Howard Lindzen is the founder and general partner at social Leverage. All opinions expressed by Howard and podcast guests are solely their own opinions and do not reflect the opinion of social leverage or stock twits. This podcast is for informational purposes only, and should not be relied upon for decisions. Guest may maintain positions and securities discussed in this podcast. Oh, came not who started Kane that? I don't know. That was way back in college. Somebody that was like a Swiss but Norwegian. And you can't run. I've never seen you. When you're like Forrest Gump, no one's seen you run. I run fast, you run well, I used to run fast.

Yeah, the canoe deny for sitting here locked down the virus Like these quiet moments. You've got the sound wired so good. I feel like I'm a little bit Howard Stern like a mini Howard Stern except no users. No viewers. There's something Zan ish about it. So Zen video is lame. I'm not, like bullish on podcast. I'm bullish on this podcast. Right. Okay. I don't think you can do this by yourself. I think everybody that does it by himself, I get it. But like it's fun to have a producer.

When did you win your first Cleo? Back in 19 93 or four people that when Cleo is supposed to end up doing podcasts in a fake office Fake career path of a Clio internal kidding, I've been a lot of curious since then. It's been a lot of financially, you know, I feel lucky to have. Kanoute came in the studio today. Special gas. Good friend LP Crazy risk manager futures traitor Index traitor. Long time trader, great athletes. Swimmer from Duke. Jack Newhouse. I talked to Jack twice a year. Generally, when the vics is about 40.

So we've had one call already this year because he's busy, man. He doesn't need to deal with retail Schmoes like myself. But ah, like knowing I'm on the same page is a professional when panic is in the air. And so we're gonna bring a professional and has traded through this stuff on his own with his own capital for many, many years and isn't lp in our fund. And great instincts show any lives in Chicago and really have that many friends in Chicago. So, Jack me host, we're gonna dial him up but first, uh, have a sponsor. Now we know, but we have ah, portfolio company that smartly sent me some copy to promote their product.

And it's one that I use coy if it so Thank you. Coffin. If you want to track and analyze what's happening in the current market turmoil, Coy Finn is your product. The Web based platform that lets you analyze stocks, e T F mutual funds and other assets all in one place. I use it all day looking at it now. Coffin has a ton of high quality data. Powerful functionality in a clean interface. The best part. It's free people free. You could sign up a coffin dot com k a y f n f i n k o y f i n dot com Kanoute, Call Jack.

Hello,

Blackjack. New house.

How you doing?

We're doing good. You got came. That key? Newt Kanoute from Norway on the line. I know you've never listened any of these pockets with many make

money. I actually did some homework. I got through a couple of them to

get ready for the who'd you listen to?

I listen to Brad and I think I listen to the 1st

1 who were generous. Shaughnessy from O'Shaughnessy wasn't great, but Jim's a legend.

It seemed like it was kind of a no brainer. I thought this stuff went over well, and then I pieced my way through the one you just did with your union square

body for our friend Wilson.

Yeah. Yeah, and that was pretty good. I thought you guys were doing some good content. Interesting.

Okay, well, thanks. This is their first professional trader, and the phones have stocked with people are freaking out. I

definitely feel like you went a little too big early. Usually you go with the big act at the end. Not the opening act. Kind of in the middle

is definitely more opening where No, it isn't. Because you know what my audience wants. You like Fred Wilson's mystery, and but the couple 100,000 people that followed me on stock twits. I really don't want to hear from Fred and Brad. I want to talk to friends. Brat. Why? I love talking to you out with just being friends is I only bug you around business once a year. I mean, hopefully it's not more than that because of the vics. I only care when the vics is when money is being changed Hands and hi Vicks levels. So I think my instincts to call you are fair, right? I don't bug you, I hope.

No, no, no,

no, no. Because you have to do this all day, but I play in the stock market now. You live in the stock market, and I'm your What you do is is just so such a mystery to me because so many people blow up. So can you just, uh, introduce yourself quickly?

Sure. I kind of got the gist of how these go with.

There's no, there's no professionals. It's a podcast. I'm wearing underwear in sandals right now in a bow tie.

I'll send you a picture. What my

hair looks like after this

is over. Uh, so I am. I graduated Duke in 2001

and

went out. It's okay. A lot of people d'oh and went out and work at a bank credit. First, quite a Credit Suisse First Boston

and hate them two years. Hate them to ex Ivy. It was

a really, really, really bad time to start a job out there with on the listed Blak trading desk. Walked in the door in July of a one and, yeah, it wasn't well time

Gragg walked in. So I was a scene that was already grad school. So you're 40 Hubble, do you? 41 because they were 13 years older. See, walk in there, 2001 got

it, walked in there 2001 and was just sort of going through the training program. And, uh, obviously America went through a massive tragedy and things one crazy. You know, being in New York was a tough place to be in. Being in finance was a tough place, and it was very interesting, though. A lot of volatilities

you're interested in the market are they loved athletes like it was like a no brainer that athletes, where had they pick you?

I had a small trading background through the Chicago Mercantile Exchange, had worked as a runner on the floor and did a tiny bit of electronic trading. Nothing that was legitimate but enough to have a little bit of exposure. And yes, they liked better schools with athletes

and then every negative one war. A Chicago person,

it was a Chicago person, and it was weird because obviously this is all gone. But the mentality of the Chicago floors back then was night and day from the New York Stock Exchange. And that was something that was a little top. I ended up eventually working on the floor of the stock exchange, and it was sort of eye opening to see the differences.

Mmm. And But you you're a survivor and an athlete, so no problem.

Oh, yeah. And you know, it wasn't even bad. It was. You know, Chicago is a very entrepreneurial people working for themselves, very aggressive, massive energy, people who really cared. And New York was much more corporate. It was more being brokers. It was trading on behalf of people. It was a little bit more relaxed. It was definitely less intense. It was a little bit of a letdown, to be honest,

coming from just sort of seeing what people were doing in Chicago. And not that, you know, the guys who are making the phone calls weren't doing massive things, but just the point of execution. It was a little more exciting to see people risking their own money. In Chicago,

Chicago is just that hidden or so much talent in all those buildings of CBO E C M E ah, Citadel? No, it's just like a sleepy giant of brains.

