The Iced Coffee Hour - Stock Market Expert: A Warning on Artificial Intelligence, Memestocks, & The Next Crisis

Episode Date: September 15, 2024

NetSuite: Take advantage of NetSuite’s Flexible Financing Program: https://www.netsuite.com/ICED ZocDoc: Go to https://www.zocdoc.com/ICED and download the Zocdoc App for FREE HIMS: Start your FREE online visit at https://hims.com/ich for your personalized hair loss treatment options NEW: Join us at http://www.icedcoffeehour.club for premium content - Enjoy! Add us on Instagram: https://www.instagram.com/jlsselby https://www.instagram.com/gpstephan Official Clips Channel: https://www.youtube.com/channel/UCeBQ24VfikOriqSdKtomh0w For sponsorships or business inquiries reach out to: [e-mail] For Podcast Inquiries, please DM @icedcoffeehour on Instagram! Timestamps : 00:00:00 - Intro 00:01:20 - How did you become a "Wall Street icon"? 00:03:28 - How accurate is Wall Street compared to what you see in movies? 00:04:49 - What is the pay like starting off on Wall Street? 00:08:42 - What's the difference between an investment banker and being on the trading floor? 00:09:41 - What does a stockbroker do? 00:12:32 - Sponsor - Netsuite 00:13:45 - How do market makers earn money? 00:15:42 - What was it like on Black Monday 1987? 00:17:07 - Causes of the 1987 crash 00:19:20 - How did your career progress after the 1987 market crash? 00:24:01 - What's your opinion on the stock market today? 00:34:21 - What's the biggest risk to the stock market in the next two years? 00:36:36 - Do you think the government is always going to step in to save Wall Street? 00:38:29 - Sponsor - Zocdoc 00:40:04 - What do you say to contradicting evidence that the economy is currently stable? 00:42:02 - Do you think the average person can/should try to beat the S&P? 00:47:15 - Why can't you make an algorithm to trade for you? 00:48:26 - How is Nancy Pelosi such a good investor? 00:50:51 - Thoughts on WallStreetBets and GameStop? 00:54:50 - Influencers and how they can effect the stock market? 00:57:14 - Who is the most effective investor of all time? 01:02:36 - Sponsor - Hims 01:03:53 - Should the stock market be open 24/7? 01:05:07 - Thoughts on crypto? 01:07:03 - Will the US dollar lose its dominance? 01:07:52 - How did you get started on Wall Street? 01:09:27 - How did his parents survive the Holocaust? 01:18:26 - Was it difficult to relate to other kids growing up because of what your parents taught you? 01:21:39 - Do you believe that everything happens for a reason? 01:22:45 - How did your older brother get you into Wall Street? 01:26:34 - What's up with the hair? *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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Start your free trial today. I thrive on chaos. We traded millions of shares every day, the open outcry, screaming and yelling, absolutely frenetic adrenaline-filled wild crazy time. I've seen every crash since 87, the bubble of 2000 crash of 2007, COVID. I'm there to forensically try and understand why the market does what it does. Is it rigged? Well, I don't like the term rigged, but is there a bit of a control going on?

Yes. What do you think the biggest risk is to the stock market over the next two years? We're in the middle of this AI phenomenon, this crazy tech trade. We've got bank crises. We've got wars going on. What ends up making a crash is when you have a perfect storm where suddenly everything comes together at once. Peter, thank you so much for coming on the iced coffee hour.

This is really neat. The iced coffee hour. The iced coffee hour. You're known as the Einstein of Wall Street. And where I first found you, I believe was probably 2019, 2020. your face was everywhere on CNBC. Any time there would be a stock market panic, stock market, you know, increase, whatever it is, your face is across everywhere. Where did that start?

So, you know, I'm really happy to be here. This is great. I appreciate it. You know, it's been an amazing journey, right? You know, I'm known as the Oncenter Wall Street, the most notable photographed. I like to say, photogenic face on Wall Street. And, you know, historically, Wall Street has not been a place. where there was a lot of press back in the old days.

They're actually, the press would show up on big days and they would take a picture of this guy. His last name was Gersh. He was a broker on the floor for years. He was the Wall Street dude, they called him, right? And that was before I was sort of well known. And in 2006, I think it was one of the crashes we had. There was a photograph taken of me. And I had my hands in the air like this.

The market was down 650 points. And that photograph was. of me with my hands in the air, got on the front page of the Daily News, and then everybody sort of picked it up right away. It was sort of captured everyone's heart and sort of the feeling of that crazy crash. It was one of the big, first big sell-offs. It was mid-February of 2006. Do you ever pose for those photos? So you're not allowed to post. So actually, it may sometimes seem posed, but the bottom line is I kind of wear my emotions on my chest, right, on my face. You know, the photographers actually get the images, AP, all those guys will not take a picture if it's posed.

So all of that emotion is real. So there's nothing as posed there. But so that was sort of the beginning of this of this journey for me. You know, I've had number of TV shows on the floor for a while. I didn't think I had that much to say. And so coming off of that picture, my face became the face of the floor. And it ended up going viral everywhere. It was, you know, the beginning of sort of virality. in the internet and all that kind of stuff, I ended up on thousands of front pages all over the country. So, and that sort of got global. So that emotion that I showed in my face, everybody loved because everybody's so related to the stock market. So that was sort of the beginning of the journey. I mean, I ended up getting on thousands of newspapers. And so my face became the

face. It was not till a number of years later that I started to think I had anything to say and I started doing interviews and talking about the market. How accurate is Wall Street to what you see in the movies. People like yelling and screaming and showing papers everywhere. No question about it. Back in the 80s, that was incredibly a great rendition of what we did on a daily basis. We traded millions of shares every day. The open outcry, screaming and yelling, absolutely frenetic adrenaline-filled wild crazy time is exactly how it was in reality. There were 8,000 people in that room. You guys were on the floor with me recently. You saw how now it's, you know, it's winded down to price seven or 800. But back then, there was a huge.

support staff on the floor. There were four rooms. There were thousands of brokers, 1366 brokers. There were clerks and reporters and squads and, you know, literally thousands of people open, outcry, screaming and yelling. And I love that. I thrive on chaos, right? I still to this day. So I asked them for a regular job. And in September, they gave me a job as a clerk. I became an option clerk. And back then, so there's no training to be a broker on the floor in order to one's quest when they get down to Wall Street is to become a broker. In order to become a broker, somebody had to leave the post. So I did it in three years. I got very lucky. One guy died, one guy retired, one guy got fired. And I moved up the ranks. And in three years, I went from

teletypist to broker. I got my first seat in April of 88. What are the salaries like starting off on Wall Street, starting off from the bottom, working your way up? Was it high paying? No, not at all. A squad made $67 a week. My first job in 1985 as a clerk, a retail clerk, I made $21,000 a year. And then I got as high as on my way to becoming a broker over those three years. I think by the time I got my seat, I was making $25,000 a year. Now, you know, it depends. There were people back then already making a lot of money. But you have to realize it's important for people to know to look at the landscape of Wall Street that they're the upstairs people and there's the downstairs people. Wall Street is

called the street for a reason. Most of the people who have been traditionally employed on the floor of the exchange are not your MBAs, are not your sort of high-flying, you know, M&A venture capital type of guys. Those are the, you know, it's a different breed of people. These are people who grew up in the neighborhood, heard about Wall Street, came down there, started at the bottom. Great rags to riches stories. The guy who once shined shoes went on to become a multi-millionaire market maker. So there's lots of really fun stories about how people, you know, went up in the ranks. But it took a while for me to make money. I mean, it was not until probably early 90s where I got an offer from, from Ivan Boski, in fact. So Ivan Boski was one of those, he was the first guy to get caught

insider trading, right? He was claiming that he was having premonitions about, um, Chinos, how did you blam? No. The Devil Wears Prada too. He's the movie event 20 years in the making. Honestly, can't with the secrets anymore, so I think we just, we should tell her. Will you two please spit it out already? This Friday, be the first to experience it only in theaters. In light of the recent scandal, I'm here to restore your credibility. Oh, because we're a team now.

That's a nice story. The Devil wears Prada, too, in Theat's Friday. Stocks trading and takeovers and all this stuff, and it turned out that he had a rabbi up at Goldman Goldman Sachs who was giving him inside information. He ended up getting indicted and fined $180 million. $180 million. He made billions of dollars. So the 180 in hindsight, it was really just a slap on the wrist of...

Absolutely. So the original Wall Street movie with Michael Douglas and Charlie Sheehan is the story of Ivan Boski. Is it really? Right. I had no idea. That's the original. And if you read the story of Ibenboski, it's amazing. So how was he getting the insider information?

He had a guy at Goldman. He had a guy at Goldman Sachs. And then when they were... were acquiring a certain company, they would let him know and then he would just buy it. He would give him the phone call and he'd go, listen, in about three weeks, we're going to be buying, you know, RJR. Nabisco is going to be buying Beatrice or whatever it may be. And so he would give him that information. He would start to accumulate large blocks of stock, right? And we should, one should have known it at the time, but it was not something we did know because they were buying,

when they went into a stock, they were buying millions of shares of stock. And he was claiming that he was having these visions at night about potential takeovers. And of course, it was not. It was a call. The guy's name was Dennis Levine. And so he did it for a number of years, made millions and millions of dollars. And he was there with every one of the takeovers. And everyone was like, how did you know?

