Investor's Edge with Gary Kaltbaum - Week In Review [03.21.2025 w Adam Sarhan]

Episode Date: March 21, 2025

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That's Tommyjohn.com, code comfort. Tommy John. Comfort perfected. Investor's Edge with Gary Coltbaum. Straight talk about you and your money. Now from the BizTalk Studios, here is Gary CultBomb. And welcome once again to Investors Edge. I'm Adam Sarhan, in for Gary Kay, who's out today. Today is Friday, March 21st, 2025, and we have a great show for you today.

I want to thank you very much for being here. Before we dive into the show, we just want to remind you this is a show about you and your money, all of the fun points in between, just as a quick reminder, if you don't get this show in your city, you can go to GaryK.com, listen live or archive. We were live Monday through Friday, 6 to 7 p.m. Eastern. Also on GaryK.com, you can follow Gary on X, formerly known as Twitter by just pressing the button. You can subscribe to get Gary's morning notes send to your inbox for free. And you can email Gary about his money management services or join his premium service, which is convictionleaders.com.

Let's talk about the market, folks. Also, I tend to go fast. There's so much to say in so little time. So if you go to garyk.com, you can rewind fast forward on any device, listen for free at your convenience 24-7. All right, few thoughts. First off, from Gary. A lot of areas are way, way, way down with a lot of names blasted. I want to give good news the past two weeks after a big drop, the lows are holding.

But every time it tries to rally, it creates a stare up and then it gets turned back down. Hopefully next week will resolve itself to the upside because resolving to the downside is not good news. End quote. So that's Gary's message right at the top of the show. Defense, folks, is key right now. We're in an environment where the market is adjusting and adapting to a lot of headlines and a lot of news. We have the tariffs. We have an economy that might be slowing down a little bit.

I'll get to that a little bit later. We have inflation. We have the Fed that is on hold. They said they're going to cut rates twice this year. Let's see. But more importantly, let's see how the market reacts and how the economy reacts. Why? Because the economy determines corporate earnings.

Earnings are a big component to price, to drive stock prices, right? Not 100% correlation. Nothing in the market that I know of is 100% accurate 100% of the time, right? Most of the things, it's a weight of the evidence like Gary says or the preponderance of the evidence in legal terms. But most of the time, it's just stacking the odds of success in our favor. It's all about probabilities. So if you have an economy where the earnings are expected to contract big time, the consumer's getting weaker. You see layoffs, you know, economies in a recession.

Most likely you're not going to have the stock market hanging all-time highs and just ripping and roaring and all that kind of fun stuff, right? So that's what I mean by the correlation between earnings and price. You know, higher prices tend to be there. Not always, but for the most part. So there's fear, there's concern. Hey, the tariffs are coming in. What is that going to do?

What are the implications for both Main Street and then Wall Street? Right? The Main Street would be the earnings growth, the economy, GDP, inflation, all of that fun stuff. and all the other economic data points as well. And then what does that mean for Wall Street? So right now the market since mid-February has had a big decline. The S&P's down about 10%, or 8, 9%, depending on the exact high you look at and where we are,

but it's down under 10% or thereabouts 8, 9% from the high. The NASDAQ composite and the NASDAQ-100, the QQQ, down a little bit more. You know, you're in pullback, you're in correction, territory, depending on the index that you look at, right? The small cap stocks are down much more, down close to that bare market territory. It's down 15, 16, 17 percent as the March low. It's down almost 17, 18 percent. Now we're off those lows, but, you know, watch that March low from two weeks ago, March 13th or a week and a half ago, right? That March low is now the next line in

the sand. And the mid-cap stock, same thing, down double digits from the high. So we're in a correction or a pullback depending on the index, but the market's under pressure. Right? That's the key message here. The market's under pressure. So when you're in a defensive situation here, technically you can look at the 50-day moving average, the 200-day moving average, even the short-term 21-day moving average. The major indices, for the most part, are below all those moving averages. You had a big move down in the first few weeks of March and the end of February into the first few weeks of March.

