Confronting The Ex-Founder Of WallStreetBets

welcome to iced coffee hour we are wall street bets what an introduction thanks so much it's great you're very welcome how are you guys we are in the presence i think of greatness here i hope so well i'm equally as happy to be here and equally as thrilled thank you so much so uh tell us a little bit about your story uh the creation of wall street bets your involvement how this came to be a little bit about the backstory of everything so i started wall street bets about 10 years ago give or take right like i've been a serial entrepreneur my whole life right out of college i've had some really successful companies i've had some big flops right but i uh one of the companies that i sold ended up being a paper millionaire company right like it was just this great deal it was the first one that i'd started from scholar college and it turned out that a lot of those papers ended up being useless right so i was like all right clearly i'm missing a finance component start getting the finance studying it you know i got myself a job at a big multinational bank and uh and making decent money i'm like all right cool i'm gonna keep my 401k i'm gonna do my typical retirement but i'm gonna put my extra money to work right and it's looking for places online that was uh condu conductive or conducive to higher risk trading right like for these things that i can win the lottery overnight and just retire happy but there was no place like that it was either like conventional diversified low commission etf type investing or professional traders right these are people that just do like look at charts all day long and i just wanted to have some fun so i started wall street bets now when you mean you started wall street bets we're talking about the subreddit on reddit well it was a whole yeah so it was a subreddit on reddit that's correct yeah and and what do you call it twitter account youtube you know like the platform there's a lot of different ones i wasn't sure which one was going to be the one that was going to grow right and so the the subreddit was the one that ended up just organically growing right like people often ask me how did you grow it so much and it was just people were interested in it yeah right like it was now why create a community why wouldn't this just be you having fun by yourself maybe with some buddies in a you know texting back and forth a little bit why create a community around that because i don't know what i'm doing right like i know what the stocks are i know the stock market is and i started looking at stock options i'm like these are cool right like they go up and down really fast with fairly little money so i'm hoping somebody can give me some tips right like it was just wanting to learn and also wanting to share that with somebody and uh and wall street bets ended up attracting a perfect mix of both well not professionals but people that really know what they're doing and people that really want to learn what they're doing and made a wonderful combination right so you were just looking for high-risk places to put your money in and you were doing yolo bets and stuff like that and then you wanted to make a community around it effectively yeah i mean i would like i don't know which one it was a chicken or the egg situation but i wanted to do high risk it wasn't like so much yolo bet it was i want to get rich quick right which requires yolo and you know like risk and return are the same thing and so if i'm going to get a scratch off lottery ticket this is at least more fun i can do it from my phone uh back in the day there wasn't commission free they were just low commission uh brokers that were just starting to kick out so i was like oh cool this is a couple bucks like when i first invested in the stock market it was thirty dollars to buy shares and thirty dollars to sell them yeah what brokerage was that that was i don't remember but i was but using like called wachovia now it's wells fargo yeah acquired multiple times but it was just through like the bank it was like we have to call up a guy on the phone jim placed this trade for me that's pretty much how it was but then the the broker that i used to use a lot was options house which then turned into e-trade but it was just you know like eventually when they start off with a little capital they have this rule called the pattern day trader you need to have 25 grand in order to do multiple trade like lots of day trades and i didn't have 25 grand so i was like uh i'm gonna use this broker and then i'm gonna get that broker and i'm gonna use that broker so that every time i open a new there's no rule that says how many brokers you can have so right yeah and it's something that people still do today that's crazy at the time was that a sizeable amount of money for you that you were you know putting in you know call options you know like i was probably putting a couple thousand like i i think i might have funded the account with either 10 or 20 grand right but it was just all right let's see let's see what i'm willing to do like anything over 25 i think that was just a psychological barrier and the word pattern daytrader was like man i have to click more little boxes it says i really need to know what i'm doing i'm going to get into like above my water but yeah you know like in the fluctuations that take place when you when you're taking such high risk trades especially with stock options like i would make 20 grand and then i would lose 40 grand and i would like refill the machine with more money very appropriate now that i'm in vegas and like okay game over and like play again and then just keep going up probably ended up breaking even probably lost money uh during the first few years but it was just a wild great learning experience how much were you making back then you're working full-time right yeah i was probably making 150 grand okay so and i was single i didn't have you know any dependents like i had a nice car but i preferred to take the metro to work right so like i really my expenses were pretty much rent right and uh and i could afford to take whatever risk i wanted to but at the same time were you also investing in like you know etfs and stuff like that no no sorry in my roth r uh yeah yeah yeah yeah that was through my employer they do the whole matching thing or whatever but everything on top of that was just yeah i would do i would do stock options on the s p i would do stock options on that day yeah what was community like back then at what point did it grow to like the first ten thousand people or or the point where you knew that this is its own community separate from everything else there's a lot of moments throughout the time so like i start