Investor's Edge with Gary Kaltbaum - Timeless Lessons on a Quiet Day [09.23.2024 w Adam Sarhan]

Episode Date: September 23, 2024

https://garykaltbaum.com/

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VAR to RELD-SYTECT-SYTECT-SANCES. Investors Edge with Gary Cultbaum. 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 Monday, September 23rd, 2024. We've got a great show for you tonight.

I want to thank you very much for being here. Before we dive into the show, just as a quick reminder, if you don't get the show in your city, You can go to GaryKK.com. You can rewind it, fast forward, pause it. I know I tend to go fast. There's so much to say in such little time that a lot of people like to do that.

They pause the show, rewind it fast forward. You can listen to any device you want for free on GaryK.com. And also follow Gary on X or formerly known as Twitter by just pressing the button. You can subscribe to Gary's morning notes sent directly in your inbox for free.

Email Gary, ask about his money management services, or sign up to his premium service. which is convictionleaders.com. All that is available on GaryK.com. There's a big banner. It says conviction leaders, or you can go directly to convictionleaders.com. So we've got a lot to cover.

First, I'm going to share some notes from Gary to make sure that I do my job and be the messenger and pass those notes and thoughts off to you so you can get them. The first thing Gary wants me to share with you is that it's a quiet day today. And quiet is good, because after a big move up in the market,

the market's earned the right to digest it and consolidate a little bit. Anything outside of heavy selling down is a good thing, is a net positive. I'll give you some support areas in a few minutes to watch. As far as yields continue to cooperate, next thing Gary wants me to share is gold continues its uptrend, which is good.

And the NASDAQ and NASDAQ 100 and semiconductors continue to lag, but they can get going very quickly if and when they decide to get it. get going. So those are the notes from Gary. You just want to share those right at the top of the show. And then I've got a lot of things to share with you today. So let's talk about support and resistance. Give you specific levels because I know that many of you like watching or writing down levels. If you're, you know, if you're able to write down or you pause it and rewind it, listen to it later and write it down later. It's not going anywhere. You can get these levels anytime you want.

So here you go. In the QQQ, NASDAQ, 485, 54 is the next level of resistance that I'm watching. that happens to be the high from August. We tried to break above it back a few days ago on Thursday with that big move up on the 19th, but then we really didn't follow through. We're at 482 now. So 485-54 was the August high, and then above that is 503-52, which was a July high.

Those are the next two levels of resistance I'm watching for the NASDAQ 100. Support, which is on the downside, is going to be 468, 202,000. which is a 50-day moving average. That's more or less the low after the Fed meeting was 470. The low of that week was 469-ish. So right around that 468, 469 level will be support.

As long as we stay above that 468 level, the market remains strong. I mean, that's the important thing that I want to share with you. The market remains strong. Now, what is support and resistance? And then we'll talk about some high-level stuff and then go into more specifics here. And I really like, I'm not on the show often, as you know, Gary does the show, And I just fill in every once in a while when he asked me to. But when I'm here, I like to share some timeless lessons that I've learned along the way because

I'm a big picture guy, but more important, that can help you the most. If I share with you something that happens right here, right now today, that's good. I do that and give you specific levels, support and resistance I'm watching right now and some sectors and stocks and things like that. But I like to share timeless content with you because those are lessons that you can use throughout multiple market cycles. So what is support? What is resistance real quickly as a refresher? Think of you in a room. Resistance is a ceiling. Support is the floor. You have a bouncing ball or stock trades between, let's say, 195 for six months. In that example, every time it gets near 100, remember, think of it more of an art than an exact science. That tricked me up a little bit at the beginning. I was thinking it more of the science to the penny. Well, it didn't hit exactly 100. It hit 99.99 or 98. It's okay. I've learned over the years.

So it's more of a zone or an area. And then it goes down to 95-ish, 95 and change, or breaks on 95 just by a tad and then gets back above it. That's support. And then resistance would be near 100. It does that, goes back and forth, back and forth for six months. In order for that stock to double or triple or go up 10x, it needs to break above 100 first. When it breaks above 100, that's called a breakout.