three or four weeks, boom, boom, down, down. And now you're trying to stabilize. And you're going sideways for the next, you know, the last week and this week with that March 13 low as support. Now, one of two things will happen. Either we break out and go higher, you know, or we roll over, break those lows and have another leg down. That's typically how these things resolve. They can go sideways for many more weeks, many more months. You know, we don't know.

nobody knows what will happen tomorrow in the market, but we know those are one of the three scenarios, right, eventually to break out or break down until then it's going sideways. I mean, that's really it. Okay, great, but we're in a defensive stance. The major averages are below their 200-day moving averages. Okay, great. Well, guess, and below the 50-day moving average in 21-day, when you have markets that are under pressure like that, they're living below the moving averages. And when they're living below those longer term moving averages, the 100 day moving at 150 day, 200 day, any of the averages that you want to look at, everyone looks at different averages. You know, you look at what's what works for you. You know, the path of least resistance is down.

And that's the big message is defense. And Gary's done a phenomenal job. I mean, phenomenal job. You know, a standing ovation type of a thing to getting out of the way. and keeping people that listen to him safe when the environment is not conducive and when things change, Gary changes. But he's been out there saying, hey, defense.

We broke the 50-day defense. And he's on record. You can go back and listen to the archive. We broke the 200-day. Things are ugly. Growth stocks drying up. There's not a lot of leadership. Bop-pap-pah-pah-pah.

Step by step by step by step. And what does all this mean? It means right now the market's under pressure. And we just have to wait. And we have the lines in the sand. You know, support. Think of support as a floor. Like if you're in a room and you have a ball and you bounce it from the floor to the ceiling,

support is the floor. Resistance is the ceiling. And the market does that. It trades between support and resistance. It's not perfectly to the penny, but it's, again, the spirit of the law, not the letter of the law. But to the zone, that area, get near the march lows, it bounces, get near the highs of the last week and a half or so or two weeks, and then it falls down again. But for now, stepping back, just use of 200 days of clear line in the sand.

Hey, are we above it or below it? Or below it, no, boy, no. Above it, hey, let's take a look here. Do we have breakouts? Do we have gross stocks? Do we have, you know, I always like to say the market is speaking and then ask, are you listening? Our job is to listen to the market. My job is to adjust it and stay in harmony with the market, right?

The word harmony, but there's a play on that word. I call it harmony with the market. Because when you do that, you're leaving your ego at the door. And when you do that, you're aligning yourself with what's actually happening in the market. Not what you think is going to happen, but with what's actually happening. And when you do that, you can protect your capital. Not just your physical capital, but your mental capital. So again, as the, I said earlier the consumer slowing down a little bit or the economy, people are worried about the economy might be slowing down.

You got tariffs. You got exemptions. You got this. You got that. April 2nd deadlines right around the corner. Next week is the last full week of the month and the quarter. That's a lot. This quarter went by fast.

An eventful quarter. A lot of things happened in 2025. But even with all of the negative headlines, the S&Ps down less than 10% from its high. Historically, that happens a lot. You get pullbacks and you get corrections. And they're followed by new highs. Not always. Sometimes they're followed by bare markets.

But this market is very headline driven. And the fact they were only down single digits in the S&P or less than 10% in of itself is a strong sign of strength from all things being equal. Now, I'm not saying the market's strong, not in any way, shape, or form. all I'm just saying is that with all these headlines, I probably would have thought, wouldn't have been surprised to see the S&P down 20% or 15 to 20% somewhere in that range. Maybe it gets there. But for now, we're down single digits.

There's a lot of technical damage. So the environment is weak. Let me be very, very clear. The environment is weak. We don't have a lot of breakouts. We don't have a lot of strong acting stocks. even a few of the stocks defensive names like a Verizon VZ is a ticker tried to break out a while ago and then abruptly failed. It's Verizon. It's not a gross stock. It's Verizon, right? You get other stocks that tried to go to and just rolled over the environment's weak.

