Investor's Edge with Gary Kaltbaum - Week In Review [01.17.2025]

Episode Date: January 17, 2025

https://garykaltbaum.com/

Amazon Hub Delivery wants to partner with your business. Help your business. Help your neighbors. Discover a new stream of income for your business when you partner with Amazon Hub delivery. You and your team will deliver Amazon packages to customers in your neighborhood on a schedule that works for you, and you'll be paid for every package you deliver. Getting started is easy.

There's no delivery experience required, no long-term contracts, and you receive weekly direct deposits. Earn more. Gain exposure for your business. Apply today at Amazon. Amazon.com slash hub delivery. That's Amazon.com slash HUB delivery. Know a local business that would make a great partner, a local coffee shop owner, florist, automotive shop, dry cleaner, you name it. Refer a business today and earn $500 when they successfully join the program. Visit Amazon.com slash hub delivery to learn more or refer a partner. That's Amazon.com slash HUB delivery. Now looking for hub partners in your area. Investor's 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 17, 2025. We've got a great show for you tonight. As always, I want to thank you very much for being here. Just as a quick note, I guess, note before we jump into the show, as a reminder, If you don't get this show in your city, you can go to GaryK.com.

You can listen live or archive. I tend to speak on the faster side. I appreciate your patience. And you can go to GaryK.com. You can pause, rewind, fast forward, and listen over and over and over again. So the good news is you're not going to miss anything. And then also on GaryK.com, you can follow Gary on X by just pressing the button. You can subscribe to get Gary, his notes sent to you every day via email in the morning.

and you can also email him about his money management services or read the other articles that he posts. If you want his premium service, you can go to convictionleaders.com. That's convictionleaders.com and take a free trial, see if you like it. All right, a few notes from Gary before we dive into the market today that I want to make sure that I cover. And then we're going to have a lot to talk about today's Friday. So it's the end of the week.

It's the middle of the month. So lots of times, I'm big on timeframes. Lots of times you'll see the market move in one direction for the daily chart or the weekly chart, but then when you zoom out in a monthly chart or even a longer term chart, you could see a complete different direction. So same is true for intraday charts or whatever time frame you want. So for me, I like aligning timeframes and almost telling stories, right? I like to say the market is speaking, and then I ask the question, are you listening? That's really the way that I look at markets.

also a more nugget for you is there's a nugget of timeless advice or wisdom from my point of view is there's an infinite number of ways to make money in the market in my humble opinion your job is to find one that works for you all right because i know a lot of people early on when i used to get started used to argue and talk about you know my way is the right way and you're in all this kind of stuff i realized after years and years and years and talking to lots of people no there's lots of ways the beauty here is that there's an infinite and almost an infinite not literally but there's a lot of ways to make money in the market just find one that works for you and your personality. You can do very, very well. All right.

So a few thoughts here from Gary. On Monday, Gary said that the worst areas of the market probably put in the near term low, and that's been one strong week. Materials, industrials, and other things are up another 4% since the close on Monday. Even the small cap Russell 2000, you can look at the IWM, you can look at the mid-cap S&P 400, all really strong moves this week, and up their small cap and the midcaps off the 200-day moving average line also. That was defended for the first time since August for a lot of these areas and a few times since,

depending on the market you look at. But those two specifically, the small caps and the mid-caps tested and defended their 200-day moving average this week, which is an encouraging sign. The S&P 500, the NASDAQ, let's take a look here and see, you know, just dive into the indices, take a look at where they closed and set the stage. for next week and more or less what some high probability situations are. The S&P closed above its 50-day moving average, which is a good sign. You know, Gary spoke about the 50-day moving average for a long time, and for weeks it was below it, it got back above it and then below it, now it's above it. In the short

term, that's a good sign. The NASDAQ-100, the S&P 500, if you're following along, is SPY, is an ETF that tracks it. The NASDAQ-100 is Q-Q-C-R-E-S-N-E-E-F. QQ. That's above its 50-day moving average. Another good sign. So you could think of a 50-day moving average, almost like a line in the sand between, you know, Bueno and no-bino above the 50-bullish environment, all things being equal, of course, assuming the 50s in an upward sloping environment, it's above the 200, you know, assuming all things are being equal, the 50-day moving average is a good line in the sand for short-term saying, hey, listen, the environment's a little bit weaker, some more defense is warranted, or if it's above it, all things,

being equal, that's a more bullish environment. Let's see here. What else did Gary say? We still have some chopping around happening. Let's talk about the fact that we're still below highs, but we're getting closer for the major indices. So when you look at bull markets, folks, you can look at, you know, over the years and you go back and study history. I've gone back and studied every bull and brand market since the early 1900s. And what are you? what you find over and over again is there's pullbacks. You know, there's an old adage on Wall Street says the markets take the stairs up and the elevator down. Stairs up being what?

