Investor's Edge with Gary Kaltbaum - The Economy and Inflation [12.23.2025 w Adam Sarhan]

Episode Date: December 23, 2025

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Who's out today? Today is Tuesday, December 23rd. We have tomorrow, Christmas Eve, and then Christmas. So, Merry Christmas to everybody that celebrates. Happy, holidays to everybody else. Happy Hanukkah, happy Kwanza, everything else under the sun. And if I don't speak to you again before next year, happy new year. All right, now that we've got that covered, as you know, this is a show about you and your money and all of the fun points in between. We've got a great show for you tonight. As always, want to thank you very much for being here. Just as a quick reminder, if you don't get the show in your city, you can go to garyk.com. You listen live or archive. We're live Monday through Friday, 6 to 7 p.m. Eastern.

You can pause, rewind, and fast forward the show anytime you want and listen on any device for free, all on GaryK.com. You can also follow Gary on X, formerly known as Twitter, by just pressing the button. You can subscribe to Gary's morning notes sent directly to your inbox. You may email Gary, read the rest of his commentary, or ask about his money management services. Again, all of that's available on GaryK.com. If you want his premium service, that's convictionleaders.com, and there he updates members several times a day. He gives daily webcasts where he shows you the charts that he's looking at, both bullish charts and bearish charts. Does an in-depth view of really everything he's seeing.

You can see the market from his eyes. All of that's available with a free trial if you want. Convictionleaders.com. All right. All of that being said, it's the last full trading day of the week before tomorrow. Tomorrow's Christmas Eve, the market closes early. We had some economic data come out today. It was economic data from when the government was closed, a little bit older economic data,

but the big headline, US GDP or the economy, the U.S. economy, grows by 4.3% in the third quarter, which was a delayed report, but still, that was stronger than expected. In fact, the expectation was 3.2%. So, a lot to unpack here with the economy, because there's a few things to keep in mind. First off, stronger economic growth, all things being equal, is good for stocks because what does that mean for next year and the year after? Simple. It means that earnings are going to continue to grow, revenue goes up, so on and so forth,

the healthy of the economy, all things being equal, the healthy of the market, the market's and mirror of the economy and sometimes vice versa. But really, the markets are forward-looking mechanism and economic data by definition is rear-view mirror, and that's really important. distinction because this tells us what happened in the third quarter. Well, guess what? Not only is the fourth quarter almost over. In fact, we're about to enter the first quarter of next year. So that distinction and that differentiation, the markets are forward-looking mechanism and economic data is rear-view mirror. It's really important because, again, most people get caught up,

oh, the GDP was X or Y or Z or earnings report was X, Y, Z. All the economic data is rear-view mirror. So understanding folks that the markets are forward-looking mechanism gives you an edge, gives you a little bit of an, what's a good word, the investor's edge, let's use the word edge, because you can anticipate what's happening, not guess, not predict, like, oh, okay, let's look forward. So here's how I do that. It's all just a matter of process of elimination and really understanding that anything in markets and in life is possible, just about anything is possible.

I'll put that caveat on there. but we want to focus on what's probable. So, for example, could the market close down 20% tomorrow? Is it possible? Yeah, it's happened before. Black in 87 or the crash in 29, whatever it was. Sure, you can have huge moves, but what are the probabilities of that happening on Christmas Eve with no bad economic data? Probably extremely low, if not it's an outlier.

So, okay, that's what I mean by possible versus probable, but we want to focus on the highest probability events. And then dismiss all the noise. You know, Steve Jobs, Elon Musk, they have a great thing online where they talk about the difference between signal and noise. Most things in life is just noise. The signal is what really matters. And if we can filter out the noise and focus on the signals, which are few and far between, but they're there, we got to find them. That gives us a big edge. So in the spirit of continuing that logic, let's connect some dots. So we have a stronger than expected economic data report that just came out. All right, face value, that's good for the market because, hey, economy's going to be stronger,

revenue is going to be up, earnings are going to be up. Oh, that's a positive. Well, okay, great. What's going to happen to the Fed? Well, the Fed's got a dual mandate. Keep jobs growing, which a healthy economy should help jobs. But really, the second mandate is inflation near 2%. Inflation's been above 2% for years now.

