Speaker 1: Welcome to Triance. I'm Joel Webber and I'm Eric cal
Speaker 1: Tunis Eric, good to see you. Likewise, I can see
Speaker 1: you're in a new spot now, an undisclosed location location.
Speaker 1: You're no longer in the blair Witch project. Clus you say,
Speaker 1: I can see a beach. It's glorious. Um, good for you,
Speaker 1: But Eric, I want to ask um a question of you,
Speaker 1: which is, have you been day trading during the pandemic?
Speaker 1: You know, I would love to, but as an E
Speaker 1: t F analyst, like I just don't want any E
Speaker 1: t F trades in my head. So the only day
Speaker 1: trading we ever do is sometimes my wife will be like, hey,
Speaker 1: do you see ge she the value investor. Do you
Speaker 1: see gees trading for like six bucks or something? And
Speaker 1: she might want to buy that, and that's what she
Speaker 1: might do. But I don't touch anything. I'm just stick
Speaker 1: divine hold. When I stopped covering ETFs, that's when I
Speaker 1: might go nuts with day trading. But I get it.
Speaker 1: I think it's fun. You know. I'm not some good ideas,
Speaker 1: but I'm not a day trader either. But day trading
Speaker 1: is I feel like one of the themes of the year,
Speaker 1: certainly of the pans, right, and so we had this
Speaker 1: idea to go actually talk to a couple of day
Speaker 1: traders and we found something. Yeah, I mean, you hear
Speaker 1: a lot of pundon's talking about them, um, but we
Speaker 1: never really hear from them. And it's just great to
Speaker 1: talk to the actual people sometimes who are doing it
Speaker 1: and to find out more about them. And I thought,
Speaker 1: you know, one of the moments that I thought was
Speaker 1: besides Dave Portnoy of bar Stool and the rise of
Speaker 1: robin Hood, you know, we saw that the media mentions
Speaker 1: of the word robin hood actually passed Vanguard about a
Speaker 1: month ago, and that says a lot about how big
Speaker 1: this is getting. And then stocks like Hurts, there's some
Speaker 1: certain stocks that have definitely moved by this sort of
Speaker 1: robin hood trader. Um. But if there's a lot of
Speaker 1: experts who are frowning on this and they think it's
Speaker 1: going to end badly, it's bad for the market, um.
Speaker 1: And then there's another side that says, no, it's good
Speaker 1: for them to get involved, get experience. Even if they
Speaker 1: get hurt it will learn from it. So it's become
Speaker 1: this huge debate. Um. It's called top three story of
Speaker 1: the year. So the two guests that we found Brad Trong,
Speaker 1: who is a nineteen year old student at the University
Speaker 1: of Texas, and Michael Guzzo, who's twenty four year old
Speaker 1: and works insurance and annuities company. So we spent some
Speaker 1: time talking with both of them about what it's like
Speaker 1: to be a day trader right now, this time on
Speaker 1: Trilliant The Mind of a day trader during the pandemic. Brad,
Speaker 1: Welcome to Trillian. How are you doing today? Hi, I'm
Speaker 1: daring good. And where are you coming? Where are you
Speaker 1: coming to us from? I'm coming from Houston, Texas right on.
Speaker 1: The reason that we really want to talk to you
Speaker 1: is just to kind of get inside the mind of
Speaker 1: what it's like to be a day trader right now. So,
Speaker 1: so tell us a little bit about yourself and how
Speaker 1: what you're doing right now. UM nineteen full time on
Speaker 1: a college dident, but part time I work on a
Speaker 1: startup and I have a small business on the side
Speaker 1: which generates the cash I used for me to be
Speaker 1: able to have capital to trade. And I have two accounts.
Speaker 1: I have a row I or A and I have
Speaker 1: a brokerage account which I trade off Fidelity that's pretty
Speaker 1: awesome for being nineteen. I gotta tell you, what's the
Speaker 1: small business that you're running. The small business I run
Speaker 1: I started back in high school, which is the window
Speaker 1: cleaning business, and basically I employe high school students from
Speaker 1: the local town that I'm from, which is Cyprus, Texas,
Speaker 1: and it just cleaned storefronts, like the windows and things
Speaker 1: like that, and I just get an ride fee since
Speaker 1: I manage everything. So how long have you been investing.
Speaker 1: I've been investing I think about a year. How did
Speaker 1: you get into it? I got into it through books.
Speaker 1: It was because one day I was walking through Barnes
Speaker 1: and Nobles and I saw the investment like the investing section,
Speaker 1: and I was like, oh, this seems pretty interesting. So
Speaker 1: I was like, I mean everyone talks about it and
Speaker 1: this is like the way to wealth and all that.
Speaker 1: So I picked up a book and ironically it was
Speaker 1: was um The Intelligent Investor, and that was my first book.
Speaker 1: And then from there I just read a lot of
Speaker 1: personal finance books which help have helped me a lot
Speaker 1: and my businesses. So how old were you when you
Speaker 1: were walking through Barnes and Noble and picked up an
Speaker 1: Intelligent Investor? I think either late sixteen or early seventeen,
Speaker 1: but I couldn't start trading until eighteen. So is that
Speaker 1: so you turn eighteen and did you start trading on
Speaker 1: your birthday? Yes? I made Well, let's say this is
Speaker 1: an eighteen know you don't have all the money in
Speaker 1: the world, not when out where I'm from, at least,
Speaker 1: so I've made an account, and I think that was
Speaker 1: a milestone for me because I was like, Okay, this
Speaker 1: is the start to my unquote career, my portfolio, things
Speaker 1: like that. So I started eighteen, I just added cash.
Speaker 1: I didn't really trade for about a good six once,
Speaker 1: and then I mean, you can't really trade because you
Speaker 1: don't have enough like day trading, what was it like
Speaker 1: dollars today trade without getting flagged or anything like that.
