1
00:00:10,760 --> 00:00:14,880
Speaker 1: Hello, and welcome to another episode of the Odd Lots podcast.

2
00:00:14,920 --> 00:00:19,079
Speaker 1: I'm Joe Wisntal and I'm Tracy Allowit. You know, we

3
00:00:19,200 --> 00:00:23,560
Speaker 1: haven't really talked about sort of the pure like markets

4
00:00:23,600 --> 00:00:25,880
Speaker 1: in a while. We've been talking a little bit about crypto,

5
00:00:26,440 --> 00:00:30,040
Speaker 1: We've been talking a bit about macro, We've been talking

6
00:00:30,080 --> 00:00:34,239
Speaker 1: about supply chains a lot, obviously, But the other big

7
00:00:34,520 --> 00:00:36,480
Speaker 1: sort of story for the last year and a half

8
00:00:36,520 --> 00:00:42,159
Speaker 1: has just been in this incredible boom in trading. I'm

9
00:00:42,200 --> 00:00:45,360
Speaker 1: going to ignore the subtle dig at crypto. There this

10
00:00:45,400 --> 00:00:48,479
Speaker 1: idea we haven't been talking about markets except for crypto.

11
00:00:50,000 --> 00:00:53,360
Speaker 1: But yeah, no, you're right. So it feels like so

12
00:00:53,440 --> 00:00:56,080
Speaker 1: long ago, but really it was only six or seven

13
00:00:56,120 --> 00:00:59,760
Speaker 1: months when we had the game stop phenomenon, the big

14
00:01:00,000 --> 00:01:03,160
Speaker 1: whom in retail trading and Wall Street bets and this

15
00:01:03,200 --> 00:01:06,920
Speaker 1: idea that everyone was suddenly pouring into meme stocks. It

16
00:01:06,920 --> 00:01:11,400
Speaker 1: feels so so long ago. It's weird. Yeah, And of course,

17
00:01:11,880 --> 00:01:15,000
Speaker 1: you know, like so I personally first started getting interested

18
00:01:15,200 --> 00:01:17,959
Speaker 1: in markets just as the thing I was interested in

19
00:01:17,959 --> 00:01:20,080
Speaker 1: like in the late nineties and high school, and there

20
00:01:20,160 --> 00:01:23,039
Speaker 1: was a dot com bubble going on, and at that

21
00:01:23,200 --> 00:01:27,520
Speaker 1: time it was just trading. Retail trading was really take off,

22
00:01:27,560 --> 00:01:29,480
Speaker 1: but also just really became like part of the culture.

23
00:01:29,480 --> 00:01:31,480
Speaker 1: People were talking about the stocks they were trading and

24
00:01:31,480 --> 00:01:33,840
Speaker 1: what they were bullish on and so forth. And then

25
00:01:33,840 --> 00:01:36,240
Speaker 1: it went felt like that basically went into like a

26
00:01:36,280 --> 00:01:40,800
Speaker 1: twenty year hibernation, and then when everyone was locked in

27
00:01:40,840 --> 00:01:44,240
Speaker 1: their homes with the coronavirus crisis for the first time,

28
00:01:44,640 --> 00:01:48,240
Speaker 1: it really came back. Yeah. So I remember writing about

29
00:01:48,280 --> 00:01:50,720
Speaker 1: this earlier in the year, and I think the way

30
00:01:50,760 --> 00:01:54,720
Speaker 1: I framed it was flows before pros. So this idea

31
00:01:54,920 --> 00:01:59,920
Speaker 1: that if, like, if you have this immense buying moment

32
00:02:00,120 --> 00:02:05,280
Speaker 1: tom from retail traders or retail investors, then maybe like

33
00:02:05,360 --> 00:02:07,800
Speaker 1: if you're a retail person, you're in a better position

34
00:02:07,880 --> 00:02:12,400
Speaker 1: to judge that momentum than someone with a professional background,

35
00:02:12,480 --> 00:02:14,799
Speaker 1: you know, say a self side analyst at a large bank,

36
00:02:14,919 --> 00:02:18,960
Speaker 1: someone like that who's looking at fundamentals. And I think

37
00:02:19,040 --> 00:02:22,880
Speaker 1: that was kind of borne out, at least temporarily by

38
00:02:22,960 --> 00:02:25,720
Speaker 1: some of the meme stock price action, but it does

39
00:02:25,840 --> 00:02:29,200
Speaker 1: beg the question of what exactly is the difference between

40
00:02:29,680 --> 00:02:34,080
Speaker 1: a retail trader versus a professional trader. Absolutely, and there's

41
00:02:34,160 --> 00:02:36,200
Speaker 1: also the question and of course you know, we've had

42
00:02:36,240 --> 00:02:38,480
Speaker 1: all these people come into the market. Probably a lot

43
00:02:38,520 --> 00:02:40,840
Speaker 1: of them have done really well, Like probably people have

44
00:02:40,919 --> 00:02:43,160
Speaker 1: made a ton of money and made multiples of what

45
00:02:43,200 --> 00:02:45,920
Speaker 1: they make of their daily salaries. And because it's been

46
00:02:45,960 --> 00:02:47,920
Speaker 1: this bowl market, which means some are going to be

47
00:02:48,040 --> 00:02:51,560
Speaker 1: tempted to like go pro on some level, not necessarily

48
00:02:51,560 --> 00:02:53,959
Speaker 1: go work for a bank or a fund, but it's like, oh,

49
00:02:54,040 --> 00:02:55,720
Speaker 1: like I made a ton of money, I could do this,

50
00:02:55,800 --> 00:02:58,040
Speaker 1: Why would I go back to my job? And so

51
00:02:58,240 --> 00:03:02,000
Speaker 1: some people will be thinking about do they want to

52
00:03:02,120 --> 00:03:06,239
Speaker 1: make trading their full time vocation? Yeah, And again the

53
00:03:06,360 --> 00:03:09,520
Speaker 1: question is whether or not the past six or seven

54
00:03:09,520 --> 00:03:12,320
Speaker 1: months have been extraordinary in one way or another. I

55
00:03:12,360 --> 00:03:14,919
Speaker 1: think we all agree that the experience of COVID and

56
00:03:15,040 --> 00:03:18,720
Speaker 1: the markets during that time have been somewhat unusual. Um

57
00:03:18,760 --> 00:03:22,240
Speaker 1: and whether or not their success over that short time

58
00:03:22,240 --> 00:03:25,480
Speaker 1: frame can carry on longer term. Right, So people are

59
00:03:25,480 --> 00:03:27,920
Speaker 1: gonna be asking themselves a do they have what it

60
00:03:27,960 --> 00:03:29,880
Speaker 1: takes to be a trader and be if they do,

61
00:03:30,000 --> 00:03:33,040
Speaker 1: how to win? So today we're going to be speaking

62
00:03:33,080 --> 00:03:36,360
Speaker 1: to a guest who knows a lot about trading, a

63
00:03:36,360 --> 00:03:39,280
Speaker 1: long time veteran, and he can he will tell us,

64
00:03:39,840 --> 00:03:42,440
Speaker 1: whether you have the stuff, whether we have the stuff,

65
00:03:42,440 --> 00:03:44,520
Speaker 1: whether the listener has the stuff to make it as

66
00:03:44,560 --> 00:03:46,560
Speaker 1: a pro trader, and if they do go into it,

67
00:03:47,320 --> 00:03:49,480
Speaker 1: how to win at it. All. Right, let's do it.

68
00:03:49,520 --> 00:03:52,240
Speaker 1: I'm excited and I'm very excited. We're going to be

69
00:03:52,320 --> 00:03:55,200
Speaker 1: speaking with Brent Donna Lee. He is the author of

70
00:03:55,240 --> 00:03:59,920
Speaker 1: a new book, Alpha Trader, The Mindset, Methodology and mathem

71
00:04:00,000 --> 00:04:04,080
Speaker 1: Addicts of Professional Trading. Is a long time veteran for

72
00:04:04,080 --> 00:04:09,000
Speaker 1: over twenty five years. He's worked at HSBC New Mura City.

73
00:04:09,480 --> 00:04:12,720
Speaker 1: Very excited to learn from Brent. Brent, thank you so

74
00:04:12,800 --> 00:04:15,880
Speaker 1: much for joining us. Hey, guys, great, great to be here.

75
00:04:15,920 --> 00:04:17,840
Speaker 1: I'm a huge fan, so thanks a lot for having

76
00:04:17,880 --> 00:04:20,640
Speaker 1: me on. So I guess, I guess the first question

77
00:04:20,760 --> 00:04:24,080
Speaker 1: I have is what is a trader? What do you

78
00:04:24,120 --> 00:04:26,760
Speaker 1: How do you define a trader? Because some people invest,

79
00:04:27,000 --> 00:04:31,560
Speaker 1: some people sometimes reallocate, some people are moving in and out.

80
00:04:31,600 --> 00:04:35,279
Speaker 1: I guess day trading. But when you talk about a trader,

81
00:04:35,680 --> 00:04:39,320
Speaker 1: what does that mean? Well, so that's a great question.

82
00:04:39,440 --> 00:04:42,520
Speaker 1: So in the course of writing the book, Um, one

83
00:04:42,520 --> 00:04:44,240
Speaker 1: great thing about writing a book is you get to

84
00:04:44,279 --> 00:04:46,760
Speaker 1: talk to a lot of random people because people DM

85
00:04:46,880 --> 00:04:51,000
Speaker 1: me a lot on on Twitter and LinkedIn. And your

86
00:04:51,080 --> 00:04:53,640
Speaker 1: question is a really good one because a lot of people,

87
00:04:53,720 --> 00:04:58,040
Speaker 1: I can tell by their questions to me, don't really

88
00:04:58,080 --> 00:05:01,160
Speaker 1: know themselves whether they're an investor or a trader. And

89
00:05:01,279 --> 00:05:06,000
Speaker 1: to me, I'm unbiased because my whole experience has been trading.

90
00:05:06,760 --> 00:05:11,360
Speaker 1: But my belief inefficient markets is that on short time

91
00:05:11,400 --> 00:05:14,360
Speaker 1: frames markets can be kind of inefficient, and on long

92
00:05:14,400 --> 00:05:18,480
Speaker 1: time frames they're pretty damn efficient. And there's a lot

93
00:05:18,480 --> 00:05:20,520
Speaker 1: of research that supports that, as you guys know, a

94
00:05:20,560 --> 00:05:23,520
Speaker 1: passive versus active, I mean, Charles Ellis was writing about

95
00:05:23,560 --> 00:05:27,400
Speaker 1: that in the seventies, um with data showing that that

96
00:05:27,560 --> 00:05:31,480
Speaker 1: passive beats active. So then I think you really have

97
00:05:31,560 --> 00:05:34,800
Speaker 1: to know what you're doing and know that you're what

98
00:05:34,839 --> 00:05:36,919
Speaker 1: you're doing is trading, and then you might have a

99
00:05:37,000 --> 00:05:40,880
Speaker 1: specific edge. And I think really the difference is, I mean,

100
00:05:40,920 --> 00:05:43,359
Speaker 1: the obvious difference is time frame. You know, to me,

101
00:05:43,520 --> 00:05:47,799
Speaker 1: trading is is something probably less than one or two months,

102
00:05:47,920 --> 00:05:49,600
Speaker 1: and then you can call it kind of call like

103
00:05:50,040 --> 00:05:52,640
Speaker 1: two months to one year swing trading. But that's getting

104
00:05:52,640 --> 00:05:56,440
Speaker 1: closer to investing and much more fundamentals. But I would

105
00:05:56,480 --> 00:06:00,720
Speaker 1: say that the definition of real trading is something that's

106
00:06:00,800 --> 00:06:04,159
Speaker 1: that you're doing that short term where you have a

107
00:06:04,200 --> 00:06:07,560
Speaker 1: solid risk management process and you have an edge that

108
00:06:07,640 --> 00:06:10,479
Speaker 1: you can identify and you can explain to somebody who's

109
00:06:10,520 --> 00:06:13,320
Speaker 1: not an expert in the business. I definitely want to

110
00:06:13,320 --> 00:06:16,360
Speaker 1: ask you about the risk management aspect and also the

111
00:06:16,400 --> 00:06:19,040
Speaker 1: idea of an edge in trading, But before we do,

112
00:06:19,400 --> 00:06:23,320
Speaker 1: just because I think this will help maybe um conceptualize

113
00:06:23,360 --> 00:06:26,320
Speaker 1: the idea of a trader. But over the past ten

114
00:06:26,400 --> 00:06:30,479
Speaker 1: or twelve years, basically since the two thousand eight financial crisis,

115
00:06:30,520 --> 00:06:34,039
Speaker 1: would you say that's been a good time to be

116
00:06:34,160 --> 00:06:38,280
Speaker 1: a trader or a poor time? Because we've sort of

117
00:06:38,880 --> 00:06:41,600
Speaker 1: heard it both ways. So there are people who argue

118
00:06:41,640 --> 00:06:46,320
Speaker 1: that valuations are completely based on momentum and inflows, and

119
00:06:46,360 --> 00:06:49,560
Speaker 1: the more money that's flowing into something, the more valuable

120
00:06:49,560 --> 00:06:52,080
Speaker 1: it gets, and it doesn't really matter about, you know,

121
00:06:52,120 --> 00:06:57,560
Speaker 1: things like price to book ratios and traditional measures of fundamentals.

