MARKET MONDAYS Feat. Bonawyn Eison 10/26/2020

let's make it greetings and salutations good people yup yup yup welcome back to another episode of market mondays so now we back to where we never left legendary vibes you know how we do it's gonna be uh it's gonna be a big one big show today big big big show let everybody pal in shout out to everybody out there all over the world the team here shout out to youtube shout out to eyl university shout out to the earnest yeah yeah this is this is this is a big one man we got a clean on there shout out to youtube look at anything else looking clean we got a we got a special guest we have what up we have of course mr ian dunlap back and this is it's going to be something special so let's get right into it um this is a big week for earn your leisure we have none other is in on yet yeah either we have none other than the legendary killer mike will be our guest tomorrow for the for the show what's going on brother happy monday thank god it's monday y'all looking sharp man you guys looking clean right they they must oh yeah okay on youtube yeah man just just trying to make it out here man just trying to make it i'm out to get all my hoodie and jogging pants orders in yeah yeah yeah yeah that's on the way yeah man you got the merch out to everybody out there showing love on the merch um yeah that's something that we working hard on and we're going to new some new things coming real soon so yeah just to give you a quick rundown of our week is crazy we got killer mic tomorrow uh that's a dope dope episode it's gonna be legendary yeah legendary situation for sure shout out to killer mike shout out to everybody man shout out to edgewood man you know if you're from atlanta man you know that edgewood the legendary historic edgewood man we was out there yeah interesting that was a that's that's interesting i said yo he the car he said you'll come with me i said all right i got you okay we go anywhere for interview man we'll do it differently yeah we'll go anywhere we travel man the equipment travel too so yes shout out to everybody black barbershop we got that done that was that was really really dope for us and shout out to killer mike man just a really really authentic good good dude man solid solid dude shout out to his wife she came through also at the end um killer mike man very very smart smart guy so yeah man historian i do this historian like that dude really like an encyclopedia when it comes to the information man especially when it comes to the city of atlanta in the state of georgia man he he's the go-to guy he loves atlanta oh my gosh yeah legendary family too yeah man like he said he he's been um he's been an activist since he was 15 years old and like when you hear him speaking when y'all had an interview it would be very evident that he he's 100 authentic about that uh he's a real deal man so shout out to tell him so that's that's tomorrow and then um we have um we also have a legendary in his own right chris senegal from from your neck towards houston texas yeah he's doing the opening so once a month we do like every last wednesday in a month we do a open enrollment ui university class which is open to the public um and that's on wednesday at eight o'clock eastern standard time he's gonna he's gonna give a presentation a teaching class about how to buy back the block everybody says that it's real trendy but he's actually has done that in the fifth ward in houston it's like you know jay prince and then he's right there yeah yeah we're seeing there being a first hand like this dude shout out to the fifth floor so that that'll be on youtube at five uh eight o'clock on wednesday make sure y'all check that out and um yeah we're going to get into it we got we got dope dope guests um bonowin uh so this is the first time that we we've done anything with um somebody from cnbc if anybody watches you obviously know that we're all real big fans of cnbc um i've been watching cnbc for years i follow that instagram page they got a lot of dope content so bonowin is a contributor he's a contributor to fast money um one of the most popular shows on cnbc and he's also a managing director of equity derivatives at xp investments um so you know we'll have a long long conversation with him but um i'm excited about having that conversation and bridging that gap um with cnbc and with with him and i'm sure it's going to be a legendary conversation so yeah before we bring him those to the scene we see family and everybody at nbc universal [Laughter] what's going on brother i'm happy to be here i'm very um excited about tonight because uh i don't think they know how long he's been on cnbc nothing's been 9 to 10 years so i'm going to be in full tavis oprah mode so everybody in zoom youtube they get about 12 or 13 off so don't kill me um but i promise i'll ask some good questions to give you guys some good answers especially since we dropped hard today which i said we would two weeks ago um but yeah i'm happy to be here i think today's show is going to be record-breaking and it's a big week too it's a big week it's a big week in in the stock market we got our big fangs reporting this week so that's that's always an interesting time yeah for sure so troy you want to go over to um disclaimer yeah yeah we spoke about this yesterday actually in our book club shout out to all the earners that were in the book club we started money master the game do your own research please do your own homework that is so vitally important our content is intended to be used it must be used for informational purposes only it's very important to do your own analysis before making any investment based on your own personal circumstances you should take independent financial advice from a professional in connection with or independently research verify any information that you find on our show and wish to rely upon whether for the purpose of making an investment decision or otherwise this message is brought to you by the good folks at earning your legion shout out to weezy and shout out to drake on that on the album covers yeah it was a cat it wasn't a cat it was uh his birthday yeah shout out to the great one change the game a whole lot yeah that's a fact oh so yeah let's let's get into it let's get into it here um let's get let's jump right into it um let me share and i promise i won't kill zone all right moving slow in the mouse everybody on youtube what up i love you guys shout out to the red panda family you guys are absolutely amazing all right let's go let me know if you guys can see my screen then i'll start you guys we got you bro okay perfect so of course we had a drop today and i want to give you some context of where we are right now in terms of the market cycle that we are going through it's fun when the market is going up but when it slides down everyone's like oh my god i hate this part of investing but it is a part of the game that we all are going to go through so i want to give you some context so where exactly are we the thing i need you to take away from today is i don't want you to confuse a bad week or a bad day in the market with an actual bad performing market we're really just coming off highs but of course covet is kicking back up election concerns are right around the corner we're not exactly sure who's going to be our leader and that is making the market a little bit timid and that's the part of the reason why we slid down today and while i said two weeks ago we were going to come down these are the levels that i'm watching so for everyone watching at home please get out your camera and screenshot this as long as the s p future stays between 3205.50 to 33.97 kudos to kayla uh happy anniversary to you dao as long as the dow stays above thousand five hundred and as long as the nasdaq future fought stays above ten thousand six twenty four seventy five to eleven thousand five forty four seventy five we are okay somebody just said it in youtube five to ten years from now we will not care about any of this but if the dow drops below 3205.50 that's when i'm gonna say okay we may be on for a wild ride so if you guys have that screenshot i'll go to the next slide and just say yes for me in chat but these are the key levels to watch and for those of you on e-trade td ameritrade please set an alert here so if we fall below you know that some of the stocks that we've been waiting to load the boat on will be on sale that's for my new investors this is a key lesson the market will not run up indefinitely to the upside i know it was fun in april may and i know it was fun in august when the market was running like crazy but this is the after effect when things are not certain when the economy is not strong so the stock market has done great but the economy is not doing well the slide begins to happen for my traders now you have to start to look too short a little bit more as well so the market will in time go back up but every single week is not going to go up week after week and if we crash before the end of the year what should we do we should recover in the first quarter of 2021 so i want to give you some dates and give you some facts to tell you when this has happened so in 1987 1990 october of 1999 the market fell apart in the last quarter of the year and they recovered the following year this also happened in the end of 2015 the end of 2016 and it was really scary in 2018 when we had a sharp dip and then january of 2019 came around and we ran off to the upside and it was quite amazing so for those of you that are new that are experiencing this for the first time the route will be rough for a couple of weeks and then after that everything will smooth out for us when have we not recovered so i want to give you context for that as well so when you tying the dot-com crash of 2000 paired with uh the tragedy that happened of 2011 that's when we did not recover in the first quarter of the new year and then also in a great recession i think we there's enough historians and documentaries about that about why we did not recover but those are the two only two instances in modern history where if we drop a lot in fourth quarter that we won't recover in the first quarter of the next year so um typically what a question that people have how do i feel about gold gold is good but gold as we talked about has been running up with the rest of the market so it's too high you can look at the ticker gld which is the most popular etf tied to gold gold is going to slide down as well the bond market is a good hedge even though we'll talk about it later and i'll let rashad troy and our special guest talk about the bond market as well but the bond market was too high as well the only true inverted correlation with the market is the vix so i'll save the answer for that later but gold is a good hedge thank you for this question um what do you do when you buy low this is a great question but you want to buy more or you buy more and your average price keeps increasing there's only one or two things you can do you can dollar cost average and you are going to see your average share price increase or you can completely just load the boat wait for one particular area and only buy if it gets to that spot now if you have the ability to buy two thousand one thousand shares three thousand shares it would be great to load the boat i know trapper waited for chipotle as he calls it uh for for i think three years to get to a spot and that's fine if you have enough capital you can wait for the market to drop to an exact area what happens a lot of times is when people do this you end up missing the mark or it's short or when it gets to your level you're afraid because now it's dropped 15 20 and now you think that it's gonna bleed down ten percent more you don't do it and what happens four years later you're like man i was waiting for the stock at 220. now it says 600 so if you have the discipline to wait for one spot great but there's nothing wrong with dollar cost averaging because it's better to be in the move than not what are my thoughts on robo advisors i think they're great we talked about this before with vanguard i think the most important thing is to make sure you're getting into good indexes or good etfs that have low expense ratios don't buy into the hype of any particular company just make sure to do your research and for those of you in canada you guys can look into what's simple they have some good options for you but robo advisors are very good if you select the right things another amazing question that i received this week with uncertainty in a housing market due to lack of stimulus and homeowners heading into foreclosure do uh do i see this affecting home builders and retail short term or long term the stock market excuse me the housing market is so hot i don't see any issues of a housing crash anytime soon commercial is going to be the thing that i'm worried about for anyone with properties they will tell you this is one of the greatest markets that we've seen and because people are moving out of urban areas and going and back into the suburbs there's not enough inventory so even with the housing market being the way that it is and stimulus market