The Iced Coffee Hour - Confronting The Ex-Founder Of WallStreetBets

Episode Date: November 3, 2021

Thank you Helix for sponsoring! Visit https://helixsleep.com/coffee to get up to $200 off your Helix mattress, plus two free pillows. Shake up your ritual today with great tasting protein powder: https://ritual.com/ich This week we are joined by Jaime Rogozinski the founder of WallStreetBets on Reddit. We talk about how r/WallStreetBets was formed, the past and current culture of the sub reddit and much more. Add us on Instagram:  https://www.instagram.com/jlsselby https://www.instagram.com/gpstephan https://www.instagram.com/alex_nava_photography Official Clips Channel: https://www.youtube.com/channel/UCeBQ24VfikOriqSdKtomh0w DOWNLOAD MY NEW FINANCIAL APP: https://hungrybull.page.link/graham GET YOUR FREE STOCK WORTH UP TO $1000 ON PUBLIC & SEE MY STOCK TRADES - USE CODE GRAHAM: http://www.public.com/graham  MY NEW COFFEE IS NOW FOR SALE: http://www.bankrollcoffee.com/ Join the 2x weekly mentorship group: https://tinyurl.com/yaexko4o The Equipment used: https://tinyurl.com/y78py5g2 Audio Equipment Used In Podcast: Rode NT1, Rodecaster Pro The YouTube Creator Academy:   Learn EXACTLY how to get your first 1000 subscribers on YouTube, rank videos on the front page of searches, grow your following, and turn that into another income source: https://bit.ly/2STxofv $100 OFF WITH CODE 100OFF  For Podcast Inquiries, please contact [e-mail] *Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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What an introduction. Thanks so much. That's great. You're very welcome. How are you guys? We are in the presence, I think, of greatness here. I hope so. Well, I'm equally as happy to be here and equally as thrilled. Thank you so much. So tell us a little bit about your story, the creation of Wall Street bets, your involvement, how this came to be, a little bit about the backstory of everything. So I started Wall Street bets about 10 years ago, give or take, right? Like I've been a serial entrepreneur my whole life, right?

Out of college, I've had some really successful companies. I've had some big flops, right? But one of the companies that I sold ended up being a paper millionaire company, right? Like it was just this great deal. It was the first one that I'd started from college and it turned out that a lot of those papers ended up being useless, right? And so I was like, all right, clearly I'm missing a finance component. Started getting the finance, studying it. You know, I got myself a job at a big multinational bank and, and make a decent money.

I'm like, all right, cool. I'm going to keep my 401k. I'm going to do my typical retirement, but I'll put my extra money to work, right? And looking for places online. It was conductive or conducive to higher risk trading, right? Like for these things that I can win the lottery overnight and just retire happy. but there was no place like that. It was either like conventional,

diversified, low commission, ETF type investing or professional traders, right? These are people that just do like look at charts all day long. And I just wanted to have some fun. So I started Wall Street bets. Now when you mean you started Wall Street bets, we're talking about the subreddit on Reddit. Well, it was a whole, yeah.

So it was a subreddit on Reddit. That's correct. And what do you call it? Twitter account, YouTube, you know, like the platform, there was a lot of different ones. I wasn't sure which one. was going to be the one that was going to grow, right? And so the subreddit was the one that ended up just organically growing, right?

Like people often ask me, how did you grow it so much? And it was just people were interested in it, right? Like it was. Now, why create a community? Why wouldn't this just be you having fun by yourself, maybe with some buddies and a, you know, texting back and forth a little bit? Why create a community around that? Because I don't know what I'm doing, right?

Like, I know what the stocks are. I know what the stock market is. And I started looking at stock options. I'm like, these are cool. Right. Like they go up and down really fast with really little money. So I'm hoping somebody can give me some tips, right? Like it was just wanting to learn and also wanting to share that with somebody. And Wall Street bets ended up attracting a perfect mix of both, not professionals,

but people that really know what they're doing and people that really want to learn what they're doing and made a wonderful combination. So you were just looking for high-risk places to put your money in. And you were doing YOLO bets and stuff like that. And then you wanted to make a community around it? effectively. Yeah. I mean,

I don't know which one that was a chicken or the egg situation, but I wanted to do high risk. It wasn't like so much YOLO bet. It was, I want to get rich quick, right?

Which requires YOLO, you know, like risk and return are the same thing. And so if I'm going to get a scratch off lottery ticket, this is at least more fun. I can do it from my phone. Back in the day, there wasn't commission free.

They were just low commission brokers that were just starting to kick out. So I was like, oh, cool, this is a couple bucks. Like when I first, invested in the stock market it was $30 to buy shares and $30 to sell them yeah what brokerage is that that was I don't remember but I was using like Wachovia's but it was called wakovia now it's Wells Fargo yeah acquired multiple times but it was just through like the bank

it's like to call up a guy on the phone Jim placed this trade for me that's pretty much that was but then the the broker that I used to use a lot was options house which then turned into e-trade but it was just you know Eventually, when I start off with a little capital, I have this rule called the pattern day trader. You need to have 25 grand in order to do multiple trade, like lots of day trades. And I didn't have 25 grand. So I was like, I'm going to use this broker. And then I'm going to get that broker.

And I'm going to use that broker. So every time I open it, there's no rule that says how many brokers you can have. Right. And it's something that people still do today. That's crazy. At the time, was that a sizable amount of money for you that you were, you know, putting in, you know, call options? No, like I was probably putting a couple thousand. Like I, I think I might have funded the account with either 10 or 20 grand, right?

