Investor's Edge with Gary Kaltbaum - Managing Risky News [02.05.2025 w Adam Sarhan]

Episode Date: February 5, 2025

https://garykaltbaum.com/

Want to earn extra income for your business? Amazon Hub Delivery is looking for ambitious business owners to assist with local deliveries. When you become a partner, you and your staff will deliver packages to customers in your area on a schedule that works for you. With each package delivered, you'll gain extra income and exposure for your business. Plus, Amazon Hub Delivery makes it easy to get started. There's no upfront costs, delivery experience, or long-term contracts required. Sign up to learn more at Amazon.com slash Hub Delivery. That's Amazon.com slash H-UB delivery.

Investors 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 5th, 2025, and we've got a great show for you tonight. As always, we want to thank you very much for being here. Before we dive into the market are all the news, and there's a lot of news.

We want to let you know that this is a show about you and your money and all the fun points in between. If you don't get this show in your city, you can go to GaryK.com, 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, formerly known as Twitter by just pressing the button. You can subscribe and Gary's morning notes sent you for free every day via email. Or you can subscribe to Gary's premium service, which is conviction leaders. dot com. Where Gary goes through and updates members several times a day, gives in-depth daily webinars

or webcasts, letting people know what he sees, shows you charts, goes over the market. You know, it's a really in-depth, powerful way of really seeing the market from Gary's eyes or from Gary's point of view. So a few things to cover straight from Gary, which I always like to do to make sure I do my part and convey the message. And again, I'm the messenger for this part of it. And then the rest of it, I'll tell you my thoughts on the market. All right, Gary says, love that interest rates continue to plunge, very impressed with how many stocks have come back a decent amount from last Monday's artificial intelligence crash.

The comeback has been based on companies opening their mouths and saying that they're going to spend more hundreds and billions of dollars on AI or artificial intelligence, which gets me, meaning Gary, which gets Gary to make this statement. They had better because the market is acting on that promise or on those promises. The latest is Google. You know, Alphabet, Google's parent company, reported earnings after Tuesday's closed and the stock gaped down today on Wednesday after earnings were announced. And Google said they're going to spend $75, or invest, depending on the word, $75 billion with a B on AI. And Gary says we are doubtful of some of these numbers, but the market doesn't care what we think. And then other news, recent gold breakout is working. Gold stocks are acting better.

And then added up, we are probably talking about promises of more than a trillion dollars, if not more on AI spending. And the market is moving on that since last Monday, sell-off with deep seek. All right. Seems like they've gone out of their way above and beyond with the numbers to defend the stocks. So that's all the news from Gary. I want to always make sure that I get that out there. front and center verbatim to make sure that the message is conveyed properly.

And now we can dive in and talk about all the fun things that are happening in the market. So we are in a very news-driven environment. Wake up just about every day to new headlines and big headlines that move markets. Some don't, some do. And when you're in an environment like this where Trump just took office, he's got tariffs coming out, He's got, you know, he moved them back a little bit. Then they came out again. He said other statements with other things.

You know, it's really important to understand the news, understand the implications of the news. But then in addition to that, and this is where it gets fun, add on other layers. It's not just one piece of news. You've got political news, but then you've got economic news, right? The jobs report comes out on Friday. you have earnings news. So we've got a trifecta of earnings, of news, excuse me, that trifecta of news. We've got earnings news, we've got economic news, and we've got political news or geopolitical news.

And when you have a situation like that in a very heavy news environment and then enter on top of that deep sea coming out of virtually nowhere, Monday, not this Monday, the Monday before, and that sends NASDAQ or tech stocks down a lot. It's a, suffice to say, it's a very news-driven environment. Now, when you're in that kind of market or that kind of environment, what do you do? The key is, is to remain objective. It's important to understand emotions and how they come into play. But remain objective, number one. Number two, ask yourself, what's the news?

We have earnings news, like Google missed on revenue, for example, but they increase their AI spend. Okay, what's the news, right? Earnings, were they up last quarter versus the year before? Are they down? So on and so forth. What was the actual news? And then second, what is the impact of that news on both Main Street and Wall Street? Main Street is the economy.