Remember, the vast majority of stocks follow the broader market. So that's why it's so important to stay in harmony with the market. because a lot of these stocks follow the market. You know, you had a stock like McDonald's that broke out of a nice cup and handle in early March. The very next day, it reversed. And then two days later, on the 11th, it negated the breakout. And now you're below the breakout level. That's a McDonald's.

Verizon, same thing. You had a big breakout on what was the 7th of March, the double bottom base. Next day, it reversed a little bit, and then gap down. So again, just take your time. defense defense defense up next we've got a lot more to cover i'm adam sarahan this is the one and only investors edge hi i'm gary colpom 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 complementary portfolio review. The number to call is 888-4-2-5-9. That's 8-5-5-9. That's 8-8-4-2. $1.22.5559. Investment advisory services offered through Colbomb Capital Management.

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Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details. This episode is brought to you by Sprecker. The platform responsible for a rapidly spreading condition known as podcast brain.

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Sprinker, because if you're going to talk to yourself for an hour, you might as well publish it. It's time to switch on the integrator units and get the brain cells working. You're listening to. Hey, this promises to be fun. Investors Edge. The last bastion of quality programming. With Gary Coltbaum. It doesn't get better than this.

And welcome once again to Investors Edge. I'm Adam Sarhan, in for Gary Kay, who's out today. case you're just joining us or missed any part of the show, you can go to gary k.com or wind fast forward, listen on any device on any time at your convenience anywhere that has internet. All right, few things. We spoke about the market. Defense, defense, defense, super clear. Kudos, hats off to Gary. Phenomenal job yet again of keeping people out of the way and protecting their capital as the market rolls over and gets in trouble. I mean, just phenomenal skill. That being said, we're We're now down. We had a big drop from late February to early March. Mid-March, around the 13th,

we tried to stabilize, go sideways a little bit, and now we're trying to rally. But we're going sideways. You know, what do we want going forward? What we're looking for is a follow-through day. What's a follow-through day? It would be a big update on heavier volume than the prior session. So let's talk about this concept of a follow-through day. I know Gary's discussed it in the past, but I'm not here often, so I like to share timeless lessons that you guys can take and learn and use it over and over and over and over again in multiple cycles. So a phone today is a concept where when you have the market pulling back, like what's happening now in a pullback or a correction or even a bare market, we need to see a new rally begin.

In order for a new rally begin, something has to happen. When the market's going down, the first thing has to happen, it has to stop going down. Simple concept, but very powerful. Notice everything I try to say here is simple but powerful. Most things in life that work are simple and very powerful. But the execution of them, that therein lies the rub. We know intellectually, how do you lose weight? Calories in versus calories out.

If you have a calorie deficit, you're going to lose weight for the most part, right? I'm talking about most people, not severe cases, just most people. Simple formula. Very powerful. Yet most people are overweight because they don't apply it. Again, simple. And say it was easy. I'm saying simple and powerful, not easy. All right. At first it's hard and then it becomes easy like anything. Writing a bike. You teach a kid how to write a bike. At first it's hard. At first it's hard. At first it's hard. At first, it's hard. At first, it's hard. All right. So the fall thing, the rally. In the most part, most things start off hard and then they become easy. So having discipline is at first it's hard. Then it becomes easy. All right. So the fall three, the rally. What is a follow-through day? The market's going to pull back. It's corrective. It's pulling back. What's what's happening now? It has to stop going down. Well, great. That happened. March 13 was a low. Great. Now you want to have an update. That's the first thing that's required for the market to go higher. You have to, A, stop going down. B, you have an update. Really that simple. All right. When you have that update, or the market closes in the upper half of the range, it's a big washout low and closes, let's say it's down for the day, but in the upper half of the range, either way, ideally you have an update. That's day one of a new rally attempt. And again, you can go look at investors Business Daily, famous investor Bill O'Neill spoke about this and it's all documented. It's not my rules. It's just something that he's noticed. Observation over every major rally in history began with the follow-through day. And here are the steps, right? So you get A, this

