Hi guys, and welcome to the penny lane podcast. This week, I sat down with Jason AKA, the Wolf of weed street, and we talked through a lot of topics, most notably, how he pays himself and reinvest his money into companies. He believes in as well as the future of psilocybin stocks, which you guys know I'm so into and , um , his tips for trading options. So I hope you guys enjoy this episode and we'll see you soon, Jason and the Wolf of wheat street. Welcome to the penny lane podcast.
Speaker 2Thank you for having me excited here .
Speaker 1I am a big fan. I have always been a big fan of yours. And then I think I learned more from your pennies going and raw episode than any of the other episodes. In fact, I was really that you didn't win the bracket
Speaker 2Well that , you know , uh, it's tough competing with the Atlas boys.
Speaker 1Yeah , sure. And then you led off Kenny powers , um, podcast. I mean, you're on a podcast circuit and I'm so happy to get some time with you.
Speaker 2Yeah. You know? Yeah. I , I I'd love to have my own podcast , but I'm too lazy. So it's just a lot easier for me to just do other podcasts. And I'm always like, cause P you know, people reach out to like, Hey, I want to do a podcast. You know, I want, you know, and I was like, look, you set it up. Like you do everything. Just tell me, when did they never go for,
Speaker 1So you would be great on a podcast. First of all, your voice is great. Second of all, you and your background is it's made for TV and audio. So I'm into that. And then you've been doing this for a long time, right?
Speaker 2Yeah. I mean, you know, I, I started , um, investing, I should say, in the spring of 2013, like right as I was getting engaged, I was like, okay, it's time to stop being such a cowboy, you know, with a simple thesis of what's the world going to need in 10 years. And I was investing in really good companies , um, you know, had I held them , um , first company was, I still remember , um, it was a company called energy recovery, Inc. I was the first company I ever bought. It was a desalinization company and it was like three bucks back then. It's like 20 now. Um, and then, you know, I was just kinda like, is this, it are the , are these the returns? And I was still doing good. I'm like , uh , I made 30% on this and I was like, about it. And , uh, you know, I talked to my sister and she's like, you know, if you had your money in a hedge fund, that would be an amazing return. She's like, just cause you're starting out with a little bit of capital. So I was like, yeah, yeah. And then, you know, I found pot stocks , um , by chance. And , um, I'd never bought a penny stock in my life. I mean, I was so wet behind the ears that when I saw the ask and it was like 10,000 shares , I was like, do I have to buy the whole thing? So I was like, what? I was like, what the limit order. I'm like, you know, all this stuff. And then I bought it and then it went up like 50% in two days. And I was like, yes, this is exactly what I was looking for. And then it dropped 50%, you know, like the following day. And I was like, well, what the hell happened? Um, so somehow I lost 150 bucks. Um, and I was really just hooked on the volatility, you know, after that.
Speaker 1Sure, sure. Been there myself. My favorite story like that is I was in Atlas when I first started trading and I think PJ was like, you know, whatever they take are long. And I was like, oh, that means that he's going to buy this and hold it for a long time. Um, I actually would love to talk about your fiance, who is now your wife. Yes. Okay. So she has been by your side, the whole journey, right? Yeah . The
Speaker 2Whole time
Speaker 1Now, does she invest?
Speaker 2Yeah, she does. Uh , you know, we, we, we do it together and cause I had another job, you know, I had a really stressful job , um, when we got together and then when we got engaged, like very high pressure, high stress, like lots of sadness because I was, you know, essentially going from disaster to disaster, you know, sometimes I would chase a storm, sometimes an earthquake would hit somewhere and then they'd like just drop me somewhere or a wildfire or whatever.
Speaker 1I
Speaker 2Worked for one of the biggest disaster disaster recovery firms in the world. So if you think about like worst case scenarios, like , you know, the firm that I was working for at the time was the first firm to go into , um, you know, ground zero first firm into the Pentagon, you know, does all the FAA contracts for airline disasters? Um, you know, they did the whole recovery for , um , Oklahoma city bombing, you know, stuff like that. And then, you know, hurricanes and tornadoes and stuff like that. And guys like me, we're basically just closers, you know, we'd come in and we weren't talking about like small projects, this isn't like something like, you know, service master or ServPro when you have a leak, you know, these were, you know, a hundred million and up projects. And, you know, we would come in, explain to a board, you know, they had a board and usually they did, you know, what we could do, you know, how, how we would deploy and that we had the manpower to pull it off and mitigate any further damage. So guys like me, we worked on a base salary with a commission. Um, and you know, your commission was upwards of 5% of some of these projects, like , uh, when hurricane I kit, which was 2008, you know, one of my , uh, my coworkers signed up Galveston university hospital. It was a $217 million project. Wow. And then you do the commission on that, you know, and I had some bad luck during hurricane Ike because that was it. I just wanted to work one hurricane and then be out. Um, and I signed up a $30 million project in my first week and I was like, I just made a , a million and a half bucks and I'm like already spending it. And then the next day I signed up a $17 million project. And I was like, you know, I'm just seeing like dollar signs. And as we're going to roll, you know , trucks onto the property, they were like, and this was when the whole financial crisis was about to happen. And they were like, this is a Lehman property. So they couldn't even pay the deductible to get it going. So I was like gone. And then the other one, like it took a year and a half to get paid, like the first third of it. And then FEMA just declared a disaster zone. So I was doing this. Um, and then at some point I found trading , um, while I was still doing it. And then right before we were supposed to get married, the company's like we're relocating to Orlando. And I was like, well, there's no way I'm moving to Orlando. I'm about to get married. And , um, you know, my wife has a career, you know, on top of it. And , um, you know, she was really , uh, supportive and she was just like, just do it, you know, like, see, see what this , this, you know, the, these pot stocks where brings you, you know, like, what's it, what's it going to hurt? You can always, you know, get another job. And so I did, I was doing the responsible thing. I , I applied and, you know , at the time Colorado had just gone legal. So, you know, I had invested about 10 grand at this point, you know, in like the first six months then Colorado,
Speaker 1You ever invested in any like part of the weed industry, like a , uh,
Speaker 2A grow
Speaker 1Or a company or any other .