Wall Street is a stock market. Next. But wait, there's more. What is the news compared to expectations? One of the big reasons why we're, we were down so much when the deep seek news came out, the AI news from China, is because it blew away expectations. Virtually nobody was expecting that to come out. Faster AI, cheaper AI. Okay, market reacted. Overreacted, market reacted, right? So earnings. Oh, earnings came in at a

dollar. Was that good or bad? Right? Well, I don't know. What's a dollar? What's a Is it compared to expectations of 50 cents? And that's really good. Compared to expectations of $10, then, hey, that's really bad. Right? Somebody out there has a great line. He goes, happiness is a formula. And it's the event, the external event, in this case the news, compared to expectations. If it's greater than expectations, you're happy. It's thumbs up. If it's below your expectations, no brain. You're not happy. That's it. That's the whole formula with happiness. So you can't control the internal events lots of times, right? We can't control what happens to us in life, but we can't control how we react to it. So in that situation, we can adjust the expectations, right? Curbian enthusiasm, one of my favorite shows. Same thing here. It applies, but without, you know, the real version of Kirby and the initial version, how about that? It's not without the humor. It's like, okay, just adjust the expectations, right? An example of this in the real world is rain. Rain, rain's neutral, right? Is rain good, or?

bad. Well, it depends on what? Your expectations. If you're going on a vacation to the Caribbean and pay all this money and have a date reserved and the whole week it's just raining every day, no, brain, not good. If you have a situation where there's a drought, we want rain, hey, all of a sudden, that's really good. Rain didn't change. It's the expectation. Same thing with the market. And when you see big moves, gaps up or gaps down, lots of times it's an expectation breaker. Humans are emotional, creatures, right? We make decisions based on emotions. We justify it with logic. I have all that outline in my book, psychological analysis, where the whole point of the book is to help people make rational, not emotional decisions with their money. So let's get back to the news and the

reaction to the news. So you look at the numbers, compare them to where they were last year, compared them the expectations, great, right? Look at the actual news. Look at the headlines. Look at the read the news, understand the news. Great, great, great. What's the impact on the market? what's the impact on the economy? Great, great, great. Check all the boxes. Economic news, same thing, political news, same thing. All go across the board. News is news, right? Great. But how does it impact? The most important thing is the reaction to the news. In my humble opinion. Why? Because that shows us what the big institutions are doing with their money. Not what they say they're going to do, what they're actually doing. And that folks is extremely important.

Very importanto, right? My kids are on dual lingo trying to learn. We're not trying. They're actually learning. I'm trying to learn. They're learning how to speak Spanish and French on dualingo. So, and it just broke out yesterday, D-U-O-L. So when you have an event that occurs, the news, you wake up tomorrow, the market gaps up, the market caps down, you know, it's volatile. But when you have an environment like us now in the market where you have a lot of news. And, you wake up, the market gaps up. And Some of it's bearish, some of it's bullish. But when you zoom out and you look at the major indices, you know, the NASDAQ 100 right now is only, I'm going to put only in quotes here, 2.5% or so below an all-time high. My goodness is that strong, right? A market that can't go down on bearish news,

right? Probably going to go up. Not saying the market's going up. You can easily roll over tomorrow, enter any negative headline you want. The S&P 500. So just about a percent below its all-time high. And you're building a base. You're consolidating.

If I were to take all the news out and just look at the price, look on a weekly chart or a monthly chart of the S&P, the SPY, or type in the QQQ, would you say that's bullish action or bearish action? It looks pretty bullish to me. Now, it doesn't mean we have to break out and rally and double from here and triple from you. I'm not saying any of that stuff. All I'm saying in the here and now, right here, right now, the environment, the market refuses to fall and the environment looks good.

Based on the fact that we have a consolidation of base going on since December, two and a half month base or so. And we're perched right below resistance in many of these indices. Not all the indices, but many of them. Specifically the NASDAQ100, the QQQ, and the S&P 500, the SPY. That, to me, folks, looks strong. Enter all the news on top of it. Trade war, this, that, and the other, AI, this thing. And we refuse to budge on the downside.

Just something to keep in mind. Up next, we've got a lot more to cover. I want to thank you very much for being here. This is the one and only Investors Edge. Hi, I'm Gary Kalpom, 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 complementary portfolio review. The number to call is 888-4-22-55-9. That's 8-8-5-9. That's 888-4-2-2-5-5-9. Investment Advisory Services offered through Call Bomb Capital Management. Hello, hello. I'm Malcolm Gladwell, host of Smart Talks with IBM. I recently spoke with IBM's new director of research, Jake Mbeta.

We discussed his vision for the future of quantum computing. At IBM research, what we always do is answer what is the future of computing, whether it's coming up with new algorithms, coming up with better AI, coming up with quantum, or coming up with just how do different accelerators go together. It's our DNA to answer the question of what is the future. Isn't it a perfect problem for IBM because you kind of need to, have a legacy of building stuff, building actual physical machines.

