Investor's Edge with Gary Kaltbaum - Create a Process [02.14.2024 w Adam Sarhan]

Episode Date: February 14, 2024

Gary K https://garykaltbaum.com/Adam Sarhan https://www.findleadingstocks.com/

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Loyalty program subject to terms and conditions. Visit the prodesk or Lose.com slash terms for more details. Subject to change. Investor's Edge with Gary Coltbaum. Straight talk about you and your money. Now from the BizTalk Studios, here is Gary Cultbaum. And welcome once again to Investors Edge. I'm Adam Sarhan, in for Gary Kay, who's out today.

Today is Wednesday, February 14th. Happy Valentine's Day to everybody. We have a great show for you, as always, and we want to thank you very much for being here. Before we dive into the show, as you know, this is a show about you and your money. all of the fun, interesting, and not so fun points in between. The idea here is to help keep you focused on what moves the needle.

And just as a quick reminder, if you don't get this show in your city, you can go to garyk.com. You can listen live or archive. We are live Monday through Friday, 6 to 7 p.m. Eastern. Also at garyk.com, you can follow Gary on X or on Twitter by just clicking on the big button. You can also subscribe to Gary's morning notes sent to your inbox each and every day for free at no charge. and you also can email Gary, ask about his money management services, or join his premium stock market newsletter, which is convictionleaders.com.

I read it every day. It's a great report. He goes into this great detail about, and basically shows you what he sees in real time. Just about every day, gives daily market webcasts where he shows you charts, he annotates the charts, and goes a lot deeper than most people do.

And he does a great job of keeping people aligned with what's actually happening. in the market. He does a good job of showing what's happening and also the why behind what's happening. So really the emphasis on what because what matters more than the why, which I'll talk about today also. So a few thoughts about today in the market is first off, it's important to understand after a big move down like we saw yesterday on Tuesday that you get some stability shows up or stabilizing in the market. It doesn't have to to be, they can get a huge sell-off and you can be down, you know, a lot more selling can come.

But when you put the pieces of the puzzle together, it's really important to understand probabilities and understand possibilities. What I've learned after doing this for decades now since the 90s is that just about anything is possible in the market. Our job is to isolate and focus on what's probable. And then out of all those probabilities, find the highest probability events and then focus on those. Because when you do that, you kind of get into a certain rhythm with the market. You get in sync with the market.

You get into the state of flow. Whatever word you want to use to explain it, I don't know. And I'm not going to even attempt to go there because it's way out of my area of expertise when it comes to all that energy and all that stuff, frequency and blah, blah, blah. It's just all I can tell you the experience of it. And it's really interesting on multiple levels that you start seeing certain patterns repeat themselves over and over and over again. Why? Because it's human nature on display.

So Gary has a great line. He goes, when you look at the market, you look at charts, and you study it so much, these patterns, he says it's kind of like looking through a familiar, you know, a photo album. and you start seeing some familiar faces. And he's so right. So coming into this week, the market was very extended. And by extended, I'll talk about that too, because that's important to understand what it means.

It's due for a pullback. Think of a traffic light. When you drive, after every green light, you get what? You get a red light. And after every red light, you get a green light. Well, in the market, green lights are big moves up and red lights are big moves down. That's it.

So the probability of a correction or a pullback increases significantly after you have a big move up. It's just the way the market works. It's another, you know, Ray Dalio, the biggest hedge fund manager alive today, has a book called Principles. It's a great book. I'm not affiliated with any way, shape, or form. It's just a great book. And in it, he talks about studying history and the importance of recognizing these patterns. and he calls it another one of those,

meaning we've seen this before. It's another one of those. So when markets get very extended on the way up, all right, due for a pullback. We just had the longest win streak in 52 years. We're up 14 in the last 15 weeks. That's a lot. At some point, the market's going to pull back.

We don't know when, but we know the probability of it happening is extremely high with every week that goes by. So that's one. Now let's talk about the what. So right now we're in pullback mode. Let's put it that way. If this gets, you know, if the buyers show up and yesterday as pullback is, it becomes a blip on the radar, meaning we hit new highs by Friday, then wow.