There's some I

mean, obviously saving money and stuff.

Exactly. People who follow blog's and whatnot will know some of the names, but there's some massive principal trading firms in Chicago that don't take claim money, just sort of user and stuff. And, you know, there's guys who have turned a couple 1,000,000 you know, billions over the past couple of decades with technology and everything else. That's something that you just don't see very often. And it happened more than a few times out

here. Yeah, someone's paying for those high rises. Now what? Uh, so when did you decide to go it on your own? Because this is what's interesting.

So it was pretty easy. I got laid off in New York. I think I was the 34th person on the desk when I got hired, and after five rounds of layoffs, I think they were down to like 12 or 14. So I got act spent a few months. It was right before Thanksgiving Christmas new. I'd be in the penalty box for a little while. No one was hiring. Markets were, you know, very, very weak at that time. Got three job offers in the same week. Picked a job, too. Be a clerk on the floor of the New York Stock Exchange, which thank God they rescinded the offer a few weeks later. By the time they rescinded

the offer so that because of market conditions are

it was it was vague. I don't know. I mean, things were not good, but it got pulled and it was something I didn't get a good explanation. I was a little flustered at the time, but I ended up deciding to move back to Chicago and start treating, moved in with my mom and dad, which was not too

exciting, but it was 1/2 of chocolate.

Exactly. It was one of those things that, after being in New York and seeing no opportunities on the desk at First Boston, all the sudden I start trading futures electronically. When on Lee, A few people in the world are starting this. All signs

are pointing or no, I wouldn't find that. How did you find that little niche.

The oh, totally. I mean nepotism at its finest. My dad was a floor traitor, and a handful of guys were trying to point guys into the screen and just pushing guys into Hey, risk very,

very small

amount of money and see what happens.

Fascinating. So So Okay, so But you knew enough that he was onto something or you were just panicked and said, I'll just try that.

I think it was one of the things where I had kind of been discouraged in New York after getting the three offers and then picking the wrong one and having a rescinded and then sort of sitting there and saying, I really want to trade when I was in Chicago, I love the aspect of making decisions. I wasn't as excited about being a broker and being on a bank. It's a lot more customer facilitation that is taking risks and the chance to go out and just make decisions with very alluring. But you know, to have the opportunity to be right or wrong and get paid instantly or pay up was very attractive.

I think you have the profile know that I know you so well, it's like I can't imagine you doing anything else.

You know, there's just not It's not for everyone, but people who like it can really thrive in those environments. There's some people who are happy working at a job for years, hoping for a promotion. There's other people. If you work really hard and come up with some great ideas, you want to get paid and you want to get paid. Now everyone's a little bit different. Do you wantto the job security for that? Optionality?

Do you think athletes are suited for that? Just because of the timing and the dedication in the focus?

You know, I don't I I actually I don't think that's a correlation. I think athletes in general just having the work ethic and being able to kind of push the hours or pushing intensity that helps. But what I've sort of learned what trading is, everyone's different. If you and I are both great traders, certain trade might work well for you, and other trades might work well

for me. There's a great about the market you're selling premium. This morning I was buying Lulu same trade, different, different process

and I think It's one of those things where you kind of have to be able to realize, like, What are you good at? Some people can take hundreds of really small losses and hit some home home runs. Other people hate taking losses, so they really let their losses run as a way to kind of get out of them. And every once in a while they get caught, get murdered. But they can stomach getting murdered once or twice a year. They just don't want to have a bunch of losing days. So everyone sort of has.

You can't afford a lot of How do you do it again?

I to I used to be a little more aggressive, but as you get older as you have Children, you start dialing it down a little bit. I try to avoid the massive losses. I am happy occasionally getting nicked up, but you know each thing has its benefit. If you're puting out of losses early, going into this train rack, you're happy. Other people you know, it's been by the dip for 10 years. The guys that have been taking a little more heat. Those strategies have worked really well over the past decade. Up until you know the recent

couple. Yeah. I mean, luckily for me, I've just been to be I mean, obviously would have. We have companies that that will struggle through this. So it's like Fred was talking about Restaurants just don't have no warning soon. I mean, two months you can't afford two months and then their startups that may felt comfortable having 12 months a runway. And they're stressed on those that had three months of run where it could be fucked. And in trading, I think this lull of low volatility until last month, Bt f. D. Was a thing you know, by the fucking depth show.

It worked.

It worked intently and work. When I said it was over in in 18 I thought it was over. I was buying out in the stress and a San Ricardo I was like, That's the end of Bt f. D. And then we're one mawr in one more suckers move and catching a lot of people.

And right now, from my standpoint, I just don't see the catalyst to really rocket the market up over the next few days. Two weeks,

and do you think the days, the weeks or years of month.

It depends on your trading style. I think ideally, you should have multiple time horizon traits. You know, you're trading on the very short term. That might be seconds, two minutes, two days. You trade medium term and then you have some really long term investments and the ideal world. You try to make sure when you're doing that, everything isn't correlated to one direction.

I got it. I don't know

if that makes sense or not

really long

bullish. If you're really long term bullish, you can trade short term on the short side. And if you catch some good moves, that's great. But what you don't want to do is have every treating signal. Be saying, Go long, go long, go long because if you're wrong that day, it's gonna

really hurt. Yeah, I'm such a neat person that once it gets about 20 positions, that's my you know, with the private market with Tom and Carrot and my partners, it's like, easy like, you know, the phone rings. I have everything in my head, but with trading positions. Once they get past 20 positions, I'm like I can't mentally compartmentalized. So that's my weak. I know my weaknesses are. And so how do you do? Short, medium long. I mean, who short like day?

I would say this for the trading positions. I think there's a difference between having 20 trading positions on that you are actively thinking about buying and selling or just from following you on Twitter today. Ah, I know some of the stocks you were mentioning. Where? Starbucks. Nike McDonald's. Let's say Starbucks, for instance. Let's say you buy it. Uh, goes trading

54.

Part right. Let's say you buy that 55 making up a number.

