Money Rehab with Nicole Lapin - Investing 101 at the New York Stock Exchange with The Einstein of Wall Street Peter Tuchman
Episode Date: May 3, 2024Nicole heads to the New York Stock Exchange to talk with Peter Tuchman, AKA The Einstein of Wall Street. There, they confirm the rumors: the Wolf of Wall Street days are over. Peter reveals what it's ...really like working on Wall Street, how to protect yourself from scammy finance "pros" and how to navigate the market successfully. You can find more on Peter (including some of the famous NYSE photos) here: https://www.einsteinofwallst.com/
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One of the most stressful periods of my life was when I was in credit card debt.
I got to a point where I just knew that I had to get it under control for my financial future
and also for my mental health. We've all hit a point where we've realized it was time to make
some serious money moves. So take control of your finances by using a Chime checking account
with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two
days early with direct deposit.
Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up
to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that
I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then,
that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime.
Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN.
Chime. Feels like progress.
Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A.
Members FDIC. SpotMe eligibility requirements and overdraft
limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject
to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details.
I love hosting on Airbnb. It's a great way to bring in some extra cash,
but I totally get it that it might sound overwhelming to start or even too
complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full time
in San Francisco and you can't go to Maine every time you need to change sheets for your guests
or something like that. If thoughts like these have been holding you back, I have great news for
you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with
Airbnb experience that can take care
of your home and your guests. Co-hosts can do what you don't have time for, like managing your
reservations, messaging your guests, giving support at the property, or even create your
listing for you. I always want to line up a reservation for my house when I'm traveling for
work, but sometimes I just don't get around to it because getting ready to travel always feels like
a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm
matching with a co-host so I can still make that extra cash while also making it easy on myself.
Find a co-host at Airbnb.com slash host. I'm Nicole Lappin, the only financial expert you
don't need a dictionary to understand. It's time for some money rehab.
When the New York Stock Exchange was established, the very first thing it did was shut people out.
Seriously. In 1792, all the reputable stockbrokers in New York got together to sign what they called the Buttonwood Agreement,
a truce basically that set out to make investing more trustworthy by keeping con artists who claimed to be stockbrokers outside the exchange.
At the time, this was a pretty significant problem.
These con artists would basically sell people stocks based on flat out lies about the investment opportunities.
And the prevalence of this made Americans skeptical about the whole investing system. So brokers started to trade behind closed doors of
the stock exchange to keep out the scammers. But closed doors didn't shut out only the bad guys.
It shuts out everyone. Since the Buttonwood Agreement, retail investors don't have the
same access to the stock exchange as brokers do.
Until today.
In today's episode, I actually go to the New York Stock Exchange to chat with Peter Tuchman,
a stockbroker at the New York Stock Exchange who has been called the Einstein of Wall Street.
And he definitely has the personality to back up such a big reputation.
I wanted to ask the most common
questions about how stock exchanges work, who's who on Wall Street, and what a seasoned broker
is anticipating to be the biggest investing opportunities of 2023. I had spoken with Peter
eons ago when I was at CNBC and have been a huge fan of his ever since. But this conversation
exceeded even my high expectations, which is rare on Wall
Street. In fact, it exceeded those expectations so much that I gave Peter a whole podcast on our
network, Money News Network. To be the first to hear more about the official announcement and to
hear more about the show, of course, follow Money News Network on Instagram. It's at Money News.
But let's get
to the main event. Here's my conversation with Peter. Welcome to Money Rehab. Thank you. Thank
you. So let's start at the beginning. Okay. When did you start here? I started here 137 years ago.
I went to high school with Alexander Hamilton. And I was here for the inauguration of George.
He's outside. It happened right outside the building. I started here in 1985.
When did the Einstein schtick come about?
The Einstein schtick.
So it's actually Erin Burnett, who is on CNN.
And she used to be with CNBC on the floor.
And we were friends.
And Mark Haynes, who was another man, he's unfortunately passed away.