Just wow. That illustrates how strong the bulls are. I guess, I don't know for sure. Nobody knows what's going to happen in the market with 100% expertise, but I wouldn't be surprised at all to see some consolidation, some backing and filling, some just, you know, digestion, whatever word you want to use to describe a pullback at some point in the near future, if not right now. So, or near, you know, the next week or so, two weeks, three weeks as we go into the second half of February. It doesn't have to happen, but probability, you know, odds are we're going to

pull back. We just had a big run. It doesn't have to happen, but again, probability. So when you understand that and you come into it with that type of a mindset, you're not caught off guard when those pullbacks happen because you expect them to happen. Like Dahlio says, it's another one of those. Gary talks about it, familiar faces. We've seen this before. So that's one.

Second, big point that I want to share with you. the what versus the why. And you know me when I filled in for Gary several times. And I like to go 30,000 view foot and speak about timeless lessons that you can apply to the market. And Gary does a great job of the day in, day out with telling you what's happening in the market. For me is I want to go and give you timeless stuff that you can use because I'm not on here often. He's on here often so he can do that. I don't have that luxury with this show.

So I try to go as wide as possible and give you some not. that can help you with during, you know, on your investment journey and trading journey to help you become better and more informed, you know, make better decisions, so on and so forth. So that's why I do this where I go wider on purpose because it's meant I'm not here often. And when I am, I'd like to share some timeless lessons I've learned to help you. So the what versus the why. When I first began and a lot of rookies or even beginners or moderates or intermediate term traders that are not as advanced.

On my journey, I evolved as most people evolved in life. You know, who's smarter? You today? Are you 20 years ago? Hopefully you today. Who's going to be smarter? You 20 years from now? Are you today?

Hopefully in the future. So, you know, as we continue to evolve and get smarter and smarter, I learned the why is initially the why to me mattered. I can't believe this. Why is that happening? Why? I just had the almost like a stubborn, I don't even know how to explain it. I just had this, I just need to know why.

Why are we up? Why are we down? Why? Why? Why? Read the news. Read the news. When I realized, and I now start sometimes writing these articles on a contributor at Forbes and I, you know, zero head picks up my stuff on zero hedge and so on and so forth.

And I realized, I'm like, wow, it's the what that matters. Why? Because here's the word why. What shows up on your statement? The price. The difference between where you enter and where the last price is or where you exit, that determines whether or not you make money or lose money. Not the why, not because it was inflation or, you know, the jobs report or the earnings report

or what only thing that shows up on your statement, to my knowledge, and any statement, any brokerage statement I've ever seen and I've been in the business since the 90s, it's price. And that's why it's so important to focus on the what. What actually is happening? Now, there's a million reasons why. There's one reason why. There's zero reasons why.

It doesn't matter. The what is what matters. Now, sure, do you, Adam is an affirmative statement. The why doesn't matter? Sure, you want to pay attention to the why and intellectually understand that. Sure, go for it. Scratch that itch, no problem. But the what matters more than the why.

Let me word it that way. It's probably a better way of wording it. What actually happens in the market that matters because that shows up on your statement. And that determines whether or not you make money or lose money, whether you win or lose business. So let's talk about the what? Price.

That shows up. Now, yesterday we had the CPI data. Gary did a great job covering it for you. The inflation report was harder than expected. The expectation in the market, I'm going to talk about that too, versus what actually happens. it was an expectation breaker. If you look at the inflation report by itself, sure, it was a little bit higher than expected,

but it wasn't anything crazy to the point where you have such a big reaction. But what changed? The change was the Fed coming into this, this big rally we've had for the last 15 weeks now or 16 weeks, is because the expectation was the market was expecting the Fed to slash rates in 2024. I had my reservations. I didn't think that was going to happen. but the markets and pay matters not mine. Okay, great.

So the market was expecting multiple aggressive rate cuts this year, just to Fed the slash rates. Well, guess what? That's not happening. So instead, you get the expectation breaker. And the Fed told us last time, hey, we're not going to cut in March. Now, maybe not in May. Go out to June. So that's the big change.

Up next, we're going to talk a lot more. We've got some more timeless lessons, some selector stocks and a whole lot more. Adam Sarhan, this is the one and only Investors Edge. Hi, I'm Gary Kalbaum, hosted a nationally syndicated radio show Investors Edge. We're not just handsome radio people. We manage investors' money for a living, specializing in fee-based discretionary money management. No big commissions, just a fee on the assets that's managed.

