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- Jordan Belfort finds it “gratifying” to see hedge funds lose billions of dollars.
- But “The Wolf of Wall Street” told Sky News he believes the GameStop mania will be “short-lived.”
- Belfort urged small investors to be cautious and only invest what they can afford to lose.
- Visit the Business Insider homepage for more stories.
Reddit day traders recently rebelled against Wall Street short sellers, pushing the share price of video game retailer GameStop up dramatically.
As a result, hedge funds and other Wall Streeters who bypassed the retailer lost billions.
“It’s shocking, really amazing and gratifying to see a little bit of pain on the hedge fund side,” Jordan Belfort told Sky News. “Hedge funds have beaten small investors since the dawn of time.”
Belfort, played by Leonardo DiCaprio in Marin Scorcese’s “The Wolf of Wall Street,” told the broadcaster he wanted to find this strategy thwarting hedge fund managers.
Read more: The SEC is monitoring the GameStop trading frenzy. Here’s why lawyers and former regulators say cracking down on the market will be tough.
But the broker, who was jailed for 22 months for fraud and stock market manipulation, is also urging small investors to be cautious.
“Although it will be short lived … everyone has to be very careful because it will be like catching a falling knife when it comes undone,” he told Sky News.
“The danger is that Wall Street and hedge funds in particular are experts at identifying what we call ‘market inefficiencies,'” Belfort continued.
“This is an inefficiency in the market right now and they will be looking to fill that inefficiency very quickly,” he added.
In his interview with Sky News, Belfort acknowledged the potentially lucrative allure for small investors choosing to buy GameStop shares.
“This is a wonderful opportunity for people to make money – everyone is bored and locked up – but just be careful and make sure that whatever you invest in these type of hot stocks, make sure you only invest what you can afford to lose, ”he said. Streamer.
“If you make the money, take the original investment out and play with the house money. That’s my advice to everyone,” Belfort added.
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