They used to call me Einstein.
And I think it was really
Aaron who started. And they would always joke, Mark Haynes would sit outside smoking a cigarette
every morning on the fire hydrant. And when I'd walk in, he'd go, hey, Einstein, you're having a
good hair day. That means that the market's going to be up today. But you are the most photographed
guy on Wall Street. How did that happen? I am. You know, look, the floor was not a place where
there was a lot of media back in the old days where there was just no place for it. And there
was always a couple of straight pictures that came out. There was a guy named Alan Gershowitz,
who they called the market dude. And whenever they took a picture, he was the one. And then in 2007,
I believe it was I'm not sure it was one of the biggest down days we had. He was about to retire
and he sort of they they took a
photograph of me and that day they interviewed him and he said he was retiring and he was going to
sort of pass the baton to me as the next market dude. And that that picture, it turned out, was
on the front page of the Daily News and then sort of and it was a big hit. It was me throwing my
hands up in the air. And and then the Post ended up interviewing me the next day to see like,
who is this guy? What does he do? Is he really the next market dude? And that kind of started
this deluge of photographs that ended up with Reuters and Getty Images and Associated Press.
So just to clarify, these are the pictures, like if you're reading a story about the market,
these are the stock photos that are used.
Correct. Absolutely. And they are they are real photos.
You know, they're not you're not allowed to pose for those photos.
And so that's real emotion. You know, I trade other people's money.
And so it's important to me if we have a successful day.
And I'm a very emotional guy. I'm adrenaline driven. And I you know, and I love the energy and I love what I do.
So those emotions tend to be real. So on an up day, you know, and I love the energy and I love what I do. So those emotions tend to be real.
So on an up day, you'll see emotions.
On a down day, you'll see emotions.
And, you know, look, media loves to capture excitement and faces and emotion, right?
So I'm sort of the most.
Exactly.
Trauma, drama, trauma, excitement, you know, depression and all of it.
And I'm the most expressive guy down here.
So I became the face of Wall Street. And you bring the energy of the olden days, as you said. So when I started on
the floor of the Merck, there was open outcry trading. Everybody was yelling. Everybody was
screaming. I think a lot of people think of the stock exchange like that still. They don't realize
that it's quiet vibes now. So you would give anything to have open outcry trading come back.
But can you explain why that left and what the heck they were doing back then when they were yelling, screaming, making hand motions?
So if anyone's ever been to an auction, look, an auction market is you have buyers and sellers.
You've got reasons why people are willing to engage in that.
The stock market is where we trade thousands of
equities, right? So open outcry is basically screaming and yelling. And that kind of engagement
is what happened. It was crazy. It was wild. You have to realize that when somebody is buying
something, depending on their intent behind it and why they're doing it, there's a sort of,
you know, they're taking a position. They're spending money. So there's emotion behind it.
There's intent and cash is being spent. So
there's excitement and emotion around it. I love that kind of energy. And I would bring it back in
a minute if I could. So you're talking about other markets just negotiating. It's a negotiation.
And there were hand signals, too, like almost like in baseball.
So the New York Stock Exchange did not use hand signals as much as the American Stock Exchange.
Right. So there was American Stock
Exchange, New York Stock Exchange. And then you had the SIBO. You were you were trading commodities.
Right. You guys traded orange juice and plywood and gold and oil and stuff like that. You were
actually in the pits, open out, doing stuff like that. Here we did use hand signals, but it was
more screaming and yelling. The hand signals that people think of were done on the American Stock Exchange. So the way the American Stock Exchange, which is a few blocks down from
here, that traded equities the same as we did. But the way the room was set up, there was a balcony
on the top and the pits were down below. And so you wanted to explain to your trader who was in
the pit what his instructions were without telling anyone next to him what you wanted to do.
Because if everyone knew, it's like if you walk out to a poker game and you've got four aces and
you put them forward, everyone knows you have four aces. No one's going to play against you.
