Investor's Edge with Gary Kaltbaum - Where's The Volume? [05.10.2024 w Adam Sarhan]

Episode Date: May 10, 2024

https://garykaltbaum.com/

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Investor's Edge with Gary Coltbaum. 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 Sartan, in for Gary Kay, who's out today. Today is Friday, May 10th, 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 market, as you know, this is a show about you and your money and all the fun points in between. Just as a quick reminder, if you don't get the show in your city, you can go to GaryK.com and listen live or archive. We are live Monday through Friday 6 to 7 p.m. Eastern. Also at GaryK.com, you could follow Gary on X or formerly known as Twitter. Just by pressing the button, there's a big banner right there. You can go on Twitter and type in or X and type in at Gary Culpom. And you can subscribe to Gary's morning notes sent directly to your inbox for free.

You may email Gary, ask about his money management services, or join his... premium service, which is convictionleaders.com. And there he shares his thoughts about the market several times a day, does daily or nightly webcasts and weekend webcasts, keeps members really abreast with all the changes in the market. You basically see the market from Gary's eyes and Gary's point of view. So that's all available at convictionleaders.com. So we've got a few topics to discuss this week. First off, notes directly from Gary that I want to make sure I convey it.

top of the show to make sure that the message is sent properly. First off, volume has been extremely low. So good price action. If you look at the major indices, the Dow, the S&P, the NASDAQ, for starters, they're all about 1 or 2%, maybe 3% below all-time highs. Now that is really important because price in my world is primary, everything else including volume and everything else is secondary. Why? Because what shows up on our statements? Price. The difference between our entry price and our exit price. That's it. That's the only factor, the variable, if you want to solve for X, think about, you know, back in pre-algebra days or algebra days, that matters with respect to whether or not we make and or lose money.

So by focusing on price as a primary factor, it helps give clarity. And it helps people focus on the highest ROI data points. In other words, there's 10,000 stocks out there. There's news. There's earnings. There's so much going on. Today, consumer confidence fell to a six-month low. But the reaction to the news, the price is primary. Everything else is secondary. So that being said, we do all things being equal. We do want to see stocks go up on heavy volume and they go down on light volume. That typically is healthy action. Why? Because heavy volume shows us what the big institutions are doing. We're not privy to their buys and cells and dark pools and HFTs and LMTs and LMPs, it doesn't matter. TUF is, it's all nonsense. What they're doing

has, it just shows up based on volume. If you have a stock that trades an average of a million shares a day. And then all of a sudden, and it's trading between, let's just say, 50 and 55 for six months, all of a sudden it breaks above 55 on 10 million shares a day. Well, that's the big institutions in their buying. In my book, it's called psychological analysis. The idea there is that fundamental and technical analysis are not enough to beat the market. If they were, everybody would win. The third element, my contribution is psychological analysis. It's know thyself, right? So, and bring out the best version of yourself. So in it, and it was number one on Amazon every day for three months, and I'm very happy about that. Thank you all that read it and left a nice review. If you want to

grab it, by all means, feel free. It's on Amazon. And in it, I talk about there's an infinite number of ways to make money in the market. Your job is to find one that works for you. And I always like to say the market is speaking and then ask, are you listening? So what I want to do now is spend some time focusing on that point by the market is speaking. And then ask, are you listen? Because what does it mean? Well, up on volume, you know, down only 2% below an all-time high. Oh, the market's above the 50-day moving average, which is in and of itself a very good sign.

Next week, we have inflation data, the CPI and the PPI, consumer prices and producer prices. That's going to be a primary focus. We also have a lot of retail stocks reporting earnings over the next few weeks. Walmart, Target, Home Depot, so on and so forth. So we still have news coming out, but what's really important is the reaction to the news. So let's talk about this point. Adam, what do you mean the market is speaking? I don't hear anything.

