Investor's Edge with Gary Kaltbaum - Week In Review [01.12.2024 w Adam Sarhan]

Episode Date: January 12, 2024

https://garykaltbaum.com/Adam Sarhan's BookPsychological Analysis: How to Make Money, Outsmart the Market, and Join the Smart Money Circle (Wiley Trading)

At CVS, it matters that we're not just in your community, but that we're part of it. It matters that we're here for you when you need us, day or night, and we want everyone to feel welcomed and rewarded. It matters that CVS is here to fill your prescriptions and here to fill your craving for a tasty and, yeah, healthy snack. At CBS, we're proud to serve your community because we believe where you get your medicine matters. So visit us at CVS.com or just come by your food. store. We can't wait to meet you. Store hours vary by location. 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 Friday, January 12th, 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, talk about the market and everything we have in store for you today. I just want to quickly give you some housekeeping, some reminders, if you will. This show is about your money and all the fun points in between. If you don't get this show in your city, you can go to GaryK.com, listen live or archive. We're live Monday through Friday, 6 to 7 p.m. Eastern. Also at GaryK.com, you can follow Gary on X or on Twitter by just pressing the button.

You can email Gary, you can subscribe to Gary's morning notes, sent directly to your inbox for free. You can also ask about his money management services or sign up to his premium service, which is convictionleaders.com. All from GaryK.com. So you can either sign up to his premium service if you want more in depth. If you want more Gary, because he's done a phenomenal job of nailing this market for you, not just this year, not last year, but for years and years and years. You know, I get the question often. Adam, when did you first hear about Gary? You know, how'd you cross paths, so on and so forth?

back in 1999, I'm dating myself. I was in school, undergrad, and I was on the AM radio listening. And I heard Gary. I just moved down to Florida. So after I moved down, I was on the radio, I wanted to learn about the markets. I started reading everything I'd get my hands on. And I came across Gary's show. And it just clicked.

It made sense to me because there's fundamental analysis, which are, if you're not familiar with that, there's how you study the company, studied the earnings, study the revenue, all the metrics that traditional value investors study. And then there's technical analysis, which is you study the stock. Think of the company as one entity, if you will, and the stock is a complete separate animal. And traditionally, fundamental analysts and technicians or technical analysts don't like each other. It's almost like two feuding religions or two feuding sports teams or whatever the case is. And what Gary's approach is, which is Bill O'Neills and many other people as well,

but what really clicked with me with Gary instantly was he combined. finds both. And that made a lot of sense to me. So there's other parts of the story too. And fast forward several years. And I've been pretty much plugged into Gary professionally ever since. So it took me several years to finally connect. And then I reached out and asked him for some books and I was listening to the show every day. And then he was kind enough to share and so on and so forth. So just again, if you want to get ahead, what many things that Gary's taught me over the years is that it's really important to take responsibility for every decision you make and the outcomes of those decisions. So it's very easy to get pigeonholed or, you know, group think

or follow the crowd and say, oh yeah, I'm going to be an analyst or a technician or a fundamental, you know, analyst, whatever the case may be, and then pigeonhole yourself into one group. But with Gary, the best thing, and again, I read conviction leaders, I listen to the show, and tuned into what the guy says, and he's got his hand, he's got his finger on the pulse. And the best part is he's flexible. When market conditions change, he changes. And he changes quickly, right? And that's one of the superpowers that are required to becoming very successful in this business.

See, it's almost like the market's counterintuitive nature, not in a malicious way or in a devious way or anything along those lines. But a lot of people, a lot of folks I speak to. I've been doing this since the 90s. I started trading in the 90s, but professionally since 2004, is that they get caught, they get stuck in their head. You know, Tony Robbins has a great line. He goes, if you get stuck in your head, you're dead. I think that came from his teacher, Jim Rohn, way back when.

But it's a simple line where I see it. I'm guilty of that for many, many years and many areas of my life where you just overthink certain things, right? But really, the ones, Darwin talked about this. There's not so much the strong survive. if it's the ones that are able to adapt the most to the changing environment because the environment's constantly changing. So that is a superpower being able to take, you know, get out of your own way.