Yeah, it's why I came to IBM. I wanted the experience, the culture of building hard things that others have not done before. Where do you imagine we are in the timeline of this technology? There will come a point when it will mature.

My cell phone is a mature technology at this point. How far are we from that point? with quantum. By 2029, we'll build the first fault-tolerant quantum computer. That is one that can run a very, very large, large problem. To learn how IBM is building the future of computing, visit IBM.com slash quantum. Amazon Hub delivery wants to partner with your business. Help your business. Help your neighbors. Discover a new stream of income for your business when you partner with Amazon Hub delivery. You and your team will deliver Amazon packages to customers and your neighbor. on a schedule that works for you, and you'll be paid for every package you deliver.

Getting started is easy. There's no delivery experience required, no long-term contracts, and you receive weekly direct deposits. Earn more. Gain exposure for your business. Apply today at Amazon.com slash hub delivery. That's Amazon.com slash HUB delivery. Know a local business that would make a great partner, a local coffee shop owner, florist,

automotive shop, dry cleaner, you name it. Refer a business today and earn $500 when they successfully join the program. Visit Amazon.com slash hub delivery to learn more or refer a partner. That's Amazon.com slash HUB delivery. Now looking for hub partners in your area. Hey, it's Ryan Sechrest for Albertsons and Safeway. It's stockup savings time now through March 31st. Spring in for store-wide deals and earn four times of points.

Look for in-store tags to earn on eligible items from Celsius, Body Armor, Oira Ida, Silk, Capri-San, Bavarian Meets, and Charmin. Then clip the offer in the app for automatic event-long savings. Stack up those rewards to save even more. Enjoy savings on top of savings when you shop in-store or online for easy drive-up and go-pick-up or delivery. Restrictions apply. See website for full terms and conditions. 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 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, listen at your leisure anytime you want for free on any device 24-7 on GaryK.com. All right, beautiful.

So we spent the first part of the show, covered some notes from Gary, went over the news, the reaction to the news. the reaction to the news is the most important thing I look for. And they gave you a breakdown of other things to look at with the news. How does it impact the market? How does it impact Main Street? You know, how does it impact Wall Street? What were the news? What were the expectations?

How does it come in with respect to the expectations? Higher, lower, good, bad, so on and so forth. Next, making sense and organizing data is really important. So as you can tell, there's no shortage of news. There's never a dull moment on Wall Street. Okay, wonderful. There's stocks moving all the time. Up, down, left, right, this, that, ooh, ooh, pop,

shiny object, shiny object, shiny up. How do you make sense of all of that? So one of the things that I like to do, I'm not on the show a lot, so I like to go a big picture with you and give you some timeless nuggets to use to help you improve your, everything, your world, for lack of a better way of saying it, because these nuggets have improved my world, is to be able to go out there and say, okay, what's something tangible? So let's look at structure.

You know, you have a lot of data coming out in the market. This stocks up. This stocks down. There's movers. There's up on volume, down on volume, you know, so on and so forth. One of the most important things to do with the news is to look at the reaction to the news. And if the market refuses to budge with all this news coming out, trade war, tariffs, China sues the U.S. The W.T.

The World Trade Organization. This happens. That happens. Blah, blah, blah, blah, blah. Market doesn't butch. Hold on a second here. In fact, we were up in January for the indices. Well, that's a good thing. And now we're up for the week we could change. But, oh, that's a good thing. We're higher than where we were with that Monday sell-off, the AI news, Deep Seek. Oh, okay. Market's pretty resilient. And your 1% or 2% or 3%, depending on the index you're looking at, below an all-time high, pretty strong action.

reaction to the news, right? And the reason why the reaction to the news is really important because it comes down the price. So when you have the data, all the news coming out and the stock's moving up, stock moving down, it's really important to use that data in a way that serves you. A lot of people have analysis paralysis.

They look at all the data, they just spent countless hours, I mean, more than I could possibly share with you. staring at the screen, trying to interpret the data to figure out what they're going to do. Well, a few things I can help you with. Structure. One of the most common things, successful people, not just traders and investors, but successful people have in common, is they have structure. People are creatures of habit, right?