Well, we know most communication between humans is nonverbal. Well, people talk all the time. You can communicate verbally like I'm doing right now. Or you can communicate in a nonverbal fashion. in this setting on the radio on a podcast or on you know verbal you need to have some kind of verbal communication but when we're in person a lot of communication happens in a non-formal setting so this morning i'm driving my kids to school and this lady basically comes out out of nowhere and like runs across in front of our car thankfully i was driving slow i was able to stop everybody

was safe nobody was hurt and told lady i gave her the motion of just like go ahead lady with my hand and gave her a thumbs up she looked she saw my she was a polo She didn't mean to. It was an accident, but thankfully the accident didn't happen. And she felt bad, but I gave her thumbs up. I didn't say a word to her. She didn't say a word to me, but we both understood. I smiled at her and see you later and see you later. And I told my kids, I said, hey, that's nonverbal communication, right? If you want to see somebody who's super happy, elated on Cloud 9, you probably can tell me what they look like. Their posture, their face, they're smiling ear to ear, so on and so forth. Now I'll take a picture of someone who's really down or depressed or sad or whatever the case, low energy, whatever the case. maybe really tired. You see them hunched over, frowning, so on and so forth. So when you meet somebody, smile. A little tidbit there. But most communication is nonverbal.

All right, great. The market. So the market's not literally talking to us by using words because the market doesn't have a voice in a traditional setting, but it's nonverbal communication. It's still communicating. And it's very powerful communication. It's subtle but powerful. And it does it with two primary things.

It's price and volume. Price and volume. So let's talk about that for a little bit. The reaction to the news, in my opinion, matters more than the news itself. Why? Because it tells us what the big institutional investors are doing with their money. Not what they're saying on TV or whatever the case may be. It's what they're actually doing.

They can't hide. Again, the stock has 10, you know, a million shares a day. all of a sudden there's 10 million breaks above resistance, and bam, it's a big breakout in heavy volume. Like Gary says, it's not Aunt Mary and Uncle Bob doing the buying. It's a big institutions. That's a subtle but important sign that, hey, that something has changed. Instead of going sideways for six months, between 50 and 55,

we now broke above resistance, 55, and we did it on very heavy volume. So we don't have to be privy to their insiders, they're buying and they're selling and their orders and all that kind of stuff. All we've got to do is just pay attention. Look at the new highs. Look at the new highs. Look at the stocks that are setting up to breakout. Look at the stocks that are over the 50-day,

so on, near 52-week highs, so on and so forth. So when you have the major indices, like what's happening now, down 2% or thereabouts, 1%, depending on the index, below a 52-week high, and above the 50-day moving average, that tells you a lot. Even though we're rallying up on very light volume, price is first, everything else is. second. Why? Because price is what shows up on the statement, not volume, not earnings, not the news,

not consumer sentiment, not the Fed meeting its price of what you own. That's it. So, there's one of two scenarios that can happen going forward. First off is the market breaks out and hits new all-time highs, which is a high probability. Second, it goes sideways for an extended period of time. Third, it rolls over and has another leg down. Okay, that's it. Literally, there's only three things that can happen after you buy a stock. It goes up, it goes down, and it goes sideways.

That's it. Keep things simple, folks. That's one thing that I can tell you that is a superpower. Not just in the market, but in life. Most people try to overcomplicate things. Einstein said keep things simpler, as simple as possible, but not more than that, right? And there's an elegance and simplicity. Kiss, the military, keep it simple.

You know what the last that stands for. Just simplify whenever possible. It can go up down or sideways after you buy it. So I have a plan. If I enter here, where am I going to exit if I'm wrong? And how much do I risk if I'm wrong? Those questions are so powerful. Where do I enter?

What do I exit? And how much do I risk if I'm wrong? Really, really important. Why? Because at the end of the day, somebody told me one time he goes Adam we're not buying and selling stocks we're buying and selling risk

I thought that I mean that you know the emoji with the head exploding that's what happened I was like wow that is profoundly genius because you're risking your money with an expectation or some hope that over time you can have a reward you'll make more money than you risk so putting

it all together the fact that we rallied on light volume not the best thing but the fact that we're near all time eyes and we're above the 50 day, that trumps everything else. So for the market, we're going into the weekend. The market's acting well for right now. We'll just be prepared. So up next, we've got a lot more to cover. I'm Adam Sarhan, and this is the one and only Investor's Edge. Hi, I'm Gary Kalbaum, hosted a nationally syndicated radio show Investors Edge. We're not just

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through call-bomb capital management. 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.