So the same thing in an auction market. There are certain things that you hold close to your
cuff. So there was a way to get information down from the balcony to the pits. Here,
we use phones,
we use squads, and we would run back and forth and sort of scream and yell. And our voice.
I'm sure you won those.
I did. I did have the, I was the loudest, most obnoxious trader in history, for sure.
So when somebody says they need like a stock broker, they're probably thinking of a financial
advisor who's working for them. A broker isn't working for a customer.
Correct.
So in the old days, a stock broker who represents a brokerage firm, whether it's Merrill Lynch or Smith Barney, the old school brokers, were the guys who were your financial advisor who took your money and they created a portfolio for you and traded it.
Those were called stock brokers.
We are traders. So those guys would
actually send us orders right down to the floor and then we would get them as brokers. Once I
received an order to buy 100,000 shares of Disney, I would have to go to the market maker who traded
Disney. Now, all the order flow from around the world who want to trade the Disney stock would go through that
market maker. I would then walk in and say, hey, Joe, how's Disney? And he'd say, we've got three
buyers. They're willing to pay a quarter. We've got a seller at three ace and a seller at a half.
Hey, Peter, what do you want to do? And then I would open up my either, depending on what my
instructions were, I would either say, I'll take stock at three ace and I'll bid a quarter.
It would then initiate or commence the negotiation. And I'd look at the other buyer and say, hey guys, I'm a buyer of a hundred thou. What do you want to do? Maybe we should pay a half. And so we would
come together, start talking. So to sort of engage each other to find out what's everybody want to
do. I mean, it was sort of a wonderful, you know, we may spend a minute there and we'd be aggressive buyers or we'd spend an hour there talking to our buddies,
deciding what to do. It's sort of like a poker game that way. But the market maker was there
to orchestrate putting buyers and sellers together. You keep saying market maker. If
somebody is listening and doesn't know what that is, can you explain how that works? Sure. So there
are brokers. Brokers represent institutions or customers, high wealth people or hedge funds or institutions. And these are not financial
advisors. Not at all. Now, these are people, boots on the ground, traders on the crowd at the point
of execution. It's important to make that distinction. A broker and a trader is the
person who actually executes stuff. A market maker is basically it's a totally different job.
They represent the brokerage, the market-making firm
that they work under. They are allocated stocks by the New York Stock Exchange, and they're there
to create a smooth and active market. So you think of it as a broker-trader. I'm a passenger on a
plane. If you think the market maker, he's the pilot. Okay, so the pilot of the plane is there
to create a smooth and active market. If you run into turbulence, that market maker will step in. If there are three sellers and two buyers,
the market maker will step in and be the third buyer to consummate a trade. If there are three
buyers and two sellers, the market maker will sell stock. When there's nothing but sellers and
there are no buyers, the market maker needs to step in to stabilize the stock. If there's nothing but buyers and no sellers, the market maker, that's his job. He's there to create liquidity within a stock and he buys and
sells all day representing the corporation to keep the stock smooth and active. And so if somebody is
listening to this and they want to start investing, they would want to look for a financial advisor who almost like a dietitian
versus a broker who is like a butcher. So the dietitian is working for you and your goals.
And then the butcher would be there to make your meal for you type of thing.
Just sell you the meat, right? And not say, hey, you should have some vegetables.
You're not going to butcher and he's not going to say like, actually have some broccoli.
