Podcast – Episode 205 — 35 Billionaire Investing Lessons for Conservative Traders

Episode Transcript

Today we’re going to be talking about 35 lessons from billionaire investors, so there are lots of people out there that have made a lot of money in different ways, and they go on all these different shows and podcasts and whatnot, and they get interviewed and whatnot, and so there’s one podcast that we were listening to, I was listening to, is called My First Million. It’s run by HubSpot, and they, you know, they have a whole bunch of people that come on and talk, and so they broke it down of the different lessons that they took from all these different interviews, so some of the people that were interviewed are people like Mohnish Pabrai. You heard of him?

Love it. I have all his books.

Really, I didn’t even know he had books.

Yeah, actually,

the

Dando investor, I think, is what he is, one of his books.

So he’s like, he’s like a Warren Buffett devotee, right?

Yeah, he completely is a Warren Buffett disciple.

Howard Marks is another one. Morgan Housel, Kathy Wood was also on this list, and there were several other people that they interviewed, and they came out with 35 different lessons. So we’re gonna go through these now. Keep in mind, these are for people who are investors, right? These are not traders, they’re not trading in and out. Some of them are buying businesses, some of them are buying stocks, some of them are buying other type of investments, but the ideas that we can take from them, I think, apply to all of us, especially right now, in the age that we’re in, with the AI story, and you know, are we on a verge of a lot of new – we’re on the verge of new technologies hitting us from all directions, and we keep talking about this – there’s the AI, there’s a robotics, there’s the space stuff, all this is happening, and so how do we, as a people, or as an investor, as a trader, take and survive all this. Number one, and then, like you mentioned earlier, there’s two economies. There’s like the K shape economy, right? So, me and my over talk about this, and I was like, you know, our job is to make sure that we are on the top side of the K when all the shit hits the fan with all this AI stuff, like if we have massive layoffs and everybody needs to be retrained and all this stuff is going to happen, I want to be on the top side, so I can withstand all the nonsense that’s going to happen. You know,

happening now, it’s not like we’re for the distant future here,

exactly. College kids are not finding jobs, people are not hiring, and in other countries, you know, when the youth are unemployed, if it gets to, I don’t know what percentage is, but if it gets to a certain percent, they start writing, and then the government is changed, so you know, if we start having riots and whatnot, because people don’t have anything to do, and no work. I want to be on the other side of that, and I want to be able to protect my family, and you know, get away from stuff like that. So, I

would say I would add that you want to, all these people, all these investors are great, right, in their own way, and they’ve been tested through different periods of different cycles of time, whether it’s been boom or bust, and I think your job as an investor is to look at all them and find the common themes across them, right? Probably the best way to go about it.

Yep, and so they had several categories that were broken down. So, one category, number one, is keep it simple, that’s what we say that all the time, right. Number two, win, win, where nobody’s looking, so that’s going to be an interesting one. Number three, your edge is in what you know. Okay. Number four, how to read the market. Number five, play the long game. Number six, get out of your own way. Number seven, traps. And then there’s the one final tidbit that was, I think really helpful, so we’ll go over that as well. You know, so Howard Marks is one of the people. He’s the co-founder of Oak Tree Capital, one of the largest investment firms in the world. And Warren Buffett actually says that you should, everybody should be reading Howard Marks, whatever he writes. The Mohnish Mabry guy that you met, that he turned a million dollars into $100 million by compounding his returns. Morgan Housel is also another one. He wrote the book Psychology of Money. Kathy Wood, she’s the founder of Ark Invest, that’s her claim of fame. Guy Spear, he’s a value investor. He wrote a book called The Education of the Value Investor, Elad Gill. He’s a Silicon Valley angel investor, and then there are several others that we’ll meet as we go along, but yeah, so section one was Keep It Simple, and of. According to Manish Bab Rhey, if you see an investment and you need Excel to figure it out, you should skip the investment.

Yeah, that is very true about him. He is, uh, he’s almost more.. he might be one of the most simple investors I’ve ever read about or had interactions with. He’s just.. he’s in like four things, he kind of reminds me of what’s his name, Warren Buffett’s pro J there, Munger

Munger,

Munger, right? He’s just like Charlie Munger, so he’s in like three or four investments, and that is it. So he’s the utmost person that just chooses something, he’s patient about it, and he just lets it go, so, but

you got to be right too. We can’t just be on four

convicted, and I think he’s the epitome of focus, and it’s not like they’re just picking a few things, they’re doing tons of research, they research it up and up, you know, every which way, but he’s one of those guys. Yeah, but he’s very, it’s very true, he’s all about keeping it very simple.

Yeah,

don’t complicate things, you don’t need to,

no, you don’t. I mean, if there is, okay, so an example of that, right? Let’s, let’s go a little bit deeper. I was watching a video a couple days ago where Chat GPT is coming out with ads on their platform, now they need money, right? Obviously, they need to, they’re spending a lot of money there, they’re losing money, but they need to, they’re offering a lot of money, but ChatGPT, you know, they want to go public, so they’re coming out with all this stuff, and ads is one of them. So now I was thinking about it, and I was like, okay, I don’t know if I want to spend, you know, like which advertisers are going to spend money to be advertising on Chat GPT, but then when I got went through their information, it was like, huh, okay, so you have right now Facebook is one of the largest platforms to advertise, and that’s where a lot of online companies go to advertise, because they have billions of users, but what’s going on with Facebook? You’re scrolling and there’s an ad in the middle, then there’s another ad in the middle, then it’s annoying. They’re, you know, it’s interrupting you from what you’re doing.

It’s, it’s becoming more and more to me. Yes, the

people hate it, and that’s why they’ve been turned off from Facebook, and Facebook is trying to get them back, but that was the biggest thing, like, oh yeah, it’s the ads, yeah, it’s Chachi PT. Also, is going to have ads, but Chat GPT is going to know more about you, what you like, what you don’t like, what you’ve done in the past, where have you gone on trips? It’s going to answer your questions, and then based on those answers it will show you an ad, and that’s going to seem like a recommendation, kind of like, hey, you know, I talked to you, I got all this, you know, based on everything I know about you and what you’re talking about, you know, check out these two or three things, you might like them, now that is a completely different mind shift than, oh, get out of my face, you know, get out of my feed, you idiot, has

that personalized information about you. Yes,

so now to me that’s brain dead simple, that yes, I want to, as a company owner, I want to advertise on that place, of

course,

and as an investor I love that that’s going to be killer, so yes, I would take my money out of Facebook and invest it in Chat GPT

after the IPO,

yes, because of that reason, because that one reason, you know, because Facebook is built on ads and they’re, they’re whatever they’re making, all their money, almost all of it comes from ads. Google is the same way. Google has self-driving cars, and this, and this, and this, but still, like 80% of the revenue still comes from ads. And so, when Claude and Chat GPT start putting ads in there, I mean, they are going to take a lot of share, market share, advertising dollars away from those guys.