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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 24-7 on any device you want, anytime you want. So we spent the first part of the show talking about the market, paying attention to how the market speaks to us. I like to say the market's talking, and our job is, I ask the question, are you listening?

And we do it by focusing up, by studying price, because price is objective. It's not someone's opinion. Oh, the price is below the 50 day? Okay. Price is above the 50. Price is near a 52 week high. Price is near 52 week low. All these things are objective.

You can quantify it. So let's talk about a few more things. We spoke about next week to be prepared for inflation. That matters because inflation's public enemy number one now for the Fed. And it's been number one for about a year and a half, almost two years now. And the Fed's in a delicate situation. the economy's starting to slow down just a tad and it's still strong but the Fed wants to cut rates and it can't because inflation's still strong inflation is high we haven't seen a big drop in inflation

if inflation drops too much that means the economy is getting weaker so it's one of those dances where it's in the Fed's backs against the wall now let's talk about AI. AI stocks, artificial intelligence, you know, were one of the primary drivers over the last year or so. You had SMCI, Navidia, you had Microsoft, Pallantir, you know, SMH, which is the ETF for semiconductors. So many stocks, specifically semiconductors or AI-related stocks, had huge moves over the last year or so. Something changed this earnings season. I just wrote an article in Forbes about this. yesterday where I said AI stocks had a little turbulence. You can Google it. And in it, I noted the fact that AI stocks, the reaction to their earnings, not the earnings were lousy, but the reaction

to earnings, this earnings season was lousy. SMCI gap down after reporting earnings. Arm, ARN, gap down after reporting earnings. Palantir, PLTR, gap down after reporting. These are all very, you know, heavy AI stocks or they benefited from the AI move. ASML, gapped down after reporting earnings. Semiconductor stock. So that was a big, big, big, big shift in the dynamic in the market because, or the character, the behavior. Because last quarter and the quarter before that and the quarter before that, you saw the opposite. You saw most of these stocks rally after reporting earnings.

So after a big move up, folks, it's really important to just. Ask yourself, am I late to the party or am I early? Or is it the right time? Why? Because getting in too late, it's not a good thing. Getting in too early is not a good thing. So that right time is really, really important. Timing in life matters, right?

Timing and markets matter. If a comedian goes on stage and just botches the joke because the timing is off, the joke can be really funny. But if he says the punchline too early, he or she kills the joke. So same thing with the market. You can have a great stock, but if you get in and get out with the wrong timing, you can miss a big part of the move. So when you look at the AI as a group or a sector, you want to ask yourself, okay, did something change? If so, what? Is the move over? Or is this just a pullback or a correction along the way?

And it reminds me somewhat of the dot-com stocks back in the 90s. when I first got involved in the markets, it was around that time, and I saw just some bonker moves. I mean, the markets were just going bonkers. Forget valuation. I mean, you had moves that were just mind-boggling, but then what goes up, the bubble popped, and March of 2000 was the top. And then the next two years, all the way into October of 2002, you just had the, you know,

the market meltdown. The NASDAQ dropped over 80% when NASDAQ 100 somewhere in that area, 85% or 84%, something like from March 2000 until October 2002. And then took like 13 years to recover. So from that March high. So what happens, or somewhere thereabouts, 13 years, 14 years, there's a long time to recover. Over a decade, let's put it that way. So I think it was 2013 when it got to new highs, if my memory serves me correctly.

But the important thing is what? Is that just because you have a decline doesn't mean that the move is over. it could just be a correction along the way. Is AI done? No. Could be. But AI itself is different than how AI stocks perform. Keep that in mind because there's a lot of people get confused.