We also provide a full range of personalized services, including retirement planning, fixed income, and educational needs, all to assist you in achieving your financial goals. understanding not all individuals have the same needs, we'll carefully evaluate your personal goals to determine a proper investment strategy. If your current approach to investing is not getting you to where you would like to be,

call us to make an appointment for a complimentary portfolio review. The number to call is 888-4-2-5-59. That's 8-8-4-2-5-9. That's 888-4-22-55-9. investment advisory services offered through call bomb capital management. Hi, I'm Dr. Jake Goodman, host of Beyond the Script, the podcast where I sit down with pharmacists to answer the health questions you didn't even know you could ask at the pharmacy counter.

In this episode, we are diving into gut health with CVS pharmacist Victoria Motola, who explains why so many of us live with stomach issues we should not accept as normal. A lot of what I see is just like, chronic bloating, chronic stomach aches. Like, I get a stomach ache every time that I eat. And it just becomes like a lifestyle where, oh, yeah, you know, I just, I have a stomach ache every day. Or I'm constantly feeling like gassy.

And all of those things are not something that generally, if you have a healthy gut, you should be living with. So that's when we deep dive. We deep dive into your medication. We deep dive into your OTC medication. And then at that point, we can probably identify something that we can change. Hear the full conversation, plus some fascinating facts about how gut health affects so much more than just your stomach on Beyond the Script, a podcast from CVS Pharmacy and IHeart Radio. Listen now wherever you get your podcasts.

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Max $100 cash back per month. Here's a quick podcast for all you true crime fans. The case of the missing reases. It was me at the store with my mouth. Motive? Um, they're rees. What was that going to do? stop myself.

Tune in next time to see if I do it again. Spoiler, I will. That had everything. Reese's, suspense, Reese's. It's time to switch on the integrator units and get the brain cells working. You're listening to.

Hey, this promises to be fun. Investors Edge. The last bastion of quality programming. With Gary Coltbaum. It doesn't get better than this. And welcome once again to Investor's Edge. In case you're just joining us from us to any part of the show, I'm Adam Sarhan filling in for Gary Kay today. You can go on GaryK.com. You can listen to the show 24-7 on any

device you want for free, and you can pause or wind fast forward anytime you want any device. All right. So next, like Gary says, next, we've got what? We've got recap of what we spoke about so far. What matters more in this business than the why? After green light, you get red lights. So after a big move up, you get declines, big move up with the green lights. The declines,

pullbacks are normal. They happen. Those are the red lights. And then after the red light, you get another green light. Just typically how it works, especially in uptrends. So, okay.

And then, I mean, that's more or less the foundation. And then we build on it and talk about what's actually happening. And let's talk about, we talk about some probabilities and how to think in probability.

That's really, really important as well. Because anything theoretically can happen. But we want to find the highest probability events and then align ourselves with that. Let's talk about something that I like a lot, which is, we also spoke about, sorry, one more thing, the expectations and inflation was an expectation breaker. The Fed's markets expecting the Fed to cut rates aggressively.

Yesterday's inflation report pretty much said they're not going to do that. The cut rates, maybe, sure, but not as aggressive as the market expected, hence the big sell-off. We were very extended, folks. Simple. The what is what matters. Coming into this, in my weekend report on finleading stocks.com, I share with everybody,

I said, hey, listen, we're up 14, the last 15 weeks. It's the strongest wind streak in 52 years. The market's so extended above its 50, day moving average, it's just a probability gain until a matter of when we pull back, not if. And then, lo and behold, bam.

So what ends up happening? When you get, talk about that evolution, from the trading standpoint. When you begin trading and investing, you know, everybody comes into the business thinking they can beat the market. Otherwise, why would you do it, right? But statistics show us that most people can't beat the market.

Ask yourself why. When I had this discovery, it took me almost actually over a decade to figure this out. It was the light bulb, proverbial light bulb went off. It clicked, if you will. The human mind, and I'm not going to go deep into the recesses of the mind to talk about things like, you know, ego, shadow, all this kind of stuff. I'll just keep it real simple. The human mind is programmed to survive, not to thrive.