They go up a little bit, go sideways, and then go up a little bit, go sideways. Those sideways consolidation areas or bases, that's part of the stairs up. On the way down, people panic and bam, stocks get sold off hard. Typically, that's what happens. But not always. So we're in the most situation now where we had a very strong week this week. You have a pullback in a bull market. The NASDAQ 100 is down 3.2% below an all-time high.

That's a normal healthy pullback. It's above the 50. Good. That's Buono, right? The S&P 500 is, or the SPY, is about 2% below its all-time high. Again, and above the 50. Buono, that's a good sign. The Dow is about 4% below its all-time high,

and that's just below its 50-day moving average. Not the end of the world, it's only 30 stocks, but okay, set in the stage. Then we have the mid-cap, S&P 400, the MDY, just a hair below its 50-day moving average. And that is 5% below its all-time high. Then you've got the Russell 2000, about 8% below its, I guess 52-week-high or all-time high, somewhere near there, but 52-week-high. And it's below its 50. So as you can see, the big-cap tech stocks once again this year are doing great. Gary says he loves the action in most of the financials, especially the big ones.

There's great reactions in a few of those names as well as some pretty good earnings that are coming out. So those are all the notes I want to make sure I cover from Gary. And now let's talk about markets. From my point of view, here's a few things I keep in mind. The end of the week, this is a time frame analysis. I always like to look back and say, okay, what happened this week? Right? Just like a scorecard and say, okay, you know, in sports, they do it.

you see it in KPI's in business. What happened this week? This week, we had bullish news from, you know, this 200-day moving averages were tested and defended in the small caps and mid-caps. We got back above the 50-day in the S&P and the NASDAQ, 100. Those are good signs. Bueno, right? Check box.

Just check marks. So technically, that was a good level. On a weekly basis, you can see, too, a big positive reversal this week. and we're only a few percentage points below an all-time high. So technically check that box. Fundamentals, what happened? Well, we had economic data this week, inflation, and we had mainly, we had other economic data,

but the big headlines were inflation data, PPI on Tuesday and then CPI on Wednesday. And then earnings. We officially are now in earning season, and the big banks kicked off earnings seasons with a bang. So putting those pieces together, you know, let's talk about what it means. Fundamentally, from an economic standpoint, you have inflation, markets love easy money from the Fed.

Just put that out there. Gary's mentioned this over and over and over and over again, and he's spot on. And since the last Fed meeting in December, the markets have been under pressure. The Fed cut rates, but it was a hawkish cut, meaning they kind of said, hey, you know what, we might not cut as many times the people thought in 2025. and we might, we'll watch inflation. Okay. The next inflation report we had, which was this week, basically told us, you know what?

Inflation as of right now is not a big threat. Now, that could change. Oil prices are up, energy, you know, net gas prices are up, corn prices are up, and that could change going forward. But right now, it took some pressure off of the Fed to have to combat inflation or shift their stance to be more hawkish. So, okay, that's the bullish event for the market. We had a few big gaps this week shows you that buyers are still out there. A few other things. Trump comes into power next week. Policies. People aren't sure yet. Market, you know, a little uncertainty.

Okay, we'll see what happens. But we know he's pro-growth. Politics aside. Right. So we'll see what happens. Nobody knows the tariffs what they're going to actually be. We have to find out what they are, and then two things. What are the impacts on both Main Street? One, and then two, Wall Street. Main Street's the economy, and then two is Wall Street. So the markets are able to breathe the collective sigh of relief, hence the big rally we saw this week. Now, if we reverse and sell off and start falling, no, Bueno, then all of a sudden defense becomes king again and, you know, we go back and the state of the market has shifted where defense is warranted or a more defensive position is warranted. Other time frame fun, I like this, this is fun for me, is look on a

monthly chart. We open the month lower. Now, look at the QQQQ, we're up for the month. That's paves the way for a bullish month. Typically when you see on a daily basis or any time frame, a week open followed by a strong close, that's a bullish event. Because everybody who wanted to sell came out and sold so far. Of course, anything can change. But came out and sold. And now the major indices, for the most part, are all up on the month. And it's halfway through the month.