And another big point I talk about in the book that I want to share with you too is the market is a forward looking mechanism. And economic data, earnings data, news is by definition a rearview mirror. backward phenomenon. It tells us what already happened in the past. The market is looking forward, but the news is looking backwards. That causes a lot of confusion on Wall Street. A lot of people don't understand that point. Myself included, it took me years before I got that clarity. So when the market's looking forward, it's pricing in the next three, six, nine, twelve months or so of potential earnings. Now it's not always right. Things change. Look, Netflix, meta all gap down after reporting earnings this quarter just a few weeks ago and then they rallied

right back up not 100% recovered the gains but you know I think Netflix is above where it was before it reported meta is right around that same area sometimes they gap down they go back up sometimes they gap up and they go down but it's important to understand the reaction to the news matters so maybe AI stocks are just resting right now which is okay they've earned the right to rest even with them resting. They're still stomachs the strongest performing, you know, it's probably one of the strongest performing sectors in the market right now. So let them rest. There's no immediate rush. Doesn't have to go up every single day, right? There's an old adage on Wall Street says that the market takes the stairs up and the elevator down, meaning it goes up, go sideways for a little

bit, it goes up again, go sideways a little bit, up again, so on and so forth until it's ready, and then when it goes down, it just takes the elevator down. Not always, but it's just a good way of simplifying it for people to understand that the underlying dynamic, it goes up slowly, it goes down faster typically. So why? Because fear is very powerful.

Very, very powerful. And when people sell, they just sell. They get the panic-type state. Just get me out. And that overrides logic in most cases. So, a few thoughts here. What sector and or sectors will take AI's place?

Is this a temporary pullback? And they're going to resume the uptrend, which is what I think is going to happen? Or is this just done for the foreseeable future? Time will tell. But stocks like SMCI, look on a weekly chart, you have a really nice downward trendline for me now over the last several weeks. I cover that this weekend in the fine leading stocks.com in my newsletter, my weekend report. It was a top stock. Nice setup. If it rallies, hey, it's back in business and it's got its mojo back. But until then, no thing. you. So understanding these things change is really, really important. Up next, the state changes. Up next,

we've got a lot more to cover. Some more stocks, more sectors, and a whole lot more. I'm Adam Sarhan. This is the one and only investors edge. 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 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 Conton? 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 computers, 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 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, Oiraida, Silk, Capri-Sung, 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. We're listening to. America is talking. Investors Edge. He's got to be pleased with that. The crowd is just on his feet here. He's a Cinderella boy.

With Gary Coltbaum. It comes highly recommended. You're going to feel better if you talk to him. And welcome once again to Investors Edge. In case you're just joining us or missed any part of the show, you can go to GaryK.com. The wine, fast forward, listen, archive, or on demand, anytime you want, 24-7 on any device. So, we spoke about a lot so far, and let's keep going because there's a lot more to cover.

When you look at the market, it's people ask me this question all the time. It's, hey, Adam, what do I do? meaning what do I buy or what do I sell? The action is really, really important. But let's back up for a second. So, you know, giving the fish isn't one thing, but teaching you out of fish is really important because then you don't have to ask that question.

You can learn. And also, just because somebody does one thing and it might work for them, Warren Buffett's a great long-term fundamental investor. He doesn't look at charts. He doesn't use technical. so on and so forth. Great. William O'Neill or Paul Tudor Jones or some of these other traders that are more technical oriented. Jim Simmons just passed away today. He's a self-made multi-billion

dollar hedge fund manager, one of the biggest guys in the world in the hedge fund space, quantitative hedge fund space, and he passed away. Rest in peace. He only looked at the price. Didn't even touch the fundamentals. Both guys are billionaires. Just because somebody does and it works for them doesn't mean it's going to work for me or the next person. And that's why in my book I outlined the basics. I give you my trading strategy, it's called AMP, but also give you framework so you can develop your own. I want to empower people to come up with their own because that means it works for you.

So an example, not from trading here, but I illustrate the point here, is working out. So I went to a trainer recently. The guy was a young kid, you know, muscles coming out. out of his eyeballs. And he's like, I'm going to have you work out so hard at him. You're going to throw up. And I said, thank you very much. No, I'm not going to throw up. See you later. Just I'm not doing it. Now, a 20 year old or whatever, someone else, maybe that works for them. Maybe they want to go hit it that hard and throw up a few times and they get over that throwing up a few times. And then they're in business. They get the results they want. They get their

mojo. They get whatever. They get in flow. Whatever needs to happen. I'm not doing that. It's not my goal, not my desire, not my interest, nothing. No interest in that at all. Now, there's nothing inherently wrong with that trainer and or that trainer's system and or way of doing things. He's got muscles, you know, coming out of his eyeballs. I don't, not literally, but you get it what I'm saying.