years. Going back to COVID, the Fed printed basically an unprecedented amount of money and just pumped so much money for the system that it created inflation. Now we're dealing with the consequences of that crazy ramp up of the market and the economy post-COVID, the supply chain, you know the whole story. Anyway, we have inflation. Okay. So the Fed wants to cut rates. It's been cutting rates. Combat a slower economy. economy because we all thought, hey, there's lots of layoffs, UPS is letting off tens of thousands of people, Amazon tens of thousands of people. All these companies are reporting big layoffs, but the economy's still strong. So if the economy is strong, all things being equal, inflation goes up.

That's a problem for the Fed. So the Fed can't cut rates as aggressive as expected because if it does, what happens in inflation? It goes up and down. It goes up. So that could be a concern going forward. But based on what we can tell, Trump doesn't want. want Powell there. That's one. Two, he wants to bring someone else in and Trump has made it very clear. He wants interest rates way down and he's not concerned about inflation. He wants the economy

to be humming. So if the Fed cuts rates, that's a stimulus for economic activity. Well, okay, that should stimulate stocks as well. Okay, we get it. It's clear. In that GDP report, there's a personal consumption expenditures price index, which is a fancy way of saying the Fed's primary inflation gauge, and that went to 2.8% during the third quarter, and the core went to 2.9%, which was higher than 2.1% and 2.6% from the prior quarter. So the inflation gauge is 2.8, 2.9% higher than the 2% range that the Fed wants, closer to 2% than it was a while ago, but it's still above 2. So again, that delicate dance, the balance of not cutting too much too fast like we did in COVID and causing inflation to ramp back up again and getting rates down is what the Fed's going to be looking at.

And of course, all of this because it impacts the market. Think of the Fed like the faucet in the kitchen. You've got water coming out. If you open it up for a blast like a fire hydrant, it's flooded money and boom, the water's flowing. If you close the faucet a little bit, the water is still coming out. out but at a slower pressure. And then as you keep closing it a little bit, little below, the water just eventually drips out. And that's stimulus from the Fed.

So we'll see what happens next quarter. We'll see where GDP is this quarter. Again, this is a delayed report, but it's a big economic data point and, you know, GDP for the country, for the world's largest economy. It's important. Hence, all this time spent on making sense of the GDP number and connecting it to, connecting the dots, right? connecting it back to stocks. What does it mean for stocks? And really, it was a surprise.

It caught a lot of people off guard because nobody expected that the Fed would be that strong, or sorry, that GDP would be that strong. And the Fed kind of got it wrong yet again. Of course, you could take your grain of thought. You could take all data with 10 grades of salt, if you will, or trading grades of salt and trust but verify like Reagan taught us. But for now, for now. GDP came out stronger than expected, and if you look at the market, market's quiet.

Nothing major is happening, you know, from the stock standpoint, it's normal. Before a holiday, Christmas is coming up, you have a half date, closes at 1 o'clock tomorrow. It's normal. What happened this week was really big, from my standpoint, in the last, actually the last four or five days. The 50-day moving average was defended. Remember, just last week, On the 17th, the Q's, the NASDAQ100, the QQQQQ, broke below the 50-day moving average. And then it got right back above it.

And now it's above it. It's also above the 21 day. So keeping that in mind as we move forward is really important because as we go through and make sense of the market, as long as we stay above that 50-day moving average, as Gary's mentioned to you many times before, we're probably going higher. The S&P 500, the SPY, you know, that was a NASDAQ,000, the QKKK here. The S&P 500, the SPY, same thing. Not only is it above the 50, above the 21 day, it is 1% below and all-time high.

Half or 1% less than half of 1% below an all-time high. I mean, that is extremely strong. It's setting up to break out. The SPY. I mean, literally, multi-month base, had a huge run from April all the way up until October. You move sideways for the last few months, and now you're basically getting ready to break out again. Super strong. Super, super strong action.