So can we rally for the next two weeks? Yeah. You know, theoretically we can. And can we fall short. But that's a good data point for right now. All right. Up next, we've got a lot more to cover. I'm Adam Sarhan.

and 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. No big commissions, just a fee on the assets that's managed. We also provide a full range of personalized services, including retirement planning, fixed income, and educational needs,

all to assist you in achieving your financial goals. understanding not all individuals have the same needs, we'll carefully evaluate your personal goals to determine a proper investment strategy. If your current approach to investing is not getting you to where you would like to be, call us to make an appointment for a complimentary portfolio review. The number to call is 888-4-2-5-59.

That's 8-8-5-5-9. That's 888-4-22-5-59. investment advisory services offered through call bomb capital management. Hello, hello, I'm Malcolm Gladwell, host of Smart Talks with IBM. I recently spoke with IBM's new director of research, Jake Mbata. We discussed his vision for the future of quantum computing. At IBM research, what we always do is answer what is the future of computing, whether it's coming up with new algorithms, coming up with better AI, coming up with quantum,

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

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

Plus, Amazon Hub Delivery makes it easy to get started. There's no upfront costs, delivery experience, or long-term contracts required. Sign up to learn more at Amazon.com slash Hub Delivery. That's Amazon.com slash H-U-B delivery. Hey, it's Ryan Sechrest for Albertsons and Safeway. It's stock up savings time now through March 31st. Spring in for store-wide deals and earn four times of points. Look for in-store tags to earn on eligible items from Celsius, Body Armor, ORAIDA, Silk, Capri-Sun, Bavarian Meets, and Charmin.

Then clip the offer in the app for automatic event-long savings. Stack up those rewards to save even more. Enjoy savings on top of savings when you shop in-store or online for easy drive-up and go pick up or delivery. Restrictions apply. See website for full terms and conditions. It's time to switch on the integrator units and get the brain cells working. You're listening to. Hey, this promises to be fun.

Investors Edge. The last bastion of quality programming. With Gary Coltbaum. It doesn't get better than this. And welcome once again to Investors Edge. In case you're just joining us or missed any part of the show, you can go to GaryK.com. rewind, fast forward, listen at your convenience as many times as you want for free on any device 24-7 anywhere that has internet that I know of at least. All right. So that being said, let's talk

about the market. This is the week in review now. So we spoke about this week. We had some bullish news from the fundamental standpoint or inflation wasn't a threat for the Fed. You know, the Fed knows back in the 70s inflation dipped a little bit and then they did some stuff and then inflation kicked back in. They were very aware of that precedent and they don't want it to happen again. So, okay, the market knows that. So the only way of that not to happen again,

as far as the Fed's concerned, you know, it's going to... Easy money, more or less of it? Well, it's going to go less of it. And it's going to go a little bit more hawkish. Okay, so that's where the market fell off, you know, fell for the last few weeks. You had some other uncertainty come in.

But for the most part now, easy money is the breath of relief from the market is back in gear because inflation right now. is not a threat. Okay, great. Now if that changes in the future, we'll adjust accordingly. But for right now, that was a big win this week. Next, earnings. So I want to take a few minutes here and speak to you about earnings because it's really important. I get a lot of questions and get some clarity on the subject. So every quarter we know companies report earnings. Beautiful. What do you do, Adam, with the earnings? I get asked that a lot. Well, there's a few things

that I look for that are big. First thing, what are the actual numbers? You know, what did the company report? How did the second, how did those numbers compare to the same period last year? I don't want to look at fourth quarter, which is strong for retail, versus first quarter, which is weak for retail. It's not apples to apples. What I want to look at is fourth quarter, like right now we're in the first quarter of 25, so we're getting earnings from last quarter, which is a fourth quarter, right, for the most part, on the calendar at least. Okay, great. I want to look at fourth quarter of 2024 and compare that data to the fourth quarter of 2023.

Now I'm comparing apples to apples. Next, growth. Do we have earnings growth over that time frame year over year on a quarterly basis? What is that growth? Is it up 2% or is it up 200%? Right? In other words, let's say a company makes 10 cents. a share in the fourth quarter of 23, and then last quarter in 2024, same quarter year

over year, instead of 10 cents a share, they made 20. Well, earnings are up 100%, right? 10 cents, double it. Okay, great. So that's good. Now, they made 11 cents. All right, earnings are up 10%. Not bad.