We have W habits, like my friend Moshe says, winning habits, or we have losing habits. habits, L habits. We want to stack Ws. We want as many winning habits as possible, and that creates a winning routine, right? I'm going to speak to you in a minute or a few minutes here about logic, emotional logic versus regular logic. So stacking Ws, when you have a routine of absorbing all the data that matters to you, know thyself. Are you a growth investor? Are you a value investor? Do you like buying stocks breaking out? Do you like buying stocks pulling back and bouncing off the 50? You know, so on and so forth.

Once you know your rhythm, what you're good at, filter out the noise. Don't look at all. Most of the data doesn't matter. Most things in life don't work and it's not a good fit for you. And that's okay. That's a beauty of it. That's okay.

It's a law of nature. Think of an apple tree. It has a thousand seeds. Let's just make up a number for the sake of the illustration. 999. Fail. One seed becomes a new tree. Nature is beautiful and it works.

Because that one seed that becomes a new tree will create borderline an infinite number of new seeds. Next tree will have another thousand seeds. Nine hundred nine will fail. So they have another tree and so on and so forth. When nature fails, it's wrong small. Only one seed dies. When it's right, virtually unlimited. Wow.

That's a winning formula. Trading is the same thing, right? Or investing. Most data that comes out is noise. I can't look at every single stock trading in the market all day every day and look at every single tick. It's just not possible. I don't care who you are. I don't care how many screens you have in front of you.

No, you don't need it. Find the data that matters to you. I love finding leading stocks, which are the strongest stocks in the market. And I like finding breakouts because that tells me there's a catalyst. Something has changed. And I like finding stocks that set up to break out. That's it. Very simple.

I like strong earnings. I like strong technicals. I like all this fun stuff. But really, what I like is finding the strongest stocks in the market at any given time. There's nothing wrong with weak stocks. For me, it's not a good fit. Someone else, great. They make God bless them.

They make them killing doing whatever they want to do. I know it's not for me. That's what I mean by creating structure. So what I'm looking at, stocks that are strong, by definition, they're leading the market, leading their peers, number one. Number two, they have strong earnings preferably, they have liquidity, they have high average volume, so on and so forth, and they're trading near their highs. Add a new high, near a new high, below a new high, and above their moving averages. That's it. That's step one.

So I have a structure, a way of filtering down, there's thousands and thousands of thousands. of tickers out there, stocks, ETFs, mutual, what do I buy? Crypto, Forex, you know, foreign exchange, you got commodity, sugar, coffee's at an all-time high, you know, blah, blah, blah, blah, blah, gold, silver, this, anything. It's too much. I want a way of filtering out the noise. I like leadership. I like strength. I love success.

Notice the language, it's emotions. That's what I'm going to get to next with emotional logic versus regular logic. I love success. And this is a very competitive arena. And the stocks that are able to outperform the other ones, that are either going up and they're going up more than the market and more than their peers, those are the ones that I want to be focused on. Because an object in motion does what?

Stays in motion. Not always, but many times it does. And when these stocks start trending, they trend for a long time. Some for many years, some for shorter periods of time. but they tend to trend for a long time. So when you put the pieces together, that helps me say, oh, okay, hold on a second here. I've got structure to my, I've got a routine. Every day right after the open, I'm looking for the breakouts.

Every day right after the open, I want to find stocks that are acting strong and I want to find stocks that are setting up. and I want to find stocks that are breaking out and I don't care about everything else it's okay I'm going to miss some things and that's okay remember that's okay that's the beauty of it is I'm not going to be able to catch every single big huge stock

that takes off and runs that's okay remember folks that's okay it's almost like the high school kid boy goes in the gym and wants to kiss all the pretty girls in the dance you can't do it you just need one you're very happy that's okay right so up next we've got a lot more to talk about with logic, motions, so on and so forth.

I'm Adam Sarhan. This is the one and only Investor's Edge. Hello, hello. I'm Malcolm Gladwell, host of Smart Talks with IBM. I recently spoke with IBM's new director of research, Jake Mbata. We discussed his vision for the future of quantum computing. At IBM research, what we always do is answer what is the future of computing, whether it's coming up with new algorithms, coming up with better AI, coming up with quantum,

or coming up with just how do different accelerators go together. It's our DNA to answer the question of what is the future. Isn't it a perfect problem for IBM because you kind of need to have a legacy of building stuff? Yes. Building actual physical machines. Yeah, it's why I came to IBM. I wanted the experience, the culture of building hard things that others have not done before. Where do you imagine we are in the time?

timeline of this technology. There will come a point when it will mature. Right? Yeah. My cell phone is a mature technology at this point. How far are we from that point with Quantum? By 2029, we'll build the first fault-tolerant quantum computer. That is one that can run a very, very large, large problem. To learn how IBM is building the future of computing, visit IBM.com slash quantum. Want to earn extra income for your business? Amazon Hub delivery is looking for ambitious business owners to assist with local deliveries. When you become a partner, you and your staff will deliver packages to customers in your area on a schedule that works for you.