I was looking for 65 or 69 but like I'll trade around it now. Like knowing that my if I get stocked, it goes into the mid forties and I'll work my way around the brand,

right? But I think there's some situations where a trade you're describing a trade. Sometimes you put stuff on, and if Starbucks say goes to 75 80 you might sit here and say, Hey, I might just illness for the next 10 years, Yeah, or 20 years and not look at it anymore, and it's no longer a trade there a really long term trade or invest

for me, it isn't Starbucks. I know that I'll pick a different restaurant if I want a room for 20 years, even though it you know what I mean. But I hear what you're saying,

right? The short, medium and long term trading. I think right now anyone who's trading short term is thinking probably in minutes, hours. The market's just too volatile right now. Volatility will dictate your definition of time so you could trade different stocks for, you know, a couple percent here and there. The markets giving enough opportunities on that could be playing around in any of the names. Whether you're using options, whether using socks medium term right now, I would define probably Maur in the week month range. Um, normally, I would even even couple days, two months rage.

Normally, I would have medium term a little bit longer. But again, volatility is extreme. And that might be something where if you're buying Starbucks at 54 you might be looking to sell it at 65 70 not make a few dollars on it, and then long term is something to me that you're putting on and you're thinking, You know, you're not worried about short term capital gains. That's something where you're putting it on. You want to take a massive, massive amount of money out of it. You're willing to risk, say, 2025% to make 100%.

Yeah, you see, for me, it's yeah, 20 to 30% for 3 to 4 times. But yet so that's the way I'm looking at. I don't see those opera. I mean, I don't trade options. I wish I did. But I don't see those yet in

I think in the Stocks. It's hard in really great names. Let's say McDonald's got meet up to 100 bucks. You can't expect for

excitement. No, but I have expected double on that prime position, something that juices had over five years.

Right? So it all really depends on what? What type of you know, different risk will feel different. Different type of retort rewards. McDonald's is not gonna go to zero. It's also not going to 400 in the next couple years.

If it got down the 1 20 I know that my downsides 90. Ah, I'll put on a bigger position and bigger brands, cause I know that you had my ups. I may not be a quadruple, but, you know, it could put real money to work and have less downside, but at theoretically, in my mind,

Right, but,

um And so So you go. So you nepotism back to Chicago, and then how does that market evolve? So you're early

in this. I was wrong place. Wrong time in New York. Got hired market, you know, do do it. Absolute disaster. The market gets imploded. There's just nothing to do. There's no opportunity. Come out to Chicago one of the first guys to start trading on the screen and, uh, trading Eurodollar futures. And it was like my eyes lit up. There was opportunity. There was a chance. It was absolutely amazing. I was a total nerd. Didn't go out much. Was really just focused on grinding trading and

doing everything he tell you. It was a grind. Your dad, like you didn't blow up right away.

Oh, no, no, no. This was all he was. Very nice. Gave me some very basic stuff, but was very good about being hands off. I spent a few days with me. And then it was kind of like, Hey, I gotta work, do your own thing. And it was very nice. Uh, always would answer a call if I needed it, But this was something that probably five or six of us sitting in a very small office. And it was nice. It was like, the first few

the company he worked for. Was it just your

only really, really small company, Really small, which still is alive today. Small trade futures trading firm that we stayed off the radar, But we have We were cranking, Uh, we would trade like honestly, it was only like you trade, like, three hours a day because there were so few people trading All of a sudden around lunch, people would start leaving and there'd be nothing in the market. You couldn't physically trade if you want it. D'oh! So you would come in each day, do your research, look a charge,

do your homework. And then for three hours, you didn't blink. Trade as hard as you can. And then, as people started slowly started peeling off. If you stayed, it was guaranteed. You're losing money

because no. When did you lose money.

No liquidity. The only orders you were getting filled on where people in the pit with handheld picking you off. So you're bidding eight for something that hits seven offer. They might not even trade with you. It goes to six offer. They hammer it. You had no clue what was going on in the pit. You were too small for anyone to care about. You

just chop you to death.

Uh, absolutely. But when the markets were in the mornings when the markets have more participants, everything worked really well. There were chances.

So what was the first big hit or big loss? Remember?

Uh, first win Waas in. Of course. Remember first Win Waas in January. We had some

guys You write more with the

2000 for 2000

for a couple

of years and we were trading. Some guys came over from London that had a relationship with us. They're Uribe, or market was very sophisticated, which was an electronic stir market, short term interest rate. We were trading euro dollars. A very similar product. Uh, and they just wanted to see what we were doing and learn about it. And I had, like, I mean, a massive up day on an FOMC statement. Uh, the amount of money that was made with almost no risk with silly. And these guys were just sitting there and one of them It was one of the better things I've heard treating.

He said this won't last very long. Do everything you can to capture this. It's gonna get a lot harder. And the at the end of the day, someone sitting next to me goes, Oh, hey, you gonna fly to Vegas

and kind of what That guy's

stuck with me And I'm like, No, I want to come to work tomorrow. And it was something where if you find edge, it's not gonna

last very long, especially

in today's day and age. And if you have it, it should really be outside of, you know, immediate family or best friends. There shouldn't be much more important than taking advantage of that while you can.

Good, good, good, good point. But when kids are so young, I mean, you got exposed to the markets when Kit. This is why I believe the markets are so important because fast you start. It's like learning Chinese or learning English. The better you get at the language of this more smart people hanging around doing this, it's there's no better industry. So you just were hook from you just got into it and you understood I got

into it. And the other thing that was going on with all the people that were trading in the pits who had been making money forever

removal to up on the

screen was coming on and the skill sets weren't really transferrable. There were some people who were able Thio, but there were great great traders who had a really tough time making the transition. There were average traders who had no chance. The guys who are making call it half 1,000,000 to a couple of 1,000,000 bucks a year forever, all this sudden had no skill set and no way to work

because they didn't have it to see if there was more competition.

No, no, no, no, no, no, no, no. Because trading in the open outcry market in a pit, uh, doing stuff with, you know, hand signals, auditory wise verse, playing with a computer, you could be a 55 year old guy who hasn't touched a computer in your entire life. You sit down and try to watch mark it on a screen, move a mouse around and react versus

the skills that you have been hearing and talking

totally different and not transferrable.