And if it does it on heavy volume, that typically, not always, but typically is a bullish sign. Why? Because that shows you the big institutions are in there driving the stock higher. We're not privy to see what their specific orders are, but that's okay. We don't have to. They can't hide to a certain volume. And volume shows up. For example, if you see a stock has average volume of 5 million shares, then it breaks out over 100 on, I don't know, 25 million shares.

you know that's not like Gary Bob doing the pie. So that's the concept of support and resistance. That's on the upside. If it breaks down below support, it's the same concept but in reverse. It's typically a bearish sign, not a good sign,

if gaps down below support on heavy volume. So support and resistance, just so you understand the language. I'm sure you guys are very smart. The audience here, so I'm sure you've heard that. Just quickly, briefly, briefly talk. A few more things I want to share with you.

Number one, I'd like to do about timeless lessons with respect to investing and trading. One of the most important things, a big core piece of what I do, it's understanding that the decisions we make have our success. Everything comes down to the decisions we make. To take action, take action on every day for three months. It's called psychological analysis. The whole idea there, in addition to fundamental and technical, my contribution is psychological analysis to investing. The whole idea there is to help you make smarter decisions.

How do you do that? By making rational, not emotional decisions, especially with your money. So people tend to buy things, if you look, break things down even more. People tend to buy things based on what they like. Oh, I like that stock. And then they justify it for, they look for reasons, confirmation bias, reasons why they like that stock. but they've already made the decision because of their emotional attachment. Same thing with anything that you buy for the most part.

I don't know anybody that walks into a house and falls in love with the house first. You typically like the house and we don't have to necessarily love it, but you like the house first and then you buy it second. I know anybody that hates a house despises it, but buys it anyway. I'm not talking about flippers. I'm talking about people that are going to live there as a primary residence. So, you know, people like things first and then they justify it with logic. Same thing with stocks for the most part.

Oh, I like this. I like that. It's a subjective feeling. So the idea is to learn how to make rational, not emotional decisions. And emotions really, really, really important part of becoming a successful investor and then successful in any endeavor for the most part. It's binary. You either control your emotions or they control you. You ever lose your temper, get upset, get angry, get mad, get stopped out of a stock, only to see it go off without you. Whatever the case may be in life, keeping calm, cool, and collected. Two people, one's highly emotional. The other one's calm, cool, and collected, rational. Usually, most of the time, if you take 100 decisions, the rational person's going to come out ahead. Most of the time. That's what I want.

It's all based on probabilities. Understanding one of the best ways to navigate life, not just markets, but life, is the future by definition is largely unknown. So let's think in probabilities. What's most likely to occur? Number one. Number two, how do we stack the odds of success in our favor?

In other words, do things that are going to help us and reduce the number of things that are going to hurt us. Think of the accelerator and break in a car. You know, the brake are things that hurt us. Accelerator helps us go forward towards our goals. How do we reduce the number of times or to hit that break on our career path or success path? in trading and investing, it's by reducing our losses, keeping those losses small. That's very, very powerful because over 100 trades, 1,000 trades, 5 years, 10 years, long enough time frame, any one trade doesn't matter in the biggest picture.

As long as it doesn't destroy you and wipe you out of the game, as long as you manage your risk. The big, big, big takeaway here is make rational, not emotional decisions. write them down, keep a journal if you want. You can practice planning your trades and then trade your plan. This is one big thing I do with coaching clients on findleadingstocks.com. We go through and say, okay, fine, what are the stocks that we like over the weekend before the market even opens? Show the leading stocks that are setting up.

Find buy points for you. And you can do this work on your own. But it's a really powerful tool because this way you're planning. You're not anticipating what the stock is going to do. Nobody knows what the market's going to do. I'm not a big fan of price targets or projections because all the big banks do it, but they always change their numbers anyway. It doesn't make any sense. But people love it.

