Investor's Edge with Gary Kaltbaum - THE MONTH IN REVIEW [08.30.2024]

Episode Date: August 30, 2024

garykaltbaum.com

Investor's Edge with Gary Coltbaum. Straight talk about you and your money. Now from the BizTalk Studios, here is Gary CultBomb. And welcome once again to Investors Edge. I'm Adam Sarhan, in for Gary K., who's out today. Today is Friday, August 30th, 2024. End of the week, end of the month. We've got a lot to cover.

But first, as you know, just some housekeeping, this is a show about you and your money and all the fun points in between. Just as a quick reminder, 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 Twitter by just pressing the button or on X. I still call it Twitter, but that's okay. You can also email Gary, ask about his money management services, or if you want, you can subscribe to his premium service, which is convictionleaders.com. He updates members several times

every day with what he sees happening in the market. He does nightly webcasts. Every day the market's open, gives leaders, pivot points, and a whole lot more sectors, industry groups, all that fun stuff, all available at convictionleaders with an S.com. So convictionleaders.com. That being said, I've got some points from Gary

that he wants me to share with you. I'd like to do that right at the beginning so I can make sure I check all my boxes and do my job, so to speak. First, watch the 10-year-year yield. It may be putting in a near-term low. If it does, we may be doing some correcting off this V-shape move. Not 100% sure, but it's been the driving force for the markets. That's big point number one. Second, Navidia remains rangebound. Don't need to go any further

than that, and it may just be doing what it did last year when it went five months before range bound before breaking out again. So it had a big move up last year, moved sideways for months and months and months, and then broke out, had another big move up. It could be doing that again. That's the big message there for Navidia.

When Gary comes back, he'll cover the VP interview and then safe travels to everybody for the Labor Day weekend. So those are the big points that Gary wanted me to cover. I want to make sure that I get them out front and center. And now let's have some fun and dive into the rest of the show. So few things here.

At the end of the week, end of the month, people ask me my process all the time. Adam, what do you do? What do you do? What do you do? Well, let's dive right in. I'll let you know what I do. First off, the biggest thing that I do is I keep it simple. First and foremost, before I do any type of work, analysis, reading, writing, thoughts on the market, I need to make sure that I understand my thoughts clearly enough. not only this I can explain to a five-year-old, but I can explain it to myself. And that's the secret there.

It's my inner child, if you will, for lack of a better word, but I want to make sure I really have a strong grasp of what I'm doing. So, you know, when I come on the show here, I don't come on often, but when I do come on, I like to talk about big picture, timeless educational stuff that you can use to become a better investor and make better and more informed decisions. So the number one thing I want to cover right now for today would be always, you know, this is called the investor's edge. Know your edge. Always keep it simple. What is it that you're looking to do? So, and how do you do it, right?

The how, the why, the what is it that you're doing? How are you doing it? And why are you doing it? That kind of a thing. Okay, great. So my edge is I really enjoy looking. at laser focused at leading stocks. Why? Because those are stocks that are by definition leading the broader market. Just that simple. I want to focus on leadership. There's thousands and

thousands of stocks out there, ETFs out there, so on its currency, commodity, you know, all these kind of things. I need a way for my brain to simplify everything and really focus on the Cream de la Crem, if you will, the best of breed, the strongest of the strong, however you want to word it, in any other language you want. Keep it simple, right?

Somebody asked me the other day, he goes, Adam, what's a good stock? Or is this a good stock? I said, all stocks are stocks. Good stocks are ones that go up after you buy them. So leading stocks, by definition, are leading the market.

That they've proven themselves. You know, Charlie Munger, he just passed away a few months ago, Warren Buffett's partner, for decades and decades, next level genius, has a great line. He goes, you don't get what you want in life. You get what you earn. Right?

And Buffett's line is learning is earning. No wonder there. They were partners for so long. But you get what you earn. You earn it. Right? So if these stocks have earned the top 10, top 20, top 30 place in the market by outperforming, those are leaders.

