WEBVTT - Delusional ETF Trading with Sarah Newton 0:00:05.920 --> 0:00:12.119 Welcome to Trilliance. I'm Joel Webber and I'm Eric belchionis Eric. 0:00:12.200 --> 0:00:14.680 We have a guest here, Sarah Newton. Who is she? 0:00:15.320 --> 0:00:18.400 Sarah Newton is somebody I met digitally. She has a 0:00:18.440 --> 0:00:21.000 handle on Twitter at Phila Trades, and you know, I 0:00:21.040 --> 0:00:24.079 live in Philly, and she started posting stuff on E 0:00:24.160 --> 0:00:27.720 T F S and uh, you know, kind of interacting 0:00:27.760 --> 0:00:29.440 with me, and I got to know her digitally, and 0:00:29.480 --> 0:00:33.000 then I started seeing around the circuit and she's I 0:00:33.040 --> 0:00:35.400 found out her story, which I thought was very interesting. 0:00:35.440 --> 0:00:37.280 And you know, one of the things we vowed to 0:00:37.320 --> 0:00:39.760 do this year was to talk to actual and do 0:00:39.840 --> 0:00:43.199 it yourself investors of ETFs and skip the middleman, the 0:00:43.200 --> 0:00:45.199 asset managers and advisors, which are good to talk to, 0:00:45.520 --> 0:00:47.400 but sometimes it's good, like with my two dads, to 0:00:47.440 --> 0:00:50.280 talk to someone who's out there doing it on their own. 0:00:50.280 --> 0:00:52.560 And unlike my two dads, which are doing a little 0:00:52.560 --> 0:00:55.760 more retirement and estake type work, Sarah is really more 0:00:55.800 --> 0:00:58.080 of a trader. I mean, she is doing it herself. 0:00:58.120 --> 0:01:00.520 She's almost reminds me of like the nine, The's version 0:01:00.520 --> 0:01:03.200 of the day Trader of stocks. She's kind of doing 0:01:03.200 --> 0:01:04.640 it with E t F s and so she can 0:01:04.680 --> 0:01:06.280 share some of those insights I thought, and she has 0:01:06.319 --> 0:01:10.720 an incredible story which we're gonna hear all about this 0:01:10.840 --> 0:01:16.760 time on Trillions Delusional E t F Trading with Sara Hi. Sarah, 0:01:16.800 --> 0:01:20.600 welcome you, Trillions. Hi do So, how did you get 0:01:20.640 --> 0:01:26.040 into E t F trading? UM? Actually, UH, to be honest, 0:01:26.560 --> 0:01:28.640 I first got into e t F s thanks to 0:01:29.120 --> 0:01:32.600 something called finn twit. I was mainly into stocks before that. 0:01:32.640 --> 0:01:36.040 I would just trade common stocks and you started to 0:01:36.080 --> 0:01:38.120 hear more about E t F s UM, so I 0:01:38.200 --> 0:01:40.000 kind of heard of them, didn't really think of it 0:01:40.040 --> 0:01:43.759 as a trading vehicle. I started using finn twit, which 0:01:43.840 --> 0:01:47.880 is uh a subsect of Twitter, and I started following 0:01:47.920 --> 0:01:52.520 people like Eric Dave Nadie would post um Christian Fromhertz, 0:01:52.560 --> 0:01:56.120 who is actually a trader much like myself, And a 0:01:56.160 --> 0:01:58.040 great thing to follow with the t F S is 0:01:58.080 --> 0:02:02.920 the flow it. It helps you UM visualize the sector rotation, 0:02:03.000 --> 0:02:06.640 which is a big, big part of UM swing trading. 0:02:07.080 --> 0:02:10.000 So that's how I initially got my INN and then 0:02:10.040 --> 0:02:14.600 it kind of segued into something more risky like UM options. 0:02:14.639 --> 0:02:17.320 But you weren't a trader to start with right, you 0:02:17.320 --> 0:02:19.800 were just doing this on the side, right, Okay, So 0:02:21.680 --> 0:02:24.480 all right, let's let's start with my back story. I 0:02:24.520 --> 0:02:28.000 started investing, I guess, I can't say trading. Started investing 0:02:28.040 --> 0:02:31.519 in the fifth grade. Fifth grade. It's a crazy story. 0:02:31.800 --> 0:02:33.920 A father of one of the kids in my class 0:02:34.520 --> 0:02:39.000 got extremely wealthy during this time period donated twenty dollars 0:02:39.280 --> 0:02:43.399 to us to trade, So he was actually making placing 0:02:43.440 --> 0:02:47.840 trades based on what we're picking. I know, I know, insane, insane. 