Stock Market Expert: A Warning on Artificial Intelligence, Memestocks, & The Next Crisis

I thrive on chaos. We traded millions of shares every day. The open outcry screaming and yelling, absolutely frenetic, adrenaline-filled, wild, crazy time. I've seen every crash since '87, the bubble of 2000, crash of '07, COVID. I'm there to forensically try and understand why the market does what it does. Is it rigged? Well, I don't like the term rigged, but is it Is there a bit of a control going on? Yes. What do you think the biggest risk is to the stock market over the next 2 years? We're in the middle of this AI phenomenon, this crazy check trade. We've got bank crises, we've got wars going on. What ends up making a crash is when you have a perfect storm where suddenly everything comes together at once. Peter, thank you so much for coming on the Iced Coffee Hour. Absolutely my pleasure. Really neat Iced Coffee Hour. Iced Coffee Hour. You're known as the Einstein of Wall Street. And where I first found you, I believe was probably 2019, 2020. Your face was everywhere on CNBC. Anytime there would be a stock market panic, stock market, you know, increase, whatever it is, your face is across everywhere. Where did that start? So, you know, I'm really happy to be here. This is great. I appreciate it. You know, it's been an amazing journey, right? You know, I'm known as the Einstein of Wall Street, the most notable photograph. I like to say photogenic face on Wall Street. And you know, historically, Wall Street has not been a place where there was a lot of press back in the old days. They're actually the press would show up on big days, and they would take a picture of this guy. His last name was Gersh. He was a broker on the floor for years. He was the Wall Street dude, they called him. Right? And that was before I was sort of well known. And um in 2006, I think it was one of the crashes we had. There was a photograph taken of me. Um and I had my hands in the air like this. The market was down 650 points. And that photograph of me with my hands in the air got on the front page of the Daily News. And then everybody sort of picked it up right away. It was sort of captured everyone's heart and sort of the feeling of that crazy crash. It was one of the big first big sell-offs. It was mid-February of 2006. pose for those photos? you're not allowed to So, actually, you know, you may sometimes seem posed, but the bottom line is I kind of wear my emotions on my chest, right? On my face. You know, the photographers actually get the images, AP, all those guys, will not take a picture if it's posed. So, all of that emotion is real. So, there's no There's nothing that's posed there. But So, that was sort of the beginning of this of this journey for me. You know, I I've had a number of TV shows on the floor for a while. I didn't think I had that much to say. And so, coming off of that picture, my face became the the face of the floor. And it ended up going viral everywhere. It was you know, the beginning of sort of virality in the internet and all that kind of stuff. I ended up on thousands of front pages all over the country. So, and that sort of got global. So, that emotion that I showed in my face, everybody loved because everybody so related to the stock market. So, that that was sort of the beginning of the journey. I mean, I ended up getting on thousands of newspapers. And So, my face became the face. It was not till a number of years later that I started to think I had anything to say, and I started doing interviews and talking about the market. How accurate is Wall Street to what you see in the movies? People like yelling and screaming and showing papers everywhere. No question about it. Back in the '80s, that was incredibly great rendition of what we did on a daily basis. We traded millions of shares every day. The open outcry screaming and yelling, absolutely frenetic, adrenaline-filled, wild, crazy time is exactly how it was in reality. There were 8,000 people in that room. You guys were on the floor with me recently. You saw how now it's you know, it's winded down to probably 7 or 800. But back then, there was a huge support staff on the floor. There were four rooms. There were thousands of brokers, 1,366 brokers. There were clerks and and and reporters and squads and you know, literally thousands of people open outcry screaming and yelling. And I love that. I thrive on chaos, right? I still to this day. So, I asked them for a regular job. And in September, they gave me a job as a clerk. I became an option clerk. And back then, so there's no training to be a broker on the floor. In order to your one's quest when they get down to Wall Street is to become a broker. In order to become a broker, somebody has to leave the post. So, I did it in 3 years. I got very lucky. One guy died, one guy retired, one guy got fired. And I moved up the ranks. And in 3 years, I went from teletypist to broker. I got my first seat in April of '88. What are the salaries like starting off on Wall Street? Starting off from the bottom, working your way up. Was it a high-paying job? No, not at all. A squad made $67 a week. My first job in 1985 as a clerk, a retail clerk, I made $21,000 a year. And then I got as high as on my way to becoming a broker over those 3 years, I think by the time I got my seat, I was making 25,000 a year. Now, you know, it depends. There were people back then already making a lot of money. But you have to realize