Not like these kids training on Robin Hood. They just don't Even this is just like it's so funny cause I love looking at stock to its and Robin. We could have traded for so long. I've already moved to Mobile feel, you know, from being social. Like once I set a screen on Lost Once I said it a desktop on loss. It's too much information. I've figured out how to curate my edge to the point where ah, I can do it on a mobile phone, Do you write? There's probably so many people. Don't never get there. Well, it'll take a while for people to get there and the next generation that just got home. Border got slammed because they don't have a desktop. They don't really have flow. They've just been staring at a small screen, thinking that things go be TFT,

but they can also rip off three trades and five seconds.

Yeah, yeah, do

it Rather walking

and yeah, And get a date on tinder. Same time. God bless exactly what you're doing. Enough to God, but seven year older, like fuck them. So, uh, So swimming when How did you get into swimming?

Got into swimming, Young. I just really wasn't good in any other sports. So it sort of self selected me and end up something at college with your good buddy Ryan Boone,

who introduced S So you made a call. So the Duke swim team. Good bed

in medium below average. Good. Don't

swank place. That's the best grade California teams.

Uh, Stanford, Texas. Auburn.

Wow. Weather. Yeah. Oh, Georgia. Okay,

everything good? For while warm weather is very good for swimming, Duke was there getting better now.

And you still love swimming,

You know, I d'oh, I got back into it a couple of years ago, and it's kind of become an addiction. I made a Ah, A buddy of mine is, uh I don't know. He's one of the guys who runs W H Trading, which is one of those Chicago prop trading firms. We made a bet on Master swimming. They published top 10 swims of the year for each age group. We made a lifetime bet on who would have more top tens. Once someone dies, whoever is the survivor has to give a speech, either gloating or complimenting the guy who died at their funeral. So we'll see how long this lasts. I have a short attention

span, but I'm a lot more challenges, like people have a short attention spans because

it's

fun, right? Oh, yeah, does. Especially now that, uh, older it's just love and my life is supposed to be varies. And I like short. I mean, I'm short attention span. I didn't start really being successful until I went longer term. Ah, but everybody's different. The I still have a sense, like to me, it's just I learned enough from enough good people and maybe Social Media's sped it up that I'm only interested when the vics is above 30.

I'm nervous and everybody else is stressed, but I like being focused when I know it should end. And so the fix. Now I've been wrong that it's been two weeks, and where the elevator the vics has been, Maybe we got three more months of it, But have you ever seen anything like this.

I mean, definitely not, right, I guess. 8 4009 I take that back 2000 and 2009 was pretty extreme. I think that both it made a call. Maybe in a way to start buying stocks in October. November. We didn't bottom till March ninth, so, you know, that was definitely a few months of scary. I actually went 100% all in and stocks during that. And I remember the ride down from maybe

eight 100. That last cut like and makes one from 25 to 10 or something like overnight. It was already down from 70 but it went from, like, 25 to 8. I don't think people can remember that lows

if you look at back of the lows. If you had invested at the lows, I mean, just on your dividend income, you're done here. You're totally set for life. It was absolutely insane. How much stuff rallied?

Yeah, yeah, yeah. And so the vics elevated. This level is weird,

but this level gives you so much opportunity. I think that I'm watching right now. And at what time is it? It's seven Chicago time, right? Yes and no. But the S and P is down 3% from the clothes. Um, it gives you so much chances when this stuff starts moving around like this. I think that if you're creative and using the option markets for entry points, you know, could you miss a home run? Maybe. I think in reality, though, this the Corona virus is something that's very real and not going away in the next few weeks. And I think knowing that you don't have to worry about suddenly S and P 3000 anytime soon. With that said, you can get really aggressive selling some putz and having great entry points into some very safe stocks.

Yeah, I'm getting there. I just too busy. And fortune really should take a month off and just do this. I'm getting a just the few people I talked to, I, uh But you're right. It is a virus. And I haven't lived through a pandemic, so we don't know that there's always a catch. You know, 2018 I was super confident and apple because it was you know, and I was calling you. I was early. 1 71 80 and Then it got down to 1 16 I called you go. What did I do? And you go sell one twenties.

It was like the night before a bottom, right? And so I felt like, okay, professional was, you know, chapel and at the bottom, right there was, like some idiot was like some major media guys like Apple 100. And it was just, you know, there was all those signs and then,

I mean, that company is not going away,

at least nothing. But then, like a few months ago, it was over 300. I was getting, you know, selling to 8 to 72 6300 and people were giving me the catcalls. And and now 2 to 40 and easily see under 200

close to 50.

Yeah, I'm not following it right now. I'm just trying to find some consumer brands. But like, I'm not interested in Apple right now like I mean, I would be interested. Are

you totally out of the name

or do you know my biggest position? But I'm not looking to add I

could make an argument. So when I started trading, I did a lot of spread trading and you buy one thing and sell the other. That's how I

treated you. Just you

were just taking out right positions. But I look the way I envisioned valuing different companies to me. I did a little research, knowing kind of some of the things you liked. In December 18 the Lows and Starbucks were 60 bucks. The low and Apple was 1 46 Today, Starbucks closes at 59. So basically unchanged

apples rally that I I just didn't wanna look. I was just like I didn't want to sell it

right. But to me, it's like I can make a strong argument. Companies that are really high right now. The Costco, walmart, the apples. You take some chips off those names

to start buying. Did I so, last week to 80 just so I could reposition in, You know, some consumer brands I've been wrong on rester. I mean, I'm fucking underwater and restoration hardware. I just It was probably dumb because Warren Buffett owns it, and it's just such a high end consumer brand that it will probably take a while to bounce. But like, how do you replace that? Like what they've done but with the virus. And it was always a black swan with certain companies. And ah, but some of these consumer Brown's assuming America was back to 0% interest rates goes back to normal in 34 months, you know? Listen,

this is not a show about emotions and feelings. I don't mean that. Just, you know, obviously people are dying and sick from this. And, uh but I'm just trying to look through that, as with the investor, I and go wait a minute and I get it. Starbucks make clothes, and we may not be able to go there. But people knew that two weeks ago or a week ago. So that's getting priced in pretty fast. Don't you know what I mean? And now in Sander. So now the price is catching up,

but I'm just trying to, like, just clearly think about which companies it may not be the sexiest, but will eventually do people go. I can't believe I didn't buy that, you know? And

that's where I think if we agree that the next few weeks

are going to be scary, I'll throw it out the next three months, right? Yeah, I'm just gonna if we're professionals. We're saying two weeks and it will probably take

three months, I think. Yeah, few weeks being 4 to 6 weeks, 12 weeks, whatever you wanna call it. But a company like Starbucks Trading, let's call it 59 60. You can sell them. May 15th $50 put and taken $6 a premium. You're getting paid 10%

10%

the underlying over only two

months and a green tea trade all day.

