- Jordan Belfort thinks it is “gratifying” to see hedge funds losing billions of dollars.
- But ‘The Wolf of Wall Street’ told Sky News that he believes GameStop mania will be “short-lived”.
- Belfort urged retail investors to be cautious and invest only what they can afford to lose.
- Visit the Business Insider home page for more stories.
Reddit day traders recently rebelled against Wall Street short sellers, dramatically raising the stock price of video game retailer GameStop.
As a result, hedge funds and other Wall Streeters that shorted the retailer lost billions.
“It is shocking, really incredible and rewarding to see some of the pain affecting hedge funds,” Jordan Belfort told Sky News. “Hedge funds have virtually defeated small investors since the beginning of time.”
Belfort, played by Leonardo DiCaprio in Marin Scorcese’s “The Wolf of Wall Street”, told the station he would have liked to have created this strategy to be smarter than hedge fund managers.
Read More: The SEC is monitoring the GameStop trading frenzy. That is why lawyers and former regulators say it will be difficult to restrict the market.
But the broker, who was jailed for 22 months for fraud and manipulation of the stock market, is also asking small investors to be careful.
“Although this is short-lived … everyone has to be very careful because it will be like picking up a knife that falls when it falls apart,” he told Sky News.
“The danger is that Wall Street and hedge funds, in particular, are experts at identifying what we call ‘market inefficiencies’,” continued Belfort.
“This is an inefficiency in the market right now and they will try to end this inefficiency very quickly,” he added.
In his interview with Sky News, Belfort acknowledged the potentially lucrative appeal for small investors who choose to buy GameStop shares.
“It’s 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 this type of important stock, make sure you invest only what you can afford to lose” he said to the radio announcer.
“If you happen to make money, take out the original investment and play with the money in the house. That’s my advice to everyone,” added Belfort.