0:02:47.919 --> 0:02:49.880 At the end, it didn't matter what we made, what 0:02:49.919 --> 0:02:51.560 we lost, he was going to keep it. It was 0:02:51.639 --> 0:02:53.400 his money. So he was your broker, and you were 0:02:53.400 --> 0:02:55.000 just calling him up and like telling him what to do. 0:02:55.320 --> 0:02:57.160 I don't even know how our trades are submitted, to 0:02:57.160 --> 0:02:59.360 be honest, but um, we picked I think as a 0:02:59.360 --> 0:03:02.120 class we picked uh ten and um. When I was 0:03:02.160 --> 0:03:06.280 in the fifth grade, it was the dot com bubble. Actually, 0:03:06.280 --> 0:03:08.080 when I started the fifth grade, we didn't know it 0:03:08.120 --> 0:03:10.880 was a bubble quite yet. So what we would do 0:03:11.200 --> 0:03:14.919 is pets dot com, I'm all in. We would use 0:03:15.639 --> 0:03:19.520 I believe it was the Wall Street Journal, and we 0:03:19.560 --> 0:03:22.720 would literally paper trade. And this is not the paper 0:03:22.720 --> 0:03:25.520 trading that people know of today. This is use the 0:03:25.560 --> 0:03:29.160 newspaper to trade. We would write down our stock selection. 0:03:29.280 --> 0:03:32.160 We would track the stocks every week, and at the 0:03:32.240 --> 0:03:35.920 end we started with at the end we we ended 0:03:36.080 --> 0:03:39.320 somewhere in the fifties. Um, so this guy made money 0:03:39.320 --> 0:03:42.000 off a bunch of fifth graders. So, as you can imagine, 0:03:42.040 --> 0:03:44.040 it was an experience of a lifetime. It's stuck with 0:03:44.120 --> 0:03:48.760 me and my My mother always stocked picked a cash account. 0:03:49.000 --> 0:03:51.320 My dad actually left his job for a little bit 0:03:51.360 --> 0:03:53.800 to try his hand at day trading. So I wasn't 0:03:53.800 --> 0:03:56.920 a stranger to this field. So being that age, seeing 0:03:57.120 --> 0:04:00.240 these astronomical returns, I was like, I'm gonna get rich 0:04:00.240 --> 0:04:02.800 one day. This is one I'm gonna do. So fast 0:04:02.840 --> 0:04:05.960 forward to you're out of college, out of you go 0:04:06.040 --> 0:04:08.920 into investing or well listen, hold on before we get there, 0:04:08.960 --> 0:04:12.120 I'll just go really quickly. And I always stock picked. 0:04:12.160 --> 0:04:14.800 I stock picked my mom's cash account when I was 0:04:14.840 --> 0:04:17.919 in high school. You know, us traders out there, we like, 0:04:18.120 --> 0:04:19.800 we like to lay our claim to fame. So I 0:04:19.880 --> 0:04:22.400 just gotta put this out here right now. I wrote 0:04:22.440 --> 0:04:25.680 my mom a note to get into Google. I said, 0:04:25.720 --> 0:04:28.120 Google's pong tomorrow. I need you to buy me a 0:04:28.120 --> 0:04:32.480 few shares. Um. Those few shares fast forward after college 0:04:32.839 --> 0:04:37.000 helped me fund honestly where I am today. So I 0:04:37.080 --> 0:04:39.680 was one of Google's first investors. Those hold on all 0:04:39.720 --> 0:04:42.080 those c NBC articles that you see about. I was 0:04:42.080 --> 0:04:44.760 going to say that was me because I hate those 0:04:44.800 --> 0:04:49.040 I think they inspire lottery picking and like. But you're 0:04:49.080 --> 0:04:51.200 one of those people. I'm going to soften my stance 0:04:51.200 --> 0:04:54.120 a little because it worked for you. But they'll they'll say, oh, 0:04:54.120 --> 0:04:57.960 if you were only invested in Google, you know, twenty 0:04:58.040 --> 0:05:00.320 years ago, here's how much that that money would be worth. 0:05:00.600 --> 0:05:02.560 But there were a lot of other companies that written 0:05:02.600 --> 0:05:06.800 by Sarah Newton. Okay, so you had some seed money 0:05:06.839 --> 0:05:11.120 from hitting the jackpot. Yes, I did. But okay, fast 0:05:11.160 --> 0:05:14.080 forward to college. I went to college during the Great Recession. 