Speaker 1: But I was just saving up a lot of capital
Speaker 1: and then just putting into more slow and steady things
Speaker 1: like some dividend stocks, even though I didn't really make
Speaker 1: much returns considering the capital I had, or just some
Speaker 1: ets and knows about it. How much when you signed
Speaker 1: up and you had your account, how much did you
Speaker 1: mentally allocate to like maybe something safer like a dividend
Speaker 1: stock or buy and hold investment versus money to sort
Speaker 1: of speculate on or trade with. I think sometimes people
Speaker 1: think that a lot of the younger investors, like a
Speaker 1: hundred percent of their money is the trading money. Um,
Speaker 1: maybe it is. I don't know. I'm just trying to
Speaker 1: find out, like how you mentally allocate buy and hold
Speaker 1: long term versus maybe the more speculative, you know, let
Speaker 1: me have fun with this this portion of the money.
Speaker 1: I what I used to do was E T S,
Speaker 1: slow and steady E T F and mutual funds. I
Speaker 1: literally just went onto Fidelity. I picked up They're one
Speaker 1: of their tools was like mutual funds, like you can
Speaker 1: like check out the morning Star ratings, what's the return.
Speaker 1: So me, trying to be greedy sort of on my age,
Speaker 1: I was like, I want the highest return, lowest costs,
Speaker 1: and I just put that in and I just picked
Speaker 1: some ets that we're at the top. Let her on
Speaker 1: no not ets, excuse me, mutual funds. And that was it. Yeah.
Speaker 1: But then now I've I've switched away from that, and
Speaker 1: so what what have you switched into? I've switched into
Speaker 1: stocks and I have E T S. But I like
Speaker 1: to use aggressive ets because I'm at the point in
Speaker 1: my life where I just want to grow my account
Speaker 1: as aggressively as possible and tirish reward. But it's it's
Speaker 1: a it's centered a lout on tech. Yeah, you sent
Speaker 1: over some tickers, so let's go through some. You have
Speaker 1: w c l D, which is the Wisdom Tree cloud Computing. Um,
Speaker 1: what drew you to that? Because also that's not the
Speaker 1: biggest one of the space, So how did you pick
Speaker 1: that one out? It's always intriguing to me when somebody
Speaker 1: whose retail doesn't just go for the obvious big dog
Speaker 1: in the category, which would be Sky Sky. Well, I
Speaker 1: mean to be a big dog, you have to me
Speaker 1: an underdog first, right, So that's why w c l D.
Speaker 1: That's that I honestly picked it. Well. Also, w c
Speaker 1: l D I think has a lot of zoom in it,
Speaker 1: and I think it might be the best performing this year.
Speaker 1: Now that's the problem. That's that's a problem I personally
Speaker 1: have with such an e T F like that. It's
Speaker 1: because some of these e t s, like the A
Speaker 1: r K e t s and the w c l D,
Speaker 1: they're carried by certain stocks that have grown so much
Speaker 1: and I know it's during the time of coronavirus and
Speaker 1: fundamentals from a retail my personal retail perspectives that fundamentals
Speaker 1: that kind of the window right now and the pe
Speaker 1: ratios of a lot of these things are absurd, but
Speaker 1: it doesn't have to capitalize on it in the meantime.
Speaker 1: I think I might pull out depending on how I
Speaker 1: feel after everything settles from Corona. So so I'm curious
Speaker 1: about UM trading during the pandemic because UM a lot
Speaker 1: of investors um UM with I think kind of say,
Speaker 1: like the best way to invest is a buy and
Speaker 1: hold strategy right where you're looking over this for a
Speaker 1: long horizon. So even though you're you're nineteen right now,
Speaker 1: you know like this is money that hopefully you're not
Speaker 1: going to need for a long time, and like the
Speaker 1: horizons very far. But I'm curious, like, is this is
Speaker 1: this money that you're playing with UM on a day
Speaker 1: to day basis that you envision holding for a really
Speaker 1: long time, or is it stuff that you think has
Speaker 1: a far shorter term horizon for you. Well, initially, when
Speaker 1: I first got into quote unquote investing, I was doing
Speaker 1: I was thinking long term, but considering our how how
Speaker 1: volatile things have been, even though it's been kind of
Speaker 1: flat recently, and I push more towards the trader side
Speaker 1: of things because I just want to capitalize that. That's
Speaker 1: just simply I just want to make sure I do
Speaker 1: a lot of swing trading, a lot of day trading,
Speaker 1: because both my accounts are above that point to where
Speaker 1: I'm allowed to day trade. I do a lot of
Speaker 1: day trading, scalping and swinging trading. That's really all I do.
Speaker 1: In the meantime. I do have ets that I have left,
Speaker 1: like a r K, like a r k K, r
Speaker 1: k G a r k W. I've been holding onto
Speaker 1: them for weeks and I just left them there. I
Speaker 1: made what returns already and I put several thousands into them.
Speaker 1: Just let us sit now. When this is over, I
Speaker 1: might take a different look onto how I currently manage
Speaker 1: my portfolio. And I think, okay, let's do a long term.
Speaker 1: Now walk me through, Brad, what a typical day of
Speaker 1: day trading looks like for you. Gosha, all right, So
Speaker 1: I know I don't how we will correct me if
Speaker 1: I'm wrong. I think we will. You're allowed to open
Speaker 1: up like four am Central Standard time something like that.
Speaker 1: But for since I used Fidelity. I have pre marketing,
Speaker 1: after hours extended trading available and I I've used it.
Speaker 1: And I wake up at five am Central Standard time
Speaker 1: every single day and I scan the market for about
Speaker 1: thirty minutes. And I know this sounds done because a
Speaker 1: lot of institutional investors are gonna get mad at me.
Speaker 1: They're gonna be like, oh, you're just supposed to like
Speaker 1: do more due diligence and you know things like that.
Speaker 1: But I literally just use Reddit and stock tweets, and
Speaker 1: I might look around Twitter. I don't have a Twitter account.
Speaker 1: I just look around. I'm just like, Okay, this is
Speaker 1: what people, this is trending, this is that, And then
Speaker 1: I look at the graph. So I do look at
Speaker 1: some technicals. I try to see where the support is.