122
00:06:58,200 --> 00:06:59,800
Speaker 1: On the other hand, there are plenty of people who

123
00:06:59,800 --> 00:07:02,160
Speaker 1: say that markets have been skewed by central banks and

124
00:07:02,279 --> 00:07:05,280
Speaker 1: you don't really know like where anything is going anymore,

125
00:07:05,520 --> 00:07:08,160
Speaker 1: and nothing makes sense. So I'm just curious, like if

126
00:07:08,200 --> 00:07:12,080
Speaker 1: you could characterize the past decade or so um, for

127
00:07:12,200 --> 00:07:16,640
Speaker 1: a trader, sure, So I would say anything related to

128
00:07:16,720 --> 00:07:20,640
Speaker 1: valuation doesn't matter for traders. Um, that would be my opinion.

129
00:07:20,680 --> 00:07:23,520
Speaker 1: And so I mostly trade currencies, but I have a

130
00:07:23,520 --> 00:07:27,040
Speaker 1: lot of experience trading equities and that if you're trading,

131
00:07:27,160 --> 00:07:30,160
Speaker 1: if you're a trader in my in my definition, you

132
00:07:30,200 --> 00:07:33,720
Speaker 1: don't really care about valuation. And so one concept that

133
00:07:33,760 --> 00:07:35,720
Speaker 1: I get into a lot in the book is the

134
00:07:35,760 --> 00:07:40,320
Speaker 1: idea of adaptation. So anyone that's saying like this is

135
00:07:40,360 --> 00:07:43,480
Speaker 1: a bad market, this market is a joke, this is manipulated.

136
00:07:44,000 --> 00:07:46,200
Speaker 1: That person is not adapting and they're not playing the

137
00:07:46,200 --> 00:07:49,880
Speaker 1: current game. So my question is always like, do you

138
00:07:49,880 --> 00:07:52,840
Speaker 1: want to live in a world of you know, the

139
00:07:52,840 --> 00:07:55,720
Speaker 1: current reality and play the current game or do you

140
00:07:55,720 --> 00:07:57,960
Speaker 1: want to play a game that you wish existed? And

141
00:07:58,560 --> 00:08:00,640
Speaker 1: then the subsequent question is do you want to make

142
00:08:00,680 --> 00:08:02,480
Speaker 1: money or not? And if you want to make money,

143
00:08:02,480 --> 00:08:05,200
Speaker 1: I think the key really is to first of all,

144
00:08:05,320 --> 00:08:08,640
Speaker 1: understand what game you're playing, um, and then number two,

145
00:08:08,680 --> 00:08:12,960
Speaker 1: adapt to that game. So I feel like the just

146
00:08:13,080 --> 00:08:16,000
Speaker 1: the idea of saying like this was a good period

147
00:08:16,000 --> 00:08:18,800
Speaker 1: to trade, this was a bad period to trade, isn't

148
00:08:18,800 --> 00:08:21,960
Speaker 1: a great mentality for traders, because what you really should

149
00:08:21,960 --> 00:08:24,720
Speaker 1: be doing as a good trader is adapting to the

150
00:08:24,720 --> 00:08:29,000
Speaker 1: current environment. Now obviously that's not like as easy as

151
00:08:29,040 --> 00:08:30,920
Speaker 1: just saying, okay, today, I'm going to do this, because

152
00:08:31,000 --> 00:08:34,040
Speaker 1: it's obvious what the environment is. Regimes change in a

153
00:08:34,080 --> 00:08:37,200
Speaker 1: subtle way, but then sometimes it's pretty obvious that the

154
00:08:37,200 --> 00:08:40,720
Speaker 1: regime's changing, like for example, when the algos started two

155
00:08:40,720 --> 00:08:44,600
Speaker 1: thousand four. Two thousand five is the first period when

156
00:08:44,640 --> 00:08:48,520
Speaker 1: I really remember the algos, the algorithmic trading really becoming

157
00:08:48,520 --> 00:08:51,599
Speaker 1: a forced in currency markets, and I remember there was

158
00:08:51,640 --> 00:08:54,959
Speaker 1: a really sharp split on the desk um so at

159
00:08:54,960 --> 00:08:58,319
Speaker 1: that time I worked at Lehman Brothers and talking to

160
00:08:58,360 --> 00:09:00,240
Speaker 1: people in the market, not just the traders at even

161
00:09:00,280 --> 00:09:02,840
Speaker 1: but just in general that there was a split between

162
00:09:02,880 --> 00:09:06,760
Speaker 1: people saying, this is bs these algals are it's not

163
00:09:06,840 --> 00:09:08,720
Speaker 1: a real market. Every time I put a bit in

164
00:09:08,880 --> 00:09:11,360
Speaker 1: it comes in one point higher. And then there was

165
00:09:11,400 --> 00:09:13,720
Speaker 1: another group of people that were like, this is weird,

166
00:09:13,880 --> 00:09:16,400
Speaker 1: Like the market the texture is different. I wonder, how

167
00:09:16,440 --> 00:09:18,960
Speaker 1: how can we beat the algals? What are the algals doing?

168
00:09:19,080 --> 00:09:21,800
Speaker 1: Can we mimic them, but do it's smarter, you know?

169
00:09:22,200 --> 00:09:24,320
Speaker 1: Can we figure out what they're doing and reverse engineer

170
00:09:24,400 --> 00:09:27,360
Speaker 1: and then make money off of that. And so I

171
00:09:27,400 --> 00:09:29,600
Speaker 1: feel like that was a real eye opener for me

172
00:09:29,640 --> 00:09:32,439
Speaker 1: because like that was whatever fifty and sixteen years ago,

173
00:09:32,520 --> 00:09:35,480
Speaker 1: so I was still kind of like transitioning between junior

174
00:09:35,480 --> 00:09:38,440
Speaker 1: and senior trader, and it was really obvious that some

175
00:09:38,480 --> 00:09:42,680
Speaker 1: people were adapting and some people were complaining. And so

176
00:09:43,320 --> 00:09:47,839
Speaker 1: that has been consistent throughout my career is you see

177
00:09:47,880 --> 00:09:50,720
Speaker 1: that people that adapt tend to do well in the

178
00:09:50,760 --> 00:09:54,040
Speaker 1: long run, and people that don't tend to maybe have

179
00:09:54,160 --> 00:09:57,080
Speaker 1: periods of success and then fail. So going back to

180
00:09:57,120 --> 00:09:59,720
Speaker 1: your original thing about, um, you know, a lot of

181
00:09:59,720 --> 00:10:04,440
Speaker 1: new traders have come in. Another thing that I've I've

182
00:10:04,520 --> 00:10:07,760
Speaker 1: witnessed from conversations with a lot of retail traders is

183
00:10:07,800 --> 00:10:11,000
Speaker 1: that a lot of people did really well in and

184
00:10:11,040 --> 00:10:15,480
Speaker 1: are struggling now. And so an obvious explanation for that

185
00:10:15,520 --> 00:10:18,680
Speaker 1: would be if you're if you were buying calls around earnings,

186
00:10:18,760 --> 00:10:22,160
Speaker 1: Let's say that was a really good strategy. However, this

187
00:10:22,280 --> 00:10:26,480
Speaker 1: hasn't been a good strategy, especially recently. So, UM, what

188
00:10:26,679 --> 00:10:30,080
Speaker 1: I tell people who are new is that you you

189
00:10:30,160 --> 00:10:34,360
Speaker 1: need to become an expert in one market, which could

190
00:10:34,360 --> 00:10:37,360
Speaker 1: be a security or for me, it's G ten f X,

191
00:10:37,800 --> 00:10:42,160
Speaker 1: but really it could be any kind of narrow part

192
00:10:42,240 --> 00:10:45,959
Speaker 1: of capital markets. And then become an expert in that,

193
00:10:46,000 --> 00:10:48,959
Speaker 1: but don't become an expert in a particular strategy like

194
00:10:49,040 --> 00:10:53,200
Speaker 1: I'm a breakout trader, or like I buy options before zooms,

195
00:10:53,360 --> 00:10:57,559
Speaker 1: earnings or whatever. Um. Like, the more narrow your strategy

196
00:10:57,679 --> 00:10:59,840
Speaker 1: is the less chance that you're going to make money

197
00:10:59,840 --> 00:11:03,400
Speaker 1: in the long run, because it's all about adapting to

198
00:11:03,440 --> 00:11:06,160
Speaker 1: the new regimes. Um. Not that there's a new regime

199
00:11:06,200 --> 00:11:09,840
Speaker 1: every single day, but certainly new regimes come their cyclical

200
00:11:09,840 --> 00:11:13,360
Speaker 1: ones and their structural ones. So the structural ones being

201
00:11:13,440 --> 00:11:16,439
Speaker 1: like retail kind of you know, was huge in ninety

202
00:11:16,520 --> 00:11:18,920
Speaker 1: from ninety nine to or ninety eight to O two,

203
00:11:19,160 --> 00:11:21,920
Speaker 1: and it's getting huge again. Algorithms came in, and then

204
00:11:21,920 --> 00:11:25,240
Speaker 1: there's cyclical ones that are more about volatility, like is

205
00:11:25,240 --> 00:11:27,360
Speaker 1: the VIX at ten or is the VIX at forty?

206
00:11:27,520 --> 00:11:31,440
Speaker 1: Your trading strategy has to be different in those two regimes.

207
00:11:31,600 --> 00:11:35,160
Speaker 1: And generally, I would say a lot of people are

208
00:11:35,240 --> 00:11:38,400
Speaker 1: good at specific strategies, but in order to be good

209
00:11:38,640 --> 00:11:41,760
Speaker 1: to to have a you know, multi year or multi

210
00:11:41,760 --> 00:11:45,319
Speaker 1: decade career, you need to be able to identify regimes

211
00:11:45,400 --> 00:11:49,160
Speaker 1: and then adapt and trade the regime and trade what works.

212
00:11:49,600 --> 00:11:52,720
Speaker 1: And that's kind of the philosophy of like do what's

213
00:11:52,760 --> 00:11:56,520
Speaker 1: working and stuff doing what's not working. That reminds me always,

214
00:11:56,520 --> 00:12:01,040
Speaker 1: of course, you know poker advaceive owing the table that

215
00:12:01,120 --> 00:12:03,040
Speaker 1: you're at and all the good ones to talk about

216
00:12:03,040 --> 00:12:05,360
Speaker 1: the ability to shift gears. If you're going to make

217
00:12:05,400 --> 00:12:07,720
Speaker 1: it as a professional trader, you have to have an

218
00:12:07,760 --> 00:12:11,320
Speaker 1: identifiable edge, something that you can articulate. All right, So

219
00:12:11,440 --> 00:12:15,040
Speaker 1: you've been a trader for over twenty five years, what's

220
00:12:15,080 --> 00:12:18,760
Speaker 1: your articulate to us non professionals? Well, your edges that

221
00:12:18,800 --> 00:12:21,680
Speaker 1: allowed you to have such a rare and durable career.

222
00:12:22,640 --> 00:12:25,240
Speaker 1: My edge, in a nutshell, just try and keep it

223
00:12:25,320 --> 00:12:29,559
Speaker 1: relatively short, is that I look at the macro world.

224
00:12:29,600 --> 00:12:33,920
Speaker 1: So I'm my if if if any of your listeners

225
00:12:33,920 --> 00:12:36,280
Speaker 1: have read my stuff, I tend to talk like fairly

226
00:12:36,360 --> 00:12:41,319
Speaker 1: macro in terms of macroeconomics, fed policy, you know, Australian

227
00:12:41,400 --> 00:12:43,880
Speaker 1: cp I, all that kind of stuff. And so what

228
00:12:43,920 --> 00:12:46,800
Speaker 1: I'm trying to do is understand the current equilibrium where

229
00:12:47,160 --> 00:12:49,320
Speaker 1: price is the sum of all the information that's in

230
00:12:49,360 --> 00:12:53,160
Speaker 1: the world, and then as new information comes in. I

231
00:12:53,200 --> 00:12:57,320
Speaker 1: think my edge is understanding what that information means in

232
00:12:57,320 --> 00:13:00,719
Speaker 1: the context of the current or slightly in the past equilibrium,

233
00:13:01,280 --> 00:13:06,840
Speaker 1: and entering trades into currencies before they move in order

234
00:13:06,880 --> 00:13:12,040
Speaker 1: to capture the momentary disequilibrium from the new information. So

235
00:13:12,120 --> 00:13:15,000
Speaker 1: that doesn't necessarily always mean like an event comes out

236
00:13:15,080 --> 00:13:18,240
Speaker 1: and then euro goes up and I buy it after

237
00:13:18,280 --> 00:13:19,839
Speaker 1: the event and sell it after the event. It can

238
00:13:19,880 --> 00:13:22,760
Speaker 1: also mean something a lot more subtle, which is that

239
00:13:23,280 --> 00:13:27,360
Speaker 1: as a narrative starts to get really really fully subscribed,

240
00:13:27,440 --> 00:13:30,839
Speaker 1: you start to see positioning by metrics, but then also

241
00:13:30,960 --> 00:13:33,600
Speaker 1: by because I have a pretty good network of people,

242
00:13:33,640 --> 00:13:36,520
Speaker 1: I get a sense of not just what positioning is,

243
00:13:36,559 --> 00:13:40,000
Speaker 1: but also like there's like an emotional edge to positioning sometimes,

244
00:13:40,000 --> 00:13:42,840
Speaker 1: like if I send out a Barish AUSSI piece and

245
00:13:42,880 --> 00:13:46,520
Speaker 1: I get like seventeen angry emails all like with pretty

246
00:13:46,640 --> 00:13:50,200
Speaker 1: weak rebuttals, then I'm like, Okay, I'm definitely onto something.