With each package delivered, you'll gain extra income and exposure for your business. Plus, Amazon Hub Delivery makes it easy to get started. There's no upfront costs, delivery experience, or long-term contracts required. Sign up to learn more at Amazon.com slash Hub Delivery. That's Amazon.com slash H-U-B delivery. Hey, it's Ryan Seacrest for Albertsons and Safeway. It's stock up savings time now through March 31st. Spring in for store-wide deals and earn four times of points.

Look for in-store tags to earn on eligible items from Celsius, Body Armor, ORAIDA, Silk, Capri-Sun, Bavarian Meets, and Charmin. Then clip the offer in the app for automatic event-long savings. Stack up those rewards to save even more. Enjoy savings on top of savings when you shop in-store or online for easy drive-up and go pick up or delivery. Restrictions apply. See website for full terms and conditions. We're 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 or miss any part of the show, you can go to GaryK.com. Rewind, fast forward. Listen, anytime you want. want on any device, all for free, on GaryK.com. All right. So we left off speaking about structure and discipline and creating W habits. So important in life. However you want to do it, that's the beauty.

In my book, I always talk about there's an infinite number of ways to make money in the market. Your job is to find one that works for you. Now, that's not literally. It's a spirit of the law, not the letter of the law, but you get the gist of it, right? So a few things, a few more things. Let's talk about logic, decision-making. and this is where it gets fun.

Humans are emotional creatures. Last I checked, I'm a human. Therefore what? I'm going to be an emotional creature, right? So people buy things based on emotion, and they justify it based on what I call emotional logic, which is inferior logic. Because the decision is already made.

And then they find logic to justify that decision. All right, a few things. Number one, let me give you an example. What does that mean, Adam? Here you go. My daughter, 13 years old, 13-year-old girl, wants to sleep over her friend's house. So far so good. Stay with me hearing the story. Simple, easy. No problem. On normal circumstances. But there's a twist. Her friend was sick. Thursday into Friday

didn't go to school, but feels better. She wants to sleep over Friday night. So far so good. Now, the following weekend, this is all true story, by the way. This happened last weekend. Now it's Wednesday in the middle of the week. This weekend coming up, there's a big recital at school. Okay, great. My daughter is in that recital and she's been practicing for the last several months, I think four or five months now, for that big recital. So I asked her, I said, honey, is it a good idea for you to go sleep over your friend's house when she's not feeling well? That is, she's feeling better. Hold on a second here. She's feeling better, but is it a good idea? You didn't answer the question, right? well all right she's sitting there arguing not arguing but telling me that all the reasons listening to reasons why it's okay of course she feels better blah blah blah so listen Claire wasn't feeling well

this is her friend Claire's the good friend and you're going to go to her house where if her friend is feeling better now that's great I'm glad Claire's feeling better but her room has all the germs in there is that a good idea to go sleep over her house a week before your recital but that she's feeling better so literally I'm getting it. her logic, she dismisses it. And then I stopped the loop. I said, okay, so clearly we're not using logic anymore. Let's agree on that. Yeah. Okay. You're right. What's happening, Sophia, sweetheart, and my daughter is like, here, there's something called emotional logic. I write about this in the book. It's people make a decision. They've almost had blinders on. They're going to

dismiss all logic. And then they're going to move forward based on that decision. Because that's what they want to do. Notice the language here, want to do. And when I broke it down to her, she began to understand. Said, okay, listen, look at simple, simple, simple thing is losing weight, gaining weight. We can all relate to it, right? Simple formula. Calories in versus calories out. Yet most people are overweight. Why? Because they want to eat the food. It feels good. They're not using their logical brains to make a decision on how many calories they eat on any given day. They're just doing what feels good. And they're throwing logic out the window.

In fact, something that directly hurts them. If they gain too much, they can have chronic disease and diabetes, blah, blah, blah, blah, blah, all this stuff. They don't care. It feels good right now. Eat. I'm going to eat. That's it. That's a depth of the brain in that decision.

