May 2021

Q1 2021 Commentary

What in the World is a Meme Stock?

Since our firm’s founding in 1994, we have often written in our quarterly investment commentaries about high-quality, large capitalization stocks. We have also written frequently about growth stocks and value stocks, as well as international stocks in the developed and emerging markets. But this is the first time that we have ever used the term meme stocks. And it is probably the only time we will write about it. But the first quarter of 2021 is when meme stock became a buzz word. Thus, the main purposes of this commentary are to try to make clear what a meme stock is, how meme stocks have traded over the past year, who has prospered from or been hurt in the torrent of meme stock trading, and the similarities to the stock pools that manipulated the prices of stocks before the creation of the Securities and Exchange Commission in 1934. Finally, we make an assessment of whether serious investors should buy meme stocks.

Robert H. Bradley

Chairman

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