Speaker 2Yeah. I mean, that's, that's a thing that I guess, you know, I don't broadcast it, but, but yeah. You know, I I've took part in , in investments early on. Um, and , and states, well, it also gave me, you know, a unique perspective. It's kinda like, I don't know if you ever saw when I had my beef with med men , um, you know, you could Google it audience, just Google my name and med men. And there's a bunch of articles. So, you know, a company that I had invested in, was it an edibles company and they weren't getting paid and they reached out to me till I can . I'm like, what do you want me to do? And they explained the situation to me. And I was like, man, this is really shady. So I kind of took a deeper dive and basically they had no money. They were taking product signing for it and then canceling the check . And then they tried saying, Hey, we're going to pay you with weed or stuck. And I was like, you do not take stock from this company. It's worthless. It's going to be worthless, which, you know, they were offering, the stock was like a dollar 25. Now it's at like 33 cents. I'm like one, you're never going to be able to clear it. Um, you know, unless it's free trading and they give you just a ton, you know, and a huge premium, like you cannot do it. And the company fought with me and they're like, oh, we're going to Sue you. You know, you're going to get sued. And then, you know, obviously the shareholders you're lying are going to Sue you. And then I was like, okay. I was like, Sue me and I doubled down because what they didn't know is that I had all the documents of all the shady stuff that they were doing. So, you know, it's kind of seeing stuff like that and understanding , um, one like how the business model works and then even, you know, understanding the construction side of some of the , and you know, these aspirations. And I'm like, and that's actually how I was outed as the Wolf is because I set a company, the company was a creative, creative edge nutrition, which was F I T X . The CEO was bill Shavanne and they said, oh, we're going to be the biggest marijuana producer in Canada. And I was like, they've got this amount of money. I was like, there , they have to do this. I'm like, they've got to dig up the city for power for wastewater. I was like, they don't have the money to cover this. I was like, this is a scam. I was like, is it? I was like, you know, they're like in the first round of licensing and I called it, I was like, look, this thing's dead money. So you accuse me of manipulation. And he, I met him actually at a conference and he outed me. He put my home address, you know, on the Facebook groups on Twitter. And this have done the shareholders where they tried to come to my house and steal my car. But where I lived at the time in downtown Fort Lauderdale , um, all the houses looked exactly the same. They went to my neighbor's house, stole my neighbor's wife's car and left four buds of weed , um, on his dashboard. And he was like, this is so weird. He's like, why would somebody leave weed on my that's really weird. My wife's like, don't tell them what you do, Todd digress a bit. So I, you know, I was applying for other jobs and then I got it . I got another job offer. And I was like, this is, I was like, sorry, this isn't enough money. And then they came and they bumped it up 50%. And then that started. And I was like, man, I was like, these companies really take advantage of people. And I'm like, but now, because I'm in a position where I can say no, look at what they just bumped everything up. And then the day that I had to give them my , um, my answer, it was a Monday and it was two days after my wedding. And on that Monday morning, I'd made like 17. I remember I made $17,000 trading, penny stocks. And I was like, I'm sorry. It was, you know, and the crazy thing is now I'm friends with the owner of the company and, you know, he's like, w what , you know, w what should I be buying?
Speaker 1Oh, sure, sure. Real power dynamics switch , switch . So you started with weed stocks, but you now only trade re we'd stop at certain times of the year, or if there's certain legislation coming up. Is that right?
Speaker 2Yeah. I mean, the problem with the cannabis industry right now, or the investors in the cannabis industry is they're not very good at one reading a balance sheet and two understanding that if a company beats eight quarters in a row, they're doing something right. A lot of investors have it in their head that the cannabis industry somehow needs legalization, somehow needs , um , safe banking to ADE. No , look they've been operating and making more money without it. Right. So I look at it as one. I don't want legalization. I want legalization to be dragged out as long as humanly possible, because it won't allow me to do the things that I do to increase my position size size , using nothing more than the market ranges and the seasonality. Sure . No to like, say banking is good. You know, it's kind of silly, but somewhere last year, everybody started thinking safe banking was like, what you, I mean, the end all be all right. You know, to kind of put it in perspective , uh, in Q1 of , uh, 2021 , uh , this company, Cura leaf is ticker symbol, C U R L F put up the biggest number that's ever been put up by a cannabis company in the United States or in Canada. It was , um, 266 million, which was more than their previous quarter. So basically they basically just kept breaking the record. This last quarter, they put up a number of 312 million. They're going to be the first company to do like a half a billion, a billion dollars in quarterly sales. Yet, for some reason, the market's like, oh, it's too expensive. And they start selling it off. So what investors need to understand is right now, the multiple is crap. Okay. The multiple on all the MSOE are crap because they trade in , in , in an efficient market, they trade on the CSE and the OTC. They're not trading on the New York stock exchange or the NASDAQ like canopy or Tilray canopy trades at a multiple of 20, okay. Cheerleader trades at a multiple four or five, depending on the day, right? Yet clearly did 115 million more in revenue. Doesn't have a billion debt and has, you know, positive margins. Canopy has negative 66% margin. So the only real differences they trade on a major exchange. So the way I look at it is at some point, these are going to trade on a major exchange. And when that happens, not only does the multiple flip, but the multiple meets something more like a CPG company or a consumer packaged goods company, which is really in a range of like 30 to 50. But because of the uniqueness, I mean, it should trade at a 50, but let's say conservatively a trades at a 30. Okay. The Tam though. So the total addressable market is just getting bigger. You've got states like New York, New Jersey that are going to completely open up, you know, New York will be the second biggest market next to California. So if it's trading at a five multiple right now, and the company is doing like more and more revenue, but their cap ex and their op ex is improving, you know, every, every quarter. Okay. So let's give it a 30 multiple, so what's five into 30. Okay. It's six. Okay. So now multiply the price that it's currently at times six, and then you've got , uh , let's say it closed at 12 today. So 12 times six is 72. That's fair value for it. Okay. But right now people are their pants now realizing like, Hey, you're buying a company that in the future is going to be worth, you know, six X.