I could be wrong, but if I was Facebook, I’d be sweating.

I would, I mean, I didn’t think about it before. I was like, oh, Facebook got nothing to worry about, but then I saw this, and I’m like, whoa,

yeah, your moat is pretty much gone.

Yeah, I mean, I, as a company owner, I would shift my entire marketing budget over to ChatGPT if it was that, if it, you know, if it came out that way, that, as I’m expecting, so that’s, you know, if they roll that out and it works,

it gets stronger, because they get more and more users, you put more and more information into it, it’s just gonna be like this flywheel,

yeah, yeah, so that’s one, if you need Excel, skip it, so that’s the first lesson, the second lesson. The easiest path to wealth, according to this list, is to stay invested. So, over the past 20 years, staying fully invested in the S&P roughly got you about 10% a year. That’s 20 years. If you go back further, it’s actually less than that. 20 years have been pretty good. Sounds

like a financial planner’s creed.

Exactly, and this is your long-term investing, that’s what kind of this, a lot of this is about. So, your money doubles, levels every seven years at 10% but if you missed just the 10 best days of those 20 years, your return goes to a negative 5%

and let’s face it, that’s most people,

yeah. So, actually, no, it goes down to about 5% so you miss half the return in those five in that year. If you miss the 10 best days, if you miss the 10 or the 20 best days, you’re at zero. You’re basically wasting your time, so you know. And over

my head, I know I’m kind of going, but you remember the lost, what, last decade, where you’re sitting there, and you know, you put your money in, and a decade later you come out, and you’re like, I’m nowhere,

yep, exactly, and even over the last 10 years, and this is true for a long time, 97% of active fund managers, they can’t beat the index. Now that’s always thrown in, like, oh, hey, you can’t beat the index, you can’t beat the index, that’s bullshit.

Well, they’re not really allowed to, for the most part.

Why do you say that?

Well, that’s what they’re meant to do. They invest in the market, so they.. how are they going to beat it? They really are supposed

to beat it, that’s

like I asked, like, how? How are they supposed to do it?

Well, they have to pick the best stocks, that’s their job.

They don’t, they really don’t, that’s the whole thing. So, of course, they’re gonna say that,

right? But I mean, like, if you are a decent seller of options, you’re gonna beat the market. You can do better than 10% That’s, I mean, I don’t know how you cannot if you are decent, but if you are a fund manager with billions of dollars, yes, then I can see how it’s much harder because you can’t be selling them any options. Then you have to be limited.

Warren Buffett was, I know, gonna have Warren Buffett’s like about that. You’re you get so much money you can’t deploy

it. I mean, he still made billions selling naked puts.

Yeah,

so maybe if he just did that, he would have been done better, but I don’t know. Yeah,

separating options, and you know, just long-term investing. Yeah,

so I mean, you know, so we have this right, where it’s like, okay, you want to be invested in the market, you want to be in all the time, but then this is what led me to the crusher strategy, it’s like, okay, there should be a way to be better, there’s gotta be something, you know, we have all these tools, all these new technologies, and this is talking about the last 20 years, but I mean the crusher strategy uses stuff that came out in the last, you know, few years.

It’s remarkable, it really is.

And so, even right now, you know, the crusher is completely crushing the market this year, and it has over the past 20 years that we looked at. It was completely destroying the market, and so I think there is still a way. It’s just, I don’t know,

there’s definitely ways. I’m just saying, like, if you look at a typical advisor, they’re kind of, I mean, they’re kind of hand tied about what they’re doing. Face it, if you have, like, all these clients, are you really going to sit there and pick all the different stocks? From I would argue, probably not.

Yeah, so the third tip is from Andrew Wilkinson. It’s to do the obvious thing. Basically, what he’s saying is that the best investments are usually the obvious ones that you talk yourself out of. That’s his idea, you know. Like, for example, he knew that Nvidia was an excellent business. He saw Facebook was trading very low, but he didn’t buy either one of them because he didn’t think they were going to go up enough. I don’t know

a little interesting to me. It’s like, well, it’s almost like a.. I hate to say it, but I will.. it’s almost kind of a protectionism thing, right? It’s like, oh yeah. So he’s saying, really, your first instinct is your best instinct. That’s what I got out of that.

Yeah, you know, the most obvious thing.. like, right now we are facing an IPO of SpaceX coming out in about a month, in June, and I’m going back and forth. Should we buy it? Should we not buy it? You know, should I try to get some shares at the IPO price? And at first I was like, no,

yeah,

but if somebody asked me, like, I had people calling me up now, friends, family, they’re like, oh, hey, should we buy, should we buy SpaceX? Should we get SpaceX? And I’m like, I don’t know, but

think about that too.

But if you ask me, like, oh, hey, five years from now, do you think SpaceX is going to be up or down? No, I think it’s up for sure. I think it’s gonna be up in my mind.

I think that’s the answer, but

that is. It should be the answer,

right, but what we’re gonna like, I look at that, right, and I say, okay, from experience, you say, well, an IPO, it’s usually you want to wait a little bit, right, but do you have that again, time preference comes into it, right, so are you able to sit there for five years and let that play out. If so, yes, I would say yes.

So,

what would make you say differently?

What made you say not to buy it?

Yeah,

I was thinking that as soon as it goes public, it’s going to pop, like the price is just going to go up,

most likely,

and so if I have to go in and buy it at the top, that’s probably not a good idea, and I would want to wait, because a lot of these IPOs, they have those lockup periods, right, and so the early investors and the employees and the owners, whatever, they can’t sell until the lockout period is over. So, in the past, it was always a better idea to wait until that period is done. All they sell it, and then you buy it, and then rewrite it up. And also, in the past, the company like this could not be included in NASDAQ or SBA and SB S and p5 100 or anything like that until a certain time frame. Well, they’ve gotten rid of that, they’ve got it’s going to be listed on Nasdaq after 10 days of the IPO, and so all of the ETFs that track Nasdaq probably is going to be included in the SP in the s5&P 100 as well later on. After that, they’re all going to have to buy this. So, is this thing ever going to come down?

So, you’re just grappling with the beginning part of it, that’s all you’re grappling with.

Yeah, and then the other thing is, okay, if it’s included in the Nasdaq and the S&P, then I already own it as part of Crusher.

You do,

so why should I? Should I buy it separately? Should I buy, like, a space ETF, you know, so those are the things that it’s not the most obvious thing, like I want to, I should own it, I think, for long term, I think it’s a good thing, but I’m almost gonna like pass on the stock because of these other reasons,

you’re just thinking about what iteration of you owning it,

you know, yeah. So I don’t know.