0:05:14.120 --> 0:05:16.680 It was a horrible whole world time, especially since I, 0:05:17.040 --> 0:05:19.559 you know, it was pretty familiar with stocks, had money 0:05:19.560 --> 0:05:22.800 in stocks, and had access to my mom's for one K. 0:05:23.040 --> 0:05:25.920 So I watched that thing get cut in half. It 0:05:25.960 --> 0:05:30.120 was devastating, and I thought to myself, I don't want 0:05:30.120 --> 0:05:32.480 anything to do with this. So I left the world 0:05:32.520 --> 0:05:36.000 of investing. Um. Actually, now that i'm thinking of it, 0:05:36.080 --> 0:05:39.800 I'm pretty sure that I own some fracking stock still 0:05:39.839 --> 0:05:41.719 to this day, because they were big at that time, 0:05:42.000 --> 0:05:44.440 and I still have not looked at that account since 0:05:44.440 --> 0:05:47.440 two thousand. Anyways, al right, not to get too off track, 0:05:48.000 --> 0:05:50.440 I left, and you know, it was really hard to 0:05:50.800 --> 0:05:53.800 hard time to get a job, and I took the 0:05:53.839 --> 0:05:56.400 first job I could get, and that was in consulting. 0:05:56.520 --> 0:05:59.000 And so I went into consulting after graduation, which is 0:05:59.040 --> 0:06:02.680 in like two thousand, two eleven, and I was making 0:06:02.680 --> 0:06:05.680 a career as a consultant when my mother, UM, my 0:06:05.760 --> 0:06:09.880 mother got sick. UM I had to leave consulting to 0:06:09.920 --> 0:06:13.520 be her primary caregiver. Um. She had breast cancer, which 0:06:13.960 --> 0:06:15.880 you know, at first, doesn't it doesn't sound like that 0:06:15.880 --> 0:06:20.000 big of a deal. People actually go through chemo and work. Unfortunately, 0:06:20.080 --> 0:06:22.520 my mother was already sick with kidney disease, so she 0:06:22.680 --> 0:06:25.520 was on chemo and dialysis at the same time, and 0:06:26.320 --> 0:06:29.560 it really required full time caretaking. So I left consulting 0:06:29.720 --> 0:06:32.960 and I went to care for her. And you know, 0:06:33.040 --> 0:06:35.960 at this period of time, I was like the rest 0:06:36.000 --> 0:06:37.839 of my friends, you know, had been in the workforce 0:06:37.880 --> 0:06:40.360 two to three years. They started getting promotions, their lives 0:06:40.360 --> 0:06:43.200 started taking off. I mean, it really hurt. It was 0:06:43.240 --> 0:06:45.400 hard to watch. I had always been like a great 0:06:45.400 --> 0:06:49.200 student in college. I was successful in my career, and 0:06:49.240 --> 0:06:50.840 it was it was hard to take a back seat 0:06:50.880 --> 0:06:54.440 to that. And um, at this point in time, you know, 0:06:54.480 --> 0:06:57.280 the market had started to rebound, things were looking better. 0:06:57.480 --> 0:07:01.320 And I think, honestly, when I try and think back 0:07:01.360 --> 0:07:03.279 of like what was like the light switch a moment, 0:07:03.560 --> 0:07:07.039 I think my mom might have accidentally because she was 0:07:07.080 --> 0:07:10.000 not a frequent watcher of CNBC. I think either she 0:07:10.160 --> 0:07:11.840 had it on or I honestly might have been in 0:07:11.880 --> 0:07:14.560 a doctor's appointment and it was on in the waiting room. 0:07:14.600 --> 0:07:17.040 I can't remember exactly how it happened, but like the 0:07:17.120 --> 0:07:18.600 light switch went off, and I was like, I should 0:07:18.600 --> 0:07:22.640 get back into this. Why did they did you when you? 0:07:22.800 --> 0:07:25.200 I thought to fifth grade and how much money I made, 0:07:25.240 --> 0:07:27.400 and I was like, oh, clearly, I can you know, 0:07:27.600 --> 0:07:30.200 make a living easily doing this and were in a 0:07:30.240 --> 0:07:32.960 place where you were like it was hard and you 0:07:33.000 --> 0:07:36.160 guys needed the money. Oh no, No. I was more 0:07:36.280 --> 0:07:41.200 at the standpoint that you know, when you're life like, 0:07:41.360 --> 0:07:45.240 finance is compounding. When you're not doing anything, you're losing everything. 