The Dow, DIA, broke out to a new high about 10 days ago or so, pulled back a little bit, and now it's right near that 484-485 breakout point. It's getting ready to breakout as well, basically trading very near an all-time high. Small caps, same thing, very close to, you know, highs and mid-caps. the IW and the small caps, midcap is the MDY, all near all-time highs, very strong action across the board, not just the AI and tech stocks. Up next, we've got a lot more to cover. I'm Adam Saran, this is a one and only Investors Edge.

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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.

You can rewind, fast forward, listen at your convenience on any device, anywhere you want in the world. So, spoke about GDP coming in stronger than expected, spoke about the fact that inflation, Fed's gauge of inflation, and that GDP report was a little bit higher than expected. above that 2% level the Fed wants, spoke about the possible ramifications for both Main Street, which is the economy, and Wall Street, which is the market.

Fed to cut rates, stimulate growth. Okay, but what happens to inflation? Something that we have to watch. And the Fed's cut rates a few times so far, small cuts, but still cut. And the economy is obviously strong. You know, earlier in the year, we were worried about inflate tariffs and what's going to happen in the economy. Economy is extremely resilient. the fact that we didn't fall and fall hard,

it's a very strong sign. I mean, just putting that out there. Super strong. So he spoke about the fact that the major indices are near all-time high. It's very strong action. I built a tool which I shared with you before. It's called breakouts and setups.com. We just had a major upgrade.

A lot of demand there. People love it. We built something called MarketTerminal.com. This is probably the last thing I've built for a while. It's MarketTerminal.com. The big Wall Street uses. terminals to win. So I'm like, all right, I want to level the playing field. I want to use one too. So it's taking me several years and a lot of money to build this thing. But we finally got it launched.

We started with breakout setups that worked. Now everything breakout and setups has we have in this market terminal as well. And it just gives us the ability to go in there and look at the market deeper than I can anywhere else. So the same thing as before we had the breakout setups. You can see breakdowns. Here we've added industry groups, sectors, and a whole lot more. If you have any questions or your breakout setups and you want to change or upgrade, just email info at market terminal.com and feel free to ask away the team, we'll get back to you and help you move over. But I built this tool because I want to see the market. There's two things that I care about in business, dearly, well in life too. Dealey is doing my best. It's, you know, in business,

it's making money and adding value, right? And saving time. Time is our most valuable in asset, folks. I mean, we can't buy more time. Buffet. in his 90s, he can't buy more time. So time, it's our greatest gift. And I used to for decades spent endless hours, I mean, burning time away, endless hours, scanning stocks, looking from this, looking for that. And I was still missed breakouts. I still do this.

There's a more efficient way of doing things with technology. I'm like, I've got to build it. And Wall Street uses terminals anyway. Why can't the rest of us? Hence the birth of market terminal. and the success after the breakup and setup. So here we go with the market terminal. Right now, there's an industry under markets,

there's an industry group section. It shows me the strongest sectors of the year. And gold, GLD, if you look at gold, silver, SLV, both super strong, multi-year highs, all-time highs, so on and so forth. Not surprising, the strongest sector in the market is the GDX and the GDXJ. Those are gold and silver stocks. And metals, copper. super strong group as well.

COPX if you want to look at the ETF that tracks copper. Now, why is that important? Because that's leadership. I want to own leading stocks. I want to find the strongest stocks and the strongest group. And we have proprietary ratings, but under each ticker and market terminal, you can type in a ticker, any ticker you want.