But I don't just blindly buy them. the next thing to do is step back and say, okay, when's an appropriate time to get in? Because anybody can just buy anything at any point in time, but you really want to make sure you're buying at high probability success. Don't just blindly buy it, but buy it when the stock, the leader, it's already proven itself, it's a leader, it's pulling back, bouncing off of support, for example. It could be a 50-day moving average, a 21-day moving average, could be bouncing off prior chart highs. it could be building a base. And a base is just a consolidation. You know, markets don't always go straight up or always go straight down. Remember, there's three things, again, keep it simple. Any stock can do after you buy it. It goes up, goes down, and it goes sideways.

So let's talk about the market and put this into action. So the NASDAQ 100, the QQQs, the leading index this year on a percent basis. Right? So I store, I go through. leaders go through the indices first. Look at the Dow, look at the small cap, Russell 2000, the mid-cap, S&P 400. The ETF for the Dow is DIA. The Russell 2000 ETF is IWM, so you can track these at home. The mid-cap is M-D-Y. The S&P-500 is ticket to the ETF is SPY.

And then the NASDAQ-100 is QQQ. So I pull them all up and I zoom out. It's the end of the month. So I want to see are we going up, are we going down, or are we going sideways? Well, good news for the Bulls is we're going up. We've been going up for a long time. The month just ended. Very impressive month.

The NASDAQ 100 ended the month higher, thanks to a late day rally here, but we ended higher nonetheless. That's the important thing. The S&P 500 ended higher for the month. Remember, the beginning of this month, it was at the 200-day moving average, the NASDAQ 100, right? The Dow ended higher and an all-time high close today. Highest close ever for the Dow. The mid-cap, S&P 400, didn't quite hit new all-time high yet, but it's very close.

and that ended a hair down for the month, but in the upper half of the range, which is a sign of strength. And then the Russell 2000, same thing, ended just barely down for the month, just under about 1.3 quarters percent, or 1.72 percent.

But ready for this? Upper half of the range. So that tells me that you had every chance in the world to fall this month, but we didn't. Instead, we rallied. And we're up for the month. That is extremely impressive.

If you just rewind the clock to August 5th, we were touching the 200-day moving average for the NASDAQ-100, the QQ. Also, for the semiconductor index, the SMH, had a big decline touched the 200-day moving average on August 5th. And then after that, basically came right back up, all the way up until the 22nd of August, or really the 20th, 19th, somewhere in that range, and then it started moving sideways.

So middle of July, all the way the beginning of August, you had a big move down. Then you hit that 200-day moving average for the NASDAQ 100 and for the semiconductor stocks, and then you shot right back up from the next maybe 10 days or two weeks or so. Then the last two weeks of August, what have we been doing here?

Basically, you're moving sideways, for the last week and a half or two weeks now, and you're forming a handle. If you look at the NASDAQ-100, the QQQ, it's a bullish cup and handle pattern that's forming. And today's close, we closed in the handle, but off the lows, upper half of the range, just a hair above the 50-day moving average.

But it's a bullish handle. One or two good days here, and we break out of the high of the handle, which is August 22nd's high, in the QQQ for those of you that are following along, I know many of you like specific levels. So I'll give them to you because that's my job. You know, see something, say something like TSA at the airport.

So here I'm saying something. I see it and I'll say it. So 485-54 in the QQQ. That's the high of that handle. If it breaks, right now we're at 476 and a quarter more, 476-27. If we break out and close above that 485-54, August 22nd's high, most likely we're going to go and retest that all-time high near 503.52.

Doesn't have to happen. Mind you. You can have a failed breakout. But we're forming a bullish handle. And that's the important thing to keep in mind. And we're only a few percentage points off of all-time highs in the market. That is exceptionally strong. Up next, we've got a lot more to cover.

I'm Adam Sarhan. This is the one and only Investor's 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, will 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 888-4-2-5-59. That's 8-8-5-59.