not being here there are people this feels like 2007 all over again with some of the hype in some of these cities houston and atlanta uh being one of them so i don't think the housing market would be greatly affected or it would do the exact opposite as it has been doing uh what are my thoughts on compound interest i think we all have heard the quote that compound interest is the eighth wonder of the world but i think one of the things that we neglect to talk about is compound interest on the negative side so this is why you'll hear a scream not to buy bad companies because let's say if you're averaging negative 12 to 25 let's just say negative 12 what is the compound interest if you do that for three or four years and bad companies now for those of us that have traded we all know we can draw down negative 12 percent in a week a quarter sometimes in a day but i think compound interest is great we all have heard of the rule of 72. if you haven't let that be your first homework assignment for tonight to google that but i want us to play defense while the market is falling so we don't have compound interest working against us and what's the best place to learn about different sectors we talked about that before but here's some homework for you there are 11 key sectors the homework item that i want you to do is from a numerical order i want you to tell me which sectors have performed the best over the last 20 years so this is the part of where everyone says hey i want you to teach me how to fish this is our first lesson for tonight where you have to get into the boat and cast your ride um should i focus on quarterly goals no no i know earnings are very popular it provides some volatility but i think one of the biggest mistakes that corporations have made and they have to play this earnings game but i think it strifel's uh or stifles excuse me stifles innovation because when you're trying to keep up with your competition on a quarter by quarter basis i think it leads you to make some decisions that you would not make if you had a year or two to flesh out a full idea so for all of you that are looking month to month or quarter to quarter is not the best judge that's why i tell you the first metric if you have a good company is you should be looking five years out to see what the potential return could be dawson sununco so i can't you know tell you what to do but when we and it happened today i want you guys please type this in chat 10 years anytime that you want to get the perspective on if a company is doing well look back 10 years sun is not doing well and has not done well so if we if i look at the chart real quick let me type it in and we go and look back over time we can see and i'll just do 20 years really quick and pull it up the high for that company was 59.99 back in 2014 and it's now 25 bucks is that an asset that you will want to hold in your portfolio put yes or no i want my assets to rise over time and it's interesting like we will hate something that gains seven to twelve percent per year but if something's down 30 or 40 we think it's a good investment good company just not a great stock to invest in and we'll talk about this with our amazing guests tonight about what do we think about what happened after the election i know these next two weeks would be scary but if we look at history history tells us what happens after an election for those of you that are voting for biting democrats have historically done well in the stock market barack obama bill clinton being two prominent examples although the taxes are dramatically high shout outs to 50 i don't agree with what you say um you're reversing on that yes well thank god 50 because those stars uh subscription was gonna get canceled so um but and then under republican leadership there's usually a spike and then we settle back and we end up in either recession or we have like economic pullback and there are pros and cons to both but i want you guys to historically look and let's take the political wwe stuff away just look at the numbers look and see what happens when each person is under administration and how it affects the market but i think after election is settled and into the next year even though the economy won't be the best because of covet and then we'll do a smaller version of shutdowns not at mass scale how we did in march and april um the stock market would do well i know you guys have asked me a lot about trading plans but since we have a great guest tonight i'll wait until next week to cover that and i want to highlight this so real estate um excuse me the retail investors pushed the market up after stimulus because a lot of us that missed out on 2008 and 2009 did not want this opportunity to pass for those of you that are new and for our first time listeners i appreciate you but what i want to make sure i deliver to you tonight is that your chance to get into the market will not pass the great thing for you is that since the market is at a high and it's sliding down you will have opportunity to get in all you have to do is wait i know it can be fomo inducing to watch cnbc or even watch us and watch everything online it's like man i missed out i can't believe i missed out in march but you will have your chance i just want you to stay disciplined and wait for your spot regardless of what you see other people doing but i want to remind you the purpose of investing is freedom can you guys please put in chat freedom some of our things that we talked about last week so i want to ask you guys a couple questions because that freedom it sounds good and it's a um financial freedom and generational wealth is a hot talking point in our community but i want you to make a decision like if tonight if you had all the money in the world what would you do with that time that you have whatever that is you need to gear your life to be able to do that i want you to take a moment to put it in check go ahead that's that's crazy because we literally this is the conversation that we just had yesterday it was like yo where are we spending our time and are we over valuing ourselves right because if we over value ourselves then we're saying that our time is not worth what we're saying it is and if it isn't then we need to focus our time on what is going to bring value to us and the people around us yesterday we're in the book club yeah yeah everybody in the book club yeah they were going it was dope but this is exactly what we were talking about what's the freedom price and uh i think me and g was going back and forth he was saying is it a value thing or is it a monetary thing which is i mean that's all for debate but like everybody should start having that thing and that that kind of mindset it was like all right well and i use the example of being a teacher it was like look are we gonna work to 66 and we're in our 30s like that doesn't even sound familiar to me and maybe other people but it just was like yeah that sound that sounds crazy to me and so retirement to me wasn't an age it was more of like a value like what is the value i have to get to in order to retire not like yo i'm 65 and i can get so i'm closer to social security and now my pension will be the average of the last three years that i worked and i just like you know that that type of game is being played and it's like i wanted people really realize it so i'm glad that you brought it up because we spoke about freedom and and uh the freedom prizes so this is dope because if you have all the money in the world and you just sit at home and do nothing you're gonna be bored i know some people are like hey give me the option to do that but if you've ever been off for a month or two after three weeks you're bored as hell if you've been on vacation for two weeks you're like okay i need to do something else so this frames your motivation and helps you define it so even if you don't know whatever comes to your mind first if you were not judged write that down because that's going to push you on the days when it's tough and you don't feel like sticking to a plan the second question who would you spend time with i know a lot of people gonna say kids family friends um significant others spouses but you have to decide okay after i know what i want to do who are you going to spend your time with tell him what we're done with tonight i want you to go call those people i don't want us to get so busy that we forget that our family and that's why i always say on my deathbed i'm not going to care about any conference call that i miss any email i'm trying to pick up the phone every time my mom and dad calls and my friend called like because if something happened and then being being to so many funerals i've never been at a funeral was like damn i wish i was on zone talking about business but the people that are most valuable in our life we often can take for granted for monetary pursuits i don't want you to make that mistake so please write down three or four people that you will want to spend time with if you have the freedom that you wanted and this is a question that really gets some clear answers if you only have two years to live what would you do now i know what mace would do if you had 24 hours to live i want to know you have to know this this will frame what freedom is for because getting to a monetary goal alone okay great once you get it but money with no friends no family you don't want to turn into uncle scrooge that's not what we're aiming for and then finally i posted this to earlier on instagram but what is your perfect schedule on a day-to-day basis and kudos to tiffany um what does your perfect day blueprint look like whatever that is do that because some of these things we can start to do now if we choose to so and once you map out your life it's amazing when you start to stick to the schedule the freedom that you want and sticking to a plan some of those dreams that you have begin to manifest so even like on ig i know you guys have been asking me about the future free futures program we'll talk about that tonight but it's not that i am ignoring you um but i want to soak in every moment i can with my family my brother and xander like everyone that i love so it's not that i'm avoiding you um it's just that i am following my own personal personal schedule so i've really been racking my brain like why the hell don't people want to stick to an easy plan i think like indexing or etfs combined with some of the sectors that we talked about whether they're consumer discretionary or tech is like one of the easiest plans but i've talked to probably 300 people in the last like 20 days about this and it pairs down to people invest for three different reasons because everyone is investing for freedom uh some people are investing for safety so typing chat if you are investing for safety you want to put your money into a vehicle in which you do not lose money or you are doing better than inflation bucket two is some people are investing for growth or freedom so you're trying to get to freedom or retirement early right and then the third one is one of the most dangerous some of us are investing for excitement alone that's where the over trading comes from the over investing having too many companies in a portfolio and we've all been there we hear of a hot stock you know so so a guy decides to take hydrogen and put it into a truck and say that he's going to be the new elon and hey i think this is the one man i missed out on tesla this one i'ma ride with and then it falls apart so you have to pick out of these three are you investing for safety are you investing for growth or freedom or are you just investing just to purely be excited i think there are a lot of other things you can do to have excitement in your life besides investing grab your pen and a sheet of paper or grab your phone and i want to tell you something that helped me i talked about my cousin rick last week ariel how are you i love you tammy i love you um kai g love you um there are four key areas in life that we have to focus on and there are these so i want you to write down mentally on a scale of one to ten one being great ten being not so good how do you feel physically same thing one to ten how do you feel emotionally one to ten how do you feel and then spiritually one to ten how do you feel and tonight i want you to make one goal for each of these so for me mentally to meditate and pray every day and then be disconnected from the internet four hours a day is key physically you guys already know the working out every day because if i don't beat this goal by december 24th i'm after about 2500 scholarships so that gives me a good challenge um emotionally is not to take in any toxic media or have any unpeaceful conversations and then spiritually to grow and learn one thing in this area each day so i can become a better person um overall and it's probably gonna be my favorite subject of the night the vix i know most people fear the vix and when you see it come up on cnbc you're like oh my god the market is falling apart but the vix is the easiest way to measure where the market is and i'm going to give you a key level tonight that will help you but so if we look at vix it's