You ever know anybody or yourself or anyone at all, for that matter, that is really good or smart but just can't get out of their own way? And they're not achieving the most that they, you know that they have more potential, but they're just not getting there because they can't get out. You know, you've seen this, I'm sure, all over the place. So with the market, there's so much data. There's so much information. I'm going to talk about inflation.

I'm going to talk about the major indices. I'm going to talk about all that stuff. But those of you that know me, I'm really big on psychology. Because that to me, well, I have a book. It's called Psychological Analysis. It was number one on Amazon every day for a few months. And my whole contribution to Wall Street, in my way, is by saying fundamental technical analysis are not enough to beat the market. I study successful investors.

I mean, that's model success. right? Why reinvent the wheel? And psychology, the the ginsiquois, the missing factor, the magic elixir, whatever word you want to use to describe it, it's the user, it's themselves. The successful ones, and I mean the top of the top of the top, are the ones that are disciplined, the ones that make rational, not emotional decisions, the ones who get out of their head, the ones who stay in tune with the market, the ones who are flexible, so adaptable, so on and so forth. These are traits that really are,

they make sense, it's easy, it's logical, it's simple, oh yeah, I get it, okay, great. But being able to do it, it's a whole different thing. So they're simple, I like to say they're simple, but not easy. Right. It's almost like losing weight, right? Calories in versus calories out. We all know that's the formula.

Anyone can lose weight if they eat less than they burn, but most people are overweight. Simple concept, just not easy, right? So with the market, when you want to get ahead, really understand there's nothing wrong with the external environment. There's nothing wrong with the economy. There's nothing wrong with the market. It's just a matter of upgrading the user. I had a really good gift for the holidays.

My family bought for me. It's a video game controller, old Nintendo joystick. And it says, I'm not getting older. I'm leveling up. Like in video games, you level up. So I'm all about that. I love leveling up. To me, you know, what's the reason why I'm not a billionaire?

a billionaire. I'm going to exaggerate here. There's nothing more with the market, the economy. It's user error, right? Think of a printer. My printer wasn't working over the weekend, so I called HP. Oh, first question they asked, is it plugged in? Oh, yeah, it's not plugged in. Okay, great, plugging in, all of a sudden it works. That wasn't the problem with the printer, but, you know, that's the first question they always ask. Lo and behold, nothing wrong with the printer. There was a problem with my Wi-Fi. Okay, great. It was operating at a different frequency and the printer didn't recognize it. Okay. A couple of things they did. They fixed. it bam-bang, user error. Had I taken the time to read the printer's manual, I would have known.

I didn't do that. So, okay, my fault. Anyway, quick fix. User error. So again, why am I sharing all this? Understanding the mindset, look at the variables you can control with investing. Super, super important. And going back to modeling success, I model success. I look at Gary, look at what he does, look at how he interprets the market, how he keeps his finger on the pulse, and how he's he changes when things change. He's done a phenomenal job at Conviction Leaders. You can take a free trial over there if you want. Go to Convictionleaders.com.

I work with him on that and I read it all the time every time he publish it something. And he'll publish several times a day. His thoughts on the market. Every night he does a webcast. 15, 20 minutes, 30 minutes, 40 minutes, depending on the market and what's going on where he breaks down what he sees

and shows you charts and explains the logic and the rationale. It's really great. It's teaching you how to fish but gives you the fish as well. So when you step back and ask yourself, you know, the end of the year, it's New Year's resolutions. Okay. I always like to ask myself, did I accomplish what I wanted to accomplish last year? Okay. We know by the second or third week of January, most resolutions are gone.

We're there now in the middle of January. So I want to make sure over the long weekend, I revisit. And I want to make sure I can get ahead. What areas can I double down on? What areas can I improve? where are my weaknesses, where are my strengths? How can I make more rational, less emotional decisions in the market? What processes can I set up to get an edge?