this thing off and well first i register and then i take a few months kind of trying to decide exactly how it's going to look and what it's going to be about and then i finally announced it like five six months later and on similar subreddits and on my twitter with six followers on whatever and people started showing up and it would double in size pretty much every year right so like maybe from a thousand to two to four to eight and then very soon you're at like five 000 it turns to a million all right like you start doubling things that really grow fast but it was it was immediately apparent when when i could see kind of like the curve of uh the growth and then there were moments where where we say ah we made it right i remember in it it was april fool's of 2004 no 2015 i believe me and the other mods were just real jokesters right like we had this keep it fun and keep it simple and so for april fool's day one of the most turn the you know you can change the interface you can make it look however you want and he put like shifted the entire thing slightly so that it was just annoying or it made you think your screen was off and it was like windows 95 type icons and it had these twirling we're like [Laughter] and on that day just serendipity we had uh i want to say it's like fortune.com or one of those uh big websites we're saying okay yeah we're talking about volatility instruments blah blah blah there's a forum where they think something something's gonna happen and then the word forum was a link and he clicked the link and it took you straight to wall street bets so we're all excited because finally somebody saw wall street bets right but we were twice as thrilled about the fact that this was on april fools so we can just imagine the number of people sitting at or reading fortune clicking clicking the link and being greeted by these non-safe for work so how do you how do you monetize the subreddit because it's one thing to create a fun community as a side hobby but at what point are you able to turn that into a business or figure out a way to monetize that uh you cannot monetize the sub right now like by the rules not by what efforts you can do right and so i was actually removed in 2020 because i wrote a book and i started this while i was before covet created this kind of competitive day trading competition that was the excuse as to why they were moving reddit never really told me but there is a rule there that says you can right um not allowed to talk about the actual story because they're actually making a movie i sold my life rights to a movie studio and so they're going to be the ones who get to tell that story but that's kind of a tangent how do you monetize a brand that is a different story right like i have the trademark i have you know i wrote the book and i have a gazillion different things under that umbrella that is monetizable so i guess the closest you could get to monetizing something on reddit would be to create a brand and kind of grow an audience similar to the way that you would do this on youtube or tick tock or whatever it might be and then kind of build it out that way sure so reddit is a policy against not directly monetizing a subreddit but you could own the trademark and then license the trademark yeah so it gets like a way around it no no no this is something yeah yeah i've spent a ton of time on this right like it's really strange because you can have coca-cola or underarm or whatever brand you want like that monetize it and then come to reddit and they say hey this is my brand we'd like to be able to uh grow the community and get them involved and monetize this component of it right but if you start from scratch and say this is my brand like or you want to turn it into one then it gets kind of tricky the rule is you cannot be paid to moderate that's the actual rule uh which in my case or whatever i'm not going to talk about my case but that's um yeah that's the rule that's in place reddit turns around when they see a subreddit that starts uh growing a lot they turn around and try to trademark that name they've done that with explain it like i'm five they've done it like i forget which ones they are i know this because uh currently in a battle with reading they're not happy with my trademark of wall street mets right but um but it is kind of a really weird thing i don't think reddit thought it through when they first started it i've been watching them forever when they were really small they're like oh this is really cool uh a lot of people come here let's hold hands kumbaya and then they realize there's potential conflicts there and yeah if you have the trademark specifically if you have the one that uh involves internet forums and chat rooms and all type of social social networking then then it gets interesting first we have to thank our sponsor helix sleep so i actually recently bought a house and i have to say i am so grateful for my helix sleep mattress seriously guys i moved in without even having a fridge without wi-fi and without even having like trash service but i made sure i did not move in without my helix sleep mattress why didn't you just stay at grams well that's besides the point alex plus i slept like 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helix for sponsoring this episode and back to the podcast i'd almost imagine that reddit now would have learned from uh those experiences and just made it like a terms of the agreement where like by signing here uh and making an account you agree that anything you create on the side it belongs to us so i i don't know if they think that would discourage some people that are creating forums though from no doing it i don't think so at all because i think the people that create forums never do it for the intention of making money i think you were a perfect example of that you just created because you wanted to do that i don't think that would discourage anyone from being like oh well i can't monetize it i'm not gonna make this community anymore yeah and somebody else would yeah i mean it is an interesting balance right like so reddit starts off as literally let's just you know i think at one point they were taking donations they just want it to be a great community and i loved reddit right like still is a great platform and uh back in 2010 or so they organized this huge rally it wasn't right at the company but it was like the community that got together in washington dc where i was living at the time they got together like 100 000 people and they filled up the uh the national mall and they had this event with stephen colbert and the other guy jon stewart and i had a bunch of celebrities on it was like wow this is really like this is a huge deal right and so right