0:07:45.280 --> 0:07:47.600 And I was losing my career and I needed to 0:07:47.640 --> 0:07:50.600 figure something out for myself. Um, I think that is 0:07:50.720 --> 0:07:58.640 a very um common treat intrinsic two females. A lot 0:07:58.640 --> 0:08:01.440 of times we're put in these hard situations. You know, 0:08:01.520 --> 0:08:04.960 many of us become caretakers at all different points of 0:08:05.000 --> 0:08:08.160 time in life. Like hopefully, hopefully a lot of us 0:08:08.200 --> 0:08:09.920 don't have to do it as young as I had 0:08:09.960 --> 0:08:13.080 to do it. Um, I know there are probably a 0:08:13.200 --> 0:08:16.560 lot of people actually my age that coming up soon 0:08:16.600 --> 0:08:18.800 are going to have to do it. Um, my parents 0:08:18.800 --> 0:08:22.360 were boomers. I'm pretty sure your parents are boomers. Um, 0:08:22.360 --> 0:08:25.000 it's just something. It's something that's coming. There's not enough 0:08:25.000 --> 0:08:27.040 workers in the field to care for all these people. 0:08:27.280 --> 0:08:30.600 There's not enough finances to pay for it, and people 0:08:30.640 --> 0:08:33.440 are going to have to bite the bullet and you 0:08:33.480 --> 0:08:39.000 know do caretaking on the side and investing or not. 0:08:39.080 --> 0:08:42.480 Everybody can trade, but investing is definitely helps fill fill 0:08:42.520 --> 0:08:46.360 the void of that income and that lack of exposure 0:08:46.400 --> 0:08:49.560 to the workforce. We basically looked at your life that 0:08:49.640 --> 0:08:51.959 you needed to be making some money, that you were 0:08:51.960 --> 0:08:53.800 out of the game, but you could get back in 0:08:53.840 --> 0:08:56.679 the game because you knew some basics exactly, and what 0:08:56.760 --> 0:08:59.400 was your next move? Um? My next move was to 0:08:59.480 --> 0:09:02.559 return to the account that I abandoned and not looked 0:09:02.559 --> 0:09:08.080 at since. And was that your fracking account account? That 0:09:08.160 --> 0:09:10.480 was my account that had actually the fracking stocks, It 0:09:10.559 --> 0:09:12.760 had the Google in it, and I think it had 0:09:12.800 --> 0:09:19.280 some Apple shares, and it was a fifty It was. 0:09:19.440 --> 0:09:22.440 It was a really pleasant surprise. It was not anywhere. 0:09:22.480 --> 0:09:24.080 It was five times I left it at ten. I 0:09:24.200 --> 0:09:25.959 returned and it was five times the size that I 0:09:26.000 --> 0:09:28.559 had left it. It was I had no idea that there. 0:09:29.000 --> 0:09:31.560 I know. Okay, so all these crazy articles you hear about, 0:09:31.600 --> 0:09:34.200 a lot of them happened to me. Don't don't take 0:09:34.200 --> 0:09:36.640 this all with a grain of salt. It's not common. Um. 0:09:36.679 --> 0:09:39.200 So I returned and I had this nice little nest egg. 0:09:39.320 --> 0:09:42.319 And if you look back to that period and time, 0:09:42.840 --> 0:09:50.840 arguably from you two, you know, pretty recently, was like 0:09:50.880 --> 0:09:52.600 a really great time to be in the market. There 0:09:52.640 --> 0:09:55.400 were some extreme draw downs that were really hard when 0:09:55.400 --> 0:09:57.720 you're staring at screens all day every day, but other 0:09:57.800 --> 0:10:00.599 than that, it was a good time to be I 0:10:00.880 --> 0:10:02.680 like to call it what I did in the beginning 0:10:02.880 --> 0:10:06.040 active investing, because it wasn't it wasn't trading. I wasn't 0:10:06.040 --> 0:10:08.080 staring at the screen all day every day because you know, 0:10:08.120 --> 0:10:10.679 I was a caretaker. Um, that took up most of 0:10:10.720 --> 0:10:15.560 my time. So more like active investing, like something in 0:10:15.600 --> 0:10:18.520 between long term investing in swing trading. That's what I 0:10:18.559 --> 0:10:20.760 was doing during that period of time. When you started 0:10:20.800 --> 0:10:23.480 doing this sort of trading for yourself. Can you remember 0:10:23.520 --> 0:10:25.360 the first E t F trade you did or what 0:10:25.640 --> 0:10:29.360 started off the E t F portion of your account? Oh, 0:10:29.440 --> 0:10:32.200 I'm positive the first E t F trade I did 0:10:32.240 --> 0:10:34.520 a spy without a doubt. I'm pretty sure that's everybody's 0:10:34.600 --> 0:10:40.320 set of training wheels exactly. Um. You know, I really 0:10:40.800 --> 0:10:43.960 think at first when I got into E t fs 0:10:44.559 --> 0:10:47.679 pre fin twit, I really just thought they covered the indexes. 