just measuring how afraid people are in the market the key level that you have to keep your eyes on is 47 for vix so we we came up a little bit today but until we get to 47 we're not really in a danger territory please write this down and please keep your eyes on this and the 30s is uncomfortable great 47 that's what i'm starting to say when i smell smoke i think the house is on fire that's a key level and then if we look historically as you know i love to go back and look at the entire escape scope of things in 2008 it got to 89 53 and then even during the covert crash it got to 85. that is the entire block is on fire number the 80s that's when everyone is uncomfortable even seasoned investors that in the 80s aren't comfortable if the vixia's there but if we break 47 that's when you would need to start to get worried a little bit and i'll speed this up so we can get our guests on um the owner of the four percent rule so rashad has talked about this before whatever you have in your retirement you live off four percent a year the guy that made that famous you said we should adjust and go to five percent a year okay and then i want you guys to screenshot this and the six laws of wealth that you have to follow because the thing that i want to give you is all the blueprints that you need and instructions so you don't have to think because a lot of times on our investing journey we're searching for the answers but if we have the answers in front of us it puts all the accountability on us so first thing first i need you to decide how much of your income you're gonna save i'm going to be very honest with you 10 is not enough it never has been so you pick between 20 to 40. two invest consistently so even when the market is bad you have to continue to invest we talked about this earlier today but avoid debt at all cost because debt is a cancer to your financial freedom number four is so key get rich slowly i know we all want 40 and 50 and 80 gains but they don't last always so invest in businesses that are solid no matter how tempting the other companies may be whether it's in the stock market or mlm or other opportunities that you have learn something new every day because the things that you are absorbing will give you an extreme competitive advantage against other people that you're investing against and then insurance and protecting the downside of your business because i think it's easy enough for us to make money the biggest threat that we face are the roadblocks that we'll run into that could potentially strip that away so if you you're not a professional stick to indexing for our first time users please keep keep it simple and this is why if you try and beat the market and fail you're gonna usually lose or do two to six percent worse every year after fees so we talked about this before with negative compounding and for those of you that are down 20 25 like imagine if you do this three four years in a row how you are going to feel so this is my blueprint for beginners so if i had to start xander all over and have to talk to him this is exactly what i would tell him step one invest in index funds first step two if you want to go outside of that look at the top three companies in the world and pick the best out of those three and add that three invest every month unless you just have a big bag of money that you're hiding underneath your bed where you can throw it all in one time but it's going to be a lot more comfortable emotionally to invest every month four this is key please write this down if you're looking at a particular sector pick the top two players in the space so on the retail side amazon target pretty damn easy picks top two credit card companies visa mastercard everybody type in chat the top two video game platforms you can make your own little mini index if you look at the top two and then number five is so important you have to avoid all distractions because not everyone is giving you advice and saying hey you should invest in this is looking out for your best interest some people are investing for purely excitement not outcome not outcome so this is your homework item of the week i want you to hop on google there is an article on medium i want you to read all the amazon shareholder letters from 1997 to 2020 it's only 72 pages and write down the top three lessons that you've ascertained from the shareholder letters that jeff has written over the years and then you get to see the evolution of the business this is a part of your fundamental research because when you start to read all of the letters that a ceo has written you can see us thinking from the very beginning and very key we talked about fundamentals i think before four or five weeks ago but how has the founder or founding team stayed on track with the initial vision and then when things went bad how did he adjust so you get to see in real time decades of research and time invested into a business and how he's adjusted and i think he'll be very fascinated to see some of his thoughts so my question for you as i wrap up are you going to invest for safety or are you going to invest for freedom for those of you if this is your first ride down into election you'll never forget these next four weeks and it will make you a better long-term investor and for my traders even if you do bad and you draw down twenty percent i am telling you the lessons that you gain from election night trading and up until election you will never forget and it will prepare you for the next crashes and strong pullbacks that we have but i need to know are you going to be an investor for the long term for safety or for growth because i don't think any of you are here purely for excitement because we're not here to gamble so thank you and i love you guys so so so much thank you and i will not end the zone i promise you thank you talk about a master class appreciate that brother appreciate that yeah man and somebody missed the first assignment the first assignment was to go figure out um all 11 sectors and see how they performed over the past 20 years i know somebody was like what was the assignment that was the first assignment all 11 sectors high performer the past 20 years find the top performers inside the center that's a fact so uh shout out to everybody on youtube if you can like this video that would please like help the algorithm and it we would greatly appreciate it so without further ado we're going to bring on our guest our pristine guest uh bonowin isin i hope he said his last name i think you got it um can we bring him on yeah yeah he's okay yeah all right bottom window so you just gotta mute yourself and uh cam was there there he goes what's going on gentlemen what's going on brother how are you doing you're doing great man uh before i get into the meet we start cooking up i just want to say thank you man it's an honor and a privilege to be here and what y'all brothers are doing for the community like pushing the culture forward educating people like communicating at a level and making like investing fun and uh achievable and actionable and relatable it's powerful man like i'm i am thrilled to be part consider me someone at your service um i'm down for the cause all money in as they say oh my god i appreciate that man i really do appreciate that man so it was a big day for you is on uh fast money i believe at five o'clock right yeah i did the options action hit um today so just like the options part i'll be back on full time wednesday and friday all right yeah so can we talk about my baby real quick what you said about microsoft go first go ahead so for anybody that as i said um monowin is a managing director of equity derivatives at xp investments which is options i believe that's optional trading right yeah um and he's also a contributor at cnbc um you you probably if you watch cnbc i'm sure you have seen them so yeah you know we uh we took one of their brightness talents let's stack yeah so he's gonna he's gonna drop a lot a lot of gyms and we're gonna talk about we're gonna talk about stock market we're gonna talk about options we're gonna talk about investing variety of different things so um yeah once again thank you thank you for joining us i know this is gonna be fun i'm looking forward to this so ian i'll let you ian went for you yo let you i'll let you kick it off and uh even ian smiley yeah my brother has a long list of questions yeah i mean i've been watching you how long have you been on cnbc 10 years oh man so wow uh i've been watching for a while so i'm so i did an online segment for them yeah maybe about eight to ten years ago yeah uh fresh out the diapers too um you could get something too bit more of an online segment um you're trying to i mean as you know and you can see from all the retail companies and every other industry like you need to have some type of digital brand right and i and i give cnbc nbc universal a lot of credit we'll get into some of the other companies that i think have fallen behind there but like the way that you communicate through media has got to evolve and change and i think they were kind of um you know they were leaders in that right like clearly they were looking to pivot or try new things given what they have already in their television brand um and brand equity there so i was doing an online segment talking about options and different companies um and then you know it just got tough work i worked i used to work with one of the guys that's one of the anchors there dan nathan um and so he kind of got me involved and then i did like a couple of sports shows or something but like it was really i was young in my career um didn't have the flexibility and so you know i just kind of had to make a decision between that and this and uh fortunately i will say the people at cnbc have been very good to me continue to like groom me and bring me along it can be a little nerve-wracking but i definitely feel like not only did they put me in the game they put me in a position to win which hopefully i can help our audience do here tonight that's amazing so my quick follow-up with rates rising and of course everyone wants to know about the election if biden wins what are some good sections to invest in and then if trump wins what's your take okay i'm gonna um deconstruct that or decouple those questions i think the right question while correlated um with the democratic party i think is slightly different um so if biden wins i think he's been very very transparent which uh unfortunately we're not really used to getting that from politicians the last four years or so but i think he's been pretty transparent in his intention as to move away from uh you know fossil fuels into renewables i think he's also been very um very transparent in terms of saying that he wants to invest into infrastructure it's been one thing i'll get into this later it's been one thing that off to have this liquidity fueling this market it's another thing to see real economic input sorry economic output and you're seeing that breakdown right now in some of the consumer spinning numbers and some of the industrial production numbers right like you're seeing you've heard the term a case-shaped recovery you're seeing some people that are bouncing back affluent people that have access to the market yeah that really only affects a small modicum of people in the united states versus the real economy so sorry to answer your question succinctly uh blue sweep i think you want to look at companies like um alternative energy companies uh tan is a way to kind of play the etf for solar is a name that i pitched uh earlier um i look at companies like roku and cat and that those are like you you just mentioned right like if you're gonna go to a sector the industrial sector pick the winners pick the leaders in those categories and i think those companies speak to infrastructure building that will be going on the cats the roku's the engineering companies of the world in a trump situation i think um i think energy does less poorly that's been a beaten down sector it's your traditional fossil fuel energy um so any any type of sectors that are correlated to deregulation so the banks right right now buybacks are restricted dividends are being scrutinized i think you'll see some easing easing up there i think you'll see some easing or more accommodative type of type of policy towards energy and i think that you might want to watch out for companies like apple because if we don't get this international relations and international policy right i think the blowback of that is seemingly underestimated in a lot of these companies and then on the flip side nike if you just want to get into like the tax breakdown um if you assume corporate taxes are going to go up you want to look for companies that have more of an international um type of revenue distribution so a company like mcdonald's for nike are very global in scope in terms of where their revenue streams are coming from so vital in in the event that that binding wins and we're talking about international especially with you know our foreign exchange and foreign policies specifically a country like china if vitamin wins is a good time to be looking at stocks