I think it’s just, you’re just, you know, it’s just the IPO part. You gotta get past,

yeah. But again, they’re, they’re not making money. They could go out of business.

Oh, that’s true of anything. I mean, but again, it’s your conviction, and it’s time, time preference.

Yeah, all right. So, number four is again Mohnish Pabrai. He says have a plan A and a plan B. Keep your capital working in a reliable compounder by default, so keep your money compounding. Only move it when something is so obviously good comes along that hits you in the face, so according to him, the best investments are ones that hit you in the head with a two by four.

Could that be SpaceX for you? No, I don’t know. Well, it’s interesting. He’s a.. I don’t know if you know this, but he is a always been a big, big, big, big, big, big investor in Micron,

Micron, really

from the beginning years ago, so that two by four actually hit him square in the face as we look at it right now, currently.

Okay, and then his default compounder has been Berkshire Hathaway, so he’s always been dollar cost averaging into that, and then if he found something better, he would take money out of that and put it over there, so that makes sense too, right? Again, I think from our point of view, like for my retirement accounts for the foundation, you know, it’s all in Crusher, like Crusher all the way, but if there is something, like maybe I want to put it into SpaceX or something, then maybe we can take some out and put it in there, but so that’s what Plan A and plan B. Is this a decent idea? Okay, number five. This is a new section. Win where nobody’s looking. So, number five is distressed assets equals a hidden gold mine. The time to buy is when everybody’s running away. When a company or asset becomes radioactive, most investors flee, and that suppresses the price far below the actual value. Fundamentals don’t change as fast as momentum does. The gap is where opportunity lives. So, according to Scott Galloway, this guy bought a bankrupt vaping company called Enjoy for $2.5 million and then because it was out of favor, he later sold that to Altria for 2.7 5 billion. He made 75 million on that. Then he bought FTX claims in bankruptcy, and he made a whole bunch of money on that. So it makes sense. Yes, but this is a lot harder than it is, you know. I don’t know

if,

yeah, very easy to say, because you don’t know when it’s going to stop going down. That’s one thing. Sometimes you can tell, but then you also have to be able to have the patience to write it out, because you don’t know the future. So, I’ll give it, like, an example, you know, for us, like Netflix – Netflix stocks was, was riding high, and I was, I owned it, and whatnot. They had a nice stock split, I thought it was going to keep going up, and then they made the bid to buy Warner Brothers, and sat as soon as that happened, the stocks just started going down, down, down, down, down, down, down, down, down, down, down, down. Now I knew why it was going down, because they’re about to spend all this money to buy this other company. So I’m thinking, okay, if the deal goes through, that’ll be good for Netflix, and the stock will start coming back up again. If the deal does not go through, that’ll be fine for Netflix, and the stock should go all the way back up to where it was before, because nothing changed. They’re still making the same money, they have the same customers, everything that was my thinking. So I stayed in it, down, down, down, down, down, down, down, down. And then finally the deal did not go through, so the stock went up a little bit, and now it’s stuck, and it didn’t go all the way back up, so if you had had that same idea that I did, and be like, okay, I’m gonna buy it if the deal goes through or not goes through, and you had waited, you didn’t make any money, you’re still stuck, you made a little bit, but you’re still.. it didn’t work. Now, How long should you hold on to that? That’s what I don’t know.

So that’s one of the toughest ones, right?

Yeah, and we got to keep going because we’re only on number five. Number six is run towards what big tech avoids. So when large tech companies abandon a category for political or reputational reasons, they create a vacuum, that vacuum is the opportunity big tech has pricing power, distribution, and talent. When they exit a category of all uncomfortable, but because it’s uncomfortable, those advantages disappear. The market opens up, and a startup can now do what a company with infinite resources just walked away from. So, basically, the idea is make a list of sectors that large tech companies are avoiding right now, not because the business is bad, but because it’s politically uncomfortable or risky, and that’s where the next breakout company could come from. An example of that is Anderil, which was a defense startup company.

It’s just where you’re finding value.

All right, number seven, look for AI exposure in mislabeled companies. So, some of the best AI investments don’t look like AI investments, they look like something investors already decided they don’t want. So, could be crypto, cannabis, media, and then people don’t do the research. So, the example they give here is Iren, I R E N, the symbol, which is Iris Energy. It looks like a Bitcoin mining company, but they’ve actually built massive data centers. They have renewable energy, and the bet is that they will be able to switch from Bitcoin mining to AI compute very easily, so they have a like a five to 10x upside and a very low downside to do this, so that might be a great idea. I rent, I R E N. Again, this is not financial advice, do your own research. All right, number eight, public markets are the best place to find mispricings. Again, this is Mohnish Babray. So, public markets are the only place in the world where the same asset gets sold at wildly different prices, depending on how scared people are. I don’t know if they’re the best place to find mispricing. It depends what you’re doing, depending what you’re looking for. You know, like if you’re going out to buy real estate, the public market would be, hey, this house is listed on the MLS, and it’s for sale, and everybody knows it’s for sale, but if you find a person who has a house for sale, doesn’t know what it’s worth, and he sells it to you without the realtor, you’ll probably get a better deal. So, I don’t agree with this one.

You disagree with Manas,

yes, Manish or Mohnish, I don’t know, Manish. Okay, yeah, I don’t know. I’m not a big fan of the Buffett way, I guess. I fell in out of favor. Buffett is very smart, he’s very smart, but yeah, I never wanted to spend like 60 years trying to build up my fortune, you know. And Manish and Buffett, they only became rich because they were managing other people’s money. If they had started like us, normal people with a regular job, and they’re just like, you know, putting money away every month, they would not be anywhere close to what they have now. Even if they had beaten the market every year, the only reason they got that rich was because. As they had other people’s money to invest, and they were making money off the fees. That’s my, that’s my take.

I agree with that. Their fundamentals are sound, but I think I could also argue that it’s a little different now than back then. You know, would you say Buffett at 70 or eight years old is the same as Buffett, and 40 years old, right? It’s just different, different time period,

I guess. Different about different different investments are available to you, and different tools, I guess. I mean, back then there were a lot more public companies than there are now, at least like 20 years ago, so you had a better, you had more to choose from,

and we actually had some crashes that you could actually scoop up some value.

Yeah, and I mean, I’m looking at it from an options view, but I’ve been trading for 20 years, so they’ve been around, options have been around for 20 years. Before that, they were really difficult to trade, I get that, but for the last 20 years,

Warren Buffett’s an option trader, I mean, he does.

I don’t know if this guy is Mohnish.

I would, I mean, I would. I don’t know, but I would probably guess that, you know, under his toodle, that she does it too.