You know, it was like, I heard it. He used to say, I think I heard voices under my pillow or something. And then, of course, after the investigation, I think it was a Giuliani investigation, back when he was the DA, that they. found out he was getting inside information. But so it took a while for me to end up making money on Wall Street. But back then, brokers, there were brokers who were making, you know, depending on what company you worked for, if you were a house broker or a $2 broker, which was an independent

commission broker. I mean, there were guys making, you know, 100, $200,000, probably there were guys making more money than that. But the street is not, you know, back then, people have this vision of these big Wall Street bonuses, right? If you look at the press from the 80s and 90s, you would hear about, you know, people making 30, 40 million dollar bonuses. And that was not ever something that happened on the floor of the exchange. Those were the guys, the investment bankers, you know, the guys upstairs on trading desks who

were putting the deals together and doing things. Those were the guys who were making the major money. How does that differ from the lower to the upper? And can you move from the lower to the upper? Are there two separate just careers entirely? It's a different career. Okay. You know, if you work on the floor of the exchange, there's probably a cap on the amount of money you can make. now it's a completely different story. But back then, you know, there were people making money, but it was not a function of people who were upstairs were a different, it was a different breed of people.

It was a totally different job. We have to realize that us on the floor, right, who were trading, you know, open outcry, it was a different temperament of human being, right? These guys had a lot more education than most of the guys on the floor. You know, these guys were street smart. Those guys were book smart, right?

And the book smart guys who put, together the big deals. You know, if you were a guy who put together an M&A deal and the deal was worth a, you know, half a billion dollars, your compensation was a percentage of that deal. That didn't happen on Wall Street. We were really working hard. We were commissioned brokers. So if someone's trying to understand what a stock broker does, what exactly do they do? Okay. There's, so a stock trader, the stock trader, stock broker from the floor side is somebody who basically is at the point of execution of buying shares of stock from a market maker. Orders are generated upstairs.

Think about this. You wake up in the morning. You're at Goldman Sachs, Wells Fargo, Morgan Stanley. Everybody shows up for the morning meeting. They have a customer base and assets under management. Hundreds of millions of dollars. They're there to invest people's money, right? So their goal, and they have a crew of analysts who decide what they're going to invest in.

Okay. Obviously, you know, the better the firm, the better the analysts, the better prediction of how the stock is going to move. So the analysts make a prediction on what they think are good investments. They come to the portfolio managers. They sit down and they decide, okay, we're going to buy a million shares of this, sell two million shares of that, whatever it may be. They sit down at their morning meeting and they say, today we're going to buy a million of this, sell a million of this, and we're going to go in and out of stock, right? Those orders are all generated upstairs. They are called down to the floor. or at least in the old days,

they would be called down to clerks on the floor. The clerk, he'd say, buy me 100,000 shares of IBM. I have a million shares behind it, meaning there's more stock to buy behind it, but I'm giving you 100,000 to buy right now. Go out there and give me a feel on what's going on in the market. Go to the market maker and ask him, where are the buyers, where are the sellers,

where can I buy 100,000? I may have more stock behind it. What's the market? The market means what's the playground look like, right? Who's there? Who's buying, who's selling? what's the temperament of the stock for a while? Order is generated up here.

It's called down to the clerk on the floor. The clerk will then put up the broker, right? Me, I'm one of the house brokers or I'm a $2 broker. And he'll say, Peter, we've got 100,000 shares to buy. I'd like to buy half of them in line. I'd like to work the rest of them. And we have a million shares behind it. It's kind of Wall Street lingo, but you can get the sense of it, that we have stock

to buy. I would then go out to the market maker. I think I gave you a little background on that on the floor. The market maker is an independent firm that has been allocated the stock by the New York Stock Exchange. He's there to create a smooth and active market. He's there to inject liquidity into the marketplace. He's there to coordinate the buyers and sellers. So I'll say, guys, we're going to bid a quarter for $200,000.

We'll talk. And the sellers will go, you know what? Great. We'll sell $250,000 shares. The market maker, if there are four buyers and three sellers, the market maker will then step in as a seller to consummate a bigger trade. If there are three sellers and two buyers, the market maker will buy stock to consummate a bigger trade.

This is all in negotiation. Although before we go on to that, we have to ask ourselves a question, what does the future hold for businesses? Because the thing is, if you ask nine experts, you're going to get 10 different answers. Rates are going to rise, they're going to fall, the stock market is going to be going up,

we're going to see a bare market. We really just got to invent a crystal ball at this point. But I guess until that happens, over 37,000 companies have already future-proofed that business with our sponsor, NetSuite by Oracle, the number one cloud ERP that brings accounting, financial management, inventory, and HR into one fluid platform. And with just one unified business management suite, you have just one source of truth, giving you all of the visibility and control you need to make quick decisions. And with real-time insights and forecasting, you're peering into the future with actionable data.

And when you're closing the books in days, not weeks, like unfortunately I've done for way too many years, you spend way less time looking backwards and a whole lot more time looking at the next opportunity. And speaking of opportunity, right now you can download the CFO's guide to AI and machine learning at NetSuite.com slash iced. Again, the guide is free to you at netsuite.com slash iced. Again, it's NetSuite.com slash iced with the link down below in the description. Thank you so much NetSuite for sponsoring today's podcast. And now let's get back to the episode. How do market makers make money if all they're doing is injecting liquid into the market, are they taking a certain percentage off of each trade?

Or are they employed, is it like a government thing? Are they employed by the New York Stock Exchange? No, they're employed by their firm. But what they do is they buy low and sell high. So his job is to constantly be buying and selling, facilitating the trades, but in the meantime making money. His goal is to buy low and sell high. You have to realize in the absence of a public buyer or seller,

the market maker has to buy the stock. or sell the stock. So in the case of a crash, the crash of 1987, where the market opened and proceeded to sell down 600 plus points or 30 plus percent, stocks went from 160 to 60. At one point, the public stopped buying the stock because they ran out of money or they watched their positions go down 100 points. The market maker had to participate all the way down. So at the end of the day, On Monday, the day of the crash of Black Monday, the market makers were long. They owned tons of stock and much higher prices. At the close of business, if you'll remember that great scene in trading places where they

tried to confiscate their seats, they said, Mr. Duke, you know how it is here. At the end of business trading, you have to come clean with how much you need money to capitalize the trades you own. So if the market maker was buying stock all the way down to 60 from 160, he needs to have money in the bank to support those trades. Many companies went bankrupt on the crash, the Black Monday, because they didn't have the money to support those trades. Okay. But obviously, their goal is to facilitate trading between public buying and selling and make money along the way. It doesn't always happen, but that's the goal.

What was it like on Black Monday in 1987? What was that like for you? I was a clerk. I was not a broker yet. I was a retail clerk and it was absolute chaos and insanity. That was my first sense of kind of, there was a lot of fear going around. I mean, the market was absolutely careening off of a cliff. There was no technology back then. It was all paper, right? So, you know, basically orders were being spit out of a machine. The phones were ringing. We were getting. We were getting. orders, sell, sell, sell, just like you would see in a movie. And brokers were just coming into the booth and you would hand them stacks of orders to sell everything in sight. They would run out to the crowd and just at that point, it wasn't a matter of negotiation. When a market is tanking, you just walk into a stock and go, I got 50,000 to sell, where are the buyers? And then you would hit a bid.

You would hit a bid. You would hit a bid. You would hit a bid. And then you would run into the booth. Give me a report. I would call it up to the customer because you wanted to give the report to the customer before it traded lower, right? You didn't want to say you sold them at 50 bucks and then it bounced back to 51, right? So the accuracy and the timeline of this whole negotiation is really pivotal. So it was crazy.

It was one of the wildest days. I would say of all the crashes. I've seen every crash since 87, the bubble of 2000 crash of 2007, COVID, clearly the craziest day of all time. What caused it? Do they know yet? Yeah, they absolutely do. Yeah. So, In each crash, and I've done a lot of talks about the different components that made up each crash that we've seen, right? And for each crash, prior to the crash, the markets were trading at record highs. And then something happened. Obviously, in the crash of 2007, what happened was that they were selling mortgage back securities that had nothing behind them, right? That was it.

they were packaging products out and selling credit and houses to people who they knew could not afford it, right? And they ended up then, their product was worth 50 cents on the dollar. They knew they had to unload it. So they put it in a nice little box with a bow and they went and sold it to somebody for 50 cents on the dollar. Everyone's looking for a discount. They didn't really, they trusted the seller because he was Morgan Stanley. He was Goldman Sachs. They didn't think that I was being sold, you know, an empty box. So they bought it, right? And And then what ended up happening, they realized suddenly, finally, when the markets started to crash, they looked under the hood and realized there's nothing in this box.

What they gave me is bad debt. So they tried to offer it for 25 cents on the dollar. So suddenly they went around, this sale of massive mortgage-backed securities that were really becoming worthless, were going around the world to the point where it all the shit hit the fan and basically everything tumbled. That was the crash of 07. I'm not really clear about what facilitated the crash of the 87 crash. There were some insurance things.

There was some potential technology that was starting to come into the marketplace. It was sort of a perfect storm. Markets can handle, we saw it during COVID. We've seen it during the interest rate crisis and all that kind of an inflation crisis. Markets can handle virtually anything if it's being given to them one thing at a time or two things at a time. But what ends up making a crash is when you have a perfect storm where suddenly everything comes together at once, right? Where you just, the market cannot really digest all of this bad news that's happening and you end up having a crash. So after that, how did your career continue progressing?