I'll say it again. The human mind is programmed to survive, not to thrive. Meaning, you have the conscious mind, the unconscious mind, or subconscious, however you want to word it. And, you know, you've got, I know I should be doing X. Let's use sit-ups because we can, most of everybody can relate to that. know Adam, myself, I can speak for myself, I want to do more sit-ups. Well, okay, how many setups have I done today? Zero. How many do it do yesterday? Zero. How many are you likely to do tomorrow? Hopefully more than one, but zero. So how am I possibly, in my heart-to-heart? I know I want to do them, but what action or actions am I taking to actually do those setups?

For right now, the answer is zero. I can be honest with everybody. Sure. So how do I possibly expect to accomplish my goals, if my goal is to get a flatter stomach, if I'm not doing the work, I'm not doing those sit-ups. Mental sit-ups, physical sit-ups, it's just an analogy or metaphor. Use it any way you want, go any direction you want. Pause. Now find another person, and that person has a six-pack. Well, how many sit-ups do you think they did? Exercise, hours at the gym, doing the reps, sweating, doing the plank.

Other exercises to strengthen the core, not just setups. A lot more than me. Well, look at my core, my midsection, and look at theirs. Same thing with success in just about any endeavor. Tiger Woods had an example one day. He shot a shot, and someone was like, I wish I was good as you. And he walks over and he's like, show me your hands. And the guy shows him his hands.

And so look at my hands. Tiger's like, I wake up every day at 4 a.m. I swing that golf club until my hands bleed. What do you do, sir? And the other guy was just sitting there and his hands were all soft. doesn't do all that. It's like if you want to do this mental setup, do the reps, swing that club, whatever way you want to do to explain it. It's the same thing when it comes to the markets and investing. So when you're there's that disconnect in the brain,

most people are in that scarcity mindset. Oh, fear and greed, we know this, drive markets. Those are two primary emotions that drive behavior in this business. Okay, great. Most people are just crippled by fear. Warren Buffett has a great line. He goes, you should be fearful when others are greedy and greedy when others are fearful. And I'll tell you what that means in a second. But fear, phomo, fear of missing out. Fear, I'm going to lose money. Fear, fear, fear, fear, which I'll talk about for a few minutes here. It's important to unpack this. And ask yourself, hey, does this relate to me? Have I seen experiences before? What are the solutions? The idea is identify it

and then find solutions, right? So what does it mean when Buffett tells us, who's arguably the greatest investor of our life today, if not ever, has a great line. Be fearful when others are greedy, greedy ones are fearful. Okay, great. Let's just illustrate the point. I'm one of those guys. Very straightforward, very simple. Okay.

You buy a stock at 100. And it goes to 101. People, most people are fearful. They're going to lose their profits. They sell it. Okay? You buy it at 10. It goes to 11.

All right. You're up 10%. 10 to 11, right? Okay, I'm fearful. I'm going to lose that problem. I'm going to sell it. And then it goes on doubles and triples and quadruples. So instead of being fearful and selling it prematurely,

there's the point where he said be gradient, hold it. Biggest let your winners run. Conversely, you buy it at 10, it goes to 9. Most people are hoping if you get back to 10, please get back to 10, please get to that 10. I'll sell it once it gets back to even. Instead, it goes to 5 or it goes to 0. Again, I'm exaggerating just to illustrate the point.

There, he says, be fearful when others are greed. Instead of being greedy, hoping it's to get back to even. Be fearful that the losses can get much bigger and sell. More or less, I'm oversimplifying it. But again, I just want to illustrate the point and move forward. Okay. So understand how fear impacts your decisions. How does greed impact your decisions?

Powerful questions when you think about them. Very powerful. So, okay, can you pause? Can you make rational, not emotional decisions with your money? I have a book that's called Psychological Analysis. It's my contribution of Wall Street. My whole idea is that fundamental technical analysis alone are not enough to beat the market if they were.

Everybody have a few islands in the Caribbean. Okay. So psychological analysis basically upgrade the user in one sentence. Okay. Learn how to make rational, not emotional decisions. How to reprogram your mind from a survival mode, fight, flight, you know, fear, ba-bop-bop-bap-man

the you know the staker-toothed tiber is coming after you type of a thing opposed to it no listen I can thrive reprogram the mind and thrive it's all I've been doing with my life and my mind for the last several decades

and looking at the market and just ask myself how do I make smart decisions what can I learn from my mistake so on and so forth so when you reprogram your mind that fear greed situation changes you find those probabilities of those strongest stocks, the leading stocks, right, in history, the true market leaders, whatever you want to call it, monster stocks. Success leaves clues. Find those

characteristics and look for the next winners today. Up next, we've got a lot more to cover. I'm Adam Sarhan, and this is the one and only Investor's Edge. Hi, I'm Dr. Jake Goodman, host of Beyond the script, the podcast where I sit down with pharmacists to answer the health questions you didn't even know you could ask at the pharmacy counter. In this episode, we are diving into gut health with CVS pharmacist Victoria Motola, who explains why so many of us live with stomach issues we should not accept as normal. A lot of what I see is just like chronic bloating, chronic stomach aches. Like I get a stomach ache every time that I eat.