But it was just, all right, let's see what I'm willing to do. Like anything over 25, I think that was just a psychological barrier. And the word patterned day trader was like, man, I have to click more little boxes. It says, like, really need to know what I'm doing. I'm going to get above my water. But yeah, you know, like in the fluctuations that take place when you're taking such high risk trades, especially with stock options, like I would make 20 grand and then I would lose 40 grand and I would like refill the machine with more money.

Very appropriate now that I'm in Vegas. I'm like, okay, game over and like play again and then just keep going up. Probably ended up breaking even, probably lost money during the first few years. Sure. It was just a wild great learning experience. How much were you making back then? You're working full time, right? Yeah, I was probably making 150 grand.

Okay. And I was single. I didn't have, you know, any dependence. Like, I had a nice car, but I preferred to take the metro to work, right? So, like, I really, my expenses were pretty much rent, right? And I could afford to take whatever risk I wanted to. But at the same time, were you also investing in like, you know, ETFs and stuff like that? No.

Oh, I'm sorry. And my Roth are, yeah. So you had a Rothier, right? Yeah, yeah. Yeah. That was through my employer. They do the whole matching thing or whatever. But everything on top of that was just.

Yeah, I would do stock options on the S&P. I would do stock options. It's not a nest egg, yeah. What was community like back then? At what point did it grow to like the first 10,000 people or the point where you knew that this is its own community separate from everything else? There's a lot of moments throughout the time. So like I start this thing off and well, first I register. Then I take a few months kind of trying to decide exactly how it's going to look and what it's going to be about.

And then I finally announced it like five, six months later. And on similar subredits and on my Twitter. or with six followers on whatever. And people started showing up. And it would double in size pretty much every year, right? So like maybe from 1,000 to 2 to 4 to 8. And then very soon you're at like 500,000 in terms to a million, right? Like you start doubling things that really grow fast.

But it was it was immediately apparent when I could see kind of like the curve of the growth. And then there were moments where we say, ah, we've made it, right? I remember in it was April Fool's of 2004, no, 2015, I believe. Me and the other mods were just real jokesters, right? Like we had this keep it fun and keep it simple. And so for April Fool's Day, one of the mods turned the, you know, you can change the interface. You can make it look however you want. And he put like, shifted the entire thing slightly so that it was just annoying.

It made you think your screen was off. And it would like Windows 95 type. icons and it had these twirling. We're like, and on that day, just serendipity, we had, I want to say it's like fortune.com or one of those big websites were saying, oh, okay, yeah, we're talking about volatility instruments, blah, blah, blah, there's a forum where they think something, something's going to happen. And then the word forum was a link and he clicked the link and it took you straight to Wall Street bets.

So we were all excited because finally somebody saw Wall Street bets, right? But we were twice as thrilled about the fact that this was on April full, so we could just imagine the number of people sitting at work, reading Fortune, clicking the link of being greeted by these non-safe-for-work. So how do you monetize the subreddit? Because it's one thing to create a fun community as a side hobby. But at what point are you able to turn that into a business or figure a way to monetize that? You cannot monetize a subreddit.

Like by the rules, not by what efforts you can do, right? And so I was actually removed in 2020 because I wrote a book and I started this while before COVID created this kind of competitive day treating competition. That was the excuse as to why they were moving. Reddit never really told me, but there is a rule there that says you can, right? Not allowed to talk about the actual story because they're actually making a movie. I sold my life rights to a movie studio and so they're going to be the ones to get. to tell that story. But that's kind of a tangent. How do you monetize a brand? That is a different story, right? Like I have the trademark. I have, you know, I've wrote the book and I have a gazillion

different things under that umbrella that is monetizable. So I guess the closest you could get to monetizing something on Reddit would be to create a brand and kind of grow an audience similar to the way that you would do this on YouTube or TikTok or whatever it might be and then kind of build it out that way. Sure. So Reddit is a policy against not directly monetizing a subreddit, but you could own the trademark and then license the trademark. Yeah. It's like a way around it. No, no, no.

This is something I've spent a ton of time on this, right? Like, it's really strange because you can have Coca-Cola or Under Armour or whatever brand you want, like that monetize it. And they come to Reddit and they say, hey, this is my brand. We'd like to be able to. to grow the community and get them involved and monetize this component of it. Right. But if you start from scratch and say, this is my brand, like, or you want to turn it into one, then it gets kind of tricky.

The rule is you cannot be paid to moderate. That's the actual rule, which in my case, or whatever, I'm not going to talk about my case. But that's, yeah, that's the rule that's in place. Reddit turns around when they see a subreddit that starts growing a lot, They turn around and try to trademark that name. They've done that with Explain it like I'm 5. They've done it with like, I forget which ones they are. I know this because currently in a battle with Redding,

they're not happy with my trademark of Wall Street, that's right? But it is kind of a really weird thing. I don't think Reddit thought it through when they first started it. I've been watching them forever when they were really small. They're like, oh, this is really cool. A lot of people come here. Let's hold hands, kumbaya.

And then they realize there's, potential conflicts there. And yeah, if you have the trademark, specifically if you have the one that involves internet forums and chat rooms and I'll type of social, social networking, then it gets interesting. First, we have to thank our sponsor, Helix Sleep. So I actually recently bought a house and I have to say I am so grateful for my Helix Sleep mattress. Seriously, guys, I moved in without even having a fridge, without Wi-Fi and without even having like trash service, but I made sure I did not move in without my He-Lic sleep. Helix sleep mattress. Why didn't you just stay at Grams? Well, that's besides the point, Alex.