How do you work your way up? Okay. So I went from through teletypist to option clerk, retail clerk, institutional clerk. I ended up getting lucky and I got a seat on the stock exchange for this one firm. I ended up moving past that firm, a couple other firms I got into, I got a higher offer making more money. That firm did not want to pay me much money. So I got an offer to $80,000. I told you to do convertible arbitrage. It was another kind of trading. It's more complicated than we can talk about here. So I got hired to do that. And that worked well. But look,

now I've been doing this for 37 plus years. And so I've worked at numerous companies. Now I work for myself. Probably 16 years ago, I did. developed, I built a trading strategy around the S&P 500 and the information that we get on the floor. So my career progressed really beautifully along the way, although it's had its, it's, you know, it's had its pitfalls. In 2006, 2007, during that financial crisis, my business dried up. I actually, I just did an interview about it the other day where there was a gentleman who asked me if I've ever been broke, right? You know, there's a guy who walks around the street asking people if he's ever been broke. And he caught me when Lehman Brothers went bankrupt.

and there was a massive financial crisis. Everything dried up around the world. People were losing their jobs en masse. And so as a broker on the floor, everybody was obviously super hesitant to just give it. I was what's called an independent $2 broker. So I didn't work for a house. I was not making a salary.

I ate what I killed, right? That was how it worked. And so if there was not that much out there to kill, I did not make much money. And literally there was a two-year period in 2006, 2007, where I was not making any money. And I knew that no opportunity was going to find me at home. It was one of my, it was a period of time.

I was going through some things personally. And I think a lot of that, that trajectory in the journey that I described to you, which was really like a fast and furious rise. And Wall Street kind of came to an abrupt halt with the financial crisis of 07. And everything started to tumble. I started to tumble, you know, spiritually and emotionally and financially. you know, we know when you're doing well, you know, I mean, that terrible line by Jordan Balford, I've been rich and I've been poorer and being rich is a lot better. So having had this really good

career on Wall Street and things were going well, having two children supporting them and a wife and then suddenly everything dries up and I lost everything for a while. I was confronted by my DNA. I thought, I dug deep and I realized I could give up and freak out and, you know, go get a job, at Home Depot, or I could sort of dig deep into my emotional strata and figure out what to do. And so what I ended up doing, I've had really great mentors along the way. And I learned from, you know, I knew that you learned from failure more than you do from success. So I literally got up every morning for two years and went into work and was not making any money. I never told anybody I wasn't making any money. I didn't tell my wife and kids. I was borrowing money, you know,

from Paul to pay Peter. I was doing a lot of different hustles trying to make it by, without letting anyone know that I was struggling. But I knew I was smart enough and I had learned enough, like from my parents, that if I don't put myself out there, no opportunity is going to find me cowering under the covers in my bedroom at home. You know, so I got up and went out there to put myself in front of the forces of evil. And literally a year and a half into that going to work every morning, literally making no money,

I ran into someone on the subway who had been a customer many, many years prior. why I had not seen in many years. And he asked me, how are you doing? And he was still a trader. And for the first time in a while, I kind of got honest. And I said, you know what? I'm broke. I'm struggling.

I am not making any money. And he goes, you know what? You were one of my best brokers. That's crazy. I know what's going on in the market and whatnot. Why don't we hook up together? And I'll start giving you business. And he did.

And we ended up growing a business together. And that sort of took me out of the depths of darkness. and I started making money again. And we ended up trading for another 20 years together up until recently. He kind of just recently retired. But, you know, I say all this to say that it's not always a straight line, you know, to success. It's not always, even if you're on a road to success, it doesn't always stay that way, you know,

and that sometimes you're going to have to step over dead bodies along the way. And sometimes you're going to have to fake it until you make it. And sometimes you're going to have to wake up, you know, feeling like you just, can't do this anymore, but you've got to keep doing it. So given all your experience in the stock market, what do you think the market is like today? Do you think that prices are too high or people becoming too greedy, too euphoric? What is your opinion on the market? I like to sort of frame everything from the post-COVID world.

Okay, so let's think back to February 12th, 2020. Markets were trading at record highs across all indices. The consumer was in really good shape. The bank's balance sheets were in an extraordinary shape, and basically the economy was doing great, you know, and that turned out to be the high. Nobody knew it at the time, but that's what it turned out to be the high. Suddenly, the COVID story unraveled, and we went from these record highs, and we careened off a cliff until May 20, March 23rd, 2020, which was that bottom right then. And that was a vast impurious sell-off. That was a different, so I've done a lot of analysis around

the different crises that we've had. And I don't use the word crash or crisis lightly because, you know, the market loves to catastrophize things. The media does, right? Suddenly you got it like two days ago last Thursday. We've been going up for 18 months in a row. The market sold off 50 points and now it's the end of the world. Worst days since 2022.

It's the greatest this. The greatest this. Yes. Right. It's that catastrophist mentality, which is crazy. It's completely nuts. But anyway, so that was an extraordinary time. And, you know, look.

So I love to analyze the different components that make up these crashes, crash of 87, crash of 29, crash of 2007 and whatnot. The crash of COVID's crash was an extraordinary one and it was different than anything else. People have often asked me, what did it feel like on the floor? And I go back, look, I got COVID March 15, 2020. I was patient zero. You know, I almost died. I was given four days to live.

I got meningitis. I've had nine surgeries. So my life was completely upended by COVID. I ended up going into isolation. I had 103.7 for almost three months. I had swelling on the brain. My cervical spine collapsed. It was a shitstorm.

And my son ended up running my business, which was an amazing thing. He really stepped up, which was great. But the market, which is important to note, so 2007, 2008, the financial crisis, the Federal Reserve, who's got, we all know what they do, but they've got tools to deal with inflation, with all the different things that the economy goes. through, right? They're given tools to control and affect the money supply. So the crash of 2007 was, they threw $800 billion into the market as a stimulus to basically bankroll the companies that were going bankrupt and the banks and the brokerage firms that were going under. It took,

they did that, they put that $800 billion into the market over 18 months. And it took nine years for the market to get back to even. So COVID came along and, um, The Federal Reserve realized that we were in a huge potentially global shutdown here, and it was already happening. The market had crashed, Dow down 10,800 points, S&P, double digits, right? And so they realized that they had a tool, which was the stimulus package once again. They looked back at what happened in 2007 and realized that that was not going to fly. And so they put $3 trillion into the market in three months, okay?

$800 million over 18 months, so seven, nine years to get back to east. Even, $3 trillion in three months, we were back to even by August 19th. In three and a half months, we got back to even. We were up 20% in 2020, 28% in 2021, right? And extraordinary. Everyone was saying, if you remember, people are going like, everyone's dying. There's three million people dead. The world's coming to an end.

And the stock market is going up, right? So that kind of changed the trajectory of everything. That kind of is where the economy in the world and the stock market kind of took a divergence. Right. And now there are times in history where they trade it together. The economy's good, market's good. Economy's bad. Economy's bad. Or sometimes they go their opposite ways. Because if you think about it, the stock market, people who's invested in the stock market, not people who are struggling living paycheck to paycheck. It's more people who have money, the 1% of the 1% of the 1%. Because the pay-shaped recovery. It's growing. Yeah, it really is.

Exactly. And they're fulfilling their own destiny here. They're wealthier people are putting money in the market. Okay. So post-COVID world, everything kind of changed. The world changed. Markets changed. and whatnot. We saw 2022, which was basically, so suddenly we're sitting here in 2021. We're trying to get back online after COVID. Basically, everything had shut down, oil production, lumber production. Nobody was building houses. Nobody was flying planes. Nobody was doing. And suddenly inflation took off, right? We suddenly had 8.5% inflation. Everything got super expensive. Nobody wanted to go back to work anymore. And so we're in this situation where so what does the Federal Reserve do? And also, we've printed $3 trillion.

You know, I think if we hadn't have done it, we'd all be on red lines today. So I'm a fan of J-Pound, what he did. Some people believe that that's why the inflation was happening because we printed all this money. But if we didn't print it, we would be in worse shape, in my opinion. Anyway, so suddenly we have a major inflation. What do you do? The Federal Reserve has a tool to get money. How do you make inflation go down to take money out of the system?

We were trading on zero interest rates, bank to bank, business to bank. They were able to borrow money. for zero. Free money. That's why the tech sector grew. All R&D, biotechs were on fire. That's why that happened. So people need to understand what makes up the market and the market going up and down. And I think it's important for them to understand why we are where we are today. That's why I'm sort of telling the story this way. So suddenly you have high inflation. People aren't going back to work. We're still in this COVID mode. And the Federal Reserve decides that, okay, we were part of the problem. Now we've got to be part of the solution. So what are we going to do? We're going to raise

interest rates so that these firms that have been borrowing money and companies and banks and businesses for zero are less likely to borrow money. We're going to start to, in order to curb inflation, we need to take money out of the money supply. The only way to do that is to raise interest rates. People are less likely to borrow. So we spent the next 18 months, consecutive months, raising interest rates, right, to pull money out of the money supply. And we were able to get, had inflation down from 8.5% to almost 2.5 now. Once again, job well done. Okay. Throughout all of this, we're in the middle of this AI phenomenon, this crazy tech trade. You know, we've got bank crises, we've got wars going on. We've got so much going on yet.