0:10:48.040 --> 0:10:51.840 You know, I think my knowledge, my knowledge pre Twitter 0:10:52.720 --> 0:10:55.840 was minimal, but almost in a in a good way, 0:10:55.960 --> 0:10:58.920 not minimal, simplistic, I'll say simplistic. And I think that 0:11:00.440 --> 0:11:03.480 was a double edged sword. Um. I think in some 0:11:03.520 --> 0:11:06.360 ways it saved me a lot of pain. But you know, 0:11:06.440 --> 0:11:10.080 there's still a lot of more innovative opportunities that I 0:11:10.120 --> 0:11:12.439 didn't know about because of it, and E t S 0:11:12.520 --> 0:11:15.480 would be one of them. So I did. I definitely 0:11:15.520 --> 0:11:19.280 did have money in spy. Um, nothing fancy, nothing options, 0:11:19.320 --> 0:11:23.960 just sitting in spy prior to Twitter. But post Twitter 0:11:24.080 --> 0:11:26.680 is when I started to get into you know, the 0:11:26.800 --> 0:11:29.960 more exotic e T F. So, so you put would 0:11:29.960 --> 0:11:31.520 you do with that fifty? Did you go all in 0:11:31.559 --> 0:11:34.640 on spy? Oh no, no, definitely not. Um I The 0:11:34.679 --> 0:11:37.439 way that I used to stock pick was not technical, 0:11:37.600 --> 0:11:41.640 not fundamental. It was I would pick stocks that I 0:11:41.679 --> 0:11:45.920 felt like I used the company's a decent amount, and 0:11:46.080 --> 0:11:50.880 that morphed. I started reading different investing books like Jim 0:11:50.960 --> 0:11:54.760 Kramer's books. Um I started searching. Oh my gosh, I 0:11:54.840 --> 0:11:57.960 remember the first thing I searched online was was I 0:11:58.000 --> 0:12:00.719 just typed in stock charts And of course the first 0:12:00.760 --> 0:12:02.480 thing that comes up is stock charts dot com, which 0:12:02.520 --> 0:12:05.439 is actually a really great resource. And I picked up 0:12:05.480 --> 0:12:08.040 a lot of the basics that I know about technical 0:12:08.120 --> 0:12:11.200 analysis from there. So you spy and then you know, 0:12:11.280 --> 0:12:13.319 you've given me here a list of E T s used. 0:12:13.400 --> 0:12:15.840 This is like, you know, level four hundred here, so 0:12:15.960 --> 0:12:17.600 you you definitely went from one oh one to four 0:12:17.679 --> 0:12:19.640 hundred at some point. How did the training wheels come 0:12:19.679 --> 0:12:24.720 Yeah into it? So again and I like double edged Sword, 0:12:24.920 --> 0:12:27.920 but so Finn twit came into my life. And what 0:12:28.000 --> 0:12:30.280 this is is this it's a subsect of Twitter, and 0:12:30.360 --> 0:12:33.360 it has all of the best of the best, also 0:12:33.480 --> 0:12:35.920 with the worst of the worst. Um there's people like 0:12:36.200 --> 0:12:40.440 Eric on there. There are hedge hedge fund managers you 0:12:41.080 --> 0:12:45.679 see in the movies on there. Um there's anonymous accounts 0:12:45.720 --> 0:12:50.360 that are you know, backstage geniuses. Um that you know 0:12:50.440 --> 0:12:53.120 go on there and share their wisdom. And this is 0:12:53.160 --> 0:12:57.000 how I learned most of what I know today. And 0:12:57.040 --> 0:12:59.480 one thing I would recommend for anybody listening who doesn't 0:12:59.559 --> 0:13:01.800 use Twitter, but if you don't have to tweet, but 0:13:02.360 --> 0:13:04.520 one thing I do sometimes if I'm preparing for a 0:13:04.600 --> 0:13:06.079 quick TV hit or something, or I just want to 0:13:06.080 --> 0:13:07.800 see what the latest people are saying about an et F, 0:13:08.320 --> 0:13:10.400 just put cash tag in the e t F in 0:13:10.440 --> 0:13:13.000 the search and you can see all the latest people 0:13:13.040 --> 0:13:14.480 talking about it. I did this for h y G 0:13:14.640 --> 0:13:17.200 recently and there was some interesting charts and things put 0:13:17.200 --> 0:13:20.280 out that really helped deepen what I was looking at. 0:13:20.880 --> 0:13:23.680 And it's free, I mean, it was an amazing quick resource. 