and companies that are coming from china specifically like maybe in the semiconductor field uh yeah i mean that whole region actually um i think i think vietnam is kind of an overlooked area as well i mean just to keep it simple i think a lot of times uh like we over complicate things right pick up something that you see has been manufactured i would say 10 years ago everything was made in china half the stuff i picked up i see made in vietnam i think b m is the vietnam etf you can kind of track the performance of that i think it's kind of it's rebounded nicely um what i think is that in the case of a blue sweep or just bite in um i i think i i mentioned blue sweet because it's harder to push through policy you saw it with the obama administration like you can have the best of intentions but when you have these bipartisan wars it's just hard to actually move things across the finish line so in the event of a bite and win or a blue sweep i do think you'll see a more diplomatic approach with china i want to i want to call things fairly both sides i do think that the trump administration has made some proper steps in terms of cracking down on um on the way china does business right like they have a very protectionist economy while we're expected to be very expansionists and global um i think also in terms of some of the scandals that you've seen in terms of like gap accounting scan standards they have not met those those standards so my point is i'm all about like a transparent market that allows you to really see what's going on um i think there can be a level of protectionism that's decreased and i think biden would probably be better at getting to that in a diplomatic way you're not going to go in anyone's home and dictate the terms on which they're going to behave um hopefully that answered the question yeah now for sure let me jump in um speaking about the energy sector because we haven't this is selected that we really haven't uh focused too much energy on no pun intended and i know i know that this is i know this is just your specialty uh one of your specialties so you have mentioned this stock before buy first solar stock or seller um can you talk about that buy first solar um so i mentioned tan which is an etf way to play it if you don't want the stock specific risk i think a lot of the gems you got you guys have been dropping on people are are great right so like if you're not as comfortable with the space and you want to play an index or an etf um it's a great great way to get exposure to an overall theme rather than taking the idiosyncratic risk of that particular company so with that in mind in terms of why i want exposure to the sector i mean you're kind of already seeing the trend away from fossil fuels i mean you know the iaea came out and i believe 25 in 2018 i believe 25 of our electric output was from renewables they're expecting that to increase by 50 by 2024 and that's like ridiculous growth right and if you look at the performance of tesla neo or any of these other companies like you're kind of seeing the hysteria around the space hell you have gm coming out with uh what was like an electric hummer yeah massive investment um into that space what i particularly so that explains why i like this sector first solar in particular i like the company just because i like the way that they go about funding businesses now this company has been around right but if you look at their balance sheet you look at a lot of other balance sheets of comps in that space they use debt as a method to fuel operations right they have more positive free cash flow but they have this debt balance so much higher enterprise value visa easter market cap but if you take a look at at um at first solar they have like half a billion dollars in debt versus about one and a half to two billion dollars of cash right so they could literally pay down that debt with cash if they so if they so choose they do have a far burning cash but as you've seen with a lot of other companies going through through covid there are things you can do whether it be layoffs or pressing vendors to kind of achieve operating leverage there so for me they're more in control of their own destiny being that one it's not not really in this rate environment but they can actually earn interest on on their cash balance as opposed to drawing more interest like um via debt and i just think they're well positioned so the the pain points and i mentioned this on cnbc revenue growth and gross margins i would like to see those things higher but i think with that company specifically being that they are like their position to be like utility or or output energy on a grand scale the moves that the democrats are saying they want to do directly speak to the pain points i think they're just perfectly kind of situated for uplift if you were to get that situation so if we see an uptick in alternative energy do you think this is like the beginning of the end for exxon and traditional fossil fuel based uh companies that have had an 80 to 100 year run um the beginning of the end as we know them and you've seen that across a bunch of industries i mean there was an article out talking about a merger or acquisition of chevron and exxon i mean if that doesn't kind of tell you where we're at i don't know what does i mean you talked about the vix and how that points to trends i think a lot of times we want to see what's going to happen but like again like trust your gut you see these massive secular shifts i mean that's like if you would ask someone 10 years ago okay ford and gm you you think what's going on with these with these manufacturing behemoths do you think they're going to change uh probably half the people would have said no but but they have they've adjusted yeah they've gone bankrupt they've been bailed out they've been restructured i think you're gonna have to see the same thing i mean whether it's the medical industry or the uh the traditional in the energy industry they have a a large lobbyist um group so like you're always gonna have to kind of fight through that but i i just i don't think you can fight science there's no way you have companies uh what is it um blue wave and uh uh spacex you have all this exploration now on the next frontier because we are quite literally destroying our our planet so i i don't i don't think there's a way around it i think you saw a bit of a head fake in 2005 when you had like the um solar crisis you saw a lot of subsidies in germany here australia um but i would i would liken that to the tech bubble in the 99 2000 right sometimes you're a little bit too early for the secular trend and i think sometimes the second time around gives you an opportunity to kind of learn from previous mistakes yeah we saw tesla obviously with with the sole solar paneling and obviously in the ev market i want to talk about the the other place expertise for you the financial sector and i want to know your thoughts on on how long you think it's going to take before they've recovered because they've taken a hit obviously since chrome has taken over the world really yeah um i think you have seen some so generally speaking about finance the financial industry yeah i mean i think what you're seeing is shout out to karen fireman she's kind of like mentioned this a few times on the show i think that you're seeing these companies trade lockstep with yield curve flattening and steepening um for one secondly i think in in certain regimes when particularly when you have interest rates as low as they are right it's very difficult to earn free carry i'll get into that a little bit later that's in terms of in addition to the stimulus that we're seeing right like money managers got have to put money to work there's no way around that i'm not paying you 2 and 20 for you to sit on cash you better find a way generate some returns for me like it just it's it's [Laughter] and i appreciate once again this is this is a very high level education everybody so i hope you guys really appreciate this youtube 5300 we are we're vastly approaching our record breaking number so please hit the like button you're going you're going to skyrocket on social media after this episode by the way um but man we saw we saw a tech run up crazy since since april um like all-time highs on the nasdaq so i i said about a month ago i thought that tech was um over-inflated and then right after that it started to go down but it's still relatively high like if you look at the dow jones we're not at the high but nasdaq we're still like close to the high so i understand that it's a stay-at-home economy and um you know the the virus has helped tech companies but do you think that tech is overrated and what's your overall thoughts on on tech as far as um stocks are concerned like the in the broader industry the nasdaq things that asia um give your honest taste i think the entire time sorry no no i'll say go ahead give your honest take um i think the entire market is overrated um it's not it's not a tech specific specific thing so yes i mean i guess the you know the short answer is yes i think it is overrated um in terms of you're paying such a high premium for what you're getting there but i you could have made this argument for the past five years in terms of pe ratios on the s p like you would have missed tremendous growth yeah um and that's why there's like the old adage of not being able to time the market so yeah but i mean where else are you gonna deploy capital right so you have sovereign interest rates that are at zero or below zero um you have monetary policy that's extremely accommodative you have a fiscal policy that's pumping trillions upon trillions of dollars into an economy you have a federal reserve that's buying literally buying the debt of these companies and then you have a banking industry kind of circling back to what you mentioned before which are making the majority of their money right now on fee generation whether that be and a lot of that is capital market fee generation right so these companies know that they're going to be able to go back and either have one have their debt backstop so the yield that that it's going to demand in the open market is going to be lower because you have infinite liquidity behind you and then you're going to be able to go to the banks which are getting squeezed on their net interest margin which are going to trip all over themselves to issue your next issue so for me it's kind of a self-fulfilling prophecy with that said i'd much rather pay these type of multiples for technology than i would for cyclical names like without a doubt no that's just me um i don't want to push my views on anyone else but it's to me it's it's not just about like the work from home thing it's the fact that these companies like are still growing generate massive amounts of free cash flow i'm talking about 30 50 billion dollars of annual free cash flow and they have more ca their cash balances are the sizes of other companies market caps i mean it is it's like it's a phenomenal thing to see and for me technology fuels every every aspect whether it's new technological advancements in the healthcare industry whether it's new technological advances i mentioned roku new technological advancements in terms of engineering um and how you're actually like going through your data science and breaking down the efficiencies of how you're actually operating i think it just permeates through all of those sectors and in a lot of cases amazon for example whether it's cloud computing in the retail space transportation logistics you just see it like they're becoming vertically integrated behemoths and it's like it's to me it's just hard to bet against that but sorry i i a little long-winded there but yes i do think they're over inflated but i just don't really know what the what a viable alternative is uh can you tell the story of how you got into the business and for anyone who's looking to follow your footsteps uh absolutely guys and if i'm going too long please just like stop me short i know keep going i love this stuff so like i just i don't think anyone's going anywhere how did i get started in the business so i did this program uh my junior year of college called uh seo sponsors for educational opportunity and it was an internship program seo dot i think it's seo dash usa.org it's the website i believe um and essentially what it did is it took excuse me sophomores and juniors from undergrad and uh hooked them up with uh internships on wall street in addition to the internship we had our own education process like it was like pretty grueling summer but it definitely got my foot in the door because i knew nothing about investing the whole reason i even wanted to get into the industry was like i'm from stockton california 209 i mean i think it's detroit and stockton are the only places that were like bankrupt through the whole downturn right so um i'm very appreciative for my upgrade upbringing but like i just didn't get the knowledge at home and i didn't even really know where to begin to get it i went to college there was a guy that um a guy by the name of deshawn owen he was into finance and economics and i always