And we've got this meme phenomenon. And we've got crypto. And we've got like this is a wild storm we're living in, right? And so net net at the end of the day, the market going higher and higher is a bit of a self-fulfilled prophecy because those people who have been in the market throughout all of this, people who bought the market during the crash of COVID or who have been in it since then or were in it before and have been able to experience this amazing rally, have made a lot of money. And they're reinvesting that money. And net net at the end of the day when you're presented as a wealthy person on where to put my money and you see this real estate's sort of dead because interest rates are going up and

Lala, and crypto is questionable. And the stock market's going up, double digits every year. Well, I'm going to put my money there. So we've fulfilled this destiny by putting more money and more money, more money into the market. We are in the second inning of an incredible game in the AI game. And Viby is obviously best to breed. That this is a, in the near term, we're all going to be living the life of the Jetsons. You remember the cartoon, the Jetsons when you were growing up like robots in your house.

and so much expansion within the AI and that whole tech game. And so that's a huge part of the marketplace. I'm saying all this to say, you're asking me the question, why are we where we are and what do people think about the market? The market is incredible. There are always going to be people who are saying, we're going to say, I know how we got to, that it can't go any higher.

You've got to short the market. I mean, this is crazy. How could it go? yet I'm a forensic broker. I'm not a financial advisor. I'm not invested in the market. I'm there to forensically try and understand why the market does what it does. That's my secret sauce.

And that's what gets me up in the morning. I love that part of it. And if I do that on a daily basis and I'm looking at the market, wondering, is it overbought, is it frothy, is it going to crash? Is this a bubble? It's not telling me that story, right? The story that I'm being told is that the market is a lot. more room to grow. That tech is a big part of it, that there are a lot of other sectors that are

powerful, that we've got $12 trillion on the sidelines selling cash and mutual funds that have yet to be put into the market, that there are tranches of people who have never wanted to, never, we're always afraid to buy into this crazy wild trajectory that the market is doing, that are eventually going to have to hop on board this train that's leaving the station. So net, net, yeah, markets go up, markets go down. You know, we've, this is, the longest time, I think, in decades that we've not had at least a one or five percent pullback in a market in history, almost in history, but decades, right? I mean, every sell-off that we've seen over the last eight months or a year has been so. We had a 10% sell-off in

April. It was the end of the world. It was an opportunity. It was a buying opportunity, right? InVitya went from 940. Nobody wanted to buy it at 940. It's too frothy. It's too expensive. It went down to 736. It's now trading at 1,500 post-split. So, look, you know, the economy is sort of catching up with the market. I think people are starting to do better. Some people are starting to go back to work. The, you know, the labor market is still a bit of a quandary. But net, net, the market seems good to me.

Yeah. From my perspective, it seems like the narrative is that there's all this money sitting on the sidelines in money market accounts that's making 5%. And that when the Federal Reserve lowers interest rates, that money's going to be making 4%. And they're going to say, well, you know, stocks have done even better. Let me finally invest in stocks. push stocks higher. What do you think the biggest risk is to the stock market over the next two years?

I've been asked that question a lot over the last couple of weeks. What could the market get tossed that would dislocate this crazy rally? Right. And if I'm to analyze it and I will go over it and I will tell you what if we say what has been thrown at it over the last two years that the market is completely rebuffed. We had a major banking crisis last year. It was a very short-term seller. that should have that should have dislocated the market for sure we have two wars going on major both of them are in a demographic where oil is involved so it's got it's got a multi-component acts to it right once you have oil if you have a war in a place that nobody really cares that's one thing but you're talking about a place that is that we saw that remember with the beginning of ukraine thing and then

the beginning of the middle east thing and the gulf of hormus and that we can't get the you know people were blowing up, you know, oil couldn't get to where I wanted. And oil went from negative 25 to 125. So what could the, what could the market get tossed at that it would, politics have no effects on the market whatsoever? Once again, confirmed the debate, if you're a pro-Trump cry and you watched poor Mr. Biden completely implode, the market did not respond to that. If you're a Trump guy and Trump just got attempted, the satiation over the weekend the market did not respond to that so that's not it the banking crisis that's not it two wars that's not it earnings some you know we we have great earnings quarters

and we have mediocre earnings quarters you know what that's just part of the the cost of doing business so what is it that could get get tossed at the market that would dislocate this i don't know and i don't know it's a legitimate it seems like there's the assumption that the federal reserve could always step in and that seems to be a backstop stop. It almost does that no matter what happens, like let's say the banking crisis, the Federal Reserve in a way stepped in and said that we're going to make sure all the customers get, are a hundred percent whole in this situation. There's not going to be any disruptions. And sure enough, the next day, because I remember that happening on a Saturday. By Monday morning, everyone was running

is normal. And so there's this belief that no matter what happens, the Fed could always step in. Do you think they're always going to continue stepping in and almost acting as a backstop that no matter what happens, the Fed has these levers to pull of either we could print more money or we could lower interest rates. A hundred percent. It's almost like it's too big to fail. Why would they not? They're there to support the economy.

Nobody benefits from an imploding economy. It just nobody does in any respect. Would you say that the economy's then rigged? Because in a way, it's like if the Fed is just there to help the economy, they could just keep pushing things forward. You know what? I tend to look. That's more conspiracy.

Yeah. than I would want to go. We're all in this, we're all on this boat together. Right. Right. We can take each other down. We can take each other up. We can dislocate the shit and throw the wrench in the, in the boiler room and really blow the thing up.

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Nobody benefits from that right now. Are there people who see your kind of thing? Is it rigged? Well, I don't like the term rigged, but is there a bit of a control going on? Yes, but that's their job. A Federal Reserve has been given tools. to help support the markets and whatnot. Not everybody gets what they want all the time.

If it was completely rigged, well, then everybody should have been bailed out. Not everyone was bailed out. GM got bailed out. AIG got bailed out. Those turned out to be bailouts that worked out because whoever, the Federal Reserve, some of the big players, think about it. We live in this system where, you know, if it wasn't the Federal Reserve that helped the banking system during that crash last year,

Warren Buffett steps in, right? He bailed out General Motors. he bought stock and, you know, in a number of stocks. So there are wealthy, wealthy, one of the people who bankrolled the banking crisis last year was Jamie Diamond, right? So it's not just the Federal Reserve. And I just don't like the word rig. But before we get into that, let's get real.

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same time, a lot of people are struggling with like the basic necessities, like groceries. I mean, housing is incredibly expensive if you want to buy a house. And if people are doing really poorly, and that's a lot of people, shouldn't the stock market be a little bit reflective of the people that are doing poor financial? I'm sure a lot of viewers are probably thinking, like, how does this, you know, it seems like the economy is doing well. One administration is saying it's doing incredibly well. One saying it's not doing well. And they just feel conflicted because they're struggling.

I understand. Look, as I start to say to you, sometimes the market and the economy are in concert and sometimes they are not. You just said to me, shouldn't the market reflect that? Well, the market can only reflect what it is. If a company is doing poorly and they have poor earnings, the stock goes down, right? That's a function of their customers, right? At the end of the day, that's how things go. Right. So I cannot speak to, yes, there are people who are struggling and that's unfortunate.

I also look at, think about it too. We have, if you look at inflation, you look at the cost of a food, you look at the cost of living and cost of gasoline, the things that are the components that make up inflation. Net, net on a global level, we are actually way better than 80% of the rest of the world. right so it's a matter of how you look at it and how you judge it i kind of think people are better off than they were two years ago it's not ideal right food is expensive i get that right and and a lot of expenses and i feel for everybody as far as that goes but we are we're working towards a better place on that that's the best you can i mean it's a matter look at you can sit where you are and bitch about it or you can say you know what we were there and we're now here so we're doing a lot better let's hope we

keep going. So do you think people, the average viewer listening right now, can beat the S&P 500 because Graham and I are of the type where like he's done a little bit of swing trading, a little bit of stock picking back in the day. But now we're both at a point. I lost a lot of money trying to do that. I got a little bit greedy. Trying to beat the S&P. Well, I got into options trading and I was selling options. It was doing really well. And I'm like, you know what? Maybe I should try buying options because I made money selling them. That's when I lost everything. But we're a firm, believers that the only thing, not financial advice that we would ever feel comfortable, like, openly talking about our own investing, it would be like S&P 500. Index funds. Index funds and stuff like

that. Do you think the average person listening right now could make money doing other strategies, or would you just recommend index fund investing? So I can't recommend anything. Disclaimer, disclaimer, or everybody. Look, there's, there's, I've heard a birdie say that if you put $250 into the S&P 500 every month from the age of 18 to the age of 60, you'll have $1.5 billion of passive income. Great, sexy, right? As sexy as you'd want it. Think about that. The S&P historically, dollar cost averaging, you can make money, putting some money aside and let's go. And not everybody is $250, put $10, put $5. One of my big things that I always talk about is investing in and not stuff, right? People need to really look at their lives. Think about it. We are the greatest

consumer generation in the world. We love to buy stuff, right? Everybody's got a closet full of stuff, right? One of the stories I always tell is if your iPhone's 14 is not broken, you don't need the iPhone 15, but everybody goes out and buys it. How about we change the mindset and instead of your buy, go out and buy the iPhone 15, go buy yourself four shares of Apple stock. If you did that, and Tony Robbins is using my freaking line on this one, investing in stocks and not stop. And the fact is that if we take all the things that we use on a daily basis and we cut back a little of that, you don't need nine coffee lattes, go buy a little Starbucks. You don't need nine yoga suits.