And then you can see the strongest stocks in that group. So if you type in Apple, there's something called industry leadership. and you can see how that stock performs to other stocks in the group based on the overall rating. Very, very powerful. So the whole idea of leadership is if you look at sports, people love sports, right? You know, the Knicks, the Giants, the 49ers, whatever, the lions, the tigers, the bears, oh, my, whatever the sport is, the devils, the Rangers, it doesn't make a difference. Everybody that follows sports knows what? The strongest teams in the league.

why? Because that's what makes the ranking, the scores is what makes things fun, right? And it separates the winners from everybody else. Same thing with stocks. If I want to buy a stock, the most important thing I want that stock to do is go up. It doesn't matter of anything, really. Earnings, shmernings, volume, everything else is secondary. Revenue growth, all that stuff. But really, what's the goal, have those stocks go up? Well, leading stocks, by definition, folks, they're leading the market. So if I'm going to go buy something, I want to buy the strongest of the strong because there's odds are, it doesn't have to be, but odds are, an object in motion does what, stays in motion? So really using that industry group watch for me, I changed it to scoreboard so I

can see how it looks, it ranks it all throughout the day, and then I can see strongest groups that day, strongest groups year to date, you know, so on and so forth, really, really strong, like lithium stocks. LIT is an ETF there that I found the market terminal, shows me the lithium stocks. It's the ETH that tracks lithium stocks, right? Copper, COPX, rare earth metals, R-EM-X, uranium stocks, URA. All of these are super strong and they're up a lot. The metals and mining stocks, XME, is up 90% for the year. Semiconductors, the SMH, is up 48% for the year. So, understanding the leading areas in the group and looking for emerging areas, it's a real edge. Why? Because it filters out the noise and focuses on what, the signals.

And then finding stocks that are breaking out on any given day, there's a catalyst there. Something happened with that stock for it to break out. Simple. Now, it doesn't mean that breakout has to work and it's going to double and triple, but if you have a stock trading between 50 and 55 for six months, 50 would be support, 55 would be resistance, in order for that stock to double, it has to go above 55. That's a breakout. Something changed. That game, take a game of tug of war. The supply demand dynamics shifted when it gets above that area of resistance.

So you could see all of that on market terminal. Tech, for example, TECK, stock that broke out today. Okay, great. You could see the trading range right there. It broke out. It doesn't mean the stock's going to double or triple. Doesn't mean the stocks can go from $46, $47 to where it is now to $50, sorry, to $50 to $80 to $100. But in order for it to get to $100, it's got to break out first.

Hence the value of knowing when a stock breaks out. So, TRP, another one, and they're sorted by MarketCath. There's so many of them. You can go through and have fun with the GHM is another one that looks good here. And then the second thing, after I find a stock that breaks out, I want to say to myself, oh, okay, what are the earnings doing going forward? And this is where the terminal comes in. And I can go as deep as you want.

You can go check it out for free if you like it. You can join if you don't like it. It's not for you. That's great, too. earnings or I think it's a dollar for two-week trial or whatever it is. A lot of this on the right side, the left side of the screen is to find ideas. The right side is to research the ideas. Right. So investors are big institutions. We know they move the market. Well, how many people know if your stock is revenue is going to grow going forward or if it's not? We show it right away.

How many times did I spend hours looking for a stock only to find a breakout, go through all the noise, all the stocks that are not breaking out, and then find it and then try to do some research on it and couldn't go as deep as I wanted. Well, here, that's why I built this. Here, and now I can do it. And quickly, safe time, simple. And hopefully help me make better decisions. That's just the goal. It's just that simple, but it's a safe time. Everything else, whatever I do with the information, it's on me, right? Just like you, it's on you. There's no earnings claims. There's no pat performance, addictive future results. There's no guaranteed of anything. No results are shown an antipotip.

all the other disclaimers, no investment advice is being given, literally just putting the cards in the table. And then whatever you do with the cards is on you. And then you can go deep and figure out, hey, are these big institutions buying it? Yes or no. And then decide if it's right for you or not. Up next,

we've got a lot more to cover. I'm Adam Sarnham. This is the one and only investor's out. Guys, it's no use putting it off. The best time for an underwear refresh is now. Tommy John underwear is designed for a perfect fit that stays put all day. Their zero-chafe thanks to four times more stretch than competing brands, and their