Maybe. Yep. And then number nine is the small portfolio advantage. I agree with this one. You know, as you go from a million to 10 million to 100 million, your opportunities are much smaller. So, the smaller portfolio, which is us, the individual investor, has definitely an advantage and allows you to be more nimble, and you should be able to beat the markets because of that reason. Now, yes, if you’re trading $100 million much harder to beat the market

about this

one. Well, what is that

you said? Like, he could make 50% He said, I’m sure I can make 50% gains with a smart small portfolio. Okay, I would love to see that. Actually, bet he goes, I know I can, meaning that he has too much money, he can’t deploy right now.

Yeah, until he retired, he had way too much money. He didn’t take a

smaller portfolio, he could do it easy.

Interesting. I would like to see that. I would have liked to see him start number 10. Invent a category, so the investors with the most extraordinary long-term results got in before an asset class became institutional. Now, when institutions arrive, they bring capital, and that capital compresses the returns. Being there before the capital means you have the whole tailwind to go higher. So, crypto would be one example.

Came in my mind, I was like, “Is the crypto guy? Yeah,

this guy, yeah, he was a crypto. He had something called Mount Gox.

Okay, what’s his name?

Thomas Brazile, B R A Z I E L.

Under.

Yeah, so he had a pitch for Mount Gox, I guess that was his company in 2015 and they laughed him out of the room. The fund that he pitched it to is now out of business, but he made 40% on the trade. That was his first pitch, his first idea to he pitched them. So, what is it that institutional investors won’t touch, not because it’s a bad investment, but because it’s unfamiliar or embarrassing to own, get in before it has a name, that’s interesting. Get in before it has a name, you know. So, to me, like cannabis stocks, they have a name, but they’re not touched right now by institutions because of the legal aspects,

so much regulation,

yeah. And so I mean, I did invest in a cannabis ETF a couple years ago, three years ago, which has almost gone to zero. So sometimes you can be a little bit too early. Oh man, all right. Number 11, boring beat, sexy every time. The more exciting investment sounds, the worse it probably does.

I, you know, I 90% agree with that.

Ah, all right. I mean, Tesla did pretty good. Tesla was pretty cool. I mean, that was like the coolest thing.

Just

goes back again to if you are in something and you, you know, let’s face it, at the most basic level, a lot of us have the shiny object syndrome, we just do, whether you want to admit it or not, right? And if you’re into something and you really study it, you’re, you want to be boring, more than that, you’re going to come out okay.

Yeah, so Vans Temple, one of the investors that they mentioned, his best performing access, his best performing investment is retail shopping centers in San Francisco, which have been compounding at about 44% a year,

but sounds boring, but it sounds

super boring. So, yes, maybe that’s.. I think

I just fell asleep.

Well, passive trading, that’s the whole point. It’s supposed to be boring. Big sexy every time, so that’s that. Should be our tagline.

Was it again?

Boring beat sexy every time.

I gotta put it right below your signer,

put it on the logo.

Yeah,

all right. And then number 12, risk is not the same as uncertainty. So uncertainty means you don’t know what’s going to happen. Risk means you could lose your capital permanently. So I don’t know what the rule is there. So when evaluating beaten down stocks separately, assess the uncertainty and the risk. Look at them separately. Okay. Wall Street, according to Mohnish, Wall Street get confused between risk and uncertainty, and where Wall Street gets confused between the two is where the greatest opportunities arise. Okay, so if the risk is low, even if uncertainty is high, you should still get it, according to you. Alright, let’s move on. Category number three, the edge in what you know. Number 13, invest in your own P and L. The products you already use and love are probably the best signal you have as an investor. You’re a real customer, you know the product works, you know people are willing to pay for it, and you have information that no analyst captures. That’s your edge.

Very Warren Buffett,

I mean, that was from Peter Lynch, you know, Peter Lynch walked down Wall Street, the Magellan guy, that’s what he said, invest in, you know, if you use it, that’s the thing you buy, that’s the company you buy.

I totally, I heard, I completely agree with that. What do you know in your life that’s better than you do?

Yeah, but there’s certain limits to that too. I had bought a stock called Chewies, it’s a Mexican restaurant.

I know we’re gonna say this, because we’ve had this conversation before. I was like, oh, Chewy, the, you know, the dog,

no, no, I Yeah, they’re from, you know, they started in Austin. It was really cool. We went there, we saw.. I was like, oh man, this is great. Then they started expanding, and I’m like, oh man, this is gonna be like Starbucks. They’re gonna be all over the place, and they just didn’t run it right, and they’re not, you know, they’ve actually, I think, they’ve shrunk since then. So, just because you like it doesn’t mean it’s gonna be management.

You got all these different layers that you have to keep up with.

Yeah, yeah. So, I mean, this is it’s a great headline, like, oh yeah, invest in your what you know, and whatever. It makes a good tagline, or

start in your investing, right? It puts you in the right arena to what look forward to.

Yeah, yeah. All right. Number 14: invest in what you can see from the inside, because this is similar. So, the best informational edge you can have as an investor is not a Bloomberg terminal, it’s a front row seat to how a business actually performs in the real world, analysts study companies from the outside, operators and customers experience from the inside. So, this is similar, you know. For example, you used to work at Starbucks, or not, you, Costco, sorry, you worked at Starbucks for a long time again, you Here at Costco for years, so you have a, you know, like you can go into a store and you can tell how they’re doing, like if there’s, if the stock, if the stocks, if the shelves are not completely stocked, you know, there’s a problem, if there’s..

I still do, I still keep in touch with a lot of employees, yeah,

so I can imagine that you would have a much better idea of what’s going on in to invest in Costco than somebody who’s not, or even an analyst who, who covers the space, you know, and so that’s why, like, we talk about this when we’re making our watch list, like the things that you enjoy, the things that you buy, the things that you spend, you don’t have to completely be an investor in those companies all the time, you know. I mean, I like Aqua Fresh toothpaste, but the stock is not doing very well, you know. So, it’s like, okay, I’m not gonna go buy the stock because I like the toothpaste, but it can be on my watch list, and I can watch the stock and maybe trade in and out, you know. For you, you own the Costco, and it’s done well, but you’ve probably made more money selling options on it than actually own the shop.

I love the stock.

Yeah, so I think it’s great. I think that the whole idea is great for your watch list, and then you pick and choose which ones are the best, maybe to buy. All right, number 415 go an inch wide, a mile deep. So, according to Mohnish again, you don’t need to understand everything, you need to understand a few things better than almost anybody else. The investors who narrow their focus to a specific domain and go deep have a structural advantage over anybody who wanders in from the outside your circle of competence. Doesn’t have to be large, just needs to be real. I mean, basically, this is like, hey, if you’re a real estate guy, invest in real estate, right?