It gives them a sense of certainty. But you're navigating an uncertain environment. The markets are uncertain. Life itself in the future is uncertain. But having a plan, enter here, exit here, risk this much here, really helps you get an edge. This is an investor's edge. We won an edge. As many edges as we can get legal and ethical, I'm all for it. I'll take them all day long. Thank you, sir. I may have another. Please and thank you. The cherry on top. And taking the power and becoming the victor, you know, shifting gears from the victim mindset of, oh, I can't do this or this happens.

Become the victor. So there we go. Up next, we've got a lot more to cover. And we'll talk about some more timeless lessons. I'm Adam Sarhan. This is the one and only Investors Edge. Hi, I'm Gary Kalbaum, hosted a nationally syndicated radio show Investors Edge. We're not just handsome radio people. We manage investors' money for a living, specializing in fee-based discretionary money management.

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That's 8-8-5-5-9. That's 888-4-22-55-59. investment advisory services offered through call bomb capital management. Hi, I'm Dr. Jake Goodman, host of Beyond the Script, the podcast where I sit down with pharmacists to answer the health questions you didn't even know you could ask at the pharmacy counter. In this episode, we are diving into gut health with CVS pharmacist Victoria Motola, who explains why so many of us live with stomach issues we should not accept as normal. A lot of what I see is just like chronic bloating, chronic stomach aches.

Like I get a stomach ache every time that I eat. And it just becomes like a lifestyle where, oh, yeah, you know, I just have a stomachache every day. Or I'm constantly feeling like gassy. And all of those things are not something that generally, if you have a healthy gut, you should be living with. So that's when we deep dive. We deep dive into your medication.

We deep dive into your OTC medication. And then at that point, we can probably identify something that we can change. change. Hear the full conversation, plus some fascinating facts about how gut health affects so much more than just your stomach on Beyond the Script, a podcast from CVS Pharmacy and IHeartRadio. Listen now wherever you get your podcasts. When energy dips, your reviving routine deserves more than a quick fix. Reach for vital proteins, collagen and protein shake and chocolate. With 30 grams of protein and 10 grams of collagen peptides, it helps support healthy,

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your business loan may be issued by On Deck or Celtic Bank. OnDak does not lend in North Dakota. All loans and amount subject to lender approval. 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 cult bomb. It doesn't get better than this. And welcome once again to Investors Edge. I'm Adam Sarhan in for Gary K, who's out today. Hey, I want to do something nice for Gary. Go to GaryKK.com, leave him a nice message. Tell him what you like about the show.

Say something nice. He's a great guy and just give him some love. I would like to give him a gift. And I'll ask you all to help give him that gift. All right. So we left off talking about some timeless lessons, talking about the market, the environment right now, the indices are quiet after a big move up. Realize we're in a bull market and we're just a few percentage points depending on the index that you look at below a 52 week high or an all-time high, which is very strong.

The importance of understanding your decisions and planning ahead. The next big thing I want to talk to you about is thinking about decisions like a trade. So trades are binary typically. You have a positive outcome. You win. Negative outcome you lose. for the most part. Well, all right. We talked about increasing thinking of probabilities. Okay. The next thing is understanding risk. Defense first. I have an investment system. It's called AMP, AMPD. And A stands for advanced entry points. M is for market conditions. Align yourself with the market. P is psychological analysis. Know yourself. D is defense first. and folks that is the

pretty much number one thing I've learned since the 90s and the last 25 plus years 30 years is that defense and respecting risk is a superpower in this business it's an absolute superpower because if you look at the investors and the traders that fail they fail largely based on one reason because they don't respect risk whether it was 2008

with the CMOs and the CLOs and the Elemental P's and QRS and TUVs and the mortgages and the subprime and this or that or any trader that, you know, that blows up. It's largely due to the fact that they're just too much risk. And again, I want to control risk, mitigate risk as much as possible. The best investors, the best traders tend to be the best risk managers. I think of every decision like a trade. If I do this, what's the probability I'm going to have a desired outcome that's. positive for me. And then weigh that. Stack the odds of success in our favor. Go with the

trades that are accelerator, think the ones that are going to give us the best possible probability for a positive outcome, and eliminate all the ones that are lousy. So how do I do that in the market? Simple. I look for leading stocks. You see, there's two types of stocks in the market. There's leading stocks, true market leaders, by definition, the stocks that are leading the market and their peers and going up. And then there's everything else. Most stocks in every bull market in history lag. It's just the way the world works.