Exactly. So yes, you're absolutely right. If I want to invest
in the market and it's not something I want to get involved in personally, I would go out and
find a financial advisor. And that's really not an easy thing to do. They're all different kinds
of them. And so I beg everyone who's listening, who's a first time investor to do your due
diligence, find out who these people are, you know, go to one of the more established ones. If you're sort of, you know, trying to trade
and create a large portfolio, what's happening now over the last number of years is a lot of people
because stock market has become cool, you know, whether it's COVID, the meme stocks, the free
trading apps, the democratization of the whole investment community. You have to realize that what happened for a hundred years was there were barriers to entry for most people who did
not have money to get into the stock market, right? You had to become an accredited investor
in order to invest in the stock market. That means, to be very particular, meant that you had
to, if whatever money you were investing, if you had to actually
sign a piece of paper that said 100% of your investment, if you were to lose it, would have
no effect on your standard of living for five years. Now, I don't know that many people who can
actually say that because that means you're a rich person, right? And that's why there are only very
wealthy people involved in the stock market. And that's kind of a shame, right? So your basic Joe or Mary
on the street could not actually invest in stock. What ended up happening during COVID was it was
this phenomenon, this movement, right? Whether it had to do with COVID, everyone was at home,
Wall Street bets or Reddit, whether it was Robinhood or Webull, whatever ended up happening
was there was sort of this perfect storm that happened where suddenly anybody with an iPhone and 10 bucks could suddenly be a trader or an investor
in the stock market. And I think it's a good thing. You know, what's ended up how well,
I was going to ask. Well, it turns out it's a great thing. Not everyone's embracing it. I'm
embracing it because at the end of the day, these people will be the future of the investment community.
And, you know, the stock market has been a bit of an exclusive.
And now it's very inclusive for anybody who wants to invest in the market.
And that's a good thing.
However.
I knew there was a but.
However, what's super important, which is sort of what I've taken on as somebody who's been here for 137 years is that everyone who was given an
iPhone and $10 and the access to the stock market, they were not given the rule book or the playbook
on how to do it successfully. So everybody who bought stock on May 20th, 2020 with their stimulus
check when they were, you know, quarantined at home with COVID and they
bought GameStop or AMC at $2, $4, $10, and they watched it go up and they suddenly were posting
pictures of them on their Bugatti with $10,000, did not realize that the stock that goes from
two to 483 can go right back down to two. And if you don't sell it when it's up at 400,
it's not about how much money you make,
it's how much you keep.
So that rule book,
it's like if I wanted to become a pilot,
I could not go to Teterboro.
Well, I was going to say,
I'm reading your mind.
I don't know how, this is crazy ESP.
It is, to me, it seems like you're just
letting somebody in the cockpit without teaching them.
It's 100% like that.
In a nuclear reactor,
just because you can doesn't
mean you should exactly if you got in and you got out and you made a bunch of money i wish you the
best because don't they hate it's a beautiful thing but if you didn't and you thought you
suddenly had diamond hands and you were not humble about the fact that you know and honest about the
fact that you actually ended up losing money and not making money and you did not do the homework and you did not get that memo that stocks not only go up, they do go down and that you need
to learn the tools to make yourself a profitable trader and negotiate this market successfully.
Well, then it's a shame because nine out of 10, this is a fact, nine out of 10 people who attempt
day trading do not succeed.
And so I sort of took it upon myself with my partner, David Green, right around the beginning of COVID.
We saw this influx of 40 million new retail traders, and we knew that nine out of 39 million
900 of them were not going to make it.
We thought, what a great opportunity to share what we know we've learned about technical
analysis, risk management and the rulebook, right, and share it with them. And that's what we know. We've learned about technical analysis, risk management and the rule book.
Right. And share it with them. And that's what we've done.
Hold on to your wallets. Money Rehab will be right back.
One of the most stressful periods of my life was when I was in credit card debt.
I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health.
We've all hit a point where we've realized it was time to
make some serious money moves. So take control of your finances by using a Chime checking account
with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two
days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime,
you'll see that you can overdraft up to $200 with no fees.
If you're an OG listener, you know about my infamous $35 overdraft fee that I got from
buying a $7 latte and how I am still very fired up about it.
If I had Chime back then, that wouldn't even be a story.
Make your fall finances a little greener by working toward your financial goals with Chime.
Open your account in just two minutes at Chime.com slash MNN.
That's Chime.com slash MNN. Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN.
Chime feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or
Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts
are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits.
Terms and conditions apply.
Go to Chime.com slash disclosures for details.