market stop going down, B, you get an update. Now, this is important. The low of that update can't be breached, it can't be undercut. Whatever that low is on that day one, you want to see the market stay above that low. If it undercuts the low, the day count is reset. Very simple. If it does not undercut that low, what you're waiting for is a big up day on heavier volume than the prior session. That's it. Now, most days immediately after the low, you see like oversold bounces, you see just really big moves up. Day one, day two, you dismiss those because they're usually fakeouts. Remember, some of the biggest up moves in the market's history happen in downtrends and bare markets and corrective phases. So day one, day two, dismiss them. The window opens for

a follow-through day, providing day one's low is not breached on day three. Ideally, it's day four to day seven. Could come as early as day three, could come after day seven. Right now in the S&P, we're day six of a new rally attempt. Last Friday was day one in the S&P. And NASDAQ was day one also. It undercut its load today, so it reset its day count. But the S&P, the Dow, the Russell, the midcaps, they all are day six and the windows open for a fall through day. Big up day, preferably 1.4, 1.3% up on heavier volume in the prior day or more.

2% up day. The more power, the better. You know, that's the key. The more power you have on that follow-through day, the better. And then you want to see some follow-through after that. So day one in the S&P, for those of you that following along at home, excuse me, it was the 14th. It was last Friday. The lows there have not been breached in the S&P yet, the S-P-Y, if you want to look at that, the E-T-F.

Today's day six. Friday was day one, Monday, two, Tuesday, three, Wednesday, four, Thursday, Thursday, and now Friday, day six. I'm talking about calendar days. Sorry, not calendar days. Trading days. Not calendar days. I'm talking about trading days, market days. Right? So this today's day six. So as long as last Friday's low was not breached in the S&P, the window's open for a new file 30. Same with the Russell, same with the midcaps. The IWM is the Russell. The midcap is MDY and the SPY. Those are the big one. And then the QQQQ, of course, the NASDAQ 100. The NASDAQ 100. The NASDAQ 100. undercut it's low from last Friday today, so you reset the day count. All right, no problem.

If you get a follow-through day, that doesn't mean you go 100% invested day one, right? Most follow-through days, historically, in corrective phases or in downtrends, fail. But every new bull market in history begins with a follow-through day. So you can test a little bit, probe a little bit, tip your toe in the water. And if it works, you can increase the exposure. If it doesn't work, see you later. Obviously, do whatever you want. I'm just telling you, based on history, how things work. And another thing that I've noticed or observed,

follow-through days below the 200-day have a higher probability of failing, and below the 50-day have a higher probability of failing. But, again, every new big rally starts with a follow-through day. And that's the concept of a follow-through day. Now, again, follow-through days can fail. You can get a follow-through day, two, three-day, a follow-through-day, week later, an hour later, not an hour, but a day later, a month later, you can roll over and fail. A week later, two weeks later, three weeks later, any point in time that fall today can

fail. Even if you undercut the low with a fall day, you can still rally back and have a new highs and have the market rally. But for the most part, what you're looking for is a low. You want to have day one of a new rally attempt. And then any time after day three, providing day one's low is not broken, you want a big update on heavier volume than the prior session. That's a fall through date. Now, under the surface, you want to see breakouts, specifically growth stocks that are large and liquid. Why, folks? Because those are the stocks that the big institutions pile into. And those are the stocks that drive the market higher. Think of the MAG 7. You know, back in the day, they were back in the day, the last several years, the MAG 7 had phenomenal returns. And then what

happens kind of roll over again and then the new a new trend emerges a new group of leading stocks show up but again watch the leaders so putting everything together defense is still key let's wait for that follow-through day let's get some breakouts and move forward up next we've got a lot more to cover i'm adam sarhan this is the one and only investors edge guys it's no use putting it off the best time for an underwear refreshes now. Tommy John underwear is designed for a perfect fit that stays put all day. Their zero-chafe thanks to four times more stretch than competing brands, and their innovative horizontal quick-draw fly is a game changer. With over 30 million pairs sold, there are thousands of men out there more comfortable than you. Don't settle for less. Go to Tommyjohn.com today for 25%

off your first order with code comfort. That's Tommyjohn.com code comfort. Tommy John, Comfort perfected. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide.