noticed this dude had like nice stuff but he you know from was from a humble upbringing but always was able to kind of make ends meet and i just asked him hey big bro can you kind of let me know what kind of things i should study or whatever so he kind of took me under his wing he was telling me listen you should go this economic route um so i did that met a couple of other buddies that were telling me about these internship programs got to um got to wall street did the internship program i'm a california kid that came out to new york and got my butt kicked man like just not understanding um just the aggression that one needs in the city and then one needs in that industry it's like straight cutthroat doggy dog um i'll just give it to you straight just the amount of like work and time that one must one has to invest at a young age i just wasn't necessarily prepared for that but i met some some mentors a guy named nadeem sadiq gave me my first shot reuben jacob kind of mentored me like guys it just i just got fortunate man i i didn't i did not dream i was not the kid that was like in the investment club and doing all these things i just kind of i i wanted i wanted the knowledge i felt like that was my way out um and once i i mean as you all know once once you like can taste it once you let me get my hand on it man you're gonna have to kill me to get my hand off take it away yeah let's go yeah shout out shout out to stockton california i'll boy uh yeah just real quick shout out to mg shout out to our guy and shout out to uh cordea and my cousin uh yeah on the super chat appreciate all of that um but i got real quick real quick because i obviously um options is your thing and and our audience and we're growing in that field as well two questions two part really i want to know how long have you been trading options and when you do is it typically a short term and if so i guess it's three part and so what what what is the typical time frame are we talking for an option tree is it a month is it two months typically what are you looking for um man i started trading 2005 so 15. and in terms of in terms of typical tenure of option i mean i i i don't want to like skirt around any questions that's just like there's no straight answer to that right it's like what what have been am i trying to play for um what like you know what what i do now is essentially i'm like more advisory and brokerage for institutional clients right um but what i've done my whole career is take positions for the firm provide liquidity be it contemplative liquidity make markets for from the most simple call put vanilla stuff to like more bespoke type of options so it really depends on the strategy sorry i want to give you a straight answer but i don't want to like simplify it in a way that's like not helpful um what i will say is that i've heard and seen a lot of retail investors that are that liken cheap options to bargain options that is not the case so um just to like break down again let me know if i'm running a little no go go right here let's keep going but to break down like the way you like how you're gonna make money in options right so you're gonna have your intrinsic value which is what it actually is worth so you have your strike in terms of a call how much is that call strike in the money so stock's at 30 your strike is 20 10 of intrinsic value now at x3 you're only going to pay that intrinsic value right like or fair value but over long term of options longer term options longer tenured options you're going to have that intrinsic value and you're also going to have that time value that you're paying for now i can get into like the greeks delta and whatnot but your delta is essentially going to be your probability of being in or out of the money and your rate of change so uh so if you have a delta of 50 or 30 or whatever it is stock moves x the options are going to move delta times x then you have your gamma right which is your essentially your slope which is the rate of that change so think speed versus acceleration your delta is going to be your speed distance over time your gamma is going to be the rate at which that speed changes and with short-term option that gamma is very high short time to maturity your rate of change is very high so you can go from in in the money to out of the money to at the money very quickly and you don't have a lot of time for that to reverberate and and and mean reverb over longer over longer periods of time what you have is even though you have these massive oscillations just statistically speaking you have much much longer observations and so you have much more time for there to be mean reverting now stocks aren't mean reverting but the volatility of stocks are mean reverting so any of you like for your math plus out there like your squares your integrals those are going to be mean reverting the linear path won't necessarily be mean regretting the company can go bankrupt company can get taken out there's no room for that to go back but if you look over the maturity of a company what happens is in its nascent it's fault you'll see it you'll see it in their earnings reports right their revenues or gross margins all those things as they're kind of finding their path become more and more balanced more and more volatile they're opaque you don't really know but as you get more and more visibility have more and more observations that's where your statistics really start to kick in so to answer your question these short term options if you really want to play for an event and you have a high amount of conviction in terms of whether this thing is going to finish higher lower or somewhere in between that's your sweet spot if you want a lot of time for that to play out you should give you should buy longer dated options now something that i like doing is i like spreading my position right because when you are just buying a call or buying a put or selling a call or selling a put your risk isn't necessarily defined sure you buy a call your risk is defined but if you insist on doing that you need to have a stop the same way you have a stop when it comes to stocks right how much premium am i willing to lose you got to walk away when you get there live to fight another day right it's all about maximizing the probability of success because none of us none of us are smart enough to make a right decision each and every time for the longer term options what you can do is you you buy that to kind of give yourself a base and then against that you can write options in the shorter shorter periods of time to kind of fund that long-term purchase because sorry the last thing i'll say is the options don't i want you to like differentiate between ownership and control and a lot of like my mentors have told me listen once you get to a level you want to own nothing and you want to control everything right but like liking that to options right options give you control of a position they don't necessarily give you ownership so you own calls you have control of this company but it pays a dividend you don't own that right so what you want to do is is pair off your right to control by writing other rights to control and that allows you to kind of like pick up and fund your trade over longer periods of time the short stuff there's just not enough time for it to snap back so i think there's there's a there's a right um a balance you should have both in your portfolio or you can i shouldn't say you can have both in your portfolio but um just the way like you really need to understand what it is that you're that you're playing for because you know the long-term stuff you can be right but it can move back against you yeah so i just wanted to ask a question uh real quick again so you're saying um just with clarity um like if you have a long term option calling like an app or whatever play short term calls during that duration at the same time as you have a long-term call sorry um i was like reading the comments i saw someone say i want everything can control everything owned that thing i'm like that's not my like that's not my advice on life you're not a doctor i was like wait wait wait wait wait wait wait wait wait i'm gonna forget you know i saw them put your whole bio up in the comments oh no he can't hide no more he's not endorsing that now what i was saying is that you buy a long-term option but you're trading short-term options of that so it's like apple you have an apple 2023 call and you have like the june of 2021 call in march of 20 that is that what you're saying exactly right so that one like or a calendar spread is what we'll call it so when you the when you own the longer dated option you own control over a longer period of time right it's like basic negotiation right the person who has the longest time to wait probably in the better negotiating position so you've done a good job i know we talked about this briefly like you have an affinity towards more longer-dated options that gives you control but against that you can be selling people option options that may or may not expire in the money and if they if they do you just exercise your control or what i would suggest rather than bringing all that money sell out of that to close that position rinse repeat i have a two-part follow-up so we talked about risk so as a futures trader hedging risk is the most important thing uh what's your favorite risk to reward ratio and then your trade and size how do you overcome a loss and deal with that emotion when you have a trade that does not work out okay yeah i got a story for you on that one um ideal risk reward again it's going to depend on the tenure but i'll as i said i like spread trading whether it be vertical or horizontal vertical is between strikes horizontal is going to be through x3 if i can put something on where so think about the the spread between the distance of the spread right if i can put something on where i'm paying one to get something three to five back i like that risk reward okay conversely if i'm writing options and i'm writing an option and i can collect 40 of that spread to give them and in the event that i lose i pay i pay 60 i like that i like those type of situations okay did i answer that great answer great answer and on the ones when we uh i know we don't want to talk about losses but they happen to everyone how do you emotionally recover when you have a big loss since you are trading size ah tequila and hennessy um just keep it real that's super real i love that i love that eddie [Laughter] what was one of the biggest losses that you may have experienced uh let's see so man this is when i first started i was trading um i'm going to leave the tickers out this it's in the past but just just so i'm safe i was trading the home builder portfolio through that crisis leading up into that crisis and there were instruments there these are otc instruments called variant swap so you talk about calls or puts those have like linear payout ratio and so we talked about gamma a little bit and i uh i don't want to like i hate when people get down and like bog down and technical speak and try to sound intelligent so if i'm doing that feel free i want this to be like a family type of discussion but you have these variant swaps and the whole point of them is essentially replicate a constant gamma profile so if you buy an apple 230 strike call and and the stock is at 230 maximum gamma but as the stock runs away from 230 you don't have as much option exposure there right this is like something that was created to kind of replicate a constant gamma portfolio so you've got to hedge a bunch of different options against this one structure so man i had this position and um i had been like buying some gamma and some of the single names versus these variant swaps that i was getting um that were getting purchased from me and i marked the variant swap and i was still kind of learning some of the tools i was young i marked the very spot but man and this thing was down a few million i got up from my seat excuse myself just went to the bathroom straight on the spot um fortunately i had like hedged some other stuff so i marked those positions and i made a lot of it back but that was kind of like the first gut punch where i was like man i can't even count i've never seen the much money in my life i can't even count that high i'm pr i'm pretending you doubt yourself you start to doubt yourself like yo man i'm about to get exposed um but what that taught me was um and i've traded a lot of high volatility books like if i have done my due diligence and my conviction like me like kicking over every stone and being a jerk and demanding answers that happens before i get myself into a deal so once that deal is there and it goes against me if my fundamental thesis hasn't changed i'm not panicking or if or if something hasn't changed that makes me acknowledge that hey you just got this wrong no like i i can stick it out now keep in mind i'm going to have some stop losses in there there's a level at which with no matter how long you how much you think you're right you have to get out of the position because you got to live the fight another day but the due diligence process