innovative horizontal quick-draw-fly is a game-changer. With over 30 million pairs sold, there are thousands of men out there more comfortable than you. Don't settle for less. Go to Tommyjohn.com today for 25% off your first order with Code Comfort. That's Tommyjohn.com, code comfort. Tommy John, Comfort perfected. Hey, it's Howie Mandel, and I am inviting you to witness history as me and my Howie DoIt Gaming team take on Gilly to King and Wallow 267's million dollars gaming in an epic Global Gaming League video game showdown. Four rounds, multiple games, one winner, plus a halftime performance by multi-platinam artist Travis Travis. Travi McCoy. Watch all the action and see who wins and advances

to the championship match against Neo. Right now at global gaming league.com. That's global gaming league.com. Everybody games. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next

dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details. You'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 Investor's Edge. In case you missed any part of the show, you can go to GaryK.com.

Rewind, fast forward, listen at your convenience anytime you want on any device, all for free. All on GaryK.com. All right. So if you just joined us, we spoke about GDP, we spoke about the Fed, we spoke about the markets of forward-looking mechanism. We spoke about the importance of following leaders and filtering out the noise from the signals. Signals matter. Noise doesn't. Lots of things that happen on any given day in the market. Most of it is noise. Our job is to find signals. I spoke about the fact that there's tools we can use to find the signals and one that works for me that I just built as market terminal. Notes from Gary, banks are strong. Semiconductors are getting better. And there's no chance of a bare market if those two areas continue to get better and they're not getting hit.

Very important. Need to be stock specific because there are plenty of stocks, technology stocks, that are still in private bare markets. So again, even as the environment's improving, it's really important to understand the difference, like I mentioned earlier, between strong groups and weak groups. I mentioned some strong groups like gold and silver, copper, you know, so on and so forth, the financials, the XLF, another group. Another group, very strong, breaking out to new eyes. Spoke about the SMH, which is the semiconductor stocks coming up the right side there looking good. Transportation stocks, the IYT, just recently broke out and is trading near an all-time high. I think in all-time high.

One second here, let me check. Yeah, right near an all-time high. Let's take a look at that's outside the transportation stocks. Let me see what other areas do I want to show you or talk to you about. It's go to the scoreboard here and go through them. All right, oil and gas. So there's the XOP. Energy stocks in general have not really been participating in a lot of this rallied recently.

Why? Because oil prices are not really that strong. So if you look at the XOP or you look at the XLE, which are, you know, another ETF attracts oil stocks or the OIH, another oil services, another ETF that tracks oil stocks, a lot of them are just really just sitting there. For the year, I think the OIH is up to 3% for the year. The S&P's up double digits, 16, 17%, somewhere in that range. The, let's see, it's OIH. Yeah, the XLE is up about 3% for the year. So again, knowing where to be in the market is just as important as knowing where not to be.

Retail stocks, XRT, had a big run from that April low, went from 61 to 81, big move. And now it's up about 9% for the year. and setting up to break out. So in addition to stocks breaking out, I want to find stocks setting up and ETFs setting up to breakout. And everything they do, it's built on those two, right now, for now, it's stocks and ETFs. Same thing I mentioned here, the breakouts, the breakdowns,

the movers, the setups, available for stocks and available for ETFs. Because I want to see the action. I want to see what's leading. I want to see what's lagging. You know, what areas are working, what areas are not working. Year to date, you know, you can look at the strongest areas up. You can look at the strongest areas down. Now, you've got oil and gas exploration stocks.

Really not doing well this year. They're down about, I think the XOP is down about 6%, 7% for the year. Down. The S&P is up to 16, 17%. Housing stocks, you can look at the ITB down about 5% for the year or home builders for about flat for the year. So they're lagging, right? Lagging bad as well.

The IYR is up about a percent for the year, lagging as well. So again, knowing where to be invested in the market. is just as important as knowing we're not to be investing. Because the areas that are not working, you want to stay away from. Software, IGV, that's what, up about 8% for the year. Retail stocks, we spoke about that, up about 9% for the year. Cybersecurity stocks up about 10% for the year. Again, I'm sharing all this.