Speaker 1: Sometimes there are support, sometimes there's there's not. And I
Speaker 1: just see what the news is, the hype, things like that.
Speaker 1: And I always trying to get in before or like
Speaker 1: just as it's starting, and get out before it could
Speaker 1: potentially come down or it could be a pump and dump,
Speaker 1: because I just don't want to be too great. I'll
Speaker 1: take if I can make five percent a day, I'll
Speaker 1: make five percent a day. I'll take that I'm guessing
Speaker 1: this is because you have you gave us a list.
Speaker 1: I'm guessing this is where you use t q q
Speaker 1: Q and s q q Q. Yeah, right, this is
Speaker 1: up because that's gonna be what is that two or
Speaker 1: three times the queues? Yes, So are those your go
Speaker 1: to tools for playing like the what you think the
Speaker 1: market is going to do that day or that week. Yes,
Speaker 1: but not not often because I I've seen it happen
Speaker 1: more often than not during the last three months. Because
Speaker 1: what happens is we either in vice persa, we open
Speaker 1: green and we close red, or we open red and
Speaker 1: we close green. So I try to like ride within
Speaker 1: the first hour and get out. So like this morning,
Speaker 1: I got into t q q Q because I knew
Speaker 1: it was gonna be a green day, and I got
Speaker 1: in and wrote in a couple of percent I think
Speaker 1: it was like two percent, and then left and that's
Speaker 1: just that. So you are just actively trading the hot
Speaker 1: hot stock of the day or hot hot vehicle of
Speaker 1: the day, right. I try to, But sometimes there are
Speaker 1: days where I actually don't make a single trade because
Speaker 1: I feel it's not worth the risk of putting so
Speaker 1: much cash into a certain stock For me to make
Speaker 1: a return. So I try to see what's worth it.
Speaker 1: If it's if I see that. If if it's something's
Speaker 1: up fourteen dollars and it's bounded hit fifteen, I'll put
Speaker 1: five thousand out of automatically put up in order for
Speaker 1: it to sell. Okay, So I'm really curious if you
Speaker 1: rewind the clock a couple of months to the beginning
Speaker 1: of the pandemic, and the stock market obviously had a
Speaker 1: really frightening uh stretch there, what was that like for you? Well,
Speaker 1: I sat on the sidelines too much, and I kind
Speaker 1: of I mean, if I could go back in time,
Speaker 1: I'll put everything to sqq Q, make a lot of turns,
Speaker 1: and then Ryan March twenty third around there, I would
Speaker 1: flip around, go t q q Q and then put
Speaker 1: some other things to like the airlines. Well, I think
Speaker 1: I think everybody would. I mean, that's like that me,
Speaker 1: that's Juel. That's negative three x the cues during the crisis,
Speaker 1: and then you pivot exactly on the two three times
Speaker 1: the cues, which I think the cues are up since
Speaker 1: then that would be the immaculate trade. Um, I guess
Speaker 1: given that the FED came out of you mentioned this date.
Speaker 1: I always am curious is how much retail investors um
Speaker 1: like yourself factor in the FED because a lot of
Speaker 1: the pundits will say that the robin Hood crowd, Dave Portnoy,
Speaker 1: these are just products of a FED induced market where
Speaker 1: everything goes up and they don't know how good they
Speaker 1: have it. Um, So how do you factor in the
Speaker 1: FED to your trading? I factor in the FED depending
Speaker 1: on what stimulus they might provide. So I mean, like
Speaker 1: we have I think the unemployment ends on July one,
Speaker 1: and that that can be a make or break. So
Speaker 1: we're trying to see because if the simulus gets extended,
Speaker 1: I'm pretty sure the market is going to go great
Speaker 1: for much longer and we're gonna have the rallies gonna
Speaker 1: continue on. But if the FED doesn't step in when
Speaker 1: unemployment ends across the country, that's when you know, we
Speaker 1: might see, well, the market might realize what's happening. Because
Speaker 1: I know that there's been a common saying market is
Speaker 1: not the same as the economy. They aren't the same thing, right,
Speaker 1: And we've seen the market go up basically ever since
Speaker 1: that Marche date. Well, the economy is sort of sputtered.
Speaker 1: What do you make of that. Well, I've only lived
Speaker 1: on this road for so long, so I can't say
Speaker 1: too much, but I would have liked for the market
Speaker 1: to completely collapse. Now my rationale, what I think during
Speaker 1: my little knowledge is that the reason why the Feds
Speaker 1: have been propping of the market is to ease the
Speaker 1: drop so it's not as hard and to help people
Speaker 1: who are about to retire. So that's that's what I thought.
Speaker 1: But me being on my my my perspective is that
Speaker 1: since I'm younger, I want the socks to keep this fossil.
Speaker 1: I wanted to drop all the way. I don't care
Speaker 1: how hard, I don't care, and all the sounds messed up.
Speaker 1: People will lose their jobs, but in my post opinion,
Speaker 1: everyone everyone will be fine at the end of the day.
