Everybody’s Michael Martin. Thanks for being here. So Got a good email from someone and said hey, you know, Michael Never seen having seen everything that you’ve seen and and knowing the people that you know and this and that Like from a historical perspective like what keeps you up at night, and I thought that was a good question.
I appreciate It’s from from Erica. Thank you, Erica So Things don’t keep me up at night obviously, I have my worries about the world and and how everybody seems to be super polarized and You know The media just sucks right they just constantly, you know fomenting hate between people Everything’s very polarized. We have to get reactions now.
Somebody does something and Then someone’s gonna have a reaction to that and somehow that becomes a news item Like I don’t find it entertaining or informative. So that you know, it’s like Brad Pitt’s line in the oceans I don’t know if it’s ocean 11 or ocean 12 and he’s talking about Casey Affleck and Scott Scott Khan and You know George asking him how how are the twins doing? And he said I think they’re having time filling they’re having a hard time filling the time along those lines. I Don’t let things get to me because I know how to manage the risk You know, I’m powerless over what goes on I’m powerless that people have to go to social media and Spew a bunch of bullshit that doesn’t matter.
I guess it feels good I just don’t know how you make any money with that like and I when I was younger and It wasn’t like I was polarized. Obviously, I’ve had my opinions. It just wouldn’t occur to me to take Valuable time from my day to go fighting into these kind of endless loop conversations that don’t go anywhere now it’s First Amendment rights are precious and I believe in them a thousand percent, but You know if you’re younger and you had a family, you know And you want to build a family or you’re trying to build a trading career in my humble opinion First Amendment rights are not you don’t have time for this You don’t have time to be flying off the handle at everything that you don’t like in the world right, so that that That Concerns me for younger people who haven’t who’ve been sucked into it See, I had the benefit of not having the Internet.
I had no mobile technology. Therefore. We had no mobile apps right, so I couldn’t see what someone’s shouting their face off about politically or about transgender rights and Transgender people in sports and athletes and whatever the issues are of the day like we we knew they were the issues were out there But we were insulated on some level because we was all the only thing we could do is really read newspapers There was no place to get scrolling news headlines in the morning So that’s what I’m saying.
Like day trading is really a late 90s Kind of phenomenon, right? It’s not been around that long There wasn’t we wouldn’t know what to do You could put on TV and see there was Lou Dobbs and CNN FN as it was called financial news Then the upstart CNBC But no one really knew how to use that. It was kind of an interesting kind of a curiosity I don’t know anyone that was getting trading ideas. It was interesting to see certain managers, you know, very very early you know Jim Cramer when he was running money for Kramer Berkowitz and And all that but we had to originate our own ideas.
There wasn’t a place, you know, there wasn’t a pod There wasn’t a meetup. And so when I think about all of this I’d like to think that traders are strong individuals, right? From a philosophical standpoint and each of us needs to know what we’re gonna do. Like we all might make A certain recipe, but we’re gonna make it in our own style So just like you got to know your position size how much capital do you have? What’s your risk per trade? You know, what’s your exit when you’re losing? How do you take profits? What do you do to manage the trade? Are you gonna add to your winners? You know if you ask a hundred traders that question you’re gonna get a hundred different answers and that’s okay My fear for the market isn’t about the market, right? It I have echoes of mm in my head right now for where we are in the world You know when it started to think like when I watched the the earnings reaction to micron like my goodness They couldn’t have put up better numbers.
They absolutely smashed now granted. The market was up 150% up to the point where they announced But then they certainly punished the stock after the numbers came in. So I’m like, okay.
I’ve seen this before I don’t know where the rollover is gonna end So, you know my my thought would be Be careful and make sure that you can define a lot of those things that we spoke about last Tuesday And what what would you do under specific search situations? The the parallels from now and to 2000 are kind of similar, you know, we have groundbreaking technology That’s very very new people know it could be an issue They just don’t even know where it’s around in their lives for most people if they haven’t even gotten on to say something At the low end of like chat GPT forget the other ones like Claude or otherwise their experience with AI could be if they’re on a website on like Amazon and they’re trying to find an order and they’re Interacting with an AI bot. That’s a can client service. That’s where the majority of people are You know coming across AI How to actually use it for productivity That’s something that the corporations are really taking on and everyone’s excited about it Just like they were about the Internet and they’re like we got to get involved.