Speaker 1Let me ask you a question along those lines. I loved when you talked about how you paid yourself and you would put you with , you took some every week, you took some money out and then you took some money and put into blue chips. Like you said, Budweiser, are you putting any of your money into these weed companies now that you would consider like long ? Okay, cool.
Speaker 2So I I'll, I'll explain what I do. Okay. So early on, I would take 80% of my money off the table in March. Okay. Because we would always see that decline. And then I would buy back in the summer at a huge discount. Um, when I was doing this, my portfolio was averaging like 300% return, you know , um, if not more from like 2016 to 2018, and as such, my, my position size got much bigger, you know? So to kind of put that in perspective. In 2016, I bought Aurora for the first time at 89 cents, I bought 20,000 shares. I sold it at three , um, for, you know, 60 grand. So I made 42,000 profit, whatever it was that summer, that following summer, summer 2017, I bought it for a dollar. Okay. But I bought 60,000 shares and then it went from a dollar to 10. And then guess what?
Speaker 1This concept, I love the concept because you explained it as just free shares the way you did. I love it so much .
Speaker 2So, you know, when all was said and done a $20,000 position, and I , I don't want to sound like I'm boasting, I'm just doing the math, a $20,000 position, a $1.2 million position using the market's volatility. Now, if I had just held, I would ha I would have crushed it either way, but it would have become 240,000 versus the other thing. Now I do this with everything. So in February, in February, you know, my rule is if your stock gets an all time high in February, take 30% off right then and there. So when all the pot stocks hit in February, I took 30% off the table. Okay. Now that money is allocated for the summer, right. But from July, until February, I'm trading these things and I'm holding the core and trading the core, which is really what you want to talk about. So to give you an idea how it works, let's say I buy to start 10,000 shares of Cura leaf at $7, which was my entry. Okay. It was actually seven 15, but let's not split hairs. So it goes up to seven 50. All right . I sell a thousand shares. It drops back down to 7 25. I rebuy a thousand shares. I pocket the difference two 50. Okay. Now I look at that two ways. One I'm setting money aside and almost using it as a, as a dividend, but two , I'm keeping that money for a rainy day. All right. On top of it, I'm reducing my risk by 25 cents on at least a thousand shares. Now it goes to eight. I do the same thing. And then I reload it seven 50 goes to eight 50, you know, maybe it makes an overstretch move. Maybe I sell 2000 shares. Okay. And then let's say, it just gets crushed one day and it pulls back to seven. Now I just reload it. And then I use that capital from all of that trading to buy more of a position. And I do this wall. The market is liquid while there's volume, while there's, you know , some kind of catalyst or whatever, I don't just sit in a position. So there's a part of that position that I won't touch, you know, in this case, it's, you know, 80%. So 20% is what I'm playing with. Now. You're going to run into circumstances where it just keeps running and you're like, well, I don't want to go under, well, there's something else to buy, you know? And you know, a lot of these pot stocks trade , um, you know, in , in tandem, meaning, you know, one goes up one's down and then they do this. So what I do is I find the two that mirror, each other are the yin and yang to each other. And then I sell this one up here and I buy this one here and then this one goes up and then I sell it. And that really speeds up, you know, I call it Seesaw trading. Then that really speeds up , um, the size of your position, because you're, you're just fully taking advantage of what the market gives you. Now, you think about if you're using this range , um, over, you know, an eight, eight month span, the amount of shares that you can stockpile, you know, and then the amount of risk. So to give you an idea, my entry on cheerleader , call it $7, right? It would take cheerleader going under $2 for me to, to break even .
Speaker 1So I love the sense in all the patients and believer in like, if this, then that in you, like, you're like, it's today , I'm going to do this. Like, it's such a well thought out in developed plan, which is what I liked about it so much. And there's just no anxiety. I mean, he just said has to go to $2 for you to break even like, you don't have any troubles being at night.
Speaker 2No, not at all, not at all. You know, that celebrate. And here's the thing. I mean, it's not just weed. You know, I get myself into positions , um, all the time and I'm too early. I get a little bit of FOMO, but , um, as long as there's range, you can fix , uh , that position. You know, too many people, they're like, well, oh, you're going to get killed on taxes. You know, you can't look at it like that, worry about that once you've got your entire position, because when I'm buying stuff in the summer, I'm not buying it for right now. I'm buying it for a year from now because I want to be selling it. So like, everything I'm buying right now is stuff I'm going to be selling in January 20, 23, you know, or November 20, 23, as long as it has a year in a day, because one , it'll probably be the top of the market that year. And I'm getting an additional 20% on my money because I'm not getting taxed on it. You know, this , this market is, you know, they , they just love shiny objects. And as being somebody that traded penny stock too early, you know, look, I, I probably, I left a lot of money on the table by just doing stupid things like rolling it, not, you know, like not being patient will kill you. You have to develop your own little plan, your own little strategy, your own little set of rules. Uh , whether you're trading stocks or options, especially with options, you definitely need a set of rules. If not, you get this ,
Speaker 1How long did it take you to discover the plan, put it in place and then stick to the plan .