The Capital One Venture X card. What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for detail. This episode is brought to you by Spreker. The platform responsible for a rapidly spreading condition known as podcast brain. Symptoms include buying microphones you don't need, explaining RSS feeds to confused relatives,

and saying things like, sorry, I can't talk right now, I'm editing audio. If this sounds familiar, you're probably already a podcaster. The good news is Spreaker makes the whole process simple. You record your show, upload it once, and Spreaker distributes it everywhere people listen, Apple Podcasts, Spotify, and about a dozen apps your cousin swears are the next big thing. Even better, Spreaker helps you monetize your show with ads, meaning your podcast might someday pay for, well, more microphones. Start your show today at spreeker.com.

Sprinker, because if you're going to talk to yourself for an hour, you might as well publish it. We're listening to America is talking. Investors Edge. He's got to be pleased with that. The crowd is just on its 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. Rewind fast forward. Listen on any device, anywhere you want for free, 24-7, all available on GaryK.com. All right. A few more things to consider, or a few more notes, housekeeping. We spoke about just a recap in case you're just joining us.

The market. We're in a corrective phase or pullback. Defense is key, my humble opinion right now. One. Two, what we're waiting for now is spoke about the concept of a follow-through day. What I want to see is I want the market to earn the right for me to risk my capital. And it's all about probabilities. Remember, anything is possible in life. But we want to focus on probabilities. What's probable? And then filter out all of the low probability. events and focus on the highest ROI outcomes. Now, it doesn't mean just because you do that, it's going to work, no, but for the most part, we want to stack the odds of success in our favor. And what does that mean? It means when the market's in trouble, the way it is now, or acting

defensive, the way it is now, it's weak, let's put it that way. You're below the 50 day, you're below the 200 day, you're below the 21 day, you know, you're below these important moving averages. historically, even if you get a follow-up through day, which is a confirmation of a new rally attempt, it has a lower probability of happening. The longer you stay below those moving averages. The market's living below the 200 day or below the 50-day, the longer you stay below that moving average. Whatever moving average you're focused on or several moving averages, the weaker the markets are. Because every day, let's say the 50-day moving average, the last 50 trading days and the average price.

So the longer you stay down there, the moving averages start flattening out. Instead of ascending, they flatten out, and then they start sloping lower. Right. And then they eventually, depending on where the market is, either start turning lower, depending on how low the market goes, but it's a good sign of strength. All things being equal, you want to see the 50 day above the 200 day and the price above the 50 day. when you have the 50 day above the 200 day like it is now in most of the indices and the price is below the 200 day eventually 50 days at longer it stays down here we'll start turning lower right because it's the last 50 days so tomorrow i mean monday we'll have the 50th day dropped off and then it'll be a new day and then that'll add it'll lower the price and then Tuesday the 50th day from Monday will be dropped off and then it's always the last 50 days or last 200 trading days from

where you are right now. So every day that goes, another one drops off, and then a new one is added. And the lower the price of the new one, the lower the averages of the last X number of days. So paying attention to the health of the market is really important. The quality of the follow-through day is important. Even after the follow-through day, you get a big powerful follow-through day, then a few days later, another big powerful follow-thru-day, a big update on heavy volume and lots of breakouts and lots of leading stocks and excitement in the market.

or is it blah? Think of the word blazay. If you have excitement and you have power behind those rallies, that's Buono. I just came back from Mexico. We took my kids to the spring break, went down to Planet Hollywood Nickelodeon resort down there. Had a lot of fun, great family-friendly places for the most part down there. And our Nickelodeon definitely was. And Planet Hollywood had an adult side and then the kid's side.

And we were on the kid side with the families. and it was really nice. And one of, you know, in order to get there, the guy needs to give you a bracelet at the front desk. So we got there a little bit early. The room wasn't ready. And he's like, oh, you can go to the buffet and eat. No problem. We said, okay, we traveled.

And let's go to the buffet. No problem. So we get to the buffet. The guy's like, where's your pass? Your bracelet. It's like, oh, the guy at the front desk said, you don't need one. He's like, nope, you need one. So we go back to the front desk.