That's 888-4-22-55-59. Investment advisory services offered through call-bomb Capital, management. 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. I'm Adam Sarhan, in for Gary Kay, who's out today. In case you missed any part of the show or want to rewind and listen again, you can go to gary k.com pause or wind listen to the show on any device for free 24-7 at your convenience

so we left off discussing the importance of under you know keeping things simple understanding where we are in the market and then looking for clues on strength and we're very close to all-time highs the NASDAQ 100 is tracing out a bullish cup and handle pattern I just keep focusing on that because that's leading it led on the way up It led for that July to August pullback or correction. And then it's now leading again on the way up and it's forming a bullish cup and handle pattern. It needs to be confirmed by breaking out above the high of the handle. Now, we are seeing distribution in the handle, which is not ideal.

Not the end of the world, but the market, my not technical term here, is mushy. Meaning the last few days, you were up in the morning, sellers showed up in the afternoon, and bam, we sold off hard towards the close. Not ideal. That's mushy action. But stepping back, the end of the week, the end of the month, it's Friday's close. That's what matters. We're up.

For the day and for the month, like we discussed, up. Okay, great. And for the week, we're in upper half of the range. Down for the NASDAQ for the week, but upper half for the range. the S&P 500 is up four weeks in a row. And just about, you know, it's 0.3% below an all-time high. Exceptionally strong, folks. And a few weeks ago, it was in a bad correction.

So the fact that we rebounded very quickly is a bullish event. The fact that we're consolidating that move up for most of August now for the last two weeks, it's a bullish event. We're building a handle. a consolidation, whatever words you want to use to describe it. There is distribution showing up in the handle, which is fine for the NASDAQ 100, meaning just some selling going on. Distribution day is just a down day on heavier volume than the prior session,

not the end of the world. A few distribution days sprinkled here and there. Okay. Not ideal, but it's okay. You start getting five or six, seven, eight, nine, ten heavy distribution days. Then all of a sudden, that either the rally fails, or you've got some more downside to go. But for now, it's the market just pausing to catch its breath.

Again, keep it simple. After you run and you work out or you have a big move for, you know, you exert a lot of energy. Body's going to rest. At the end of, how about this? The end of every night, what do people do? We go to bed. Why?

Body needs the rest. Same with the market. They don't just go straight. They go up. They go up. sideways, they consolidate, they build a base. And these bases, folks, come in different sizes, shapes, patterns, time, length, duration, all this fun stuff. And then you either break out of the base and have another leg up or you break down below support of the base and you start falling again.

It's just the way the market works. So going back to those leading stocks, Adam, great. So Navidia's a leading stock. Do I just step in and buy it? You know, SMCI or whatever these, Apple or Tesla, okay, great. No, the answer is you don't just step in and buy it at any point in time. You wait for high probability trades. Remember, every side of the trade, there's two sides, has an element of risk, an element of reward. Of an investment, of a trade, house, really any decision. Now, should I cross the street? Okay, look both ways before you cross the street. We teach our kids that. Hopefully, fingers crossed, I'm going to cross the street and not have a problem. Right? You're weighing the risk. There's no cars coming. I'm healthy. Great. I'm going to cross that street.

It's not a big street. I can get to my neighbor's house across the street. No problem. Versus the reward of going, having a play date at my neighbor's house who's across the street. For example. Same thing with the market. So decisions in my mind's eye are trades When you look at it from that lens of risk versus reward So how do you make smart decisions? You measure risk and you measure the reward And you look for the trades and the decisions

That have the smallest risk versus the highest potential reward If you take a lot of risk and you lose let's say you lose a dollar when you're wrong And when you're right you make a penny it could take you 100 wins just to make that dollar. So you do the opposite when you're wrong, you lose a dollar when you're right, you win five or you win two or you win 10. Over time, that can be a winning formula. It's a recipe for success, is what I was going to say, because it's all about risk and reward. So when you look at the market, look at it from that lens.

Am I just buying a leading stock because it's up? No. Wait for it to pull back. Wait for it to consult. They all do. Navidia is one of the strongest stocks in the market, a true market leader, check the boxes, all that fun stuff. And full disclosure, I'm long. Guess what?