it's important for people to know to to look at the landscape of Wall Street that there're the upstairs people and there's the downstairs people. Wall Street is called the street for a reason. Most of the people who have been traditionally employed on the floor of the exchange are not your MBAs, are not your sort of high-flying, you know, M&A, venture capital type of guys. Those are the you know, it's a different breed of people. These are people who grew up in the neighborhood, heard about Wall Street, came down there, started at the bottom. Great rags-to-riches stories. The guy who once shined shoes went on to become a multimillionaire market maker. So, there's lots of really fun stories about how people, you know, went up in the ranks. But it took a while for me to get make money. I mean, it was not until probably early '90s where I got an offer from from Ivan Boesky, in fact. So, Ivan Boesky was one of those He was the first guy to get caught insider trading, right? He was claiming that he was having premonitions about stocks trading and takeovers and all this stuff. And it turned out that he had a rabbi up at Goldman Sachs who was giving him inside information. He ended up getting indicted and fined $180 million and so forth. $180 million. He made He made billions of dollars. So, the 180 in hindsight was really just a slap on the wrist of Absolutely. So, the whole the original Wall Street movie with Michael Douglas and Charlie Sheen is the story of Ivan Boesky. Is it really? I had no idea. That's the original. And if you read the story of Ivan Boesky, it's amazing. So, I got How was he getting the insider information? He had a guy up at Goldman Sachs. He had a guy at Goldman Sachs and then when they were acquiring a certain company, they would let him know and then he would just buy. He would give him the and he'd go, "Listen, in about 3 weeks, we're going to be buying, you know, RJR Nabisco is going to be buying Beatrice or or whatever it may be." And so, he would give him that information. He would start to accumulate large blocks of stock, right? And we should one should have known it at the time, but it was not something we did know cuz he they were buying when they went into a stock, they were buying millions of shares of stock. And he was claiming that he was having these these visions at night about potential takeovers. And of course, it was not. It was a call. The guy's name was Dennis Levine. And um So, he did it for a number of years, made millions and millions of dollars. And he was there at every one of the takeovers. And everyone was like, "How did you know?" You know, it was like it was it was like I heard it I heard He used to say, I think, "I heard voices under my pillow" or something. And then of course, you know, after the investigation, I think it was a Giuliani investigation back when he was the DA, that they found out he was getting inside information. But so, it just took a while for me to end up making money on Wall Street. But back then, brokers there were brokers who were making, you know, depending on what company you worked for. If you were a house broker or a $2 broker, which was an independent commission broker. I mean, there were guys making, you know, 100, 200,000. Probably there were guys making more money than that. But the street is not you know, back then, people have this vision of these big Wall Street bonuses, right? If you look at the press from the '80s and '90s, you would hear about, you know, people making 30, 40 million dollar bonuses. And that was not ever something that happened on the floor of the exchange. Those were the guys, the investment bankers, you know, the guys upstairs on trading desks who were putting the deals together and doing things. Those were the guys who were making the major money. How does that differ from the lower to the upper? And can you move from the lower to the upper? Are they're two separate just careers entirely? It's a different career. Okay. if you work on the floor of the exchange, there's probably a cap on the amount of money you can make. Now, it's a completely different story, but back then, you know, there were people making money, but it was not a function of People who were upstairs were a different It was a different breed of people. It was a totally different job. We have to realize that us on the floor, right? Who were trading, you know, open outcry, it was a different temperament of human being, right? These guys had a lot more education than most of the guys on the floor. You know, these guys were street smart. Those guys were book smart, right? And the book smart guys who put together the big deals, you know, if you were a guy who put together an M&A deal and the deal was worth you know, half a billion dollars, your your compensation was a percentage of the deal. That didn't happen on Wall Street. We were really working hard. We were commission brokers. So, if someone's trying to understand what a stock broker does, what exactly do they do? Okay. There's So, a stock trader So, the stock trader, stock broker from the floor side is somebody who basically is at the point of execution of buying shares of stock from a market maker. Orders are generated upstairs. Think about this. You wake up in the morning, you're at Goldman Sachs, Wells Fargo, Morgan Stanley. Everybody shows up for the morning meeting. They have a customer base and assets under management, hundreds of millions of dollars. They're there to