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they're actually giving $200 off all mattress orders and two free pillows. If you go to helix sleep.com slash coffee. That's helixsleep.com slash coffee, $200 off all mattress orders and two free pillows. That's right. Helixleap.com slash coffee. Thank you so much Helix for sponsoring this episode and back to the podcast. I don't almost imagine that Reddit now would have learned from those experiences and just made it like a terms of the agreement where like by signing here and making an account, you agree that anything you create on the side, it belongs to us.

So I don't know if they would implement that. So you think that would discourage some people that are creating forums though from doing it? No. I don't think so at all because I think the people that create forms, never do it for the intention of making money. I think you were a perfect example of that. You just created it because you wanted to do it. I don't think that would discourage anyone from me like, oh, well, I can't monetize it.

I'm not going to make this community anymore. Yeah. And somebody else would. Yeah, I mean, it is an interesting balance, right? Like, so Reddit starts off as literally, let's just, you know, I think at one point they were taking donations. They just wanted to be a great community. And I loved Reddit, right?

Like, still is a great platform. And back in 2010 or something. So they organized this huge rally. It wasn't right at the company, but it was like the community that got together in Washington, D.C., where I was living at the time. They got together like 100,000 people, and they filled up the National Mall,

and they had this event with Stephen Colbert and the other guy, John Stewart, and had a bunch of celebrities on it. It was like, wow, this is really, like, this is a huge deal, right? And so Reddit at that point kind of got involved with it. And then all of a sudden, big money starts rolling in. And they sold it, then they bought it back. And then now they're considering going public with this.

And so I think their original model wasn't really a business model. It was more, this is for everybody, you know, by the people for the people type thing. And then eventually they're like, all right, well, we got to pay the servers. It's a lot of traffic. Yeah. We got to start doing some things. And then one thing lets to the next. Now they want to do an IPO, which now forces their, you know, the financial statements to be nice and clean with that.

So they're still kind of maneuvering it. But I don't think it's well defined, right? Like it's a weird thing that you register a subreddit and then if it gets big, then they subjectively go and try and get it, right? Like there's a bunch of other ones like Satoshi Street bets and other ones where they don't seem to care about. But couldn't they argue that that's for the benefit of let's say, let's say I'm looking at that and finding like Bitcoin bets. Let's just say that that's a subreddit. I see it getting big. I didn't create it, but I could go and register the trademark for that.

Can't just any random person go and do that. So it's better for Reddit to do that in some random. Yeah, look, I get that point. I understand they want to, they want to be able to protect it, right? Because especially if something gets big at like, something like Wall Street bets, then that's pretty much a threat.

Trademark laws, thankfully, they're relatively fair, all right? So when you all go to trademark someone, they're going to be like, well, show me that you've used it, right? Or show me that you have the intention to be used if nobody's used it before. And as part of that process, you know, one of the final steps is they published, this trademark application to the world. And anyone that has any objections and come in and say, no, if you grant that person,

that trademark, that's going to harm my business, right? And so then that starts a whole process. Got it. So what are your thoughts now about how Wall Street bets has evolved? Do you think today it's the same feeling or the same intention as it was back when you started it? Or do you think it's evolved and taken a life of its own? And it's different from what you first had in mind?

It's shifted as it's grown, but it has. a lot of things that are still the same, right? The community gets started and it is a fun, honest, like brutally unapologetic place for people to hang out and to learn. And so this is, often I get the question, like, so why do people brag about their losses and on Wall Street best? I'm like, it's not so much that they're bragging, even if it looks like it. Maybe there is a little bit of kind of flexing there, but it's more, this is real, right? This is, in the real world, you both win and lose money. And in this case, I got my ass handed to me.

So give me like a virtual hug, right? And same thing like, look, how much money I made or sometimes, like, how much money I made. And then look how much I just lost it again. But this, you know, let's let's have fun. It's just been no filter offensive a lot of the times. There's just a lot of locker room banter. It's been predominantly male for as long as I can remember. So that hasn't changed, but it started shifting.

Like some of the aspects of it, which I wasn't happy with and still are it, is you have some of this unapologetic, offensive speech turn into hate speech, right? And it starts to becomes counterproductive. Or even though there's no political, like there's just here we're talking about stocks of betting or whatever, we're not deviating from this, including politics, right? just to make this nice silo of it, you know, people do start deviating in that direction. So some of that, I think, is because it's grown so much and so you have slightly less control. But the overall tone of fun of really creative, really smart people that have come up,

Wall Street Beds became real famous here with Game Stuff, right? But as you know, because you had a podcast about this couple years. ago where these people took out infinite leverage, right? Oh, yeah. Right? And prior to that, they had done other stuff that was so much, like with the box spray. Like, there's been really clever. These people come together and they say, let's exploit an inefficiency and they do it well.

That was right. That was Wall Street Betts, the Robin Hood Infinite Money Glitch. Wow, that was the original. I completely forgot about that. Yeah, it was like two years ago. Geez, I love that guy. We had them on. So for those that are not aware, this guy found a,

loophole in Robin Hood where I forget exactly how it worked but he was basically he was taking on margin I think he was selling options or he's he was doing something with options and then selling those options so Robinhood gave him a credit back but because he still has that position but he got a credit back Robin had then doubled his margin and he was able to do it again and then he would double his margin again and so with like two grand he was able to get like one point seven million dollars worth of margin and the downside with this is that it doesn't seem like I would play it smarts. Like, I think if you want,

$1.7 million of the margin, at least do something where you have a high likelihood of making money because, you know, you have to pay a back at some point and they're going to learn about it. But it just seems,

so many people at that time were just making these ridiculous bets with like a one and a hundred chance of like being big, and then they would lose it and just delete the app. And, uh, but you know what?