Yeah, yeah, okay, yeah,

becoming an expert on a few things, right? And that’s where he’s put,

yep, if you’re an option seller, sell options, don’t be buying options and doing this and doing that, you focus, you focus on the like this is what we say, we do say do one strategy and get really, really good at it, and once you’re consistent, once you’re consistent, you’re making money time after time after time, month after month, then maybe you can think about, okay, I’m going to add a second strategy to diversify, but not in the beginning,

not in the beginning.

So, all right, number 16. I don’t know if this will apply to us, but Guy Spear says, read the primary documents.

Read the what documents? The

primary documents, the important parts of any investment are primary documents, summaries, filter out inconvenient details. So, don’t do a summary, read the whole original document of me. I don’t know what this is saying.

Well, it’s interesting, because Guy Spear is a good friend of Mohnish, so they’re those guys are connected.

Yeah, so it’s like, read the 10k read the bond prospectus, read the, you know, the original filings. Otherwise, you don’t know what you actually own.

Yeah, Guy Spears, he’s an investor over in Europe. I don’t know exactly where, but he actually got a free lunch from offered by Warren Buffett, and he took him up on it, paid a lot of money, and then became a popular professional investor himself.

Cool. Interesting. All right. Category number four is how to read the market. This one is number 17 from Howard Marks. Know where you are in the cycle. So, this is this is actually really important, but I don’t know, sure how you actually do this. But so you can’t, according to this report, you can’t predict where the markets are going, but you can almost always figure out where you are in a predictable cycle, every cycle has the same fingerprints. Deals get done too easily. Nobody seems worried. Everybody at the party wants to talk about stocks. That sounds very familiar,

you know, the cycle of euphoria and exuberance, and then despair, right, and then okay, you know, where are we in that cycle? True, right? I mean, it’s very.. I don’t want to get into it, but it’s very 1920s right now, very

1920s very 1999

dislocated from fundamentals,

you know, I’m getting phone calls from people, from friends, family. Oh, should we invest in SpaceX? Should we invest in SpaceX? How’s the market doing? How’s the market doing? Everybody wants to know. So, I don’t know. I like, I guess you could defend cycles different ways, maybe, but some people say it’s like a baseball game, you know. What inning are you in? I think we’re at the probably in the sixth inning, or we might be in for like a market crash before

bottom of the eighth right now,

I don’t know, I really don’t know.

No one knows for sure, right? Already

knows, so it’s very easy to say, oh yeah, know where you are in the cycle. Okay, well, we’re towards the end of the cycle, I think, so, but we still don’t know. You could be totally wrong about it, and you could be early, you need to be like, oh yeah, this is a bubble, but maybe you’re five years too early,

right? But so, do you have a plan for that cycle? That’s all.

Yeah, when things, when things change, do you should have an exit strategy,

just like the seasons come and go. I mean, you should all

right. Number 18, watch what they do when it’s hard, when something threatens a company’s core business, ignore what management says. Watch what they ship, that’s the real signal. Because any CEO can sound confident on an earnings call, what they actually build next tells you where they’re playing offense or defense. Companies that protect their turf and play defense, they die slowly. Companies that shift towards the threat survive true, so

adaptation, where you’re adapting to the changing environment,

so like the next time something threatens a company that you own, look at what they’re doing, not what they’re saying. Saying, if they’re cutting costs and defending margins instead of building new products towards a threat, that’s the sign to get out. Okay, number 19, the biggest risks aren’t in the forecast, so the risks everybody is talking about are already priced in. The ones that will actually hurt you don’t have a name yet, so if everybody knows about it, it’s already in the price, and this goes on the upside and the downside.

Yeah,

right. So, like, hey, oh, this Chat GPT is going to have ads. We talked about this earlier today, and if they have ads, then they’re going to make a lot more money, and the stock will go up, so that’s a good reason to buy the stock. Well, everybody already knows that they’re going to have ads, so that’s already baked into the price.

So that brings to me, that brings up Charlie Munger, he’s always like, invert the story, invert your investing, think of what can go wrong.

Okay, so in this case, what if their ads flop and nobody likes them,

right? You’re inverting the whole story,

so what does that mean, that we don’t buy it? Are we short it?

No, it just means to add up in your mind and really do the research to figure out what can go wrong, what’s the possibilities are, that’s what you were talking about, where you don’t know,

so that’s a little bit what we talked about earlier, looking at the unknown versus the risk,

yeah,

right, okay, all right. Number 20, find the information that Wall Street ignores. So, Wall Street runs on transactional data, credit card receipts, analyst reports, earnings model. The edge is in the information they won’t look for. So, for example, one guy turned 20,000 Chris Camillo turned $20,000 into 75 million in returns over 18 years by reading TikTok comments at 11 o’clock at night, watching consumers and Walgreens, and tracking Google searches for roof repair. So

he’s like a good trend reader,

yeah, yeah, he’s saying, according to Chris, you don’t have to be smart, you have to be smart in a totally different way than others,

that’s almost like, you know, they say book smart, street smart,

yep, number 21 this is from Morgan Household, the author bet on what never changes, so human nature hasn’t changed in years. The desire for status, safety, convenience, and pleasure is as strong today as it was a century ago. Companies build on those foundations don’t depend on any technology, they just need people to be people,

and disagree with that.

Yeah, it’s a good idea. All right, next we have play the long game. So, I think we’re gonna, we have an idea of what that means. Go ahead.

So, what is that long game?

So, number 22 it’s an infinite game, investing has no finish line. The moment you start playing like it does, you make the wrong decisions.

Okay,

I guess you just don’t give up would be another way to say that.

I think of the, again, it’s just the long term.

Yep. Number 23 operators make terrible investments, so the skills that make somebody a great operator are almost perfectly inverted from the skills that make them a great investor. Maybe the instincts that build your business will quietly destroy your portfolio if you let them run unchecked. Maybe as an investor you’re rewarded for taking action as an investor, as a sorry, as an entrepreneur, you’re rewarded for taking action as an investor. You get punished for taking too much action. Maybe we could say a different.. I don’t know about that. Number 24 consistently good is better than occasionally great. Consistently good.

Yes, I wholeheartedly agree. Okay, so base hits the core of being an option seller.

Base hits, yeah. So the best return you can earn this year is not the goal. The best return you can sustain for the longest time period is so one terrible year can wipe out or one terrible trade can wipe out three or four good ones. Compounding only works if you stay in the game, and so you’re better off making 10% a year than 20% for a few years and then blowing up. So, yes, yep. Number 25 don’t aim for the pin, stay out of the gutters. Yes, don’t aim for the pin,

you’re saying go for like, go all the way, you know,

but aren’t you supposed to aim for the pin when you’re bowling?