invest people's money, right? So their goal and they have a crew of analysts who decide what they're going to invest in, okay? Obviously, you know, the the better the firm, the better the analyst, the better the prediction of how the stock is going to move. So the analysts make a prediction on what they think are good investments. They come to the portfolio managers, they sit down, and they decide, "Okay, we're going to buy a million shares of this, sell 2 million shares of that, whatever it may be." They sit down at their morning meeting and they say, "Today we're going to buy a million of this, sell a million of this, and we're going to go in and out of stock." Right? Those orders are all generated upstairs. They are called down to the floor, at least in the old days. They would be called down to clerks on the floor. The clerk he'd say, "Buy me 100,000 shares of IBM. I have a million shares behind it." Meaning there's more stock to buy behind it, but I'm giving you 100,000 to buy right now. Go out there and give me a feel on what's going on in the market. Go to the market maker and ask him, "Where are the buyers? Where are the sellers? Where can I buy 100,000? I may have more stock behind it. What's the market?" The market means what's the playground look like, right? Who's there? Who's buying? Who's selling? What's the temperament of the stock for a while? Orders generated up here, it's called down to the clerk on the floor. The clerk will then put up the broker, right? Me, I'm a I'm one of the house brokers or I'm a $2 broker. Uh and he'll say, "Peter, we've got 100,000 shares to buy. I'd like to buy half of them in line. I'd like to work the rest of them, and we have a million shares behind it." It's kind of Wall Street lingo, but you can under get the sense of it that we have stock to buy. I would then go out to the market maker. We I still I think I gave you a little background on that on the floor. The market maker is an independent firm that has been allocated the stock by the New York Stock Exchange. He's there to create a smooth and active market. He's there to inject liquidity into the marketplace. He's there to coordinate the buyers and sellers. So I'll say, "Guys, we're going to bid a quarter for 200,000. We'll talk." And the sellers will go, "You know what? Great. We'll sell 250,000 shares." The market maker, if there are four buyers and three sellers, the market maker will then step in as a seller to consummate a bigger trade. If there are three sellers and two buyers, the market maker will buy stock to consummate a bigger trade. This is all a negotiation. Although before we go into that, we have to ask ourselves a question. What is the future hold for businesses? Because the thing is, if you ask nine experts, you're going to get 10 different answers. Rates are going to rise. They're going to fall. The stock market is going to be going up. We're going to see a bear market. We really just got to invent a crystal ball at this point. But I guess until that happens, over 37,000 companies have already future-proofed that business with our sponsor, NetSuite by Oracle, the number one cloud ERP that brings accounting, financial management, inventory, and HR into one fluid platform. And with just one unified business management suite, you have just one source of truth, giving you all of the visibility and control you need to make quick decisions. And with real-time insights and forecasting, you're peering into the future with actionable data. And when you're closing the books in days, not weeks, like unfortunately I've done for way too many years, you spend way less time looking backwards and a whole lot more time looking at the next opportunity. And speaking of opportunity, right now you could download the CFO's guide to AI and machine learning at netsuite.com/iced. Again, the guide is free to you at netsuite.com/iced. Again, it's netsuite.com/iced with the link down below in the description. Thank you so much, NetSuite, for sponsoring today's podcast, and now let's get back to the episode. How do market makers make money if all they're doing is injecting liquidity into the market? Are they taking a certain percentage off of each trade or are they employed? Is it like a government thing? Are they employed by the New York Stock Exchange? No, they're employed by their firm, but what they do is they buy low and sell high. So his job is to constantly be buying and selling, facilitating the trades, but in the meantime making money. His goal is to buy low and sell high. Mhm. You have to realize in the absence of a public buyer or seller, the market maker has to buy the stock or sell the stock. So in the case of a crash, the crash of 1987, where the market opened and proceeded to sell down 600 plus points or 30 plus percent, stocks went from 160 to 60. At one point, the public stopped buying the stock because they ran out of money or they watched their positions go down 100 points. The market maker had to participate all the way down. So at the end of the day on Monday, the day of the crash of of of of Black Monday, the market makers were long. They owned tons of stock at much higher prices. At the close of business, if you'll remember that great scene in Trading Places where they tried to confiscate their seats, they said, "Mr. Duke, you know how it is here. At the end of business trading, you have to come clean with how much you need money to capitalize the trades you own." So if the market maker