I don't make the rules. Again, I'm just here to play by the rules and just report to you, share with you what I've learned over the years. There's a small number of stocks. They call them the Magnificent 7 recently. And before that, decades ago, there was a nifty-50 and then dot-com and the dot-com stocks. the market exploded higher in 2000 or the late 90s and early 2000 into March of 2000 before it topped out.

It was a dot-com stocks that were leading at the time. If you owned, I don't know, utility stock or railroad or something else, it lagged compared to the dot-coms in that era or that bull market. And most of the time, every bull market has a new batch of leading stocks. and even then you see some cycles or see other sectors show up and lead. Defense stocks happen today, right now, we're breaking out. You can look at LMT, Lockheed Martin, NOC, North of Grumman. You can look at a bunch of other ones, HWM, I believe. You've got KTOS about the breakout and a few other ones.

Money's moving into that area. So what I, and then again, there's leadership. stronger stocks in the market and then there's everything else and the leadership is constantly in flux ebbing and flowing right this group leads for a little bit semiconductors led most of this year

now they're lagging a little bit they're pausing they've earned the right to pause and digest and consolidate that huge move they had now we're seeing other stocks show up defense stocks recently we saw the nuclear stocks last week with the consolation energy CEG company came out

and said hey we're going to turn three mile nuclear energy energy plant back on because we're going to sell power to Microsoft for their AI data centers. Wow. And then CEG stocked gaped up and exploded higher on Friday and then rallied again because there's a clear demand there for energy. Right? We haven't upgraded our nuclear power plant. The energy system, the grid has been under pressure.

It's near capacity. So on and so forth. So staying in tune, staying in harmony is my way of saying it's staying. in harmony with the market is really important. And an understanding that Newton taught us an object in motion stays in motion, stocks that are going up are good stocks. After I buy them, there's only three things the stock can do.

It can go up, it can go down, or it can go sideways. I don't want to buy stocks that are going down. So I eliminate those from those are the breaks. I don't even touch them. I don't even look at them. Look at Walgreens, WBA. 52-week lows, it's cut in half this year. Markets ripping, new all-time highs.

And this guy's going straight down. Not something I want to own. Right. And that could be a leader next cycle or in a few months or whatever the case is. But for now, it's lagging. No, thank you. And then do that for probably two-thirds, if not 80, 90% of the stocks out there. And then I've got the top cream de la Crem, the best of breed, right?

The all-stars or whatever word you want to use, the leaders, the leading stocks. right those of you that follow sports look we have baseball going on we have uh basketball just started and what you know hockey's about the star and you got whatever right basketball after that you know the strongest stocks in your league you just you know it hey yankees number one met's number one the 49ers the rams whatever it doesn't matter you know where you're start how about the stocks what are the strongest stocks in the market top five strongest stocks in the market most people have no idea. How do you plan to beat the market if you know the strongest stocks in the market? That's the type of things where I keep it real simple, but that's what I, that's the edge.

So I want you to, you know, take whatever you like out of this and leave the rest like you do with anything in life. But that's really something. Once I understood then it was crystal clear in my mind's eye, that's it. It's all I want to do is find leading stocks. And same on the website. Find that I've run. It's fine leading stocks.com. It's real simple. But not just buy them because are up, wait for ideal times that give us high reward and low risk entry points. So as we understand defense, we understand risk management, we understand we can control where we enter for the most part, a little slippage or whatever the case is. We can control where we exit for the most part, unless if you have a huge gap down. But outside of that,

you can put stops in, to get in, stops to get out. Ask yourself, before you enter, where am I going to enter? Where am I going to exit if I'm wrong? And how much do I risk if I'm wrong? it doesn't have to be any, you know, deeper than that, for the most part. It can really be that simple and that powerful. So that gives me control, gives you control, gives you the ability to control your risk and manage that risk better than everybody else or as best as you can. And that is a massive edge, almost an unfair advantage. That being said, there's a time.