I don't. So clearly what he's doing physically is giving him more muscles than what I'm doing. but what he's doing doesn't work for me. I'm not going to put myself through that kind of a workout because my priorities, my goals are not the same as his. I don't want to have muscles coming out of my eyeballs. So that approach doesn't work for me. And there's nothing wrong with that approach.

In fact, most things in life don't work. And that's okay for every single person. And it's still okay. The key is to find what works. works best for you. So instead of using that approach, I find a different approach or a different trainer might come up with my own program and say, oh, okay, you know what? I'm happy walking. So every day I walk about 15,000 steps on average so far in the last 12 months. Sometimes I go up to 20, 21,000. On the low end, I'll do 12 or 13, somewhere in that range. But I need to walk. Okay,

I'm not sweating. I should be doing more set up. Sure, I get it. But I'm moving. It's a step in the right direction. And it breaks up the monotony just sitting all day. Okay, great. That works for me. Take a few breaks throughout the day. Start early in the morning. Bam, found some that works for me. Now I want to build on it. I'll do some push-ups, then do some sit-ups, and then slowly figure out an approach where I can get some weights, do some basic weights. That works for me. That's the key with investing too. Is figure out an approach where you're comfortable. There's system traders. to talk about Jim Simmons. He makes computer programs and, you know, buy here and sell there based on rules and all this kind of fun stuff. He's a mathematician. Okay, great. And there's his trading systems, people systematized trading. But then they can't follow the system that they created. So what good is it? In fact, it's not any good at all. So really understanding, know thyself, master thyself, understanding your strengths and your weaknesses is a superpower, both in investing and in life. I'm very good at big example.

You know, here's a story. I'm very good at big picture thinking. My wife, God bless her, she's very good at details. I'm not good at details. So when it comes time to go, you know, strategic big decisions, we'll talk. Okay, great. We come to a conclusion together. Great.

We're going to go north. Okay, great. Or we're going to go south. Okay, great. How we get there, the details of it, honey, it's all you. And I get out of the way. Why? because I know my lane.

In Forbes, my lane is investing. I'm allowed to write about anything to do with investing. Comes about sports, politics, the weather. Not my lane. I can't write about it. But investing, wide open. Same thing here is know your lane. Know your strengths.

Some people are comfortable taking a lot of risk. Some people are not. Some people like growth stocks. Some people like value stocks. Some people like charts. And people don't figure out what you're comfortable with, what you're good with. And if you have to get out of your comforts a little bit, that's good.

Grow. That's how you grow. But figure out an approach that works for you. And figure out a way of objectively analyzing and making decisions based on price. And get aligned with the market. You know, people want to be in harmony or aligned. I always joke with the word harmony. I say harm money.

We want to be in harmony with the market. Look at the sectors. You know, look at the major indices first. And then look at the sector. and then look for the leading stocks in those sectors. Because that's the market speaking to us in the nonverbal way, right? It's a very subtle way. But if you see a lot of AI stocks acting well, a lot of housing stocks acting well,

a lot of gold stocks acting well, great, the market speaking. Hey, we should focus on gold stocks or housing stocks or whatever the case is. If they're all breaking down, hey, this is an area I don't want to be part of right now. That's okay. and it's just changes. It's a constant state. It's an infinite game.

You know, people love playing sports or, you know, I just played chess with my kids the other day. It's a finite game. There's a certain number of pieces. There's rules. There's a definitive winner, definitive loser. Infinite games are a different set of rules. The market's an infinite game. It's never going to go anywhere.

This guy, Jim Simmons, was a master for decades and made billions of dollars. One of the best track records out there. The guy passed away. The market's still open. same thing it's just going to for everybody it just never ends so how do you play a game that has infinite it's an infinite game the rules of the game are different it's a marathon not a sprint type of a thing you don't have to risk everything on one trade in fact I recommend you don't do that well there's no investment advice been given do whatever you want but you know everything I say

is general informational purpose and educational purposes only nothing else but You know, putting everything on one stock, it's not, it doesn't typically, historically, usually not the best idea. Going slow and steady, much better idea for an infinite game. Being on top of the market and staying in harmony with the market when the state changes. And it goes from strength to weakness, change accordingly. Someone asks me, oh, you bullish or bearish, whatever the market is. The market's acting strong and acting well, great. it's breaking down, acting weak, get out of the way.