And we talked about data. There's so much data out there. What data actually matters? How do I filter out the noise and focus on the information that really moves the needle for me when it comes to investing or trading or any endeavor that I want to do? The markets, we have an upper hand. that's easy because it's price. You know, one of the most important things

is focusing on price action in the market. Because the market's telling you what the market, you know, I always like to say the market is speaking and ask, are you listening? The market's telling you what it thinks at any given time. Now that changes because prices change all the time. But once you learn how to

look for clues in the market, you see certain behavioral tendencies. Gary talks about this. It tells you just like going through a photo album and looking at familiar faces. When you study, you the biggest winners in history, you start seeing, oh, wait a minute, they go from the lower left to the upper right. They respect the 50-day moving average or the 21-day moving average. Or they tend to have strong earnings. They tend to have the making new highs, so on and so forth. So when you

find tomorrow's winners, oh, hold on a second. I have a stock that's going from the lower left to upper right. It's consolidating nicely, building a base. Volume is drying up. Company has explosive earnings. They have a new product that's in demand. It's near a 52 week high. It's above its 50-day moving average, above it, you know, near a 21-day moving average, if you will. And then all of a sudden breaks out above resistance on massive volume. Well, it doesn't have to go higher, but odds are it will.

Not always, but odds are it will. Especially if the market environment is bullish. So, again, I'm a big picture kind of guy. And I like always with these, especially with the show, end of the week, beginning of the year, it's always important to just step back and put things in perspective. Up next, we're talking about some stocks, the market, sectors, and a whole lot more. 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.

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our programs are designed for people who never stop. You bring the fire, APU will fuel the journey. Learn more at APU. APUS.edu. One sweet, melty bite of a Hershey's bar, and suddenly I'm right back sitting on the front porch with my grandmother on a slow summer afternoon. She doesn't say much, just breaks the bar in half and hands me a piece. I open my mouth to say whatever a nine-year-old wants to say.

And she replies with a low, listen. So we sat there, listening. That was the first time I learned that quiet, it can feel full. Hershey's. It's your happy place. It's time to switch on the integrator units

and get the brain cells working. You're listening to. Hey, this promises to be fun. Investors Edge. The last bastion of quality programming. With Gary Coltbaum. It doesn't get better than this. And welcome once again to Investors Edge.

In case you're just joining us or missed any part of the show, you can go to GaryK.com. You can listen to every episode. pause it, rewind it, fast forward on just about any device you want. All for free on Gary K.com. So I spent the first part of the show going over some of the traits that are required to make smarter decisions in the market and some mindset things because really the mindset's one variable that separates the top 1% from just about everybody else.

The discipline, the motivation, the goals, the focus, you know, these things sound simple, but they're really, really powerful when you harness the energy. Really powerful. Now I want to talk about the market. So the major indices remain exceptionally strong. The QQQ, the NASDAQ, had nine up weeks in a row. It fell the first week of January, and now it's up again this week. Very, very strong action, even as Apple broke below its 50-day moving average. And Apple is one of the biggest. stocks in the market, Microsoft, I believe, just surpassed it, but weighting in the index, especially the NASDAQ 100. And the NASDAQ 100 is above its 21 day and it's above its 50 day,

barely budged. The rest of the stocks of the NASDAQ overall, they're still acting very strong, for the most part. Some of them are weak, but for the most part, the NASDAQ 100, let's put it this way, the QQQ, still acting very, very strong. The high recently was 412.92, and right now, we're just a few points below there. When you have a market this week, we have a market. We have inflation come out. CPI was on Thursday and then PPI today, the consumer price index and then the producer prices. So when you have consumer prices come out like what happened yesterday on Thursday, and they came out higher than expected. And I'll dive into inflation and talk about it some more because I know a lot of people like that stuff, where it's important to put things in context.

Most of the time, one report doesn't really matter. But when you have a situation where the Fed and the market, much of the rally from the end of the of October into early November up until now is based on one thing. It's based on the Fed cutting rates because they beat inflation. But all of a sudden, the jobs report came out stronger than expected and now inflation is stronger than expected with a CPI number. The market opened lower yesterday, but closed higher. This is the NASDAQ 100 I'm talking about. And bounced off its 21-day moving average. When you have an environment like that where you have every chance in the world the fall. And Apple, one of the biggest stocks in the market, it's already below its 50. And Tesla

getting hit, below its longer term moving averages as well. And the NASDAQ 100 stays and closes up yesterday, that's a very bullish sign. Because when you don't fall on supposedly bearish news, instead you go up, that's bullish. And the opposite's also true. You know, my morning report on finleading stocks.com I had just yesterday I said, the market's like a game of tug of war. on any time frame, daily chart, intradate chart, weekly, monthly, quarterly, annual chart, to me, it doesn't matter. When you open week, you open down like you did Thursday, and then you close higher, that all things being equal, that's bullish. It's a game of tug-of-war. For that day, the bulls won that day.