0:13:23.800 --> 0:13:27.200 It's like Google on steroids and and very specific. If 0:13:27.200 --> 0:13:28.679 I put H y g Intwo Google, I wouldn't have 0:13:28.720 --> 0:13:31.839 gotten that specificity at that speed. UM, so it can 0:13:31.880 --> 0:13:33.560 really help. And you just put the dollar sign in 0:13:33.559 --> 0:13:35.680 the ticker and you can find everything that people are 0:13:35.679 --> 0:13:38.680 saying about that e t F before you potentially buy it. Yes, 0:13:39.240 --> 0:13:41.120 so if you're new, if you're new to the Twitter 0:13:41.160 --> 0:13:43.439 sphere and you're hearing this podcast for the first time, 0:13:43.920 --> 0:13:47.880 UM finance, Twitter does not work with hashtags. They work 0:13:47.960 --> 0:13:50.120 with what's referred to as a cash tag, and that 0:13:50.320 --> 0:13:52.679 is the dollar symbol. So if there is an e 0:13:52.800 --> 0:13:55.720 t F you're looking to find more research about, like MJ, 0:13:56.360 --> 0:13:59.560 you put in the cash tag or the dollar symbol 0:13:59.760 --> 0:14:02.840 mg A and you can you can filter it by top, 0:14:02.880 --> 0:14:05.760 you can filter it by latest um and you can 0:14:05.760 --> 0:14:16.160 see all different opinions. Fast forward to today, right, you're 0:14:16.920 --> 0:14:19.120 you have your account, right, so e t f s 0:14:19.120 --> 0:14:21.040 are a tool in your account that you use and 0:14:21.160 --> 0:14:24.640 are you riffing off of like economic data or interest 0:14:24.760 --> 0:14:26.880 rates to move money within e t f s? Like 0:14:26.920 --> 0:14:30.120 do you use say like H Y G or t 0:14:30.320 --> 0:14:31.760 L T like do you know what I mean? Like 0:14:32.160 --> 0:14:34.600 a lot of people might use those to play rates. Okay, 0:14:34.760 --> 0:14:38.920 so I use e t f s in way more 0:14:38.960 --> 0:14:40.760 ways than I used to use E T s now. 0:14:40.800 --> 0:14:43.120 I use them in about ten different ways, one of 0:14:43.160 --> 0:14:47.320 them being what you're talking about, UM speaking to economic data. UM. 0:14:47.360 --> 0:14:50.440 Do I trade them all? No? Do I watch them? Yes, 0:14:50.520 --> 0:14:53.240 that's a whole different story. H y g j N 0:14:53.360 --> 0:14:56.560 k U U p UM UP is the dollar junk 0:14:56.600 --> 0:15:00.400 bonds high yield And if I'm to trade anything, it's 0:15:00.400 --> 0:15:04.080 going to be t l T and that's bonds UM. 0:15:03.480 --> 0:15:07.760 I just I think anybody out there who who watches 0:15:07.840 --> 0:15:11.320 bonds has seen the trade that there just was recently 0:15:11.520 --> 0:15:15.040 with the experience volatility. If I'm gonna trade anything, it's 0:15:15.040 --> 0:15:18.240 going to be t LT. The liquidity in it UM 0:15:18.240 --> 0:15:21.800 makes up for the non existent liquidity in the actual 0:15:21.840 --> 0:15:24.600 bond market because as you know, you know, bonds sell 0:15:24.760 --> 0:15:28.240 at different times UM and t l T is the 0:15:28.280 --> 0:15:31.240 twenty plus your treasury, so it definitely is sensitive to 0:15:31.320 --> 0:15:34.960 rates and also sometimes used as a as a crisis hedge, 0:15:34.960 --> 0:15:38.480 like if you think things are getting really bad, t 0:15:38.600 --> 0:15:40.680 LT could be a flight to quality as well. Yeah, 0:15:40.760 --> 0:15:43.840 and I hate to hedge. You know. If if I 0:15:43.920 --> 0:15:47.000 have to hedge, uh, I probably shouldn't be in the 0:15:47.000 --> 0:15:49.400 trade in the first place. I don't use t LT 0:15:49.560 --> 0:15:53.520 to hedge. I do use the volatility instruments to hedge. 