Not just to see it, first glance and then move forward, go a little bit deeper and say, hey, hold on a second here. Is there something to it? Could it be an emerging area coming up the right side? could it be a new area of money is going to begin flowing into it? Or is it the toast? Again, it varies. Like the KRE, for example,

was underperforming for much of this year. Those are the regional banks, the KRE, just recently broke out to a new high. And it's up about 13% for the year. And we know the big banks, the XLF and the KB are both are doing well. Okay, maybe the regional banks

are going to begin playing catch-up. Again, connecting dots, right? Airline stocks, ticker symbol, Jets, ETS, up about 14% or 15% for the year. Big run in the last several weeks. Okay, money's rotated out of AI into airlines and some other areas too. Gary's been all over it like white on rice, right? A few other areas. Genome, genomics, GNOM. Another ETF that tracks genome stocks. That's up about 21% for the year, beating the S&P. Money's flowing there. Well, my brain's

going to go right to biotech stocks, XBI. The biotech sector, up about 37% year to date. Well, the S&P's up about 17. That's pretty good. That's Beno. Next healthcare stocks, the XLV, up 12% for the year. So again, and by the way,

these are just the ETFs that track the groups. Once I find one of these ETFs and I want to go deeper, I'm going to click on the strongest stocks in the group and all that's right on market terminal. I can click on, oh, the XLV, well, here you go. One of the strongest stocks in the group, boom, XYZ. Like Regeneron broke out this morning.

It was on the breakouts page. It's a big pharmaceutical company, biotech company. Okay, noted. Look for other stocks in the group that are acting well. And it's really easy to do all that stuff. Revenue, is it growing, to have a binary past and future. Most people have no idea if the numbers are going up or down. I want to see it.

I made it visually friendly so people can see it with easy ratings or scores so people can easily see what's happening. So again, as your year comes to an end, it's really important to do some post analysis. Look back this year. What worked? What didn't work for you? and doing that introspection, all areas of my life, I can speak what I do. I can tell you what to do. I don't know you, but well, I can tell you what I do is I want to improve.

I want to get better. I want to be grateful for everything I have and everything I've done. Well, how am I going to do that? It's constant growth. And it's intellectual honesty. I have young kids and then a bunch of friends over just last night. We were playing baseball upstairs in the, in the loft area of the house and one of the kids, uh, wasn't happy because the, he was out.

And right away, always do the right thing. Kids, before we started the game. Hey, kids, there's going to be disagreements. We don't fight in this house. You know what we do? We settle it. Rock paper, scissors. One guy said the kid, one kid said he's out. The other kid said, I'm not out. And they started, you know, disagreeing. And you could see it right away instantly. Boom, they're about to get heated. Stop it. Take a breath, relax. We're going to always do the right thing. That's okay. You could see things differently. That's fine. rock paper, scissors, and then we're going to go with whatever the result is. Sometimes you're going to win, sometimes you're not, and that's okay. But we're not going to sit here and fight and

argue and not have fun. No, it's not doing it. And then they all agree, they do rock paper scissors. One wins, one lose, and the game goes on, and there's no fighting, and everyone stays even keel, right? Controlling the emotions is a superpower. But looking back objectively to how can I improve in the market and in life, superpower. Hey, the market bottomed in April. Okay, great. Adam, here's my post analysis, I didn't buy early April. I should have. I didn't. Okay, market was oversold, the tariffs. There's a lot of confusion out there. I didn't realize that the market wouldn't care about the tariffs and now there's tariffs and the economy just grew by over 4%. Nobody cares. Okay. And we'd come roaring back. I didn't. I missed that. Okay. Such is life.

Guess what? I can learn. I can improve. I can get better. I'm human. I'm going to make mistakes. And one of the greatest things my daughter taught me actually, because we sat down, she made a mistake, and we sat down and went through it, is that mistakes are your teacher. Mistakes are your teacher. And they can be one of the best things for you.

If you look at it from that POV, like the kids say, from that point of view. Instead of looking away from the losing trades, I print them out and I look at them, and I have two folders, a winning folder and a losing folder for all my trades. why did I lose? Why did I win?