that goes into putting on a position is critical at least for me that along with the quantitative metrics that i use that gives me something to lean on when when ish hits the fan as they say yeah um and then not following the crowd when i'm and we're all guilty of it like when you momentum trade and you think you can just ride the wave human psychology flips on a switch so fast yeah um and so i mean the answer question man like it's really the due diligence and the research and the questions um and like the rigorous lead up to that which gives me the ability to kind of ride that out i mean i just i know i'm not going to be right all the time it's about being right 51 of the time and when i'm wrong mitigating those losses so that those losses are much lower than my that might win what percentage are you putting your stops at uh again it depends on on the situation but i mean okay in a normal okay i'm glad you asked a great question so i'm gonna go back to your metric the vix the vix will give you a barometer that you should be using to determine how much volatility is going to be in that market i think people kind of like there's a misnomer of it being a fear gauge it's not really a fear gauge the volatility gauge right if you take the square root of so you have 252 trading days in a year right take the square root of that because again we're talking about option uh volatility here so volatility is a square root of variance so you have to deal in squares while squares are additive but your square roots aren't added so if you have like a a squared plus b squared you can't that's not a b squared right um square root a b i mean so you take your your square root of 252 that will give you 15.84 call it 16. divide that vix number by that that's the percentage move that the market is pricing in to the general market okay that's that's there you go crack the vix code and for all right so your vix is telling you what the implied move of the s p over i believe a three month period is it's a blended move right but this is for any option if you look at the implied volatility you take the square root of 252 which is the number of trading days in a year because everything is normalized for the square root of time and the reason why i'm telling you that is because again variance is a square volatility is a square root so you've got to normalize things so you can compare apples to apples if you take the square root of 252 if you put that in your calculator right now you're going to get like 15.8485 something like that call it 16. if you take the implied implied volatility or implied movement so the fix which is a volatility index call it it's right about 35 right now if you take that and divide that by roughly 16 that output will give you the first the move the implied move of the s p in percentage terms so when you see a day like today the markets move just under two percent and you see the dicks at 34 like right hand they just don't in the normal range that that's a great equation the problem the problem is when you said um divide take the square root and you lost 98 percent of the people this is a part of teaching to fish though i guess i guess that class wasn't as overrated as i thought it was don't talk about education tomorrow yeah but i'll tell you it's 16 it's roughly 16. i apologize that's a lot yeah i gave people bad information about not having to go to math class that's the trigonometry skill geometry trigonometry algebra advantage algebra calculus there you go you name it shout out to everybody on youtube we have a look at those alerts it's a we had a time we got a tie right now for all-time high 5400 people yeah you're right up there with buddhista you know huh watching this thing you've ever heard of before all right sorry you're talking to me yeah what name again budget needs to get a good company don't worry thank you guys so much are you a noob i am yeah what college did you go to stanford university land the new living nightmare chapter spring 0-4 okay shout out to all of the the fraternities out there i went to school he was like we ask [Music] [Laughter] oh man now this is this is this is very enjoyable um we're going to try to get some questions yeah you want me to run off the earnings real quick yeah yeah we're going to go this is what we usually do at the nine o'clock hour but since it was so there was a master class going on we said we're just gonna let it run so i'm just gonna give the earnings um of some big earnings that are coming this week obviously we spoke about before uh that the fang stops we'll be reporting so that's uh obviously check and twilio reported uh today um and if you've been following chad it's some of the that's the stock that we spoke about early on like earlier you know what what was that like may we spoke about yeah may i think april may yeah uh checking twilio reported today tomorrow morning cap will be reporting uh and tomorrow afternoon another two stars that we've been talking about having amd uh we'll be reporting as well as microsoft and then wednesday sally's favorite style will be reporting as well as sony uh and then one day wednesday afternoon man it's a big one we got etsy fastly gilead well here it is teledaca will be reporting visa and service now all stocks that we've spoken about before and then thursday is the big one third is a big one a.m before the opening we got uh shopify and mandera and in the evening right after closing we got apple amazon facebook and google i mean it don't get bigger than that and then friday we got honeywell which was added to the dow jones in uh august and uh charter communications as well so those are our earnings for this week it's a big week it's a big week i got a quick follow-up before we go so i'll get my tavis smiling real quick as a pro what what indicators are you using to assess where you want to get into the market or what quantitative tools if you're not able to share what indicators you like oh no that's fine um definitely price to earning um definitely a 200-day moving average 50-day moving average previous lows and highs volume i mean all of your technical indicators um i think uh when you see like a stock gap and then fill in that gap i see a stock start to base for a while i see that as an upside indicator previous support and resistance levels are like very key technical indicators particularly when they're coupled with legitimate volume and then as i mentioned i look at um percentage moves versus the implied volatility of a stock and that will give me an idea of whether or not it's within a normal kind of like distribution right when i start to see two or three sigma moves start i mean you gotta you gotta kind of change your calculator right you shouldn't be writing those type shouldn't be riding those type of way can you just turn your value up just a little bit i feel like we got a little bit lower on us is that all right yeah yeah yeah it should be should be yeah let me know if it's uh yeah i think i think i think it's back to where it was before yeah i apologize to all the map geniuses out there it was a joke it was a joke people was a joke i'm not i'm not looking down on anybody's mathematical brilliance man take don't take it too serious ladies and gentlemen over what time for the trigger ahead yeah because i'm gonna ask you too because i mean you told us both you could kind of answer you said 47 was the number when we're looking at the vix but what would tell us that we're okay right does the vix need to be in the teens or or the early twenties what what number will indicate that you know what well we're okay um like to try to give you a straight answer i mean man recent regimes you see the big sub 14. it's up 12. yeah right right like less than a percent that's like normal i mean we're still rich um it's just that like i think this is the new normal like i i think and if i can kind of go off on a tangent i think um people have to have to understand that this is not a normal trading or investing environment and what i'm seeing and a lot of questions i get is that people are like chasing the next hot thing if selloffs like like that happen in march should not happen routinely that's gone you got to move on to like a different [Music] yeah man people are chasing these moves as if they're they're a new normal and and i i really want to caution against that this is not a get rich quick type of game this is a stay in your seat keep your shirt maximize your odds of winning game like anything else right you're not going to just hop in here all types of market i mean i'm i'm just a guy right you've got all types of like super quantitative bots that you're trading against that are like scraping twitter for news and like you know moving things around and micro milliseconds like you're not you're not gonna compete in terms of that trying to get rich quick you have to find your lane your area of expertise and exploit that but trying to just ride the next hot thing i i mean best of luck maybe you can get up here and tell me about it but um i appreciate it shout out to wall street traveler he's we have we have we speaking yesterday and he was like um he was like yo that was a once in a lifetime opportunity he said something to the effect like that was historic like what happened from march to september that wasn't that wasn't normal so that was legendary yeah so i mean i literally waited from 2009 for that move and and to be very honest no one fully took advantage because when we dipped that hard still fearful you didn't know if the fed was going to stop printing i don't have inside information um so the reason why i give so much reverence to you because not many times we get a chance to talk to someone who's on the pro side so these rules are so key um and once again to like thank you for sharing some of your insight if i could ask you what's some of the best what's the best piece of advice you've ever received about investing from anyone you've met or maybe a mentor uh first of all thank you but uh man i respect what you do i've got a chance to look into your stuff like i said man i'm honored to be here with you guys so i'm just one of the founders um 100 i mean that genuinely turns the best advice man there's a lot and i don't want to cut anybody out um few quick anecdotes uh bulls get rich bears get rich pigs pigs get slaughtered um don't catch falling knives don't step in front of freight train man i feel like i've been told that so many times yeah it's a great lesson though um i think everyone's heard cut your losses ride your winners but i think it's harder to do psychologically which is why you put in stop losses like take away all of the emotional response like we are emotional creatures we're wired that way for our survival trading should not be emotional you need to make that as clinical as possible you get to a level that's where it is that's it that is it um another thing that i like is like if i have a stock right and we've seen a lot of stocks double triple see you're in a stock and it's doubled or tripled take that same inverse ratio sell that amount and you're in for free so i've heard so i've heard like and i think you guys are right but i've heard people say okay you owned apple you never should have sold it now i'm with you don't sell good companies but risk management is also key so if you're up double if you sell half or a quarter if you're so half you're in the trade for free if you have owned half of your apple position from 2005 till now oh my gosh you're still printing you're still minted yeah and you sleep well at night um what else um i will say there's a the the advice that i've gotten from investing versus trading is different trading is much more about being calculated understanding trends putting in stops being super diligent it's just it's just an unemotional boring game of just making sure that you do the same mundane task over and over again and just being very rigorous on the investing side and you guys have really hit the nail on the head again kudos to you all um i think it's more about like understanding that you should be in low fee indexes or indices because at the end of the day like the basic core tenants of finance are time value of money or time accretion and compound interest like that's that's your basics internally growing right yeah so give yourself time you're not going to do this overnight keep fees to a minimum establish a core position and then like when you want to do some short-term option trades or you want to hop into the next hot stock or whatever you can like allocate small portions of capital to do that i think you should i mean man i'm getting crucified saying this but i think you should have some stock trick off money right like better than going to the club and blowing bottles or doing something else stupid we're buying a chanel bag like that's true um we just broke a record we just broke a regular news alert 5500 that's a big fact amazing man part of history by the way you have etched in eyl history now yeah if you want to if you want to see bonnie went back sometime in the future drop a one drop of one in the comment section let me legendary oh boys oh man oh yeah you're gonna