Just that simple. And then it repairs itself, gets up again, great, I'll get back in. I don't want to own things that are going down, big. Now, if it's a small correction, small pullback, that's one thing. But if it's getting crushed, see you later. It starts breaking support, breaking moving averages. You know, that's how the market's speaking to us. Just about every great stock in history, eventually at some point had to be sold.

Because it broke down. A lot of the stocks that were big darlings of the market a hundred years ago are gone, 30 years ago, gone. A lot of those dot-com stocks that went up so much, the ticker's not even available anymore. Either they went bankrupt, they got bought out, Yahoo, Y-H-O-O, used to be one of the strongest stocks in the market. It made more Cuban a billionaire. That ticker, it's not even available anymore. So, things change.

They ebb, they flow. Stay in harmony with the market. That's the big picture of thought here. Why? Because that over time, an infinite environment, will allow you to do very, very, very well. And that's the key. You don't want to fight the market. Make the trend your friend.

There's another adage on Wall Street. So up next, we've got some more to talk about. I'm Adam Sarhan. This is the one and only Investors Edge. I'm Malcolm Gladwell, host of Smart Talks with IBM. I recently spoke with IBM's news. director of research, Jake Mbeta. 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, 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 mature. My cell phone is a mature technology at this point. How far are we from that point with Conton?

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. 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.

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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. 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.

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What are we waiting for? Well, what are you waiting for? One, two, ready, go. Action! In the guest's edge. with Gary Culper. 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.

Listen live or archive. We are live Monday through Friday, 6 or 7 p.m. Eastern. Or you can listen to any device 24-7 anytime you want. Fast forward pause and or ask whatever you want, you know, pause for wind fast forward any time you want. So we spoke about the market. we spoke about sectors, we spoke about how to listen to the market. He's covered a lot of grounds, how to be in harmony with the market. Let's do a few, I guess, questions that come up that I get a lot that I'd like to cover.

So a big point of the book in psychological analysis is how to make rational, not emotional decisions with your money. One of the biggest problems that I faced for my entire 20s and 30s was, well, half of my 30s, I was making emotional decisions. Unbeknownst to me, I thought I was making rational ones. But when I objectively look back and studied the market and studied my behavior, that's what really matters. There was a disconnect.

The market was up big, but I would miss it. And I'm like, what is going on? So, as I mentioned earlier, I did some introspection. I did some soul searching kind of a thing. Looked at my strengths, looked at my weaknesses. and said, oh, what am I good at? I'm good at big picture. Okay, zoom out, Adam, look at the monthly charts,

look at the annual charts, look at weekly charts, look at daily if you want. But stay away from the intradate charts. They just don't work well with Adam. I'm not good at details. I'm not good at the, you know, ins and out, and the minutia, but I'm very good with the big picture. So I adjusted, I adjusted my strategy.

Instead of looking at the market all day, every day, I would zoom out. I'd look at it. I did most of my work on the weekends when the markets are closed. And then I'd have a plan for the following week. Now all of a sudden I'm not making emotional decisions. I'm not chasing something. I'm not fomowing in, you know, fear of missing out or I'm not, you know, chasing something that's up too much because it's extended.

No. And if I miss something, that's okay. Now all of a sudden there's a structure. and I'm aligning my investing with my strengths. And at the same time, I'm reducing the unforced errors. Think of tennis or any game that, you know, there's unforced errors where I just hit the ball out for no reason. That's an unforced error. If I'm not interacting in the intradate charts because I'm not good at that, I know I'm not good at that, so stay away from it.