247
00:13:50,960 --> 00:13:54,440
Speaker 1: So there's like a more subtle aspect of positioning that

248
00:13:54,440 --> 00:13:57,280
Speaker 1: that I sometimes can tease out as well. But then

249
00:13:57,400 --> 00:14:00,120
Speaker 1: also the on the other side, it can be something

250
00:14:00,200 --> 00:14:04,439
Speaker 1: like say news comes out and um, it's a New

251
00:14:04,480 --> 00:14:07,280
Speaker 1: Zealand housing number comes out, and so in that example,

252
00:14:07,320 --> 00:14:10,720
Speaker 1: I know the markets really interested and really cares about

253
00:14:10,880 --> 00:14:13,920
Speaker 1: Kiwi housing. But then say another number comes out, and

254
00:14:13,960 --> 00:14:16,320
Speaker 1: I'm like, I know the market doesn't isn't really that

255
00:14:16,400 --> 00:14:19,800
Speaker 1: fixated on that, but you know, currency moves twenty pips

256
00:14:19,800 --> 00:14:21,560
Speaker 1: on it. Then I'll take the golf fade and I'll

257
00:14:21,600 --> 00:14:24,480
Speaker 1: take the other side. So I think my edge is

258
00:14:24,680 --> 00:14:28,360
Speaker 1: understanding what matters and what doesn't, because that's one thing

259
00:14:28,400 --> 00:14:31,440
Speaker 1: that's really frustrating for a lot of people is and

260
00:14:31,520 --> 00:14:35,520
Speaker 1: actually for financial journalists as well, is trying to understand

261
00:14:35,600 --> 00:14:39,600
Speaker 1: sometimes why things move when it doesn't always totally make sense.

262
00:14:40,040 --> 00:14:43,280
Speaker 1: So if you, for example, like the classic example is

263
00:14:43,280 --> 00:14:48,120
Speaker 1: current account deficits, so generally currency markets don't care about them,

264
00:14:48,120 --> 00:14:50,720
Speaker 1: but every five or ten years will trade off of

265
00:14:50,760 --> 00:14:52,520
Speaker 1: them for like a year, and then we stopped trading

266
00:14:52,520 --> 00:14:55,560
Speaker 1: off of them. But the current account deficits themselves are

267
00:14:55,600 --> 00:14:58,600
Speaker 1: pretty sticky. They don't change that much. Kind of knowing

268
00:14:58,720 --> 00:15:01,280
Speaker 1: what matters as well is an important part of that.

269
00:15:01,400 --> 00:15:04,359
Speaker 1: So for example, like if you trade a lot of correlation,

270
00:15:04,400 --> 00:15:08,880
Speaker 1: which I do, knowing which assets people care about and

271
00:15:08,920 --> 00:15:10,840
Speaker 1: which ones they don't, So like if oil has been

272
00:15:10,840 --> 00:15:14,600
Speaker 1: in a forty five range for eight weeks. The correlation

273
00:15:14,640 --> 00:15:17,640
Speaker 1: to dollar cat probably isn't that significant. But if oil

274
00:15:17,720 --> 00:15:19,760
Speaker 1: is like on the front page of Bloomberg every day

275
00:15:20,120 --> 00:15:22,640
Speaker 1: and it's breaking to new i'll, you know, new three

276
00:15:22,680 --> 00:15:25,680
Speaker 1: year highs, then the correlation to cat is probably going

277
00:15:25,760 --> 00:15:27,760
Speaker 1: to pick up. And so I have a good sense

278
00:15:27,840 --> 00:15:30,160
Speaker 1: of like, Okay, I gotta have oil on my radar

279
00:15:30,240 --> 00:15:34,400
Speaker 1: because we're you know, it's all over Bloomberg or or not.

280
00:15:34,640 --> 00:15:37,320
Speaker 1: So then sometimes, like if you don't know what you're doing,

281
00:15:37,960 --> 00:15:39,640
Speaker 1: you might see like the oil has been in a

282
00:15:39,920 --> 00:15:42,840
Speaker 1: range for six weeks, and the range is and it

283
00:15:42,880 --> 00:15:45,880
Speaker 1: goes from forty one to forty four, and people are like,

284
00:15:45,880 --> 00:15:47,840
Speaker 1: how come dollar cats not moving? And it's like, well,

285
00:15:48,000 --> 00:15:51,360
Speaker 1: because oil is not front of mind right now. Um So,

286
00:15:51,360 --> 00:15:54,760
Speaker 1: so my age is understanding the current narrative and then

287
00:15:54,840 --> 00:16:14,600
Speaker 1: surfing the move to the new narrative. What does an

288
00:16:14,680 --> 00:16:18,200
Speaker 1: edge look like for retail traders? Because you're talking about

289
00:16:18,320 --> 00:16:23,280
Speaker 1: you know, professional experience, maybe some insight into flows and positioning,

290
00:16:23,520 --> 00:16:27,760
Speaker 1: which your average retail investor is not going to have. Sure,

291
00:16:28,240 --> 00:16:30,680
Speaker 1: so I don't want to overstate positioning just to be clear,

292
00:16:30,760 --> 00:16:33,520
Speaker 1: because actually, oddly enough, I think that's one of the

293
00:16:33,560 --> 00:16:38,680
Speaker 1: most overrated variables. My view on positioning is that it

294
00:16:38,800 --> 00:16:41,920
Speaker 1: kind of matters at the super extremes, and it can

295
00:16:42,000 --> 00:16:44,560
Speaker 1: be like the only thing that matters at the super extremes,

296
00:16:44,920 --> 00:16:47,160
Speaker 1: but most of the time it just doesn't matter. Um

297
00:16:47,160 --> 00:16:51,240
Speaker 1: Like macro and stuff tens and and flows and all

298
00:16:51,280 --> 00:16:55,200
Speaker 1: that tend to override positioning. But as a retail in person,

299
00:16:55,520 --> 00:16:57,920
Speaker 1: I can answer that easily because that's what I did

300
00:16:58,000 --> 00:17:01,360
Speaker 1: from us and three that's what I did. I was

301
00:17:01,400 --> 00:17:05,080
Speaker 1: trading my own account during the nasdack bubble, and at

302
00:17:05,119 --> 00:17:08,359
Speaker 1: that time my edge was first of all, I didn't

303
00:17:08,359 --> 00:17:11,720
Speaker 1: have very much money, so I would risk management. My

304
00:17:11,800 --> 00:17:14,560
Speaker 1: risk management was really good. I worked at a place

305
00:17:14,600 --> 00:17:17,159
Speaker 1: called Swift Trade, which was like a place where you

306
00:17:17,200 --> 00:17:19,640
Speaker 1: go in and sit down and it's you have it's

307
00:17:19,680 --> 00:17:22,600
Speaker 1: a trading floor, legit trading floor, and you pay commission.

308
00:17:22,640 --> 00:17:25,600
Speaker 1: I think it still exists actually, um Like people kind

309
00:17:25,600 --> 00:17:27,280
Speaker 1: of call them bucket shops, but this was like a

310
00:17:27,280 --> 00:17:30,520
Speaker 1: professional place. It wasn't a bucket shop. And whenever people

311
00:17:30,560 --> 00:17:32,800
Speaker 1: walked by my screen, people used to always say, how

312
00:17:32,800 --> 00:17:34,720
Speaker 1: can be your Your P and L is always green,

313
00:17:35,280 --> 00:17:38,679
Speaker 1: And essentially the reason was so that obviously if you're up,

314
00:17:38,680 --> 00:17:40,320
Speaker 1: it was green, and if it was if you were down,

315
00:17:40,320 --> 00:17:43,240
Speaker 1: it was read. Was that I just cut my losing

316
00:17:43,280 --> 00:17:47,840
Speaker 1: positions really really fast. So everything I did was momentum based,

317
00:17:48,160 --> 00:17:51,320
Speaker 1: essentially looking at futures, and I had the future squawk on,

318
00:17:51,440 --> 00:17:53,520
Speaker 1: and then when futures started to you know, you could

319
00:17:53,520 --> 00:17:56,320
Speaker 1: get a sense of there was some electricity in the futures.

320
00:17:56,760 --> 00:17:58,960
Speaker 1: Then you would get on the bid in six stocks

321
00:17:58,960 --> 00:18:01,920
Speaker 1: that trade super wide, and then try and get given

322
00:18:01,960 --> 00:18:04,199
Speaker 1: by other retailer, by whoever, and then ride it up

323
00:18:04,200 --> 00:18:06,240
Speaker 1: a little bit. But I always cut my losses really fast.

324
00:18:06,280 --> 00:18:09,560
Speaker 1: So one edge can be really good risk management, and

325
00:18:09,600 --> 00:18:11,800
Speaker 1: the other one was I was really fast on the keys,

326
00:18:12,280 --> 00:18:16,240
Speaker 1: which sounds stupid, but in those days there were so

327
00:18:16,280 --> 00:18:19,720
Speaker 1: many ridiculous things happening. Like somebody would go on CNBC

328
00:18:19,880 --> 00:18:22,359
Speaker 1: and say, hey, my stock of the week coming up

329
00:18:22,400 --> 00:18:26,320
Speaker 1: after these commercial messages. It's a optical network maker in

330
00:18:26,400 --> 00:18:30,040
Speaker 1: Texas or whatever. So you just frantically google like optical maker,

331
00:18:30,440 --> 00:18:33,239
Speaker 1: you know, and find the three biggest ones or in

332
00:18:33,280 --> 00:18:36,440
Speaker 1: that case there's probably only one. You buy it and

333
00:18:36,560 --> 00:18:38,479
Speaker 1: go up four percent and you sell it. So there

334
00:18:38,520 --> 00:18:42,399
Speaker 1: were so many trades like that that essentially almost felt

335
00:18:42,400 --> 00:18:45,119
Speaker 1: like zero risk. But then I can give you the

336
00:18:45,119 --> 00:18:48,080
Speaker 1: rest of that story, which could because that again relates

337
00:18:48,080 --> 00:18:53,439
Speaker 1: to my my adaptation thing is that so what I

338
00:18:53,520 --> 00:18:57,000
Speaker 1: was doing relied on pretty wide bid offer and then

339
00:18:57,080 --> 00:19:00,240
Speaker 1: just catching brief momentum and kind of catching the the

340
00:19:00,320 --> 00:19:02,359
Speaker 1: wide bid offer on a lot of these stocks. So

341
00:19:02,440 --> 00:19:06,760
Speaker 1: every morning I printed out a sheet or a list

342
00:19:06,880 --> 00:19:09,119
Speaker 1: of all the stocks over a hundred dollars, and it

343
00:19:09,160 --> 00:19:11,800
Speaker 1: was around four pages long, and those are the ones

344
00:19:11,840 --> 00:19:14,240
Speaker 1: I focused on because you need like high nominal value

345
00:19:14,280 --> 00:19:18,400
Speaker 1: to have wide bid offer. And in two thousand two,

346
00:19:18,440 --> 00:19:20,480
Speaker 1: when I printed out that thing, there were four stocks

347
00:19:20,520 --> 00:19:22,720
Speaker 1: on it, so went from four pages to four stocks.

348
00:19:23,119 --> 00:19:27,159
Speaker 1: And then in the meantime in two April one it

349
00:19:27,240 --> 00:19:29,159
Speaker 1: was either April one or O two, I can't remember,

350
00:19:29,160 --> 00:19:33,800
Speaker 1: but stocks went to decimalization. And so when the nominal

351
00:19:33,840 --> 00:19:37,080
Speaker 1: value of stocks was way lower and then there was decimalization,

352
00:19:37,200 --> 00:19:40,280
Speaker 1: the bid offers size collapsed, like so instead of some

353
00:19:40,359 --> 00:19:43,479
Speaker 1: stuff was trading like fifty cents wide tons of stocks

354
00:19:43,480 --> 00:19:46,320
Speaker 1: at that time, we're trading like one one cent wide.