It's consolidating. It has gone nowhere since June. Healthy. It's perfectly normal because stocks need that consolidation. That base is what sets up for the next move higher. All right. So let's go a little bit deeper here. You've got all these different sectors, right, in the market.

Well, which ones do I buy, Adam? It's we want to look at sectors that are setting up to break out and or that give us an edge. Low risk, high reward. However you want to define that, you're free to define it. It could be breaking, back to a 50-day moving averages, back-in-offerment, perches. There's a lot of ways to define an edge in the market. I like to say there's an infinite number of ways to invest.

Your job is to find one that works for you. So when I go through the sectors, the end of the week, the end of the month, got a weekend report that I publish on Find Leadingstocks.com where I go through it. And I say, okay, let's look at the sectors. And then I find the strongest stock in the sectors, semiconductors, SMH. You have a cup and handle forming. You're below the 50-day moving average, but you've got a handle here. A breakout above this 250 area or 253 in the SMH, you're probably going higher.

Then I'm going to drill down and look at some of these semiconductor stocks. You know, look at Navidia, for example. Look at KLA Kentancourt. KLAC is a ticker. You've got a 839-85 pivot point setting up here. Somewhat of a head and shoulders continuation pattern, but there's a pattern there, right? It's not a perfect one, but it's a spirit of the law, not the letter of the law. Then I'll go through some other semiconductor and say, okay, where are strong ones?

What other semiconductors are acting well? Then I can go find NVMI. This showed up in my weekend report. It's a Israeli stock, a semiconductor stock, has a cup and handle. 236, 64 is a pivot point there. Has strong earnings growth, trading near a 52 week high, actually trading near an all-time high. Right? Great.

Setting up. It's in the handle. hasn't broken out yet, not extended, and so on and so forth. Up next, we'll talk some more stocks, some more sectors. I'm Adam Sarhan. This is the one and only Investors Edge. 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 Investors Edge. I'm Adam Sarhan, in for Gary Kay, who's out today.

In case you missed any part of the show or want to re-listen to anything, I know I have a tendency to speak fast. I have a lot to cover and in a very little amount of time. You can go to GaryK.com, rewind, fast forward, pause at your convenience 24-7, all for free. So we talked about leadership, finding stocks that are trading that are in uptrends. Newton taught us what? An object in motion stays in motion. I want to find stocks that are going up.

Real simple. Stocks that are going down, in order for them to go up, they have to stop going down, number one. Number two, they have to start going up. That could happen. But typically, it's much easier for my fine stocks that are going up,

that pause, take a breath, and they can keep going up. So that's why I look for leadership. Now, there's nothing wrong with looking anywhere else. I'm just letting you know my process. So I isolate and I narrow down thousands of stocks to, I don't know, let's say 20, 30, every week,

50, 60, 70, 80? Depending on the market. If it's a crummy environment like 2022, the list can get 10 or 20 stocks reacting. 5 or look okay if we get the conditions improve. But now, you've got 20, 30 stocks that look good, 70, 80 on the

broader watch list. And that's it. That's what I'm focused on. Come next week, I'm going to look for breakouts. What else do I look for? I want to find stocks that are acting well on earnings. Right? So I go through the sectors, like the semiconductors,

and then I go through the stocks, the strongest stocks in that group. Great. Other groups that act well, and I'll get to earnings in a minute. So let's put a pin in the earnings for a second. The financials, look at the XLF when you have a chance. Super strong.

Very, very strong action. All-time highs for the XLF, right? You got stock, then look at the groups. The stocks in the group. Goldman Sachs. super tight. Volume is drying up as a stock just sits right below its all-time high of 51726. Very, very strong action, right? You got JP Morgan. That already broke out. It's up almost every single day since that August 5th low except for one day. That is incredible, right? Short term,

now that's extended. That would be example of a stock I would not buy up here. Why? Because it just went from 190 on August 5th up to 2.25. where it closed almost 225. The 50-day moving average is 209. It's extended. The old chart high was 217. You're at 225. Right?