Speaker 1: So you know, just let it drop all the way
Speaker 1: down rock bottom, get everyone get it, or ride it
Speaker 1: back up. That's how I should have been. So speaking
Speaker 1: of yeah, you know, it makes sense. And your mindset
Speaker 1: of looking for cheap is interesting to me because when
Speaker 1: when we study et flows, it seems like when something
Speaker 1: goes up, it's like a shiny object. Retail jumps in
Speaker 1: and tries to write it and sometimes they're late. But
Speaker 1: what we've noticed is that the retail trader, the millennial,
Speaker 1: the younger one, seems to look for deals and that
Speaker 1: you own a bunch of airline stocks. Um, is that
Speaker 1: what drew you to the airline stocks with just they're
Speaker 1: so cheap? Or did you think that the expert class
Speaker 1: was overdoing the COVID fears? Why did you buy those
Speaker 1: at the time? And how did that trade go? It
Speaker 1: was oversold, completely oversowed, just just like at thin getting
Speaker 1: I I I personally believe COVID is a serious thing,
Speaker 1: but I think on the investment side of things, people
Speaker 1: were wearing way too much and everyone was just panic
Speaker 1: selling and it kept heading what stop limits and everyone
Speaker 1: just kept going down and down and down, And I
Speaker 1: think that's that's what caused such a worry. And then
Speaker 1: on my side, I saw, Okay, these airlines are cheap. Yes,
Speaker 1: the travel tourism ministry is completely like destrot in the meantime,
Speaker 1: but it's gonna bound like it's it's it's gonna it's
Speaker 1: bound to rebound. So I got into it and I
Speaker 1: erode it to the first peak, and then I left
Speaker 1: because I knew that after that there was more news, Well,
Speaker 1: there was more news coming out saying that, oh, we're
Speaker 1: having delays for cruises. Now we're having delays for parks,
Speaker 1: and um, that's not gonna ask many flights and this
Speaker 1: and that. I was like, Okay, I made my return
Speaker 1: to made returns on these airlines. I'm out now, so
Speaker 1: or even a hundred cent in returns and some of them. Okay, Brad,
Speaker 1: you mentioned returns. I gotta ask your to date. Where
Speaker 1: do you stand? Off the top of my head, on
Speaker 1: my rock I am over, and on my brokerage, thank you.
Speaker 1: On my brokerage, I think I'm up. I'm up over
Speaker 1: four call my brokerage. So what advice to other day
Speaker 1: traders do you have? Well, my advice would be two,
Speaker 1: don't fight the fed. Don't don't fight the fed, and
Speaker 1: just be realistic and don't be especially if you're thinking
Speaker 1: long term besides like day training, like everything in long term.
Speaker 1: Don't be like complaining over like a couple of pennies
Speaker 1: or a dollar, because if you know the socks is
Speaker 1: gonna go up anyways, who cares you to get hurt
Speaker 1: in the short term but the long term? Making me
Speaker 1: just fine, Like you're not gonna be looking back and
Speaker 1: be like, oh, Boeing's like currently what when seventies something
Speaker 1: right now? And you're not like, oh I wish I
Speaker 1: got out one sixty, but now like Boeing's worth like
Speaker 1: to fifty or something made no difference, Like you'll be fine.
Speaker 1: As for day trading, I just think more like just
Speaker 1: technical kind of makes sense. But just since since considering
Speaker 1: our all todd time, day train should be focused a
Speaker 1: little bit more on the market sentiment and the hype
Speaker 1: around things two do well. So that makes me wonder
Speaker 1: does it feel like you're gambling? It's not gambling if
Speaker 1: you know what you're doing. So I know people that
Speaker 1: I trade with that do gamble. But me, on the
Speaker 1: other hand, I'm like, what is it currently? Am I
Speaker 1: in before the wave comes in or the robin Hood wave?
Speaker 1: That's and And it's funny because ron that kind of
Speaker 1: makes or break things because when they come in on
Speaker 1: the Central Stanards time, they come in at eight am.
Speaker 1: I think they get in thirty minutes before the market opens.
Speaker 1: I believe everyone always worries on like stock tweets. They're like, okay,
Speaker 1: are they going to make a break this stock? Like
Speaker 1: this this this hype stock right now because robin hooders
Speaker 1: can shift the market just a little bit to the
Speaker 1: point where everyone starts panics on which is unfortunately it's
Speaker 1: the truth from what I see. So that kind of
Speaker 1: is in tune with what I think the media portrays
Speaker 1: robin Hood is the ability to move stocks a little
Speaker 1: bit even though they are you know, the total assets
Speaker 1: on robin aren't that big relative scheme of things. So
Speaker 1: what do you think of the robin Hood class of investor?
Speaker 1: Describe them for us? What do you think that? What
Speaker 1: do you think of them? A lot of them are young,
Speaker 1: A lot of them, a lot of them are very well.
Speaker 1: If what's young, if you're nineteen, well, no nine. There's
Speaker 1: there's people that trade under like their parents account and
Speaker 1: and I know them. I know them person They trained
Speaker 1: on their parents account and they're like what sixteen and
Speaker 1: they go up to like my like college age students.
Speaker 1: But I think in my personal opinion, I don't know,
Speaker 1: I don't want to get I mean, there's great people
Speaker 1: on every single platform, but I think the common class
Speaker 1: of people on robin Hood are a little bit more
Speaker 1: than novice because because one of the first things I
Speaker 1: did do when I made an account. I made two
Speaker 1: broke produce. I made one not triality, I made one
Speaker 1: on robin Hood. But then I quickly realized, Okay, yes,
Speaker 1: the ui US looks pretty here and everything, but this
Speaker 1: looks so tacky. I gotta move something to a little
Speaker 1: bit more professional with the tools the actual news. So
Speaker 1: I went straight to Fidelity. And that's why I said
Speaker 1: to that. I see robin Hood is more of like
Speaker 1: it's fun, but I see it more it's like a
Speaker 1: little bit more novice. Whereas the professional traders with a
Speaker 1: bigger accounts move, they moved to like a trade um,
Speaker 1: Charles Schwab and Fidelity. That's what I see mostly. So
Speaker 1: you've been pretty fortunate so far this year. What would
Speaker 1: you do if the market took a turn for the worst.
Speaker 1: If it's a turn for the worst, and it could
Speaker 1: be during election time, that's what a lot of people
Speaker 1: are saying right now. It could be during election time
Speaker 1: it took turn for the worst, I would have half
Speaker 1: of my account, like, both of my accounts, I would
Speaker 1: have half of them like on the side and the
Speaker 1: other half out either the day trading, depending on how
Speaker 1: it is, Like if one side wins and the market
Speaker 1: sentiments like all right, stocks go up, I'm actually throw
Speaker 1: my whole account into it. But if stocks go down
Speaker 1: because one party wins, I'm just gonna put half half
Speaker 1: my portfolio to the side and then the other half
Speaker 1: until like st Q and write it down by the
Speaker 1: day and then to see where stocks go. Things like that,
Speaker 1: You're you're I mean d smps down what a couple
Speaker 1: of percents this here? So if you were a hedge fund,
Speaker 1: you'd be like a big deal. You're being getting phone
Speaker 1: calls from Cowper's um and that's fun, right. I guess
Speaker 1: my question is, like, to Joel's point, let's say you
Speaker 1: were down ten percent this year, would you have as
Speaker 1: much interest in doing it still? Like how much of
Speaker 1: the fund comes from being up versus just the interesting
Speaker 1: part of analyzing stocks in the news and whatnot. Well,
Speaker 1: if I was down, let's say I would still invest.