355
00:19:46,800 --> 00:19:49,639
Speaker 1: So what I was doing stopped working, but I just

356
00:19:49,720 --> 00:19:52,000
Speaker 1: kept on doing it. So my account went from like

357
00:19:52,040 --> 00:19:55,120
Speaker 1: twenty five thousand to three D fifty thousand back down

358
00:19:55,119 --> 00:19:59,480
Speaker 1: to like seventy thousand by O two oh three. And

359
00:19:59,600 --> 00:20:01,679
Speaker 1: it was as I never adapted. I just kept on

360
00:20:01,720 --> 00:20:04,440
Speaker 1: doing the same thing. And so one thing I say

361
00:20:04,440 --> 00:20:07,480
Speaker 1: in the book is one of the reasons that you

362
00:20:07,560 --> 00:20:09,440
Speaker 1: really have to have an edge that I don't think

363
00:20:09,480 --> 00:20:11,800
Speaker 1: people fully understand, and I try to lay it out

364
00:20:11,920 --> 00:20:16,440
Speaker 1: in in with some graphs of gross and net, is

365
00:20:16,680 --> 00:20:20,840
Speaker 1: that you can be gross positive and net negative and

366
00:20:21,000 --> 00:20:24,240
Speaker 1: that's not going to pay the bills. So generally what

367
00:20:24,359 --> 00:20:26,960
Speaker 1: happened to me was throughout my whole time when I

368
00:20:27,000 --> 00:20:29,359
Speaker 1: was day trading, I was always gross positive, so I

369
00:20:29,400 --> 00:20:31,919
Speaker 1: always made money. I had some kind of edge. But

370
00:20:32,080 --> 00:20:34,760
Speaker 1: there's commission, right, So as I was trading more and

371
00:20:34,800 --> 00:20:37,320
Speaker 1: more shares because the value of the stocks went down,

372
00:20:38,040 --> 00:20:41,679
Speaker 1: they're my commission was slowly rising, rising, rising, until the

373
00:20:41,720 --> 00:20:44,280
Speaker 1: point where a lot of days I was net negative,

374
00:20:44,320 --> 00:20:46,840
Speaker 1: even though I was still mostly gross positive most days.

375
00:20:47,480 --> 00:20:51,440
Speaker 1: And so people have to understand that, Like people think, oh,

376
00:20:51,440 --> 00:20:54,199
Speaker 1: it's a zero sum game. I'm a smart person. I

377
00:20:54,240 --> 00:20:57,280
Speaker 1: cannot smart. You know, I'm smarter than average, which is

378
00:20:57,320 --> 00:21:00,119
Speaker 1: that the classic bias. But anyways. But the thing is

379
00:21:00,160 --> 00:21:02,679
Speaker 1: it's actually a negative some games. So you have to

380
00:21:02,720 --> 00:21:06,720
Speaker 1: be able to whether you're paying you know, visible commission

381
00:21:06,760 --> 00:21:08,960
Speaker 1: or not you are paying attacks every time you trade.

382
00:21:09,000 --> 00:21:12,200
Speaker 1: Even as an institutional trader, there's still brokerades and prime

383
00:21:12,240 --> 00:21:14,680
Speaker 1: brophees and bid offer and all that, so you have

384
00:21:14,840 --> 00:21:17,440
Speaker 1: people have to understand it's it's a negative some game,

385
00:21:17,800 --> 00:21:22,679
Speaker 1: and so that's why it's so difficult. So anytime people

386
00:21:22,880 --> 00:21:25,280
Speaker 1: bring up dot com your stories, I get excited because

387
00:21:25,359 --> 00:21:28,320
Speaker 1: I was a small retail trader around then too, and

388
00:21:28,680 --> 00:21:31,840
Speaker 1: you know, I definitely saw exactly what you described, especially

389
00:21:31,840 --> 00:21:34,720
Speaker 1: with friends who like made a ton of money in

390
00:21:36,200 --> 00:21:39,879
Speaker 1: early two thousand and it didn't they didn't realize that

391
00:21:39,920 --> 00:21:42,399
Speaker 1: the market had shifted for like two years, and so

392
00:21:42,440 --> 00:21:44,320
Speaker 1: they just kept doing the same thing, and so that

393
00:21:44,440 --> 00:21:48,720
Speaker 1: really resonated. But actually, so I graduated from college and

394
00:21:48,760 --> 00:21:52,840
Speaker 1: O two and I got a job offer. I was

395
00:21:52,960 --> 00:21:55,359
Speaker 1: kind of a job offer at one of these like

396
00:21:55,640 --> 00:21:58,760
Speaker 1: trading shops, and like two people applied and they gave

397
00:21:59,320 --> 00:22:01,520
Speaker 1: four people offers, and it was like one of these

398
00:22:01,520 --> 00:22:03,480
Speaker 1: places where they would like start you with X amount

399
00:22:03,560 --> 00:22:05,639
Speaker 1: and if you did well, and it was you know,

400
00:22:05,800 --> 00:22:07,920
Speaker 1: I actually got one of the offers, and I didn't

401
00:22:07,960 --> 00:22:10,439
Speaker 1: take it for whatever reason, because I was young. I

402
00:22:10,480 --> 00:22:12,879
Speaker 1: want to party and I didn't. I just I didn't

403
00:22:12,880 --> 00:22:14,760
Speaker 1: feel ready and I ended up not doing it. And I,

404
00:22:14,840 --> 00:22:17,280
Speaker 1: you know, twenty years later, almost twenty years later, I

405
00:22:17,280 --> 00:22:20,080
Speaker 1: I sometimes think back and I like, did I make

406
00:22:20,119 --> 00:22:22,280
Speaker 1: a wrong choice? I Could I be a billionaire? You know,

407
00:22:22,359 --> 00:22:24,239
Speaker 1: could I be like a huge hedge fund mogul now

408
00:22:24,280 --> 00:22:26,880
Speaker 1: if I had taken that job and really gotten into trading.

409
00:22:27,520 --> 00:22:31,320
Speaker 1: So which raises the question I'm I'm guessing the answers. No,

410
00:22:31,400 --> 00:22:33,239
Speaker 1: I don't think I would have been good. What does

411
00:22:33,320 --> 00:22:35,919
Speaker 1: someone have to know about themselves? How can I like,

412
00:22:36,080 --> 00:22:37,960
Speaker 1: if I think back to that moment, is like, did

413
00:22:37,960 --> 00:22:39,720
Speaker 1: I make the right choice in two thousand and two

414
00:22:39,760 --> 00:22:42,679
Speaker 1: to either to not take this offer? What should I

415
00:22:42,720 --> 00:22:45,560
Speaker 1: know about myself to determine whether that was the right

416
00:22:45,560 --> 00:22:50,400
Speaker 1: call or not? Sure? So, I think the first thing

417
00:22:50,760 --> 00:22:55,119
Speaker 1: that that successful traders who I mean, what you're describing

418
00:22:55,760 --> 00:22:57,920
Speaker 1: is someone that kind of comes in and pretty much

419
00:22:58,119 --> 00:23:01,720
Speaker 1: does well right away. And and generally most people don't

420
00:23:01,720 --> 00:23:03,800
Speaker 1: do that because there's a lot of painful lessons, which

421
00:23:03,840 --> 00:23:05,400
Speaker 1: is kind of what my book is about. Like I'm

422
00:23:05,400 --> 00:23:07,840
Speaker 1: not saying I'm the holder of absolute truth on trading.

423
00:23:08,160 --> 00:23:10,679
Speaker 1: It's more like here, I made all these mistakes and

424
00:23:10,680 --> 00:23:13,000
Speaker 1: and saw other people make mistakes, and then train people

425
00:23:13,080 --> 00:23:16,760
Speaker 1: who made mistakes. So a lot of success in trading

426
00:23:16,800 --> 00:23:20,440
Speaker 1: sometimes comes more from like having adequate runway. And that's

427
00:23:20,440 --> 00:23:22,040
Speaker 1: why I like going to a bank or whatever, you

428
00:23:22,080 --> 00:23:25,160
Speaker 1: have more runway, whereas coming into a day trading shop,

429
00:23:25,720 --> 00:23:28,239
Speaker 1: the problem, the biggest issue really is that you just

430
00:23:28,280 --> 00:23:30,840
Speaker 1: don't have a ton of runway, usually because you have

431
00:23:30,880 --> 00:23:33,280
Speaker 1: a finite amount of capital or you have like a

432
00:23:33,359 --> 00:23:35,639
Speaker 1: you know, pretty tight stops and all that. So the

433
00:23:35,680 --> 00:23:39,440
Speaker 1: point that you have to get to is you pretty

434
00:23:39,480 --> 00:23:41,560
Speaker 1: much have to start from the point that that a

435
00:23:41,600 --> 00:23:45,480
Speaker 1: lot of people get to eventually, UM, which is being rational.

436
00:23:45,920 --> 00:23:49,800
Speaker 1: Um is the number one thing. So what tends to

437
00:23:49,840 --> 00:23:53,080
Speaker 1: happen is people can be rational when they're invaluate, when

438
00:23:53,080 --> 00:23:56,199
Speaker 1: they're analyzing the market. But then what happens is as

439
00:23:56,200 --> 00:23:58,760
Speaker 1: soon as you put on a position, you're like just

440
00:23:58,840 --> 00:24:02,040
Speaker 1: like the steaming hot pile of bias because you have

441
00:24:02,160 --> 00:24:05,280
Speaker 1: emotional attachment to the to the position itself and the

442
00:24:05,440 --> 00:24:08,160
Speaker 1: new information. You're kind of generally a bit more white knuckling,

443
00:24:08,440 --> 00:24:11,400
Speaker 1: so new information, you tend to overreact to the new

444
00:24:11,440 --> 00:24:14,920
Speaker 1: information to the conmon and two verse. Key stuff kind

445
00:24:14,920 --> 00:24:18,199
Speaker 1: of goes into this, but a lot of that is

446
00:24:18,359 --> 00:24:21,040
Speaker 1: in an experimental setting. So what I try to do

447
00:24:21,080 --> 00:24:22,760
Speaker 1: in the book is also relate a lot of the

448
00:24:23,240 --> 00:24:27,560
Speaker 1: conmon divers key stuff to trading, because all that stuff

449
00:24:27,600 --> 00:24:30,760
Speaker 1: that happens in an experimental setting obviously happens in real life.

450
00:24:31,400 --> 00:24:33,919
Speaker 1: And then I think you also have to be really conscientious.

451
00:24:33,960 --> 00:24:36,600
Speaker 1: So it's funny he said you wanted to party and

452
00:24:36,600 --> 00:24:38,560
Speaker 1: all that. And that's one thing that kind of hurt

453
00:24:38,640 --> 00:24:42,159
Speaker 1: me in in the two era was that, you know,

454
00:24:42,200 --> 00:24:44,600
Speaker 1: I was twenty two three. I had a lot of

455
00:24:44,640 --> 00:24:47,240
Speaker 1: other things that I wanted to do. Besides, I wanted

456
00:24:47,280 --> 00:24:49,000
Speaker 1: to go and trade for a couple of hours and

457
00:24:49,000 --> 00:24:51,520
Speaker 1: make my money and then go have fun. And that's

458
00:24:51,520 --> 00:24:54,320
Speaker 1: just not how the world works. Like so I think

459
00:24:54,400 --> 00:24:58,040
Speaker 1: conscientiousness again, And so I did a little bit of

460
00:24:58,080 --> 00:25:00,800
Speaker 1: research for the book. Most of it is my experience

461
00:25:00,840 --> 00:25:04,240
Speaker 1: watching watching people and watching myself, but I did some

462
00:25:04,400 --> 00:25:09,120
Speaker 1: research as well on what are the fundamental underpinnings of

463
00:25:09,160 --> 00:25:13,320
Speaker 1: success in the world in general, and conscientiousness is the

464
00:25:13,560 --> 00:25:17,800
Speaker 1: is the one that generally in athletics, academics, business in

465
00:25:17,880 --> 00:25:22,320
Speaker 1: almost all domains, the research shows that conscientiousness is the

466
00:25:22,400 --> 00:25:27,320
Speaker 1: number one driver, and interestingly, conscientiousness is the one trait

467
00:25:27,480 --> 00:25:30,000
Speaker 1: in the Big five that goes up over time throughout

468
00:25:30,040 --> 00:25:32,800
Speaker 1: your life. So again, I think that makes it really

469
00:25:32,800 --> 00:25:36,160
Speaker 1: hard because you have to do the work. Like there's

470
00:25:36,200 --> 00:25:39,680
Speaker 1: so many people out there trying to compete. It's it's

471
00:25:39,800 --> 00:25:44,840
Speaker 1: very similar to like you mentioned, poker, professional sports, trying

472
00:25:44,880 --> 00:25:48,000
Speaker 1: to be a professional fiction author. Is that the barriers

473
00:25:48,000 --> 00:25:50,800
Speaker 1: to entry are so low and the rewards are so

474
00:25:51,119 --> 00:25:54,200
Speaker 1: massive that it just attracts a lot of people. And

475
00:25:54,240 --> 00:25:56,840
Speaker 1: obviously that means there's a lot of competition. Plus there's

476
00:25:56,840 --> 00:25:59,880
Speaker 1: transaction costs, so the negative sum game with a ton

477
00:25:59,880 --> 00:26:03,600
Speaker 1: of skilled individuals. You have to do the work. And

478
00:26:03,680 --> 00:26:08,320
Speaker 1: so if you are trying to like make make your

479
00:26:08,320 --> 00:26:10,840
Speaker 1: money in three hours trading the open and then you

480
00:26:10,880 --> 00:26:12,520
Speaker 1: know go back to bed so that you can go

481
00:26:12,600 --> 00:26:15,640
Speaker 1: club until three am or whatever, that's that's not gonna work.