0:15:53.640 --> 0:15:56.000 Um there's v x x B, which is is the 0:15:56.000 --> 0:15:57.880 new v x X. But hold, let's there's this thought 0:15:57.880 --> 0:16:01.760 fear for a minute now. The volatility instruments are power tools, 0:16:01.840 --> 0:16:04.640 right right. They hold Vick's futures and so they have 0:16:04.680 --> 0:16:07.120 to roll them, and so the roll, the cost of 0:16:07.200 --> 0:16:09.480 rolling could be like years. So they're they're widely known 0:16:09.480 --> 0:16:11.960 not to hold long term. So you're you're you're kind 0:16:11.960 --> 0:16:13.640 of going in and out of them. But when the 0:16:13.680 --> 0:16:16.880 market has a bad day, nothing goes up like a 0:16:17.000 --> 0:16:19.240 vix et f. It it's up like three or four 0:16:19.320 --> 0:16:22.440 times what a negative three times smp E t F 0:16:22.480 --> 0:16:25.560 would be up like it's the ultimate jack pot if 0:16:25.600 --> 0:16:28.160 you're right. If you're wrong, though, they it's like it 0:16:28.240 --> 0:16:30.080 corrodes on you. So do you do you like kind 0:16:30.080 --> 0:16:32.240 of come in and out of it. I've never held 0:16:32.400 --> 0:16:35.360 a volatility product for longer than two days. I never would. 0:16:35.520 --> 0:16:39.640 There's you can't there's no there's no real chart patterns 0:16:39.680 --> 0:16:42.920 to it. People will try and play technical analysis on it. 0:16:43.040 --> 0:16:45.480 I don't believe it works that way. Um, there's some 0:16:45.520 --> 0:16:48.800 people that do. Most people don't. But yeah, after after 0:16:48.840 --> 0:16:52.480 listening to the Dad's podcast, UM, I do. I do 0:16:52.600 --> 0:16:55.040 fear there's a lot more people out there like them 0:16:55.040 --> 0:16:58.680 who misunderstand these instruments and are and are being encouraged by. 0:17:03.880 --> 0:17:05.919 So let's just step back for a second. What what 0:17:06.000 --> 0:17:10.600 do you think your strategy is right now? Right now? Okay, 0:17:10.680 --> 0:17:15.040 so the commodity play. Um, I think this year, uh, 0:17:15.200 --> 0:17:18.080 we're going to see a significant move in gold, and 0:17:18.080 --> 0:17:22.520 I'm playing that out via g LD. Wow, she seems 0:17:22.520 --> 0:17:26.480 really confident about that. Listen, I think gold is uh 0:17:26.520 --> 0:17:28.160 why do you think gold is going to move? Because 0:17:28.160 --> 0:17:31.280 gold has zero correlation, right, so it doesn't necessarily move 0:17:31.640 --> 0:17:34.360 opposite stocks. I mean, I won't bore you guys with 0:17:34.480 --> 0:17:38.920 all of my technical analysis jargon, but technically it has 0:17:38.960 --> 0:17:41.679 the potential to break the downtrend line from two thousand eleven, 0:17:41.880 --> 0:17:45.560 which which would be you know, a very large move. Also, 0:17:45.600 --> 0:17:48.879 I'm also playing this off of the chance that you know, 0:17:49.240 --> 0:17:52.400 we might be entering our recessionary period in the next 0:17:52.480 --> 0:17:55.040 two years. Like I'm not saying that definitely this year, 0:17:55.119 --> 0:17:58.679 but most definitely in the next two years. Um, this 0:17:58.760 --> 0:18:01.560 can be played out for easily. I I'm playing it 0:18:01.600 --> 0:18:03.800 out through actual shares of the e t F. I 0:18:03.840 --> 0:18:06.040 know other people who are playing it out through leaps, 0:18:06.160 --> 0:18:09.600 which are options that go out into UM, so you've 0:18:09.600 --> 0:18:12.240 got time on that. So they're not as volatile. They 0:18:12.320 --> 0:18:14.640 kind of they don't really move much at all. But honestly, 0:18:15.040 --> 0:18:17.679 if there is a big move to the upside, you 0:18:17.720 --> 0:18:20.439 know they're gonna they're gonna read for the reward. I 0:18:20.480 --> 0:18:22.560 see