Speaker 2You know, it really took dodging a couple of bullets to kind of understand like, Hey, this could have been really bad. So, you know, one of those bullets was when I went on my honeymoon, I went to Cambodia and Thailand and I was like, I don't want to be holding all these penny stocks. You know, I'm going to start taking profit. And I was like, these things are, you know, like every person trading, penny stocks are going to a dollar. And I , I took a lot off and I was like, I could always get back in. Right. And the market, the market crashed. Oh, wow. You know, and I avoided the whole thing. You know, now I'm sitting there with like all this. I'm like, what do I, what do I do? I'm like, I , I can't buy these things. I was like, they look like crap. And then I'm like, but then also I'm like trying to understand. I'm like , I'm learning about toxic dead. And I'm like, man, you stepped in like golden. So it really, like, I was an English major. It really just kind of came down the math. Right. And it was always like, understanding like how much you're down. So if something goes down 10%, you need it to go up 11% for you to break. Even if it goes down 15, 20, 50, a hundred, you know, and then you start doing that. And you're like, man, it also works the other way. Like if I sell this here and it drops 10%, I can buy 10% more. And then if it goes back, I'm getting, I'm catching a 20% move. And then you're like, what if I did this a lot? It's kinda like , um, and happy Gilmore when they were like, Hey, you can make a lot of money. And then that music plays , uh , that that's kind of like the aha moment. And then you start looking at , and you're like, man, why, why wasn't I doing this all the time? And you know, look, even in 2000 16, 17, 18, now look, I would say the same things. I go, look, market's going to pull back in March. And people will be like, you don't know what you're talking about. You know, in 2019, and in March of 2019, I said, I'm out, I'm out of pot stocks and I'm short pot stocks . And everybody's like, you're going to get destroyed. You're such an idiot. Your , your time is done. The market dropped 70%. And most of those companies never recovered, you know? And in the summer I was looking, cause I took most of my money right before legalization. So, you know, if you go on Twitter and you type in like Wolf , a wind street and the search and you type in October calendar, I made a calendar for what the market was going to do once legalization, Canada happened. And it was like on the Mo it was spot on. I'm like, we're going to get a 20, 30% correction. We got it. You know, like within a week. So in the summer I'm really flushed because I actually made more money shorting pot stocks in 2019 than when I was a bull from January to March 5th. And I was like, man, I can buy all this back. I'm like, I could get five times the position I had in this, you know, five times, three times I could get three times as much. Can it be like all this stuff? And I was like kid in a candy store. And I was like, you know what? I'm like, I think I'm a little too biased right now. I'm like, ah , you know, like my eyes are like saucers, let me, let me get a second opinion. So I hired a Quan. Okay. So I hired a quantitative analyst that actually had a lot of the data. I I'm pretty sure I paid him for something that he just cut and paste, but it was worth it. You know, I was like, I wanted to know specific companies what their value was. If you sold it off for parts. I wanted to get an understanding of the dispensary counts in Canada, the foot traffic in the United States, all of this stuff. And you know, when he flipped it to me and this is September, I was like, I can't get back in. I can't do it. So I didn't, and I didn't get back in until , um, July of , uh, 20, 20, you know? So I was out of the game for like a year and a half pretty much. Um, and it's not that I didn't like, my sows , you know, some of them were newer. They had share on lots and I didn't, I just didn't want to get the market just wasn't there. And I was like, okay, well we're going into a presidential year, things change. And so a lot of the criticism I get, well, if you're so good, well, why weren't you buying cheerleader at $3 in March? And I'm always like, well, idiot, I can't get leverage on Cura leaf. And we had the absolute best market for like that's ever been seen. And most of our lives with COVID, I was like, they don't have options. I'm like, I'm trading, you know, I'm making a thousand percent on, you know, weekly options. Why would I want to waste my time? And it's funny because I was still like gun shy about getting, getting , um, cause I was like, man, I should just stick with this market because it's paying so well, you know, I'm grabbing square 40 bowing at 90, the only two pot stocks I bought during the pandemic where I PR at 50 and power read at seven 70. Um, and I don't have those anymore now they're , they're up a little bit more, but you know, it was a Roku option trade where I was like, you know what? I got really lucky or, you know, I'd say I got lucky, but I'm not, I'm not a charter. So I , I always say I'm lucky. And you know, the thing went from a hundred to 130 and I was like, okay, I'm going to use this to kind of see , you know , give me the cushion. And I rolled all of that profit in
Speaker 1A lot of information on my own personal interest. And your thoughts like siliciden industry like mine in an MD , mine medicine, what's going to happen with that . We had a lot of episodes where I just feel like that's on an incredible industry that we will get to experience during our lifetimes. So I'd just love to hear what you think about it.
Speaker 2Um , uh, you know, my, my wife and I, our founding investors of Simon .
Speaker 1Oh, I had no idea. So you're 82 .