So if they're up 30 cents or let's say 300%, 500%, even better, right? Of course, if it's sustainable. So that's another thing I look at. Next, estimates. What does the street, you know, the analysts on the street, where do they expect the company earnings to be, the company to have reported? Top line revenue, bottom line earnings. What does, how did the company fare, what the actual results were, compared to analyst estimates? It's not as important to me, but I still want.

want to know. If the company, you know, analysts were expecting, let's say, a dollar in revenue, company reports $5, wow, that's going to be a positive reaction. Most, all things being equal. Of course, things could change there because maybe revenue was up, but earnings were down, or something else. But again, I want to see what the analysts believe the numbers were top line and bottom line. And what were the actual numbers? Did they beat? Not beat? So on and so forth. Next, there's more. But wait, there's more. The most important thing, I look for, reaction to the numbers. By the way, same thing for economic data, same thing for earnings data. Any event, whatever that event is, great. There's going to be opinions. Most of the

time it's mixed, maybe even most people are going to think it's bullish, most people think it's bearish. That's fine. That's what makes the market. We're all looking at the same data, and people interpret it differently. When you look at the market and you look at the data, and you look at the data, you look at the reaction to the data that tells us what the big institutions did with their money. Not what they said on TV. Some guy comes on and says, oh, yeah, I'm really bullish on XYZ or LMNOP or QRX or T UV.

No, that's not the game. The goal is to see what they're doing. Now, we're not privy, at least I'm not privy to any institutional activity, what they're buying, what they're selling, so on and so. forth, but they can't hide. The good news is we don't have to be privy. We can tell by studying price and volume because they can't high. Example, average volume is 10 million shares a day and you see 200 billion shares in a given day on a huge gap up the day the company reports earnings. I'm exaggerating just to illustrate the point. That would be a sign of institutional

accumulation. Accumulation is a fancy word, institutional buying. The opposite would also be true. Big gap down, average volume is 10 million shares. You see 100 million shares or 200 million shares gaping down on that day and it's down to 10% or whatever it is. No point in that scenario if you're long. That's an example of institutional distribution, right? Heavy volume coupled with big price moves. That's how they show up. They leave footprints in the sand, so to speak. Now, doesn't mean every time the stock gaps up, it's going to double and triple and quadruple. It's just a, this is all about probabilities. Right?

When you cross the road, so to speak, you can look both ways, and if there's no cars coming, you're going to cross the road. Odds are you're fine. It's a quiet residential street. There's no cars. Most likely you're going to cross that street. Could you get hit by the proverbial bus? And there's a super low probability. I'm going to cross the street.

Get in the car. get an airplane, so on you got to live life based on odds, probability, right? That's what we're looking for, clues. We're looking for highest probability outcomes that favor us and avoid the ones that don't favor us. So that's another sign that I look for, that institutional, the reaction, the institutional accumulation or distribution after earnings are announced. Because it's a good tell. It shows me what the big institutions are doing with their money and most, you know, most of the

market is driven by big money, by big institutional investing. Now, individuals have a lot of say as well. Don't get me wrong. We saw what happened when they all piled into GameStop. That was still a lot of institutional buying as well. But still, the biggest people that manage money are the big institutions. And when they're going into something and they get aggressive, they have a tendency to do it for a long period of time. And that's good because they tend to be like bandwagon effect where more institutions start piling in and then more buy and more buy. And that's a big driver of stocks. I'm not here to talk about exact percentages, none of that stuff.

Just suffice it to say big institutions, you know, play a big role in the market. End of the story. So I want to get a little clue or get some ideas on what they're doing. Now, in a related, that's where I look for earning season because I know we're entering season now and we're going to get lots of questions about earnings. and those are the big things I'm looking for. What the earnings were year over year? Did we have growth?

Not growth? Oh, there's what the analysts expected and then the reaction to the numbers. All right. Up next, we've got a lot more to cover. I'm Adam Sarhan. This is the one and only investors' age. Hello, hello.

I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvin Krishna. And I asked him, how can companies use AI to its fullest potential to create smarter business. My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example. If anybody has more than 10% of what they had for customer service 10 years ago,

they're already five years behind it. If anybody is not using AI to make their developers who write software, 30% more productive today with the goal of being 70% more productive. Yeah. Wow. So we are not asking our clients to be the first experiment on it.

