GameStop Hearings | What we learned from the GameStop Hearings?

The GameStop Saga continues. Attorney and Advisor Chris Berry discuss what we learned from the Congress hearing about GameStop in this episode of Daily Wisdom.

Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.

Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi.

Castle Wealth Group helps families with their legal, financial, and tax planning for their retirement and legacy.

With the use of legal structures like revocable living trusts, Castle Trusts (asset protection trusts), Chris Berry and Castle Wealth Group can help your family plan, protect, and preserve what is important through their Retirement and Legacy Blueprint Process.


For more info visit:


Episode Transcript

The Saga Continues

Hey, this is Chris Berry with Castle Wealth Group. Today, we’re going to talk about what we learned from the GameStop hearings. If you like this information, please make sure to subscribe to the YouTube channel and comment below.

Christopher Berry is a leading estate attorney and advisor in the area of retirement and legacy planning. He has been featured in publications such as Forbes, Kiplinger’s, Crain’s Detroit and more. He’s the host of the weekly radio show and podcast, The Chris Berry Show. He’s a national thought leader as it relates to retirement and legacy planning and has authored of the Amazon bestselling book, The Caregiver’s Legal Guide.

If you’ve been following the GameStop saga, it’s been pretty interesting. A couple of weeks ago, a lot of people on Reddit, which is a social interaction platform, similar to a Facebook, less about what you ate and just more about sharing ideas, sharing stories, in one of these sub Reddit groups called Wall Street Small Bets, there was a lot of conversations about a specific stock, GameStop, actually a couple of different stocks, GameStop AMC Movie Theaters, as well as Blackberry. So a lot of people will view these companies as kind of dinosaurs, right? Kind of like the Blockbusters of the world.

But there was a Redditor, that’s a person who’s on Reddit, a YouTube person who actually worked in the financial industry. He worked for an insurance company. His name, there’s a cuss word in it, so I’m not going to use his name, but the acronym is Deep F Value was his username. Then he also had a YouTube channel, I think it was called Roaring Kitty. Anyways, he was just talking about how he was finding value in these kind of dinosaur companies. One thing that came out was that there was a lot of hedge funds that were shorting some of these companies, some of the big Wall Street hedge funds, Citadel being one of them, were shorting these companies with the idea that the value or the stock was going to go down.



So in Reddit, this Reddit user DFV we’ll call him, started to show that A, Wall Street and the hedge funds were shorting this company, and B, there was a lot of value potentially in specifically GameStop because gaming is becoming… It’s like a sport. It’s on ESPN, which is crazy to think about. I used to play Nintendo way back in the day. You always joke around, especially now as a parent, I have two young kids, I don’t want them playing video games all day. I’m like, “Go out and play outside,” right? But now, video games can be a career. People are making millions of dollars on Twitch playing video games.

So anyways, he was very heavily invested in a GameStop and a lot of individual investors on Reddit started to kind of get the message and it became almost a organized movement to begin purchasing GameStop stock. So I think the GameStop stock might’ve been a low for the last 52 weeks before this happened. I think it was about $2 and then I went up to $8. But anyways, everyone got behind this and became a snowball and I think GameStop got up to $480 per share, which was crazy. This all happened within a week with the idea that A, a lot of people saw some value there and they got behind it and a lot of these individual investors became unified.

Then B, there’s a little bit of the stick it to the man kind of rebellion with these hedge funds that had shorted the company. So they’re taking losses as the stock is growing. Then what was interesting from an insider perspective was looking at the trading platforms. So there’s different custodians that manage money, whether it’s TD Ameritrade, Fidelity, Schwab, those are kind of the big three. But then recently, we’ve had a lot of these individual investing platforms like Robinhood, for example, where you can almost day trade with an individual accounts with the idea that it’s happening in realtime.

These trades are a “free”, but understand, nothing in life is actually free. Even Google, when you’re using a Google search engine, they’re collecting data. When you’re using Gmail, they’re collecting data. So you’re still paying for it, even though you’re not paying it out of your pocket, you’re paying it out of your privacy. Similar with Robinhood. Understand that they’re not altruistic. They’re not a nonprofit. They’re sending signals to these big hedge fund companies.



So what happened was there was so much volume, Robinhood actually shut down and would not allow you to make trades on certain stocks, which created this interesting question where with the internet, everything is being more spread out, where it’s not all the power isn’t in necessarily the Wall Street firms. Now, individual investors can engage in day trading too. But if the company is going to shut it down, then that tells you that they’re still supporting the big hedge fund companies, right? Wall Street and the powers that be versus the individual investors.

So while we think of these Robinhoods is really creating a democracy in terms of investing, what we saw when push came to shove is that Robinhood shut down to stop all these individual investors moving into positions that maybe these hedge funds and big Wall Street companies didn’t want all these investors moving into. So now, yesterday as I’m recording this, we had a hearing in Congress about it. So I think his name is Ed Gill, he’s the kind of Reddit person that started a lot of this, the Robinhood CEO, Vlad. They were all called in for a hearing in front of the Congress Financial Committee. It was interesting just seeing how out of touch a lot of these older individuals who were on this committee versus a lot of this is more of a younger person movement investing in these individual stocks.