Speaker 2So if you , I think I'm one of the first people on fin twit. Um, and I started talking about it in 2019. Um, I'll send you the tweet I saw, I read a piece on , um, MVMA being used for , uh , it was a 15 year study for treating post-traumatic stress disorder and I've eaten mushrooms and every time I've eaten mushrooms, you know, look, I've come out of it smarter, you know, more relaxed. I mean the first time I ate mushrooms in college, I went, I went to university of Arizona, you know, I kind of went through my life and all the things that used to worry me and then just came to the realization. Like the things that I worry about now are things that I'm not going to worry about a year from now. Cause I'll be alive. And like, if you're alive, then why work? Right. So, yeah. And , and, you know, every experience I had was great. I never saw anything. I never took it that enough to, you know, go down the rabbit hole. So to speak, never tried any of the hot, the really strong stuff like Iowasca, which my sister went to Brazil just to take Iowasca, which is not. But, you know , um, my personal view is it's going to be bigger than cannabis. So I think it's going to be bigger than cannabis , um , for a select number. Now I invested in Seibon on my wife and I invested inside them, I think at a $10 million valuation. I think it's like $400 million right now. Wow . Um, so it was , uh , it was a lot of risk, right? Because you know, who, who would have , who would have known that it would, you know , make it to the New York stock exchange and everything, you know, and I'm also an investor in , uh , Thai life sciences. And you would think that I have bias because of position size inside . But I think a tie is like this generation's Chipola meaning from a pure stock move perspective. I look at it like this, it's got a pipeline of 13 drugs. It owned majority stakes in 10 different companies that owns 25% of compass it's backed by Peter Thiel. It's got first mover advantage. Um, you know, they developed a lot of the chain that all these other companies would need to go to move forward. It's a $3 billion company right now. So everybody's looking at, you know, they think siliciden , they think, oh, they're never going to sell mushrooms, you know, at seven 11. Yeah, no. That's not where the money's at. The money is in biotech. So this, this always, you know , convinces people. So I'm going to give it to , to the listeners in the 1990s, which, you know, I was around for , um, in the 1990s , um, Eli Lilly develop a drug called Prozac, which was a nasty drug. It was a zombie drug. And it was for treating depression. That drug was so successful. They were making $10 billion profit a year on it. Okay. It became a generic in 2004. You'll have Lily's market cap right now is right around $230 billion. 30% of that market cap is just from Prozac, a drug that they stopped making 16, 17 years ago. Okay. And it was a nasty drug talk to anybody that ever had to take Prozac and they hated it. And then they were offered and then your other choices are lithium. Okay. Who wants to take lithium? You know, nobody wants to be zombified cause you're depressed after COVID the depression numbers. I mean the suicide rates, everything is just going up. Right. So now what if a company could come and do , you know, create a drug for that's clean. That doesn't mean you feeling like, it's derived from nature rather than a synthesize molecule of something that just dopes you up. So I think gone on just that drug alone. Right. You know, let's say, you know, so 30% of 230 is 70. Call it $70 billion. All right. Now let's just cut that number in half. All right . Let's say $30 billion at $30 billion. A tie is $176 company. Okay. In a market that is like the adoption of silicide bin and DMT and ketamine. And um, you know , uh, MTMA uh, versus like cannabis it's light years ahead. I would've never thought it would be this fast, but the problem, the reason it's so fast is because the data is so strong. So PTSD, you're looking at 80% plus success rate, you know, they're using it for addiction, they're using it for anxiety. It's like every, if any, one of those things happen and they come , come out with a drug, it's a hundred dollars company all day. Yep . Now there's a big one. Right. And the one that nobody talks about, and it's the one that I'm like fantasizing about it's , uh , dementia, and Alzheimer's, it affects parts of your brain and stimulates parts of your brain that were dormant. You know, that's what it does. That's why, you know, it brings clarity. So what if it could mend and heal parts of the brain that have gone dormant because of, you know, dementia or whatever, or, well , what if it could stop it in its tracks? What's a company like that worth. For sure. Now you're talking about like thousand dollar comp , like the kind of company that has to forward split because it's so successful for. So, and I think that companies like Simon , um, I like Simon Moore , not just because I'm an early investor, but they spend money properly. They're not like, Hey, let's do this study. And they don't own the patent on the thing that they're studying. So I think it's a really , um, big market. It just, it takes a lot of , uh, of education , um, for people in it. Um, and it's not my job to educate them. And by all means like, you know, if you think it's a shiny object, sell it, you know, I'm happy to buy it down here because when I buy it, I'm not looking at it as like a $15 stock. I'm looking at it as like, oh, I just bought this stock for $15 and it's going to be, you know, a hundred thousand dollars someday ,
Speaker 1For sure. I'm sort of doing your strategy of just buying these companies, like using all my profit from trading to just buy these companies. I mean , 15 years ago, if someone had said to me that like, we will be legal and we'll have all of these medical, like my mom is at the drug store, buying CBD for her back. Like that blows my mind that we're there as a society. So I don't know. It just seems, it makes perfect sense to me.
Speaker 2Yeah. It's a , you know, look, it's, you know, we're living in a time when prohibition is ending and, you know, look, if any, one of us could go back 90 years to when , uh, you know, prohibition ended, like we would have been buying alcohol companies, the problem with the cannabis market and even siliciden to some extent is you have people that shop based off of price. Okay. Which is probably the worst thing you can do that like, oh man, Cura leaf is too much. Green thumb is too much true. Weave is too much. I can get more shares of this. It's a dollar.
Speaker 1Okay .
Speaker 2Yeah. You know, they're like, oh , [inaudible] , it's going to the moon. Can't do the math like this. Thing's got like, people were trying to tell me it's going to $10. I was like, it would be a $40 billion company it's never happening. So you have to understand whether you're buying a share of Amazon, one share of Amazon or, you know, $3,000 worth of. You're still getting $3,000 worth of. And at the end of the day, the only thing that matters is the ROI on what you're buying. Now you can play a penny stock, you know, and the trips are, you know, half a penny, whatever, and get more alpha. But you better be quicker than the guys that told you to get in because you know, like the early people are the ones making all the money.
Speaker 1That was a very delicate way to say that.