What was I thinking when I placed the trade? And I write it down. What was I thinking when I'm winning trades or I think when the losing trades? I learn after years of doing this work at the end of every year, the end of every quarter and every month I do it. Okay, guess what? I can see myself objectively, which is extremely important and extremely difficult for most people to do. In fact, there's something called a personal blind spot bias. In psychology, you can't see yourself objective.

Most people can't see themselves objectively. The example of this is ask 100 newlyweds the night of their wedding. Raise your hand if you think you're getting divorced. Nobody's going to raise their hand. Statistically, we know half of them are getting divorced. That's a personal blind spot bias. You can't see yourself objectively. Well, all right, I can read on paper.

I can get my, that's why journaling is so powerful, right? I can write down and then look through 20, 30, 40, 50, 100 losing trades over the last several years. 100 winning trades. Well, you're going to find patterns. Usually, it's right there. If you take time, you separate yourself from the losing trade, and you objectively, intellectually honest, that's the key. And look at the mistakes because there's teeth.

And look at it with that positive length. There's something to learn here. Mistakes are my teacher. What patterns are my unconsciously repeating over and over again? Up next, we've got a lot more to cover. I'm Adam Sarhan. This is the one and only Investor's Edge. It's no use putting it off.

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you can rewind fast forward listen at your convenience anytime you want on any device So we spoke about a lot today. Again, feel free to rewind. Fast forward over the break. Just recently we spoke about introspection and mistakes are our greatest teacher, one of our greatest teachers. Super powerful. And then, you know, I keep everything binary, past future, you know, earnings growth, past future, market economy, past future. Just listen to everything I've said for even just in this show. It's really simple. binary, it's up down, left, right, you know, past future, someone, it's over with the economy, economic data like GDP, inflation that came out today, showed us what happened in the past. Well, the market's looking forward, right? Okay, me too. As a user, we upgrade software all the

time, upgrade the iPhone or upgrade whatever, your computer. Okay, great, I want to upgrade the user. Super important. Very important, though, like they say. Why? When I upgrade the user, I get better. Who's smarter you today or you 10 years ago? Me today, me 10 years ago. Most probably you today. Why? Because we continue to grow and learn and upgrade the user. So a lot of my work, I heard a book, and the book is called Psychological Analysis,

and it was number one in Amazon for three months. Why? It teaches people how to make rational, not emotional decisions with their money. How to upgrade the user. These cognitive biases I spoke about, speak about it in plain, simple terms. It took me five years to write the book. I threw away four different manuscripts until finally I found one that was simple enough. There's cartoons in the book.

It's that simple. And I kept on simplifying, simplifying, until it's really easy to understand. The whole premise in my world or my contribution of Wall Street is that fundamental and technical analysis are not enough to beat the market. If they were by themselves, everybody would own a few islands in the Caribbean and that's it. It's over. Well, all right.

Something else is out there. It's know thyself. It's upgrade the user. the ones that do exceptionally well here are disciplined, just like in any endeavor. Michael Jordan wouldn't sleep in and party and do drugs a night before a game or even do that at all. He was extremely disciplined. You can read Tim Grover, who's his trainer and Kobe Bryant's trainer, has great books.

I'm not affiliate with him. I have nothing to do with the guy. Just I respect success. And he's got one book called Relentless, another book called Winning, W, number one, not I, and N-I-N-I-N-G. W number one and an ING winning. You want to be number one. How do you get there? It's relentless consistency.

Being disciplined, being having a plan, being intellectually honest with your strengths and with your weaknesses. How can I improve? How do I do better? How can I grow? And then setting goals that are realistic goals that I can achieve or work. or work, get closer to, and then measure my success. And if I'm off the beaten path, if I'm wrong, get back on the, you know, course correct.