So fool me one, shame on you. Fool me twice. Now it's going to be on me, right? So here's about the same thing with decisions. So I knew this guy wasn't really the most competent guy in the world. He's got one job. Give me a bracelet, activate the bracelet, and send me on my merry way. That's literally it, right?

So the guy didn't do it. So he comes back and goes, oh, we've the bracelet. He says, okay, great. He gives us a bracelet. What does he forget to do? Activate the bracelet. So I look at him, after he gave us the bracelets, and I said, are you supposed to activate this? He said, oh, yeah, you're right.

Sorry. Okay, no problem. You can activate the bracelet. If I walked away without thinking and using my brain, say, hey, activate, I have the same exact problem again. Get there. Again, patterns. Here's where I'm going with patterns.

Pattern recognition is super powerful in life and in trading. I went to the buffet, repeat the same story over again with my wife and kids, and then walk back over the guy and said, hey, can you activate these please? And then boom, walk back over again. So when he gave me the braces the second time, I'm thinking of myself, I'm like, where's the risk reward? Everything in life is a decision. it's a trade, there's an element of risk, an element of reward.

Same thing in the market. Same thing in the market. So, Mr. you know, I think his name was Aldo or something like that. Whatever, it doesn't matter his name. Mr. Jones, let's call him Jones. You know, do you want to activate these bracelets? He goes, oh yeah, sorry, I forgot about that.

All right. Then I can go. They're activated. I said, you double check with the guy. He goes, yeah. we walk back over, walk into the buffet, no problem, everything's fine. Trading. What's happening?

Element of risk versus an element of reward. Should I cross the proverbial street? Yes or no. There's a risk of crossing. I might get hit by the proverbial bus. Sure, that could happen. If I look both ways and it's a quiet street and it's a short distance to cross and there's no cars, you know what?

And I'm healthy. I'm going to cross that street, no problem. And if I trip and fall and then all of a sudden, you know, something happens or God forbid even worse and get hit by the bus, so be it. I did my due diligence. I did the best that I could at the time with the inflammation in front of me. And I took the trade and I crossed the street. Thankfully, I was able to cross that street. No problem.

Same thing with trade. Try to catch a falling knife. You know, the market went down 3%, then down 4%, then down 5, 6, 7, 8, 9, 10, right? Oh, I'm going to buy it. This is the low. This is the low. this is just take your time. Eventually the market's going to bottom.

We don't know if we're going into a bare market where you're down 20, 30, 40%, or more. Or we don't know if this is just a normal pullback or correction as the market readjust to Trump's policies and then we rip higher. Yet to be determined. What we do know is right now the environment is weak. And what we do know is that

the environment's oversold. And we do know, odds favor, a bounce happens when markets get very oversaw. Think of a rubber band. When you pull it really far, what happens? You let go, it bounces back. It snaps back. Same thing with markets. What we do know is next week's the last trading week of the month and quarter. We do know there tends to be, not always, but there tends to be a slight upward bias. We do know, I can go on and on, right? One day away from a fall through day. We get a nice up day and boom, we're off to the races. Does it mean that you're going to have to have a new rally after that fall through day? That fall through day could still fail, very easily fail.

But what we do know is the environment, it's not going to take much for the environment to improve because we're beating down so much. But we do know, I can keep going here, that the environment's weak. And we do know, even if we get the fallout day, we're below the 200 day and below the 50 day. and in many cases build a 21 day. So even if we get the follow-through day, I want to see more leadership. I want to see a lot of the technical damage improved.