at that point kind of got involved with it uh and then all of a sudden big money starts rolling in they you know they sold it and they bought it back and then now they're considering going public with this and so i think their original model wasn't really a business model it was more this is for everybody you know by the people for the people type thing and then eventually they're like all right well we gotta pay the servers it's a lot of traffic yeah we got to start doing some things and then yeah one thing led to the next now they want to do an ipo which now forces their epider you know the financial statements to be nice and uh clean with that so they're still kind of maneuvering it but i don't think it's well defined right like it's a weird thing that you register a subreddit and then if it gets big then they subjectively go and try and get it right like there's a bunch of other ones like satoshi street bets and other ones where they don't seem to care about but couldn't they argue that that's for the benefit of let's say let's say i'm looking at that and finding like bitcoin bets let's just say that that's a subreddit i see it getting big i didn't create it but i could go and register the trademark for that can't i can't just any random person go and do that so it's better for reddit to do that and some random look i get that point i understand they want to they want to be able to protect it right because especially if something gets bigger like something like wall street bets and that's pretty much a threat uh trademark laws thankfully they're relatively fair all right so when you all go to trademark someone they're gonna be like well show me that you've used it right or show me that you have the intention to be used if nobody's used it before and as part of that process uh you know one of the one of the final steps is they publish this trademark application to the world and anyone that has any objections can come in and say no if you grant that person that trademark that's going to harm my business right and so then that starts the whole process got it so what are your thoughts now about how wall street bets has evolved do you think today it's the same feeling or the same intention as it was back when you started it or do you think it's evolved and taking a life of its own and it's different from what you first had in mind it's it's shifted uh as it's grown but it has a lot of things that still that are still the same right the community gets started and it is a fun honest like brutally unapologetic place for people to to to hang out and to learn and so this is yeah oftentimes i get the question like so why do people brag about their losses and on wall street best i'm like it's not so much that they're bragging even if it looks like it maybe there is a little bit of kind of flexing there but it's more this is real all right this is in the real world you you both win and lose money and in this case i got my ass handed to me so give me like a virtual hug right and and uh and same thing like look how much money i made or sometimes look how much money i made and then look how much i just lost it again uh but this you know let's let's have fun it's just been no filter offensive uh a lot of the times right there's just a lot of locker room banter it's been predominantly male for as long as i can remember so that that hasn't changed but it started shifting like some of the some of the aspects of it which i wasn't happy with and still is you have some of this unapologetic offensive speech turn into hate speech right and you starts to it becomes counterproductive or even though there's no political like there's just here we're talking about stocks or betting or whatever we're not deviating from this including politics right just to make sure make this nice uh silo of it you know people do start um deviating in that direction so some of that i think is because it's grown so much and so you have slightly less control but the the overall tone of fun of really creative really smart people that have come up wall street bets became real famous here with gamestop right but as you know because you had a podcast of about this couple years ago where these people took out infinite leverage right and prior to that they've done other stuff that was similar like with the box like there's been really clever these people come together and they say let's exploit an inefficiency and they do it right that was wall street bets the robin hood infinite money glitch wow that was the original i completely forgot about that yeah it was like two years ago jeez i i love that guy we had him on so for those that are not aware this guy found a loophole in robin hood where i forget exactly how it worked but he was basically he was taking on margin i think he was selling options or he's he was doing something with options and then selling those options so robin had gave him a credit back but because he still has that position but he got a credit back robin hood then doubled his margin and he was able to do it again and then he would double his margin again and so with like two grand he was able to get like 1.7 million dollars worth of margin and uh the the downside with this is that it doesn't seem like i would play it smarts like i think if you want 1.7 million of the margin at least do something where you have a high likelihood of making money because you know you have to pay at some point they're going to learn about it but it just seems so many people at that time were just making these ridiculous bets with like a 100 chance of like being big and then they would lose it and just delete the app and uh but you know what like i i guess we could kind of talk about this now it's been two years um robin hood uh i hope i could talk about it anyway go for it my understanding is that uh robin hood settled a lot of these cases for pennies on the dollar so someone would oh like two million bucks and robin would be like hey just just we'll call it this amount could pay us off over time we'll call it even like they got out good but i think robin hood is afraid that uh these people could lawyer up and be like well you allowed some 18 year old kid to get on infinite margin in a way that your platform encouraged and allowed he's not responsible for that loss that's a glitch on your platform he doesn't have the money plus here's the thing when you're 19 you have no assets you have no money to pay for what are they going to collect they have a judgment against you 1.7 oh i i'm bankrupt now oh so i go on social media and talk about that yeah and they're the bad guys like no but you know what's interesting about that so like when that you know part of when i started wall street bets i'm looking at i'm