And it just becomes like a lifestyle where, oh, yeah, you know, I just have a stomach kick every day, or I'm constantly feeling like gassy. And all of those things are not something that generally, if you have a healthy gut, you should be living with. So that's when we deep dive. We deep dive into your medication. We deep dive into your OTC medication. And then at that point, we can probably identify something that we can change. Hear the full conversation, plus some fascinating facts about how gut health affects so much more than just your stomach on Beyond the Script, a podcast from CVS Pharmacy and IHeart Radio. Listen now wherever you get your podcasts.

With the Venmo debit card, a taco in one hand, and ordering a ride in the other, means you're stacking your rewards. Nice. Get up to 5% cash back with Venmo Stash on your favorite brands when you pay with your Venmo debit card. From takeout to ride shares, entertainment, and more. Pick a bundle with your go-tos and start earning cash back at those brands.

Do more stash, get more cash. Venmo Stash bundle terms and exclusions apply. See terms at Venmo.com. dot me slash stash terms. Max $100 cash back per month. Here's a quick podcast for all you true crime fans. The case of the missing Reese's. It was me at the store with my mouth. Motive? Um, they're rees.

What was that going to do? Stop myself. Tune in next time to see if I do it again. Spoiler. I will. Wow. That had everything. Rees. Suspense. are listening to America is talking. Investors Edge. He's got to be pleased with that. The crowd is just on his feet here. He's a Cinderella boy.

With Gary Colbomb. It comes highly recommended. You're going to feel better if you talk to him. And welcome once again to Investors Edge. In case you're just joining us, I'm Adam Sarhan in for Gary Kay, who's out today. And we cover a lot. We're talking about the mind. You missed any part of the show.

You can go to GaryK.com and listen for free 24-7 on any device you want. Pause it. Fast forward. Rewind it. Feel free to listen on any device you want. So, spoke about the mind, but we left off and fear, greed, and the mind is programmed to survive, not to thrive. Successful people are the ones that are able to reprogram their mind, so to speak, and do the work, do those sit-ups that most other people don't want to do in any endeavor, right? Could be physically. could be the guy who goes to the gym and works out

Adam's not going to the gym, therefore the guy who goes to the gyms can get better results, sure. Just because the guy goes to the gym doesn't mean he's going to have better results than other guys that go to the gym, but at least you'll have better results most likely than the guy who doesn't go to the gym. So same thing with the market, same thing with the analysis,

same thing with the homework. Right? So in it, like, there's lots of ways to go here. So when you ask yourself, first off, let me talk about myself, myself, because that's easier for me to do my progression and share with you my story. So as I learned how to invest and trade very early on, I knew I don't know. And that became my biggest strengths because I had one job and that's to learn. So I've been on that mission, on that journey for the last several decades now with that simple focus in mind.

Very powerful. I need to learn. So what are the most successful people in this business doing? day in, day out, weekend, week out, month and month out, quarter and quarter out, year in year out. And what can I start doing, develop those kind of skills? Like Tiger Woods hits a club until his hands bleed? Great. How do I do that with the market? It's not about research, because if it was just research, three analysts would be a billionaire.

There's other elements involved. And I'm going to keep it very, you know, brief. I'm not going to go too deep here because I want to make sure I can get the message across that needs to get a good. across, but there's a routine, a habit. People are creatures of habits. We all have them. Some habits serve us. Some habits don't serve us. Okay, I want to find habits that serve me, especially when it comes to the market in my business. Okay, great. So what I've noticed, I've been doing this now for decades, studying successful people in this business, is that just about every successful person

does a few things. Number one, they respect risk. The best traders, the best investors out there tend to be the best risk managers. Not always, but again, they tend to be very, very careful when it comes to risk. One. Two, they have a routine or a way

of taking all of the market information that's out there, filtering out all the noise or the things that don't matter for, them and laser focusing like a hawk or like an eagle just laser focused on the information that matters to their decision-making process. Next, they have rules that protect them, that get them into a stock, that get them out of a stock and that tell them how much they should risk on any given idea.