break the internet yeah you're gonna come back you gotta put in your bio market monday's contributor nbc cnbc slash marketing one day's contributing i like that any uh book recommendations i know ian loves money massive game that's obviously what uh uh right now you you have any are you you're gonna go with that one no money master the game is come on yo and i'm telling you i read that as someone who's like experience and yo that book is fire breaks it down in like such detail if you want to get more into like options trading and some of like the more technical aspects of it there's a book called options volatility and pricing by nattenberg this was the first book i was given to read absence volatility last name nattenberg and that will go through like that will break it down for you and for you math buffs out there there's a book um by hull h-u-l-l oh yeah um that will get into more of like the nuances around the map i don't know if you necessarily need it but like you know what i don't want to put limits on you guys like go out there and be beasts like there's nothing that you can't like understand or do you might as well i mean um do it big paul has some amazing indicators too um a sector that i've hated for a while is banking but are there any banks if you can't touch on it you don't have to that have good trading operations that you think could last through covet and election yeah um i do actually so like i like the money center banks that have trading operations i mean again man you're sharp dude man all over it man this dude is blessing y'all [Laughter] appreciate that oh that's coach right there my brother just texted me he said yo y'all got montana and brady on at the same time this is great um so banks right i like the money center banks that actually still have trading operations uh because if you looked at the looked at the previous earnings right you've had all these write-downs for a possible consumer debt right so you think about banks like they're in the core business borrowing short lending loan that's just what they do you talk about the overnight rate or the repo rate they borrow money they have like a one to nine or one to ten ratio where they have to have um hold against your deposits and they literally go out and lend money it is like the oldest trick in the book right and then on top of that you know they have credit cards and fees and everything else right but what you've seen is when the consumer is damaged and again i'm gonna go off tangentially like this economy this american economy make no mistakes about it is fueled by consumer spending point bank point blank period and i'll take that a step further and say it's fueled by debt induced consumer spending like the worst company yeah that's how these companies are getting rich off of people for y'all credit buying liabilities instead of assets so like that should stop here um so once you understand the way these banks are making money off you all say like you're seeing now a trend towards um more of the retail banking you just have morgan stanley they just bought eaton bands i forget what company that they that they just bought um but essentially giving them um exposure to more retail more feed generation essentially uh i listened to your to your show last week when you liking it to a talk i don't care if you go leave stay i mean i'm i'm clipping my flipping my coupon i'm sorry to answer your questions succinctly jp morgan goldman sachs um morgan goldman sachs and morgan stanley are the kind of companies that are on my radar i think uh jp morgan is top in class um goldman sachs specifically to your question is renowned for their trading acumen yeah oregon stanley is just a well of a equity house and i think they have kind of kind of diversified into uh lower volatility more visible revenue streams and then i i wrote these down i think um but i could tell you off top of my head i think what you're seeing now is a lot of these banks are trading at like one times price to book right which means like the assets that they have on their balance sheet the level at which they carry them the stock is trading one for one with that i think jp morgan trades like one point two times i think goldman sachs might trade like point nine or one times i think morgan's sound is trading down like 85 now keep in mind that they have already went and written down billions of dollars so you're getting companies that are trading at low ratios to book after said book has been written down so i feel you in terms of not necessarily liking them they're like utility stocks the dividends might come under scrutiny but like i i i think you buy good companies at cheap levels and i i think some of those what's the injury industry consensus of why blackrock has outperformed goldman at such a wide scale in terms of stock price even though blackrock offerings i mean think about how many etfs they offer creation redemption business like they're just it's it's feed generation okay i mean sorry like i i can give you a longer one answer but i'm trying to like kind of cut down on my proposedness yeah and i won't rush out and try to jump in because we've been here for five hours so i was gonna say this uh there's some people here who were here with us like 700 of them i was gonna maybe take one that's wrong they said he ain't got no guidelines tonight so go ahead go ahead look yeah i'm trying to extract all the gyms i can hey yo i really wanted you to ask the verizon one man can you can you do that one i really liked that one that was a good one we'll save it we'll see yeah we'll we'll save it i will say we'll save it yeah let's try let's try to get two let's try to get two questions in sorry go to a new name this is obviously you know a very special episode and uh we had a lot of questions um and it was a lot of information to cover so we're just trying to get two questions in so make these questions it's under a lot of pressure actually oh man it's a newcomer you gonna do that yes i am going to do that congratulations is it you've been unmuted on mute yourself i hope i said it right yeah it's more tell me i'm telling you what's going on no pressure bro what's going on listen appreciate y'all friends appreciate all y'all do um gentlemen a question i have for you is ian at one point how the election and the certain pricing the certain numbers that the i think the dow has to get you so we'll know who will win the presidency that's the period yeah the way you're looking at it right now brother do you see are we going to reach those numbers or what um i will say this though i think um with north carolina being up for grabs and 2016 is different in 2020 and i'll let the brother chime in the landslide or the secret victory that trump had in 2016 is different in 2020 um with cases spiking and the economy not doing as well it puts the election up for grab so i think if we continue this a lot for the next two weeks definitely if we crack anywhere underneath 3 000 and cases go up i it may be a home run for biden but i'll let the brother speak um and and let him tell his perspective on if we'll drop in these next two weeks before election uh i'm gonna i'm gonna skirt dodge i'm sorry i'm gonna have to i'm gonna have to punt that one well plate yeah i mean we went in terms of my view of the market over the next couple of weeks sorry these comments are hilarious thank you uh yes i gotta scare the political talk i'm not gonna like condemn anybody what i will say is i think the risks right now aren't necessarily a trump or a biden win it's like a contested win or a disputed win or as we've been on record saying not simply i'm not going to leave peace president like and i think what people that's that fear is still very much in the market and i think i'll say the second thing is kind of like fiscal stimulus the size and scope and where it's going to be targeted is it going to be two and a half trillion is it gonna be 800 billion is it gonna be one trillion are we going to bail out quote unquote blue straight blue states or states and local governments municipality municipalities that are kind of under pressure um i think so yeah i mean i i don't see much upside for the next two weeks like why what like from a risk reward standpoint why would you put money to work right now because we're back near all-time highs maybe you make another three percent maybe maybe make five percent but you might drop i don't want to put fear into people but my point is the risk reward is now asymmetric i don't have a crystal ball i can't tell you whether it's up or down but if i'm if i'm purely again taking out the emotion and i'm looking at expected value right and i say okay it might be up it might be down if up then up by how much if down then down by how much now attach a probability to both of those situations i'll tell you for me the expected value is less than zero which means you don't clinical that's just like normal yeah yeah that was a good question i appreciate that i was actually planning on asking ian that question as well like based off of that where is it going and it was looking like it was going up which would have favored trump and then it started to come down and then it's been like on a spiral so based off of the numbers that we did previously he ended this i don't know yeah i mean from a technical standpoint for us to bleed back down to the 78 six based off the five year earnings will have to be terrible all week and then cases of basically have to double every three days for us to dive down that far anything is possible but the probability of it is is lower all right we're going to avena i hope i said that correctly i've been i'm mute yourself you've been a muted go ahead i don't know yeah i mean from a technical standpoint for us to bleed back down to the 70s you got oh you got you got sorry sorry bro sorry i'm sorry i took up all the time i was trying to get the most out of now we're gonna go to stanley stanley we coming to you i'll meet yourself you've been on muted stealing like oh no they called me oh come on y'all squeeze this question why are you going in you want to ask the the team yeah um yeah i'll squeeze it in so on a macro scale what's the insight that well how long will it take with the economy to recover not the market but the actual economy and then like i've hated 18t for a long time because of i think the business model is inferior does the industry think that like legacy companies like atnt ge ibm we're seeing the beginning of the end or once again do you think they'll start to rebrand and become powerhouses again i'm gonna take the second question first because i think it's just like a more straightforward answer um i think i'm on record given my views on 18t um it hasn't participated in what has been an era of tremendous growth and upside you've seen and again man i realize running companies are difficult so i'm not here to smash anybody but yeah you've seen mergers and acquisitions that have failed i think when you see yourself paying x selling companies for half x or pennies on the dollar um and then if you look at like the ballooning debt balance at att now i get it i understand why they're selling this they need to shore finances they need to get some cash on the balance sheet but i think they're just behind the eight ball right like now to their credit i will say i think like 90 percent of their revenue comes from services as opposed to like actual art these comments are wild um so like at least that's like service business but the issue was that there's still a capital intensive business you've got these satellites you've got these in-home infrastructures they do fiber optics all those things are like capital intensive like businesses you need actual hardware so now you're looking at okay now i have to like have some type of return on equity or return on capital just a much more difficult business to kind of push through as opposed to a data center or netflix well really they're like okay what we need to do is we just need to go and get content i mean content fine what you need a hard drive to store content and you need some distribution channels and so i just think they've kind of they've they've kind of chased and as opposed to growing some of these things organically they've made these acquisitions and a paid premium for them repeatedly and they haven't worked which clearly i think cripples your ability to kind of move forward on the ibm side i think you have seen them kind of pivot a little bit from personal computers to more of like a consulting type of service i think there's some i think there is something there but like clearly that wave has faded big man and then um you asked me about ge stock price tells you you all you need to know there it's it's like are they a financing company i mean so they've gone from a hardware company financing the uh being more of a financing company and now they're kind of trying to pivot i think these companies can survive or they'll just get bought um i think ibm has done a decent job at t i give them credit for like attacking a weakness but i just i feel like they're day late dollars short um as far as our was the first question you asked me in