on the heels of financial crisis right like i'd actually lost a job to the financial crisis so to some extent i you know and i lived in dc where a lot of the occupy wall street moved so i had all these things fresh on my mind and i started learning about these things called leveraged etfs and these are like these exotic variety which are just basically math formulas and and i was like how can these things exist and why are they legal and didn't we just learn a lesson this thing is you know the counterparty risk and if you're not supposed to be able to share sell short unless you know you have the collateral or experience but you can buy an inverse etf and somebody else is taking on the infinite risk and weird stuff right so i'm matt and i write this entire blog post and i was like i'm going to publish this and the whole world is going to be just as outraged as me but first we have to thank our sponsor ritual protein powders can be extremely intimidating especially with their very confusing ingredients list and also just like the overall perception of them but fortunately ritual is here to shake things up but the truth is we all need protein and it's not just for building muscle we need it at a cellular level so rituals team of scientists reimagine protein powder from the ground up the result is a delicious plant-based protein offered in three premium formulations for distinct life stages and unique nutritional needs all made with the same high standards approach and commitment to traceability that ritual is known for i personally take rituals daily shake powder every single day twice a day in the mornings i mix it with my banana smoothie and then before my workout i dry scoop it jack you don't dry scoop it 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this dialogue right and that's why i called it wall street bets is i wanted to to make a statement there that this is the casino right and this is a lot of fun that ethos continued to grow which also was right around the time when bitcoin started also a similar language and philosophy in mind right with like f the central bank and the whole system but anyways but this is where we're we're hoping to spark a conversation so throughout this entire time you get you fast forward to this moment where these people take on risk that they cannot handle right like well i don't have that money like you know if if uh if the banks were able to do this in 2008 they didn't have the money and they got bailed out i was like well then come get me i got i don't have a million dollars to see this is now your problem is the typical if you owe the dollar the bank a dollar it's your problem if you owe them a million it's theirs like this is kind of that and that continued through well today and then obviously with gamestop and these other the philosophy so do you worry that it's leaning a little bit too much into gambling versus investing oh that's a great question um no no no like so you have you have putting your money and hoping that you get returns as a thing all right and then you get to def you get to pull different levers and then you get to put a spectrum and on one end you're going to have what probably what you're probably meaning by investing which is lower risk let's diversify this is wealth growth and compound interest in your dividend collection stuff okay and then on the other hand and then you can start doing some higher risk things maybe actually picking out your own portfolio individually taking stocks and whatever it is and continue working your way up as risk starts increasing uh so is your potential return obviously and then you have what we're calling gambling right which is ultra high risk right like low probability but but really high impact potentially uh speculation so there is there is your your spectrum and along the way everybody is guessing right like warren buffett obviously is a great investor but he gets it wrong sometimes too right like the airlines in kovitz was a great example with it so he takes his little loss and whatever and call it a day but his his approach is is one that requires decades this other one is just you're just pulling it up and so you're speculating from both ends of it it's how much am i willing to lose or how much do i want to make and then you can even make it justice you can get you can make it um you can gamble responsibly right if if you have a hundred thousand dollars and you go to someone saying dude don't do these out of the money stock options because you're going to lose your money it's like yeah i could lose 100 of my money but i'll take a thousand of those dollars put them on this side of the spectrum and i'll take the other 99 over here i've seen multiple times people take 1 000 turn it into a hundred thousand dollars overnight all right so was that risking or was that super intelligent diversified approach to what was money risk management yeah 100 luck yeah the incredible amount of luck uh but still it happens and it's like well worst case scenario which was the most likely i would have had 99 000 left right and i got i hit the jackpot and so now i have twice as much money as i started with it's irresponsible to take the hundred thousand dollars and do that yeah all right that's interesting because it's exactly the same as what well not exactly the same but very similar to what uh ask sebby said when he came on our podcast he was no is beat the bush he said that you should place your bets obviously you know you should be doing the long-term you know growth investing and stuff like that but at the same time it is important on occasion to put some money here put some money there that could potentially you know explode and and you know skyrocket your account if you want to become that type of wealthy so here's here's a cool thing right before coronavirus one of the things that that uh led to be being removed i was i i said to myself all right now this is big and i wanted to start this conversation we've already had it a few times with the infinite margin like you had a handful of events now let's take it to the next level i really want to see people on tv mad about the situation so i'm going to rent out a casino like one of those you know concert venues a place i'm gonna do this competitive day trading like a tournament type thing where you have 10 or 12 competitors on stage on the front it was like an esports tournament right trading live with the actual stock market oh my gosh and yoloing the crap out of this so it's gonna it's gonna have the format of a video game tournament like these esports that's amazing yeah i would watch that yeah ppv yeah do what you just you give everyone 10 grand i mean there's a lot of laws around that so i actually created this