You are

not aim for the pin, stay out of the gutters.

I don’t know, that’s weird. So it says

here, okay, so there’s a bowling analogy. This is from Guy Spear. Beginners think the goal is to hit the front pin. Really, the goal is to keep the ball out of the gutters, because if you stay in the lane long enough, you’ll eventually hit something. I

take that as, like, okay, learn slow, learn your environment, don’t go for everything all at once,

don’t get blown up, I guess. All right, yep. Don’t go in the gutter. I got

his email

number six.

Ask him to explain his quote.

Get out of your own way, okay? Number 626, Don’t cut your flowers and water your weeds, so I guess this is basically like keep the runners running and the cut the losses,

yeah, with a lot of treasures, yeah, good ones go,

so it says here that create create a category of never sell in your portfolio, these are businesses with durable competitive advantages, strong management, and long growth runways. So, this is, you know, if they have a moat, don’t sell established criteria that would trigger a review based on fundamental business deterioration rather than valuation metrics. So, I know we’re

short of time, but this, this brings up a very interesting point in my mind. So, yes, that’s true, but you’re gonna have to be doing those reviews so much more than you used to with AI. These modes are getting destroyed at hyper speed.

Yes,

so

yes, not only that, but now you have the SEC coming out and saying that they want to have earnings reports for companies, they want to require them every six months instead of every three months, and so there’ll be less information out there for you to even do an analysis and do a report on, which I mean, it’s part of the Trump administration, so you know their earnings reports are very tedious. They are, they take a lot of time from the senior management, and it requires the company to be focused on a quarter by quarter basis, right? So I guess the benefit of this would be the company has more time to execute its strategy before they have to report it, but as an investor you have no clue what’s going on for six months, that’s a long time,

doesn’t help

you, no. So, based on back to this one, Mohnish quote says that this is one of the mistakes that I’ve made through most of my career. I’ve repeatedly sold good businesses because they appeared expensive, and I was already always wrong. So, have some companies that you just never sell. That’s interesting. Never thought of that.

Yeah, so he’s basically saying it kind of goes counter to some of their thought process, though. It’s right, so it’s like, okay, if the moat’s still there, why would he sell?

Because sometimes they get expensive, right? The PE ratio is out of whack, and all that stuff.

Yeah, so he’s taking it off, and then you know, you don’t know what the market’s going to do, and then you buy it.

Yeah, like you said, you know. Micron is one of his, one of his big favorites, right now. The thing went up 20% yesterday. It’s been up like over 200% in a couple months. Has he sold it? Maybe

other investors that do, like there’s a guy I listened to, Jordy Visser, right? So he owns Micron, and I heard I was listening to his podcast over the past weekend, and he’s, he’s already trimmed Micron, right, because it’s he saw it run up, so he’s taking that capital and he’s going to deploy it somewhere else, so this kind of runs counter to what Manisha is saying in a way,

yeah. yep, that’s what makes the market, right?

Yeah, no, it makes it interesting, right?

Yep, so I mean, that guy’s maybe he’s trading too much, he’s over trading, and

how you’re doing your portfolio, are you, are you willing to, are you seeing an opportunity to take that capital, right? It’s expensive, and move it in something else, kind of depends where you are.

Yep. Okay, so this is number 27 This one I do not agree with. The news won’t help you beat the market, so I agree, but I also don’t agree. I haven’t, I have an example of how this is wrong, but mostly for the. Stock market, I think it’s right. All right, so markets process publicly available information almost instantly. By the time you read the headline, the trade is already over. What the news actually does is trigger emotional reactions, buying on good news, selling on bad – that’s a trap. Most news exposure usually means more emotional trading, which means worse results. So, there was actually a test that that somebody ran that gave 118 finance-trained adults the actual front page of the Wall Street Journal one day in advance and told them to trade, so they, so you got the, you get the Wall Street Journal one day in advance, so you can put whatever trade on you, today for tomorrow. Half of them lost money, one in six lost everything. The average person made 3.2% while the market made 15% in the same period. So even with the news, people predicted the market direction correctly only 51% of the time, so then that was regular people. Then they brought in five pros, hedge fund managers. They finished up 130% on average, but they were still calling direction. They were only right 57% of the time, the what they did differently, they did two things differently. They skipped one in three trading days. Why we don’t know why, and they never bet big enough to blow themselves up, so they never went all in on their idea. Now that’s counterintuitive too, because we’ll see later on down the list, and you know, the fewer trades you have, the more conviction you have, the more you should put in them. So,

gotta have enough capital, though. Yeah,

so now I’ve seen it happen for us, or at least for me, like I have done back testing on a strategy, and I’ll do a certain amount, like a certain percentage, right. And then, when I start trading it live, I will do worse than the back testing, because when I was doing the back testing, there was no news, there was no noise. I didn’t know what was what was happening in the markets, I know what’s happening yesterday. I just saw the price, and I only paid attention to the price. So, I do agree that news in the markets and people cannot predict direction anyway. So, I agree in that sense, where it’s like, okay, if I told you, and this happens a lot when earnings come out, right? It’s like, oh, hey, Nvidia came out, and they beat the top line revenue, and they beat the margins, and this, and this, and this. Oh, great, stock must have gone up. No, it went down 3% Yeah, that one, nobody can predict. So, this is kind of similar to that, but one way the obsession to this is in the oil markets, because in the oil markets the news will definitely help you beat the market, because it’s supply and demand,

right,

and so long term you take a look at supply, that’s news, you look at demand that’s news, and you know up till now OPEC has been the one telling us what’s going to happen with oil prices, so if you listen to OPEC, you can predict if prices are going up or down in the long run. That’s been pretty simple. Now, it doesn’t always happen. There’s sometimes there’s a war for no reason that comes in the middle, but stuff like that happens. But overall, yep. All right. Number 28 never a band. abandon what’s working. The most invisible way to destroy your compounding is to pull capital out of your best strategy and deploy it into something worse. Okay, but how do you know if it’s worse,

you all

right. Automate yourself out. All right. A good strategy is run by an emotional human will underperform the same strategy on autopilot. The system is rarely the problem. The person running the is the problem. Okay, that makes sense. So, basically, don’t don’t trade when you’re stressed, distracted, or emotionally off, and this is coming from a sports bettor. This guy bets on sports, so yeah, okay, he’s like a trader, he’s like a day trader type. So, yeah, all right. Number 30. Volatility is a gift. This one comes from Kathy Woods. The best investors treat volatility as a treat. If your conviction in the underlying business has not changed, a lower price is better for you. The only way volatility hurts you is if you react to it, maybe. I mean, volatility means what, it’s going up and down, so

yeah, I said that’s the opportunity you’re getting,

yeah, that’s fine, you know, I mean, like, you know, for even if we’re trading options on something that’s volatile, it’s like, oh, it’s an update, you want to sell calls, down day, you want to sell bricks,

the VIX is sitting at 12, you know, there’s not much opportunity,

right, I mean, you could also say the opposite side to that, right? Like, oh, Vix is at 12, hey, I’m selling nine condors all day long,

right? There is, but it does create opportunity.