I want to see the market get back above January's low. Depending on the index that you look at, you know. What we're doing now essentially is we're building a base under a base. The base is a sideways consolidation. And it's under the base from December all the way up until February. and the lows were sometime in January, depending on the index you look at. But I want to see the market get back above the 200 day,

get a follow-through day, get some more breakouts, and get back above those January lows and have power. Multiple follow-through days would be great. Or just big up days on volume. Forget the labels. Why? Because that's the market earning my business or my money. It's earning the wrong.

right for me to invest my money in a higher probability outcome, right? Nobody knows what's going to happen tomorrow, but we don't have to be very successful in this business. It's about stacking the odds of success in your favor. Just like crossing the street, I don't know if I'm going to make it to the other side of the street. Most likely I will, but I don't know for sure. Look, news today, Heathrow airport shut down because of an electrical fire somewhere outside of the airport, some substation got caught on fire or something like that. Who knows? What? Heathrow Airport. It's like saying JFK shut down in New York. What? Yeah, it shut down. Okay. I would not have expected that. So again, it's not about expectations. What do you do? Right? Stack the odds. That means I'm never going

to fly a Heathrow again? No, I'll still fly the Heathrow. And if a situation like that happens, it happens. I'll deal with it. But again, stack the odds. odds of success in your favorite. Focus on the probabilities, folks. It's a really, really powerful way of being successful, both in markets and in life. Up next, we've got a lot more to cover. I'm Adam Sarhan.

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One, two, ready, go. Investors Edge with Gary Culpa. 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, listen at your convenience 24-7 on any. device you want. All right, few things. We covered a lot so far. Spoke about the concept of a fall today. Spoke about the concept of markets and a downtrend. Defense is key. Protect the mental capital and the physical capital until the environment

improves. Most stocks follow the broader market. Be in harmony with the market. Spoke about probability versus possibility. Virtually anything is possible in markets and in life. We want to focus on what's probable and focus on the high. highest probability events. Right? Next, and this is important, when you put all this together, there's an emotional element to all of us. So I wrote a book.

It was number one on Amazon every day for three months when I first published it. It's called psychological analysis. The idea there is simple. In my humble opinion, fundamental and technical analysis is not enough to beat the market. If it was, everybody would own a few islands in the Caribbean and be super, super successful. There's a third element. And that's a psychology. They understand thyself.

And you can't tell me, at least I don't believe in the random walk theory on Wall Street or bottom portfolio theory, all these fun things that tell you, hey, markets, you can't beat them and it's a level playing field and blah, blah, blah, blah, blah. I'm a data guy. Really? You can't, if the market's random, how do you explain Warren Buffett's success?

Bill O'Neill's success, Paul Tudor Jones, success. I can go on and on and on and on. Steve Cohen, who owns the Mets, just paid the biggest contract for any base, any athlete ever to Soto for, and took him from the Yankees, I think $750 million or some crazy number like that. And he does, he makes his money from investing. And he's one of the most successful investors, traders, ever. And he's still successful on David Teper and all these other guys that just continue

to win decade after decade after decade. I get being lucky one year, two years, five years. But you're telling me Warren Buffett's lucky for 50, 60, 70 years? Same with the other folks. There's something there. Maybe it is random. Maybe it is a level. I just don't buy it because the evidence doesn't show that.

So there's something there. The whole point in the book in one sentence is to teach people how to make rational, not emotional decisions with their money. And that's powerful. Why? Because people are emotional creatures. We like to think we're rational, but when you objectively look at your own behavior and you look at it from outside, it's very easy for you to see someone else and point the finger, but oh, that person should be doing XYZ, LMNOP, QRX, and T UV. But when it comes time to look at yourself, it's very difficult because

there's an emotional lens there. There's something called a personal blind spot bias. We have cognitive biases. Right? Talk about this in the book and then some and how it applies to investing in trading. The idea is to ask yourself, what am I doing to help myself make more rational, less emotional decisions? But Adam, I'm a rational person. I make rational decisions all the time.