thing i had it all set up so i'm familiar very well with what the restrictions are but even more than that it was like let's take a dave portnoy and a jim cramer and you know if you saw oh yeah you know what you call it trading spaces the homeless guy from the street like just get a little bit of everything just to see yeah to see what wins if you wat chris moneymaker for that first world series of poker wasn't a good poker player but it was fun to watch and he you know and he won because he was lucky obviously there's lux so let's just you know do this yolo thing and and and no other place than in a casino right because i want the world to know that we're playing with the stock market from las vegas um then coronavirus came and killed my dreams but now i'm bringing it back and that's going to happen much bigger this time around because um let's just see some opportunities open i want an invite to that i want to see it sounds incredible yeah yeah absolutely so how do you oh so how do you feel wall street bets has changed investing because i think very much it's it shifted away from it it almost seems like now people are no longer interested in safe fundamental stocks because they're like why would i wait a year to make seven percent when all of these other people are trading momentum stocks now or meme stocks and they're making that in a few hours it's a great question is it's not that wall street bets created that is that these people were created before wall street bets there's an entire mindset in this generation like millennials on down where they were impacted by this 2008 financial crisis it was the banks that made them graduate college with huge loans and you know no prospect for a job and maybe move into their parents basement and maybe their parents lose their house like it's just very few opportunities and you can see that even to this day millennials and gen z they have it worse off than their parents that like if you were to make a comparison they're having kids later so you have this kind of distrust to the system this this mindset that starts creating like this gig economy that leads to uber or whatever you know becoming influencers online let's let's hustle let's try to make some money on the side because i'm i have to fend for myself right so that mentality starts creating itself right there and then people say okay well there you have the stock market and we know that it's just wild because it can go up or down and people tinker with it all the time like not too long ago several months ago that was the um i forgot what the name of this company was some some fund was being insanely irresponsible with derivatives and they ended up like spooking the entire stock market and dropped viacom's stock price by 50 percent nothing to do with viacom it just had to do with derivatives and this domino effect forget their name um and uh and it's like well but come there the fundamentals are the same why did this thing drop fifty percent they didn't announce any news it was some other irresponsible player that had this domino effect that that created this thing so it's like well i'm gonna go in and out and i'm gonna use it too can't beat them join them that philosophy has kind of [Music] continued up until this day my my personal thing about wall street is i actually unlike popular belief i love wall street i love the system i just think it needs fixing to some extent all right like the the purpose for these things existing is to raise capital for companies all right people forget about that but the other you know just a couple weeks ago i had a reuters um journalist say hey amc the stock is up because everyone's talking about this thing and the ceo just now is going to do an additional offering and in the prospectus it says these stocks are not worth what you say you know what people are paying for means so he admits there that he's scamming people and then he says there's going to be a larger supply thereby supposedly reducing their price and people still bought it the price even went higher like what what what's happening here isn't this crazy do you worry that it's ever going in the direction of being like a pump and dump where everyone collectively gets together and say hey we like this stock we're just gonna buy it up and if all of us buy a thousand dollars worth we could influence the price this much and we just gotta sell i do um i like it's not that i worry that it's gonna happen it's more it's more i'd like it to not turn into that be turned into the conversation uh because then it's not productive anymore and then it's actually counterproductive to the system right like one of the greatest things about the market is price discovery so more people that are in it the more efficient that process can be so i think that you uh the that if you have people thinking they're going to make a quick buck by pushing the prices around then then i'd like for that to not happen but it cannot happen that easily what we saw with gamestop is so much more than just a pump and up like it's easy to see these guys like the stock and these guys were shorting it a lot and it was a short squeeze and it was just very sophisticated surgical maneuver with luck and all these different things they tried out with apple or whatever it's not going to happen try that with penny stocks that will right but that was one of the reasons why when i started wall street bets it was like no penny stocks because that that's too easy um and then then eventually we ended up increasing the bar to i forgot what th it was both the stock price and the market cap amount just to just to prevent that kind of dialogue it's not not productive and it's also gonna get unwarranted attention yeah did you yourself get in on gamestop amc no um no i live in mexico right now and so ever since i moved in mexico moving money from my u.s broker to mexico and back like it's just such a pain in the butt and then taxes become really complicated so i stopped trading individual stocks and stock options since since i got there in 2014 i now do like futures and forex like i do my best where i can do it easily right now why do you why did you move to mexico and where did you move from i was in dc in the last place but in the us i've lived in dc chicago like salt lake city utah moved around a bit um meg i was actually born in mexico and i lived there until i was like 12 13. always wanted to go back opportunity popped up went down there for a little bit and i was like i like it here sorry but you still do yolo bets yeah but with just futures and other other things i use different instruments and do you do you you can't use robinhood anymore i can do you use it no no i don't use any usb like i have i have brokers that have