Basically, a stock or share is considered a “meme” when it gains a lot of buzz on the Internet and social networking sites. This usually means the stock or share has to do with some sort of popular trend or current event. For example, if a celebrity dies unexpectedly, there is going to be a huge amount of interest in the media as a result of this. In the end, however, this will likely mean very little for the actual price of the stock or share.
However, if the stock or share has gained enough popularity to drive a lot of buzz on the Internet and social networking sites then that’s probably a good indication that this is a good buy. If the stock or share has actually done well, there will likely be more people buying in, which in turn should lead to increased share prices and higher volume trading. This would make the stock a “superior” one, and it may even be priced at a better price than you would normally pay.
If a stock or share does poorly for a short period of time (such as one week or less), it will typically quickly recover from this and return to being profitable. A stock or share that trades with a high risk tolerance is much less likely to do well if it’s priced low during such a short-term dip.
This is why you need to have a pretty good idea of what a stock or share will do before buying. If you’re thinking about buying shares of a particular stock, then it’s a good idea to look for something that’s been trending for a few weeks or months, rather than looking for something that just came out of nowhere and sold off all of a sudden. This way you’ll know a bit more about the company before you spend a lot of money.
Of course, this isn’t to say that every share is going to perform well no matter what. There are a lot of Meme stocks that won’t perform at all, and if you’re investing your money in these then you’re more likely to lose it because of under performing shares.
However, it does mean that if the market momentum is in your favor, you may get lucky enough to strike it big and make quite a bit of money. On the other hand, if the market momentum is against you then you could lose your investment because the company isn’t performing well.
The key is to make sure you do your homework and invest in a variety of different stocks. This will help ensure that you don’t end up losing money on one stock because of one or two companies. So the next time you’re watching the news, and see a stock or share that’s trading for way below its intrinsic value, don’t be tempted to buy it based solely on market momentum.
Instead, invest some time in studying the history of the company, knowing the basics of how it functions, and determining whether it is a stock that will appreciate in value over time, or whether it will continue to fall in value due to a long-term lack of appreciation. If the fundamentals of the company are good, you can often bet that it will go higher in value over time, and you will profit in the process.
However, if it’s a stock that has struggled over the years, but has only lost money over the long term, then you may be better off waiting until the company has regained some of its value before you buy. Even a small gain can make you a lot of money in these kinds of situations. As I said earlier, stock trading is not a game in which you can ride the wave and hope to make a profit.
So if you’re wondering what a Meme stock is, the answer is “it depends”. It depends on whether you are buying a stock based on market trends, on the fundamentals, or by looking at history.