Being prudent and buying in the base or on the right side of the base as it's coming up of a downward trend line or bouncing off the support or wherever it is. But somewhere where the risk is low, if I'm wrong, if I buy it now, where's my stop? 190? It's too far. 217? Maybe. But that's tight.

Okay. 50 moving average? Again, chasing. FOMO, fear of missing out as an extremely strong emotion in life and in the market. Extremely.

So focus on these leaders, these leading stocks, these leading areas. Well, Adam, J.P. Morgan broke out, but Goldman didn't. Does that mean Goldman's a laggard? No, it doesn't mean it's a laggard. It just means it hasn't broken out yet. Compared to J.P. Morgan, is it a laggard?

Well, J.P. Morgan broke out in this cycle, yes. The other one Goldman hasn't yet, but that doesn't mean it can't. Ideally, I would have been in Goldman, J.P. Morgan, excuse me, the first one to break out of the group. That's the ideal scenario, right? And if I missed it, then I just wait. Okay, Adam, you missed it, not the end of the world. And guess what?

That's okay. See, that's the other thing. When you miss stocks, and I don't know anyway, that catches every single one every single time, it's going to happen. You're going to miss them. Understand there's another stock coming. There's another opportunity coming. It's not the end of the world.

You miss a bus. There's another bus coming. You miss an elevator in the building. Another elevator's coming. By the way, another way that I rank these leaders is year to date. J.P. Morgan's up about 30%. Goldman Sachs is up 31%. So which one's leading?

Right the second J.P. Morgan's leading. But Goldman for the year is up just a little bit more. So it's not the end of the world. but I've got a nice setup in Goldman Sachs. So I'm not going to blindly buy J.P. Morgan just because it's up and then chase it, right? Because if that just pulls back, normal pullback, I'm going to get tagged and get stopped out. So that's what I mean by ranking the probabilities and just picking your shots. And the beauty is you have the, everyone listening here has the ability to buy and sell whenever they want,

unless they work at some big hedge fund or bank and they have restrictions. But outside of that, you can enter and exit whenever you want. That's the beauty of this business. love it for that reason. There's no quote-unquote rule that says I have to hold something or own it or enter here or buy here. Everyone's free to do whatever they want. It's a level playing field. Right. And then I go through other areas, sectors, biotech stocks. Look at the XBI when you have a chance. The XBI is a big cup and handle pattern and it's about the breakout. And volumes just dried up in this handle. for the last few, what, about a month and a half, five, six weeks now, a breakout above in the

XBI above 103 would be bullish. Then I'm going to go find biotech stocks that are acting well, that are not extended, that are still basing. Because this thing hasn't broken out. The XLF broke out already. So it's a different dynamic. The SMH, the semiconductors, haven't broken out yet, right? So you'll see more setups there, like some of the ones that I share with you.

And so on and so. I go through all the sectors. Steel stocks, discretionary stocks, materials, gold stocks. I can go on and on and on and on. And I love it multiple reasons. Number one, intellectually, it's extremely rewarding. It's like a puzzle. Some people play Sudoko or crossword puzzles or anything like that. This is it.

This satiates me on all the, they check all those boxes from an intellectual standpoint. One. Two, it's fun. And when you're right, you make money and you're rewarded. It's really, and it's always new. It doesn't get old. The trite idea, it doesn't get trite. It's just nonstop new stock breaking out, blah, blah, blah, blah, blah, blah. Next, earnings.

How else do you find leaders, Adam, with the whole theme of the show tonight, putting things in perspective, keeping it simple, looking for leadership. earnings companies every quarter have to report their publicly traded companies have to report their earnings okay great there's three things the stock can do after you buy it go up down or sideways guess what spoiler alert there's three things the stock can do after reports earnings up down or sideways simple you're going to get to know me but you know a little better it's simple that's it all the stock can do would go up down or sideways so for example take a look at a build-a-bear, B-B-W, when you have a chance.