482
00:26:16,240 --> 00:26:18,639
Speaker 1: And I think, you know, fundamentally, a lot of people,

483
00:26:18,680 --> 00:26:22,600
Speaker 1: including myself, didn't really I never was very conscientious as

484
00:26:22,640 --> 00:26:24,920
Speaker 1: a as a young person, I was the opposite whatever

485
00:26:24,960 --> 00:26:29,160
Speaker 1: the opposite is so unless you have that really strong

486
00:26:29,560 --> 00:26:32,600
Speaker 1: mentality of coming in and doing the work and grinding

487
00:26:32,680 --> 00:26:35,520
Speaker 1: every single day. And actually it's the same with poker, right,

488
00:26:35,600 --> 00:26:38,040
Speaker 1: The people that really find success at a young age

489
00:26:38,400 --> 00:26:40,919
Speaker 1: are the people that can grind and grind and grind.

490
00:26:41,440 --> 00:26:45,280
Speaker 1: And then the last thing I would say is the

491
00:26:45,480 --> 00:26:48,480
Speaker 1: right level of confidence. So I call it calibrated confidence.

492
00:26:48,520 --> 00:26:51,439
Speaker 1: So generally, you know the poll or the survey or

493
00:26:51,480 --> 00:26:54,280
Speaker 1: the research that says of people think they're better than

494
00:26:54,320 --> 00:26:58,160
Speaker 1: average drivers. Um, that sounds like a joke, but it's true, um,

495
00:26:58,200 --> 00:27:01,359
Speaker 1: And that the research shows out in every every area.

496
00:27:02,200 --> 00:27:05,720
Speaker 1: The problem with trading if if you're overconfident, you tend

497
00:27:05,720 --> 00:27:08,359
Speaker 1: to blow up, and if you're not the a right

498
00:27:08,400 --> 00:27:10,760
Speaker 1: amount of confidence, then you just tend to not be

499
00:27:10,840 --> 00:27:13,399
Speaker 1: able to pull the trigger. Or the other side of

500
00:27:13,400 --> 00:27:15,159
Speaker 1: that is every time you get into a trade, you

501
00:27:15,280 --> 00:27:17,480
Speaker 1: just see danger everywhere and you just want to get out.

502
00:27:18,160 --> 00:27:23,000
Speaker 1: To come in at three years old and be rational, conscientious,

503
00:27:23,240 --> 00:27:28,280
Speaker 1: and have calibrated confidence, Man, that's a huge ask. Like, yeah,

504
00:27:28,359 --> 00:27:30,400
Speaker 1: there's a few people that are like that, but that's

505
00:27:30,440 --> 00:27:33,440
Speaker 1: a huge ask. And then the other thing that that

506
00:27:33,480 --> 00:27:38,920
Speaker 1: we kind of talked about is adaptation. So doing something

507
00:27:39,119 --> 00:27:42,280
Speaker 1: and making money that doesn't mean that that thing is

508
00:27:42,320 --> 00:27:45,200
Speaker 1: going to work next year. So having one eye on

509
00:27:45,240 --> 00:27:48,400
Speaker 1: the horizon and saying okay, and I mean that takes

510
00:27:48,400 --> 00:27:51,560
Speaker 1: a lot of humility to um to say okay, I'm

511
00:27:51,600 --> 00:27:53,640
Speaker 1: not a god, because you feel like a god when

512
00:27:53,640 --> 00:27:56,879
Speaker 1: you're twenty two and you you quadruple your account, you know,

513
00:27:57,040 --> 00:28:00,040
Speaker 1: so to be able to say okay, and to be

514
00:28:00,040 --> 00:28:01,919
Speaker 1: able to admit admit, okay, I was in the right

515
00:28:01,920 --> 00:28:04,640
Speaker 1: place at the right time here, but next year might

516
00:28:04,640 --> 00:28:06,280
Speaker 1: be different. So I'm going to be have one on

517
00:28:06,440 --> 00:28:09,600
Speaker 1: the horizon and get ready to adapt. So just on

518
00:28:09,680 --> 00:28:14,480
Speaker 1: that note, you know you talked about identifying regime changes earlier.

519
00:28:15,240 --> 00:28:17,720
Speaker 1: How do you actually go about doing that? Because you know,

520
00:28:17,760 --> 00:28:19,760
Speaker 1: it's one thing to say, like, well, obviously you have

521
00:28:19,880 --> 00:28:22,159
Speaker 1: to adapt, but in order to adapt, you have to

522
00:28:22,240 --> 00:28:25,840
Speaker 1: actually spot that something is changing. So how does one

523
00:28:25,880 --> 00:28:30,200
Speaker 1: do that as a trader? Sure, so that's one thing

524
00:28:30,320 --> 00:28:34,639
Speaker 1: that it's it's also really hard to you can see

525
00:28:34,720 --> 00:28:38,400
Speaker 1: something changing. So for example, I trade a lot of correlation. Um,

526
00:28:38,600 --> 00:28:41,520
Speaker 1: so I see like gold rallying, that's generally bad for

527
00:28:41,560 --> 00:28:43,840
Speaker 1: the dollars. So if you're on a super short term

528
00:28:43,880 --> 00:28:47,440
Speaker 1: trader and you see yields lower, gold up and dollar

529
00:28:47,520 --> 00:28:51,240
Speaker 1: hasn't moved, then you know, you might think that gives

530
00:28:51,280 --> 00:28:53,720
Speaker 1: me a clue that the next and the dollar is

531
00:28:53,760 --> 00:28:56,040
Speaker 1: probably down. That's kind of like a basic framework of

532
00:28:56,040 --> 00:28:59,720
Speaker 1: how correlation works. Pre two eight, that was a huge

533
00:28:59,840 --> 00:29:01,960
Speaker 1: edge because a lot of people didn't even have live

534
00:29:02,000 --> 00:29:05,400
Speaker 1: feeds to stuff like even working at an investment bank,

535
00:29:05,880 --> 00:29:07,720
Speaker 1: there were traders that sat too over for me that

536
00:29:07,760 --> 00:29:10,120
Speaker 1: didn't have live feeds to gold and oil and stuff

537
00:29:10,160 --> 00:29:13,000
Speaker 1: like that, which is mind blowing now. So then oh

538
00:29:13,000 --> 00:29:16,120
Speaker 1: eight brought all that into focus because correlations went to

539
00:29:16,200 --> 00:29:19,560
Speaker 1: one between every single asset class. So a lot of

540
00:29:19,560 --> 00:29:22,920
Speaker 1: algorithms obviously plugged into that, but then every human being

541
00:29:22,960 --> 00:29:25,480
Speaker 1: as well did. Oh and the other thing is too,

542
00:29:25,520 --> 00:29:27,960
Speaker 1: is that the blog is fear exploded at that time.

543
00:29:28,040 --> 00:29:31,040
Speaker 1: So the overlays. So what I sent out an overlay

544
00:29:31,080 --> 00:29:34,520
Speaker 1: of um, you know, kiwi and against SMPS in two

545
00:29:34,520 --> 00:29:36,720
Speaker 1: thousand six. That was kind of a novel thing and

546
00:29:36,760 --> 00:29:39,040
Speaker 1: people be, oh, that's cool. Yeah, risk appetite kind of

547
00:29:39,120 --> 00:29:40,880
Speaker 1: drives both of those things. They should go up and

548
00:29:40,880 --> 00:29:44,320
Speaker 1: down together. And now I mean those things, those overlays

549
00:29:44,360 --> 00:29:47,479
Speaker 1: are are so common that. Um, there's there's just not

550
00:29:47,560 --> 00:29:50,120
Speaker 1: a lot of edge left with that. But because I

551
00:29:50,280 --> 00:29:52,600
Speaker 1: started trading that way and it was a huge edge

552
00:29:52,600 --> 00:29:54,360
Speaker 1: for me, and including a way, it was a huge

553
00:29:54,440 --> 00:29:57,240
Speaker 1: edge as correlations went to one, it's really hard to

554
00:29:57,240 --> 00:29:59,640
Speaker 1: give up on that because you kind of have some

555
00:29:59,680 --> 00:30:01,400
Speaker 1: owner ship in it and that thing kind of paid

556
00:30:01,440 --> 00:30:03,440
Speaker 1: your bills for a long time or did did well

557
00:30:03,480 --> 00:30:05,200
Speaker 1: by you, and so to throw it in the garbage

558
00:30:05,200 --> 00:30:09,880
Speaker 1: feels bad. Um. So there is a challenge to saying okay,

559
00:30:09,880 --> 00:30:12,440
Speaker 1: first of all, identifying that things have changed, which I

560
00:30:12,480 --> 00:30:15,040
Speaker 1: think I was doing at the time, but then I

561
00:30:15,080 --> 00:30:17,040
Speaker 1: stuck with it way too long just because it was

562
00:30:17,120 --> 00:30:19,640
Speaker 1: such a good strategy. I was kind of, I think subconsciously,

563
00:30:19,640 --> 00:30:23,200
Speaker 1: to go maybe it'll come back. One really obvious way, sorry,

564
00:30:23,240 --> 00:30:27,479
Speaker 1: to answer your question more directly, Tracy, to identify regime

565
00:30:27,680 --> 00:30:32,120
Speaker 1: is using a Volve filter. So if vix is below fifteen,

566
00:30:32,560 --> 00:30:37,080
Speaker 1: that's one regime fifteen another forty, and then above forty.

567
00:30:37,240 --> 00:30:40,960
Speaker 1: That's one really simple way. Um. And I think if

568
00:30:41,520 --> 00:30:44,680
Speaker 1: you have any experience trading, you do that a little

569
00:30:44,720 --> 00:30:48,760
Speaker 1: bit um by intuition or you know you do it

570
00:30:48,840 --> 00:30:51,960
Speaker 1: just because you know you feel it. But doing it

571
00:30:52,000 --> 00:30:56,360
Speaker 1: more systematically and adjusting your position size based on current

572
00:30:56,440 --> 00:30:59,560
Speaker 1: volatility is something that people generally don't do very well.

573
00:30:59,760 --> 00:31:04,000
Speaker 1: So you'll see in a bank, you'll see a trader

574
00:31:04,080 --> 00:31:07,840
Speaker 1: that just always is longer short, twenty euros twenty million euros,

575
00:31:08,600 --> 00:31:11,600
Speaker 1: and that makes no sense of fall goes from six

576
00:31:11,800 --> 00:31:13,800
Speaker 1: one month, year of all goes from six to twelve.

577
00:31:14,360 --> 00:31:16,760
Speaker 1: You shouldn't just always have the same position. Like that's

578
00:31:16,840 --> 00:31:19,560
Speaker 1: pretty much trading one on one is adjusting your position

579
00:31:19,600 --> 00:31:22,440
Speaker 1: to volatility. Yet a lot of people don't do it.

580
00:31:22,600 --> 00:31:25,720
Speaker 1: So that's one way you can identify regimes. There's a

581
00:31:25,720 --> 00:31:29,240
Speaker 1: lot of quantitative ways um looking at you know, rolling

582
00:31:29,480 --> 00:31:33,000
Speaker 1: twenty day correlation of assets against each other and things

583
00:31:33,040 --> 00:31:35,920
Speaker 1: like that. But then also I think part of it

584
00:31:35,960 --> 00:31:39,719
Speaker 1: is is just paying attention and and listening to what

585
00:31:39,760 --> 00:31:43,200
Speaker 1: people are saying and being thoughtful about it. So I

586
00:31:43,240 --> 00:31:46,280
Speaker 1: think if you're if you're not in that mindset of adaptation,

587
00:31:46,880 --> 00:31:49,920
Speaker 1: then when new things come along, you're just more fighting it.