Go buy a couple of lulu lemons or whatever. But invest in stocks and not stuff. Identify things that potentially may go up in value. It's very hard to beat the S&P 500. I have a school with my partner, David Green, called Wall Street Global Trade Academy, where we teach thousands of retail traders around the world, technical analysis and risk management on how to trade. There's a successful way of trading and there's an unsuccessful way of trading. You were making money because you were collecting premium. You decided to go out there and become a stock picker and buy stock.

And you had to confront the fact that, you know what? Wow, if I put up a thousand dollars to buy an option and it expires, money lost. Right. So it's a matter of really learning the game. There is a playbook, right? for beating the S&P 500, and it's surely not easy. So there are certain rules, and we teach them every month in our master class, right? Have a stop. Have a plan when you get into a trade. Why am I buying it? Right?

Because the charts tell me to. Okay. Have a stop order on every trade. Have a plan when you get into a trade. Take a profit when you can, not when you have to. Okay? Never turn a winning day into a losing day. That means that if you're up $1,000, you reached your goal.

Have a goal of how much you want to make in a day. If you reach your goal, turn the machine off. It's the best you're going to get. If I'm up $1,000 and I insist that I got diamond hands and I got to keep trading, the 20% rule. If I lose 20% of what I made on the day, then you got to turn the machine off, right? Hire someone to stand behind you and hit you in the head with a 2x4, and you'll probably do well trading.

If I'm having a bad day trading and I have three losing trades of $50, I turn the machine off, I'm having a bad day, I'll come back from a bad day. No revenge trading. So there are rules that make you a successful trader that may make you able to beat the S&P. But how many people have the emotional maturity to follow that? Like I feel like all of these things. Very few. Yeah.

It's the psychology of trading is the hardest part of this game. I can teach you, David Green, my partner, who is a master technician. He was a market maker on the floor. He left the floor. He thought he knew everything. He lost 300 grand in the first three months. He said, this isn't sustainable. He went out and learned technical analysis and built a strategy.

around successful trading and the psychology around it. It is very hard. That's the hardest part of this because we get wrapped up. I'll give you one quick analogy. There's two kinds of gamblers. Two people go to Vegas. There's one guy who's got a thousand bucks. He's going to play $1,000.

If he makes a thousand, he has a goal. If I make a thousand, I'm going to turn. I'm going to step away from the table. Go see Salon Dion and go to dinner at Ruth Chris with the family. Great scenario. Great plan. Or the other guy who goes in with a thousand dollar and has no plan. He's up 1,000, he's got diamond hands, he's great, he goes all in, he doubles up.

He's up 3 grand, up 4 grand. Suddenly, he's overdone it. He starts losing. He's to lose down 1,000, down 2,000. He goes to the ATM four times, and by the end of the night, he's sitting out on the curbs, you know, smoking lucky strikes, you know, drinking Hennessy, right? There's two different people, the way they trade and the way they gamble, right? It is, it's a mindset that you have to go in.

This market has never been as volatile as is. So if that's the case, why can't you get an algorithm to trade on those beliefs? Because I feel like that would not get emotional. You could set certain parameters, certain things that it could look for, set the stop losses, trailing stops, and just had that trading on autopilot in the background. Well, you know why, first of all, I don't know how to code. And I don't know that. I'm a really anti-tech guy. I don't even know on a freaking computer.

I'm a people person. I'm a humanist. And I'm like one person to another. Yeah. Maybe there is an algorithm, but you have to realize there are a lot of extenuating circumstance. There's a lot of nuance around the market, and things can go wrong, right? And it's not like shooting fish in a barrel. So, you know, I'm willing to bet that there's probably some kind of algorithm that you may be able to build that may be able to lock in some profits.

I don't think so, though. There's a lot of, there's human error. There's a lot of emotions around it. It's not easy. That's why 80% of people who try day trading fail, right? That's why in our class, in our school, in our academy, the main thing we teach is the psychology of trading, right? How is Nancy Pelosi such a good investor? Wouldn't it make sense for a hedge fund to go and hire her?

I'm not sure you'd really want her around the house all the time and the farm. So it's a great question. And, you know, why and I've brought it up a lot? Why is it that, you know, people in Congress are able to get information? It's inside information. Let's be honest. It's got to be. These people are not traders, but they're making hundreds of millions of dollars.

So if I get prior knowledge that COVID is attacking the United States and I buy a bunch of moderna and I sell a bunch of airline stocks and make a million dollars, well, then it's not my smarts. it's inside information. You know, if you know the show billions, right, and which is the story of Stevie Cohen, okay, who runs 0.72, one of the great edge fund managers of our time, right? The belief was that he made a shitload of money off of 9-11,

the World Trade Center, right? There are people who take situations, analyze them and trade on them, whether it's good news, bad news, people getting hurt, whatever. Right? The stock market is, you know, it's not rigged. It's just a matter of what you do with the information you have, right? I mean, you know, there, look, if you want to be the, there are funds now.

There are trading apps, right? I've spoken to them all. You can go to Quint Quantitative on Instagram and they'll print every trade that's in Nancy Pelosi's portfolio. If you, there are trading apps that can actually copycat all the trades of people in Congress. If you want to open up those accounts and copycat them, you can do it too. The problem is, though, isn't it, don't they give them like a 30-day window to report that stuff if you are a government official? Some of it's nowadays, the information comes out a little earlier. But look, that's, look, Warren Buffett announces he's taking a 5% stake in XYZ.

Everyone runs into buy it. The bottom line is he may have done that six months ago, right? So it's a matter of knowledge, information is gold. It's a matter of what you do with the information. You know, is it a little bit rigged in that way? Yeah. Should those guys in Congress have privy to be information that could be tradable in the stock market? I don't think they should.

I don't think that's fair. I like a fair playing field. What are your thoughts on Wall Street bets and what was the New York Stock Exchange floor like when the whole GameStop thing was happening? I'm sure because there is like a Citadel booth in there. Absolutely. They are market makers. and they were the stock that traded the GameStop. And they were the ones suffering.

They were the ones that all the people all in. They suffered and they benefited and they suffered. I don't want to get too much into name calling because I work with them every day. But yeah, that was a little bit of a wall that got crossed there because Citadel was the one that is the market maker for GameStop. And then there was Melbourne Capital and then all the shortstop and whatnot. Wall Street bets, look, I actually know the guy who started who was the first Wall Street bet guy, We had him on the podcast. You did.

Jamie's a genius and he's a sweetheart. He's a good guy. He ended up getting ousted by his own, his own rats, right? I just spoke to him a couple of weeks ago, actually, and he's wonderful. You know, there's nothing, there's nothing to say, nothing better than to say about what, there's some smart people out there, you know, and a lot of them are willing to share their smarts, right? Like Jamie, Jamie, Jamie's amazing that way.

You know what? It was wild and crazy time on Wall Street. that day game stop, stop trading 29 times. Okay. You know, we felt it was an attack on us. We felt that it compromised the integrity of the floor. But you know, at the end of the day, I mean, look, I'm not, I don't like to should or what it could a bitch and holler about stuff like that.

At the end of the day, the game was made. And if somebody's able to, you know, figure out a way to mess with it, you know what, until we find out that it's really Fagasy, then, you know, it's going to happen. have to happen. What ended up out, look, it was a fascinating phenomenon, you know, that happened then. Now, what I'd love to talk about is the recent resurgence of Roaring Kitty. Yes. So Roaring Kitty, in my opinion, was a bad guy. The guy obviously came along. He had a bit of a, he had a good streak. He made a bunch of money, right? But what ended up happening with him and what I really am angry about recently is that he, what he's doing now, what he did by coming out

and saying I'm long a billion shares of this. And he got everybody to buy GameStop to $67 after the close of market business that day. And for no, you have to realize, when you have a platform, you need to know who's following you and you need to know the effect of your words on them. I'm not going to have a platform and say shit that's going to make some kid jump out a fucking window. Excuse my language. You know, more people lost money that day because he went out there and touted that stuff.

Right. that's irresponsible. In fact, in my opinion, it should be completely illegal. You need to know that people are following you and they're going to follow you to the end of the earth because you said, what was the mindset behind that?

When he went out and he said, I'm coming back, you know, I'm in-game stop and I own a billion dollars worth of that stock. What is the retail, amateur, irresponsible, you know, first-time newbie trader thinking, well, he's never going to let it go down because he has a billion dollars. He doesn't want to lose money.

So everybody ran into the stock. The next day I went down to 20 again. Right? And everybody lost money but him. He may have lost money, but we don't know what he's really doing. I mean, you know, look, you can hide behind the mask of social media in so many different ways. You know. The Volkswagen Atlas is a 7-C powerhouse that actually makes sense for real life.

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but he's trying to say his whole live stream, I thought was a genius play from his perspective to show that he's not pumping the stock, because when he went live, the stock went down. And so that's his argument of saying, look, I don't have a positive impact on this. I went live and it went down. And here's proof that I'm not manipulating the stocks.

I see the perspective personally. I do tend to side with it being closer to market manipulation because he's posting about such big positions. But then you get to the point of where do you draw the line of if, you know, if let's just say Jack's uncle goes and posts on Facebook saying, I bought a million dollars of the stock, it's going to have zero effect versus if someone else with a large following says the same thing. it will. And where do you draw that line of like at a certain follower count, a view count? What if Jack's uncle posts has zero following? But that post for whatever reason just goes viral.