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

every day. Or I'm constantly feeling like gassy. And all of those things are not something that generally, if you have a healthy gut, you should be living with. So that's when we deep dive. We deep dive into your medication. We deep dive into your OTC medication. And then at that point, we can probably identify something that we can change.

Hear the full conversation, plus some fascinating. Focinating facts about how gut health affects so much more than just your stomach on Beyond the Script, a podcast from CVS Pharmacy and IHeart Radio. Listen now wherever you get your podcasts. When energy dips, your reviving routine deserves more than a quick fix. Reach for vital proteins, collagen and protein shake and chocolate. With 30 grams of protein and 10 grams of collagen peptides, it helps support healthy hair, skin, nails, and joints in a smooth, ready-to-drink shake.

so your afternoon reset actually sets you up for success. Vital Proteins. Stay vital. Visit VitalProtene's dot com to get started. These statements have not been evaluated by the Food and Drug Administration. These products are not intended to diagnose, treat, cure, or prevent any disease. On Deck is built to back small businesses like yours. Whether you're buying equipment, expanding your team, or bridging cash flow gaps, On Deck's loans up to $400,000 help make it happen fast. Rated A-plus by the Better Business Bureau and earning thousands of five-stileged. trust pilot reviews. OnDec delivers funding you can count on. Apply in minutes at ondac.com. Depending on certain loan attributes, your business loan may be issued by OnDec or Celtic Bank.

OnDec does not lend in North Dakota. All loans and amount subject to lender approval. 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 Coltbaum. 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 Sarhanan in for Gary Kay, who's out today. In case you're just joining us or missed any part of the show,

or you want to leave a nice note for Gary, which I ask everyone to do, be very nice. Go to GaryK.com. You can pause, rewind, fast forward. I know I have a lot of content that I want to share with you. I'm passionate about this topic. It changed my life, and I've seen it change other people's lives. I'd love to help.

and that's what drives me. So again, you can pause, fast forward, rewind at your leisure on any device you want, all for free in GaryKK.com. All right, next. So put a lot of this together. We know the importance of risk management. We spoke about the importance of finding leadership,

knowing the leaders. We spoke about the importance of breakouts, right? A stock has a trading range between, let's say, $195 for six months, and then one day it breaks out above 100 on massive volume. Well, you know, that's not Aunt Mary and Uncle Biden. doing the buying. That's the big institutions. Something has changed. There's a catalyst.

That's a breakout. So I want to know those breakouts. Every day in the morning, I send out a breakouts report. I want to see stocks that are breaking out, specifically leading stocks that are breaking out. Well, Adam, how do you find those leaders? Another great way of finding leaders is looking at a 52-week high list, looking at stocks that are making new highs. But not just blindly buying anything that's on a new high list, because sometimes they're extended. It's not prudent. there's no real exit point. It's too far above its pivot, its pivot point or its by point.

It's too far above its 50-day moving average or 21-day moving average. It's just extended. But go through these lists and then take out the ones that are extended or the ones that aren't good. There's no volume there. Maybe it doesn't have your fundamental criteria,

whatever the case may be, and then find the ones that meet your criteria. And the art of saying no, folks, is an absolute superpower in life and in markets. It's one word. One of the shortest words in the language. No. No.

Charlie Munger, Warren Buffett, his late partner, Charlie Munger, rest and peace. Man's a genius. Einstein level genius. Great. Him and Warren have a great line. They call it the circle of competence. And they draw a circle and say, this is what we know. This is what we're good at.

Go back to that dot-com bubble. They didn't really participate in that because.com was not part of their circle of competence at the time. So they focused on what they know. Insurance companies, railroads, financials, their circle of, etc., their circle of competence. Coca-Cola, American Express, you know, things like things that they know when they understand. The credit card. Coke. We get it.