Get back on the right path. All of that adds up quickly to helping people increase the probabilities and the odds that they'll be successful. It's just very, very, it's that simple. You can go any deeper you want. But really, somebody with the plan will probably outperform somebody without a plan. Not always, but many times. So that introspection, the end of the year approaching right around the corner, taking a look at markets, taking a look at where I went wrong, where did I do good, you know, how did I perform well. Okay, great, all of that stuff.

Super important. But again, to be honest about it. Because it's really easy to tell yourself a story to justify or to trick your brain or whatever, right, to justify that, quote unquote, bad patterns, the bad behavior, so on and so forth. and a few great lines I'll leave you with. If somebody gave me a great line one time, I have a podcast where I interview the Smart Money for Timeless Advice. It's called Smart Money Circle.

And in it, somebody said, Adam, you're not buying and selling stocks, you're buying and selling risk. That blew my mind because that's so genius. It's just next level. Second thing that was really, really left a big impact on me as well is we all looking at the same exact data. We're using it differently.

The successful people use it differently. and a lot of them are disciplined. They have a plan and they trade their plan. Before the market even opens, a lot of people know, hey, here are the stocks I'm focused on. Here are the setups. If they break out, here's a level where I'm going to enter. There's three questions I ask myself. Hey, Adam, where am I going to enter?

Where am I going to exit? And how much do I risk if I'm wrong? And then a third thing, which I just discovered recently with the help of market terminal and AI, which is built into market terminal, is a lot of the patterns, I would type and I find my patterns, and then the AI gave me a really interesting insight. So you're not really trading the stocks or the risk. You're trading what, you know, you're happy when you win. You're sad when you lose or upset when you lose or enter any positive or negative feeling.

It's really what's happened with most humans is they're trading their self-worth. And that's a big problem. Big problem. Doesn't mean you have to be doing that, but it was like, whoa, hold your horse. are there a second. That was really big. Because yeah, I feel happy when I win. It's a great feeling. And when I lose, yeah, it's a bad feeling or a positive negative, any positive emotion. For years until I realized that some, the emotions are driving my decisions. I thought I was making rational, logical decisions. I realized, no, I'm not. And after speaking with thousands of people in

this business for 20 plus years, 25 years now, I realized most people are on autopilot. And they're not even aware of it, just like I was. The emotions are driving my decisions. I wasn't aware of it. Mark goes down and fear. Mark goes up. Grief. You know, Buffett talks about you and be fearful when others are greedy and greedy when others are fearful. Powerful stuff. And this sets you afraid. When you upgrade the user and you get stronger, you get stronger, you get stronger, what happens? At least what happens to me is I can make better decisions. I don't make better decisions. What happens? All of a sudden, the results and improve, not instantly, not overnight, but my life, and I'm using that in the air quotes here, improves dramatically. Why? Because I'm making better decisions. And over time, that compounds. Every year I speak at my kid's school. And last year, I spoke in my daughter's class and she was in seventh grade. Now she's in eighth grade. And the whole thing was about compounding. The eighth wonder of the world. I asked the kids, how many wonders of the world? They're like seven. I said, no, here's another one, eighth. And it's compounding.

I spoke said so showed him how money compounds but really knowledge compounds at the end was the hook and not just that everything you do in life compounds your habits compound good habits bad habits you know take that inventory how can I improve how can I improve how can I improve and then replay another big thing that changed my thinking up to help me upgrade my user trading the expectations for gratitude and I can wrap up with that we're really it's just is switching. It's a trade. Expectations for gratitude. That being said, everybody want to thank you very much. Merry Christmas. To everybody, happy holidays. To everybody, happy New Year, if I'm not back before the New Year. And I'm grateful to be here. Grateful to Gary for everything he's done.

And thank you all. And to all of the night. This has been Investors Edge with Gary Cult Bomb on Biz Talk. To listen to past episodes or to get in contact with Gary, go to Gary K. Go to Gary K.com. That's Gary K.com Guys, it's no use putting it off. The best time for an underwear refresh is now. Tommy John underwear is designed for a perfect fit that stays put all day. Their zero-chafe thanks to four times more stretch than competing brands, and their innovative horizontal quick-draw fly is a game changer.

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