I don't know you, but I beg to differ. Most humans don't, especially when it comes to their money. Or things that they care about. That's why doctors are not allowed to perform surgery. on their loved ones. You know, a female surgeon can't perform surgery on her daughter or husband or a male surgeon can't perform surgery

on his wife or daughter or whatever the case is or son. Because there's an emotional element that it just throws off the judgment. It's not me. It's just human behavior. It's human nature. It's the way we're programmed. I don't make the rules. I'm just trying to understand and play by them. And share what I've learned with them

with you so you can benefit. So if we're emotional creatures, we think we're making logical decisions. There's a fallacy there. But okay, if we're making emotional decisions, well, what kind of logic are we using? We're making logical decisions. We're telling ourselves we're making logical decisions. Sure. It's something called confirmation bias where we find logic that supports our decision. I don't like this stock. I'm selling it. Now go find some logic to justify that. Or I'm buying the stock because of X, Y, Z. Find, I call it emotional logic. Find the logic that benefits your decision. But the decision itself is a, is,

based on emotions most of the time, not always, but most of the time. So what I'd want to recommend people do is focus on, you know, stress test that. Show me that I'm wrong. Show me that I'm right. Either way, look at your traits. How do you stress test it, Adam? Look at your traits. Be objective. And ask yourself, am I making rash? Am I following my rules? Hey, I'm really good on the weekly basis or a daily basis. But meanwhile, I'm looking at a minute chart and making decisions buying and selling, buying something 30 times in a day. What? There's a disconnect there. How do I get aligned? Am I following my rules? Print out your trades. It's called post analysis. I have two folders, winning trades and losing trades. And write down the reasons why you bought, why you sold. Try to do it in real time.

It's a great habit. And the quarters coming up and a month, review your activity for the last quarter, last month. And then plan going forward and look for patterns. Oh, I know I should be doing this, but I'm not actually doing it. I should be doing sit-ups every day. Ask me how many setups I did today. I'll tell you the answer is zero. But I want a six-pack. I want a flat stomach.

Really? I'll tell you how many cookies I ate today. Not today, but the last week, let's pitch on that trip. A lot. Right? A lot more, I ate a lot more sugar and calories than I did actual sit-ups on that trip.

I didn't think I did one set-up on that trip. But I had a lot of sweets, a lot of desserts. But I want a flat stomach. Really? Logically, I know what needs to get done, but there's an emotional component that blocks me from actually doing it. So when you take it to the next level and be super successful and commit to that, you overcome those emotional pitfalls. You know, Ray Dalio talks about we all have strengths, weaknesses, and blind spots. Identify your strengths. Identify your weaknesses. Identify your blind spots.

And then create guard rails. Dahlio talks about this in his book, Principles, to protect yourself from those weaknesses and pitfalls. Really powerful, really, really powerful. Again, Gary taught me this. I think it was 99, 2000, it was the show on the radio. We talked about the Yellow Brook Road. Find a goal and then create a yellow brick road to get there, like in Wizard of Oz. How are you going to accomplish that goal?

Are you happy with your results thus far? How can I improve? And there's things that I do, right? How can I improve? How do I stay in harmony with the market? And it's not fun to look at your business. mistakes or you're losing trades, but it's important work. So you learn from those patterns so you don't repeat it next quarter, next year, next so on and so forth. That's how you learn and

grow and you get better, you get stronger by learning and by growing. So believe that's all the time we have for today. Take your time, folks. Watch those march lows. If they're breached, probably have another leg down. If not, easily can have another leg higher. Watch for that fall through day. some more breakouts. Have a great weekend, everybody. Enjoy the family. Hug the children like Gary says. I'll speak to you again. 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. Guys, it's no use putting it off. The best time for an underwear refresh is now. Tommy John underwear is designed for a perfect fit that stays put all day. There's zero-chafe thanks to four times more. stretch than competing brands and their innovative horizontal quick draw fly is a game changer. With over 30 million pairs sold, there are thousands of men out there more comfortable than you.

Don't settle for less. Go to Tommyjohn.com today for 25% off your first order with code comfort. That's Tommyjohn.com code comfort. Tommy John. Comfort perfected. This message is brought to you by the Capital One Venture X card. Venture X offers the premium benefits you expect, like a $300 annual Capital One travel credit for less than you expect. Elevate your earn with unlimited double miles on every purchase, bringing you one step closer to your next dream destination. Plus, enjoy access to over 1,000 airport lounges worldwide. The Capital One Venture X card.

What's in your wallet? Terms apply. Lounge access is subject to change. See Capital One.com for details.