Okay, great. Dot com. I don't know what dot com is. Warren said Charlie. Charlie said, I don't know it either. Hey, we're going to pass. No. Well, we had huge moves that we missed. That's okay. Berkshire warns still today now, what, 25 years almost after the dot-com bubble burst?

Still one of the wealthiest investors on the planet ever. And he didn't really participate in the dot-com bubble. It's okay. The other idea, the concept that I want to keep, you know, keep, I'll share with you and have you keep in your mind, is that it's virtually impossible to consistently catch every great leading stock. I used to get upset when I missed something. Oh, man, I saw it. Did you buy it? Nope. Adam, I did not buy it. Well, guess what?

I have a great line that's not mine. Great author. His name is Jeffrey Fox. He has a line. He goes, it don't mean a thing in business. This is his motto. It don't mean a thing unless it goes kaching. In the business setting, right? I had a great idea. Did you execute the idea?

No. Well, okay, it doesn't mean a thing. Simple concept. Very powerful. I always use the comparison to the high school boy in a dance who wants to kiss all the pretty girls. That's impossible. You just need one pretty girl and you'd be very, very happy. That little boy, you know, that 18-year-old boy, whatever it is, is going to get happy. Okay, great. Same thing here with the markets. One good stock, two good stocks a year.

You catch a really good trend could make your real simple. It doesn't have to go any deeper than that. So, where you've got two good stocks, three stocks, four stocks, there's going to be other stocks that show up. And it's okay. If you miss them, as long as you can focus on the one or two or three or four or five, you know, just focus on leaders. So what happens, what's happened to me is that over the years now, I think I've been doing this now professionally since 2004. I think am I serious seven? Yeah, 2004.

So anyway, about 20 years professionally, I started trading in the 90s. But really, what happens is it helps you focus on leadership. So I don't care about all the stocks that break out from low-level bases or breakout after hitting a 52-week low or breakout and they're below their 200-day moving average and below their 50-day moving average. And all the stocks are just underperforming and lagging badly. Most of the stocks in the market. I don't know them. I don't care about it. I mean, I know of them.

know them intimately like I know the leaders. I just want to see leadership. So look at LMT when you have a what does this mean? Adam, give me an example. Look at LMT. These are leading stocks, stocks trading near 52 week highs or at 52 week highs. In some cases, could be all-time highs. It doesn't matter depending on the stock. And they break out. Ideally, not always, but ideally you have heavy volume. And let's say that example of a hundred and 95, it breaks out above a hundred, few days, few weeks, few months later, it never looks back. It just goes straight up. And next thing you know, you're trading at 115, 120, 130, somewhere in that range. And then it builds a new base. All of that is, and then it'll move sideways between, let's say, 120 and 130 for another

year, six months or eight months or six weeks, or three weeks or whatever the case may be, and then break out again. And then have another run maybe 20, 30, 40, 50 percent. Who knows? There's no limit how high you can go and then build a new base and consolidate and then break out again and then again and again. That's how leading stocks work. Now you're going to have some wild pullbacks in between because big growth stocks tend to do that. You can look at a Navidia, for example, NVDA, which full disclosure, I have a position.

And the stock had a huge move this year and then a huge pullback. and then it rallied back again and now it's just consolidating and spacing. Look at other stocks, some of them have a huge move and then they stop leading and the moves over and they never come back again.

So understand these things are that they ebb and flow, they're fluid, they're constantly in motion. The market folks is an infinite game. It's another concept I want to share with you. If you play baseball, you have a fixed number of players

certain beginning, clear beginning, clear end, keep track, one team wins, one team loses end of the story. Football, same thing. It's a finite game. Most games, chess, checkers, football, baseball, hockey, whatever. Finite games. Clear beginning, clear ending. The market, it's an infinite game. It requires a different mindset. When you're playing a finite game, you play with a certain strategy, you play because you know there's a fixed number of players, one's going to win, one's going to lose. Here, there's new people entering and exiting the market literally all the time. Right now, as we speak, we probably have.

