- Jordan Belfort finds it “gratifying” to see hedge funds losing billions of dollars.
- But “The Wolf of Wall Street” told Sky News it believes GameStop mania will be “short-lived.”
- Belfort urged small investors to proceed with caution and invest only what they can afford to lose.
- Visit the Business Insider homepage for more stories.
Reddit day traders have recently rebelled against Wall Street short sellers, causing the stock price of video game store GameStop to rise dramatically.
As a result, hedge funds and other Wall Streeters who shorted the retailer have lost billions.
“It’s shocking, really amazing and gratifying to see a little bit of pain on the part of the hedge funds,” Jordan Belfort told Sky News. “The hedge funds have more or less beaten up since the dawn of time.”
Belfort, played by Leonardo DiCaprio in Marin Scorcese’s “The Wolf of Wall Street,” told the broadcaster that he wishes he would come up with this strategy to outsmart hedge fund managers.
Read more: The SEC follows GameStop’s trading frenzy. This is why lawyers and former regulators say it will be difficult to curb the market.
But the stockbroker, who was sentenced to 22 months in prison for fraud and stock market manipulation, also urges retail investors to exercise caution.
“Although this will be short-lived … everyone has to be very careful because it will be like catching a falling knife if it falls apart,” he told Sky News.
“The danger is that Wall Street and hedge funds in particular are experts in identifying what we call ‘market inefficiencies’,” Belfort continued.
“This is an inefficiency in the market right now and they will try to close that inefficiency very quickly,” he added.
In his interview with Sky News, Belfort recognized the potentially lucrative appeal for retail investors who choose to buy shares in GameStop.
“It’s a great opportunity for people to make money – everyone is bored and stuck – but be careful and make sure that whatever you invest in these kinds of hot stocks, you only invest what you can afford to lose,” said he against the broadcaster.
“If you happen to be making money, take out the original investment and play with the money on the house. That’s my advice to everyone,” added Belfort.