was buying stock all the way down to 60 from 160, he needs to have money in the bank to support those trades. Many companies went bankrupt on the crash of the Black Monday because they didn't have the money to support those trades, okay? But obviously, their their goal is to facilitate trading between public buying and selling and make money along the way. It doesn't always happen, but that's the goal. What was it like on Black Monday, 1987? What was that like for you? I was a clerk. I was not a broker yet. I was a retail clerk, and it was absolute chaos and insanity. That was my first sense of kind of there was a lot of fear going around. I mean, the market was absolutely careening off of a cliff. There was no technology back then. It was all paper, right? So you know, basically orders were being spit out of a machine, the phones were ringing. We were getting orders, "Sell, sell, sell," just like you would see in a movie. And brokers were just coming into the booth and you would hand them stacks of orders to sell everything in sight. They would run out to the crowd, and just at that point, it wasn't a matter of negotiation. When a market is tanking, you just walk into a stock and go, "I got 50,000 to sell. Where are the buyers?" And then you would hit a bid. You would hit a bid. You would hit a bid. Wow. And then you would run into the booth, "Give me a report." I would call it up to the customer because you wanted to give the report to the customer before it traded lower, Right. right? You didn't want to say you sold them at 50 bucks and then it's it did bounce back to 51, right? So you the accuracy and the timeline of this whole negotiation is really pivotal. So it was crazy. It was the wild one of the wildest days, I would say, of all the crashes. I've seen every crash since '87, the bubble of 2000, crash of '07, COVID. Clearly the craziest day of all time. What caused it? Do they know yet? Yeah, they they absolutely do. Yeah, so in each crash, and I've done a lot of uh talks about the different components that made up each crash that we've seen, right? And for each crash, prior to the crash, the markets were trading at record highs. And then something happened. Obviously, in the crash of 2007, what happened was that there were the the um they were selling mortgage-backed securities mortgage-backed securities that had nothing behind them, right? That That was it. They were packaging products out and selling credit and and houses to people who they knew could not afford it, right? And they ended up then their They had their product was worth 50 cents on the dollar. They knew they had to unload it, so they put it in a nice little box with a bow, and they went and sold it to somebody for 50 cents on the dollar. Everyone's looking for a discount. They didn't really They trusted the seller because he was Morgan Stanley. He was Goldman Sachs. They didn't think that I was being sold, you know, an empty box. So they bought it, right? And then what ended up happening that They realized suddenly finally when the market started to crash, they looked under the hood and realized there's nothing in this box. What they gave me is bad debt. So they tried to off it for 25 cents on the dollar. So suddenly they went around this this sale of massive mortgage-backed securities that were really becoming worthless were going around the world to the point where it all that [ __ ] hit the fan, and basically everything tumbled. That was the crash of '07. I'm not really clear about the the what facilitated the crash of the '87 crash. There were some insurance things. There was some potential technology that was starting to come into the marketplace. Uh it was it was sort of a perfect storm. Markets can handle We saw it during COVID. We've seen it during the interest rate crisis and all that kind of and and inflation crisis. Markets can handle virtually anything if it's being given to them one thing at a time or two things at a time. But what ends up making a crash is when you have a perfect storm where suddenly everything comes together at once, right? Where you just the market cannot really digest all of these bad this bad news that's happening, and you end up having a crash. So after that, how did your career continue progressing? How did you work your way up? Okay. So I went from through uh teletypist to option clerk, retail clerk, institutional clerk. I ended up getting lucky and I got a seat on the stock exchange for this one firm. I ended up moving past that firm, a couple other firms I got into. I got a higher offer making more money. That firm did not want to pay me much money. So I got an offer to $80,000, I told you, to do convertible arbitrage. It was another kind of trading. Uh it's more complicated than we can talk about here. So I got hired to do that and that that worked well. But look, I've now I've been doing this for 37 plus years and so I've worked at numerous companies. Now I work for myself. Probably 16 years ago I developed I built a trading strategy around the S&P 500 and the information that we get on the floor. So my my my career progressed really beautifully along the way. Although it's had its its you know, it's had its pitfalls. In 2006-2007 during that financial crisis my business dried up. I actually I just did an interview about it the other day where that there was a gentleman who asked me if I've ever been broke. Right? You know, there's a guy once around the street asking people if he's