Speaker 1: I would still trade, because I think that's the part
Speaker 1: of change and considering our time that that can be
Speaker 1: an excuse, like why your account is down? Do I
Speaker 1: think your accounting You down't know what if your account
Speaker 1: is down, it's like, well it's it's during COVID. You'll
Speaker 1: you'll be fine, you'll you'll make it back and it's sorry,
Speaker 1: but I mean, considering our recent rally, I think everyone
Speaker 1: should at least be in the green in the meantime,
Speaker 1: assuming you weren't like trading like some speculative like stock
Speaker 1: that went down or something. I forgot to ask something.
Speaker 1: What do you think of E t f s in general?
Speaker 1: E t s in general? I think they're great for
Speaker 1: people who want to like invest passively, but if you
Speaker 1: have like an aggressive mentality to make risky trades and
Speaker 1: things like that, I would I like e t f
Speaker 1: s that do high returns. I don't care how much
Speaker 1: expense ratio is, but I want them to be as
Speaker 1: high as possible. And the problem nowadays what I see, well,
Speaker 1: not really a problem. I to see that a lot
Speaker 1: of the stocks are still at a quoin unquote discount
Speaker 1: right now. So I'd rather capitalize on the stocks than
Speaker 1: to put money into an e t F because the
Speaker 1: E t F might not make enough returns fast enough
Speaker 1: as much as I want to stock. It's interesting. Thank
Speaker 1: you so much for all the Yeah, thank you for
Speaker 1: having me, Michael, Welcome to Srilliance. Thank you, thanks you
Speaker 1: as thanks for having me on very excited. So, Michael,
Speaker 1: who are you and where are you coming to us from? UM?
Speaker 1: My name is Michael Guzzo. UM. I'm from Old Bridge,
Speaker 1: New Jersey. UH, small town in Jersey. UM. I graduated
Speaker 1: from Rutgers University with a biodegree, currently working in finance. UM.
Speaker 1: I worked for UM, an insurance and annuity company, doing
Speaker 1: basicool clerical stuff. And you know, I'm here obviously to
Speaker 1: talk about trading and day trading. So that's something I
Speaker 1: got into as recently as March. And I'm not very
Speaker 1: experienced or anything like that, but it's something that really
Speaker 1: just came about out of nowhere because obviously with the
Speaker 1: pandemic UM there is really a void less for a
Speaker 1: lot of people. So stay trading was something that came up,
Speaker 1: and now I'm really interested in it. So I've been
Speaker 1: doing it for a little bit now and something i'd
Speaker 1: love to talk about. So how and how old are you?
Speaker 1: I'm four years old, so I graduated in Okay. UM.
Speaker 1: So that I'm kind of curious about investing in general.
Speaker 1: Have you had you ever invested before the pandemic or
Speaker 1: did was that was the pandemic what got you into investing? So? No, Yeah,
Speaker 1: I never actually invested before the pandemic. It was the
Speaker 1: pandemic that led me into this. So really I think
Speaker 1: what happened was it was kind of like a perfect
Speaker 1: storm situation. So I think there is really a void
Speaker 1: left by the pandemic for a lot of people like
Speaker 1: me my age. So I'm really into playing poker and
Speaker 1: a little bit of online gambling, and that was something
Speaker 1: that was really halted as this happened. So that void
Speaker 1: was left, and then we kind of turned to the
Speaker 1: internet and we saw that it was really an up
Speaker 1: and coming thing among younger people, especially um this day
Speaker 1: trading whole phenomenon with retail investors coming in. So I mean,
Speaker 1: I really think it was a result of the pandemic primarily.
Speaker 1: And then you just go online seeing these online communities.
Speaker 1: There's a bunch of people it's just like me who
Speaker 1: are just getting into this try to you know, be
Speaker 1: really risky with their with their money and investments because
Speaker 1: we're at a young age where we want to try
Speaker 1: to get off to like a really good start, and
Speaker 1: we could afford to make really big risks. So what
Speaker 1: was the moment that you said, you know what I'm
Speaker 1: gonna I'm gonna get into the market. So my friend
Speaker 1: had actually been talking to me about the market. He
Speaker 1: told me um he was doing options, and I had
Speaker 1: no idea what that was at the time, so I
Speaker 1: looked into it and I did a little research, and
Speaker 1: obviously it's a very complicated thing, so it took a
Speaker 1: lot of time to really learn what was going on.
Speaker 1: And my friend who initially introduced me to it, had
Speaker 1: started off doing very well, and it was something I
Speaker 1: obviously wanted to look into and see if there was
Speaker 1: an opportunity. And I noted this that at the time,
Speaker 1: obviously of the market crash, it was an extremely volatile
Speaker 1: time for the market, and it seemed like there was
Speaker 1: a huge opportunity for people to make a lot of
Speaker 1: money or you know, lose a lot of money they
Speaker 1: don't know what they're doing, which of course happened to
Speaker 1: I'm sure a bunch of people. So yeah, it was
Speaker 1: it was really just my friend who introduced me to it,
Speaker 1: and as I did more research, it was something I
Speaker 1: became really interested in this following and of course I
Speaker 1: had a family grandparents who were always big into investing,
Speaker 1: and I was always very interested in maybe trying it
Speaker 1: out and I thought I could start here is a
Speaker 1: good learning experience, but really just go right into it.