And I know because I was overweight for most of my life. And I know it because that's what my thought process was. It was very simple. It's not that deep. like my other friend says. So here you go, right? So once we understood it's not, we're not having a logical conversation. She laughed and, you know, I always used laughter as a way to change the state. All of a sudden, we now can speak the same language. We're having a logical conversation. She didn't end up going to sleep over at her friend's house. It was her choice not to do that.

Again, empowering her to make the decision instead of me making it for her. So, That was a very powerful lesson. And I'm showing it with you because it applies to stocks. I like XYZ. Apple, Tesla, IBM, Google, Amazon, Netflix, whatever it is. I like it. Notice in the language. Like is an emotion.

It's a feeling. Oh, I'm going to buy Apple because, da-da-da-da-da. Enter emotional logic. The decision's already made to buy XYZ for most of us. And this is all happening in a split second unconsciously. I'm just trying to bring this to your conscious mind to help you make better decisions. Right. So once you understand there's that emotional, logical, this is the emotional part of the brain,

the logical part right left, or everyone up down, you know, diagonal. It doesn't matter to me. Point is that all of us are emotional creatures and we make emotional decisions. And oftentimes don't go with the best logic. We go with the most convenient logic that already supports our decision to buy or sell. Pain, another emotion, right? Pleasure. People are wired to seek pleasure and avoid pain. Buy a stock, it goes down to tick on me.

I'm losing, I'm losing pain, pain, pain. Abort, abort, abort, sell. What? Happened to me for so many years, right? Have a plan before you enter the trait that helps remove the emotions, create structure, create a routine. So week in, week out, week in, you can take all this data, incoming data, filter out all the noise that doesn't impact you or apply to your investment decisions,

and then focus on the highest ROI data under the highest ROI facts that help you make better, more objective decisions. It's literally the point of the book, psychological analysis, right? The whole premise is that fundamental and technical analysis are not enough to beat the market, in my humble opinion, if they were everybody would own a few islands in the Caribbean, something else is missing, which is a psychot. You, the user, right? You ever call customer service or support, customer support for something?

I bought a printer. It doesn't work. What's the first question? Is it plugged in? Oh, no, it's not plugged in. Nothing wrong with the printer. It's user error, right? Story in my life.

Nothing wrong with the market. Nothing's wrong with the economy. User error. How come I'm not Paul Tudor Jones or Bill O'Neill or any of these legends? Yet, in the making, I've had great. great returns, great run, this and the other. It's user error. Hey, I got one job. Learn.

Upgrade the user. That's it. Thankfully, I've done very well. Great, very happy. Great. Guess what? Innately, I want more. I want to do better. I want to enjoy the ride. But upgrade the user. That's the point of everything I do.

It's upgrade the user. Right? Next. So let's talk about taking all of this and then applying it to the market, right? So you have the routine. Here's where I'm going to go is really boil it all down. Simply, stock can only do three things.

It can go up, it can go down, and it can go sideways. And that's it. It doesn't matter what the stock is. It doesn't matter if it's AI, if it's BI, if it's CI, or if it's Elementop or QRS or TUV, up down sideways. End of story. Full stop, period. Next.

Right? Keep it simple. Before I buy something, I'm asking myself three questions. Where am I going to enter? Where am I going to exit? And how much do I risk when I'm wrong? And that risk part of the equation is so powerful. Why? Because at the end of the day, we're buying and selling not stocks, but risk. someone told me that one time in my Smart Money Circle podcast show that I do. I interview CEOs of publicly traded companies and big money managers for timeless advice. And guy says, Adam, you're not buying and selling stocks. You're buying and selling risk. I said, oh my goodness.

Wow. It's genius. The best traders, investors in the world understand that. It's risk to reward. Go back to the apple tree. Go back to nature. And you use that way of saying, hey, when nature's wrong, when nature's wrong, it risks one seed.

When it's right, it makes borderline infinite number of seeds. That's a winning formula. Same thing with investing and trading. When I'm wrong, I want to be wrong, small. And when I'm right, I want to be right big. That's it. Really that simple. Then create a process, you know, reverse engineer it to figure out how that works.

This way, it's a think of it as power and control. It gives you the power and lets you take control of the items or the things that you can control. I can't control if a stock gaps up or gaps down or goes up or goes down after I buy it. But I can control when I can enter. I can control when I exit for the most part. And I can't control how much I risk when I'm wrong. Unless if I have a huge gap down on me outside of those rare scenarios, we pretty much can control those three things.

So that's what I focus on. And again, everything else, backseat. Not that they're not important. They are important. But what's more important? What's the highest ROI activity? Things I can control. And then that gives you the power.