my investments non-yellows so everything got rolled up at the either e-trade or a td ameritrade so all my brokers that i have are now those two and what do you think of the gamification of trading on robinhood i think it's great right you have well first of all i'm going to say having confetti animations or whatever is not going to force somebody to buy stuff i i don't know really i hate to interrupt i liked the confetti i'm good remember those are the good old days and you got a free stock and you scratched it off i loved it i like the confetti i love it i like it too yeah i love it all right what is that it's funny you're not gonna you're not gonna go out there and buy you you enjoy it so if you have to pick between brokers to yolo with maybe you're like i like the one with confetti yeah right you've already made your decision to yolo or right like and so uh so i don't think that that in itself encourages the crazy behavior i think that that decision is made it's either made or going to be made throughout the natural progression of these people's adventures in the stocks uh but i think that it's great because it educates people if you if you buy a stock in tesla like i just bought a share all right and now i'm hoping to get rich i'm going to check the stocks today it's up two percent cool that's exactly what it was supposed to do the next day it goes down two percent like why is it going down like what is the news you know when it goes up it's no big deal when it goes down there's gotta be news right start looking it up and they can't find any news on tesla but then they're like all right there's this dude called powell jerome powell he's talking about some interest what does that have to do with anything right next thing you know they're understanding monetary policy and what has to do with the interest rates how these things are interconnected in the bond yields and whatever it might be and all of a sudden you have a person that's become educated because of their two percent you know in tesla that's that's one example maybe it doesn't go that crazy but but once you have that stock in your thing so the gamification process encourages that process it's not scary there's confetti scratch your thing off click the button in fact robinhood is funny because they stock options which are trickier uh or they can be trickier than regular stocks uh definitely it can be they can they can be intimidating when you open an options chain on a regular broker and have like a gazillion numbers that are flashing robin hood says all right you want a stock option sure no problem do you think the stock's going to go up or down and then you answer with the arrow with the color-coded arrow it's like so they make it so easy oh yeah yeah they don't even have an option chain it looks different you like buy sell call put it's just like any other option so well i have to say yeah i didn't understand options but when you go through robinhood do you think it's going to go up or down down when do you think it's going to go down this date how much do you think it's going to go down this much there you go that's what you want i mean that's wonderful you don't have to know black shells pricing model like it's it's cool because it's like whoa why does this thing go down so much right or up so much or whatever it is and so that's that's cool because it encourages experimentation and fun and learning and and i think it's a it's it's like a gateway drug for people but are you concerned though i think the problem with gamification is that uh from the sec's perspective robinhood is is gamifying a system that benefits the more the users trade and generally the more users trade the more money they lose at robin hood's benefit yeah do you think that there's any sort of conflict of interest no no robin i followed everything up until losing it robin has benefited robin hood is indifferent as to whether you lose money they will make their they will make their money from number of troops well let me clarify that um generally the more people trade the more likely they are to lose yes so by robin hood encouraging users to trade more at their benefits basically people are more likely to lose money there you go so uh is there a perverse incentive no because well first of all there's a lot of criticism towards the the encouraging so the first thing is how do they encourage a lot of trading by making them free right and so then that that takes us to this payment for order flow concept and so then you're starting questioning execution of these things and i don't as a sub part of your question i don't really care about like i don't think that payment for order flow is bad the rules are such that the payment photo flow have to give you the same or better prices than you would on the exchange so the prices themselves are good this whole front-running thing is like silly um i personally i don't like payment further for myself because i need a fast execution i need pennies on the dollar i do like charts i'm more technical than meme stock or yellow type stuff uh so i choose to pay a commission for my trades because that's what works for me you take keith gill it takes 50 000 grand and turn it into 50 million dollars like these guys don't care if you got stiffed a couple of cents on this thing because their approach is a different one that suits them so so on the payment for water flow standpoint not really worried the let's encourage a lot of activity on there uh it it i think that as long as people are aware that what they are doing is risky which oftentimes they do especially after they lose money then then it's on these individuals there's there's gamblers right there's there's a like an addiction of gambling and gamblers anonymous and those people have a problem and that problem is usually hey this activity is now affecting the livelihood of you and your family whatever it is go get some help those people exist whether they be in vegas or whether they be on the stock market for the majority of people they say i lost money that hurt i don't want to do that again so some people are so risk-averse so like never again close it and uninstall the app and call it a day for a lot of people it's like no no i think i can learn from this thing right like i think i can do it better next time as was the case with me i would make tons of money and i would lose tons of money and when i make tons of money i would start seeing dollar signs i'm like i just need to do that six more times and i'll have 600 million dollars right like because if you do the math and you know then of course you can't do that six more times and so eventually the the trajectory that at least i took was from like crazier risk to more systematic and so