one on here that I want to really unpack 0:18:22.600 --> 0:18:25.080 a little bit. Um. You like em. There's two reasons 0:18:25.119 --> 0:18:27.520 I find find that interesting. A. You know, merging market 0:18:27.520 --> 0:18:28.840 has been beat up for a long time, so why 0:18:28.880 --> 0:18:31.000 do you like it? And be you know, amongst the 0:18:31.040 --> 0:18:33.440 CTF analysts, e M is a tough pill to swallow 0:18:33.440 --> 0:18:36.280 because it's so expensive, So we are so inclined to say, 0:18:36.560 --> 0:18:38.479 you know what, use I MG or v W Oh 0:18:38.480 --> 0:18:41.359 they're way cheaper um. But traders do like e M. 0:18:41.440 --> 0:18:43.440 Can you kind of break down why you like that? 0:18:44.560 --> 0:18:47.080 I like em because of the way it looks technically. Again, 0:18:47.119 --> 0:18:50.800 like most people who are traders trade on a technical basis, 0:18:50.880 --> 0:18:53.119 So from looking at e M, it's been in a 0:18:53.200 --> 0:18:58.040 consistent down trend um. And the reason why I'm watching 0:18:58.119 --> 0:19:01.400 it right now is because uh, and I shouldn't even 0:19:01.400 --> 0:19:03.360 say watching, because I have been playing it. But I've 0:19:03.359 --> 0:19:06.399 gotten burned several times so far. So Um in October 0:19:06.520 --> 0:19:08.240 I was in it, thought it was going to break 0:19:08.280 --> 0:19:10.480 to the upside. It kind of did a fake breakout 0:19:11.160 --> 0:19:14.399 failed again. Um. But E E M is you know, 0:19:14.440 --> 0:19:18.199 it's it's almost like volatility, like the volatility products, in 0:19:18.200 --> 0:19:20.320 the sense that it's got a wild ride. You can't 0:19:20.359 --> 0:19:22.119 get in it and expect it not to move a lot. 0:19:22.200 --> 0:19:24.240 And I think the reason why traders like it is 0:19:24.280 --> 0:19:28.200 because the upside potential if it works is big. Um, 0:19:28.240 --> 0:19:32.639 the payoff is big. And you know, since we don't 0:19:32.680 --> 0:19:36.160 have to be in these products for long, the cost, 0:19:36.920 --> 0:19:39.679 the cost of things like management fees is not really 0:19:39.880 --> 0:19:42.280 important to us. How long are you typically in a 0:19:42.359 --> 0:19:44.639 position something in my active account, I would never be 0:19:44.680 --> 0:19:46.359 in for more than three weeks. That would be and 0:19:46.400 --> 0:19:49.240 that would be long, like a long term swing trade. 0:19:49.359 --> 0:19:51.120 We did a study. There's a thing you can calculate 0:19:51.160 --> 0:19:53.479 the break even holding point on where the bidass spread 0:19:54.520 --> 0:19:57.199 versus the cost like and I think, E M. This 0:19:57.320 --> 0:19:59.720 is like five years ago. I did this. If you're 0:20:00.000 --> 0:20:02.480 to go be in within three weeks. It's actually cheaper 0:20:02.480 --> 0:20:05.280 to use em because the expense ratio is pro raded 0:20:05.280 --> 0:20:09.000 over a year, so the bitest spread and the liquidity 0:20:09.040 --> 0:20:11.880 is such that it's cheaper. That's really all I'm ever 0:20:11.880 --> 0:20:16.159 looking at. I I honestly, I know from following so 0:20:16.240 --> 0:20:19.840 many et F guys, what you know the BIPs are? 0:20:20.359 --> 0:20:23.600 Do I really care? Now? I'm focused on the bidass spread. 0:20:23.720 --> 0:20:25.879 That's the end all be all for me. When you 0:20:25.960 --> 0:20:28.240 put on here, which again I find interesting, it's the 0:20:28.240 --> 0:20:30.920 best performing e t F this year's MJ. We've covered 0:20:30.960 --> 0:20:33.280 cannabis a couple of times on this podcast, Like we 0:20:33.320 --> 0:20:35.959 had Barry red Holts on even though he believes that 0:20:36.000 --> 0:20:37.560 pot is going to be a big deal, he just 0:20:37.560 --> 0:20:40.679 won't touch it. You have it on here. Um, what 0:20:40.840 --> 0:20:44.240 is your take on the cannabis industry as a trader 0:20:44.280 --> 0:20:46.879