I love hosting on Airbnb.
It's a great way to bring in some extra cash.
But I totally get it that it might sound overwhelming to start or even too complicated
if, say, you want to put your summer home in Maine on Airbnb, but you live full time
in San Francisco and you can't go to Maine every time you need to change sheets for your
guests or something like that. If thoughts like these have been holding
you back, I have great news for you. Airbnb has launched a co-host network, which is a network of
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Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests,
giving support at the property, or even create your listing for you. I always want to line up
a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it
because getting ready to travel always feels like a scramble, so I don't end up making time to make
my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host
so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host. And now for some more money rehab.
Well, you did two interesting things. You made this distinction, whether you're a trader or an
investor. Correct. Super different things. Super different things. We are teaching them to be
traders. An investor is someone who makes a long-term bet in the market,
investing in a company that they like, responsible investing.
But people invest in a company because they like the product.
They like their guidance.
They like what they're doing from a profitable point of view.
I like Nikes.
Everyone's wearing them.
I'm going to buy Nike.
I love Apple.
Everyone's got an iPhone.
I think the company's going to do good.
I want to be in it for the long term. Everyone's got an iPhone. I think the company's going to do good. I want to be in
it for the long term. That's investing. Trading is making short bits of money on a daily basis.
So at the end of the day, I have make some green. At the end of the week, I'm greener. At the end
of the month, I'm greener. That is day trading. That is scalping. People call it scalping.
Whether it's day trading or not, it's making small bits of money on short term trades, whether it's a minute, five minutes, an hour or a day,
every day trying to become profitable on a daily basis, creating some disposable income.
Totally different experiences, totally different mindset, totally different thing.
And who is trading for versus long term investing?
So in the old days, you had money, you gave it to a broker, they did the trading for you.
Then people sort of took it upon themselves.
They have a good job, they have a 401k or what it may be.
They make a judgment, right?
People who love the stock market, who love investing,
right, will make a decision
that they want to invest for themselves.
They'll do their homework
and it takes a lot of homework to analyze a stock,
what products are on the pipeline, what the guidance looks like going forward. And they'll
invest in a company for the long term. A trader is a young person or an older person who likes
the action. Right. You know, you know, some people are gamblers. Right. Some people like to go to a
sports game and just watch the game. And then some people like to bet on the game. Well, that's people who come to the stock market and who want to bet on the market. They
want to bet that GameStop goes from two to 20 or Nike goes from 106 down to 80 or whatever it is.
It's people whose Wall Street has gotten their attention. The accessibility to trade the market
has opened up. They've been given the availability to find a free,
no charge trading app where they could buy and sell. The Internet has exploded in information
and people who are sort of false advisors and fake advisors telling everybody what to buy and sell.
And those guys are bad actors. So be careful if you're following a lot of them. Right. Well,
no names. Right. I'm not going to
mention any names, but look, let's think everyone's seen the movie wall street, uh, the wolf of wall
street. Who was that based on Jordan Balford? That was based on, he's a bad guy and I don't
like to diss anybody, but what Jordan Balford did back in those days was he did what's called
a classic pump and dump. He would buy a bunch of stock. Then he would have his little minions.
He'd have his little minions go out and call everybody and say, we recommend XYZ when they've already taken a big position in XYZ.
And the thousand people following them would go buy it.
And when they were buying it, he'd be selling it.
There are a lot of people on the Internet right now who for $7.99 or $25 a month will sell you price stock targets,
stock picks and financial advice. And what they do is they create a huge community by creating all
this false enthusiasm around a company that tell you this is a great one and look at that stock
and la la la. They'll have a community of 5,000 people. They'll go out and buy a bunch of shares
for themselves. Then they'll put it out on
Instagram or on Discord or on Reddit and say, I like X, Y, Z, I like whatever. And then everyone
rushes in to buy it. And when you're buying it, they're selling it. And the stock will go up on
big volume and then you'll see it go down. So those are the bad actors in the space.