We say, you can leverage what we did. We're happy to bring out all our learnings, including what needs to change in the process, because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation,

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

That's Amazon.com slash H-UB delivery. Hey, it's Ryan Seacrest for Albertsons and Safeway. It's stock up savings time now through March 31st. Spring in for store-wide deals and earn four times of points. Look for in-store tags to earn on eligible items from Celsius, Body Armor, ORAIDA, Silk, Capri-Sun, Bavarian Meets, and Charmin. Then clip the offer in the app for automatic event-long savings. Stack up those rewards to save even more. Enjoy savings on top of savings when you shop in-store or online for easy drive-up and go pick-up or delivery.

Restrictions apply. See website for full terms and conditions. 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. In case you're just joining us or missed any part of the show, you can go to GaryK.com. You can rewind, fast forward, listen live or archive on any. device 24-7. All right. So we spoke about the market. Market wrap at the beginning of the week,

the recap of the week, week in review. I spoke about time frame analysis. And another point that I wanted to bring up, I was looking at my notes here, is when multiple timeframes align, that tends to be a higher probability outcome. Again, if you see a bullish daily chart, bullish weekly chart, bullish monthly chart, that's, that's Bueno. That's a good sign. All right? Next, my kids are doing dualingo, hence the Buono and No Buono. All right. Next, earnings. We spoke about earnings. What I look for during earnings season.

The actual numbers, how did they compare year over year? Is there growth, no growth? What the analysts expected compared to the numbers. Beat, not beat. Guidance. Another thing, the company raised guidance or lower guidance. Guidance isn't as important because many times these big companies, Apple, we saw them do it, was notorious for years and years and years.

They would smash, blow away estimates and then lower guidance. Stock would go down for a few days. Then next thing you know, blink your eye and boom, it's up at new highs. Because they knew it's a game of expectations, right? So guidance is good, but it's not on my top of the list. But I do want to put that in there as well because that's a piece of the puzzle. And then, of course, the reaction to the news. And the reaction for me trumps everything else because that tells us what the big money is doing.

or at least shows us what it does. Now, let's talk about the single, in my opinion, most important variable or component to invest in. And it's price. Why? Because what's the one thing that shows up on your statement? Price. Volume doesn't show up on your statement from your broker. Earnings don't show up on your statement from your broker.

inflation doesn't show up on your statement from your broker. It's the price you entered compared to where it's trading in the market. That's it. And then it's such a, when I understood that, it gave me clarity like there's no tomorrow. Why? Because all of a sudden I was able to get, to get deep breath, get some zen, get some clarity, some laser focus, any word you want to use, really get a better understanding of what. moves the needle. I'd buy stocks. They'd go down and, oh, but it's got great earnings. Market. I'd lose money. I'd call my broker. I got great earnings. Nobody cares. Click. It's price, right?

I'm not saying earnings don't matter. We're in earnings season. Of course they matter. But it's primary. What's the single most important thing that determines whether you make money or lose money. It's price. That's the only thing that shows up on the statement, right? And all the other variables, super important, but just slightly less important. It's almost like the driver and then everybody else in the car. Driver's got a little bit more importance as far as safety is concerned than everybody else. Driver, I'm going to again exaggerate to illustrate the point. The driver is blindfolded.

No one else is blindfolded. You've got, let's say, a car five people. Four people are not blindfolded. Guess what's going to happen? Most likely you're going to crash. But wait a minute. Most of the people were not blindfolded. It doesn't matter.

The variable that really matters is the driver in that safety situation in the car with five people, right? Even though four weren't, again, I'm just trying to illustrate the point. So price for me is that in the driver's seat, everything else, the rest of the car. Right? Still important. But just price is primary. So that's why that objective study of price is so important. And now let's talk about.

our interaction with prices. So a lot of us, humans, all humans that I know of at least, we're emotional creatures. We buy things based on emotion, for the most part, not all of us. Of course, I'm not speaking in absolutes. There's always exceptions. And then we justify it with what I call emotional logic. And you don't believe me?