588
00:31:50,040 --> 00:31:52,760
Speaker 1: So you know, the classic example of that is I

589
00:31:52,800 --> 00:31:55,480
Speaker 1: remember in two thousand and ten, I might have the

590
00:31:55,560 --> 00:31:59,000
Speaker 1: year wrong, but around there David Tepper went on CNBC

591
00:31:59,120 --> 00:32:00,920
Speaker 1: and he's like, there's a lot liquidity. You've got to

592
00:32:00,960 --> 00:32:03,400
Speaker 1: own stocks, and a lot of people were like, that's

593
00:32:03,440 --> 00:32:06,920
Speaker 1: so simplistic, like it's just not that easy, dude, And

594
00:32:07,120 --> 00:32:11,000
Speaker 1: it was that easy, So you know he was. He

595
00:32:11,120 --> 00:32:13,600
Speaker 1: had an open mind too, like I don't care what

596
00:32:13,680 --> 00:32:15,680
Speaker 1: I wish FED policy was, or I don't care what

597
00:32:15,760 --> 00:32:18,400
Speaker 1: I wish how how stock markets work, this is how

598
00:32:18,440 --> 00:32:21,600
Speaker 1: they are currently working. And he was correct. And you know,

599
00:32:21,640 --> 00:32:24,680
Speaker 1: I know one anecdote of of of sort of a

600
00:32:24,720 --> 00:32:26,840
Speaker 1: friend of a friend of mine who opened a hedge

601
00:32:26,840 --> 00:32:29,880
Speaker 1: fund in and the first trade he did was sell

602
00:32:30,040 --> 00:32:35,080
Speaker 1: SMP futures and they closed in because performance wasn't very good.

603
00:32:35,520 --> 00:32:38,040
Speaker 1: And the last trade they did was covering an SMP short.

604
00:32:38,240 --> 00:32:40,600
Speaker 1: So not to say they were short the whole time,

605
00:32:40,640 --> 00:32:43,800
Speaker 1: but you get the idea that that that not looking

606
00:32:43,800 --> 00:32:47,400
Speaker 1: at what regime you're in can kill you. You know,

607
00:32:47,440 --> 00:32:51,280
Speaker 1: I remember that the Temper call, and you know what

608
00:32:51,440 --> 00:32:55,800
Speaker 1: struck me about Temper at the time was and you know,

609
00:32:55,880 --> 00:32:58,760
Speaker 1: not overthinking it. And I feel like again, I'm like

610
00:32:58,760 --> 00:33:01,120
Speaker 1: thinking about my own temp were meant in life and

611
00:33:01,160 --> 00:33:03,320
Speaker 1: why I don't think I would have been a good trader.

612
00:33:03,360 --> 00:33:08,200
Speaker 1: I feel like the people who go into journalism it's like, well,

613
00:33:08,240 --> 00:33:11,520
Speaker 1: you know, technically speaking, when the FED expands the balance

614
00:33:11,600 --> 00:33:14,960
Speaker 1: sheet and that's not really at a liquidity and it's

615
00:33:14,960 --> 00:33:16,880
Speaker 1: a nasset swap. But we like to think like that,

616
00:33:16,960 --> 00:33:19,920
Speaker 1: and we like to explain why some white white people

617
00:33:19,960 --> 00:33:23,520
Speaker 1: are wrong, or we explain why some popular conception doesn't

618
00:33:23,560 --> 00:33:28,920
Speaker 1: actually the mechanics of something that everyone's talking about doesn't

619
00:33:28,920 --> 00:33:31,880
Speaker 1: actually work that way. And I feel like there are times,

620
00:33:31,920 --> 00:33:33,840
Speaker 1: and maybe there are times when that's called for, but

621
00:33:33,880 --> 00:33:36,800
Speaker 1: I feel like our times in Post two thousand nine

622
00:33:36,920 --> 00:33:42,000
Speaker 1: was one probably uh you know, last April was one

623
00:33:42,120 --> 00:33:49,920
Speaker 1: where overthinking and it can really really not just following momentum. Sorry, no,

624
00:33:50,040 --> 00:33:52,400
Speaker 1: that's all right. I mean I think it's I don't

625
00:33:52,400 --> 00:33:56,240
Speaker 1: think it is, because I think it's more understanding what

626
00:33:56,280 --> 00:34:00,200
Speaker 1: matters and what doesn't. So looking at your framework if

627
00:34:00,240 --> 00:34:02,880
Speaker 1: you're if you're more of a so like I'm a

628
00:34:02,880 --> 00:34:07,440
Speaker 1: combination of fundamentals, technicals, and positioning. But when I say fundamentals,

629
00:34:07,440 --> 00:34:10,600
Speaker 1: it's more about narrative um in the kind of I

630
00:34:10,640 --> 00:34:12,879
Speaker 1: don't know if you guys read Ben Hunts stuff, but

631
00:34:13,120 --> 00:34:16,480
Speaker 1: um in that kind of vein of not necessarily the

632
00:34:16,520 --> 00:34:20,080
Speaker 1: fundamentals as a weighing machine, but more as a voting machine,

633
00:34:20,120 --> 00:34:22,920
Speaker 1: so like, what are people voting for? And I think so,

634
00:34:23,040 --> 00:34:26,080
Speaker 1: I think if you have the right framework, then that's

635
00:34:26,160 --> 00:34:28,839
Speaker 1: what what it. So it doesn't necessarily mean always being

636
00:34:28,840 --> 00:34:31,840
Speaker 1: long stocks. In fact, right now you might start to think, Okay,

637
00:34:31,840 --> 00:34:35,759
Speaker 1: now we're in the transition period between additional liquidity and

638
00:34:35,920 --> 00:34:40,160
Speaker 1: reduction of liquidity. So maybe now for stocks, if you

639
00:34:40,160 --> 00:34:43,360
Speaker 1: were using that framework, that that temper framework. And I

640
00:34:43,360 --> 00:34:44,799
Speaker 1: don't know if this is the case because I haven't

641
00:34:44,840 --> 00:34:47,960
Speaker 1: heard from him in a while, but um, in that framework,

642
00:34:47,960 --> 00:34:51,440
Speaker 1: you might be now thinking about selling calls or something

643
00:34:51,480 --> 00:34:53,279
Speaker 1: like that, because we might be more in a chop

644
00:34:53,560 --> 00:34:56,520
Speaker 1: period now where it's not clear. I don't think which

645
00:34:56,520 --> 00:34:59,839
Speaker 1: way liquidity is going. It's certainly not as clear as

646
00:34:59,840 --> 00:35:04,160
Speaker 1: it so to me. No, I don't think it's a

647
00:35:04,200 --> 00:35:08,640
Speaker 1: momentum strategy. It's it's having the correct framework and then

648
00:35:09,400 --> 00:35:12,799
Speaker 1: using that framework to to trade. And the way that

649
00:35:12,880 --> 00:35:15,520
Speaker 1: I kind of describe it is you want to be

650
00:35:15,560 --> 00:35:19,880
Speaker 1: more concerned about what's happening and less concerned about why,

651
00:35:19,920 --> 00:35:24,879
Speaker 1: because the Y is important. But the like you said, Joe,

652
00:35:25,080 --> 00:35:27,240
Speaker 1: you can kind of get bogged down and the Y

653
00:35:27,360 --> 00:35:29,759
Speaker 1: and the thing is it matters, and you have to

654
00:35:29,760 --> 00:35:32,920
Speaker 1: have a framework that makes sense. But in the end,

655
00:35:33,200 --> 00:35:35,640
Speaker 1: the what is what matters And I think that's the

656
00:35:35,640 --> 00:35:38,839
Speaker 1: the useful part about technical analysis is that it's been

657
00:35:38,880 --> 00:35:42,279
Speaker 1: shown in a lot of research that technical analysis is

658
00:35:42,320 --> 00:35:45,600
Speaker 1: not a good forecasting tool. It doesn't back test very well.

659
00:35:45,640 --> 00:35:47,879
Speaker 1: If you back test head and shoulders are any kind

660
00:35:47,920 --> 00:35:51,720
Speaker 1: of patterns, generally systematically, they don't back test very well.

661
00:35:52,360 --> 00:35:54,920
Speaker 1: And yet there's also research that shows that people that

662
00:35:55,080 --> 00:35:59,720
Speaker 1: use technical analysis outperform those that don't, and that sounds

663
00:35:59,719 --> 00:36:03,040
Speaker 1: like a disconnect. But I think the reason that, um,

664
00:36:03,080 --> 00:36:07,080
Speaker 1: it's not is that technical analysis a great risk management tools.

665
00:36:07,120 --> 00:36:09,919
Speaker 1: So it tells you, you know, if you if you

666
00:36:10,600 --> 00:36:13,239
Speaker 1: breach a certain level, then you're going to admit that

667
00:36:13,280 --> 00:36:15,520
Speaker 1: you're wrong, and it forces you to admit that you're

668
00:36:15,560 --> 00:36:18,400
Speaker 1: wrong UM And I think that's the real value of

669
00:36:18,400 --> 00:36:23,000
Speaker 1: technical analysis as opposed to using it as a forecasting tool.

670
00:36:23,080 --> 00:36:25,160
Speaker 1: So I think a good framework is to have your

671
00:36:25,200 --> 00:36:28,480
Speaker 1: fundamental view, but then or your narrative view or whatever

672
00:36:28,520 --> 00:36:30,560
Speaker 1: you want to call it, but then you overlay technical

673
00:36:31,040 --> 00:36:34,759
Speaker 1: um parameters around it so that you have reassessment triggers

674
00:36:34,880 --> 00:36:38,680
Speaker 1: or or exit or action triggers based on technical analysis.

675
00:36:55,640 --> 00:36:58,960
Speaker 1: So a slightly random question here, but you bringing up

676
00:36:59,000 --> 00:37:02,160
Speaker 1: technical analysis reminded me of this. With your background and

677
00:37:02,200 --> 00:37:06,040
Speaker 1: currency trading, what do you think about bitcoin? Because to me,

678
00:37:06,280 --> 00:37:09,560
Speaker 1: like trading bitcoin is sort of it's sort of like

679
00:37:09,600 --> 00:37:13,160
Speaker 1: the ultimate expression of this of the idea that you know,

680
00:37:13,200 --> 00:37:17,200
Speaker 1: it doesn't sot so much matter why stuff is happening. Um,

681
00:37:17,239 --> 00:37:19,239
Speaker 1: the focus should be on the what. And I have

682
00:37:19,320 --> 00:37:21,600
Speaker 1: to say, as financial journalists, you know, every time there's

683
00:37:21,640 --> 00:37:24,840
Speaker 1: a big surge or fall in the price of bitcoin,

684
00:37:24,920 --> 00:37:27,040
Speaker 1: we're all sort of scrambling to try to figure out

685
00:37:27,080 --> 00:37:30,360
Speaker 1: a reason, and often for most of the time it

686
00:37:30,440 --> 00:37:32,760
Speaker 1: doesn't even really matter, right, The only thing that matters

687
00:37:32,880 --> 00:37:35,360
Speaker 1: is the price move. So I'm just curious whether or

688
00:37:35,360 --> 00:37:37,359
Speaker 1: not that's something you're looking at and how it kind

689
00:37:37,360 --> 00:37:42,480
Speaker 1: of relates to your overall trading strategy. Sure, so I

690
00:37:43,000 --> 00:37:46,720
Speaker 1: watch it closely. I actually think that bitcoin is slowly

691
00:37:46,760 --> 00:37:49,239
Speaker 1: becoming a pretty good proxy for the whole dollar d

692
00:37:49,320 --> 00:37:54,120
Speaker 1: basement and and fed liquidity trade. So when for example,

693
00:37:54,200 --> 00:37:58,760
Speaker 1: bitcoin peaked the nights, Elon went on sn L and

694
00:37:59,200 --> 00:38:03,200
Speaker 1: that was actually a decent indicator for for the currency market.

695
00:38:03,280 --> 00:38:05,280
Speaker 1: So if you look at what Aussie did, or or

696
00:38:05,400 --> 00:38:09,880
Speaker 1: or the more reflation oriented currencies that peak, and bitcoin

697
00:38:10,000 --> 00:38:12,920
Speaker 1: was a pretty good signal to get short those currencies.