Like, I guess we could kind of talk about this now. It's been two years. Um, Robin Hood, uh, I hope I could talk about it. Anyway, my understanding is that Robinhood settled a lot of these cases for pennies on the dollar. So someone would owe like $2 million.

And Robin would be like, hey, just, we'll call it this amount, could pay us off over time, we'll call it even. Like, they got out good. But I think Robin Hood is afraid that these people could lawyer up and be like, well, you allow some 18-year-old kid to get on infinite margin in a way that your platform encouraged. and allowed, he's not responsible for that loss that's a glitch in your platform. He doesn't have the money. Plus, here's a thing. When you're 19, you have no assets. You have no money to pay for.

What are they going to collect? They have a judgment against you. 1.7. Oh, I'm bankrupt now. So what? I didn't go on social media and talk about that. And they're the bad guys. Like, Rob, no, but you know what's interesting about that?

So, like, when I, you know, part of, when I start of Wall Street bets, I'm looking at, I'm on the heels of the financial crisis, right? Like, I'd actually lost a job to the financial crisis. So at some extent, I, you know, and I live in D.C. where a lot of the Occupy Wall Street move. So I had all these things fresh on my mind. And I started learning about these things called Leveraged ETFs. And these are like these exotic variety, which are just basically math formulas.

And I was like, how can these things exist? And why are they legal? And didn't we just learn our lesson? This thing is, you know, the counterparty risk. And if you're not supposed to be able to sell short unless, you know, you have a collateral or experience, but you can buy an inverse CTF and somebody, else is taking on the infinite risk and weird stuff, right? So I'm mad and I write this entire blog post, and I was like, I'm going to publish this,

and the whole world is going to be just as outraged as me. But first, we have to thank our sponsor, Ritual. Protein powders can be extremely intimidating, especially with their very confusing ingredients list and also just like the overall perception of them. But fortunately, Ritual is here to shake things up. But the truth is, we all need protein, and it's not just for building muscle. We need it at a cellular level. So Rituals team of scientists reimagined protein powder from the ground up.

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Thank you so much ritual for sponsoring this episode and back to the podcast. And I was like, no, I was going to read my blog post. You know, instead that's wrong. I can't beat him. Join them.

I'm going to start using these leveraged DTS. Well, stock options on top of them to do some crazy things. And then let people, you know, let people become outraged on how we use this. And, and that's how you'll end up starting this dialogue, right?

And that's why I called it Wall Street Betts as I wanted to, to make a statement there. that this is the casino, right? And this is a lot of fun. That ethos continued to grow, which also is right around the time when Bitcoin started. Also with similar language and philosophy in mind, right? With like F the central bank and the whole system. But anyways, but this is where we're hoping to spark a conversation.

So throughout this entire time, you get, you fast forward to this moment where these people take on risk that they cannot handle, right? Like, well, I don't have that money. Like, you know, if, if, if the banks were able to do this in 2008, they didn't have the money. They got bailed out. I was like, well, then come get me. I got, I don't have a million dollars to see. This is now your problem. It's the typical, if you owe the dollar, the bank a dollar is your problem.

And if you owe them a million, it's theirs. Like, this is kind of that. And that continued through, well, today. And then obviously with GameStop and these other philosophy. So do you worry that it's leaning a little bit too much into gambling versus in, investing. Oh, that's a great question. No, no, no. So you have putting your money and hoping that you get returns as a thing, all right? And then you get to pull different levers and then you get to put a spectrum. And on one end, you're going to have what you're probably meaning by investing,

which is lower risk. Let's diversify. This is wealth, growth, and compound interest in your dividend collection stuff. Okay. And then on the other hand, and then you can start doing, doing some higher risk things, maybe actually picking out your own portfolio, individually taking stocks and whatever it is and continue working your way up. As risk starts increasing, so is your potential return, obviously. And then you have what we're calling gambling, right, which is ultra high risk, right? Like low probability, but really high impact potentially, speculation. So there is your spectrum.

And along the way, everybody is guessing, right? Like Warren Buffett obviously is a great investor, but he gets it wrong sometimes too, right? Like the airlines and COVID was a great example with it. So he takes this little loss and whatever and call it a day, but his approach is one that requires decades. This other one is just you're just pulling it up. And so you're speculating from both ends of it is how much am I willing to lose or how much do I want to make? And then you can even make it justice. You can get it.

You can gamble responsibly, right? If you have $100,000 and you go to something, dude, don't do these out of the money stock options because you're going to lose your money. It's like, yeah, I could lose 100% of my money. But I'll take a thousand of those dollars, put them on this side of the spectrum, and I'll take the other 99 over here. I've seen multiple times people take $1,000 turn it into $100,000 overnight. So was that risking or was that super intelligent diversified approach to money, risk management?

Like, of course there's luck. 100% luck. Yeah. The incredible amount of luck. But still it happens. And it's like, well, a worst case scenario, which was the most likely, I would have had $99,000 left. Right. And then I got, I hit the jackpot.

And so now I have twice as much money as I started with. It's irresponsible to take the $100,000 and do that with it. That's interesting because it's exactly the same as what, well, not exactly the same, but very similar to what Ask Seby said when he came on our podcast. He said, no, it was beat the bush. He said that you should place your bets. Obviously, you know, you should be doing the long term, you know, growth investing and stuff like that. But at the same time, it is important on occasion to put some money here, put some money there that could potentially, you know, explode and, you know, skyrocket your account if you want to become that type of wealthy.