I didn't believe myself either. It took me years to figure this out. It's real simple. tell me the last time you bought a stock that you absolutely hated it. I mean despised. Notice the language. Most people buy stocks they like. Lots of people buy stocks they love. Notice the language. Emotions. Think about big purchases in your life. How many times have you bought a house that you couldn't stand? Bought a car. I just can't. I hate this vehicle. I'm going to buy it. You know what? Give me two of them. Doesn't happen. similar things with stock. So under the surface, when you buy a stick of gum, you buy a car,

you buy a house, you buy a stock, it's a similar psychology is at play where, hey, we're making emotional decisions. We're justifying it with logic. Maybe I don't love the stock, but I don't necessarily hate it. But hey, look, it's got earnings. It's got volume. It's got price. It's got this. It's got all those things. It's the emotional side that I really want to shed some light on because it'll help you with your decision-making process. And that's what I get really passionate about because that fundamentally changed my life. And I've seen it do so many other people as well where it's like, wow, hold on a second. You mean I don't have to react in this way anymore? Even though I reacted that way for the last 20 years or 30 years or 10 years or

two years or whatever the case may be, yeah, you're free to react any way you want. And you can put some space between the event and your reaction to it. It doesn't matter what the event is. but you can control how you react to it. One of my favorite nuggets of timeless wisdom. It's we can't control what happens to us in life, but we can control how we react to it. So powerful. I'll say it again. We can't control what happens to us in life,

but we can control how we react to it. And that, ladies and gentlemen and folks, is the, I mean, that also fundamentally shifted my whole outlook. Wait a minute, what? I can't control if I get, you know, the stock goes up or down after I buy it. I wish I could. I can't. That's okay.

I don't have to. I can control when I enter. I can control when I exit. I can control how much I risk it when I'm wrong. Whoa, wait a minute. What? Yeah. Those are my three most important questions I ask before I buy anything.

Where am I going to enter? Where am I going to exit? And how much am I going to risk if I'm wrong? And I go into it knowing most trades don't work out. That's okay. And that's okay. Just like a baseball player, right? Best baseball players in the world strike out six, seven times, and they crack it three times.

They hit home runs, grand slams, whatever it is, right? Singles, doubles, triples, all that adds up. But they're striking out more than they're hitting. And that's okay. That's the beauty of life. Where when you're wrong, you're wrong small. When you strike out, you have one out. Three strikes, you're out.

When you hit a grand slam, you win four. You get four points, right? That's asymmetric. It's a fancy wall tree word here, asymmetric risk to return. When you're wrong, now I learned this from nature, you're wrong small. Nature's the same way. Apple tree has a thousand seeds. I'm just making this up to illustrate the point.

Let's say a thousand seeds come out of that apple tree. Most of those seeds are not going to become new apple trees, and that's okay. Let's just take the extreme. 99 of those seeds don't work. That's okay. One seed becomes a new tree. Guess what? It's going to repeat the process.

Another thousand seeds, 999 don't work. Another seed works. Great. Rinse wash, repeat. Nature flourishes. But Adam, most of the trades don't work. That's okay in that situation. Most of the seeds don't work.

Most of the pitches don't hit grand slams. That's okay. Providing what? When you're wrong, nature loses one seed. That's okay. When it's right, borderline infinite number of seeds, not literally, but thousands and thousands and thousands, if not millions of new seeds come out of that one seed that worked. So paying attention to things that matter versus things that don't matter as much or just don't matter is a game changer. And understanding the lay of the land is super important. I had a, I spoke to somebody today, there's two people in business together, and one guy's a businessman, been around for, I think, 60 years in business. The other person's about much, much younger, it's about 20 years in business. And one doesn't have the wherewithal to really understand business, the younger one. And the senior, the older one, it's been around the block, he understands

it, and the young one's a young whippersnapper, and this, that, the other thing, and then, everything right now, right now, right now, doesn't have a chance to sit there and be patient. Another component of being successful in investing. As he's talking to me and telling me the story about business has nothing to do with stocks, I'm thinking about the market. I'm like, wow, price, you know, profits are a function of price and time. And there's the time frame part of the earlier conversation, right? Get in, get out right away.

All right. Up next, we've got a lot more to cover. I'm Adam Sarhan. And this is the one and only investors' age. Hello, hello. I'm Malcolm Gladwell, host of Smart Talks with IBM. I recently spoke with IBM's new director of research, Jake Embatta. We discussed his vision for the future of quantum computing. At IBM research, what we always do is answer what is the future of computing.