698
00:38:13,280 --> 00:38:15,440
Speaker 1: Dollar Canada made a low at that time as well,

699
00:38:15,760 --> 00:38:18,319
Speaker 1: So I think it's becoming an important proxy. And the

700
00:38:18,360 --> 00:38:22,080
Speaker 1: other thing that I think is interesting is it does

701
00:38:22,200 --> 00:38:25,080
Speaker 1: look to me like there's a pretty clear substitution effect

702
00:38:25,160 --> 00:38:29,759
Speaker 1: between gold and bitcoin, where the gold there's a lot

703
00:38:29,800 --> 00:38:33,319
Speaker 1: of on Twitter, hey, what why is gold underperforming? And

704
00:38:33,400 --> 00:38:36,520
Speaker 1: to me, it seems like it's Bitcoin is becoming a

705
00:38:36,520 --> 00:38:39,840
Speaker 1: competitor to gold, right, And some people might believe that

706
00:38:39,920 --> 00:38:42,080
Speaker 1: or some might not, but it doesn't really matter if

707
00:38:42,120 --> 00:38:44,520
Speaker 1: you don't believe it, because you know, thirty eight percent

708
00:38:44,560 --> 00:38:46,800
Speaker 1: of people do believe it and they're buying bitcoin instead

709
00:38:46,800 --> 00:38:49,960
Speaker 1: of gold to hedge the dollar debasement story. So to me,

710
00:38:50,120 --> 00:38:53,080
Speaker 1: I think it's it's becoming like I don't really have

711
00:38:53,120 --> 00:38:55,719
Speaker 1: a view on price at current levels, but as an

712
00:38:55,719 --> 00:38:59,279
Speaker 1: asset class, I think it's it's just becoming a new

713
00:38:59,320 --> 00:39:02,040
Speaker 1: asset class. I know the way commodities really weren't that

714
00:39:02,120 --> 00:39:04,959
Speaker 1: much of an asset class at one point. Historically they were.

715
00:39:05,000 --> 00:39:08,280
Speaker 1: They were you know, good that got transacted and hedged

716
00:39:08,719 --> 00:39:11,160
Speaker 1: and then uh, they're a financial asset class and that

717
00:39:11,160 --> 00:39:13,080
Speaker 1: that can happen once in a while. And that's what

718
00:39:13,160 --> 00:39:18,120
Speaker 1: I think crypto UM specifically bitcoin is becoming and and

719
00:39:18,280 --> 00:39:22,960
Speaker 1: more narrowly, it's becoming a meaningful competitor to gold UM

720
00:39:23,000 --> 00:39:25,160
Speaker 1: because you get a yield on bitcoin and you don't

721
00:39:25,200 --> 00:39:27,839
Speaker 1: get one on gold. And and then depending on your

722
00:39:27,880 --> 00:39:31,279
Speaker 1: age and and you're kind of not political orientation, but

723
00:39:31,360 --> 00:39:36,360
Speaker 1: you're like money monetary systems orientation. UM. Again, it doesn't

724
00:39:36,360 --> 00:39:38,839
Speaker 1: matter if I believe or not. UM, if a lot

725
00:39:38,840 --> 00:39:41,560
Speaker 1: of people believe, then that's where the price is going

726
00:39:41,600 --> 00:39:44,000
Speaker 1: to be influenced. So that's again, Yeah, that's a good

727
00:39:44,000 --> 00:39:47,520
Speaker 1: example of the the what, not the why. And uh,

728
00:39:47,600 --> 00:39:50,480
Speaker 1: it is definitely interesting trying to find a framework for bitcoin,

729
00:39:50,520 --> 00:39:53,080
Speaker 1: I think is one of the great challenges right now. UM.

730
00:39:53,640 --> 00:39:56,200
Speaker 1: Like obviously a lot of people use technical analysis, but

731
00:39:56,280 --> 00:40:00,399
Speaker 1: I think there's a really interesting behavioral aspect as well. Uh.

732
00:40:00,440 --> 00:40:04,640
Speaker 1: The SNL elon stuff being one of the most intriguing

733
00:40:04,680 --> 00:40:08,000
Speaker 1: ones where it was the biggest by the rumors cell

734
00:40:08,040 --> 00:40:10,520
Speaker 1: the fact. And just to be clear, I was taught

735
00:40:10,520 --> 00:40:13,279
Speaker 1: writing about this like a week before it happened, so

736
00:40:13,600 --> 00:40:15,400
Speaker 1: and I'm wrong all the time, I'm just saying in

737
00:40:15,400 --> 00:40:17,520
Speaker 1: this case, I was right, and it was really obvious.

738
00:40:17,600 --> 00:40:19,560
Speaker 1: It was like the greatest by the rumor cell. The

739
00:40:19,600 --> 00:40:23,000
Speaker 1: fact trade in history was to be long does or

740
00:40:23,120 --> 00:40:26,480
Speaker 1: or long bitcoin into SNL and sell at eleven thirty

741
00:40:26,600 --> 00:40:29,520
Speaker 1: and it was like tippy top was eleven thirty or

742
00:40:29,520 --> 00:40:32,640
Speaker 1: eleven forty five. It's it's amazing. So there are some

743
00:40:32,680 --> 00:40:35,440
Speaker 1: behavioral things I think that you can kind of unpack

744
00:40:36,080 --> 00:40:39,640
Speaker 1: in in the crypto space. Um, but yeah, mostly it's

745
00:40:39,680 --> 00:40:43,040
Speaker 1: technicals and flow that seems to be what dominates. And

746
00:40:43,040 --> 00:40:46,560
Speaker 1: then there's this whole ecosystem of fundamental analysis going on

747
00:40:46,600 --> 00:40:50,440
Speaker 1: in the alt coins, which is interesting. But that scenario

748
00:40:50,520 --> 00:40:52,799
Speaker 1: that's you really have to spend so much time to

749
00:40:52,880 --> 00:40:57,680
Speaker 1: become expert. You know, you said something interesting earlier on

750
00:40:57,880 --> 00:41:02,280
Speaker 1: and you're talking about uh, sentiment or positioning and how

751
00:41:02,840 --> 00:41:05,600
Speaker 1: positioning is not always the best indicator. But sometimes if

752
00:41:05,640 --> 00:41:08,640
Speaker 1: you overlate with sentiment and you mentioned if you say,

753
00:41:08,680 --> 00:41:11,600
Speaker 1: put out a note about the Aussie there was bearish

754
00:41:11,680 --> 00:41:14,000
Speaker 1: and what you've got a bunch of bad anger responses

755
00:41:14,040 --> 00:41:17,319
Speaker 1: that might tell you something. Do you use can you

756
00:41:17,440 --> 00:41:20,239
Speaker 1: use social media that way? Can you like put out

757
00:41:20,280 --> 00:41:23,840
Speaker 1: a tweet with some idea, some trade idea, some theme

758
00:41:24,600 --> 00:41:27,920
Speaker 1: with the express purpose of trying to gauge the sentiment

759
00:41:27,960 --> 00:41:31,600
Speaker 1: of the reactions. Well, you know what, I have thought

760
00:41:31,640 --> 00:41:34,839
Speaker 1: about that, but generally I would say no, And I've

761
00:41:34,880 --> 00:41:38,320
Speaker 1: tried to get my feed to be as balanced as possible.

762
00:41:38,560 --> 00:41:41,279
Speaker 1: But the problem is that there's so much bias I

763
00:41:41,320 --> 00:41:44,319
Speaker 1: find on Twitter, Like, just in general, Twitter tends to

764
00:41:44,400 --> 00:41:49,000
Speaker 1: lean very bare stocks. For example, it's more like UM,

765
00:41:49,000 --> 00:41:52,480
Speaker 1: going to trip Advisor to check out the hotel, and

766
00:41:52,520 --> 00:41:55,000
Speaker 1: you're going to see like a lot of piste off

767
00:41:55,200 --> 00:41:58,279
Speaker 1: people in there. So generally I don't find it to

768
00:41:58,360 --> 00:42:01,120
Speaker 1: be that great. Maybe it's just like the mix isn't

769
00:42:01,120 --> 00:42:04,040
Speaker 1: good enough, or that there's too much biased, But I

770
00:42:04,120 --> 00:42:07,440
Speaker 1: just find you just generally tend to either tweak some

771
00:42:07,640 --> 00:42:11,480
Speaker 1: like tweak a specific topic that gets people kind of

772
00:42:11,560 --> 00:42:14,880
Speaker 1: angry or or annoyed, or you don't and you just

773
00:42:14,880 --> 00:42:17,960
Speaker 1: get a couple of like weak replies that that are

774
00:42:18,200 --> 00:42:21,120
Speaker 1: supporting you. So it it's more like is your view

775
00:42:21,120 --> 00:42:23,440
Speaker 1: a trigger? Yes or no? If yes, then you get

776
00:42:23,480 --> 00:42:26,440
Speaker 1: a ton of responses, and if not a trigger, it

777
00:42:26,520 --> 00:42:29,239
Speaker 1: doesn't go viral enough, and then it just you know

778
00:42:29,320 --> 00:42:31,719
Speaker 1: how the Twitter Elgo just kind of drops it and

779
00:42:31,719 --> 00:42:34,640
Speaker 1: and nothing. No, you don't get any really meaningful reactions.

780
00:42:34,640 --> 00:42:37,720
Speaker 1: So so I guess my answer would be no, Maybe

781
00:42:37,719 --> 00:42:40,400
Speaker 1: it's more because of Macro, Like maybe if you're in

782
00:42:40,440 --> 00:42:44,719
Speaker 1: single names, there might be more balance, um and more

783
00:42:44,800 --> 00:42:47,440
Speaker 1: people interacting with your tweets. But I would say on macro,

784
00:42:47,600 --> 00:42:51,040
Speaker 1: you either trigger people or you don't. So I guess

785
00:42:51,080 --> 00:42:53,640
Speaker 1: I'm wondering. You know, for all the people that sort

786
00:42:53,640 --> 00:42:58,520
Speaker 1: of got into retail trading over the past year or so,

787
00:42:58,840 --> 00:43:02,640
Speaker 1: what would be or advice to them going forward? Like

788
00:43:02,719 --> 00:43:08,000
Speaker 1: you're one big piece of advice. Sure, so my definitely,

789
00:43:08,040 --> 00:43:11,000
Speaker 1: my number one piece of advice would be be humble.

790
00:43:12,400 --> 00:43:15,440
Speaker 1: It's easy to make money in a raging bull market, um.

791
00:43:15,480 --> 00:43:19,120
Speaker 1: And there are specific things that happened in that may

792
00:43:19,239 --> 00:43:22,160
Speaker 1: or may not ever happen again in our lifetimes. So

793
00:43:22,200 --> 00:43:25,279
Speaker 1: I would say, be humble. Um. And then just behind that,

794
00:43:25,400 --> 00:43:28,600
Speaker 1: like we were talking about, is be sure to adapt

795
00:43:28,800 --> 00:43:31,200
Speaker 1: as things change. Don't just get stuck in your one

796
00:43:31,239 --> 00:43:33,640
Speaker 1: strategy that worked last year, because it's probably not going

797
00:43:33,680 --> 00:43:36,440
Speaker 1: to necessarily work this year or next year. So if

798
00:43:36,480 --> 00:43:39,520
Speaker 1: you want to trade for the rest of your life,

799
00:43:40,000 --> 00:43:44,840
Speaker 1: be humble and adapt. One last question. You know, again,

800
00:43:44,920 --> 00:43:48,640
Speaker 1: you have this new book out, Alpha Trader. Obviously, if

801
00:43:48,680 --> 00:43:51,840
Speaker 1: someone has been a professional trader for twenty five years,

802
00:43:52,239 --> 00:43:56,479
Speaker 1: there's presumably extremely rare, especially if you sort of start

803
00:43:56,520 --> 00:43:58,880
Speaker 1: from the universe of everyone who thinks about getting into trading.

804
00:43:58,960 --> 00:44:00,839
Speaker 1: But what do you just was a little bit more

805
00:44:00,880 --> 00:44:03,600
Speaker 1: about your background, and for someone considering the book, like

806
00:44:03,640 --> 00:44:06,080
Speaker 1: why should they why should they listen to you? I

807
00:44:06,080 --> 00:44:09,120
Speaker 1: guess the main thing that I have, as you mentioned,

808
00:44:09,200 --> 00:44:12,640
Speaker 1: is experience, But then my experience is pretty broad. So

809
00:44:12,680 --> 00:44:15,640
Speaker 1: I tried to write the book not just for new

810
00:44:15,680 --> 00:44:19,280
Speaker 1: retail traders, but also so that one of my peers

811
00:44:19,320 --> 00:44:21,800
Speaker 1: who's been trading for twenty years at a major hedge

812
00:44:21,800 --> 00:44:24,799
Speaker 1: fund would also get value from the book. That's that's

813
00:44:24,840 --> 00:44:27,319
Speaker 1: the way that I tried to write it. So the

814
00:44:27,400 --> 00:44:30,839
Speaker 1: three stages of my career were or my my real

815
00:44:31,160 --> 00:44:35,720
Speaker 1: career in trading were trading professionally as a currency trader

816
00:44:35,800 --> 00:44:38,040
Speaker 1: for a bank was the majority of it. But then

817
00:44:38,080 --> 00:44:40,319
Speaker 1: I also spent about four or five years trading my

818
00:44:40,360 --> 00:44:43,160
Speaker 1: own money on the nazdac as we mentioned on Nazak Bubble,

819
00:44:43,640 --> 00:44:45,239
Speaker 1: and then I was also at a hedge fund for

820
00:44:45,320 --> 00:44:49,760
Speaker 1: three years, so I have one thing that that really

821
00:44:50,320 --> 00:44:53,560
Speaker 1: that that taught me was varying your risk size and

822
00:44:53,760 --> 00:44:57,280
Speaker 1: really having proper risk management. Because a lot of people