If you do that in 78 10 names that you really believe will be around for a while, you might get burned. And one,

I will give you my name

for weeks. You might get take heat for a few weeks, but over time it's gonna work. The Fed made it clear when they lowered when they lowered Ah, full percent this week. They made it clear they were gonna leave rates low for a while.

And now let's reverse so, meaning people still seek liquidity and rates will, you know rates will rise, but you're right, Treasuries, there's zero.

Well, the Fed's interest rate thing was really thing, that they were gonna leave him there for a while. I think that if if we bought him out at 2000 or 1800 in the S and P, if all of the sudden we rally back to 2400 the feds not gonna instantly start jacking

There's still that will just be price movement to be no economic. That'll just be prices changing. Not nothing else on the surface.

Yeah. So can I drive the interview

for a second? Yes, or

uh oh, totally. Just making sure that I like taking through a little bit. Yeah. Uh, let's talk about just for a minute. I think something that's funny that I looked up and prep for this. Donald Trump takes over or wins the election November 16. The S and P basically opened right around 2100 the 91 it traded down to 2000. How ironic would it be? A guy who has totally branded himself the stock market President America business. If he leaves office and we're trading right where he began,

I don't think there's a chance that we trade much higher than the market. That's what I'm saying. Like he tempted the gods, you know, he could beat the media. He can beat the dumb people he can whip up, you know? I mean, it's America, but you can't beat the market.

It's really hard.

It he really not smart enough. And that was I'm doing and it will be. You know, what's sad is that's what I always thought would be his undoing from the minute he tweeted about, you know, the market because he's never made money in the market and it was insulting of all the things that he does. It's insulting, obviously. But it was insulting to me because that's all I do. You think about this stuff and he didn't think about it at all. And I know it's so easy and jobs and and so if you're steering the direction, that's what's always pissed me off was like you knew it was gonna go broke. You know? He doesn't care right now. He's gonna go all in on the market and he can't make the market move. We decide. We just saw with breaking

be No, I mean, no one wants to say living through this will be enjoyable.

No, funny

is his election is 100% idea market.

I don't know anymore. I'm not politically understanding how everything works. It doesn't seem it seems like he has 900 lives, so I don't even want to go out on a limb.

Well, we would agree that if that some peas at 3000 the odds of him getting elected

her it was 99%. But now is it 19

compete under? If yes, competes under 2000 I don't think he has a chance. And it'll be really funny watching him over the next few months. You know, obviously he's dialed in right now to keeping people alive.

But some point is he down there. He started with China today, which pissed me off because if he really cares about the thought, this is what I worry about him. Chaos theory is that he blows up all the time. He doesn't really understand. The market is emotional. He's a wimp. He And if you don't understand the market and in the same time you're trying to prop the market and you're picking a fight with China and blaming it on them spreading, you know, getting in a Twitter fight with the essence with the vics, it 80. When you're the president, hate it I just think that's how you blow up.

And I think the market's agreeing with your

totally So I'm saying like that's the wild card of why I just could last till the election, meaning if the market's really want him out, they'll have to keep this thing low for six more months.

It will be. It'll be very hard to watch it

so long. It's a duration. You got an edge. You've got to get in shape. You got to, Ah, stay focused and surround yourself with smart people. I think and like you, there's no sure thing right now because when the vics is that a the only sure thing is it betting on America? But at the same time, we have somebody who I don't think cares about him. I know everybody's good through this thing is, but I don't think he really cares. That's what worries me, and deep down, that was the whole point. At least the one person that could be a criminal,

it could be a thief. It could be patting their own pockets, But do they really care out like you ever did? He's doing deals all over the world. He didn't really care about the wherever. His money was good. That's what I took it. So I worry about that. That's just probably being too cynical. But it feels like people are starting to buy into that,

and we have many months of it at a

crucial, very crucial time. Crucial times. Are you guys locked down in Chicago?

Things haven't been that bad here. Uh, they shut down restaurants, bars. All the gyms are closing. Uh, I guess yet we I should say we are. Schools are closed. It's been Ah, a little different. But I look at it and say pretty much Everyone I know so far is healthy and, you know, think about even 10 15 20 years ago. The amount of entertainment we have at home on your board is amazing.

And I'm enjoying it.

My gym clothes, my gym clothes. Today's the last day, so that will start getting to me a little bit. But other than that, you know, it's stuff is pretty good here. I think that it being spring and it slowly warming up will keep people in Chicago a little bit scene. But I think the homeschooling, the teachers who you know, got into their jobs to work with. Young kids are now trying to be a virtual. You know, they're almost like tech consultant trying to help. Mom said, Get on the stuff. You're gonna see that stuff start to wear on people. I think that the parents that are trying to teach our kids reading, writing math that isn't very easy. I know my household had a few blowups today. I think that'll be a stress point.

Yeah. Wow,

you need a peanut butter and jelly, a ramen noodles. Or make pasta for many, many days and be comfortable. But when you're screaming at your seven year old to do what you tell him, that

gets a little, would you? If your son came to you, 12 said, just late. Lay it up but need a Robin Hood account in a bank roll. Would you be excited or pissed?

My seven year old is begging me

to buy stock. You want

to learn what it is. We got some stock market game. He's a mathematical guy. I want him to learn some very basic and then the other thing is, I think that, you know, in real life like the for When you're a kid, you make bad. Some people let you out of them with your family. You're doing little stuff the minute you realize that when you make a make a deal, you give your word. This that and you're liable for your losses. That kind of changes the game. Feeling the pain hurt,

feeling the pain merits Venmo is like, even though it's not gambling. My son, having to work on his own live month to month and pays. Bet some and mo, I'm sure and all the debts. You know, when you split up a meal, there's no there was when we were a kid, there was the Welcher who just like had soup and never paid. And and there's a guy who did ran up the bill on you over years. You know, you had those friends. Now it's like

it's totally gone.