So here's a cool thing. Right before coronavirus, one of the things that led to being removed, I was, I said to myself, right, now this is big. and I wanted to start this conversation. We've already had it a few times with the infinite margin. Like you had a handful of events. Now let's take it to the next level. I really want to see people on TV mad about the situation. So I'm going to rent out a casino, like one of those concert venues at a place.

I'm going to do this competitive day trading like a tournament type thing where you have 10 or 12 competitors on stage on the front. I was like an e-sports tournament, right? Trading live with the actual. the stock market and yolowing the crap out of it. So it's going to have the format of a video game tournament like these e-sports. That's amazing. I would watch that. Yeah. I would watch that. Yeah. PPP. Yeah. What? You just get everyone 10 grand. I mean, there's a lot of laws around that. So the mechanic. I actually created this thing. I had it

all set off. So I'm familiar very well with what the restrictions are. But even more than that, it was like, let's take a Dave Portnoy and a Jim Kramer. And, you know, if you're Oh, yeah. You know, we call it trading spaces, the homeless guy from the street. Like just get a little bit of everything just to see, you know, to see what wins. If you watch Chris Moneymaker from that first World Series of poker wasn't a good poker player, but it was fun to watch and he, you know, and he won because he was lucky. Obviously there's luck, so let's just, you know, do this yellow thing.

And, and no other place than in a casino, right? Because I want the world to know that we're playing with the stock market from Las Vegas. Then coronavirus came and killed my dreams. But now I'm bringing it back and that's going to happen much bigger this time around because I just say some opportunities opened. I want an invite to that. I want to see that in person. Yeah, absolutely.

So how do you feel Wall Street bets has changed investing? Because I think very much it shifted away. It almost seems like now people are no longer interested in safe fundamental stocks because they're like, why would I wait a year to make 7% when all of these other people are trading momentum stocks now or meme stocks and they're making that in a few hours? It's a great question. It's not that Wall Street Betts created that is that these people were created before Wall Street bets.

There's an entire mindset in this generation, like millennials on down, where they were impacted by this 2008 financial crisis. It was the banks that made them graduate college with huge loans and no prospect for a job and maybe move into their parents' basement and maybe their parents lose their house. Like it's just very few opportunities. And you can see that even to this day, millennials and Jed Z,

they have it worse off than their parents that like, if you were to make a comparison, they're having kids later, etc. So you have this kind of distrust to the system, this mindset that starts creating like this gig economy that leads to Uber or whatever, you know, becoming influencers online. Let's hustle.

Let's try to make some money on the side because I'm, I have to fend for myself, right? So that mentality starts creating itself right there. And then people say, okay, well, there you have the stock market. And we know that it's just wild because it can go up or down and people tinker with it all the time. Like not too long ago, several months ago that was the, I forgot what the name of this company was. Some fund was being insanely irresponsible with derivatives. And they ended up like spooking the entire stock market and dropped Viacom's stock price by 50.

percent, nothing to do with Viacom. It just had to do with derivatives and this domino effect. Forget their name. And it's like, well, but Viacom, their fundamentals are the same. Why did this thing drop 50%? They didn't announce any news. It was some other irresponsible player that had this domino effect that created this thing. So it's like, well, I'm going to go in and out.

I'm going to use it to Can't Beat him, join him. That philosophy has kind of continued up until this day. My personal thing about Wall Street is I actually, Unlike popular belief, I love Wall Street. I love the system. I just think it needs fixing to some extent. Hey, Ontario, come on down to Bed MGM Casino and check out our newest exclusive. The Price is Right Fortune Pick.

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please contact Connix Ontario at 1866-531, 2,600 to speak to an advisor free of charge. BenMGM operates pursuant to an operating agreement with Eye Gaming, Ontario. All right. Like, the purpose for these things existing is Thorey's capital for companies. Right. People forget about that. But the other, you know, just a couple weeks ago, I had a Reuters journalist say,

hey, AMC, the stock is up because everyone was talking about this thing. And the CEO just announced they're going to do an additional offering. And in the prospectus, it says these stocks are not worth what you say, you know, what people are paying for him. So he admits that he's scamming people. And then he says there's going to be a larger supply, thereby supposedly reducing the price. And then people still bought it. And the price even went higher. Like what's happening here? Isn't this crazy? Do you worry that it's ever going in the direction of being like a pump and dump where everyone collectively gets together and say, hey, we like this stock. We're just going to buy it up. And if all of us buy a thousand

dollars worth, we could influence the price this much and we just got to sell. I do. I'll Um, I like, not that I worry that it's going to happen. It's more, it's more, I'd like it to not turn into that be turned into the conversation. Uh, because then it's not productive anymore. And then it's, it's actually counterproductive to the system, right? Like one of the greatest things about the market is price discovery, some more people that are in it, the more efficient that process can be. So I think that you, uh, that if you have people thinking they're going to make a quick buck by pushing the prices around, then I'd like for that to not happen,

but it cannot happen that easily. What we saw with GameStop is so much more than just a pump and dump. Like, it's easy to say these guys like the stock and these guys were shorting it a lot. And it was a short squeeze. And it was just very sophisticated surgical maneuver with lock and all these different things. They tried that with Apple or whatever. It's not going to happen. Try that with penny stocks.

That will, right? But that was one of the reasons why when I started Wall Street Best, it was like no penny stocks because that's too easy. And then eventually we ended up increasing the bar to, I forget, both the stock price and the market cap amount, just to prevent that kind of dialogue. It's not productive and it's also going to get unwarranted attention. Did you yourself get in on GameStop, AMC? No.