Now all of a sudden is he liable for something he said that happened to go viral by chance? It's such a weird. I agree with you. It's a fine line. And then also personal responsibility if someone is following roaring kitty and, you know, then it's gambling at that. I agree with 100%. Everyone is responsible for their own hitting of buttons. So look, if you're going to get into bed and do. that kind of stuff, then you're on your own in a way. I felt that what he did was market manipulation. I think his live stream was a bit of a psychotic rant, and the guy doesn't, in my opinion, but look particularly stable, but that's not, I'm not a doctor. But at the end of the day, I felt that was irresponsible in so many different ways. And we don't really know what's going on in the backdrop. He may have had somebody selling it. He may not even be long all that. I mean, how do we know what's really going on, right, at the end of the day? So, you know what? I'm not,

Look, at the time, I thought it was fascinating what happened, the fact that you can use social media to corral the troops to take a stock that is bankrupt and take it from two to 483 and back to three. Fascinating. For me, as a trader and somebody who is an educator and is trying to get people, you have no idea how many thousands of people have come to us. Me and David Green and said, I'm still long Rivian at $98. I'm still long. GameStop at 480. I analyze these meme stocks. I know that a majority of the volume.

is at the highest, highest price. And most people have gotten caught along these things at a higher price. And as to your point, everyone's responsible for hitting their own button. But at the end of the day, my job is to try and level the playing field and educate people about what really goes on and how to make some money and do the best they can. And so, yes, at the end of the day, it's everybody's responsibility. If you do that, but look, we saw some guy jump out of window for it was trading Robin Hood, if you remember, some kid committed to look.

So social media is a two-sided coin. It can be really good. It's a matter of what you do with your platform and it can be a dangerous space too. One needs to have personal responsibility for what you do. And if you're a notable person on social media, you should have some responsibility on what you're saying. Who do you think is the most effective investor of all time and what's the best investment you've ever made? The best investment I ever made was in my children. Up until recently, I never owned a share of stock in my life.

I am as a registered broker. I'm not allowed to be in a stock for myself and for my customers in a 30-day period. So I decided many, many years ago I wasn't going to invest in the stock market. And I've never invested in the stock market. Recently, I inherited a little money and I gave it to some, a wonderful guy who's trading it. But I don't know what I'm in. I never picked it. I never called it.

I said, here's a couple of shackles. Make me some money. But so I always drew a strict line. between that. So what are compounding growth? Like knowing about all of this stuff when you were young, like, you know, you could have invested, say, 30 years ago, you didn't think to like, okay, all these other people are doing it. I see them getting very wealthy.

So as long as for the 37 years that I've been a broker for me to invest in the market in stocks that I'm not in for customers was a pretty complicated thing. Yeah, are there people on the floor who trade stocks that they're not in for customers? There's legal restrictions. It's legal restrictions. I'm a registered broker. I'm not allowed to do that. So I can't be in a, and also, I did not want to go into my job.

I'm a customer guy. I like, so if I'm, if I have a position for me, I'm long a thousand shares of, you know, a union Pacific and my customer gives me a million shares to sell, no matter how good I am, it's going to taint the way I, I'm going to, you know, look, I was on the floor when Jordan Balford came down to the floor and recruited eight brokers, you offered everybody a million friggin dollars to become one of his stoolies, one of his friends. running scum and eight brokers followed him. Okay.

They said, yeah, I'll sell my integrity for you, right? And what he wanted to do was he wanted to front run orders. He found brokers who had large businesses. There used to be brokers who would stand in IBM, would stand in Berkshire Hathaway, and everybody gave them their orders. They had huge order flow, right? So if I have a billion, it's not, there's not rocket signs. If I have a billion shares of IBM to buy, Jordan wanted, what Jordan wanted people to do

was buy the first 5,000 for him. And then when you're done, what's called on a cleanup, at the end of your order, when you're about to buy your last 5,000, sell my 5,000. That's called front running. So that's what he did. That was one of the things he did. And there were people who were willing to sell their integrity for a million bucks to work for Jordan.

They got taken off the floor in handcuffs by the guys in windbreakers. Okay. Look, and I'm not a fan of his. I think he's a bad guy. He's still not paid back. 80% of the people he took money. from. I'm a firm believer in second chances. I'm happy to speak to him

the minute he's done paying every single person back who he did. He makes half a million dollars doing motivational speaking about selling a friggin' pen when the little old lady who we took 300 grand from on the last day when he knew he was being indicted has not been paid back yet. So look, there are good people and bad

people. I try and be one of the good guys as far as that goes. But you asked me my best investment was to, I made a deal with myself that I was going to put my kids through school, give them a great education so that they graduated without any debt. I saw so many of their friends who ended up graduating with owing student loans and all that,

and it just affected their mind. So that's where I put all. Everyone said, like, you make a good living on Wall Street, yes, what did you do with your money? I put my kids through private school and college, and there's a couple million bucks right there. And who's the most effective investor of all time? Well, you know, they're probably their hedge fund. Effective meaning they did the return on investment was the best. What do you mean by effective? I would say return on investment over, you know, enough time to predict. Obviously, we all look up to Warren Buffett, right? Incredibly smart man, conservative at best in his investments. And, you know, he buys companies. He doesn't buy stock. He buys, you know. I love, I'm a fan of Marcus Limonis, you know, who's a, he is a CEO, I believe.

of camping world. And he talks about people, process, product, and profitability, the three peas or the four bees, right? There are smart people. Look, I'm friends with Kevin O'Leary, another really smart investor. I love Kevin's, you know, the idea that he's a big investor in dividend stocks, right? He has an ETF that are all dividend stocks. Smart investor, probably. Lee Mark Cuban is as well. Bill Ackman, smart investor, Carl Icon, smart investor. Have you ever met Buffett? I met Buffett many times. But Warren Buffett used to come to the floor a lot. He would come in and he would stand next to Berkshire Hathaway, which was being run by Jimmy McGuire. Jimmy McGuire, wonderful man, market maker, governor of the stock exchange. He was the only guy

who Warren would let trade his stock. Obviously, Warren got carte blanche when he came on the floor. He got to do whatever you wanted to. But he was not. incredibly sweet, humble man. I saw him actually, you know, like you'd get down on his knee to pick up a pan or something that this young lady had. And he was already too old to be bending over to pick up a pan. But he was sweet. He was humble. He was super nice. He is. And yeah, I probably met him four or five times. But before we get into that, men, real talk for a second, we are all afraid of losing our hair. And whether that's a receding hairline, thinning out the crown, or just thinning in general, the fear is there. But fortunately, there is a solution. And that would

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directly to your door. So guys, start your absolutely free online visit today at Hems.com slash ICH. That's HIMS.com slash ICH for your personalized hair loss treatment options or you could click the link down below in the description. Hymns.com slash ICH. Results vary. Based on studies of topical and oral monocidil, prescription products require an online consultation with a health care provider who will determine if a prescription is appropriate. Restrictions apply. See website for full details and important safety information. Thank you to Hymns for sponsoring this episode and back to the podcast. So I'm curious about this. Do you think the stock market should be open 24-7? Absolutely not. You know, that rumor came out a little while ago and it's a pretty

short-lived rumor. Market, you have to realize the old days markets traded from 9 o'clock to 4 o'clock. years ago they used to trade and they were closed on Wednesdays way, way back in the day because they had to do all the clearing. Now markets actually are open 24-7, right? So the question would be, should the stock market, the New York Stock Exchange, be open? Correct. Because you can trade S&P 500s all year, all night long. The spread is very wide and after-hours trading.

People do after-hours trading a lot. You know, the economic data comes out at 830. That tends to jolt the market. People will trade from 830 to 930 because there's a lot of volatility. However, people need to realize that the spread is very thin, the liquidity is very thin. But right now you can trade 24-7, right? It's just a matter of what instrument you're going to trade. You can trade futures, sometimes until until 6 after hours.

You can trade S&P 500, 24-7. You can trade a lot of individual stocks after hours as well. So the question would be, should the new NYSC be open 24-7? No, there's absolutely no reason for that to happen. What are your thoughts on cryptocurrency? You know what? Cryptocurrency was something that I rejected for a long time. I just thought it was a bunch of hooey.

You know, I'm always sort of wavering in my mind because I don't invest. I'm not an investor in markets and I'm sort of restricted in that way. And I kind of maybe I got angry at it because I didn't invest in it and I, because I missed the boat in it. You know, sometimes you got to wonder, I like, did I not make a bunch of money in that? So I'm going to dis it because I didn't like it or I didn't get invested in it. So I kind of pooh-poot it. never really addressed it and I kind of didn't understand it. I like things I understand.

Right. And, you know, I obviously, it's an entity and you can buy it and sell it and blah. But I didn't get what was behind it. I didn't get how real it was. Is it all made up? And, you know, I like to be able to see what's behind the curtain. And then, and then I became fascinated by it. And then I, you know, and people started asking me a lot of questions about it. So I had to do research to find out about it. You know, look, I've gotten involved in meme coins. And I, you know, I launched an NFT, you know, and I'm watching. and I'm watching its acceptance across the board. You know, I don't know yet if it is an actual hedge to the market and a hedge to the S&P at all or whatnot.

I find it fascinating. I still don't know if it's real. You know, there's that great Saturday night live skit with Elon Musk where they asked him what's Dogecoin and he answers it. And they said, but what is Dogecoin? Right. Does anybody really know what the heck Bitcoin is or what it is? You know, it's a funny thing about, about, you know, like art, art is on regulation. entity. It's like people will, what's a coin worth? There are 30,000 meme coins come out every day.