Speaker 1: So so the time frame that you're sort of describing,
Speaker 1: you know, March was a pretty traumatic and dramatic month
Speaker 1: for a lot of investors. Did you get in as
Speaker 1: the market was going before the market went down, as
Speaker 1: it was going down, or or after it reached bottom.
Speaker 1: So I've got in basically as it reached the bottom,
Speaker 1: maybe like a day or two before it actually hit
Speaker 1: the bottom, talking of you know, the E, T S,
Speaker 1: the S and P one hit bottom. So there was
Speaker 1: a very heavy sentiment at that time that we were
Speaker 1: going to continue to go down in the market because
Speaker 1: there was just panic all around with this virus. People
Speaker 1: were really thinking that, you know, this is going to
Speaker 1: be like a really catastrophic thing for our country and
Speaker 1: it was going to have a lasting impact, which who knows,
Speaker 1: it's still may but we didn't expect, you know, at
Speaker 1: least people among the online communities didn't expect us to
Speaker 1: have the comeback we've had so far. So I did
Speaker 1: get in near the bottom, and with that strong sentiment
Speaker 1: that we were going down, I started off expecting that
Speaker 1: we would continue to go down, which platform did do
Speaker 1: you use to trade and how did you divide the
Speaker 1: money between maybe more long term versus pure just trading
Speaker 1: money that you're trying to get a quick buck off of.
Speaker 1: So when first of all, the platform that I used
Speaker 1: exclusively is robin Hood and that's a very popular one
Speaker 1: among you know, new traders. I'm sure you guys know that.
Speaker 1: So that was the most accessible and easy one just
Speaker 1: to start off with. It's a very easy going platform
Speaker 1: and like the the way it looks and everything is
Speaker 1: very accessible and easy to use. So that was good.
Speaker 1: And then to answer your second question, um, I really
Speaker 1: was just trying to make a quick book and that
Speaker 1: continues to be the theme. It's not really much about
Speaker 1: long term investment as of right now. I'm trying to
Speaker 1: build up a you know, a capital, a large amount
Speaker 1: of money to start into long term investing um because
Speaker 1: you know, with options, it's a really volatile thing where
Speaker 1: prices can go up and down very much, where if
Speaker 1: you're investing a long term you want to hold that
Speaker 1: for a long time, and you kind of need a
Speaker 1: lot of money to start off with if you want
Speaker 1: to make a big amount. I'm really curious how you
Speaker 1: go about your day are you are you trading throughout
Speaker 1: the day or basically, what's describe a typical day for
Speaker 1: you and what are your inputs? Like? What are you
Speaker 1: looking for? Right? So, I would say the main thing
Speaker 1: I'm looking for to decide how I'm going to trade.
Speaker 1: Because I'm obviously not very experienced with this, I don't
Speaker 1: know any of the technical analysis of the stuff that
Speaker 1: goes into you know, price action and determining where the
Speaker 1: price is going to go, So I rely heavily on
Speaker 1: online materials, you know, online communities, places like Reddit, Twitter.
Speaker 1: Although a lot of this stuff is not very professional,
Speaker 1: professional or reliable in a sense, um, there are some
Speaker 1: really great things you can find, especially on Twitter. There's
Speaker 1: there's some great resources professional traders too, you know, give
Speaker 1: out great advice. And it's not to say just follow
Speaker 1: every single thing they say, but you know, for someone
Speaker 1: like me who who's not very experienced with the market,
Speaker 1: you've got to look for those resources at and see
Speaker 1: what you can do with them. As for a day
Speaker 1: by day basis, That's basically what I do is. You know,
Speaker 1: now that I've been doing this for a long time,
Speaker 1: there are certain stocks I like to follow, and you know,
Speaker 1: look for buying opportunities where you know, try to buy
Speaker 1: dips where I think they're gonna go back up and such. Um,
Speaker 1: But looking online for you know, people I've been following
Speaker 1: and just kind of following on the sales is up.
Speaker 1: Tell me about sort of some of the dips that
Speaker 1: you've been sort of looking for, what kind of what
Speaker 1: kind of stuff. So a lot of things I'm focused
Speaker 1: on is tech stocks at this time and online retail
Speaker 1: selling things like cloud services, Star and cloud Services have
Speaker 1: seemed to be doing very well, um, And any time
Speaker 1: you find a dip in those, I think it's a
Speaker 1: good buying opportunity. But yes, to remember that this is
Speaker 1: kind of not a long term thing. It's very short term.
Speaker 1: So it's all about you know, getting in and getting
Speaker 1: out quick to make a profit. And although I haven't
Speaker 1: been that great as far, I think I'm learning a
Speaker 1: lot to get to a point where the future that
Speaker 1: I'll be able to do list more successfully. So you know,
Speaker 1: specific stocks all. So online gambling ones were good for
Speaker 1: a point, but they've been going down a little bit now.
Speaker 1: Just about doing the research online and looking for the
Speaker 1: right opportunities and you know, knowing when to exit well
Speaker 1: that's a good question. So let's say you go into something,
Speaker 1: how do you know when to exit if it doesn't
Speaker 1: go up in a day or two? Are you out right? So,
Speaker 1: I mean it's a lot of risk management. It is
Speaker 1: very difficult doing this from a very you know, inexperienced
Speaker 1: perspective that I have, because someone like me, I get
Speaker 1: very scared when you see the price to go down
Speaker 1: and you know you're down the money. So it's like
Speaker 1: when you when I first started doing this, it was like, oh,
Speaker 1: I'm down a little bit. I need to exit right away,
Speaker 1: and then you know, the next day or the two
Speaker 1: days from then, it goes up and you're like you
Speaker 1: kind of regret it. And then on the flip side,
Speaker 1: it's like, oh, you hold it for you have profits
Speaker 1: and you want to hold it for longer and try
Speaker 1: to build it more, and then it goes down and
Speaker 1: you lose it, and like, you know, just being so
Speaker 1: an experience than impatient with it, it's kind of difficult
Speaker 1: to gauge when the right entry and exit points are.