Next, again, what I'm giving you here is not a full list, there's more, but I cover a lot of this in the book, but I'm just giving you some highlights here. Next, they have a way of taking the information from the market and then putting it, basically coming out with some kind of a way to make it useful for them. And everybody's different. So in the book, I say there's a million, infinite, not a million, there's an infinite number of ways to make money in the market. Your job is to find one that works for you.

because just because somebody is a really good fundamental value investor doesn't mean that works for every single human on the planet. Someone is a really good technical trader might not be good for every human on the planet. Somebody's really good. You get the point? So find what works for you. That self-discovery is priceless. I can tell you for me how I use all of this stuff is I don't make decisions during the day, very rarely do I, if ever. I do my work on the weekends and at night when the markets are closed and I plan ahead, just like Ben Franklin taught us, failing to prepare is preparing to fail. Say it again. You either prepare to win or you prepare or you don't. And if you don't prepare to win, by definition, you're preparing to lose. My kids are still young.

They have a test. Okay. Did you study for the test? No. Why are you going to possibly pass? it. If you're not preparing to win by studying for your test, you're preparing to lose. That's it. You study? No. Okay, get ready to lose. Get ready to fail that test. You're going to bomb it. Same thing in the market. So my preparation is my weekend work. And I do my work on the weekends and share it and share my thoughts with people. So that helps me take all the information, distill what matters to me, take out the information that matters, and leave everything else. And then focus on the important things that move the needle. Then I find stocks.

I like leading stocks. That's my thing. I like to find leadership, just pure percent change, strongest performing stocks in the market. Why? Because I want stocks to go up after I buy them. Remember, stock can only go do three things after you buy it. Go up, it can go down or it can go sideways. That's it.

Super simple, super powerful. So buying stocks that are just up doesn't necessarily work. necessarily work because it has overhead resistance, lots of other considerations. But when I can focus on leading stocks in the market and then buy them at the right time, breaking out of bases or coming up off of support or early entry points or whatever the case may be, that greatly increases the odds of success. Just like my kids again here, they've got a multi- my son, he's got a multiple choice question. Seven years old, second grade. Okay, great. Hey, five plus five, I'm exaggerating here, we're just creating this question. Five plus five is ten.

But the question says 5 plus 5, and it gives you four answers. 1, 2, 3, and 10. Well, you know 1, 2, and 3 are physically not possible because 5 plus 5 is higher than 5. So, okay, the answer must be 10. Eliminate the noise. That is so incredibly powerful. I'm not buying stocks that are making 52-week lows. It's just not even something I'm considering.

It doesn't work for me. Someone else can do it. God bless them. For me, that doesn't work. I want stocks near new highs, at new highs, all-time highs, off of support, so on and so forth. Coming out of bases, in bases, clear areas that I can see and use for entries and exits. And then plan ahead. But that's my process.

That works for me. I can identify my risk. I can identify my entries. And when there's nothing to do, there's nothing to do. I don't force it. I've learned the hard way. over trading and forcing a trade, imposing my will in the market, it's just a losing trade. It's a losing proposition.

So, create a system that works for you. That's what I can share because that's all the successful, just about every successful investors I've ever studied, I've ever met, I've ever read, I've ever interacted with, has an approach, has a process. I help people create that process. It's really powerful. And that transformation on the other side is just, it's fantastic. Gary's process is fantastic.

And I learned a lot of this, if not all of this, stuff. I give Gary the credit. Absolutely fantastic. I started listening to him on radio, AM radio, way back when, when I was in college. I went, whoa, this guy gets it. And I was hooked ever since. So the guy gets it.

His process, he's on it. And it works for him. Great. Convictionleaders.com. Great. Go take a free trial. Check it out. It's great.

So, we're in a situation where it's really, it's important to do those mental sit-ups, create a process for yourself that works that you can apply and then the consistency of it. That's key. We're doing it, week in, week out, daily, whatever your process or your time frame is up to you. But do those mental sit-ups because over time, It'll make you a better trader. It'll make you a better investor. It'll make you so on and so forth.

