BlackBerry vs. Dogecoin: How to Make Money From Meme Stocks

It started as a joke. But now meme stocks and coins have taken investors by surprise. How do you make money from this? 

| More on:
A close up image of Canadian $20 Dollar bills

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

2021 has been a crazy year so far. Millennials are betting actual money on memes and even making money from them. It first started with the subreddit WallStreetBets exploiting the short-squeeze trading strategy with meme stocks like BlackBerry (TSX:BB)(NYSE:BB)GameStop, and AMC. Then this meme craze spread to crypto where Elon Musk’s Dogecoin memes sent the coin up. Now both meme stocks and Dogecoin are rising. 

If you want to make money from memes, you have to let go of the fundamentals and look at the psyche of the Redditors. You have to read between the memes and play the short term. 

A word of caution when trading in memes

Now, before I tell you how to make money from memes, a word of caution: do not touch your long-term investments, as they are your backups. Remember, these Redditors are young and have yet to start building their savings. As Warren Buffett puts it, the short-term noise will vanish. Only the ones with a stable foundation will survive the harsh weather and grow stronger. 

You can play the meme game, but only with the money you can afford to lose. 

How to make money from meme stock BlackBerry

Between May 15 and 24, Dogecoin dipped 40%, as many traders cashed out their money from the meme coin over the silence of Elon Musk. And on May 25, BlackBerry stock began to surge and rose 76% in six days. 

In my one-week BlackBerry prediction, I’d stated that the stock would likely surge throughout this week to $15. It is when it crosses the $15 mark that caution is necessary. It becomes difficult to predict. Once hedge funds play their bet, the stock could see a steep dip if Robinhood and other broking platforms interfere like they did last time.    

On June 2, hedge funds played their bets, sending BlackBerry stock up 31% to as high as $20. If the January short squeeze is to repeat itself, this is the threshold where the stock will begin to fall. Even if that is not the case, funds are once again flowing to Dogecoin. 

This is the time to take profits. If you own BlackBerry stock, sell it at the current trading price of $18. Don’t get too greedy, or you will miss the opportunity to make money on this squeeze. If you believe the stock will still grow, sell 50% of your BlackBerry holdings at the trading price and set the trade for the other half at a $20 price.

BlackBerry stock has long-term growth potential, but that doesn’t make it a buy at $18. Once this short squeeze is over, you will get a chance to buy the stock at the dip. Do not buy BlackBerry stock above the $11 price. Wait for it to fall. After the first short squeeze, BlackBerry stock fell to $10 in three months. 

BlackBerry versus Dogecoin   

Just like BlackBerry, if you are considering buying Dogecoin, think again. In the case of BlackBerry, it has a business that generates revenue. The stock has an intrinsic value and the potential to expand in the future. But that is not the case with Dogecoin. It has no intrinsic value, and the day Elon Musk ditches the meme coin, the coin will dip. BlackBerry is a better investment than Dogecoin because of the former’s predictability. 

Even if you want to invest in Dogecoin, invest less than 3% of your portfolio. Do not tie any financial goals to this 3%. A meme is a joke, and your investment portfolio is no joke but your life savings. If you trade in meme stocks, do so with discipline and without greed. Maintain the traditional path of fundamental investing for the long term.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Puja Tayal has no position in any of the stocks mentioned. David Gardner owns shares of GameStop. The Motley Fool recommends BlackBerry and BlackBerry.

More on Tech Stocks

potted green plant grows up in arrow shape
Tech Stocks

TFSA Investors: Double Your Investments With These 3 Top Growth Stocks

Despite the volatility, I am bullish on these three stocks, given their solid growth potential.

Read more »

Arrow descending on a graph
Tech Stocks

2 Industries That Saw the Worst Decline Last Month

The TSX has been declining at a sharp angle since the beginning of June. And two industries (crypto and cannabis)…

Read more »

STACKED COINS DEPICTING MONEY GROWTH
Dividend Stocks

TFSA Investors: Turn $1,000 Into $10,000 in 10 Years

10-fold growth within a decade is rare but not unheard of. You can capture this growth either by predicting a…

Read more »

Growth from coins
Tech Stocks

Got $1,000? Buy These 3 Under-$20 Growth Stocks to Earn Higher Returns

These under-$20 growth stocks can deliver solid returns in the long run.

Read more »

Shopping card with boxes labelled REITs, ETFs, Bonds, Stocks
Tech Stocks

TFSA Investors: 3 TSX Stocks You’ll Regret Not Buying on the Dip

Among wide range of investments allowed in a TFSA, now is the time to invest in stocks.

Read more »

Tired or stressed businessman sitting on the walkway in panic digital stock market financial background
Tech Stocks

2 Stocks That Lost Over 50% in 2022

The recovery of the TSX’s tech superstar and a promising high-growth stock that lost more than 50% in 2022 is…

Read more »

Man holding magnifying glass over a document
Tech Stocks

Why BlackBerry Stock Looks Way Too Undervalued After Q1 Earnings

BB stock hasn’t seen any appreciation lately, despite its continued progress on the IVY platform and early signs of the…

Read more »

A stock price graph showing declines
Tech Stocks

BlackBerry Q1 Earnings: The Declining Revenue Streak Continues!

Will BB stock break below $6?

Read more »