A fund manager shares their thoughts on the renewed popularity of meme stocks, specifically GameStop, calling it "frankly stupid."

• According to fund manager Cole Smead, the current meme stock craze involves gambling.
• On Tuesday morning, GameStop and AMC shares experienced a 47% and 51% increase in premarket trading at 6 a.m. E.T.
• An army of day traders were prompted to jump into GameStop by a post on social media platform X by "Roaring Kitty" in 2021.

Cole Smead, a fund manager, has characterized the meme stock craze as "stupid," with day traders continuing to invest in and.

Smead Capital Management CEO Smead stated on CNBC's "Street Signs Europe" on Tuesday that it is gambling.

He emphasized that the individuals involved were young people, like himself, who were engaging in reckless behavior.

On Monday, GameStop and the movie theatre chain experienced significant gains in their stock prices, with GameStop's shares rising over 74% and the movie theatre chain's shares increasing by over 78%.

The jump was seemingly prompted by a post on social media platform X by "Roaring Kitty," who in 2021 encouraged an army of day traders to pile into GameStop. Roaring Kitty, whose legal name is Keith Gill and is also known as DeepF------Value on Reddit, is a former marketer for Massachusetts Mutual Life Insurance.

On Tuesday morning, GameStop and AMC shares experienced a 47% and 51% increase in premarket trading at 6 a.m. E.T.

According to Smead, the day traders were 'just taking in rat poison,' as quoted by the late, great Charlie Munger.

Last year, Munger, the vice chairman of Berkshire Hathaway, famously described cryptocurrency as "rat poison."

— CNBC's Yun Li and Fred Imbert contributed to this report.