Speaker 2Are you? I don't want to say front-loading but yeah, look, I know like I've made my way from the OTC to the big boards to options, to whatever. I'm happy people make money. Like I'm happy. What I hate is because you know, guys from the old days still reach out to me, they're like, yo, buy this thing. I'm like, okay. Yeah, I'll take a look at it. You know ? And they think I'm just going to come in. And I know that they're calling , you know, 10 it's , 10 other people. And then I just see the thing get crushed. And I'm like, this guy is trying to like have me come in with size so he could blow out into me. You know? So it's like, they're there very few people, you know, on fin twit that I would trade penny stocks with. They're like handful, you know, maybe like three people, you know, that I know are just, aren't going to try and screw me. But that's the risk when you're playing penny stocks, like you're , you're going to get taxed at one point. You're gonna , you know, so when you do make those huge gains, buy real stocks with those gains , don't roll those huge gains into the next Palm . Okay. Cause look at the end of the day, that's what they all are. They're all, I mean the whole, market's a pump , right? You've got to treat the market like a game of craps, right? When your number hits, you take some money off the table, you put it somewhere safe. Whether you're doing that with penny stocks or trading small caps or trading options, as soon as I really started to do that with purpose, you know, because I trade a lot of options. Right. And you know, on like a Monday I'd kill it. Let's say I was trading Roku, kill it on Monday. And then I get back into it on Tuesday and now give back, you know, like 20%. And then the next day I'll make 10%. And then the next day I lose 30%. And then at the end of the week, I'm like, oh wow. I made five grand. I'm like Monday, I made 10. So I should have just stopped. So now what I do is every time I, I, you know, peel out of a trade, I'm putting it in something that I know is Bulletproof or something that I want to own long. And you know, during COVID. So in September I made, I made the decision to stop trading tech and to only focus on reopening stuff. And everybody's like, why are you trading reopening trades? Nobody's gotten nobody's flying. And I was like, exactly. I was like, what are you going to take a horse and buggy to go see your aunt? No, I was like, I'm not buying AMC . I go, what? I go, look, I haven't filled my gas tank in three months. So I'm buying Exxon from 40 all the way down to 32. I'm buying Alaska air from, you know, 45 to 36. I'm buying spirit air from 25 to 20. I'm buying Rite aid at $11 and I'm buying and I don't care because all it is is profit. I'm just like, and I just don't touch it. Buying Budweiser. I'm buying stuff with dividends and buying companies with good bounce sheets that could survive. And then once that first vaccine news hit, everything was up 50%, but that money wasn't gambled and rolled into the next trade. So I take profit at, before this, I was taking profit twice a week after this. I was like, there's too much money in here. And then I went to three times a week and then even that wasn't enough. So yeah, I mean, it's the smarter the market. It really is an exercise in tortoise and the Hare , you know, like I haven't been in like the market that long compared to a lot of people, but I can tell you, like, you know, if I would've done this years ago, like all those times, like I just got a little too cavalier with trades, you know, I would've saved myself a lot of money or would have made myself a lot more money and I would have evolved better to be even better prepared for when we had COVID or when in 2018, you know, Powell talked about raising interest rates in the market tanked. So now as we go into a taper, you know, that's what I'm thinking. I'm PR I'm preparing now. And that's something I think that, you know, look, you can't trade pennies all your life. You've got to graduate. Um, and it can be done. You know, look, I, I put 10 grand into the market in 2013 and you know, my perspective is I've been living off of that 10 grand ever since, you know? And , um, yeah, I mean, you know, I , all this star wars paid for, with the stock market,
Speaker 1I learned so much from your interview and so much enjoyed going through it again, because before I heard it, I was just like, you make the money, you keep it in your account, you take another trade or you pay yourself, it hit Netflix growing the bigger portfolio or more having a longterm , you know, I'm just living for the next day like, oh, what's going to be running tomorrow. Or I really liked the long-term approach and the ability to be in the game for a long time.
Speaker 2Um, you know, incremental growth is so much better because, you know, once I started doing that, my losses got really, really small, like exceptionally small. Um, and my wins just got bigger and I took like taking the more conservative approach. I mean, it was like, my account just did this because I was taking, I was taking less trades and focusing more on ideas, you know , like , and that's how I look at it. It's like, I'm an ideas guy. Like I'll get paid for my ideas versus like, oh, look at this chart. You know, like I trade on my phone. So like , I don't trade on a laptop. I don't have like a crazy set up. Um, I trade on my phone because I find it easy. I find it, you know, it's just simple. I can see everything that I need to, you know, I've got an app I watch, you know , I watched the time trades and everything I can, you know, I can read level two. If I need to chart, I can do that. I can recognize things, but a lot of people, they try and focus a little too much on, oh, I need this , this giant rig. And I need to be able to see this and that. I need to be looking at two things when I'm trading the spy QQQ and whatever I'm trading and understand the cause and effect, and what's going on in the market, that's it, that's, that's, that's investing. Right. And when you take that, that, you know, that tiny, that you know, where your whole job is to just hit singles, all that should just start adding up and it, and it compounds. Um , and then before, you know, it, not only did you not lose money, but now you're more profitable than you've ever been. And you , and you'll say to yourself, you're like, holy, did I, did I just learn how to like trade? And that's what happens? You know? Like I always tell people, cause a lot of people, you know, in , um, you know, true trading group, which is my service, you know, I do one-on-ones and they're like, I want to learn how to trade options, you know? And I'm like, okay, I'm going to start you off with the most boring option, you know , which is like us steel. And now that's all they trade. They don't even trade anything else. But using that model, I go, look, when we get into a trade, I want you to take 50% of that profit. And I want you to put it into some, some stock that you've just always wanted to own . I go look at it as like the market's saying here, I'm just buying this for you. So that way you don't gamble it. I want you to take 25% and pay yourself. Okay. Or you can pay yourself, you can put it away for, you know, for rainy day. And the other 25% is just to increase your buying power because you don't want to have so much money that you do something stupid. You want enough money to do something, you know? And , um, like the picture of behind me, one of , uh, one of my said this and you know, and just like , I want to learn options. And I was like, no, cause he, he, you know, he bought some stock and it ran and he's like, I don't know what to do when I was like, sell it. He's like, why I'm I'm up this much? I was like, yeah, you're up 300% on a gamble. I was like, just get out. And you know, and the thing ended up tanking. We put it into a bunch of safe stuff and then he just kept on growing and growing and growing. And you know, there's, there's something to that because you don't want to get rich on a screen. Right. Getting rich on a screen is probably the most depressing thing in the world. Before, you know, in 2016 to 2018, I saw so many people that they had all these pot stocks and they were killing it. It was like their own little ETF. And then when all was said and done, you know, they had seven figures at one point and then 50, 50 grand at the end of the day. And that's, that's just a tragedy, you know , you have to have a plan, you have to stick to it.