Yeah. Number 31 buy when you don’t want to. This is like the fear in the streets, right? Buy when there’s blood or something,

whenever one’s that’s when you buy,

yep, so fear suppresses prices, prices eventually recover, so yeah, that’s true. After the COVID crash, you have to

be like, “Hey, I’m going to a garage sale. It’s the same idea, like, are you going to go to a garage sale and hope the prices are high. No, should be no different.

Yeah, but in Garage, though, you’re getting, you’re getting crap. A lot

of people could say, “Hey, I’m running a business, I see some value. You’re seeing value in the stock market, should be no different.

Yeah, yeah, but I mean, it’s hard. That’s the emotional part, that’s really hard, right? Like, after Covid, after, I mean, after Covid, when, when everything shut down, the market dropped straight, you know, almost in a, almost in a straight line, it had some idea, and then it started falling. Right now, a lot of these companies,

at

that point, are you like, hey, is it ever going to, is it going to A, is it going to continue to drop? You said it before, and B, is it ever going to be the same?

Yeah, right.

Really, what’s kind of going through your head. So, a lot of people will, as you get better investing, yes, you’re taught to buy low, but maybe you traunch into it, right? You don’t deploy all your capital at once, like down, you put some more into it, you put some more into it, and then that kind of stabilizes you emotionally.

Yeah, but also, when you’re, when fear is at such a high level, you’re not thinking straight, and so, like, I remember Avis car rental company was trading at like $1

yeah.

You know, and so what does that mean? That means that, like, so rationally you could be like, oh, okay, you know, it should be worth more than $1 because they own all the cars, or they lease, they lease the cars. I don’t even think they own the cars, but, like, you know, are people never going to travel again? Are they ever going to rent cars again? In

that moment, you’re like, maybe I don’t know, maybe,

but maybe Avis, as a company, will not be able to last long enough until things recover. That’s the real fear, right? So, like, restaurants, restaurants, all the stocks, all sold off because people were just not going out to eat, they couldn’t, and even the people that could go right, you were the restaurant was only allowed to have like 20 people on there instead of 200 So, how long is that restaurant gonna stay open? So, you’re really

looking at it, comes down to you’re looking at that group of restaurants, right, which is the best to withstand that type of thing,

yeah, are

they gonna come back to Huddle House, are they gonna come back to Texas Roadhouse? I mean, that’s what you got to kind of decide on,

but if you had gotten in at the bottom, or even close to the bottom, you did really, really, really well,

really good, yeah.

So, all right, number seven, common traps, new section number 32 cheap isn’t cheap enough. So, the biggest trap in value investing is confusing cheap with good. Something can be deeply discounted and still worth nothing. Okay, don’t buy handbags on Canal Street, because those are all fake. Buy them on Madison Avenue when they’re discounted, unless you want the fake one.

Depends on what you see as value.

All right. Number 33 True diversification is hard. Most portfolios look diversified, but aren’t. When institutions get scared, they sell everything at once. That’s when you find out if you’re diversified, if everything moves in the same direction. That’s a good one. So, according to like Ray Dalio, the key is to find 12 possible or positive income streams that are uncorrelated, 12 income streams that are uncorrelated, not 12 things that feel different, 12 things that move independently, that’s really hard.

All weather portfolio,

yeah, that’s really like, do

I have money in gold, do I have money in stock, do I have money in cash, do I have money in bonds, do I have money, you know, across all these different things, and you can weather all the

seasons, yeah,

yeah. Yeah, so that’s the one portfolio that’s actually beaten the market and done less in the downturns as well, because of that.

I don’t know why we should be surprised, though. He’s the most successful

one of them.

Yeah, Bridgewater.

Yeah, number 34 your fund is probably just an expensive index, and that’s from Kathy Wood, because she is against funds, so she’s talking her own book. The most actively managed funds charge active fees while hugging the index. You’re paying for conviction that you’re not getting, so basically it says take a look at your top 10 holdings, or take a look at your funds’ top 10 holdings, compare them to the S&P founder. If they’re the same, you’re paying too much. Oh,

yes.

So, all right, but that doesn’t mean you should give it a Kathy Wood either.

No. and

then number 35 advisors work for themselves. Your wealth manager’s job is not to grow your money, is to keep your money under management. And this is from Moyes Ali, who worked at Goldman Sachs and multiple other wealth management firms.

Oh, that’s from his view. Yeah, I don’t want to be like there is a lot of benefits to an advisor too. I don’t want to say that it’s not right. I’d like to say that there’s some good things too. Is it

worth it? Is it worth paying the extra fees? That’s the question. All right,

are you asking for my.. I

go, you want to go ahead, and you can answer it. I mean, I.. yeah, I’m.. I’m actually against advisors to most degree, for so there are a few that are experts, and it’s like anything, right? I mean, even like in doctors, there are doctors who are idiots, and then the doctors were really awesome, so I’m not saying don’t go to the doctor, but if you, the only doctor you have is an idiot, maybe you don’t go to him, you know, as much as you can stay away from him.

I think you just have to understand what they do, right? Go a little deeper into what they could, what they’re going to do for you, and you come up with for yourself whether you’re willing to do that or you’re willing to take another route.

Yeah, so investing is not for everybody. Everybody can’t do it, everybody doesn’t want to do it. So the advisor, which I think they’re still going out of business because of the fees they charge and the AI is coming for them. So yeah, I think they’re going to be out unless they’re very, very good at their jobs, and they have a good, you know, they have a good relationship with all their customers. I think that’s the only reason people will stay with them, because of the relationship

stops promoting them,

but other than that, they’re a middleman, and they add extra fees that could be going into your pocket that are not, and the advisors that I have seen are not worth it. They couldn’t, they couldn’t make their own money themselves, you know, they make money not from investing, but they make it from their, from their customers.

For my experience, I’ve had that play out early on when I didn’t know, and I was like, “Okay, my account’s not moving at all, and I’m like, “Oh, look at all these fees. Okay, then you learn about the market. Okay, is that really worth it to you? No.

Yeah, so ignorance is very expensive,

certainly,

and that’s why we are here to educate everybody.