It'll help you get in that state of flow I spoke about earlier, that rhythm with the market, getting in sync with the market. The more you interact with it, and the more you study it objectively and humbly, the more you'll start recognizing these patterns. You see, in life, you've got any aspect of life, you can have patterns. Not every pattern works.

In fact, most patterns don't work, and that's okay. Just like most trades don't work, that's okay. head of baseball, the best baseball players in the world, hit three out of ten, more or less. And that's great, not even okay. They also happen to be the biggest strikeouts, the ones that hit the home run kings

tend to be the highest strikeout people as well. And that's okay. As long as when you're wrong, you lose one. When you strike out, you lose one, right? When you get a grand slam, you can win four. So put everything together and figure out an approach that works for you. I hope that's helpful.

Up next, we've got a lot more to cover. I'm Adam Sarhan, and this is the one and only Investor's Edge. Hi, I'm Dr. Jake Goodman, host of Beyond the Script, the podcast where I sit down with pharmacists to answer the health questions you didn't even know you could ask at the pharmacy counter. In this episode, we are diving into gut health with CVS pharmacist, Victoria Motola, who explains why so many of us live with stomach issues we should not accept as normal.

A lot of what I see is just like, chronic bloating, chronic stomach aches. Like, I get a stomach ache every time that I eat. And it just becomes like a lifestyle where, oh, yeah, you know, I just, I have a stomach egg every day. Or I'm constantly feeling like gassy. And all of those things are not something that generally, if you have a healthy gut, you should be living with.

So that's when we deep dive. We deep dive into your medication. We deep dive into your OTC medication. And then at that point, we can probably identify something that we can change. Hear the full conversation, plus some fascinating facts about how gut health affects so much more than just your stomach on Beyond the Script, a podcast from CVS Pharmacy and IHeartRadio. Listen now wherever you get your podcasts. With the Venmo debit card, a taco in one hand, and ordering a ride in the other, means you're stacking your rewards. Nice.

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They go perfectly with music. Podcasts. And welcome back to the show. Even nature sounds. Oh, and the thing where someone crinkles tissue and whispers at you. Hello. Look, I'm not here to judge what you listen to. I'm here to judge you for not eating Reese's while you listen to it.

Reeses. Ashley, go back to the nature sounds. Nice. Yeah, that's really nice. You're listening to. What are we waiting for? Well, what are you waiting for? One, two, ready, go.

Investers Edge. With Gary Culpe. And welcome once again to Investors Edge. in case you're just joining us or missed any part of the show you can go to garyk.com, rewind, fast forward, pause at your leisure. I know I do speak fast.

I do want to address that because I have so much to say in so little time to say it. So again, if you miss anything, you can go to garykay.com and rewind fast forward at your convenience. So we spoke about a lot today, spoke about expectations,

the Fed yesterday with inflation, spoke about coming up with the process, spoke about a lot more. We've got a few minutes left, so I don't want to recap everything we've covered, but I want to share some more stuff with you. So stocks, sectors, indices. When you put all this together, it's important to come away with an approach that you can consistently apply.

So for me, it's just leadership. And again, the approach that you create, and this is important, can be simple. In fact, I argue nine out of ten times, it should be simple. I'm not even argue. That's just my belief. There's a certain genius in simplicity. Remember, a stock can only do three things after you buy it, up, down or sideways.

That's simple. The best things in the world are simple. Google.com, there's nothing on the page except for a search bar. That's simple. Now, I'm not saying simple as dumb or stupid or any other word you want. No, it's the exact opposite. There's a certain elegance, a certain genius in simplicity. People's minds, the survival side of the minds that we spoke about,

people who minds are programmed to survive, not to thrive. The reptile brain or whatever word you want to use unconscious mind wants to overcomplicate things. Oh, it can't be that simple. I need to go ahead and, you know, blah, blah, blah, blah, blah, blah. Exact opposite. The most successful people out there have a very simple and very powerful approach.

And I recommend strongly urge how any word you want to use everyone listening to do the same thing when they come up with theirs. You want to come up with a complicated one and it works for you, God bless you. Do it. But just start simple.