They reported earnings on Thursday. Earnings are up 12%. Stock gaps up. Breakaway gap. Explodes out of a base. I think it was up somewhere near 15% or 20% something like that day. I'm up another 3% today. Yesterday, same day, Best Buy, ticker symbol B-BY reports earnings.

earnings are up 10% year over year. Guess what? The stock does a breakaway gap explodes up 14% out of above resistance of a double bottom base. Does a breakaway gap. So it literally opens up above resistance. Think of resistance and support. Like resistance is a ceiling in a room. Support is a floor.

So if you have a stock trading between 190 for six months, 100 would be resistance. 90 would be support. In this case, Best Buy BBI BBI gaps up, breaks out of that base on monster volume. Average volume here is about 3 million shares. Yesterday they had over 12. It's four times more volume than normal. Now like Gary says, that's not Aunt Mary and Uncle Bob doing the buying.

It's the big institutions. And typically, not always, when that happens, they keep buying. It doesn't have to be immediate, but over time, if you look at these, breakaway gaps, fast forward two, three, four, five quarters, especially if the company keeps reporting good earnings, guess what? Stock is higher. Back in May, Best Buy, gapped up on almost 14 million shares. And it was up that day 13%. And it closed that day at 81. It's now at 100. So it Gapped up in May, heavy volume, move sideways for a few months. We talked about that basing.

You remember stocks go up down or sideways. Sideways is when it builds a base, built a big double bottom base. Thursday gaps up on volume, monster volume again. This is 12 million shares this time and hits a high. Stocks that gap down. It's the opposite. There's heavy selling there. But the gaping up, that shows you something has changed.

Not always. You can gap up and then roll over, close the gap and seal it. but the ones that gap up and go those are leaders that are breaking out of basis those breakaway gaps so up next we've got a lot more to cover I'm Adam Sarhan this is the one and only investors edge for listening to what are we waiting for one two ready go investors edge with Gary Kulpba and welcome once again to investors edge I'm Adam Sarhan

hand and for Gary Kay who's out today. In case you missed any part of the show, you can go to GaryK.com, rewind, fast forward, pause at your convenience anytime you want from any device, all for free. If you want to subscribe to Gary's premium service, I read it every day. You can go to Convictionleaders.com and take a free trial and get Gary's ideas in real time.

The market's moving. And nightly webcasts where he shows you charts and shows you what he's looking at. and breaks down his logic, you know, he gives you the fish, but also teaches you had a fish. So a few other things. We spoke about, so far this show, know your edge, investor's edge. Keep it simple. I like to buy leading stocks that are pulling, that are consolidating or pulling back or digesting their moves. And coming up the right side, meaning they're bouncing after the dip.

I don't just buy the dip. I was on Fox business years ago, and Liz Clayman asked me, goes, Adam, you have a unique approach of buying the dip. You don't do it. I said, no, I don't. I buy the bounce after the dip. So all I want to do in layman terms, so a five-year-old can understand that, find stocks that are going up, wait for a good time to buy them, and then buy them, and have stops in case I'm wrong. And I'll be wrong often. Okay, when I'm wrong, be wrong small. When I'm right, be right big.

That's really it. In layman terms, in simple terms, a five-year-old can understand it. that's my process. And in order to do that, you know, how, the what, the how and the why kind of the thing, I showed you the why earlier. I shared you with you the why earlier,

the intellectual stimulation, of course, the financial awards and so on and so forth, and the gratification, all that fun stuff. It's a great feeling when you're right and all that stuff. Okay, great.

And it's new and exciting. Now, the how, share with you as well. That's the what I do. That's the why I do it. Now, the how I do it. So I'm looking for leadership. So stocks that are making new 52-week lows, I'm not really interested.

You know, Walgreens, WBA, a lot of these pharmacies have been making new lows for a long time. I don't want to buy something. The market's ripping. The market's going, you know, the market since last November has gone pretty much straight up, except for a little few weeks in March to April. And then July to early August. Outside of that, they've got a huge move. Meanwhile, look at these stocks making 52-week lows, and they've gone the exact wrong

direction. So not only did I lose money in the stocks that are going down, there's an opportunity cost of not making money in the stocks that are going up. So if I'm just focused on leadership, I'm not going to catch them all, that's okay, because you just need one or two good trades and you really can make an entire year, or just a handful, depending on your position size and all that stuff, all that fun stuff. But just a few trades and great, you're set. But the other side of it is I don't have to worry about the stuff that's not going up. I can't physically, my brain, I can't follow three, four thousand stocks. It's just not physically possible for my brain that look at all that stuff.