Trading has often been synonymous with getting rich quick versus long-term investing, which is like this slow, steady burn.
Do you recommend people are long-term investors as well before they start trading?
So I cannot really answer that.
I'm not allowed to talk about individual stocks or be your financial advisor.
But having analyzed the markets on a day-to-day, hour-to-hour, week-to-week, month-to-month basis
for as long as I've been here, over time, stock markets have gone up, right? The S&P has outperformed
most everything over the last as many years as it's been here. Every crisis and crash, and I don't
use that word lightly because we've really only had a few, even though people feel if the market's down a thousand,
that is a crash. And that's really not the crash of 29, the rough times of the seventies,
the crash of 87, the bubble of 2000 and COVID. Those were legitimate crashes over time. Those
have been more by better buying opportunities than selling opportunities. So I think everyone, young
people, there is a saying that if a young person at the age of 20 were to put, I'm saying this
hypothetically, if they were to put $250 into the S&P 500, and I'm not recommending this,
over every month, then by the age of 40, they would have $600,000. At the age of 60, they would have $1.6 million cost averaging,
right? And so that would be investing in your future in a financial instrument that over time
has proven to be successful. So I think everyone should do that hypothetically. People should
invest in stocks and not stuff. Okay. This is one of my messages, which I learned from a guy down here on the floor,
which is we don't look, we are the greatest consumer generation of our, in history. We
always have to have the next sneaker, the next iPhone, the next, this, the next, that,
even though if you look in your closet, we are, have so much stuff that we don't really use or
need. If I could say anything that would sort of inspire a young person,
that if your iPhone 13 is not broken, you may not need the iPhone 14,
maybe take that money and buy a couple of shares of Apple.
And I'm not recommending you do that.
Couldn't agree more.
In my last book, I talk about how I always wanted this Tiffany bracelet.
Growing up, I couldn't afford it.
And when I finally could afford it, I ran out to the Tiffany's store in New York.
And I went to go see that exact bracelet. And I was like, this is the time I'm going to make it.
And this is going to feel like the status that I finally got this bracelet. I was so jealous of all
these other girls wearing. Then I left and I called my broker at the time and I bought Tiffany's stock
instead. There you go. So we're totally on the same wavelength. And that's the greatest thing
that people can do. I agree. But if they're investing for the very first time, do you think it's wise to buy individual stocks versus you can buy in like a stock to the S&P 500 that you mentioned?
You can buy into an index instead. People would ask me in the middle of the pandemic, A, should I sell when everything's in the pooper?
No, I think we can agree on that.
Correct.
Buy low, sell high. Correct. I think we can agree on that. Correct. Buy low, sell high.
Correct.
I think we can agree on that.
And second, should I buy Zoom?
I'm a first-time investor, but Zoom I hear is crushing it.
So should that be my first foray?
Okay.
So Zoom, that nobody really heard of before the pandemic, went from 20 to 400.
And it went right back down to 20, basically.
So the bottom line is if and I can't
really tell you what to do, but look, an individual stock will go up and down on on the profitability
of the company and whether they're doing good things or not doing good things. And they are
basically at the risk of something bad happen, the market changing, a global pandemic, a war,
whatever they're connected to. A defense company does better when we're in war.
You know, an airline company does poorer during a pandemic.
An e-commerce company goes up during a pandemic.
So you need to sort of get an oversight of what the world's doing at a time.
But investing in companies that make money, no matter what's going on, is probably a good thing to do.
Companies that make money, no matter what's going on, is probably a good thing to do.
Exposure to one company, you are at risk if something goes wrong with that company.
And that can happen in this crazy world from one minute to the next.
In this market, we go up and down a thousand points in an hour, right?
You can be in a bear market in the morning and a bull market in the afternoon. What you just said was there are these things called financial instruments like the S&P 500,
which are
500 stocks put together in a basket, which gives you this global footprint of basically the American
economy and global economy. And so if you want exposure to all that and you're a buyer of the
world and life, then probably an investment in the S&P 500 is a good one. Okay. So what you're
suggesting is kind of like the shaded part of that Venn diagram,
almost like trading and long-term investing
or cautious, responsible investing.