then it's all of a sudden things about risk management and you know putting a little bit more science to it and uh and that's the name of the game what did i walk away with even if i had lost money i walked away with tons of knowledge i am now a better fundamental investor right because of that natural curiosity than most people would probably imagine so what are your own personal investments looking like i'm a boring investor so i have like snp in the nasdaq it's a little bit heavier uh and that's it on the u.s side right and that's what percentage would you say that is oh what of just like total yep uh [Music] that's an excellent question i would probably say 20 percent okay and then the other 80. you want to hear the question no i have seen i have it build a bear no there is there is uh you know liquid like a savings or whatever it is with the bank we have real estate we have crypto which is something i'm getting really heavy into uh and then and then other investments a very large part in private equity really because these are the the uh pre-ipo type investments now i know this may seem like a silly question but how do you yourself make money uh i make money in lots of different ways so i have this is a casino sir i i do make money with trading right so uh but but it's no longer the thing that i sit there all day long doing right like stuff no no trading short term stuff like that i now just go into the high propensity i've seen this enough times and lost enough money to know that there are some really big opportunities that even in regular investing you know that like this is the go all-in moment because the stocks are down fifty percent like pandemic last year two thousand eight and then that that thing happens for more frequently with trading where it's like whatever your style is i'm like this is a three times a year type situation i'm gonna put a lot of money on this bank right and then it's very high propensity to pay out like you know over 90 and and the returns are insane so and then there's smaller ones of those opportunities that come in and so if i happen to be on my phone and i'm checking these things and my setups are there or i feel that there's a short term thing i'll go in there and that that generates a fair amount of money but i'll do that maybe anywhere between one to four times a month that's all that it really takes to do that and then uh but that's boring and i don't want to just do that all day long so the things that i make money from is i do speaking arrangements i wrote a book i'm probably writing another one i'm doing this las vegas thing uh this the um what do you call it the competitive day trading thing that turned into because of the regulations this is kind of cool the sec it turns out is not that much of an impediment to doing this it's more the fcc so i want to pay the winner a million bucks and so in order to do that you have to you know you can't give it to your buddies to be competitors and i need to make sure it's fair so then that created an entire reality tv show that's attached to her right so i just signed with a really big production company that's going to to handle that so you have your reality tv show leading up to the final event and so that's a a money maker there you know like the movie that i created uh making deals with uh the crypto um is is a good one i've created so i i i'm now getting big into crypto but i still my passion is wall street and i know that those two things are emerging so i've created this platform that is combining crypto with um regular stocks or traditional finance so you can now actually invest from the crypto side into the stock market and create these kind of i want to there's a tiny little tangent but i think it's exciting right like to showcase the technology of what it is that we created on the crypto side you guys know the etfs are right right so etfs they have to if you want to rebalance them like to make them ememe stock etf you have to like file with the sec and you have to pay money and wait in the improvement and whatever and then eventually you can do that on the fly on the blockchain without having to do any of these things so i'm creating an etf that will trade on the stock market whose sole underlying is an etp which is what we're calling exchange traded portfolios it's like a blockchain version of it and that blockchain version etf all it does is it copies the greatest investment couple of our generation nancy pelosi and company mm-hmm excellent like they're 20 stock markets they've proven they have 112 annualized return with 12 drawdown they have really impeccable stats you can now trade real time with that and so uh now when you mean real time aren't we seeing with within a 30-day wait yeah yeah yeah you won't be able to get their exact returns yeah if they happen to have incredible luck with timing you know because sometimes politicians can be really really lucky with timing maybe you're not going to get that exact little bump but you'll be able to get i would love that honestly we should be able to that should here's the thing because recently they've wanted to uh i think they've actually just banned uh uh uh policymakers from buying individual stocks and i don't know if they passed that or not i haven't i have to go look i think they just did okay and they've uh so basically they could they could buy individual stocks but they have to give 45 days notice to the public and it has to be approved they that's good for you they have to they have to they have to hold that investment for a year and if they want to sell again another 45 days notice and it has to be approved but those are under special circumstances but otherwise they must buy into a mutual fund or an etf that tracks the broad market that was just something that i covered later on on friday's video and i covered it friday friday's video because it came out thursday night okay that's right i haven't seen it yet yeah okay and i titled my video banned from investing but here's the thing about it i don't know enough about this so i'm so i'm gonna try not to say too much about it but i'll say what i've seen in the past with these things like this insider trading thing has is not new it's happened forever right and the first time that i saw it i was outraged like there's some some um congress people they were buying property in some state right before they approved the railroad to go through it what you know like inside information maybe it wasn't the stock market and same outrage people got really upset so they passed the law of no insider trading fairness act of america whatever year it is and what the rules say is you can no longer buy like property in the state of wyoming you know between the days of