Speaker 1I just love it so much. I just, it's such a great strategy. So I'm going to make you the pledge that I'm going to start doing more of that. Now I'm not making a ton of money. I can't do a lot of that right now, but you are my goal in ever since I heard you. I was like, that just makes sense to me
Speaker 2A little
Speaker 1Bit, a little bit, but it's sort of like, like CCL is my favorite stock and I just watch it and watch it and watch it and if
Speaker 2Okay. All right , ready? Here's a lesson. Oh, okay. So everybody should have a stock like that in different sectors. So CCL is transportation. So look, this is how penny stocks , and this is the iHub app. All right, everybody that trades penny stock, it has the iHub app. So I got my monitor. This, this monitor has 90 stocks and it's called Corona volatility. But then I go like here and then I go, where is it? Transportation? And then I have my transportation monitor. So then I watched the transportation stocks. I got tech, I have dividends . I have my long positions. So in watching CCL, you understand the range is probably better than anybody now when you're trading options. Okay. The problem that most people trade when they trade options is they're not allowing themselves enough time. Okay. You know, with us steel, I used to do this. I used to trade like a two week out option. Now I'm trading three months out. Right. Because I know I'm not going to get burned. And it's been one of the biggest moneymakers for me this entire, since September last year or since COVID, you know, I mean, the thing went from five bucks to 30 and just trading the range. So if you understand, Hey, like CCL moves like within like a 50 cent range every day, times of the day, what does it move with by an option like 50 cents or a dollar out, you know, like obviously the further out you are the more time you want never sacrifice price for time when it comes to options. Okay. People will be like, oh, well this one's 20 cents. It's 20 cents because it's for suckers. Right . Okay. A lot of people when they trade options, you know, like, because it, it ha it actually happened to me today with Roku. I stopped out of my three, 15 calls that I had for next week. Cause I was like, I'm just getting buried on this. And I got out of my three tens with like, not even 10%. And then they ended up going like 60%. My three fifteens ended up hitting and I ended up selling. And then I looked at the end of the day. And when all was said and done, I made like $300 on the whole thing. Cause I took the loss here, but it should have been a monster day. You know, sometimes you're gonna try and fight the market. You know? So what you say to yourself is it's not that I'm wrong. It's just that my timing is off. Now, when you use the strategy we were talking about before, like hold the core trait of core . So let's say you get into a CCL option at $2. Okay. And the market starts going. And then all of a sudden you see the yield curve go up and spy and QQQ start taking your. And you're like, oh no, all right, I'm going to get out of this. And you get out of it at a dollar 50. Okay. Now you had 10 contracts at two. So you , you just lost 500 bucks, but you're like, I still like this trade still have a lot of time. It gets down to a dollar. And then all of a sudden you start seeing everything settled down. Now what you do is you buy 15 contracts at a dollar. Okay. You just use the same money. Now you can use the same money and get into the same strike or you could use the same money and get into a lower strike. Never add money to it. Okay. You're taking enough risk on with what's happening. Take less risk . Okay. Always less risk. Like if you always say yourself, well, if I was looking to get into this position, would I get into this strike? Or what you know, like, is this kind of overdone? Like, there's no news. Everything's good. You know, things are starting to open up. This is just a broader market move and it's just getting sucked in with it. So let's say you just buy the 15 contracts at a dollar. Okay. Well you're down 500 bucks and all of a sudden you start seeing CCL . It starts going up. Now it gets to a dollar 50. Well guess what? You're not only even, but you're up. You're up 250 bucks. Okay. So that a hundred, that first 10 contracts took care of what you lost on the move from two to one 50 from one to one 50. Now you've got five contracts left. So you sell the 10 contracts at one 50. Okay. Then that those five are profit. Two 50. You can take it. All right. Maybe you wait for a pullback and then you start to see , oh man, this thing's bouncing. So let's say you take the 10 and then it goes back down. Well now guess what? Here's the thing. Now here's the trick. Okay. You ready for this? You don't buy, you buy the same strike. You just buy it a week out because now you're taking less risk with more time. Remember time is the most valuable thing when you're trading options and you still have those five, because then the thing can run. And then the five go to two, you've taken all the risks out of the equation. You know, like one of the options I would suggest right now is CX. Okay . It's a max , it's a cement company. It's probably the most boring stock you'll ever see get $7, January or December calls. Okay. And if you lose money on it, just tell me and I'll send you whatever you lose. I'm never going to have , I'm never going to have to send you the money. Every time that thing gets down to like seven , um , or seven 50, I mean, you know , this, it just got caught into this whole pullback . And now with infrastructure, I'm also in us steel $25 , um, January calls. You think that's a no brainer . They're trading at like a dollar 70 right now that boring is the moneymaker. And it's not like Roku where you have to watch it all day. You know, like two weeks ago I got , um, I had to sign a power of attorney and I to like, I was trying to do it on my phone. And then I was like, oh , I gotta pull up my laptop. Cause my, you know, sign easy. Wasn't working. It was, took me two minutes to sign it in that two minutes, Roku dropped like five bucks, five bucks. And I was like, all right. I , um , I just got stopped out by an email, you know, use the, you know, look. And once you find an option, that's boring. Like us steel or cement . I never traded a carnival, even though my wife's friend. Um, her name's Kelly, Arison her family founded carnival. Then they also own the Miami heat.