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

Where do you imagine we are in the timeline of this technology? There will come a point when it will. will mature. Right? Yeah. My cell phone is a mature technology at this point.

How far are we from that point with quantum? By 2029, we'll build the first fault-tolerant quantum computer. That is one that

can run a very, very large, large problem. To learn how IBM is building the future of computing, visit IBM.com

slash quantum. Want to earn extra income for your business? Amazon Hub delivery is looking for ambitious business owners to assist

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

Hey, it's Ryan Seacrest for Albertsons and Safeway. It's stockup savings time now through March 31st. Spring in for store-wide deals and earn four times of points. Look for in-store tags to earn on eligible items from Celsius, body armor, ORA-Aida, silk, Capri-San, Bavarian Meets, and Charmin. Then clip the offer in the app for automatic event-long savings. Stack up those rewards to save even more. Enjoy savings on top of savings when you shop in-store or online for easy drive-up

and go pick up or delivery. Restrictions apply. See website for full terms and conditions. You're listening to... What are we waiting for? What are you waiting for? One, two, ready, go. Investers Edge with Gary Kulp.

And welcome once again to Investor's Edge. In case you're just joining us or missed any part of the show, you can go to GaryK.com, rewind, fast forward, or listen on any device 24-7, anywhere that has Wi-Fi. All for free. If you want Gary's premium service, you can sign up to Conviction, leaders.com.

And take a free trial. Now, we were talking about markets at the beginning of the week in review. We spoke about some bullish events that happened this week. Spoke about where we are, a few percentage points below all-time highs. We spoke about earnings, and we've got a lot more earnings coming up over the next few weeks. Really, the next few months. We've got about a month and a half here, five, six, seven weeks of heavy earnings coming up. And then they taper off a little bit, but we're entering the thick of earnings.

season over the next four to six, seven, eight weeks. And it repeats every four times a year, right? Every quarter we report earnings. So it's another important thing that I did. Then I spoke about some of the timeless wisdom that I like to share that helped me and change my life where you can, you know, what do you look for? Well, a few things. What do you look for during earning season? Spoke about that. Spoke about taking some time between an event that occurs that you like or don't like, pause, take a deep breath, think about the emotions there, put a space between it, and then react. So you control the reaction. Spoke about decision making, emotional decision making versus logical decision making. I'll touch on that a little bit more. And then spoke

about understanding the laws of the lay of the land, right? If you're an active trader, most trades don't work, and that's okay, providing the risk is small, reward is big. All right. And then we spoke about time frame. So we're covered a lot. I don't do this often. So when I do it, I try to go with timeless advice and timeless wisdom that can help you that you can take in any environment, any market environment, and thrive. And the three most important questions I ask, up, down, sideways, where do I enter, where do I exit? And then how much do I risk when I'm wrong? Because I'm going to be wrong. It's going to happen. In the early days, I used to think I'd never be wrong, but that was just my inexperience and naivete, if you will. All right, a few minutes. A few minutes.

here that we have left, let's talk about decision-making and then the rational stuff. Okay, so if we make decisions that are highly emotional decisions, we're not aware of that, right? Think of two people in a marriage. One's going ballistic, emotionally charged, yelling, screaming, jumping up and down, the other one's calm, cool, and collected. Who do you think is going to make better decisions in that moment? The highly emotional one, again, I'm exaggerating just to illustrate the point, or the one that's calm, cool, collected. Hopefully the Com Cool Collected one. Doesn't have to be that way, but for the most part, if you took 1,000 people, most people are going to be ComCool collected.

They'll make better decisions than if they're highly emotionally charged. Okay, great. Now take it to investing and trading. Think about your money. Do you hate your money or do you love your money? Most people like their money. They love their money. They're emotionally attached.

You happy when you make a million bucks or you're really pissed off and sad and upset and angry and mad and blah, blah, blah, blah, blah. Of course, you know, simple. There's positive emotions. any emotion you want, I'm not here to talk about that. I just want to illustrate the point, hey, there's an emotional attachment to money. Okay. Well, we're making decisions. Are we 100% objective? Most time, people think they are. But when you go back and study your trades, post analysis is what I'm going to wrap up with here. You can see certain behavioral tendencies of, hey, here are my strengths, here are my weaknesses, and here are my blind spots.

Ray Dalio talks about this in a great book he wrote, you called Principles. I have no affiliation with them, I have nothing to do with it, just sharing something that I like. The book was good. And in it, he talks about know your strengths. And he's right. Know your weaknesses. He's right. And know your blind spots.