I don't know the exact number, but thousands and thousands, if not millions, of new accounts being opened and closed all throughout the world all the time, all day long, all night long. It's just the way the world works. It's not a finite number of players. People add money to their, and then by millions, I mean, not just new accounts opening up, but people adding money, taking money out, putting money in. It's constantly, constantly growing and changing. So it's a finite game.

It's going to outlive everybody. The markets will be here in 100 years, 200 years, 500 years, bearing some unforeseen major collapse of civilization. As long as things are working, the markets will be here and functioning. So it's an infinite game. So keep that in mind. Remember I said earlier, one trade doesn't matter. As long it doesn't blow you up, you respect risk and as those

risk, you know, keep risk very small, then it doesn't matter. When it does matter is if it blows you up. In other words, you have a hundred dollars in the account and one trade, put it all in, then you lose it all. That matters. But you lose one percent of that, or half of one percent, or 20 basis points, and you lost, that's okay. Because you can fire many bullets, so to speak, you can take many trades and not have a lot of damage to your portfolio. And that's what I meant earlier when I said risk management and defense first. It's not just keep your loss as small. That's a huge part of it.

The other part of it is protect your portfolio. Protect your money. It's your money. I've seen, my goodness, $2 million accounts go down to $300,000 because of lousy risk management. Three and a half million dollars accounts go into $300,000. I mean, just annihilate, and these are retired folks, because they didn't respect risks. That's a timeless lesson for everybody. Up next, we've got a lot more to cover.

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Action. Investers Edge with Gary Kulp. 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 convenience anytime you want 24-7, all for free on GaryK.com. All right. A few more things as we wrap up here in the last few minutes we have together. We spoke about a lot.

And these are timeless lessons, folks, that hopefully help you the way. they've helped me and countless other people. Understanding that everything in life comes down to the quality of our decisions really changed my life. And then becoming the victor saying, hey, I take full responsibility for everything that happens to me, really, really change my life. And then respecting risk. Just in tennis or in any sport, you have unforced errors.

Let's say in tennis, you want to hit the ball back and get it on the other court and in-in, like make sure the ball lands in. That's the only job you have as a tennis player. you hit a winner and the other person can't respond, or you can't hit the ball back. But just to keep it real simple, you want to reduce your number of unforced errors. If I hit the ball in tennis and it goes out of the court, I just lost a point. The opponent didn't do anything to get that point. I literally just gave that person a point.

That's an unforced error. Some of the best tennis players in the world are any athletes or any performance-based people. This is a performance-based business. we get paid to perform. Plan it simple. If you're not happy with the performance, you can improve, do better,

and that's it. Okay, great. Athletes, actors, there's no guaranteed outcome. You can't go, like, for example, you go to an accountant. For the most part, any good accountant can do your taxes.

Maybe one can do it better than the other, but the point is a taxes will get done. A dentist, any good dentist, that graduated from a good school and is good, could fill a cavity. Now, those are businesses that have predictable outcomes. In our business, since it's a performance-based business, there is no predictable outcome.

You can't guarantee 1 plus 1 equals 2, meaning you guarantee you'll be up 25, 30, 40, 50, 80, 100, 2% every year. You can't guarantee you'll be up 50% every year. It's physically impossible that I know of at least how to do that. Every single year, guaranteed. A lawyer can't guarantee she can win in court. She can hope do a good job, but there's no 100% guarantee, right? So there's just certain things in life where there's a guaranteed outcome or predictable outcome is a better word.

But in other words, dentists might not fill the caveat. There could be an issue. Small probability, small chance, but it could happen. So it's a predictive, highly confident, high probability, you know, predictable outcome. But this business is not. So to keep your mind straight, hence the name of my book, the title, I was just talking about, somebody today said, oh, Adam, you know, I love your title. I said, man, you must be the only person on the planet that loves the title of the book.

Psychological analysis, because most people don't. It's not a, you know, a, what's a good rated G word, attractive title for the book. But it's something that matters to me because it's fundamental analysis, technical analysis. Okay, there's psychological analysis, know thyself, right? Upgrade the user. We upgrade our software all day long. Upgrade the user. Make better decisions.

