Unless you’ve been living under a rock for the past few weeks you’ve heard about Pokemon Go. Hell, even if you’ve been living under a rock I’ll bet you’ve still heard about it – and maybe caught a Pikachu while you were down there.
“Invest wisely” -Pikachu*
While you’ve surely heard about the explosive popularity of the game, unless you enjoy following the stock market, you may not be familiar with the corresponding burst in the price of Nintendo stock. As you’re probably aware, Nintendo created the original Pokemon games and was involved with many of the related properties – like the cartoon and merchandising.
So when the game exploded in popularity – soaring to #1 on Android and iPhones – investors naturally wanted to get in on the inevitable profits. (The game is free to download but offers items for purchase inside the app, often called a “freemium” game.)
Nintendo’s stock price rose nearly 40% overnight on July 11, shortly after the game was released.
However, today the stock crumbled nearly 20% overnight as Nintendo released a statement reminding everyone they don’t actually make or own Pokemon Go.
Now, they do own a partial stake in the maker of Pokemon Go and will therefore share in some of the game’s profits, so it’s not a total loss. But it should serve as a reminder not to blindly throw money into any investment – be it a stock, real estate property, business, etc – without first thoroughly understanding it.
Sure, some of the “investors” that blindly threw money into Nintendo will make money, though I’d wager most of those who had no idea lost money. In either case, simply coming out ahead doesn’t mean it was a wise investment; it was just a shot in the dark that may have paid off – a gamble.
If you have extra money that you’re willing to gamble on stocks, go for it. That can be fun. But money for your financial goals – whether that be financial freedom, buying a home, college education, or whatever your goal may be – should be invested, not gambled. This means actually educating yourself on the prospective investment – or finding a professional that can help you understand it.
I’d be happy to help of course, although not right now – I’m about to go into the bushes in search of a Tauros.
*Little known fact: Pikachu is a fastidious investor