Speaker 1: So I've kind of I've kind of started to take
Speaker 1: a more conservative approach and just try to take profits
Speaker 1: wherever I could, and you know, set up stop losses
Speaker 1: at certain points when I think it's gone too far.
Speaker 1: So I'm curious because what you're sort of describing there is,
Speaker 1: um the day trading mindset versus sort of a buy
Speaker 1: and hold long term investor. And I'm curious have you
Speaker 1: thought about sort of do you think you're going to
Speaker 1: continue to day trade or are you see yourself transitioning
Speaker 1: into becoming more of a buy and hold long term investor.
Speaker 1: Right So that's a really good question. Um. I do
Speaker 1: envision over time that I'll gradually change my strategy to
Speaker 1: more a long term position, But the goal right now
Speaker 1: is to be as risky as possible, I think, because
Speaker 1: like I said, I want to build that capital before
Speaker 1: I transition to more long term positions. The way to
Speaker 1: do that quickly is, you know, trading these options and
Speaker 1: day trading and playing like very short positions. So that's
Speaker 1: the goal I would say, ultimately is to get to
Speaker 1: a spot where I feel comfortable I have enough capital
Speaker 1: to start investing long term and then maybe set aside
Speaker 1: a little bit for the day trading. But you know,
Speaker 1: I think right now we're in a time where the
Speaker 1: market is so wilid hoiwer that there's there is a
Speaker 1: lot of opportunity where you can make you know, a
Speaker 1: large amount of money in a short period of time,
Speaker 1: and that's really the goal for now. And those opportunities
Speaker 1: have come to me, just just hasn't been the right
Speaker 1: capitalization on my part. So how much are you willing
Speaker 1: to risk? Um, I mean on a on a specific
Speaker 1: trade or just overall both, I mean overall, I would
Speaker 1: I have invested around pen grant, so that's like the
Speaker 1: starting point, and then on specific trades I try to
Speaker 1: you know, keep a percentage of that amount as the limit.
Speaker 1: So you know, that's obviously a strategy that people use,
Speaker 1: and I know kind of grand Pobaby isn't a lot
Speaker 1: to really start with, but you can you can make
Speaker 1: a significant amount of money with that. So you know,
Speaker 1: on a specific trade, I try not to go over
Speaker 1: like a five amount, I guess, but if I really
Speaker 1: feel confidently about something or or I'm seeing some feedback,
Speaker 1: you know, I'll go, I'll go, I'll go a little
Speaker 1: higher than that. Okay, let's some you know, one of
Speaker 1: the things you mentioned earlier, just want to go through
Speaker 1: how you like what you're using. You said you use
Speaker 1: options on spy and i w M, which is the
Speaker 1: large and small cap ets. What kind of options are
Speaker 1: are you using? And like how do you because options
Speaker 1: side options like this is a different end of the
Speaker 1: swing pool then then most people. Yeah, yeah, it's a
Speaker 1: little more complicated, right, It is very complicated, and and
Speaker 1: that's kind of like I kind of just jumped right
Speaker 1: into the fire. You know, I really didn't know much
Speaker 1: about investing, so we went straight into options and it's
Speaker 1: really h it's really a you're playing with fire when
Speaker 1: you're doing that, and it's an explosive game. So, um,
Speaker 1: the type what you mentioned this spy and i WM options,
Speaker 1: that's really what I started off with because those are
Speaker 1: the major indexes, and I really didn't know much about
Speaker 1: other stocks. So, you know, at the time when I
Speaker 1: went in, when we hit the bottom, I was doing
Speaker 1: mainly put on spot, which you know, I'm sure you know,
Speaker 1: is you're betting on it to go down over a
Speaker 1: certain period of time. So, like I said, when I
Speaker 1: first got in, there was a really strong sentiment that
Speaker 1: we were kind of going to continue to crash down.
Speaker 1: And I think we were around you know, like two
Speaker 1: fifty two forty range, and I was kind of just
Speaker 1: piggybacking on these online communities, taking out positions, monthly positions
Speaker 1: on spy puts, like in the two hundreds the two
Speaker 1: hundred and five range to start off, which you know
Speaker 1: is very far out of the money, but people were
Speaker 1: really expecting from kind of like apocalyptic thing to come
Speaker 1: from the market. And you know, like when I first started,
Speaker 1: it was I had no idea how to manage or
Speaker 1: when I went to exit a certain position. I kind
Speaker 1: of just held on my first trade until it expired,
Speaker 1: which essentially became worthless at the end because I didn't
Speaker 1: know what I was doing. So as the market went up,
Speaker 1: you know, I should have probably cut the losses. It
Speaker 1: sounds like you've transitioned to other things as well, from
Speaker 1: options on major indexes, like what have been the last
Speaker 1: Like what are you using these days to get that?
Speaker 1: I guess juice right, So, um now I don't focus
Speaker 1: as much on those major indexes really. Over the time
Speaker 1: I started with the indexes to kind of learn how
Speaker 1: it works as far as the pricing, how the pricing
Speaker 1: changes with the movement of the stock price, the pricing
Speaker 1: of the option. Um Now I moved on to know
Speaker 1: your general mostly like popular stocks, Facebook, Apple, Twitter, things
Speaker 1: that you know are common among people. Day trading has
Speaker 1: been like such a phenomenon during the pandemic as as
Speaker 1: you mentioned, and you know, you're an example of someone
Speaker 1: who sort of got drawn into the markets from this.
Speaker 1: What have you learned about investing through this? UM? Well,
Speaker 1: I definitely learned about options a lot. And that's the
Speaker 1: main thing that I say. I really took a huge
Speaker 1: leap in learning. I mean by no means am I
Speaker 1: an expert on this stuff or you know, knowledgeable about
Speaker 1: how technical analysis works, but just as far as how
Speaker 1: you know, puts and calls operate, as far as their
Speaker 1: prices in relation to you know, expliration dates and the
Speaker 1: prices of the stocks. So I think that's been a
Speaker 1: very good learning experience for me for the future if
Speaker 1: I want to continue to do this and you know,
Speaker 1: develop a more conservative approach. And you know, through these
Speaker 1: online communities I was mentioning, like Twitter and Reddit, um
Speaker 1: there are some really great, you know, resources for learning
Speaker 1: on there as far as you know, people providing input
Speaker 1: for trading and just overall information. And there's a bunch
Speaker 1: of people taking advantage of these retail investors splotting in
Speaker 1: by providing conscription services on you know, learning more information
Speaker 1: about trading and stuff like that. So yeah, so what
Speaker 1: what advice for others um interested in doubling in options?
