Do you remember the GameStop short squeeze?
Back in early 2021, GameStop (an American video game retailer) was widely seen as a struggling business. Big institutional investors (the hedge funds) had heavily bet against it, convinced its share price would fall as digital competition grew and the effects of COVID took hold. On paper, it all made sense. What didn't make sense, at least at the time, was what happened next.
In January, a group of ordinary individuals on the online forum “WallStreetBets” uncovered the fact that the hedge funds had taken this practice to the extreme. In response, they decided to orchestrate an increase in the company share price by buying up the stock and refusing to sell to the hedge funds. These weren’t professionals or insiders, just everyday people exchanging ideas online. As more people joined in, the price started to climb. Then it surged. Then it exploded. A stock that had been written off suddenly rose more than 1600 percent.
And just like that, it became more than a market story. Hedge funds were losing billions while some ordinary people saw their accounts grow to life changing sums. It felt like a moment of rebellion, like the script had been flipped and the underdog was finally winning.
But beneath the excitement, something else was happening. The story pulled in huge numbers of people who had never invested before. It was fast, emotional, and everywhere you looked people were talking about it. The idea of quick money was hard to ignore. Some got in early and did very well. Many arrived late, driven by momentum and headlines, and experienced the other side of it when prices fell just as quickly as they had risen.
That's the part people tend to forget. In what was, at its core, a wave of speculation driven by hype, a lot of inexperienced investors learned a painful lesson.
Because what the moment really showed is how easy it is to get pulled into a game you never planned to play. Some participants understood the risks and were comfortable with the volatility. Others were simply caught up in the noise. Even when it seemed obvious how it might end, people still joined in, hoping they would get out at the right time. That rarely works. It's like stepping into a fast moving game halfway through and hoping instinct will carry you through.
It also brought to life a distinction that Warren Buffett and Benjamin Graham have been making for decades. When your decision is based on what someone else might pay tomorrow rather than what something is worth over time, you are not really investing. You are speculating. And while speculation can feel exciting, it's not a game most people win consistently.
What makes all of this so relatable is that it is deeply human. The fear of missing out, the pull of a crowd, the belief that you can time it just right. These are instincts we all recognise. Greed, often disguised as FOMO, is a constant in human behaviour. It can lead even rational people to set aside judgement, drawn in by the promise of quick and easy gains. That’s why these episodes keep repeating. The details may change, but the behaviour stays the same.
Speculation may be exciting, but it is a game where you hold little real advantage. Long term investing built on patience and discipline, on the other hand, is far less common and far more valuable. It's also an approach where even the average investor can succeed. The key isn't to ignore speculative moments, but to recognise them for what they are and stay aware of your own limitations. Long term investing rarely feels exciting. It doesn't dominate headlines or go viral. Instead, it's built on something far more dependable: consistency, patience, and a clear sense of direction.
The GameStop short squeeze is just one example of something that seemed to be “working” in the moment. Opportunities like that will always appear, then disappear. The most effective defence against the pull of speculation is simple: stay anchored to your own goals and your time horizon. That perspective keeps you from being drawn into games where you hold no real advantage.
Because as a mature long term investor, you are playing a different game, one grounded in long term thinking. The aim is not a quick win, but lasting outcomes: financial independence, a dignified retirement, and the ability to leave something meaningful behind.
There will always be another “easy money” story. Another surge that makes you wonder if you’re falling behind. But the real edge comes from recognising that you don’t need to chase every opportunity. Staying committed to your own plan may not feel exciting in the moment, but over time, it’s what delivers. đź©·
Disclaimer: This content is for general information only and isn’t intended as financial advice. Everyone’s situation is different, so consider what’s right for you and seek professional advice if needed.