Everything's a cash basis, like even Steven, right from the get go right? So I think that helps these kids like that. We all make fun of them, but they're learning basics,

So it's really important

to look

if I could trick my kid into working at all in making a small amount of money I would love to turn him into a Robin Hood trader

is this is, like

so I think is so valuable for young people to realize what pain is. You talked about not wanting to go into a motion on this podcast, but I think one important thing is learning. You know, when everyone's puke ing when everyone's sick, when everyone's miserable, that's the times you gotta write checks that sometimes you gotta buy stuff. And that's the time you got to. Just if money is not really good, you gotta cut all spending to do whatever you can do it.

Yeah, and this is the stuff that I love to talk about all day. This is I don't think anybody's doing this. Well, I know the guy's a tasty trade. Do it, but it's just over my pay grade. There's not like a they're not. They're so good at what they do is options and and whatever. But they can't. I want to hear them talk really dumb sometimes, and I can't

get it. Why am I one of my buddies? Ex ex employees is ah, tasty trade guy. Connect you with him? He can definitely talk to him

if you need them. Yeah, I think the only thing I would do over is learn to trade options. I don't know why I did it. I know it. I understand. Not bad a math. It's just so much more powerful

with people that are making money hand over fist right now. Trading are using

options, and that's all I want to do right now is sell premium and do some cheap calls and do some just too old. And I'm too busy and too focused on start ups.

But the beautiful thing Howard is a thing

like Robin. Oh my God. You know, I am trading one lot. They banned me today because how so? Because I put on too many day trades. Really? The vault in me. So I was I was knocked out. I don't know how the way every day for

than your account head

or whatever you say. And I, like, had a great Dan. I'm banned. I can only close positions right now. Looking

at the frustrating thing. Yeah, market. You could buy all day

I nearly 90 day penalty box or some day trading rule today. I've never understood if

you buy a stock, you make money. Why

you can't just put in the corner. I e mailed the CEO say, Listen, can you get my 50 K account? That my play account off restrictions? Meanwhile, my daughter's trading on Robin Hood, not day trading into the lives. I'm begging the CEO even though I'm an investor to figure out how to get off penalty box. And I'm signing options disclosure agreements tonight because I've never I got to get more. I gotta get my Morgan Stanley can option ready

because that is that a few days to do and we really see the market take a leg down. You want to be ahead?

Yeah, so I'm signing tonight and dealing with it. But it's just like I now know enough from trading from talking to smart people and trading one lot for a couple of years to learn. Uh, I'm addicted. Hey, this is the first person I've told it to him, Totally addicted. It makes no sense to to trade stocks if you're gonna trade and and not understand options.

And to me, you can look at stocks that like whether it's Apple Oppa to 80 or whatever when it was there a few days ago. When you get stocks that you want to maybe take a little off to sell a few calls on it, take a little premium in, maybe reduce your risk a little and maybe get called away. It's not the end of the world. It's a great way to get a little ink

is for me. And that's why I got turned off options because I'm a neat Emma Emma order freak, A A and what I saw more than you know what I mean. This is why I didn't do options. And this is probably why I'm still going to be very neat and tidy and not do selling calls against my position because I can't keep it all in my I'm very like I want to go to bed. I won't take my Ambien and I wake up semi comatose sometimes, and it's too much fog tohave 80 positions on. So that's a gift, as I say. If I learned it properly, I wish I could do options again because I don't think there's a better way too, uh, too short, medium and even long term. You use like the long term.

Yes, I think it's great with not as much, though, because the volatilities much better. The way of options decay works. It's much better to use. Call it 90 day unless

30 day and left. Yes, they're less

E o time to qet out a year or two is not very sexy with options.

I got it. Yeah, so you know, if you gotta have cash to buy stocks, But, uh, it's just super interesting. So I'm like super Geek Day in reading and quietly learning over the great

about places like Robin Hood is options used to be prohibitive for a smaller person to trade.

I'm sure I'm getting ripped off, But like in a high volatility market, you know, one lots of whom I'm going to complain to.

Well, I'm saying, you know, you look back 10 years ago, it was you could pay a decent chunk of that premium if you're selling calls or doing whatever selling puts, you're gonna lose a lot of what you're selling the fees. And now those fees are so much less you can afford to dio 123 lattes that you couldn't have before.

Yeah, if Max, listen, If your kids math incline, the 2 80 that you put into college. You might as well have set him up in a knot. He wouldn't give in to 80 at once. Be mentors will say, Here's 15 K or five months. Go fucking learn English, English, math, English, which is Robin Hood and, um or, you know, taste wherever you're gonna do, Think or swim and, uh, go get an education in getting your ass handed to you. Do you remember the first time you panicked and just take Just puked?

Yes, it was the worst I waas in. Oh, it was a good lesson. I was in the Bahamas, I was 21 my body were trying to figure out where to go for dinner. And we had the 100 dollars steak house or the spar. Oh, and go get pizza and mashed potatoes and my buddy goes, Hey, I figured out how to earn dinner money, and he called it the think system. And you had better dollar on video blackjack, and then you would keep betting, doubling your bed until you want, and so you would win a ton of $1 bets and occasionally you have to go over to the table and bet 15 than 30. Then 60 and long story short. He and I were doing it together, and when we lost a $500 hand and had no cash left, it was kind of one of those eye opening experience

is so a small amount, but it was just years. You're young and stranding

a massive. It's all relative, right? Like your billionaire friend can lose a 1,000,000 box and not notice it. That was a massive hit at the time, because remember, losing 500 when you're doubling every hand means you just dropped 1000 in, like, five minutes. Yeah, And

what? We're doing

my lessons out of that one. Despite the fact that I went and got to get a bartending job to cover that one. Uh, what I learned from that Waas. You kind of have to realize what you're doing during it. What if you have 500 on the table? You have no more money, and you get dealt two aces. You can't split them. You don't have the cash to do it. What if you get some weird thing where you have to Ah, split once or twice, and all the sudden you have three or four hands down. When you walk into something, you kind of want to know what the capital requirements are in the extreme scenario. And I think that applies very well, too.