Blind spots is an example of something that you didn't otherwise see if you just thought about it, right? Think about two people playing checkers or chess or anything. And the third person can see things that they don't see because they're not in it. You know, they're out of it. They get more clarity. So it's the same thing where we all have blind spots. We all have strengths.

We all have weaknesses for the most part. know I know I'm really good at big picture stuff and I know I'm really bad at detail stuff. I'm not going to try to do detail stuff. I used to. No, bueno. There you go. Not good. Now I'm looking at bigger picture.

I'm much better weekly time frames, monthly time frames. I want to align myself with big trends. You ask me to look at a minute chart, my brain turns into scrambled eggs. I just can't do it. not good for me. I don't have any, it's just not my, it doesn't match my chemistry, right? So how do we, if we understand we're making emotional decisions with our money, how do we make rational ones? Well, a lot of that comes into planning. How are successful people successful? They plan. Gary, at least the listener of Gary's show, right here on this show, back 25 years ago,

in the late 90s, early 2000s, he had a great line. He goes, at the end of the year, Yellow Brook Road. right? Review. Let's talk about post analysis. Plan the future. You want to get the Oz. You're going to follow the Yellow Brook Road. Okay. Now we can get, there's a destination. Oz and we have a path to get there, the planning. Same thing with markets. Plan your week ahead. It's a weekend now. Great. Plan. What are the best stocks in the market? What are my buy points? What are my setups? What are the stocks breaking out? What are the best ideas? Strong earnings, the highest probability ones, right? Strong earnings, strong technicals, all the fun things we look for. Plan. Where am I going to enter? Where am I going to exit? How much am I going to risk if I'm wrong?

A lot of that planning helps remove the emotions from this. At least it helps me. Nicholas Darvis had a great book. It's called How I Made $2 million in the market. Another good book to read. He wrote it decades ago and he did that and that worked very well. He was a ballroom dancer and had a deal in Asia where he was dancing. And then he came back to the States and he just lost a bunch of money. And then he went to Paris, made all his money again. He said, wait a minute, what? He was in the office with the brokers and people were jumping up and down.

He was in it. He couldn't do it. Do it well. And then he left it. And he's like, oh, okay, this works for me. Some kind of guardrail or some kind of routine. Again, Dalio talks about guardrails to protect ourselves from ourselves. Right?

There's a good side in all of us, a king, if you will, or queen. and then there's a fool. I call it my books the smart money superhero and the dumb money beast. The superhero is the calm, cool, collected, rational one. And the dumb money beast,

think of like the Tasmanian devil. Runs around, makes emotional decisions all day long. Which one do you want to have in control? The one you talk to more is the one that's going to be in control. Talk to the king. And same with your spouse

or same with your friends or same with anybody. Treat them well, treat them with respect. They do the same to you. king, queen energy shines. You treat them poorly, yell, scream, jump up and down, blah, blah, blah. You interact with the fool. Guess what?

Fool comes out to play. It's your choice. Who do you interact with, right? So anyway, hope this works out well. This is being received well with the intention. And the intentions of help, nothing more, nothing less. It's a good week. Let's see what happens next week.

I'm out of time. This is the one and only investor's edge. Hug your children like Gary says, and I'll speak to against you. 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 GaryKK.com. Want to earn extra income for your business? Amazon Hub delivery is looking for ambitious business owners to assist with local deliveries.

When you become a partner, you and your staff will deliver packages to customers in your area on a schedule that works for you. With each package delivered, you'll gain extra income and exposure for your business. Plus, Amazon Hub delivery makes it easy to get some. started. There's no upfront costs, delivery experience, or long-term contracts required. Sign up to learn more at Amazon.com slash hub delivery. That's Amazon.com slash HUB delivery. Hey, it's Ryan Sechrest for Albertsons and Safeway. It's stockup savings time now through March 31st. Spring in for store-wide deals and earn four times of points. Look for in-store tags to earn on eligible items from Celsius, body armor, or Ida, Silk, Capri-Sung, Bavarian Meats,

and Charmin. Then clip the offer in the app for all. automatic event-long savings. Stack up those rewards to save even more. Enjoy savings on top of savings when you shop in-store or online for easy drive-up and go pick up or delivery. Restrictions apply. See website for full terms and conditions.