Why Dan Niles Says Retail Traders 'Saved Both AMC And GameStop'

The recent frenzy surrounding stocks like AMC Entertainment Holdings inc AMC and GameStop Corp GME is positive if it gets people interested in investing, Satori Fund founder and portfolio manager Dan Niles said Friday on CNBC's "TechCheck."

When it comes to stocks like AMC Entertainment and GameStop, investors should only invest what they can afford to lose, Niles told CNBC. 

He compared the recent retail trading frenzy to the biotech boom in the early 1990s and the dotcom bubble in the late 1990s. 

Retail traders have the right to gamble on the stocks that they want to gamble on, he said. 

It's certainly possible that these stocks could collapse at any time — and it's also possible the stocks could double or triple from current levels, he said. 

"Retail traders have saved both AMC and GameStop," Niles said, adding that the only reason the Reddit stocks are surviving is because the companies were able to raise money at "incredible valuations."

Related Link: Josh Brown On Recent Surge In AMC Entertainment, GameStop, 'Good Outcomes' For The Companies

AMC, GME Price Action: AMC Entertainment is up 2,591.51% year-to-date. GameStop is up 1,280.04% year-to-date.

AMC shares were down 3% at $49.80 at last check Friday, while GameStop shares were down 2.2% at $251.04.

Photo by Patrick Pelletier from Flickr.