All right. Up next, we've got a lot more to cover. I'm Adam Sarhan. This is the one and only Investor's Edge. Hello, hello. I'm Malcolm Gladwell, host of Smart Talks with IBM. I recently spoke with IBM's new director of research, Jake Mbata.

We discussed his vision for the future of quantum computing. At IBM research, what we always do is answer what is the future of computing, whether it's coming up with new algorithms, coming up with better AI, coming up with quantum, or coming up with just how do different accelerators go together. It's our DNA to answer the question of what is the future. Isn't it a perfect problem for IBM because you kind of need to have a legacy of building stuff? Yes. building actual physical machines.

Yeah, it's why I came to IBM. I wanted the experience, the culture of building hard things that others have not done before. Where do you imagine we are in the timeline of this technology? There will come a point when it will mature. Right? My cell phone is a mature technology at this point. How far are we from that point with Conton? By 2029, we'll build the first fault-tolerant quantum computer.

That is one that can run a very, very large, large problem. To learn how IBM is building the future of computing, visit IBM.com slash quantum. Want to earn extra income for your business? Amazon Hub delivery is looking for ambitious business owners to assist with local deliveries. When you become a partner, you and your staff will deliver packages to customers in your area on a schedule that works for you. With each package delivered, you'll gain extra. income and exposure for your business. Plus, Amazon Hub Delivery makes it easy to get started.

There's no upfront costs, delivery experience, or long-term contracts required. Sign up to learn more at Amazon.com slash hub delivery. That's Amazon.com slash HUB delivery. Hey, it's Ryan Sechrest for Albertsons and Safeway. It's stockup savings time now through March 31st. Spring in for store-wide deals and earn four times of points. Look for in-store tags to earn on eligible items from Celsius, Body Armor, Oraida, Ida, Silk, Capar, Free Sun, Bavarian Meets, and Charmin. Then clip the offer in the app for automatic event-long savings. Stack up those rewards to save even more.

Enjoy savings on top of savings when you shop in-store or online for easy drive-up and go pick-up or delivery. Restrictions apply. See website for full terms and conditions. You're listening to. What are we waiting for? Well, what are you waiting for? One, two, ready, go. Action!

In the Gester's Edge. With Gary Culpa. 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 or wind fast forward. Listen at your convenience on any device you want, 24-7 all for free on garyk.com. All right, few thoughts here,

and then we'll keep on moving along. So spoke about the news, spoke about the market, spoke about factors you can control, power control, spoke about how to make logical decisions, not emotional decisions. Spoke about a few other things also. Gave you the notes from Gary. Just high-level thought process here as we wrap up in the last few minutes. You know, when you come into the market, it's really important to ask yourself,

the name of the show is Investor's Edge, right? What's my edge? How can I improve, upgrade the user? How can I improve my decision-making process? One of the best ways to do this, and this is free. It doesn't cause you anything, is do what is called post-analysis. Gary spoke about this on the show before. You know, Bill O'Neill's talked about it, lots of great traders.

It's a great way, the word introspection. It's a great way to be objective and look in the mirror at your actions. Because that's what we're rewarded and or penalized based on not our thoughts as much as our actions. Did I buy the stock? That's an action. Did I sell the stock? Action. Did I not buy the stock?

Action. Did I not sell the stock? Action. Right? Or not action in those cases. So, again, the big thing here is to ask yourself, hey, am I in a situation where I'm aware of my strengths and aware of my weaknesses because if you're not, then something's missing. And what are my blind spots? You know, everybody's got strengths, everybody's got weaknesses. Great. Everyone's got blind spots. What are they?

What am I strong at? What I do with the post analysis, everyone's got the wrong way of doing it. But what I do is I keep it really simple. Notice a common theme of everything I do is keep it simple, right? And I print out all my winners, put them in a folder, print out all my losers, put them in a folder, print out all my losers, put them in a or screenshots, whatever you want. And then I literally annotate, I write with a pen on the charts, why I bought and why I sold. All the reasons. Sometimes they're long, sometimes they're short. And then I look at all the winners and I look at all the losers.

And I say, okay, I have a lot more losing trades and I do winning trades. And that's okay. As long as the winners are small. Sorry, the losers are small and the winners are big, bigger than the losers. Let's say when I'm wrong, I lose one unit. whatever that unit is, $10,000, $10,000, it doesn't matter. One unit of risk against at least, hopefully, two units of reward, five units of reward when I'm right, 10 units of reward, 20, so on and so forth.