No, I live in Mexico right now. And so ever since I moved in Mexico, moving money from my U.S. broker to Mexico and back, like it's just such a pain in the butt and then taxes become really complicated. So I stopped trading individual stocks and stock options since I got there in 2014. I now do like futures and forex. You know, like I do my bets where I can do it easily. Yeah. Why do you, why do you move to Mexico?

And where did you move from? I was in D.C. in the last place. But in the U.S., I've lived in the D.C., Chicago, like Salt Lake City, Utah. I moved around a bit. I was actually born in Mexico. And I lived there until I was like 12, 13. I always wanted to go back. Opportunity popped up.

Went down there for a little bit. I was like, I like it here. So I stayed. But you still do Yolo bets, but with just futures and other things. I use different instruments. And do you, do you,

you can't use Robin Hood anymore? I can. Do you use it? No, no, I don't use any U.S. broker. Like I have, I have brokers that have my investments non-yellow, so everything got rolled up at the either E-Trade or TD Ameri-Trade.

So all my brokers that I have, haven't are now those two and what do you think of the gamification of trading on robin hood i think it's great right you have well first of all i'm going to say having confetti animations or whatever is not going to force somebody to buy stocks i i don't know really i hate to interrupt i liked the confetti i miss i remember those are the good old days and you got a free stock and you scratched it i love i like the confetti i love i like it Yeah, I love. It's cool. All right.

It's fun. You're not going to go out there and buy it. You enjoy it. So if you have to pick between brokers to yolo with, maybe you're like, I like the one with confetti. Right. You've already made your decision to yolo. Right.

And so, uh, so I don't think that that in itself encourages the crazy behavior. I think that that decision is made. It's, it's either made or going to be made throughout the natural progression of these people's adventures in the stocks. But I think that it's great because it educates people. If you buy his stock in Tesla, like, I just bought a share, right? And now I'm hoping to get rich. I'm going to check the stocks today.

It's up 2%. Cool. That's exactly what it was supposed to do. Next day it goes down 2%. Like, why is it going down? Like, what is the news? You know, when it goes up, it's no big deal. When it goes down, there's got to be news, right?

Start looking it up, and they can't find any news on Tesla. But then they're like, all right, there's this dude called Powell, Jerome Powell. He's talking about some interest. What does it have to do with anything, right? Next thing you know, they're understanding monetary policy and what has to do with the interest rates and how these things are interconnected and the bond yields or whatever it might be. And all of a sudden you have a person that's become educated because of their 2% in Tesla. That's one example.

Maybe it doesn't go that crazy. But once you have that stock in your thing. So the gamification process encourages that process. It's not scary. There's confetti. Scratch your thing off. In fact, Robin Hood is funny because they stock options, which are trickier. or they can be trickier than regular stocks.

Definitely they can be intimidating when you open an options chain on a regular broker and have like a gazillion numbers that are flashing. Robin Hood says, all right, you want a stock option, sure,

no problem. Do you think the stock's gonna go up or down? And then you answer with the arrow, with the color-coded arrow, it's like... They make it so easy. Oh, yeah. Yeah,

they don't even have an option chain. It looks different. Up or down. Buy, sell, call, put. It's just like any other option chain. They explain it so well. I have to say, I didn't understand options, but when you go through Robin Hood, do you think it's going to go up or down? Down.

When do you think it's going to go down? This date. How much do you think it's going to go down this much? There you go. That's what you want. I mean, that's wonderful. You don't have to know black shul pricing model. Like, it's cool because it's like, whoa, why did this thing go down so much?

Right? Or up so much or whatever it is. And so that's cool because it encourages experimentation and fun and learning. And I think it's like a gate. way drug for people to want to learn more. But are you concerned, though? I think the problem with gamification is that from the SEC's perspective,

Robin Hood is gamifying a system that benefits the more the users trade. And generally, the more users trade, the more money they lose at Robin Hood's benefit. Do you think there's any sort of conflict of interest there? No, no, no. Robin Hood, I followed everything up until losing it Robin Hood's benefit.

Robin Hood isn't different as to whether you lose money. They will make they will make their money from number of trades. Well, let me clarify that. Generally, the more people trade, the more likely they are to lose. Yes. So by Robin Hood, encouraging users to trade more at their benefits. Statistically, people are more likely to lose money.

There you go. So is there a perverse incentive? No, because, well, first of all, there's a lot of criticism towards the encouraging. So the first thing is, how do they encourage a lot of trading by making them free, right? And so then that takes us to this payment for order flow concept. And so then you're starting questioning execution of these things. And I don't, as a subpart of your question, I don't really care about like I don't think that payment for order flow is bad. The rules are such that the payment for order flow have to give you the same or better prices than you would on the exchange.

So the prices themselves are good. This whole front running thing is like silly. I personally, I don't like payment for order for myself. because I need a fast execution. I need pennies on the dollar. I do like charts. I'm more technical than meme stock or yellow type stuff. So I choose to pay commission for my trades because that's what works for me.

You take Keith Gill that takes 50,000 grand and turn it into $50 million. Like these guys don't care if you got stiffed a couple of cents on this thing because their approach is a different one that suits them. So on the payment for order flow standpoint, not really worried. Let's encourage a lot of activity on there. I think that as long as people are aware that what they are doing is risky, which oftentimes they do, especially after they lose money, then it's on these individuals.

There's gamblers, right? There's like an addiction of gambling and gamblers anonymous, and those people have a problem, and that problem is usually, hey, this activity is now affecting the livelihood of you and your family. family, whatever it is, go get some help. Those people exist, whether they be in Vegas or whether they be on the stock market. For the majority of people, they say, I lost money.