Now, if you start selling puts, you need to know you could to get assigned every put you sell. If this market tanks, everything is very correlated right now. In the moment, I wasn't thinking clear. And now it's kind of like all right, when you do different things, you need to know what is the worst case. How much cash do I need? I think people, you know, if you're gonna invest, I would say, Hey,

put whether it's if you think your job's secure. Put six months of cash on the sideline if you're not very secure, maybe a year on, and after that you can use that money to go play. But you need to make sure you know your kids they're gonna eat your mortgage is gonna get paid your car payments gonna get paid. Whatever it is, whatever you're absolute essential payments are you need to know that there

and why do you like to start it? But, like, why were you interested in start up investing, or were you always doing it?

I think there's edge there. I think there is opportunity. I think it is something. When you talk about how to differentiate short, medium and long term trades, you write a check, whether it's into a funder and individual deal. You know, for the next 3 to 7 years, it's gone. I did some opportunities own funds, a TTE the end of last year, and that was something where you're sitting there going, Hey, this is a 10 year play. If the market's up or down in the short term, as long as nothing blows out,

it's really not that critical. Now you're 89 when you're getting closer to sell. You wouldn't want to see something like this happen. But it's something where to me. You just want to have a bunch of different strategies. There's saying, if you know you're doing well, if you're rich and you want to stay rich, the easiest thing to do is diversify. But if you're poor and you want to stay poor, you diversify. I think when you're young and you're starting off. You need some all in moments to kind of get going. And as you get more established, you want to start a start building something that's a little, you know, all weather defensible as you go.

That's so true. Since I think of the drug stores like I walk into a drug store, I'm like, I'm like, dizzy. I need one bandit in a row of band AIDS. He too diversified. And, um, but in the and in the for poor people, you're right. Like I mean, the worst thing I can do is diversify, and

you have

no chance if you have actions. So I tell people that if they tell me what the d a go if you don't get on, get on a rocket ship like find. If it's not, you find something that's working and just you did with the screen, trading like see a hole in you see opportunity, you're going to just pounce, deserve

the big difference between being 25 30 and no kids and being 45 have a couple of babies in the house. And you know there's times that being diversified if money isn't abundant, makes a little more sense to me when you're young toe live on someone's couch or live in your parents basement and put everything you can into stuff and take a shot. It makes sense like that. That's your time to do it.

Yeah, it seems like, uh, like the Silicon Valley back back some of the swagger than it's gotten a little sloppy. And so we'll see what comes out of this next boom. Anything they're really excited about, like long term.

That's a good question, I would say Right now, long term, I'm excited to try to buy some really, really quality company names that I will have confidence in 5 to 10 years will work. I maybe a year, year and 1/2 ago put all my kids college funds into cash and or I guess, you know, money market funds. And I'm very excited to try to figure out howto quote unquote time. The bottom with that, they have a limited time prize until college does come versus my retirement horizon that much longer. So it's a little harder game to play with them. I'll be a little greed here looking for the, you know, a really buyable bottom. But right now,

if you're not excited, you know, generally the stock market isn't that sexy Right now, it's an amazing opportunity, and that should get people

really excited. Yeah, it's amazing opportunity, but I know I'm competing against. That's why the only thing I have is my network to call smart people like yourself because I'm at such a disadvantage, even though I know things can break. So it's like you really have tohave ah, network in place because the pros have all these tools. And even though the vics is at 80 there, dialed into like it's not easy, even when it seems easy.

Yeah, when you look at those historical prices we talked about of great names and you know the single digit range, they didn't last very long.

They don't last. That's a number. I mean, the pain's gonna be brutal, but it's just like you said. If you can earn 10% selling cream, short term premium have entered the pros. Just go Fuck that. Why my 0% Treasuries? I'll take the volatilities to make the 10% a month versus Nove all, and by the way, we're getting involved Treasuries and move like 56% each way and one day.

Oh, in

last two days, I mean, that is we're breaking or we're bottoming. So something Brady

the something of body sent me recently was if you go back to the market highs before the financial crisis Oh, wait. 09 And you put on, uh, a Treasury. It was like a 20 year treasury e t f. Or bought the S

f p Y doing better And treasures

Yes, over 12 years. And I think what that shows to me is when everything's great, you need to be comfortable taking a little stocks off the table. And when everything is getting like it is now where people are panicked, worry about their jobs, worried about their homes, you gotta start slowly rising that allegation.

I don't understand it. The yield on the NASDAQ 100 is higher than Treasuries. So these companies were so rich with cash the leading companies in the NASDAQ 100. So you take the ball at this point down 30% and you take another 30% 40% you know, risk. But you know, you're gonna make money and the yields the same.

I mean, don't you feel like a B S and P? I mean, if the NASDAQ gets down to that, that's like a 20 year 4 to 5 x trade.

I think if I was positioned it right, I don't know if we'll ever get there, but, uh, I know where it was. America breaks, which won't matter. Um, then yet I'm looking. I'm excited for the opportunity as I was in December of 2018. That was just a V rocket ship. Though

America is not gonna break, that's what it comes down to. We have too many checks and balances in the government. Trump can only do it. If you're anti Trump, he can only do so much. Congress can shut him down he's gonna be out of. He's either going to be dominating the world in a few months or out of office. But when push comes to shove, America works. And if you're betting on America long term, it's gonna work Buffet, You know, I know you're not the biggest buffet hand, but he is

a fan in these moments because we need him because it s so it's the last thing I was gonna say I was shocked today because we're in a dilemma like, Why hasn't he stepped up and bought some bowing? Like if he's gonna bet on an American company? Stocks at 100 today, down from 400 it's basically the equivalent. And so I don't know if he's nervous. What that says, that he's gotta step in our ready, like, Do you think like like it's, You know, the cynic in me is like He's not an idiot like he's too early for him to save America already, right? It's just one company, but like both pretty important, as fucked up as it was, it's an important American company and stocks at 100 bucks. I don't have the skills because I don't shine the balance sheet. What kind of government or buffet have to step in at some point? But it's kind of early in a crisis, so this ship to be

happening. So I would say this. I don't I'm not an expert on what Buffett does, but from what I understand, when things get really bad, companies come to him hat in hand and say, Here's what we need. We need to figure out terms Uh,

this market is looking

so fast, I'm not sure that there's that many really great companies that have come running to him to get

you feels like Boeing's. The first morning

you get this market another few weeks. I think that there is a very good chance you'll start getting people to go to him, that it's too early Right now. He doesn't know where to put the chips. And let's be honest. Trump's talking about how the airline industry this isn't this isn't their fault. He's gonna make it work. If I'm bowing, I'm putting myself in that group. Deploy. I'm thinking that the government's gonna bail me out. I'm not thinking I need to go make a deal with someone.