So for me, the close matters more than the open on any time frame that I look at. The opposite's also true in a bear market. When you open higher and close lower, that's a bearer sign. So again, all things being equal. So when you look at your stocks, subtle but important signs of clues, just detective work. We're looking for clues.

We're looking for probabilities, right? Could the market pull back into the 50? Yes, the major indices. Sure. But let's look at the NASDAQ 100s. They focused on that. But we're just a few points below fresh record highs. We could also easily just keep going up.

So in the last 10 weeks, we had one down week. was it 11 weeks. So sorry, we're up nine weeks in a row, then the 10th week was down. This is the 11th week. So in the last 11 weeks, we had one down week. That's a very bullish action. And again, we're just a few points below an all-time high in the NASDAQ 100. So to me, that's strong. On a weekly basis, this is an up week, that's strong. Again, when you have every chance in the world to fall, and instead of falling, you go up, that's a bullish sign. So that's, that's a, That's the first thing I'll keep in mind.

Second, you look at the S&P 500, similar situation, very strong action. Again, upweek this week and it didn't even touch the 50-day moving average. The NASDAQ 100 didn't either, but it just remains perched near its recent highs, right? The Dow, look at the D, the S&P, by the way, for those of you following at home, is the SPY, is the S&P 500. It's the E-T-F that tracks it. The Dow, D-I-A. Look at that ATF. Super tight action.

On a weekly basis, we're going tight now for the last three or four weeks. Very bullish action. So there's two ways to consolidate a big move up. From the October low all the way up until January, you had a big move in all of the market based on the fact that the Fed's going to cut because inflation's coming down. Well, okay, this week we found out that inflation's not coming down as fast as people are expecting. And the market's still up. Bullish sign.

So it's not going to take much for the market to shoot up and keep, you know, resume its uptrend. That being said, could we pull back? Absolutely, we can pull back. And in fact, I welcome it. Because when the market pulls back, one of the things I love to do is in a strong environment like we're in now and the market pulls back a little bit. And again, we're seeing distribution beneath the surface. In fact, one of Gary's webcasts just yesterday on convictions, leaders.com, which I urge everybody to go out and take a trial if you're not already a member.

He went through a whole webcast yesterday in the afternoon before the close on icky was the word he used. Icky action, distribution, areas to avoid. Not only does he tell you where to look at, you know, leading areas, he also tells you the lagging areas and the areas to avoid. And there was a whole webcast on that yesterday in the afternoon before the close. So, yeah, there's distribution occurring beneath the surface, but looking at the major indices, the action still remains strong.

And the notion is the Fed's going to cut rates this year. Now, they cut rates once or twice. They cut rates four or five times yet to be determined, right? It's data dependent. All I know, and again, out of all the data points that are out there, the Fed, the Shmed, the this and that, all that stuff takes a backseat. A friend of mine calls it, be done and follow price. Don't, you know, what shows up on your statement?

price. Nothing else. Literally, nothing else shows up on your statement. The single most important factor that determines whether people make money

or lose money in this business is the price. The difference between your entry price and the market price. So sure, we can analyze other data points. You're telling me talking about moving averages. You hear me talking about volume.

You hear me talking about earnings and you're talking about revenue and return in equity. I love all that stuff. Great. But in my mind's eye, there's a priority here. Price is primary.

Again, in my humble opinion, everything else is secondary. Why? Because what shows up on my statement? What determines whether I make money or lose money in this business? Price. So when you have so many data points, it's easy to get stuck in that analysis paralysis. If you haven't heard about that before, you can Google it. It's just a common term that people make where they have too much data in front of them.

They analyze, analyze, analyze, and they get paralyzed. They can't make a decision on what to buy, what to sell, when they get in. They just get paralyzed. And they're over-analyzing. And a lot of smart analysts, not good traders. So again, focus on price. Hope this helps. Up next, we'll talk about sectors and stocks and a whole lot more.

I'm Adam Sarhan. This is the one and only in Investors' Edge. Energy season always has a way of sneaking up on you when you least expect it. One minute, you're listening to your favorite podcast. You're locked in. Hanging on every word when BAM! A surprise bonus episode drops. Brought to you by allergies.