That hurt. I don't want to do that again. So some people are so risk averse. They're like never again, close it and uninstall the app and call it a day. For a lot of people, it's like, no, no, no, I think I can learn from this thing, right? Like, I think I can do it better next time, as was the case with me. I would make tons of money and I would lose tons of money. And when I make tons of money, I would start seeing dollars.

signs. I'm like, I just need to do that six more times and I'll have $600 million, right? Like, because if you do the math and, you know, and then of course you can't do that six more times. And so eventually the trajectory that at least I took was from like crazy risk to more systematic. And so then it's all of a sudden things about risk management and, you know, putting a little bit more signs to it. And, and that's the name of the game. What did I walk away with? Even if I had lost money, I walked away with tons of knowledge. I am now a better. fundamental investor, right, because of that natural curiosity, then most people would probably imagine.

So what are your own personal investments looking like? I'm a boring investor. So I have like SNP and the NASDAQ. It's a little bit heavier. And that's it on the U.S. side, right? What percentage would you say that is? Of what? Of just like, of your total.

Total port. Yeah. That's an excellent question. I would probably say 20%. Okay. And then the other 80. You want to hear the good stuff? No, I have...

I have a bear. No, there is, there is, you know, liquid, like a savings or whatever it is with the bank. We have real estate. We have crypto, which is something. I've been getting really heavy into. And then other investments, a very large part in private equity, right? Because these are the pre-IPO type investments. Now, I know this may seem like a silly question, but how do you yourself make money?

I make money a lot of different ways. So I have... This is a casino, sir. I do make money with trading, right? So, but it's no longer the thing that I sit there all day long doing, right? Just the long term? No, no, no, not. Trading short term stuff like that.

I now just go into the high propensity. I've seen this enough times and lost enough money to know that there are some really big opportunities. Even in regular investing, you know that like this is the go all in moment because the stocks are down 50%. Like pandemic last year 2008 and that and that thing happens for more frequently with trading where it's like. whatever your style is. I'm like, this is a three times a year type situation. I'm going to put a lot of money on this back.

Right. And then it's very high propensity to pay out. Like, you know, over 90% and the returns are insane. So, and then there are smaller ones of those opportunities that come in. And so if I happen to be on my phone and I'm checking these things and my setups

are there or I feel that there's a short term thing, I'll go in there and that generates a fair amount of money. But I'll do that maybe. anywhere between one to four times a month. That's all that it really takes to do that. And then, but that's boring and I don't want to just do that all day long. So the things that I make money from is I do speaking arrangements.

I wrote a book and probably writing another one. I'm doing this Las Vegas thing. This, the, what do you call it, the competitive day trading thing that turned into, because of the regulations, this is kind of cool.

The SEC, it turns out, is not that much of a impediment to do. doing this is more the FCC. So I want to pay the winner a million bucks. And so in order to do that, you have to, you know, you can't give it to your buddies to be competitors and I want to need to make sure it's fair. So then that created an entire reality TV show that's attached to her, right? So I just signed with a really big production company that's going to, to handle that.

So you have your reality TV show leading up to the final event. And so that's a money maker there, you know, like the movie that I created, making deals with. the crypto is a good one. I've created, so I'm now getting big into crypto, but I still, my passion is Wall Street. And I know that those two things are emerging. So I've created this platform that is combining crypto with regular stocks or traditional finance.

So you can now actually invest from the crypto side into the stock market and create these kind of, I want to, this is a tiny little tangent, but I think it's exciting, right? Like to showcase the technology of what it is that we created on the crypto side, you guys know what the ETFs are. I assume. Right. So ETFs, they have to, if you want to rebalance them, like to make a meme stock ETF, you have to like file with the SEC and you have to pay money and wait and they approve it and whatever. And then eventually you can do that on the fly on the blockchain without having to do any of these things. So I'm creating an ETF that will trade on the stock market whose sole underlying is an ETP, which is what we're calling strange trade of portfolios.

It's like a blockchain version of it. That blockchain version, ETF, all it does is it copies the greatest investment couple of our generation, Nancy Pelosi and company. I love that. Excellent. They've proven they have 112% annualized return with 12% drawdown. They have really impeccable stats. You can now trade real time with that.

And so. That's amazing. When you mean real time, aren't we seeing within a 30 day window? Yeah. Yeah, you won't be able to get their exact returns. Yeah. If they happen to have incredible luck with timing, you know, because sometimes politicians can be really, really lucky with timing.

Maybe you're not going to get that exact little bump, but you'll be able to get. I would love that. Honestly, we should be able to, that should, here's the thing. Because recently they've wanted to, I think they've actually just banned, uh, uh, policymakers from buying individual stocks.

And I don't know. they passed that or not. I have to go look. I think they just did. Okay. And they've, so basically, they could buy individual stocks, but they have to give 45 days notice to the public, and it has to be approved. That's good for you. They have to,

they have to hold that investment for a year. And if they want to sell, again, another 45 days notice, and it has to be approved. But those are under special circumstances, but otherwise they must buy into a mutual fund or an ETF that tracks the broad market. That was just something that I covered,

or not on Friday's video. And I covered it Friday's video because it came out Thursday night. Okay. That's probably why I haven't seen it. Yeah. And I titled my video, banned from investing. But here's the thing about I don't know enough about this. So I'm going to try not to say too much about it.

But I'll say what I've seen in the past with these things. Like this insider trading thing is not new. It's happened forever. And the first time that I saw it, I was outraged. Like some Congress people, they were buying property in some state right before they approved the railroad to go through it, whatever. you know, like inside information, maybe it wasn't the stock market. And the same outrage, people get up really upset.