823
00:44:57,600 --> 00:45:00,160
Speaker 1: read a lot of trade selection books like the those

824
00:45:00,160 --> 00:45:02,560
Speaker 1: books are fun too, are more fun to read market

825
00:45:02,600 --> 00:45:05,600
Speaker 1: Wizards and and the John Murphy books or whatever books

826
00:45:05,600 --> 00:45:08,160
Speaker 1: you're reading, most books are about trade selection, and there's

827
00:45:08,160 --> 00:45:11,160
Speaker 1: not that many books about risk management. So I try

828
00:45:11,200 --> 00:45:13,920
Speaker 1: to cover that in a in a pretty easy to

829
00:45:14,000 --> 00:45:17,320
Speaker 1: understand way, but a few I have a few chapters

830
00:45:17,320 --> 00:45:19,760
Speaker 1: about risk management because I think that's a really important

831
00:45:19,800 --> 00:45:22,480
Speaker 1: thing that gets left out of of a lot of books,

832
00:45:22,880 --> 00:45:26,280
Speaker 1: and especially young traders. But even you would be surprised

833
00:45:26,320 --> 00:45:29,440
Speaker 1: because at a bank, there's so many other things that

834
00:45:29,480 --> 00:45:31,520
Speaker 1: you're doing, like market making and all that that that

835
00:45:31,719 --> 00:45:34,320
Speaker 1: risk management isn't always taught either, so you tend to

836
00:45:34,440 --> 00:45:37,960
Speaker 1: learn it more about osmosis, So I think my range

837
00:45:37,960 --> 00:45:41,080
Speaker 1: of experience UM and then also the way in the

838
00:45:41,120 --> 00:45:45,440
Speaker 1: book I try to go through everything from understanding the

839
00:45:45,440 --> 00:45:48,320
Speaker 1: meta game, which we kind of touched on two specific

840
00:45:48,400 --> 00:45:51,360
Speaker 1: here's how I make my my choices of what to

841
00:45:51,440 --> 00:45:55,200
Speaker 1: trade correlation. I cover a lot of topics UM. So

842
00:45:55,280 --> 00:45:57,960
Speaker 1: I think people that whether they have experience or not.

843
00:45:58,600 --> 00:46:00,640
Speaker 1: The whole idea of the book was to try and

844
00:46:00,680 --> 00:46:04,320
Speaker 1: add value to people across the spectrum, right from somebody

845
00:46:04,320 --> 00:46:07,960
Speaker 1: who's never traded before right to um, someone who has

846
00:46:07,960 --> 00:46:11,400
Speaker 1: a lot of experience. And one cool thing that or

847
00:46:11,440 --> 00:46:14,960
Speaker 1: the thing that I found cool or validating was Ben

848
00:46:15,040 --> 00:46:18,880
Speaker 1: Hunt wrote the foreword to the book, and his takeaway

849
00:46:18,920 --> 00:46:20,920
Speaker 1: at the end of the forward, and the interesting thing

850
00:46:20,960 --> 00:46:22,800
Speaker 1: was a couple of other people that like were early

851
00:46:22,840 --> 00:46:25,439
Speaker 1: readers before the book was published, said the same thing

852
00:46:26,080 --> 00:46:29,040
Speaker 1: was that it's kind of a book about understanding the

853
00:46:29,040 --> 00:46:31,560
Speaker 1: game that you're playing, and and it can relate to

854
00:46:31,680 --> 00:46:34,600
Speaker 1: the areas outside of trading as well. So there's a

855
00:46:34,680 --> 00:46:37,320
Speaker 1: lot of stuff in the book about self awareness, UM

856
00:46:37,360 --> 00:46:42,919
Speaker 1: and adaptation obviously, and discipline, conscientiousness, doing the work, how

857
00:46:43,000 --> 00:46:45,880
Speaker 1: success transpires in the world in general. So there's a

858
00:46:45,920 --> 00:46:49,520
Speaker 1: lot of subjects that that aren't super specific to trading.

859
00:46:50,080 --> 00:46:52,360
Speaker 1: And so Ben says in the end, this is the

860
00:46:52,440 --> 00:46:54,440
Speaker 1: kind of book he would buy for his uncle or

861
00:46:54,480 --> 00:46:56,960
Speaker 1: for his niece or whatever who aren't even in trading,

862
00:46:57,520 --> 00:46:59,880
Speaker 1: because hopefully it can teach you some of the things

863
00:46:59,880 --> 00:47:03,200
Speaker 1: that I've learned about, you know, playing the bigger game

864
00:47:03,400 --> 00:47:06,160
Speaker 1: or or other games like poker and things like that.

865
00:47:06,200 --> 00:47:08,800
Speaker 1: So I think it has some application outside of trading.

866
00:47:09,560 --> 00:47:11,759
Speaker 1: Um from the feedback I got, that's what people said,

867
00:47:11,800 --> 00:47:14,040
Speaker 1: and that's kind of what I hope UM that that

868
00:47:14,080 --> 00:47:17,160
Speaker 1: people also get out of it is some application outside

869
00:47:17,160 --> 00:47:22,479
Speaker 1: of trading. Brent Donnelly, thank you so much for coming

870
00:47:22,520 --> 00:47:25,040
Speaker 1: on Odd Lots and congrats on the book. Thank you.

871
00:47:25,320 --> 00:47:43,040
Speaker 1: That was awesome. Thanks, thanks very much, thank you. Obviously,

872
00:47:43,120 --> 00:47:45,719
Speaker 1: I always really like those episodes. I mean I really do.

873
00:47:45,960 --> 00:47:47,800
Speaker 1: I always go back in time to like two thousand

874
00:47:47,800 --> 00:47:50,080
Speaker 1: and two and whether I could have been a trader,

875
00:47:50,160 --> 00:47:54,479
Speaker 1: and I actually think no, I really think I went

876
00:47:55,280 --> 00:47:57,799
Speaker 1: I made the right decision to not pursue that. I'm sure,

877
00:47:58,120 --> 00:47:59,960
Speaker 1: like I think, you know, oh, I could have made

878
00:48:00,200 --> 00:48:01,640
Speaker 1: a bunch of money, but I just have a feeling

879
00:48:01,640 --> 00:48:03,040
Speaker 1: I wouldn't have been a wain. Why don't you set

880
00:48:03,120 --> 00:48:06,880
Speaker 1: up one of those like fantasy football type portfolios and

881
00:48:06,960 --> 00:48:09,839
Speaker 1: see how you do? Although actually that's that's a terrible idea,

882
00:48:09,880 --> 00:48:12,000
Speaker 1: because if you lose loads of money, you just feel bad,

883
00:48:12,040 --> 00:48:14,160
Speaker 1: and if you make loads of money, you feel bad

884
00:48:14,239 --> 00:48:17,719
Speaker 1: because you haven't actually made loads of money. Yeah, well,

885
00:48:17,760 --> 00:48:20,799
Speaker 1: I thought it was interesting his point about like sort

886
00:48:20,840 --> 00:48:24,640
Speaker 1: of runway and risk management and if you like to

887
00:48:24,920 --> 00:48:27,640
Speaker 1: enter the game at like some like day trading shop

888
00:48:27,680 --> 00:48:31,280
Speaker 1: where you're on like really really sort of tight stops

889
00:48:31,440 --> 00:48:34,520
Speaker 1: and so forth, versus say coming up through a bank

890
00:48:34,880 --> 00:48:36,880
Speaker 1: where you're a market maker and you have like a

891
00:48:36,920 --> 00:48:38,560
Speaker 1: lot of time to learn and you have like a

892
00:48:38,600 --> 00:48:42,359
Speaker 1: lot of liquidity behind you. Like, I just feel like

893
00:48:42,960 --> 00:48:45,680
Speaker 1: that's such an important lesson and it just seems so

894
00:48:45,719 --> 00:48:48,040
Speaker 1: easy to get chopped if you don't have like a

895
00:48:48,520 --> 00:48:50,800
Speaker 1: you know, a really good risk management framework and you

896
00:48:50,840 --> 00:48:52,520
Speaker 1: don't have a lot of cash behind you. You's just

897
00:48:52,520 --> 00:48:54,440
Speaker 1: got to be so easy to get like chopped out

898
00:48:54,440 --> 00:48:56,160
Speaker 1: at the beginning and be out of the game day

899
00:48:56,160 --> 00:48:59,319
Speaker 1: one before it even gets started totally. Um. The other

900
00:48:59,360 --> 00:49:02,360
Speaker 1: thing that's struck me was this idea of not worrying

901
00:49:02,360 --> 00:49:06,000
Speaker 1: about the why and focusing on the what. And to me,

902
00:49:06,080 --> 00:49:09,560
Speaker 1: that just kind of characterizes the past, you know, certainly

903
00:49:09,640 --> 00:49:13,440
Speaker 1: the past ten or twelve years since the two financial Crisis,

904
00:49:13,719 --> 00:49:16,080
Speaker 1: where we had so many people who were talking about

905
00:49:16,080 --> 00:49:20,960
Speaker 1: markets being artificially inflated by central banks. Nothing makes sense anymore.

906
00:49:21,000 --> 00:49:25,160
Speaker 1: Everything is distorted, but in the end it might not

907
00:49:25,560 --> 00:49:28,720
Speaker 1: actually matter. Like the thing that matters is what people

908
00:49:28,760 --> 00:49:31,799
Speaker 1: believe in, Um, the actual flows in the story that's

909
00:49:31,840 --> 00:49:35,640
Speaker 1: behind those flows. And so how do you bet on

910
00:49:36,000 --> 00:49:38,359
Speaker 1: you know, stocks in two thousand eight or two thousand nine,

911
00:49:38,400 --> 00:49:42,600
Speaker 1: you'd be doing phenomenally. Well, Yeah, I think that's really hard.

912
00:49:42,680 --> 00:49:45,720
Speaker 1: And again I really do think that, like my mind

913
00:49:45,880 --> 00:49:48,800
Speaker 1: is not like and I really believe I don't know

914
00:49:48,840 --> 00:49:51,200
Speaker 1: about you, but I really believe a lot of journalists

915
00:49:51,400 --> 00:49:54,839
Speaker 1: would not make for good traders because I truly believe that, like, well,

916
00:49:54,880 --> 00:49:59,600
Speaker 1: they tend to overthink things. It's two different skill sets. Yeah, yeah,

917
00:49:59,680 --> 00:50:01,640
Speaker 1: and it it's more important to be right, you know.

918
00:50:01,680 --> 00:50:03,040
Speaker 1: It's like the classic thing, it's like do you want

919
00:50:03,080 --> 00:50:05,239
Speaker 1: to be right or do you want to make money? Journalists,

920
00:50:05,239 --> 00:50:06,719
Speaker 1: I want to be right, and we don't want to

921
00:50:06,719 --> 00:50:08,960
Speaker 1: make well, I mean with good reason, right, Like, the

922
00:50:09,000 --> 00:50:11,400
Speaker 1: whole point is you're trying to build up credibility so

923
00:50:11,440 --> 00:50:15,640
Speaker 1: that people believe in your journalism. Um, you're not trying

924
00:50:15,800 --> 00:50:19,080
Speaker 1: to make money obviously as a journalist, you're not trying

925
00:50:19,120 --> 00:50:21,920
Speaker 1: to make money. No one goes into journalism to become

926
00:50:22,080 --> 00:50:25,319
Speaker 1: rich and famous. Okay, shall we leave it there, Let's

927
00:50:25,400 --> 00:50:28,920
Speaker 1: leave it there. Alright, this has been another episode of

928
00:50:28,960 --> 00:50:31,760
Speaker 1: the All Thoughts podcast. I'm Tracy Alloway. You can follow

929
00:50:31,800 --> 00:50:35,200
Speaker 1: me on Twitter at Tracy Allaway and I'm Joe Why

930
00:50:35,239 --> 00:50:37,920
Speaker 1: Isn't All? You could follow me on Twitter at the Stalwart.

931
00:50:38,280 --> 00:50:41,320
Speaker 1: Follow our guests on Twitter. Brent Donnalley, He's at donne

932
00:50:41,360 --> 00:50:43,520
Speaker 1: leye Brent, and he's the author of the new book

933
00:50:43,520 --> 00:50:47,800
Speaker 1: Alpha Trader, The Mindset, Methodology and Mathematics of Professional Trading.

934
00:50:48,280 --> 00:50:51,000
Speaker 1: And be sure to follow our producer Laura Carlson. She's

935
00:50:51,080 --> 00:50:54,400
Speaker 1: at Laura M. Carlson. Followed the Bloomberg head of podcast,

936
00:50:54,480 --> 00:50:58,080
Speaker 1: Francesca Levy at Francesca Today, and check out all of

937
00:50:58,080 --> 00:51:02,120
Speaker 1: our podcast at Bloomberg. Unto a handle at Podcasts. Thanks

938
00:51:02,160 --> 00:51:02,640
Speaker 1: for listening.