00:00 Speaker A
And I’m going to start with actually a question from uh from a listener, Greg from Nebraska and I want to start this get it get everyone’s opinion on it. Is it better to trade a little bit every day or should you really wait patiently for the big setup?
00:13 Speaker A
Got Lou, I know you’re dying to jump in.
00:14 Lou
And it’s like drinking, just wait for the big setup. Just have one good trade. Now I I I think you churn your account if you trade every day, it just keeps you busy. I’ve never seen a day trader that’s super successful and can retire. Maybe I’m wrong though.
00:28 Speaker C
I agree 100%. I mean, I’m a I’m a buy and hold kind of guy. Right.
00:31 Speaker C
I you know, you know what I like to say? I like to say slow is the new fast, right? You know because there’s so many times like you’re watching the markets, you see something happen and the stock has a crazy reaction and you’re thinking, I should be doing something, I should be doing something. And then you have to tell yourself, I should be doing nothing. Let’s see how the market, see where and nine out of 10 times, it’ll it’ll correct itself.
00:54 Speaker A
But that’s hard to do, right? If somebody wants to trade, that’s hard to do.
00:57 Lou
Yeah, that’s why he trades Palantir every day and Tesla.
01:01 Corey
Do you?
01:02 Speaker C
No.
01:03 Corey
No. Well, look, Oh Corey, we’ve
01:05 Corey
Look, if you can if if you can consistently make money on trading every day, God bless you. There are like a very few people in the world that can do that, but if you’re one of them, awesome. You know, I prefer to come up with a thesis like you need an entry like an entry plan and then an exit plan. And you stick to that.
01:22 Speaker A
I I I think it depends on who you are, who your personality is, right? If you’re a day trader type, then you want to do something every day, you want the market to be anxious, you want the market to be volatile because that’s what you live on. That’s not how I live.
01:35 Lou
But can you live on? I mean I guess that is there’s got to be studies out there that show for the everyday investor, day trading is not the path to wealth accumulation. It’s the path to just anxiety and enough to keep doing what you’re doing.
01:50 Speaker A
Okay, I I think that’s true. I mean, I think that’s right. I mean, I don’t think day trading is the way to to creating generational wealth. Maybe I’m wrong.
01:59 Speaker C
Yeah. Look, I learned the hard way. You know what I’m saying? I went down that path many times, sure that I found the right way to do this, systematic trading, programming, everything. Right.
02:10 Speaker C
I got to this point because I lost a lot of money doing that. Believe me, believe me, it was hard, it was a hard-earned education. But I learned that honestly, at this stage, certainly in my career, which obviously didn’t start yesterday, um, that uh, you know, that that’s the move. And it’s been working for me. And even through the most volatile markets, that tends to work. I mean, you still have to have your thesis, you have to know why you’re buying, you have to check yourself, make sure that it’s still holding. But at the end of the day, in and out, in and out, it’s not working. It’s not working.
02:41 Speaker A
And you got to have a strong stomach because to your point, during those times when there’s a cycle and every looks like everything is a disaster and oh my God, oh my God. You have to have confidence enough in yourself that you’ve done your work, you’ve done your homework, you know what the thesis is, and this drawdown has got nothing to do with the individual name.
03:00 Lou
Yeah, and you get tested. I mean, look at the software as a service stocks right now, like AppLovin and names like that, they’re Snowflake, they’re down 30, 40, 50% year to date and then all of a sudden bounce back 20, 30% today. Like,
03:10 Speaker A
Right. And they bounce back viciously because they got way oversold. It’s like I always say, the pendulum swings too far to the left, then it swings too far to the right, right? So they get way oversold and then we have that reaction like we had and suddenly it turned around and you go happen, you know.
03:26 Speaker C
Yeah, but you know, if you’re buying stocks that you’re expecting to earn 25% on, then you got to be prepared to take the to take the violent swing. I mean, that’s that’s, you know, basic not theory, that’s law in finance. A lot of people just don’t know that.
03:42 Speaker A
No, because if you’re buying Verizon, you’re not expecting to make 150% because it’s not going to it’s not going to it’s not going to it’s not going to make 150% every year. It’s going to be steady and just consistent, right?
03:54 Lou
Yeah, the best piece I ever read on this was from Morgan Housel years ago on the agony of high returns. It was tracking the best performing stock was Monster Beverage, if you can believe it. It was up 10,963%. But it had seven or eight drawdowns of over 50%, two drawdowns of over 80%. So like the volatility to be buy-hold is not any it doesn’t mean it’s, you know, easy returns either.
04:19 Speaker A
Right, right.
04:19 Lou
But day trading, I think you just set yourself up.
04:21 Speaker C
But you just have to recognize that the the volatility is always going to be commensurate with what you’re expecting. I mean, I know that Monster Beverage trade because I think I I wrote it for the last 3%.
04:36 Lou
I don’t know where it went after that. It’s out of my memory, but you know,
04:38 Speaker C
Morgan made 10,000%, I made 3%. It’s all good.
04:40 Lou
I took that last 3% ride, I