The itchy, watery eyes hit non-stop sneezing kicks in, and a runny nose forces you to hit paws. Suddenly, everything is a trigger, the flowers, the breeze. It feels like even the trees are out to get you. Luckily, Kleenex ultrsoft tissues have you covered. They're allergist approved and silky soft to help prevent skin irritation, so you can stay comfortable all season long. Don't let allergies put your life on pause, especially not when you finally got your cue exactly where you wanted.

Be prepared with Kleenex Ultrasoft tissues. For whatever happens next, grab Kleenex. Add them to your cart today. 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.edu. One sweet, melty bite of a Hershey's bar and suddenly I'm right

back sitting on the front porch with my grandmother on a slow summer afternoon. She doesn't say much, just breaks the bar in half and hands me a piece. I open my mouth to say whatever a nine-year-old wants to say. And she replies with a low... Listen. So we sat there. Listening. That was the first time I learned that quiet can feel full. Hershey's.

It's your happy place. We're listening to. America is talking. Investors Edge. He's got to be pleased with that. The crowd is just on his feet here. He's a Cinderella boy. With Gary Colbomb.

It comes highly recommended. You're going to feel better if you talk to him. And welcome once again to Investors Edge. I'm Adam Sarhan in for Gary Kay. In case you're just joining us or missed any part of the show, you can go to GaryK.com and listen for free. Rewind, fast forward. You know, I tend to speak fast because there's a lot to cover in there's so little time.

And if you want, people email me all the time and say, oh, you know, we were able to go back and pause it, rewind it fast forward, so on and so forth. Thank you for covering everything that you cover because I try to fit a lot in there. And I tried to do things a little bit different. than Gary, so it's not, so it's a different flavor, if you will. And it's really important when you look at markets to ask yourself, you know, let's talk about competition for a second,

because this is important too, who am I competing against? Yes, you're competing against everybody else in the market, sure, all the other participants. But what I like to say is I'm also competing against my former self. And so is everybody else. Who's smarter you today or you 10 years ago. Hopefully you today. Hopefully me today. Well, all right. Who's going to be smarter? Me today or me in 10 years? Hopefully me in 10 years. So what steps am I taking to objectively analyze my behavior and my actions? Remember, making a decision is just like a trade in my mind's eye. Every decision is a trade. What does that mean? There's an element of risk and there's an element of reward.

Real simple. Should I cross the street? Well, if I look both ways and there's no cars coming, I'll cross the street. Should I, you know, small decisions to big decisions. I can go on and on,

but I trust the points made. Should I get on the plane? Should I get married? Should I cross the street? Get on the bus. Take this job, quit that job. Buy, blah, blah, blah, blah, blah, blah. Buy the stock.

Sell this stock. Let's talk about how to make decisions in a way that can help you overcome that analysis paralysis that we just discovered, just discussed. When people have too much, you know, data points coming in, even it happens with a few data points. Me, myself, I mean, I'm very bad at shopping for myself. It's just not a skill.

It's not something I enjoy. It's not something I'm good at. I go into the, you know, even restaurants, I go to the menu. And it's like my brain doesn't even read. what's on the menu because I've eaten at restaurants before. If I go to a Mexican restaurant, I'm going to get fajitas. I know my order. Okay, no oil.

That's it. I don't have to look at the menu, but that's my brain. I go to another restaurant. I have my meals. I've tried a lot of things and I know what I like at. Each restaurant, the overall genre. So for me, I don't want to sit there and read a menu. My wife, God bless her, she is a foodie, she loves the menu, she loves a cook, she loves

all that stuff. And she'll read the menu and she'll talk about the flavors and to me it just way over my head. I don't get it. Okay. Shopping, clothes. Same thing. I'll walk into a store or even now online, whatever it is. And it's like my brain just doesn't process the information like a normal human being.

So she walks in, no problem whatsoever. Bam, bam, bam, bam, bam. Okay, know your strengths, know your weaknesses. So I'm like, well, what if I buy these, you know, this shirt? But what about that shirt? Can I get a better deal over here? Let's go check that store. And then I get through all these scenarios and I end up not either wasting a lot of time

or not buying something. And the list goes on and on. It doesn't matter. You're watching TV. Let me, you know, just pick a show. No, I'm going to go through the menu. Then I'm going to go look at, you know, to Netflix. I go look at Paramount Plus.