Things are worth what people are willing to pay for it, right? So I'm fascinated by it. I think it's, it's become something real because of its acceptance across the board by governments and by entities and by a lot of the big players in the game. And it's something that's gotten my attention and everybody should pay attention to it. What are your thoughts on the U.S. dollar and losing its potential dominance over time. Do you think that's an issue or do you think that's something that is just overhyped? You know what? I don't look. I'm not an economist and I don't. It's not really one of my specialties. So I don't really like to speak to things like that. You know, the fact that a lot of the countries around the world are stepping away from the dollar as

its main form of currency and standard, it feels a little disappointing. I feel like we're getting ganged up on. I'm not really sure what the mindset is behind it. And I don't know how it will affect the value or the U.S. economy. But look, I'm an American and I love this country. And so when we get ganged up on by guys who I don't think are really nice players and bad actors, I'm not a fan of it. How did you get started on Wall Street? I've had an amazing life, right? My parents, I have, my parents are both Holocaust survivors. They came here in 1949. They fell in love after four years in Auschwitz in camps and came to the states, had me and my brother. I grew up on the Upper West Side here in New York City.

I was a bit of a hustler entrepreneur all through high school. I had a T-shirt company. I was selling it at rock shows, this and that. And I graduated high school in early 70s, not to age myself. I've been 55 for 10 years. If you're going to ask me my age, that's my age. I kept myself out at 55. But I ended up graduating high school.

I spent a year in Israel. Then I came back to the States and I went to the University of Massachusetts. My love back then was agriculture. I had this dream, especially after I'd been in Israel, I was working on a farm where we were doing a lot of hybriding of plants. And that was, I don't know where it came from, but it was one of my dreams to do something in agriculture. I ended up getting a degree in plant and soil science from UMass, which is one of the top ag schools. And then after a couple of years of that, I realized that was not my future. I have a much older brother.

My father, during the war, in the camps, adopted this young boy at the age of eight. His parents had been killed. My grandfather was a well-known businessman. He was the president of Souchard Chocolate before the war. So in the camps, they used to use prominent businessman to sort of put together prisoners to get them to be efficient and work hard. And my grandfather was asked to put together a factory to build a firing pin. for the B-1 bombers for the Germans.

Can I ask how they survived the camps? You know what? If I were to ask my mother that question, she would say a day at a time. You know, most of the people in their family were, they were gas. They were sent to the gas chambers by Joseph Mangala, who was the death doctor.

I mean, I could tell you stories all across the board about that, my mother, one of the sole survivors of her family. She had seven siblings, and everybody was sent into the gas chambers by Dr. Mangala, who was known as the gentleman who stood out front the camps, and he did the finger separation, where he'd send people to the gas chamber.

He would send people to work. Was that random? You know what? Being able to survive it was random in so many ways. It was a lot of it was luck. My father's written a book called My Stories of Survival, where there were these just crossroads. There were times during the war

where he could have been killed and something happened, whether it was a God's intervention or what. But there was a lot of, it was just random whether you were able to survive the war. It was obviously internal spiritual strength. You know, my mother had two siblings

who actually died the day of liberation. So how they survived is really, it's a quandary to me. But I would say just, you know, they were really incredibly strong individuals and they uh there was some luck there for sure how did the siblings die on the day of liberation was it the eating they died of typhus and they died of starvation so on the day that the uh russian forces and the uh u.s forces came in to liberate the camps uh my mother was sitting in a field with these

with two of her sisters uh both who were very sick and one who was just completely emaciated who was starving to death and they actually died died on that day you know and And they ended up being carted off to the gas chamber. And my mother with one other sister were able to walk out of the camps with the liberating forces. They ended up going into what was called a displaced person camp, which is where after the war, they would put all the people who had survived. I mean, think about it out through Auschwitz. You know, millions and millions of people went through Auschwitz and literally 20, 30,000 actually survived. So, you know, the survival rate was very small.

I was just going to say, I know this podcast isn't about the Holocaust, but one thing, I mean, we've thrown this out a couple of times. So Graham and I are both ethnically Jewish, I would say, is probably the proper term. And so I've always grown up with like a natural curiosity to the Holocaust. Is there anything that your parents, like, told you about it as far as like lessons that they learned? Maybe you recognize something in your parents that you didn't recognize in other people that hadn't gone through such a hard, I guess a few years in Auschwitz.

Yeah. Great question. And I appreciate the question because, yes, it definitely, for everything that they went through and shared with me, formed my whole, my whole nature, my whole being, my whole internal strength and spirit. You know, very many people who survived the war, there are two kinds of people. And I actually wrote a paper about it in college. What effect it had on their, you know, on their ability to deal with life, with religion, with spirituality and whatnot. My parents met. They fell in love. They came to America, had an American dream, had a couple of kids, were very successful and came out of the war not really believing in God and sort of believed in their own inner strength and spirit. A lot of people who came out of the war, and it really depended on what age you were. My parents were 17 and 18 when the war broke out. So they had finished basically high school beginning of college. People who were a lot younger, who basically by the time they came to America as immigrants, who had missed that period of education, came here and ended up not having a skill, didn't have a job. By the time, my father was one of the first Jewish students in a German medical school.

He literally sat. There's an article been written about it. He sat next to SS officers in the Heidelberg Medical School after the war next to the people who incarcerated him. So, you know, very many people who survived the war sort of were very closed. They were so scarred emotionally that they didn't talk about it with their children. There is a movement of children of survivors, right? And I've gone to some of these. I'm not a professional kid of a survivor.

There are these large groups of people who spend a lot of time together talking about the trauma of it all. And I've seen that there are parents who never discussed it. I have this adopted brother who my father adopted this young man in the camp. And I consider him my older brother. He's still alive. He's 92. And there's another great story there because he went on to become a major Wall Street

Titan, which is exciting. And that's why I ended up on Wall Street. But many people came out of it really quiet and really scarred and never talked about it. And some people came out in my house. There was not one night that by the end of dinner, the conversation was not about the Holocaust. My mother used to wake me up at 2 o'clock in the morning, and we would sit and watch musicals on TV, and she would tell me about the experiences of her incarceration. Stories that were so horrifying were definitely not, not, not for a prime time and shouldn't have

probably been shared with a seven or eight year old. I mean, lying in a stack of cots where there were four or five people in each cot and four levels. And she would wait for the woman next to her to die so that she could steal her shoes and her burlap skirt that they gave them, right? Because they gave them one burlap skirt to wear. Women wore wooden shoes. They wore clogs. And basically it was every man for himself, you know, and basically to survive,

it took every bit of, you know, resilience. My mother, they were fed a turnip peel soup and three-day-old bread. That was the food that they were served. And my mother used to sell her bread for cigarettes. Okay. She had been a smoker before the war. And her mindset was that she couldn't imagine eating a meal without a cigarette, so she preferred to smoke.

And at different points during the war, she almost starved to death because of that. But anyway, so I spent my whole life hearing the story. hearing about their lives. And I think for me that really, you know, I grew up understanding that it could be worse, you know. I mean, they didn't pound that into me. But, you know, I mean, if I would complain about stuff, they would look at me and go, you know, like, really, you know,

is that really. You can't complain to a Holocaust. You know, you can't complain to a Holocaust. Yeah. But they did it in a nice way. And, you know, and they said, you know, basically, you know, that resilience of spirit, that inner, inner strength that we go to when we are,

going through trauma or we're under a situation that's really difficult is really what makes our, you know, our inner core. So, I mean, I could tell you stories about it forever and ever, but, you know, they, they went on to be successful. My father was a doctor, became a well-known doctor. My mother was his secretary. They were inseparable. They fell in love on a blind date. My father went to have a date. He was in medical school in Heidelberg after the war. he was set up on a blind date with this woman who he went to meet her she got caught on a train she came home late and her roommate opened the door that was my mother and um and they fell in love at first sight they look at each other but what is that how do you do that if you're on a date with another woman no they were he was on he was going to have a date with her roommate she was she didn't make it home from work on time so my mother opened the door okay and they they just she they looked at each other and just said you know we were going to be together. It was like love it for a sight. But they went, they ended up becoming incredible, an amazing couple. They did a lot of great things for a lot of people around

the world. They bore me and my brother. And we had an amazing, unconditional love childhood. But, you know, there was obviously, there was some scar and there was some trauma by being their kid and by hearing these stories at a young age. So while it really, it built me up, you know, spiritually and emotionally with some real strength because down the road, I've gone through some things on my own that I sort of look back and I kind of had to dig really deep and go, you know, so like this is the DNA I come from. And so I'm not going to get tossed around by, you know, maybe perhaps petty things. Yeah. Was it ever difficult to relate to other kids growing up because of those experiences that you heard about? You know what? I think in retrospect, yes. At the

time I was in it, you know, and I, you know, I don't think I talked about it with other people, you know, I mean, it was, as I said, there was literally no dinner table conversation by, by the end of the night where it was not talked about, right, and the experience they went through. And whether, you know, we had friends over or whatnot, I felt separate in a way because I came from that experience. And, you know, my parents had numbers branded on their arm and they survived, you know, probably the worst, obviously the worst, uh, uh, obviously the worst, uh, hollings. because in history, although there are others that were similarly as bad, but not, at least in my experience. Yes. Yeah, I never really thought of it. But in retrospect, that's possible.