So I eliminate, you know, think about in tennis or in any sport. You want to reduce your unforced errors. Reduce them. I have a show where I interview big money managers, CEOs, all these kind of guys. It's called Smart Money Circle. You can go on YouTube. It's free or on any podcast platform. And one of the CEOs just last week

it gave me a great line. He goes, there's lots of things you can't control in life. You cannot control. So I focus on what I can control. What's that? Adam, you might ask. I said, sure, what is it? He goes, execution.

And I laughed and I said, that's so smart. Just do it. And then reduce the unforced errors. Cut the, if you're going to you know, it's hard enough to, quote, unquote, do something, and especially in the market where you can't control it, and there's so many variables, so on and so forth. Okay, reduce the amount of errors I'm going to make

and focus on the risk side of the equation, those two I've found to be extremely beneficial. Because most people that come into the market pull out their calculators, and they only look at the reward side. If I buy 1,000, you know, X amount, a million shares of this, and it goes up by a dollar, I just made a million dollars. And they almost pretty much ignore the wrist side of it.

But what happens when you do that? Over time, you kind of get beat up. So reducing the unforced errors helps you when you go play tennis, for example. I want to get the ball in the court, the other guy's court. That's my number one job. In order for me to score points and win the game, my ball, when I hit the rack, and it leaves my racket, it has to go into the other guy's court.

If I hit the ball too hard and it goes out, I lose a point. That's an unforced error. Now, if I hit it and the guy hits it back and really hits it really, really well or the gal, and I miss the point. Okay, that's not an unforced error. That's just I missed the point. It was a better shot and I couldn't get there in time. Okay.

But if I keep hitting the ball out, out, out, out, these are all unforced errors. The other person is getting points, and I'm losing the opportunity to get points. So reducing the unforced errors is a superpower. And then, oh, my biggest thing, I have an investment system. It's in my book. The book was called Psychological Analysis. It's available on Amazon or Barnes & Noble. And it was number one on Amazon for the first three months when it was first published.

I'm very happy about that and proud about that. I have an investment system called Amped, A-M-P-D. D is defense first. It's a superpower. Capital preservation, which Gary is fantastic at, it's a superpower. Every major investment firm that blew up 2008 or everybody that's blown up in the history of Wall Street, you know, that I've studied. So I'm going to put the caveat there that I've actually studied these people.

They failed for one reason, one reason only. They didn't respect risk. I don't care if they were trading, you know, tulips back in the Holland and the tulip bubble hundreds of years ago. They were trading.com stocks. They were trading, you know, whatever, CDOs, whatever, housing mortgages, whatever. they didn't respect risk. That's how you get blown up in this business.

Or you lose too much. Because the math, if you just look at the numbers, you're going to want to keep those losses small. If you buy something at 100, it goes down 50%, it's now at 50. In order for it to get back to 100, it has to go up 100%. Because you're at 50,

in order for it to go up to 100, it's got to go up 50. That's 100% move. But you only lost 50%. That's how the number. work. And if you go down more, down 60%, 70%, 80%, 90%, you need hundreds of more percentage points to get back to even. You're down 10%, you need 11% gain to get back to even. You're down 25, you need a 33% gain to get back to even. When I first learned this, when was it, 20 years ago, 25 years

ago, I was floored, blown away. I was like, what? And I can control to a certain extent that risk just keep the loss of small. So in closing, I hope everybody has a fantastic holiday weekend. Thank you very much for listening. Gary, I believe we'll be back next week. Hug your family. Enjoy every moment. It's prime is our most valuable asset.

Thank you, everybody. I'll speak to you again soon. This has been Investor's 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.