Then on Disney, I'll go look at Paramount Plus. And then Paramount. Plus, I can look at HBO Max and so on and so forth. And then next thing you know, an hour goes by. So when you make decisions, how do you get over that? Or how do you overcome that, right? Well, all right. Here's what I've learned. And this has helped me. I hope it helps you.

And that's why I'm sharing it. One, max risk. What is the worst case scenario? If I buy that shirt, I don't like it. I'm going to return it. I lose nothing. Just buy it. That has helped me tremendously. If I buy that stock, I can't get a refund and return it if it goes down against me.

But what I can do is I can put a stop and get out. So before I enter, I ask myself three questions. Where am I going to enter? Where am I going to buy? Once I get what I'm going to buy, then where am I going to enter? Here's the question. Where am I going to buy? Once I get that, you know, where do you enter?

So those are two parts of the first question. What to buy? Where to get in? How about that? Where to get in? Where to get out? Where do I exit? And then three, how much do I risk it if I'm wrong?

And again, all this is writing my book, psychological analysis. You can go on Amazon and just type in psychological analysis or search my name Adam Sarhan. All right, real simple. S-A-R-H-A-N on Amazon. Pick up the book. If you like it, great. Let me know. Or leave a nice review if you want.

If you want to be nice. So when you understand your max risk, all of a sudden there's pressure is released. Weight is lifted because I know my worst case scenario. I'm going to lose more than I'm going to win in this business. I'm actively trading. Most of my trades don't work and that's okay. Just like baseball. The best baseball players in the world hit what, three out of ten, maybe four out of ten?

Not even. a little bit over three out of ten. That means the best all-time baseball home-run hitters, most of them have records for striking out the most. But that's okay, because they strike out, they lose one point. Grand Slam home run, they make four. Asymmetric returns. So in trading, it's the same thing.

If I'm going to be wrong, just keep it real simple, I'm going to be wrong one unit, whether it's 1%, half a percent, 10 basis points. It doesn't matter. You pick what's right for you. I'm just giving you structure here. However you want to, you know, I put the cards on table, whatever card you want to pick up and play, by all means, do it. And again, no investment advice is being given. Let me be abundantly clear here.

So this is just general framework on how I think and what's helped me, some tools that have helped me and helped other people. So when you realize your max loss and you know most trades aren't going to work, okay, when you're wrong, let's say one unit, that's okay. Because out of 10 trades, I'm going to exaggerate here, but let's just say I'm wrong, nine out of 10 trades. That means I lost 90% of the time, right? Another trader wins nine out of 10 trades. Okay, which trader would you want? The guy who loses nine out of 10 times or the lady who wins nine out of 10 times, 90% win ratio or 90% loss ratio? before you answer is a trick question.

There's not enough information. Well, Adam, of course I want the 90% win ratio. Not necessarily. Why? Because the number of times you win, it's irrelevant. The number of times you lose is irrelevant. What matters? How much do you win when you're right and how much do you lose when you're wrong?

Trader A, who lost nine trades in a row, lost one unit nine times or minus nine. The 10th trade, just to keep it easy, they won 10. Net net, they're up 1, right? You lose 9 times in a row, you lose $1, 9 times, you're minus $9. The 10th time you win $10, 10 minus 9 is 1, positive 1. But they have a 90% loss ratio. Trader B did the exact opposite. 1-1, 9 times in a row.

10th trade lost 10. Net net minus 1. At the end of the day, you want to make money or lose money? But 90% win rate doesn't matter. 90% loss ratio doesn't matter. I'm just exaggerating to illustrate the point. What matters? Risk.

I have a whole chapter in my book about risk. In fact, I have an amped investment system. D stands for defense first. When you focused on risk, you know, the best traders in the world or best investors in the world are the best risk managers. Tend to be. Not always, but tend to be. Why? Because, you know, I was interviewing somebody one time and he told me, goes, that I'm

we're not buying and selling stocks, we're buying and selling risk. I thought that was genius. Because you're risking a dollar, whatever it is, I'm just simplifying for a dollar, but whatever amount of money you put into a stock, hopefully to make $2 or $5 or $10. Asymmetric returns. You risk one, you make more than one. That's asymmetric returns. And asymmetric risk, however you want to word it, same concept.