If you can do it simple, then if you want to keep going by all means, but you don't have to complicate it. Even, you know, you look at these algorithms or fancy things and all this kind of stuff, they're based on simple principles. Sure, the algorithm itself can be complicated and whatever, but it's based on simple principles. Attention, likes, behavior, simple concepts. So with trading, with investing, when I look at the market, my process, because people are asking

all the time. Adam, what do you do? What's your process? Here you go. I don't care about 99% of the things that are happening in the market. In fact, there's an 80-20 rule, the palatable principle thing, where 80% of things that you do don't matter, 20% really moves a needle. I take it a little bit further. I talk about this in the book. I go 991. 99% of the things I do on a given day, this is just me. Really don't matter. The 1% I do moves the needle in a very big way. If you're into math and you want to go deeper into this or Google it, there's something called a normal distribution, which is a bell curve. Think of the kids in the school. Like some kids get A, some kid gets B, most get C, some get C, some get Fs. Okay, that's a normal distribution. Then there's

a power law distribution. That's my world. Where, think of the population of cities. There's hundreds of cities in the country, if not thousands of cities. Okay, great. They vary in size and population. New York City, Chicago, Miami, you know, L.A., Seattle, San Francisco, have a much higher population than a small city in the middle of nowhere. So if our job, they're hiring you to become, you know, build a water solution treatment plant for the average city or a police station for the average city, take the average population of all the cities in the country.

It might be, I don't know, I'm just going to throw out a number here, you know, a million people. Well, that's not going to work for a city that has 20 million, and it's not going to work for a city that has 200,000. So that's a power law distribution. So the average number of population, in all the cities in America, it's not really a good representation

because it's concentrated in a small cluster of cities that have just huge, ginormous populations. So the power law in business, it's the same thing. So think of like the online video games, Roblox, RBLX, or Candy Crush. They have the power law distribution versus a McDonald's, which tends to have a normal distribution.

The average customer goes, to McDonald's, isn't going to spend $10,000. They're going to buy hamburger, cheeseburger, maybe four or five of those meals. Okay, great. Or four or five people are with them. Maybe 10 people are with them a party of 20, birthday party, whatever. That's fine. But you're not going to have somebody go in there and spend a million dollars at McDonald's.

Most likely, at least, it's not going to happen. Game like Roblox or Candy Crush are those kind of business models. Those are built by definition for the super user. You're going to have, I think it's 90% or 95% of the users aren't or it can be free or can he barely spend any money. And five or six or maybe let's just say simple math, 90, 10% of the users spend the bulk of the money. And that's okay.

That works for that business model. That's the power law distribution in action. So for me, I'm looking for the power law when it comes to my stocks. I want to find the strongest stocks in the market, strongest sectors at any given time. And that changes. Sometimes semiconductors are leading like right now. Sometimes you have biotex lead like back in 20. 2014 and 15. And ebbs and flows, ebbs and flows. But my goal, Laser Hawk, focus on leadership

and be agnostic. Go in there with no biases. Hey, whatever's leading, that's great. Let's get aligned with the leadership. Stay in harmony. Instead of the word harmony, I have to play on that. It's called harmony with the market. And when those areas stop working, they stop leading, some other area leads. Great. I'll move to that area. But stay focused in leadership. And understand pullbacks are normal and most of the time healthy now in the in the pullback like we could be in now yeah sure it's bumpy short it feels bad sure sure sure it's painful if you're staring at every single tick but if you have your stops and you respect risk and you know where you're going to enter you know where you can exit before the week even starts then hey it's another one of those and in hindsight

most pullbacks offer another chance to get in. I was interviewed on Fox Business years ago, Liz Clayman asked me, he goes, Adam, you have a great way of buying pullbacks or buying the dip. You don't buy the dip. I said, no, I don't. She goes, what do you do?

I said, I buy the bounce after the dip. I welcome these pullbacks. In my early days, I was scared of them. I was, oh, no, the market's going to pull back. I'm going to lose some money. Now, I have to gone through decades of these pullbacks, and most of the time, those pullbacks are short-lived, and they resolve themselves and go higher.

guess what, I embrace it with two arms, especially in uptrends like we're in now. So take everything, put it together. Hopefully this has been helpful for you. Thank you, everybody, for being here. This is the one and only Investor's Edge. This has been Investors Edge with Gary Cult Bomb on BizTalk. To listen to past episodes or to get in contact with Gary, go to GaryK.com. That's GaryK.com.

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