I want to get smarter. I want to make better decisions. Why? Because if I can upgrade my user, what's going to happen to my quality of my life? It's going to go up or down. It's probably going up. I want that. Yes, please. So I'm a voracious reader.

I love to learn. I know I don't know. So I've got one job. It's to learn. Really that simple. And I love it. So these timeless lessons, folks, as you take what you like, obviously, as you do with everything in life and leave the things you don't like. but ask yourself, how can I come up with the plan

to create some structure to my investment? So Adam, it's a performance-based business. How do I perform better? Well, here you go. It's one word, structure. If you have two people, one has structure, the other one doesn't. Who do you think it has a better outcome?

Doesn't mean the person without structure is going to be bad, so to speak, but just on a probability standpoint, you increase your odds of success, reduce the enforced errors. Give yourself a structure. Come up with the plant. What works for you to analyze stocks?

What works for you? Create a certain amount of time and do some work. Look for the leaders. Look for stocks and setting up in bases. Look for stocks that are breaking out. Ask yourself when you're going to get in. When are you going to get out? Find setups before they break out.

And find the breakouts. I would sign up to Convictionleaders.com. It's a phenomenal service. And Gary does the work for you and then some nightly webcasts and he shows you what's happening during the day, so on and so forth. But ask yourselves, how do I get structure? Get an edge. Look at high school. Every high school in the world, if you go to school, takes in kids in ninth grade,

12th grade, their kids go out of school, pretty much all you have to do is show up and do the work and you're going to graduate high school. How is that possible? Because they're structure. Every Monday, Wednesday, Friday, 9 to 10, they're doing math. 10 to 11, they're doing science. In science class, they only do science. In math, they only do math and so on and so forth for the rest of the day. At the end of the four years, hey, here's your diploma. Thank you very much. On to the next one. College. Great. You make a good. your own schedule. The dropout rates much higher on college. Wonder why. Shocker of all shockers. There's no forced. High school, pretty forced. You're going here. This is the way it works.

College, here, you make your own schedule. What? Then all of a sudden, things fall apart. Not for everybody, of course, but I'm just speaking, just generally speaking, right? Humans. Structure is a superpower. And I strongly, strongly urge and suggest everybody I talk to to create structure, any goals they have in life, whether it's working out, it's losing weight, it's getting better at the market, it's reading, it's anything you want to do. Structure wins almost every single time,

especially when you're in the learning phase. And even when you're not, how do you think the greats become great? They have structure, they have discipline. Michael Jordan used to wake up, I think, 4.35 in the morning and shoot the basketball all day long. Tiger Woods one time was swinging the golf club, a guy yells at him,

I wish I was good as you, Tiger. He goes out to him. He's like, show me your hands. Guy shows him his hands. He's like, look at my hands. I have blisters all over him. I wake up at 4 o'clock in the morning. I swing that golf club until my hands bleed.

You don't want to be as good as me and he walks away. It's true. Show me your actions. When I talk to people right away, tell me your actions. It's not what you want. It's what do you do. When you understand that there's multiple wants that are conflicted, conflicting. I want to lose weight, but I want to eat the cookie. Well, what do you want more?

What are the actions that support that? And when you adjust that, you get your actions in line with what you want most. Guess what? Life changing. I mean, most of the time, big success, big life-changing results on the other side of that. Oh, I want a six-pack. Well, how many set out you do today, Adam? Zero. How many cookies you eat today, Adam? I had a cookie today. Okay. Do you really want that six-pack? I didn't have a cookie today, but I had one yesterday. So it's the same thing. All right.

Hope the points have been made. I want to thank you all very much for being here. This is an absolute pleasure. It's a delight. It's a privilege. Gary back, I believe, tomorrow. And I'll speak to everybody again soon. Take care.

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. Success starts with your drive, and American Public University is here to fuel it. With affordable tuition and over 200 flexible online programs, APU helps you gain the skills and confidence to move forward. Whether you're changing careers, starting fresh, or pursuing a lifelong passion, our programs are designed for people who never stop. You bring the fire, APU will fuel the journey. Learn more at APU.APUS.edu.

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