Okay? So that's why for yeah, yeah, yeah, I like it. I mean, I'm with you on all this. We think the center holds were center holds kind of guys because if

you would say that her

yeah, if the center doesn't hold when we know now.

So give me. Give me one good idea before we shut this

down. My one good idea is hate sharing. I mean, a shared today, I think Lulu, you buy start today 1 40 I bone some and I sold it on the way. But I am still a nice position for May. But I started buying today under 1 40 but I was wrong on restoration, so I don't know. So I'm like flipping around. It was up 20 at one point today off those lows. So I just think I'm trying to build a position in a Cultural American icon, and I think it seems unstoppable and that's everybody's taking their shots on them from Gap to Nike. But they have that brand that's kind of survives, and they don't even have a seat. The founders not even see the brand runs without the founder, and he stole like alert.

So I just think that's my brand. But it's a very complicated business, and it's a fashion business. But they've solved all the things that seem to be a next Nike. So I like it. It's expensive, but I like that America in the way casual America has become and millennials, I think, and Gen z I think in, you know, I like companies that sell the 1% because the

recession for Lulu I just don't see people who, if we're gonna be on lock down and gyms aren't open for the next few months, I don't see people

paying up for that. They don't. So that's that's why this sucks down 50%

right? Right.

Meaning, I agree with you. I agree with you. I wouldn't touch it. A 201 80 or 1 60 But today at 1 30 I'm like, Okay, wait a minute. Goes to 80. I could get up. I'll have a good position at 1 10 if I could trade my way around right? That's all I was. That's my idea of like, Okay, there's, You know, if I get it, you know, average price of 1 10 over next 34 months and I'm wildly about it in the world doesn't come to an end. That's a 300. You know. They have so much growth ahead of them that

give you I'll give you two quick ideas, and I don't disagree

with that. Well, that's just a boring, rather save consumer play idea. I just don't want leverage.

The my two ideas Number one CMI Group. I know inside info on this, but CMI group reports earnings on for 29 in the morning, People 29th. Their volume has been off the charts. I think you could have a really big print there into that number. I think trading call, buying calls going into that week or just buying the stock outright could be a great idea. Also, if for some reason everything gets really bad and we closed markets for a few weeks, I could see that stock really getting hit. I think it's trading. It was 1 49 yesterday, 1 60 today, off a high in the two twenties. If the market were too close for a few weeks and that stock really got hit off it, I think that's a very solid by the other stock. I like a lot. That I think is very interesting. Pellet on today came out and said they're giving their app away for the next 90 days.

Oh, is that why the stock was up at him following his? This stuck with strong did it

in such. It is such a great idea. If

you think about it. Howard, everyone

in the world losing their gym, being stuck

in their house, not being, you know, that's

why so many people are gonna start using that free offer, and I think you're gonna have a lot of people stick with it. It's hard to get someone to say, Hey, sign up. This is $20 a month to it. I think you're gonna get a lot of people who start using it and either decide to quit their gym and keep it or just stick with it. In general, it's really not that expensive, you know, to go by the bike of the treadmill is really expensive, but if they can start getting a bunch of these $20 subscription, Oh, it could be a big

deal. Dick it get bought by Apple No. Two. There's there's a floor underneath it at some point with that move, because Apple's a buyer a 10 bucks for 20. So there's very little downside. So I get that love it. I just hate the hardware. I've always lose money and hardware except apples. So, But then again, Apple could buy them or Tesla at this point.

But you know what? There's a chance pellet on just became a software company, really a service. Not

They're slipping really Swiss. I love it. Great called Spoon loves it. Machado loves that all my little d m group loves it, and they use the product. I the reason I do not have the stock because I keep walking by the store and not buying the pallet on you know what I mean? Like, I'm not a customer. Hate buying, going all in on products I don't

use. You can sign up for the app now

for the next. I think I'd use it. No, I'm saying, like I'm still not. There is a user because I write outside, but we'll see. I totally and the cmu when you live in there seeing me, I realize you

don't have the option to your apartment in Chicago.

You know, if I was in Chicago American palate on D. Uh, I'm just not. I'm not wired right for pellet on the stock with CMI, it wouldn't 1 20 be a gift of all time,

100%. And that's something where if this thing sells off again and get back into the one forties selling put home run,

who more complicated

that thing? That thing will eventually work.

Yeah, I

think I think the selloff right now is really attributed with rates going to zero the long, you know, the medium term earnings might not be so great. But right now, I mean, they're volumes are off the charts. Their next earnings is gonna be crazy.

All right, I learned a lot. Ah, you're the man. I have to do this. I know it's a lot of fun, but don't have toe look into a camera. You, um You didn't have to. Really? And you get toe like think through some of your positions, which is good forces don't have e have so much for podcasting. All right. Good luck tomorrow. Appreciate the insight,

having

going to see him, But there you have it. I was different, very different, Just so smart. So dialed in the reason I like him. He's so dialed in, it's hard to distract him. So when I call him and we know what we're gonna talk about and I try and keep it short because he's busy doing the real job. But it helps me kind of think through this, like panic with friends. Like, if I'm gonna panic, call. Some are people that can help me take advantage of it. Right. But you can't abuse it.

The key thing is, can't abuse that you can't and no one to call these people and you gotta build up goodwill. So true. All right, my man, let's have a good night. We'll be back tomorrow with panic with friends.