But what about investing in companies that don't show positive fundamentals? Many call that speculation.
In recent days, poor performing media/entertainment companies -- GameStop, a physical store chain of video games, and AMC Entertainment, a struggling theater -- have seen wild upward spikes in their stock prices, up around 2,000% for GameStop and 600% for AMC since the start of the year.
This list also includes other laggards -- Nokia, Blackberry, Bed, Bath & Beyond and Ross. Much of this was effort was done on the popular retail stock trading site, Robinhood.
Why? A Reddit forum of motivated average, everyday retail investors decided to gang up on big controlling hedge funds they feel prey on poor performers. Truth be told, they are poor performers for a reason.
This sounds like good news for some. Yet, we know rises of this type have another strong likely direction — a deep dive.
Fundamental stuff usual prevails. So, physical sales/rentals of video games right now? For many, that sounds like GameStop would be destined for a Blockbuster Video trend line. Virtually everything in the video-gaming business is digital/online.
For its part, AMC Entertainment, the largest U.S. theater chain, has a strong at-home
entertainment trend to face.
That said, though digital streaming movies and TV content continues to grow, expectations are big venues will continue to be an ongoing business in future.
One caveat: Many analysts believe this might be for a smaller range of movie genres -- bigger audience, action/adventure, fantasy, franchise movies.
Is this kind of speculation waiting to hit other weak spots in traditional media? So far, this isn’t the case.
The good news: Many legacy entertainment companies have decent, if not good, staying power. New digital media opportunities abound for many -- if not with actual positive financial results, read revenues and profits.
Other media/entertainment might be in the same situation.
Anyone with just a linear, TV network -- and no viable streaming plans? How about a midsize company with all its eggs in a declining legacy pay TV businesses basket -- cable, satellite, or telco? What's the status of TV station groups with no real promising digital media/connected TV efforts?
Better not speculate. A new democratization of investors might take you for a wild ride.