Absolutely, say 100%

100% All right, now the final rule. So, this was interesting. Almost all of your lifetime returns will come from a tiny number of decisions. Most investments will be average, or worse. A small handful will be extraordinary. The mistake most people make is sizing every position equally, meaning the same amount in every position, as if every idea has equal potential. They don’t. The best opportunities are rare. Treating them as rare and waiting for them is what separates, according to this, the great investors from the busy ones. So, it gives you three examples here. Warren Buffett ran Berkshire for 58 years. In that time, 12 decisions actually moved the needle, only 12. So, he had one great idea every five years, that’s kind of bad, but I mean it worked. Another guy, Sheil Monot, venture capitalist, has deployed 450 million across hundreds of companies, but by his own. Math, most of his return has come from 10 of them out of hundreds. Now, different ball game, he’s taking more risk, but still only 10 made all of his money. And then Chris Camilo, he knows countless investors whose only significant win was buying Tesla in the 2000 10s, so they rode in a Tesla. They bought a Tesla. They understood they’re like, “Wow, this car is amazing. They bought the stock, one decision, and they’re a top 1% investor because of that. So Chris says you only need one great trade to be a top 1% investor over the course of your life, so that’s the end of that report. So, what’d you think?

I love it. I love the, I love seeing the common themes across all these investors, so I always have the thought process, if you can learn one good thing from each person, then it’s all worth it. So, here you have what, 35

you have different ideas, you have different thought process, they come from different places, so not, you know, I mean, part of it is also just because they are a billionaire, they’re smart doesn’t mean they know everything. I mean, I thought I would say I’m not gonna, you know, bow down to a guy just because, oh yeah, you’re a billionaire, okay? You know, no, I’m not saying you’re doing that. I just.. that’s the way I think about it.

Serious, how I’m not bowing here.

No, the one thing that people tell me, like most people, you know, if somebody has a book, they’re like, “Oh my god, he’s got a book, he wrote a book. The book said this, like, I don’t care what the book said, you know, I’ve written a book, I know that any idiot can write a book,

right,

right, and so, like, just because it’s printed somewhere or set somewhere, or somebody makes a comment, doesn’t mean that it’s gospel, and you treat it as such, and you just live your life by it, unless it actually is real gospel, you know?

No, I think you’re hitting on a very major point, because I think you have to be open to growth, you have to be open to changing your view when that comes around, but you have to let’s face it, these people are going through their lives, they’ve been very successful, but you have to, if you just stayed with one person, for example, and I’ll pick on Dave Ramsey, okay, you just stick with him, and you’re never going to be open to other opportunities around you. You’re just going to have his view, and his view alone. So, you need to look at that, take the best from him, and then keep evolving, right? So, I think there’s nuggets in there for all these people, all these investors that you can apply to your life, but you just don’t. Again, I agree with you. You just don’t say this is gospel, right? Because anybody can write a book, and these people are going through their own experiences, right? And life’s changing, as we know, right before us. So, it’s important to be open to the possibilities out there.

Well said. Well said. I like it. Yep. Ash Brady has a comment, says that risk is quantifiable, uncertainty isn’t, and that’s definitely the case, you know. Uncertainty could be for any number of reasons, but risk, you can, you can try to figure it out what the risk is, you know, and put $1 amount on it. That was a good, the good, good comment, Matthew Triolo is in the house. He’s given us a high five for Intel. Intel did great, you guys called it. Yep, we did that, and Intel keeps going up. Hang on, just hang on to that one. But yeah, and then any, any last words before we wrap up? We have gone over

slightly

half an hour late. It’s okay.

No, I’m just.. it’s a.. it’s exciting, right? It’s a journey, and here we are.

Yeah, so I mean, some of these things, like this, is mostly for investing, right, buying, buying things, not really trading, not, and we do a little bit of both, we do the investing as well as mostly trading, depending on our account, so retirement accounts, for a lot of us, are long-term investments, and using options to boost the returns on those, and then there’s the trading account,

yeah, and then there’s a trading account that is used for income and also investing, so yeah, it is, it is very interesting in that sense, so I. That

they just separate that completely. There’s just a divide, especially when you’re brand new, they’re risky. It has nothing to do with investing, right? And you don’t even think that they’re even connected at all. But when you get deeper into it, they really are. They complement each other. It’s like a knob. You have your investing, it’s a slow knob, and then you have your, you know, your options on it, and it’s like a quicker knob, right? And they, they both work together.

Yep, like I talked about in the passive training book, it’s like, you know, you have your different rockets, you know, like we before, you had, you know, now you just have that one rocket, the Falcon, or whatever it’s called. This goes up before, when you had the space shuttle, right? You had the space shuttle, you had the big, the big rocket that it would sit on, the big one, and then you had the two side boosters,

right?

Right, so the boosters would launch first, and then the big one would go, and then this, then the space shuttle would detach, and it would go by itself. So that’s kind of what investing is, you know, you have the big the space shuttle that you’re in, that’s your long-term, maybe your compounding growth, you know, dividend-paying stuff, that’s your foundation, and then you have the options that are the boosters, and then you have anything else that will propel it forward, you know, the different, the different things that we talk about in the club, like saving on taxes, or you know, using long options at times, and stuff like that. You trading in a corporation that helps with certain things, and you know, so all these different ideas will also boost your return. So it’s all just, it’s not just one thing, like, okay, I’m gonna buy a stock, and that’s it. No, it’s all everything put together,

they’re all interconnected.

Yeah. Had a question from Alan. We have another Allen in Market Power, and he asked me today. He’s like, so what, what, what percentage of your portfolio do you trade market power with? And I’m like, you know, this is a good question, and everybody does it a little bit differently. I told him that I’m only using it for about 10% because I’m not always in front of the computer, so I can’t get the trades on, you know, I can’t do all the trades because I’m not there, and so for me market power is super positive, is super powerful, but it’s a lot more active than I would like to trade, so I don’t do all the trades

right, which would be different from if you were sitting and you weren’t doing what you do, and you’re in front of the computer yourself, you may put more.

Yeah, exactly. And so that’s kind of how it works, and so I told them, like, I have, you know, I’m doing different strategies. I have naked puts that I’m doing on threshold stocks, I got layups going on, I got oil that we’re selling, oil options, and I have some long stocks right now on some of these things that we’re recommending, you know, like Intel, the show I did on Friday was about Trump’s newest investments, you know, the government has bought some quantum computing companies, so I went through the list of what they bought and gave my give and take about which ones might make a good investment in the future, so long stock, like Micron, like Intel, you know, I still have my long calls on Intel, and they’re still going up, so that’s also part of the portfolio, and then you also have market power, and then you also have, you know, some other stuff that I’m playing with, other trades that I’m working on so a lot of stuff,

that’s how it should be. It should be fun,

it should be fun, should be boring, but fun.

Boring is fun sometimes.

Alrighty, that’s it for today. It was a long one. Appreciate you guys hanging in there.