We need AI exposure But you can’t be blinded by ideology. That’s kind of what I was getting at in that episode and and and lose sight of good risk management You have to remember and one day I’m gonna do a massive study on it I just have to get the data and it’s harder to get because they the the data companies take out the delisted companies I don’t know if you know that or not. So if you go and subscribe to even You know a premium, you know charting package and you type in some old tickers The charts don’t come up because they they don’t they don’t include them So if you wanted to go see like what did Enron look like or Bear Stearns E&E E&E was Enron BSC was Bear Stearns Corporation.
Then you have the winners like Bank Boston BKB, which I owned a lot of Especially after Glass-Steagall because I knew it was it was a good bank It had a good dividend and I knew it was an acquisition target. And yes, it was eventually acquired by Fleet Bank So you’d want to see like what are those charts look like coming up to those periods of time to It does for those of you that do your own back testing You know that there’s survivorship bias, right? Because the only thing that you can see are survivors right you it would be good to know Would your instincts, you know lead you to want to buy stuff in downtrends, for example? And what would that look like over a longer period of time? Thinking again that lower prices is somehow more valuable. Well, it wasn’t for Enron.
It wasn’t for Bear Stearns So you kind of have to be careful because you can’t predict what’s gonna happen and if anyone told me back then from the you know, 98 to say 2003 2004 that you know, those companies would have been out of business or Lehman Brothers. I would have been like there’s no chance Well, how would that even happen? So I think people are blinded by the ideology Like they are in a lot of things in life and they just don’t have the flexibility to see things from several different angles That’s why again last week. I think it was Tuesday.
We talked about you know, you need to have a Plan for every possible outcome and know what you’re gonna do ahead of time Because then it’s like well what’s new that could possibly come out Right, what is new that could come out that news that could hit the tape or be revealed about the company that I’m not prepared for Because when you’re prepared It’s like okay. Look I might have to make an adjustment going forward. But at least now I know what I’m doing I can see, you know, there’s asset classes and certain stocks that are you know, just hyped because they’re part of They’re like with the in crowd and that can lead people to turn a blind eye to good risk management and it opens them up to losing a lot more money Because just like the folks thought in 1999 and early 2000 that the Internet was here to stay It’s the new economy, you know, and they were right.
It was here to stay and it is the new economy But they still lost an enormous amount of money And I know plenty of traders that just said you know what? I’m not I’m not actually cut out for this I thought I knew what I was doing because I was making a lot of money in the late 90s It was hard to lose money when you were trading equities that were evolved in technology, right keep in mind that From 95 to 99 the market was up quite a bit and then from early 99 to early 2000. It doubled again in a year that’s how rare this kind of situation was so people were just sitting back saying Man, I smoke in bed. You know what? I mean face down.
It’s like fuck you got to be careful You know, you have to be careful you have to have a plan you you have to and I learned this from an editor when I was writing my book They said like look, there’s a good chapter. It just doesn’t fit in the book So you kind of have to pardon the expression you have to kill your babies and I didn’t understand it at the time So I’m like, yeah, it’s a pretty good chapter. Maybe it’ll fit in another book some at some point But you have to do that with your portfolio to nothing lasts forever So you have to you have to be objective enough to say hey this vehicle was good It’s made me a good chunk of money up to a certain point But again, if you want to do yourself a favor go to whatever free charting you’re looking at or the you’re paid one type in QQQ look at monthly bars and then look from March of 99 watch it go from 50 to 120 and then crater Like how are you gonna handle that if that looks like some of the names that you’ve been in? Because you need an answer to that as well you might not want to think about it because it’s like You get married because you hope you’re gonna live you live for happily ever after until you get divorced, right? So how how is that gonna gonna happen? So think of this is like a bit of a prenup Think of how you need to create a bit of a prenup with yourself and the market on how you’re gonna manage risk and not Get caught up, right? Everyone has their Facebook story about getting caught up.
Anyway, please like and subscribe. I appreciate everybody Thank you for all the kind remarks and please keep you know, your emails and your comment comments coming I’ll do what I can to help you. See you tomorrow