whatever 2005 and 2006 if you were about to pass a law about a real like it was just very specific to do not repeat that one particular maneuver again uh and i'm inclined to think that the but now i have to go read it before i speak i i guess i'm hoping that the rule is actually the way that you've described it like once wants to find princeton because that would be the fair thing but in the meantime i'm still really excited about the the prospect of being able to mimic because i still think that the congress uh has the ability to be better traders and the general americans and so anyway so i so i make money with that related stuff and and uh yeah i don't know that entrepreneur speaking of that i found this to be a very interesting video this uh this guy nob jaws over at market sentiment he analyzes all of these stocks and including the stocks on wall street bets he's he's the one who's put together in the past this entire spreadsheet analyzing the mentions the daily mentions of every single stock on wall street bets and then analyzing its performance this guy is incredible but he looked at the past performance of congress members and determined that overall they do beat the s p 500 by a little bit uh but it's skewed by the by the few people like the pelosi's who end up doing really well but most people who copy these within 30 days barely beat the s p 500 it's by like one percent and it's not worth over 10 000 different trades copying them except it's like the you know the top five i think so so here's here's what's interesting right like as we're because this is happening by the way this isn't just a joke and and and doing that and doing all these filings and work on these things like all right well what happens if pelosi resigns right like you know amongst many other different things and so the way that we're solving that is something that goes in that direction where it's like well that's okay i have my my ledger here of potential politicians all right like and these are their stats like if they're baseball players and this one right here they and you can see all their past performance and then you could just kind of this thing happens on the blockchain there's like a governance based thing people vote community whatever and so basically the the community's gonna take a vote and select the new politician that's going to be the key winner so that you know i i do figure that if you take everyone as an average you have like 435 congress people plus 100 senators i mean you have like over 500 people you're probably going to get an average as an average but yeah i think that people are going to go for the ones that have a better track record what are your thoughts about alternative investments whether that be nfts art collectibles what are your thoughts on that i made the mistake of assuming that crypto was bitcoin or whatever coin for too long like i i knew exactly what it was at the beginning i even had you know gotten into it myself never made it part of wall street best because the execution the difficulty of getting involved was just too high and i never reevaluated that stance and i regret not doing that because because the crypto is so much more than just coins right like it is an entire system that is mind baffling and i could do an entire hour just on that but the so so i start seeing these nfts and i start seeing these rocks going for a million dollars and i can make quick assumptions about it and say okay the tulip mania we got in the situation here but i'm not going to make that mistake again so i'm going to go in there and i'm actually going to buy some nfts and see what it's about um and i think there is definitely some serious staying power there it's incredibly fascinating nfts uh the the core definition non-fungible tokens are just like a data file that has information in it and it's on a blockchain and you can do a lot of stuff with it now it's they're currently their use is currently associated with here's a picture of this pixelated whatever you know sell it for a lot of money but that's not what the technology is that is one use of that application the actual nft application i think has tremendous investment potential i touched on the fractionalized real estate you know i was i probably shouldn't say who but there's a very high profile famous real estate individual you know who approached me was like dude we we need to marry these nfts with real estate and uh and because i had this preconceived notion i'm like this is a really cool thing people can just buy little pieces of it you have the art you have the i do my picasso and i can sell i think that's really cool too and and then you have the other one that's currently in existence is the you know 10 000 pre-generated let's make a community and sell it to them i you know there's we are also in a heated situation where there's a lot of money flowing in a lot of excitement that's going to die off there's going to be some stuff but you know it's talking about regulation uh uh with i could say who brittany kaiser she's like the the whistleblower the cambridge analytic uh we're talking about other crypto stuff and and she's got this uh you know she's trying to get into the lobbying world and she's got all these things registered i'm like why don't you give the office of the congressperson an nft you tell that congressperson this nft is programs that it's going to give you every month one million dollars of the owner of this nft so long as the mechanism by which you can receive that million dollars continues to be illegal right that's the rule right so it's like this automatic lobbying contraption where you don't have to call and wine and dine whatever you're you know people that are in the house of representatives specifically the two-year term people they just do campaigning all year long like it's incredible so you don't have to campaign anymore here's your money just make sure that you don't pass any laws that prevents that from happening because then we don't want to break the law and we'll have to shut off your nft like cool stuff there thank you so much for coming on it's fantastic meeting you yeah no likewise this is a lot of fun this is probably the most prompt uh podcast we've ever done in terms of like starting starting right on time ending right on time i want to respect your time thank you and we really appreciate you coming on yes thank you so much for having me yeah thank you guys uh make sure to subscribe oh you want to tell them to hit the like button you just hit the like button subscribe and make sure to get your free stock down below in the description thank you guys so much for watching and until next time awesome appreciate it thank you so much man i really appreciate that