terms of how long it will take for the economy to bounce back yes i'm glad you decoupled the economy from the market i think a lot of people get to get those two confused and i think that our our current administration is heralding our economy and liking that sorry heralding the market and liking that to our economy so if you break down if you like look at the economic indicators right like so you have still record unemployment um still record unemployment you have industrial production which still shows that there's slack in the economy i realized that we got a jump in terms of consumer spending numbers but again a lot of that was spent on goods as opposed to services so like those are not going to be recurring revenue stream you have a consumer that's had highest savings rate that it's had in modern history um and you have the end of benefits and you have what in my opinion fiscal policy that is geared much more towards large mega cap gold bracket firm buying their debt issuing liquidity access to capital markets all those all of those things only really apply to publicly traded companies for 40 of the us economy 40 of the workforce are small and medium-sized businesses as you've seen how the cares act and ppp trying to get those loans having the the administrative wherewithal and paperwork to actually go and be able to get approved i think that aspect of the of the economy is still very much damaged and i don't see i don't see that coming back anytime soon what i will say and what i think is great about this company this country is the innovation i think what you're going to see is some of these companies are gone they're done right when you we've talked about vertically integrated businesses and some of the big tech names but small mom and pop shops sometimes they only have one trick there's not like they can squeeze vendors it's not like they can increase costs of customers you're going to go to somewhere else and they also have to compete with the likes of other um well-capitalized uh competitors it's like they they don't have the ability to pivot or move to a different revenue stream so i think those businesses are going to kind of be impacted and to an extent won't come back you've still seen it in the travel and leisure sector you've seen it in hospitality restaurants like and we're going into winter i i don't know you know how how we're gonna get through that you can only socially distance and and sitting outside for so long i mean i'm on the east coast come december man that's gonna feel like up north um in game of thrones you're not going out there there's no sitting outside so um yeah man i think um like like i said you've heard uh the term k-shaped recovery i think you've seen it or people that have disposable income to invest in the market people that can afford to buy a home people that have credit or haven't had their credit impacted because of not having a job so that they can go get a loan so you have rates at all-time lows but if you look at the banking standards the hurdles to actually get those rates those are at cyclical highs yeah so you're just not seeing the liquidity actually be dispersed to the part of the economy that in my opinion needs it the most i think what you're going to see is um a rebirth of sorts but i i think this this rebound is going to be protracted first appreciate that i got my man marcus thank you for being so patient man shout out to youtube i'm reading all those comments too man you guys are funny youtube is hilarious is on fire too man shout out to them shout out to you marcus what's going on bro you been on muted chillin chillin how y'all doing today good how you doing brother good good that book club was fire it was good it was good ian panda loving it loving it brother uh is it bona win look english is my second language did i say it right bonus bono man yo a lot of jams man i really appreciate it i actually got a question for you because in the beginning you started talking about china and the relationship that biden would have if he gets elected once he's in that it will probably you know be a lot better than it currently is with trump meaning that there's also a lot of companies right now that have been on the stock market like looking and whatnot is it smart to even think about investing in any sort of chinese rand company because in the end of the day if you really think about it it's not really owned by the ceos it's owned by the government so is it smart to invest in any companies at all like the neos and the and whatever etf that's predominantly ran or owned by chinese is it smart or is it should we just stay away from them um great question marcus i appreciate it my man um yeah i mean listen state-run enterprises are nothing new and they're not only specific to china you see the same thing it's a lot of emerging market countries petrobras is state run ballet there's a state there's a state-run aspect to that um electoral bra so it happens it's not just china yeah man companies like baba alibaba i wouldn't care who owned it that thing prints money um now you look at the size of the chinese population and you know i'm not here to debate international diplomacy that's way over my head i studied ir in school but i forgot everything i studied i just held onto the path but um listen companies money is green everywhere you go companies are in the business of making money state-run companies just like private enterprises are in the business of of making money and that chinese economy has bounced back and has been exemplary and i'm not i'm not rooting for or against anything but purely by the math china has bounced back from this economic downturn in ways that is exemplary and we should probably be taking some tips how they did it now i'm not saying to force people in their homes or whatever i'm talking purely economic data output production gdp they have bounced back you've seen the economy growing they do everything from manufacturing their protects they're protective of their companies um yeah their censorship and all those other things but keep in mind people are gonna never doubt the propensity of the global consumer to spend people want to spend their money on something whether you're chinese brazilian american mexican or everything in the middle i think that that's shunning an entire population because of some diplomatic issue i think that's old school um not targeted at you but like i think it's ignorant we've seen it in the past you know world war ii people didn't want to buy cars from japan or whatever the world is way too global for that type of protectionist type of mentality so yes good companies no matter where they are i think you can buy them yeah we they got something very interesting i'm not sure if anybody's paying attention but they have one of the largest ipos in the history the largest the hand group the ipo is going to i think 34 billion ibm ridiculous so that you know what that should be oh the an ipo yeah man crazy audio ramco also another massive ip yeah i mean just a different level final one appreciate you brother it was a pleasure superstar i appreciate you man i appreciate y'all man um we spoke several times and i'm glad we was able to make this happen like i said anytime you want to come back you always got a home here um and look forward to just you know fostering a relationship with you so how can the people follow you on social media would you like to tell the people how can they watch you on cnbc like what what what all the information you would like to give out i appreciate it um first and foremost if you have me back i'd be thrilled to come back come on man as i told you i can't tell you enough how much i expect what y'all do it's man it's it's awesome it's awesome and so to even be tangentially associated with it bruh like i'm proud of you guys like real time we can put contributor in the bio food easily [Music] but yeah man i'll i'll let you know once my november schedule comes out and we can we can look i know things kind of get slow around the holidays but i'm happy to pop on um and do that uh in terms of cnbc um i do the show fast money that's on monday through thursday five to six on friday five to five thirty i'm not on every day i'm usually on about two to three times a week this week i'll be on friday uh wednesday and friday for the entire show i did just the options action segment today um in terms of social media and i'll admit like i'm not the biggest social media person um i'd have some people manage that stuff for me at bonowin just my first name at bondwin b-o-n-a-w-y-n instagram twitter linkedin it's all there i have one of those names where nobody else wants it i guess no i appreciate i appreciate it um earn your leisure big week for us shout out to killer mike we got killer mike tomorrow just to remind you guys he said when we met killer mike he said he found us on instagram he thought he was a uh all right a 90s r b group like who's these light-skinned cats talking about fighting so this ford what do they call it quintet like when it's four four people this is like the supremes or something like this is crazy like i'm reading the youtube comments a lot of page rage comments you guys are funny in youtube well yeah make sure you check that episode out tomorrow five o'clock live on youtube and or audio platforms and wednesday we're back with chris senegal the legend um yeah the legend himself had to buy back the block that's eight o'clock already we're taking over this whole week we're taking over this whole week right now so we appreciate all you guys i'm gonna get the last word to eat oh you wanna say something yeah i'm looking at his numbers man let's run bottom of his numbers up he's almost had two thousand people follow me man let's run this guy's numbers up let's get those guys let's get some numbers out cnbc they can't do that for you but we can't nbc universal family but like i said i mean that's testament to you guys brand that's that's just incredible man that's uh that's what it's about and i i know a lot of people get up and be like yo i believe in giving back just down to third um but man y'all y'all put in luke to row hats off to him appreciate you appreciate it brother you know what i would like to encourage people to do i like the people of course it is the holiday season obviously we know thanksgiving is approaching um and i'm doing this with a couple of schools right now but just donating money to families in need um because right now it's a tough time obviously we know with the economy we're talking about it but there are a lot of people that are in need so even if it's your the school in your neighborhood you don't have kids that go there reach out to the principal see if there's families in need and see if you can donate anything um money would probably be the best or gift cards obviously with corona you know bringing having a can drive is probably not the most optimal thing to do right now so and i i encourage anybody to do that find a family that that's in your neighborhood that could that could use to find some some funds or something just to help them along this holiday season so please i encourage people to do that that's a fact ian give you the last word brother i've had the word all night so i appreciate you um call someone that you love after this um for everyone who's asking about the program if you go to the link in my bio i'll put it in there it'll be free you can put in your name and email and get signed up there but troy rashad thank you for allowing me to platform um bottom of my brother i've been following you for a long time and i uh i had a blast tonight thank you for being on man and your expertise um because there's not many brothers in the industry that are willing to share the information so from the bottom of my heart thank you for coming on the platform and sharing your uh insight with us tonight man you're amazing hey bono and breaking news alert they got you to 2000 right now let's see what we're going to end by the end of the night those numbers are going to be crazy tonight they said yeah already troy so here we [Laughter] go all right all right ladies and gentlemen thank you guys for rocking with us um we will see you next week tell the friend to tell us wednesday we'll see what's in it well i'm talking about marketing tomorrow but uh remember this pie the podcast will be on audio outlets at 12 o'clock midnight eastern standard time so subscribe to apple um spotify and uh leave a comment rate and then if you missed any part of this it'll be it'll be available on youtube the playback will be available on youtube um within like 40 minutes something like that so all right this is one of them that you're probably gonna have to listen to a couple times and next week i won't be all in a video with all the questions do a cnbc wave again no like kudos to everybody at cnbc nbc universal um yeah love you guys for real we love you all man we'll see y'all all right all right peace thank you

Channel: Earn Your Leisure

Views: 55,628

Rating: 4.9820628 out of 5

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Id: KXv67Nc7ibA

Length: 115min 50sec (6950 seconds)

Published: Mon Oct 26 2020