See, I would love to just continue talking about stuff like this because I'm just wildly curious. And by the way, if you guys want to learn more, I don't know. I'm sure you've read a mansearch for meeting, Victor Frankel. You know, I actually haven't. I'm not a book reader. I haven't read a book since The Cat in the Hat. I've got my mind as a little spectrumy. And so I'm not able to read books, but I've heard of the book. And I know it's amazing. Love the book. Highly encourage you guys to read it if you want more insights on what the Holocaust was like from a survivor. Fantastic book with a lot of really good philosophy. My father's book, which is called Remember My Stories of Survival. What's amazing about it is it was a small short vignettes about experiences that he had were literally that was at a crossroads where it would have gone.

One way it would have died and something happened that made him survive just to give one last little story. my grandmother, who unfortunately was murdered by Gestapo in one of the selections one night, my grandmother, unbeknownst to my father, sewed a $20 gold piece into the lapel of his jacket. Right? That's kind of, that was a ghetto mentality used to do things like that. Because before they were sent to the camps, the way, if you read about the final solution, and I would imagine it's in that book, the way the Germans got the Jews to really basically end up walking into the camps like sheep to slaughter, as the quote is, is that they would surround them. They would ghettoize them. They would put

yellow stars on them. Everyone knew who they were. They would start starving them or shutting down their businesses, stealing their belongings. They put a barbed wire around the neighborhoods where they lived and slowly, slowly they isolated them from the rest of society until the point where they finally deported them. It was just like, you know, take me. Let's go. What's the next step in this long sordid tale? My father went out to steal some food because they were hungry and he ended up going through one of the crosschecks where there was barbed wire and he ended up, it was late in the middle of the night and he got caught by a Gestapo and who grabbed him and threw him up against the gates and was going to shoot him. And when he grabbed

my father by his lapels of his jacket, he felt something in the jacket. And it was this $20 gold piece that my father, my mother, grandmother had sewn into his jacket. And the guy, oh, rips it out and takes it and said, okay, he took the coin and left. my father go. So that would have been he was about to be killed and that was sort of one of those. So it's these short little small stories about where life could have gone really wrong and it ended up going right. Do you believe that everything happens for a reason? Yeah, I do. Because of those experiences, it's possible. You know, I mean, the chances of them surviving were so slight, you know, And as I hear stories like that, and it's happened in my life too, you know, where there are things happen and, you know, where you feel like maybe God intervened on your behalf or, you know, coincidence.

People say there are no coincidence. And things happen for a reason. So, yeah, I kind of do. Yeah. Even us meeting was such a crazy story. But Macy, there you go. Macy wanted to visit Wall Street. And it just, it happened to be that we were walking down.

We finished a podcast right before. So we met up with her. We went down Wall Street. And Jag was like, no, the front's over here. And we were going to walk the other way. And we walked down. And sure enough, I see you right out front. And I'm like, I can't believe it's you because I've seen you on CNBC.

I've seen your photos everywhere. Apparently, you would send me an Instagram message years ago that I just missed by mistake. And now here we are because of that. Had we not gone into that exact time, this would not be happening. I love that. And when it happens, it feels so good. And it can be so right. Yeah.

I agree. So going back to your older brother. his impact on you getting into Wall Street. How did that come about? Okay. Second year of college, he called me up and he had been a big part of my life growing up and he said enough of this, you know, this agriculture crap. You're going to Wall Street. I want you to get into finance. You're going to be great at it. And I'll help you out. And so it wasn't him. It was his sort of pushing me that made me do it. But I ended up getting a degree in international business and finance at UMass. I came back to New York after that.

I registered at Baruch to get an MBA. I was getting an MBA during the day. I was the dormant at Studio 54 at night. And that was it. And I was trading commodities. That was my first inroad into trading. What sort of commodities, really? I was trading orange juice, futures, lumber, and potatoes.

And it was just kind of arbitrary. It was something I got into back in the old days used to get to Wall Street Journal. And they would have the quotes for all the commodities. orange juice, soybeans, all those kind of things. And I just started reading it and it just seemed fascinating to me. He was big on Wall Street, Harvey. So I knew that. And I started trading them.

He had given me a couple thousand, three thousand bucks, actually. I think maybe it was bar mitzpa money. And so I tapped into that. I started trading orange juice futures and I ended up turning the $3,000 into $45 to grant. How do you do that, trading orange juice? You know, well, you know what? I guess I had a good strategy. I developed a strategy which served me well in my new life. But I don't know. You know, it was a long time ago. Technical analysis? You know what? It wasn't actually technical analysis. Because, you know,

the way, if you go back to the old newspapers, the way the futures trade in orange juice, they give you the futures price. Now, it's based on obviously weather and all these other things, right? And so go back to trading places, right? That great movie where there was a, there was a, the um mr beeks you know the movie i'm sure yes yeah yeah it's in new york same story with orange juice futures so anyway i got on the right side of a trade i ended up making a bunch of money and i lost it in one day i spent four months building this great portfolio from three thousand to 45 grand and i lost it in a debacle over actually in orange juice freeze and i couldn't get out of the market and i ended up losing it all all that being said i um uh i left new york that was 19

80, 81. Life had gotten a little bit crazy. I don't need to elaborate too much. It was the 80s. It was New York City. I was hanging out at Studio 54, and I realized maybe I should get out of town. I never finished my degree at the MBA. I got probably 10 credits away from completing it. And I had a friend who was running an oil company in Norway, and they were spending two years in West Africa doing exploration off the coast of Benin was the name of the country. And so I went there and I spent a year and a half there doing the accounting for this Norwegian oil company. After a year and a half there, it was time to put on my big boy pants. Once again, my brother called me and said, let's go, get back to New York. It's time to get a real job. So I came back to

New York and I got a summer internship. On the floor of the New York Stock Exchange, my father had a patient who is the market maker in AT&T. And one patient who was a partner at Cowan Company, which was a big brokerage firm back then, they gave me a summer internship on May 23rd, 1985. And the minute I walked onto the floor, I knew it was for me. It was chaotic. It was wild. adrenaline filled.

It was super exciting. It was full of humans. And I'm also, that was what I inherited from my dad, was that love for the human element in life. I got a question. Yeah. So the hair. What's the plan with the hair?

Are you going to keep it growing it out? Are you going to, like, why? This, I don't mean for this to be offensive at all. Why not a toupee, you know? Yeah, well, first of all, no toupee. Tupets are just ridiculous. Well, people would also know, I guess, because they've seen your face so much. At this point, you don't just grow hair like that.

You know, I'm a purist, right? Right. I'm a short, funny-looking guy with wild hair, and I got to own who I am, right? I don't want to be anybody but me. I'm happy with me, you know? And so that's cool. I love my hair. My hair is my power, right?

You know, I'll show you a picture because I just found it. But I used to have 18 inches. I had an 18-inch ponytail. I still have it somewhere in a box. I was known for a massive mane of hair. I had from the age of, you know, from 18 on, because I cut my hair off in one, swoop when it was literally down to my ways. I had I was known as the longest, I had the longest hair on Wall Street for the longest time. Finally, everybody came up to me and said, Pete, it's about time.

You got to cut that stuff down. And I said, fine, you guys know me better. You raised $25,000 for charity and I'll shave my head on the floor. I said it kind of flippantly. Two days later, they handed me 25 grand in cash. They had to be done. You're shaving it, bro. And we used to have a guy named Luigi, who was the barbershop guy on the floor of the stock exchange, who had a beautiful little old Italian barbershop. He didn't speak any English with a big chair with the leather and the bronze and the copper. You know, like if you've ever been to an old barbershop, right, had a barbershop thing. And we all went there and we filmed it and they shaved my head. And there's a photo of me with the shaved head. And I gave the money to UNICEF and a couple of other children's

charities. And it was a big thing. So I love. I love it. I love. my hair. It's a big part of my power. You know, there was a guy named Mark Haynes who worked for CNBC. He used to sit out. He passed away recently. The person who nicknamed me the Einstein of Wall Street was Aaron Burnett. She is a CNN reporter. She works, used to work on the floor. Mark Haynes was her co-host. He used to sit outside the stock exchange, smoking a cigarette on the Johnny Pump there. And every day I would walk into work and he would say, if Tuckman's having a good hair day, the market's going to be up. And we used to track it. And it was true. And it was true.

right it was sort of a funny coincidence so um i feel very strongly my that my that my hair is a big part of my personality i love it you know i uh my wife recently passed away unfortunately uh from cancer and she uh she in 2019 she got cancer we got rid of it came back in 21 and unfortunately it killed her she next week will be a year since she passed away she ended up having chemotherapy and she lost all her hair and in solidarity for her one day when she called me and said, I'm starting to lose my hair. I got to go get a wig. I shaved my head. And I went to the barbershop and I shaved my head. And I came into work and nobody knew. I had not told anyone she was sick. So everyone's going like, what did you do? And they ended up, I told them what had happened and it made a big splash. It

got on CNN that, you know, that, you know, we know how important Peter Tuckman's hair is to him. And obviously, his wife is more important to him than his hair. So I had, you know, and it took a while. It actually took, so I shaved it to the bone. And it felt great because the two of us had shaped heads. She shaved her head, too, because she had lost most of the air. And so the two of us walked around for like a year and change with, she, she wore a wig, which I bought her a wig, which she rarely wore. And so the two of us were like the bold duo. And it was. look, I look different, completely different. Thank you so much.

Really appreciate it. We'll link to all of your information down below in the description. I appreciate it. It's been such an honor. Yeah, it's an honor for me too. Thanks, guys. Until next time.