on my blog "Is GameStop a Good Long Term Bet or is the Tide Against it Too Strong Now?" explaining everything. If you are long OR short it is something you should read. Or you can ignore it all at your own peril. Hopefully you can learn from my experience and analysis.