So if that will help, at least that's helped me make better decisions and overcome that analysis paralysis because I'm quantifying my risk beforehand. I'm doing my homework. I'm analyzing the market. I'm analyzing the best stocks. I'm looking for winners. Prior winners. I study successful stocks. Look at that photo album like Gary talks about it familiar faces. Stack the odds of success in my favor. And swing the bat. When I'm wrong, I know how much I'm going to lose before I enter. That's really, really liberating. It's freedom. It's freedom because now I'm no longer stuck in that analysis paralysis or grip by fear. And if you've been in that situation or you are in that situation, I'm sure you can relate to it.

So hopefully this helps you. Ask yourself, how can you use this information to make better decisions? That'll help you. So up next, let's talk about some more stocks, some themes, and a whole lot more. I'm Adam Sarhan. This is the one and only Investor's Edge. always has a way of sneaking up on you when you least expect it. One minute you're listening to your favorite podcast. You're locked in, hanging on every word when, bam, a surprise bonus episode drops. Brought to you by allergies. The itchy, watery eyes hit non-stop sneezing kicks in, and a runny nose forces you to hit paws.

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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. One sweet, melty bite of a Hershey's bar and suddenly I'm right back sitting on the front porch with my grandmother on a slow. Oh, summer afternoon. She doesn't say much, just breaks the bar in half and hands me a piece.

I open my mouth to say whatever a nine-year-old wants to say. And she replies with a low, listen. So we sat there, listening. That was the first time I learned that quiet can feel full. Hershey's, it's your happy place. You're listening to. What are we waiting for?

Well, what are you waiting for? One, two, ready, go. Action. In the Vester's Edge with Gary Kulp. And welcome once again to Investors Edge. I'm Adam Sarhan in for Gary K, who's out today. In case you're just joining us or missed any part of the show, you can go to GaryK.com, pause or wind, fast forward, listen to this show on any device for free, and share it with your friends, if you like.

So, that being said, we have a few minutes left and we do have to end the show. So I do want to quickly summarize what we just. discussed so far and then share some themes with you that I'm seeing in the market. Spoke to you about data. Spoke to you about filtering out the noise. How to focus on price, which is, in my opinion, the most valuable or most important data point there is. Talk to you about helping you make rational, not emotional decisions with your money.

We briefly touched on that. Spoke to you about helping you overcome analysis paralysis, how to make trades in the face of fear, how to mitigate the fear, reduce it. right by focusing on the risk that's really really powerful the three most important questions I ask is where do I enter where do I exit how much I risk if I'm wrong and then gave you some other tools that I used to help just get an edge and make sure my mindset is straight and focused and all that fun stuff and then of course how Gary does I mentioned how Gary does a really great job with conviction leaders and with the radio show of keeping of staying flexible and keeping

his finger on the pulse, when things change, he changes. So that being said, let's talk about some themes in the last few minutes that we have before we wrap up. A few things that are happening here. First off, we're entering earnings season. So next up is earning season. That's one. During earning season, I pay attention to how the stocks react to the news, more than the news itself. Why? Because the market is a forward-looking mechanism. The market looks to the right of the chart. The earnings, by definition, look to the left. Same with economic data.

So many times you'll see a stock go down on earnings, on bed earnings. You'll see stocks go down on good earnings. You'll see stocks go up on bad earnings. You'll see stocks go up on good earnings. You can see the whole gamut of reactions. And people often ask me, well, Adam, the quarter was so good, but the stock went down. Why? Answer, simple.

More people sold than bought. The opposite's also true. So the reaction tells me what the big institutions are doing with their money. And that drives the market. So as we enter earnings season, several of the big banks reported earnings today, J.P. Morgan, JPM is a ticker there. Bank of America, BAC is a ticker there. You've got Wells Fargo, WFC reported earnings.

And then you have Citigroup reported earnings and BlackRock reported earnings. Most of them, BlackRock was okay. the action there is strong. City Group was up a little bit, but they warned ahead of time. You've got Wells Fargo that was down, Bank of America was down. JP Morgan was up in the morning and then down, well, Bank of America was down for most of the day.