So a couple of takeaways, first of all, I think that individual investing in further kind of creating a democracy of investing is going to continue. What the internet’s done is it’s expanded a lot of knowledge where now we have all this information at our fingertips. In the past, and being a student of kind of financial history, reading a lot of biographies on the Rockefellers, the Rothschilds, the Morgans, a lot of what made their wealth was the speed of information. For example, the Rothschilds, if you look into their history, how they made a lot of money initially was they had a very good communication system in Europe where they found out that if Napoleon had lost a battle, they would get the message to their trading people sooner than everyone else. They were using things like carrier pigeons, and they had a very established network of communication.

Well, with the internet and faster internet speeds, it’s not all about what’s happening in Wall Street. Now, individuals can get access to information, and depending on the platform, make trades almost instantaneously as well. So I think as the internet continues to evolve, internet speeds pick up, we’re going to see more individual investors being able to do things as quickly and efficiently as a lot of these big firms. So it was interesting watching these hearings to see kind of this battle between the establishment of these big Wall Street firms, the entrenched political family is versus a lot of these upstarts, these individuals.

So it’s a little bit of this class battle, which really seems to be fitting into the last couple of years of looking at a lot of almost revolution to a certain extent where people are tired of the status quo. So it’s been interesting from a big power versus the individual investor, looking at that interplay. I think that we’re going to see more and more individual investors being able to exert control in less centralized power. I think that’s something that the internet has done is it has allowed individual investors to come together and organize themselves. Because guess what, these hedge fund companies they’re doing the same kind of similar market manipulation, where they’re making bets based on information they have.


Individual Investors

Well now, with that information spreading out, individual investors are having similar abilities to get access to information and also organize to do things like run up the GameStop stock. I don’t personally think there’s anything fraudulent with it. My background, my undergrad was in finance. As a lawyer, I had a lot of business law and securities law classes as part of my law school track. So just in my humble opinion, I don’t think there’s any fraud necessarily going on in terms of overall investing in the GameStop stock. Individual investors may have issues depending on if they have any types of licenses or anything like that.

But in terms of the overall what happened, I personally don’t see anything wrong. I look at it as someone that helps people in this area, it’s another indication that the markets are a little bit unpredictable. Other than a handful of people who predicted GameStop stock to go from $3 to $480 within a week, that shows you some of the unpredictability of investments in the market. Not to say that you shouldn’t have money in the market, but also consider there are other alternatives. One of the important things is to have a plan. For a lot of my clients is we’re dealing with retirement planning, we wouldn’t want to put all of our portfolio into one stock.

Versus if you look at this Reddit group, which again is a lot of younger individuals, they have a term called YOLO, you only live once. So you see people putting all of their savings into a penny stock with a hope that it goes up. There’s room for that maybe in a portfolio, but as you get closer to retirement, it’s probably not something you’re going to want to engage in. So again, it was interesting watching some of the hearing, as well as watching some of the commentary on the hearing. I don’t think that there’s going to be a lot that happens out of these hearings with regards to the GameStop hearing.

I think it’s just the government trying to kind of wrap their arms or do a Monday quarterback over what happened. I don’t think there’s going to be a lot of changes per se. I think we’re going to continue to see that the power is going to shift from kind of the big Wall Street main firms, like the hedge funds, and we’re going to see more and more opportunities for individual investors to make money and get access to information. Now, the flip side of that is for everyone that made a lot of money, there’s probably 10… For every one person that made a lot of money on say GameStop or AMC or Blackberry, there’s probably 10 people that lost money, okay? Because trying to time the market, it’s stressful, and it’s not something that should be done maybe with your retirement portfolio.


10% Rule and Retirement

If you look at it as this is fun money, this is kind of gambling to a certain extent, I’m going to take 10% and that’s my play money, and you want to play around and invest it, that’s great. But as you get into retirement, understand that it’s not so much about accumulation and growth. Now, it’s more about preservation and distribution. So I viewed the GameStop saga and the hearing, I was kind of sitting there watching popcorn, knowing that this isn’t something that a lot of my clients are going to be involved in because they’re closer to retirement.

But for those 20 year olds, those 30 year olds, they have time on their side. Throwing some money into something fun like that to watch the rollercoaster, nothing wrong with that. So hopefully you found this valuable. This has been Chris Berry with Castle Wealth Group. Make sure to subscribe to our YouTube channel, make any comments below. Let me know if you did participate in the GameStop saga. Did you have any GameStop stock? How did you do? Put those comments in the comment section. Thank you so much.

Castle Wealth Group has clients across the nation and helps families plan, protect and tech preserve what is important by creating a retirement and legacy blueprint.



Castle Wealth Group Legal in Media

Send Us a Message