Speaker 1Oh
Speaker 2Yeah. We're sure we're shareholders at like eight bucks.
Speaker 1Ooh . My entire thesis for carnival is you're not going to keep Americans off a cruise ship. You're just not going to like sickness, whatever. Like as soon as people can get back on a cruise ship, they're getting back on and that's my whole
Speaker 2Yeah. And my, our whole thesis was either they're going to get about , I'm like, they're not going to get a ballot from the government. I was like, they can bail themselves out. Yeah. And it's like, who is it? It's like carnival Royal, Caribbean or Legion . You know , one of those is saddled with a ton of debt you know, one acquires the other. It's just more people love cruise . I hate
Speaker 1Chris. I hated crews . I fit crews . People, Americans love
Speaker 2To create middle, middle, middle Americans love , you know, like I can hear the cruise ships from my house. I'm like. So yeah, there you go. You just got your , your first options lesson.
Speaker 1Thank you so much. So if I want to learn more from you, which I think I do, where do I find you?
Speaker 2So we have this thing it's called true trading group.com. Okay. So it's a seven moderators with all different , uh, specialties, some options, some small caps , um , you know, mid gaps , large caps, whatever. Uh, you know, my specialty is really whatever the I want. Um, you know, I trade ideas, you know, and it's really cool, but you know, it's not just like, I don't, I don't want you to keep your people think that it's like, like just a chat room. Cause it's not, it's a complete platform. Real-time data, there's a simulator for trading stock or options. Um, there's courses. I mean, we even give you tests that we force you to pass. And every time you pass, you get a badge, you know, once you gotten all your badges, your TTG certified, and then you're able to, to get into more things. Um , but we do webinars and it's think of it as like Netflix for trading. So there's no real upsell. Um, you can do a seven day trial , uh , it's free and then check it out, you know, and then we're in there , uh, you know, all day. It's a lot of fun too . You know , we've got , uh, close to 8,000 members in any given day. There's 2000 people in chat. We also have like, Benzinga , uh , squawk. So we're getting real-time news as it , as a ping zoom, the market. It's cool. You know, so that's where you can really learn. And we also have a YouTube channel that's every night and that's a hundred percent free and you'll learn a lot of there too.
Speaker 1Cool. I'm currently doing a self-imposed like, I cannot be on discord. I can't be on Twitter except for DMS. I cannot receive any information about the market other than like, I have a trade idea scanner and I think, or swim scanner and that's it. And I just have to, I'm just trading in it. Um, and it's been quite the experience. I've really liked it. Really.
Speaker 2Yeah. See, I, I mean, maybe it's the things that I'm trading, but I'd really like to see what everybody's saying and try and understand the sentiment that's out there and the market psychology. You know, one of the things that, you know, there's a really good book you should read while you're on this self-help kick . Uh , it's actually two books. One of the books, one book is called animal spirits and the other book is markets , mobs and mayhem by Robert [inaudible] , uh , rubber mental was one of the first partners at Goldman Sachs , um, incredible book. It's at a print. You can find a PDF of it online for free. He just got a search and you can buy it used. Those are the only two books that I've read about the market. And especially right now , um , with everything going on, you know, especially for when I was trading cannabis, you know, understanding the market psychology was as a trader. It was like fishing with dynamite, you know, understanding like the frustration, the FOMO, like what people are going to do next, because, you know, at the end of the day, the market is just a massive game of musical chairs. And it's like, okay, well, when when's the music gonna stop and how many chairs are going to be left. Right. And, you know, but I want to be able to kind of see or hear when that music is going to go off quicker than, than the next person. So it's really good for just kind of understanding, you know, market fluctuations and you know , why people do the things that they do. Because remember like at the end of the, like, I hate when people like, oh, you know, like you gotta be a robot when you're a trader it's. It's complete. Like I made money on Roku and I'm so about how much I made on Roku. It would've been better if I lost money. And I was like, oh , I just did the right thing. You know ? Cause we're all basket cases and you know, that's all gonna , that's gonna influence what we do tomorrow. Um, you know, are we, is it going to influence it influence us to the point where we , we revenge trade profits that we had yesterday to get back, you know? Yeah. It's a , it's a really good , uh, a good read. So let me know how it goes for our book club.
Speaker 1Oh, perfect. You know, I'll read it. I'm a big like homework, I'll , that's sort of fun doing this , uh, thing, because I just wanted to prove to myself that I was seeing the things that I was seeing and not being influenced by anyone else. It was a con, it was like , uh , I needed to test myself so that I could confidently say I see this. Right. You know?
Speaker 2I mean, how long have you been trading ,
Speaker 1Uh, 18 months,
Speaker 2you, you, in this podcast alone, you learn more than I learned in five years. And that's the truth. Like I was so dumb. Like I have no idea how I'm , I'm not working nine to five right now. I have no idea, you know? And it's like, especially for the people that find it early, right. You have your whole life to trade
Speaker 140 though. So I'm trying to learn these things. And I'm like, I'm just not where I was 20 years ago.
Speaker 2Yeah. You know, like little by little, little by little,
Speaker 1Well, thank you. Thank you so much for your time. And I just, I like you. I like your energy. I like your whole style. I'm a big fan. I said at the beginning, I was a big fan and this was such a treat for me to get this one-on-one time with you. So thank you.
Speaker 2Thank you for having me. It was actually a lot of fun,
Speaker 1Please, please. I've I have 50 more questions I could ask you. So we'll get another date scheduled.
Speaker 2Thank you.
Speaker 1Thank you so much to Joel Edwards, our producer in Chesley low for the banjo music by.