So I'm reducing the amount of unforced errors that are going to come. And I'm increasing the probability of success because I'm, I'm, I'm sorry. staying in my lane. I'm fishing in a pond where Adam has a higher probability of success. So the big point of the book is learn how to make rational, not emotional decisions. And then as I, you know, I reread some of the old classic books. There's a great book by Nicholas Darvis called how I made two million dollars, or the book was how I made $2 million in the market. And he was a ballroom dancer back in I think it was the 60s or 70s. And what he did was, this was before the internet, he'd go to Asia and he'd have the broker fax him or teleks him or whatever

it was back then, the charts and Barron's magazine and blah, blah, blah. He would send back orders, but he'd have to put orders for entry and orders for exit. And then he would do whatever he was doing and he did very well. And he made $2 million decades ago back when $2 million was really, I mean, it still is a lot of money, but a tremendous amount of money back then. Just trading stocks. And then he went back to New York and he got annihilated because he was in the broker's office and he was buying and selling and just making decisions and emotions were high. blah blah blah blah blah blah blah then he took a I think a little I guess retreat whatever word you want to use he got on a plane went to Paris and he started doing well again well what he noticed was when he

planned his trades in advance he would do well but when he was in the middle of the broker's office and people are yelling and screaming and tickers go and stocks are going up and down sideways there's no rhyme or reason so it didn't work well for him now someone else might do very well staring at the screen all day. It just, for me, that doesn't work well for me. Okay, great. So find out what works well for you, folks. That's the bottom line. And then stick to it. There's going to be temptations and that inner narrative is super important. Who do you talk to more than any other person in the world? Yourself. Be mindful of that conversation. Bring out the best version of yourself. In the book, I've got two characters. There's cartoon characters. The only investing book that I know of that

has cartoons in it. One is a superhero and the other one is what I call the smart money superhero and the other one is the dumb money beast. And the dumb money beast, like a Tasmanian devil that runs around and makes emotional decisions and causes chaos and just subparred decisions. And it's in all of us. Those two kind of good evil, the smart bet dumb, whatever word, however you want to, that dichotomy is in all of us. Okay, I just make cartoons so people can quickly easy and understand the concepts. So now I ask myself, how do I bring out my superhero? How do I up, increase the probability of success? Make smarter decisions. And then when I bring out my superhero, who's going to perform better? My superhero or the dumb money beast, who I call Schmelf in the book. We call it in the house, too,

when somebody's off. We're like, oh, they're smelhing. My kids or my wife or whatever. Me, I'm off. My wife's like, okay, you're smelhing. Okay, great, I get it. And we can step back. There are a bunch of cognitive biases that are in the book, too. And one, One of them is the personal blind spot bias. People can't see themselves objectively. And that's a big problem for traders. Ask how, you know, I speak to traders all over the world. And then how many people, you know, I'm in a room and think they're going to beat the market. Everybody raises their hand. Statistically, we know most people are not going to beat the market. Ask newlyweds. You want to hear that. Here's an example.

100 newlyweds get married. The night of their wedding, how are people thinking to get divorced? No one's going to raise their hand. But we statistically, we know half of them are getting divorced. People can't see themselves objectively. So part of this whole process is helping you bring out your superhero. and overcoming some of these biases. If you have a mind, you have biases. It's just that simple. So learn them, understand them, know what they are.

Do things to protect yourself from Schmelf, right? Which is the emotional version of an lesser intelligent person that's inside of all of us that we just make silly or questionable decisions. I'm trying to use nice language. And you understand. It's in all of us. It's universal. You bring out your superhero, you plan ahead, all of a sudden, you're now take a step in the right direction of being more and more in control.

Not of the market, but of your behavior. That's key. It's controlling the behavior. Because we can't control the market, but you can control how you react to it. Same thing with anything in life. You can't control what happens to you in life, but you can control how you react to it. And that's so liberating. It's so powerful.

So as we go into the weekend, take your time, go through the market, look at the leadership, look at stocks that are acting well. We've got inflation coming out next week. We've got earnings still from all the big retailers. Take your time. As long as we stay above the 50, things are going to give the market the benefit of the doubt. If we break down, be prepared and ready for another leg down. Anyway, that's all the time we have for today.

As always, I want to thank you very much for being here. I'm Adam. Sarhan, this is the one and only investors. 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. 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.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.

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, ORAIDA, Silk, Capri-Son, Bavarian Meats, 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.