Speaker 1: Do you have? Um? My advice would be not to
Speaker 1: go in you know, so gung ho right away, I
Speaker 1: would say definitely if you're going to start off, start
Speaker 1: off with a very small amount and you know, try
Speaker 1: to learn how the price action works as far as
Speaker 1: like how the relation of the option prices change, how
Speaker 1: the option prices change in relation to the stock, and
Speaker 1: how it gets close to the aspiration date, and you know,
Speaker 1: just learn overall about how it works before before you
Speaker 1: invest too much money. Right, do you feel like you're
Speaker 1: a gambler? Does this feel like gambling? Yeah? Definitely, So
Speaker 1: it definitely feels like gambling as opposed to investing, And
Speaker 1: I think that's an important thing to recognize. So I'm
Speaker 1: I'm a very big poker player. Um. You know, obviously
Speaker 1: with the pandemic all the casinos were shut down. So
Speaker 1: back to the point I mentioned earlier, kind of less
Speaker 1: devoid and a lot of people like me, you know,
Speaker 1: I like to play poker and gamble on online online
Speaker 1: sports whatever e gaming and you know, gamble on sports
Speaker 1: com on, and this is really kind of similar to
Speaker 1: that in the sense that it is a gambling as
Speaker 1: opposed to investing. Whereas, if you're investing long term more
Speaker 1: or less, if you're investing in you know, a solid company,
Speaker 1: you have an idea over a long period of time,
Speaker 1: you're pretty much guarante feed in the sense to get
Speaker 1: some returns, whereas this really is a gamble where you
Speaker 1: can you can get massive returns, but you can lose everything.
Speaker 1: And well, I guess real quick, how much are you
Speaker 1: up here to date? Would you say, I'm definitely not
Speaker 1: up here to date? But you know, um, it's it's
Speaker 1: been a good learning experience as far as just the
Speaker 1: whole the whole use of robin hood and learning how
Speaker 1: the options work. Um. So, And so let me pivot
Speaker 1: from that, which is because a lot of people are
Speaker 1: worried about people having a great experience. They're up big
Speaker 1: and then are they going to be shattered when they lose?
Speaker 1: So if you're not up here to date, that's um
Speaker 1: kind of kills that whole critique from the pundit crowd
Speaker 1: on the retail investor. I guess my think my other
Speaker 1: question would be something they say is well, as soon
Speaker 1: as sports come back, a lot of these traders are
Speaker 1: gonna go back to that. Do you think this is
Speaker 1: going to be something you do in the future even
Speaker 1: when sports come back and other forms of like I
Speaker 1: guess gambling for lack of a better word, reappear, right, Um,
Speaker 1: I think for me and for a lot of people,
Speaker 1: it definitely depends on how well we do with this
Speaker 1: when that stuff comes back, because obviously that voice that
Speaker 1: has been left um by no sports has been fulfilled
Speaker 1: by you know, playing with the market. So if I'm
Speaker 1: in a position where I have lost a lot of
Speaker 1: money when sports come back, maybe I'll take it easy
Speaker 1: and not continue to do this. But I think that
Speaker 1: it's something over the long term that I really want
Speaker 1: to continue to learn about and and probably continue to
Speaker 1: do regardless of this stuff coming back. And I think
Speaker 1: that will be a common thing among many people my age.
Speaker 1: Like I said, they kind of just we're through into
Speaker 1: the fire here, and it's it's a thing where people
Speaker 1: who weren't previously exposed to it, who have now seen
Speaker 1: it really see it as a huge opportunity where they
Speaker 1: can make a lot of money if they if they
Speaker 1: want to put in the work and learn about it.
Speaker 1: So I do think that even as time goes by,
Speaker 1: we will continue to see um an increase in people
Speaker 1: investing in the market and and doing options. What do
Speaker 1: you think of E T s? UM, I think the
Speaker 1: the E T s they're more of a kind of
Speaker 1: safer a safer play relative to stocks. Maybe I'm not
Speaker 1: really sure though. UM. Like I said, I started off
Speaker 1: in the beginning with the E T s. I think
Speaker 1: obviously they are a general indication of how the market
Speaker 1: is going. UM the ones that I really played around
Speaker 1: with the most of the Spy and the Russell. I
Speaker 1: think there are opportunities there in the E T s
Speaker 1: because if there's you know, good news about COVID or
Speaker 1: bad news about it, you can generally expect a move,
Speaker 1: especially now in these times, up or down. So I
Speaker 1: think there's there's a lot um to be had as
Speaker 1: far as opportunities in the ets, because I think they're
Speaker 1: it's more easily predictable than a particular stock, because you know,
Speaker 1: there's news about particular stocks that can come out that
Speaker 1: change the price in a kind of drastic manner. Whereas
Speaker 1: the EPs kind of moved with what's going on in
Speaker 1: the news, just general sense, all right, Michael, thank you
Speaker 1: so much for joining us on Trillions. Thanks guys, thank
Speaker 1: you for having me. Thanks for listening to Trillions until
Speaker 1: next time. You can find us on the Bloomberg Terminal,
Speaker 1: Bloomberg dot com, Apple Podcasts, Spotify, and wherever else you'd
Speaker 1: like to listen. We'd love to hear from you. We're
Speaker 1: on Twitter. I'm at Joel Webber Show. He's at Eric Caltunas.
Speaker 1: This episode of Trillions was produced by Magnus Hendrickson. Francesca
Speaker 1: Levy is the head of Bloomberg Podcast, but then to death.