So they passed a law of no insider trading fairness act of America, whatever year it is. And what the rules say is you can no longer buy like property in the state of Wyoming, you know, between the days of whatever 2005 and 2006, if you were about to pass a law about a real, like it was just very specific to do not repeat that one particular maneuver again. And I'm inclined to think that the, but now I have to go. it before I speak. I guess I'm hoping that the rule is actually the way that you've described it.

Like once the fine print to think because that would be the fair thing. But in the meantime, I'm still really excited about the prospect of being able to mimic because I still think that the Congress has the ability to be better traders and the general Americans. And so anyway, so I make money with that related stuff. And yeah, I don't know. So I don't know. Now, speaking of that, I found this to be a very interesting video. This guy, Knob Jaws, over at Market Sentiment, he analyzes all of these stocks, and including the stocks on Wall Street bets.

He's the one who's put together in the past, this entire spreadsheet analyzing the mentions, the daily mentions of every single stock on Wall Street bets, and then analyzing its performance, this guy is incredible. But he looked at the past performance of Congress members and determined that overall they do beat the S&P 500 by a little bit,

but it's skewed by the few people like the Pelosi's, who ended up doing really well. But most people who copy these within 30 days barely beat the S&B 500. It's by like 1%. And it's not worth over 10,000 different trades copying them, except it's like the top five, I think. So here's what's an interesting, right?

Like as we're, because this is happening, by the way. This isn't just a joke. And doing that and doing all these filings and work on these things. They're like, all right, well, what happens if Pelosi resigns, right? Like, you know, amongst many other different things. And so the way that we're solving this. That is something that goes in that direction where it's like, well, that's okay. I have my ledger here of potential politicians, right?

And these are their stats. Like if they're baseball players and this one right here, and you can see all their past performance. And then you can just kind of, this thing happens on the blockchain. There's like a governance-based thing. People vote, community, whatever. And so basically the community is going to take a vote and select the new politician. It's going to be the key winner.

So that, you know, I do figure that if you take everyone as an average, you have like 400, 135 congresspeople plus 100 senators. I mean, you have like over 500 people. You're probably going to get an average as an average. But yeah, I think that people are going to go for the ones that have a better track record. What are your thoughts about alternative investments, whether that be NFTs, art, collectibles. What are your thoughts on that? I mean, the mistake of assuming that crypto was Bitcoin or whatever coin for too long. Like I knew exactly what it was at the beginning. I even had, you know, gotten to, you know, gotten to. into it myself never made it part of wall street bets because the execution the difficulty of getting involved is just too high and i never re-evaluated that stance and i regret not doing that because because the crypto is so much more than just coins right like it is an entire system that is mind baffling and i could do an entire hour just on that but the so i start seeing these nfts and i start seeing these rocks going for a million dollars and i can make quick assumptions about it and say okay the tulip mania we got in the situation here

But I'm not going to make that mistake again. So I'm going to go in there and I'm actually going to buy some NFTs and see what it's about. And I think there is definitely some serious staying power there. It's incredibly fascinating. NFTs, the core definition, non-fungible tokens are just like a data file that has information in it. It's on the blockchain and you can do a lot of stuff with it. Now, they're currently, their use is currently associated with, here's a picture of, of this pixelated whatever, you know, sell it for a lot of money.

But that's not what the technology is. That is one use of that application. The actual NFT application, I think, has tremendous investment potential. I touched on the fractionalized real estate. You know, I was, I probably shouldn't say who, but there's a very high profile, famous real estate individual, you know, who approached me as like, dude, we need to marry these NFTs with real estate. And because I had this preconceived notion, I'm like, this is a really cool thing.

People can just buy little pieces of it. You have the art. You have the, I drew my Picasso and I can sell it. I think that's really cool too. And then you have the other one that's currently in existence is the, you know, 10,000 pre-generated list, make a community and sell it to them. You know, there's, we're also in a heated situation where there's a lot of money flowing in, a lot of excitement. That's going to die off. there's going to be some stuff.

But I was talking about regulation with, I can say, Brittany Kaiser, she's like the whistleblower at Cambridge Analytic. We were talking about other crypto stuff. And she's got this, you know, she's trying to get into the lobbying world. And she's got all these things registered. I'm like, why don't you give the office of the congressperson an NFT? You tell that congressperson, this NFT is programs that it's going to give you every month, $1 million, to the,

of this NFT, so long as the mechanism by which you can receive that million dollars continues to be illegal, right? That's the rule, right? So it's like this automatic lobbying contraption where you don't have to call and wine and dine, whatever. You know, people that are in the House of Representatives, specifically the two-year term people, they just do campaigning all the year long. Like, it's pretty well. You don't have to campaign anymore. Here's your money. Just make sure that you don't pass any laws that prevents that from happening because then we don't want to break the law and we'll have to shut off your NFT. Like cool stuff there. Thank you so much for coming on.

It's fantastic meeting you. Yeah, no, likewise. This is a lot of fun. This is probably the most prompt podcast we've ever done in terms of like starting, starting right on time, ending right on time. I want to respect your time. Thank you. And really appreciate you coming on. Yes, thank you so much for having.

Yeah. Thank you guys. Make sure to subscribe. Oh, you want to tell them to hit the like button. You just got to hit the like button. Subscribe and make sure to get your free stock down below in the description. Thank you guys. much for watching and until next time.

Thanks. Appreciate it. Thank you so much, man. I really appreciate that.