Sometimes when you think about trading,
you're thinking of this gut-rich quick schemes,
but what you're advocating is trading responsibly.
Okay.
So it's sort of the middle shaded part.
Yes, absolutely.
Look, not everybody's going to be, look, as I said, suddenly the barriers to entry for a trader and investor are down and anybody can do it.
Because you can day trade like so-called responsible index funds.
Absolutely. You can day trade stocks. You can day trade funds. You can day trade ETFs.
It doesn't matter as long as you don't trade on hope is not a trading strategy.
FOMO, fear of missing out, is not a trading strategy.
Uncle Herbie on the Internet telling you to buy something is not a trading strategy.
Fundamental analysis is kind of risky in this crazy world we live in because the markets
are so volatile.
Markets that go up and down as volatility as these do.
One must know the rules about having a stop order, risk management, money management.
The psychology of trading is a really important thing.
So you have one little person on your shoulder going, I'm a genius.
I got diamond hands.
I'm going to make a million dollars.
And then there's the other one who's more conservative saying, I'm up 50 bucks.
Let me take a profit.
I'll get into another trade later. So that's the paradox. And so I beg people to err on the side of caution and less risky in a market that goes up on a day, you know, up thousands of points at any given time. devil. You mentioned these downturns and you listed them. Do you think we could go into one?
And if so, when we were all watching during COVID and the market stopped,
there were these breakers. Can you explain? You were here. Can you explain what happened?
Sure. And can that happen again? And how do you prepare?
Okay. Markets go up, markets go down. We've learned that, right? A lot of the anxiety and unknowns about what's going on globally are still very much alive. Markets don't like unknowns. They don't like
anxiety. So the market, if you ask me, is the market going to go up or down? The answer is yes.
And most people won't tell you that. I told that to Neil Cavuto once, and it was like the hit of
the day because no one's saying that. Everyone's saying it's going here. It's going to go there.
I don't predict anything. I have no opinion. It's going anywhere. Circuit
breakers. Let's talk about for a minute. So we have here on the stock exchange, if the market
goes down 7%, we slow down. If it goes down 10% on the Dow or the S&P 500, I don't know the
particular numbers. We actually stop for 15 minutes. We give everybody a chance to see where
the body's buried, what's really going on,
kind of digest the news, and then we reopen. If we go down again-
It's a timeout.
It's a timeout, exactly. And if you have a kid, you know that a timeout can do only,
not everything, but good.
Or in a game, yeah.
Yeah, exactly. And then if we go down again, once again, then we stop for a little bit longer.
And then basically what you don't want to do is to disadvantage the actual companies and the investors to have an overreaction that may be out
of the guardrails. So we end the episodes with one financial tip you can take to the bank. You have,
I think, a whole bank of tips you can take to the bank. But if you could pick just one.
I think it's important to invest in stocks and not stuff. We love to buy things. You know,
I'm a firm believer and it's not something I've been and not stuff. We love to buy things. You know, I'm a firm believer
and it's not something I've been that great at.
But if you see something you really love,
walk around the block for 20 minutes
before you go in and buy it,
like you did with that Tiffany bracelet.
You know, we always think we need something
just because we want it.
And that may not be the case.
If you're a young person
and you want to get invest in your future,
then that's a great place to start.
That if something is not broken, you don't need the next one.
And so if I could just say anything to anybody, invest in stocks and not stuff.
Money Rehab is a production of Money News Network.
I'm your host, Nicole Lappin.
Our executive producer is Morgan Levoy.
Do you need some money rehab?
And let's
be honest, we all do. So email us your money questions at moneyrehabatmoneynewsnetwork.com
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content. And lastly, thank you. Seriously, thank you for listening and
investing in yourself, which is the most important investment you can make. you