On track, closing the upper half of the range. We'll see what happens there. But Bank of New York Mellon, BK, another one that gapped up. So if you want a good example of what I look for, BK, gapped up on earnings, broke out of a little high handle here. Big cup, a little bit of a handle, short handle, but broke out nonetheless. I guess not a huge breakaway gap, but for a bank it's a big breakaway gap.

But earnings were down 2% year over year. $1.28 versus $1.30. In the fourth quarter of 23, they earned $1.28. Fourth quarter of 22, they earn $1.30. It's a little bit less, down 2%, but the reaction was good. That to me is bullish. The reaction folks matters more than the actual news because going forward is where the market focuses on. So I keep track, one of the things I do during earnings season, I keep track of the

winners, the big gap ups, that is, and the losers. I love it when a stock gaps up, raises guidance and beats estimates. Love it. So that's one big theme as we go forward watching earnings second. Japan, the Nikai, which is the Japanese stock market, is breaking out to new multi-decade highs. Well, okay. or multi-year highs, let's do that. And the action is strong. A lot of Japanese stocks are acting strong as well. So not necessarily going to go out there and buy them right now,

but you want an example, Nintendo, N-T-D-O-Y. Huge move recently, from 10 to 14 since October. That's a 40% move. Had a cup, had a high handle, broke out near 11, 90, about 12 bucks, and now it's near 14. super extended in the short term, but really strong action. And you can look at Toyota TM there, another Japanese stock acting well. Sony, you can look at that as well, S-O-N-Y, big moves recently.

So money's flowing into Japanese stocks. Okay, noted, right? I'm not going to go chase them. I'm just showing you themes. Next one, uranium stocks. URA is an ETF that tracks uranium. Big gap up. CCJ is a uranium stock, or uranium stock, a Canadian company.

big gap up today. Okay. Noted. Again, not going to chase them, but just showing strength. Metals, gold and silver is another theme that I'm watching. Gold, if you look on a monthly chart, has a huge cup and handle base going back to 2000. If you look at GLD, going back to when the ETF started back in late 2004, early 05. Huge run. It's 2012 a top down in 2011. Built a huge cup for many years, then built a huge multi-year handle. And now you're right near resistance to that handle. A breakout above 194 is going to be very, very bullish, and the GLD is right near 190-ish or 189-ish. All right, noted.

But you've got gold stocks that are acting really well. Something like Barrett Gold, G-O-L-D, ticker symbols gold, G-O-L-D. All right, cup, handle. 1855 is a pivot point, and when these gold stocks kick into gear, they go, and they go fast. Royal Gold, RGLD, 125-19 is a pivot point somewhere around there. And again, these aren't by recommendations or anything along those lines. I'm just watching them because I know I've seen this sector before. I was trading these gold stocks back in the early 2000s and all they up until 2012 or 11-ish when they had the huge move.

And you just saw massive, massive moves. When they go, they go. And then, of course, semiconductors, SMH, another theme that I'm watching. Because they've been leading. The AI stocks, Navidia, the past few days, broke out of a big base at Giac. He's been all over, by the way. Broke out about 500. Now it's at 546 in what, three or four days?

That's a big move. SMCI, super micro-computer, broke out, I guess, broke out of a mid-level base, but it's a big huge basing pattern from going back to the summer last year, last summer. And last year, it was one of the strongest stocks in the market. AI stock and, you know, hardware peripheral stock, computer stock. Big move.

I'm watching it. Now you've got a little consolidation the last few days. they report in 18 days. Again, watch earnings. Navidia reports in what, 40 days. So take your time and some of these other ones. Check earnings on every single thing I mentioned because we're getting into earnings seasons.

You'll see earnings right around the corner. But some of the big ones that are reporting soon, you've got Netflix, Tesla, etc. So just take your time. We're going to wrap up here because we're running out of time. As always, I want to thank you very, very much for being here. We have a long weekend. Take your time with the market.

Enjoy the weekend. Put the market where it belongs. So have a great weekend, everybody, and I'll speak to you again soon. Take care. This has been Investors Edge with Gary Cult Bomb on BizTalk. To listen to past episodes or to get in contact with Gary, go to garyk.com. That's GaryK.com. Success starts with your drive. An 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. Guys, it's no use putting it off.

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