What to learn from buying BlackBerry stock in wake of 2021 meme stock craze

Yahoo Finance senior columnist Rick Newman describes his experience participating in 2021's meme stock craze and how much money he lost as a result.

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- The turn of the calendar usually calls for some portfolio reshuffling. And in a year where broader markets have slumped, certain sectors have fallen even further. Meme stocks, once the darling of the day, traders in 2021 have had little to celebrate this year. AMC, GameStop, and BlackBerry each off more than 50% this year.

So what happened to those investors that bought high only to watch their shares tumble? One of those Wall Street bet hopefuls is right with us now, our very own senior columnist Rick Newman. You bought some BlackBerry stock back in June of '21. Why?

RICK NEWMAN: Sozzi just ripped me on this one. He said, dude, what were you thinking? And back in June of '21, GameStop and AMC had already spiked by then. And everybody's talking about what's going to be the next meme stock. So I thought I'm going to try this out and see what happens. I don't mind experimenting with investments at a small scale because sometimes you learn more by losing money than you do by making money. And I certainly learned because I lost a lot of money on BlackBerry.

- You learned what?

RICK NEWMAN: My investment-- I put in 2,500 bucks in BlackBerry when it was at $14. Now, I'm glad I didn't put more in. I'm not starving because BlackBerry has been down by about 70%. But as I'm looking at what's happening with this, and we are writing about how the meme craze is over, and you look at what's happening with the stocks, they're almost all back to pre-meme levels. BlackBerry never memed after I bought it. It was a meme stock that didn't meme. So I ended up losing about $1,700. And I don't have to care about BlackBerry anymore. I don't have to look at that dog in my statement.

- But you say, Rick, that you learned. What did you learn? And, typically, let's just be honest. This is how millions of Americans, in fact, do make stock purchases today.

RICK NEWMAN: So I knew that this was a speculative bubble when I bought BlackBerry. I didn't even look at the balance sheet. I didn't look at stock recommendations. I just wanted to see if it would work getting into a speculative bubble. And all the pros were correctly saying this isn't going to last. People are going to lose a lot of money. That mostly has happened. But I knew that. I expected that to happen.

And I just wanted to see can I get in before other people so that this will go up and I'll just sell it to somebody else and the guy I sell it is going to be the one who loses the money instead of me. Well, I turned out to be the schlub. I was the one who bought too late. So one lesson is if you're going to get into a speculative bubble, get in early. And probably the better lesson is just don't get in the speculative bubble at all.

- What you need to do is start a podcast and pump that stock up. What is the Wall Street--

RICK NEWMAN: Let's talk after the show.

- I'm kidding. No pump and dump scandals. I'm not recommending it. What are they talking about now on Wall Street Bets?

RICK NEWMAN: I went to look. Are they still talking about what the next meme stock is going to be? This is the Reddit channel. No, they are fretting about what's happening at Tesla, what's happening at Twitter because a lot of them have Tesla stock and they're Elon Musk fans and Tesla has tanked. What is Tesla down, 60% this year? I mean, it's a wipeout. And there's a lot of moping about a very gloomy Christmas because everybody lost a lot of money.

- Well, at least they've got crypto. Oh, wait. No, they don't.

RICK NEWMAN: Yeah. The everything rally is the nothing rally.

- Wow. It is a tough year for those folks, as well as you. But, apparently, you have it to lose. So that's a good problem to have.

RICK NEWMAN: I'll just add one little thing. I bought an energy ETF when oil was at $50. Oil went to $20. It seemed like a really bad bet.

- You held it.

RICK NEWMAN: But then it went to $120. I sure did. I didn't sell that at the bottom.

- Well done, sir. And that's the kind of advice we need. Rick Newman, senior columnist.