So I don't cap the upside. Typically, I let the stock go as much as it wants to go. As long as it's acting healthy and there's no reason to sell it, I want to give it every chance in the world to succeed while it's working. have a cushion. But when it goes against me, see you later. I'm very, very quick to be like, bye-bye. So when you create that process, okay, great, risk versus reward, I have the winning trades and the losing trades. I start detecting patterns. I've done this with other people in a coaching service and you can, you know, this is exactly what the process is. The winning trades,

oh, I'm really good when X. I thought I was good at, let's say, buying off the 50 day or buying breakouts or whatever the item is, right? But then I've noticed that most of my trades that are losing trades are because I'm chasing the stock. I had FOMO, fear of missing out, or, or, or, or, or, well, which is it? Am I really good at that or not? And if I'm not good at that, but I thought I was good at that and I kept on doing that, I expect different results. Clearly that's Einstein's definition of insanity, right? So the key there, folks, is to do what, is to really understand that To understand thyself, know thyself. Where am I good?

I was working with a client one time, and they thought they were really good at day trading. They would look at the minute chart and two-minute chart and whatever, five-minute chart, and we did this exercise. We went through the last 100 trades. And they realized that the winning trades were the trades that made it to the daily chart that weren't short-term intraday trades. And most of the losing trades were short-term intraday trades. Get in, went down a little bit, got out.

Went in, down a little bit. They couldn't take the pain, they got out. But when they place a stop and then walk away and stop staring at the screen every day, every second of the day, guess what? Most of the time, that worked out for them, and the big winners came from. So that person had a choice.

Keep doing what's not working, but it feels good to do that, or adjust and start doing what has been working for them. It's easier said than done, but it's very powerful, very powerful exercise. Why? Because it allows you and me and all of us as humans to really understand our behavior better than if we don't do that exercise. Really powerful.

It's not the funnest exercise to do. just like going to the gym and quote unquote doing those sit-ups. You can have a lot more fun, usually watching TV than doing the sit-ups at first. But once you understand the sit-ups are good for you, you can change that association with pain and pleasure. You can change that if anything in life. Hey, guess what? There's pleasure doing these sit-ups. Let's go.

Then all of a sudden you get empowered and things change. Same thing with the behavior, right? The stacking W, stacking L's. Understanding if you can reduce your unforced errors, in life, not just in business or in trading, in life, you're way ahead of the pack and you're way ahead of your former self. Unforced errors, when you make a mistake that hurts you in tennis and you hit the ball and it goes out. The other guy, your opponent who you're playing against, you just gave him a point or gave her a point. They didn't do anything.

You hit it out. If I can reduce the number of unforced errors, I'm way ahead in any given day. across the board, right? So I do my best to plan for that and assume that, hey, if things go wrong, where's my stop out? And I take trading and I use it with real life stuff. If this doesn't work, where am I out? Where's my exit? How much am I going to risk? What's the worst case scenario? I'm okay with that? If I am, make a decision, move forward. If I'm not okay with it, adjust. So putting all this together, hope this is helpful for you. I believe Gary will be back tomorrow. as always, I want to thank you very much for being here.

I'll speak to you again next time. 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. Amazon Hub Delivery wants to partner with your business. Help your business. Help your neighbors.

Discover a new stream of income for your business when you partner with Amazon Hub Delivery. You and your team will. deliver Amazon packages to customers in your neighborhood on a schedule that works for you, and you'll be paid for every package you deliver. Getting started is easy. There's no delivery experience required, no long-term contracts, and you receive weekly direct deposits. Earn more. Gain exposure for your business. Apply today at Amazon.com slash hub delivery. That's Amazon.com slash H-UB delivery. Know a local business that would make a great partner, a local coffee shop owner, florist, automotive shop, dry cleaner, you name it.

Refer a business today and earn $500 when they successfully join the program. Visit Amazon.com slash hub delivery to learn more or refer a partner. That's Amazon.com slash HUB delivery. Now looking for hub partners in your area. Hey, it's Ryan Seacrest for Albertsons and Safeway. It's stockup savings time now through March 31st. Spring in for store-wide deals and earn four times of points. Look for in-store tags to earn on Elliptons.

eligible items from Celsius, body armor, or Ida, silk, Capri-San, Bavarian Meats, and Charmin. Then clip the offer in the app for automatic event-long savings. Stack up those rewards to save even more. Enjoy savings on top of savings when you shop in-store or online for easy drive-up and go pick up or delivery. Restrictions apply. See website for full terms and conditions.