ever been broke and he caught me when Lehman Brothers went bankrupt and there was a massive financial crisis. Everything dried up around the world. People were losing their jobs en masse and so as a broker on the floor everybody was obviously super hesitant to just give I was what's called an independent $2 broker. So, I didn't work for a house. I was not making a salary. I I I I ate what I killed. Right? That was how it worked. And so if there was not that much out there to kill I did not make much money. And literally there was a 2-year period in 2006-2007 where I was not making any money and I knew that no opportunity was going to find me at home. It was one of my it was a period of time I was going through some things personally and I think a lot of that that trajectory in the journey that I described to you which was really like a fast and furious rise in Wall Street kind of came to an abrupt halt with the financial crisis of '07 and everything started to tumble. I started to tumble, you know, spiritually and emotionally and financially. You know, we know when you're doing well, you know, I mean that terrible line by Jordan Belfort I've been rich and I've been poor and being rich is a lot better. So, having had this really good career on Wall Street and things were going well, having two children, supporting them and a wife and then suddenly everything dries up and I lost everything for a while. I I was confronted by um my DNA. I thought I I dug deep and I realized I could give up and freak out and you know, go get a job at Home Depot or I could sort of dig deep into my emotional strata and figure out what to do. And so what I ended up doing I've had really great mentors along the way and I learned from you know, I knew that you learn from failure more than you do from success. So, I literally got up every morning 2 years and went into work and was not making any money. I never told anybody I wasn't making any money. I didn't tell my wife and kids. I was borrowing money, you know, from Paul to pay Peter. I was doing a lot of different hustles trying to make it by without letting anyone know that I was struggling. But I knew I was smart enough and I'd learned enough like from my parents that if I don't put myself out there no opportunity is going to find me cowering under the covers in my bedroom at home. You know, so I got up and went out there to put myself in front of in front of the forces of evil. And literally a year and a half into that going to work every morning literally making no money I ran into someone on the subway who had been a customer many many years prior. Who I had not seen in many years. And he asked me how you doing? And he was still a trader and for the first time in a while I kind of got honest and I said, you know what? I'm I'm I'm broke. I'm struggling. I am not making any money. And he goes, you know what? You were one of my best brokers. That's crazy. I know I know what's going on in the market and what not. Why don't we why don't we hook up together and I'll start giving you business. And he did and we ended up growing a business together and that sort of took me out of the the depths of darkness and I started making money again and we ended up trading for another 20 years together. Up until recently he kind of just recently retired. But you know, I'm say say all this to say that it's not always a straight line, you know, to success. It's not always even if you're on a road to success it doesn't always stay that way. You know, and that sometimes you you know, you're going to have to step over dead bodies along the way and sometimes you're going to have to fake it till you make it and sometimes you're going to have to wake up, you know, feeling like you just can't do this anymore but you got to keep doing it. So given all your experience in the stock market, what do you think the market is like today? Do you think that prices are too high? Are people becoming too greedy, too euphoric? What is your opinion on the market? I like to sort of frame everything from the post-COVID world. Okay? So, let's think back to February 12th, 2020. Markets were trading at record highs across all indices. The consumer was in really good shape. The banks' balance sheets were in an extraordinary shape and basically the economy was doing great. You know, and then and that turned out to be the high. Nobody knew it at the time but that's what it turned out to be the high. Suddenly the COVID story unraveled and we went from these record highs and we careened off a cliff until May 20 March 23rd, 2020 which was that bottom right then. And that was a fast and furious sell-off. That was a different So, I've done a lot of analysis around the different crises that we've had and I don't use the word crash or crisis lightly because you know, the market loves to catastrophize things. The media does. Right? Suddenly you got to like like 2 days last Thursday. We've been going up for 18 months in a row. The market sold off 50 points and now it's the end of the world. Worst day since 2022. Yes. Right? It's that catastrophizing mentality which is it's completely nuts. But but anyway, so that was an extraordinary time and you know, look so I love to analyze the different components that make up these crashes. Crash of '87, crash of '29, crash of 2000, 2007 and what not. The crash of COVID's crash was an extraordinary one and it was different than anything else. People have often asked me what did it feel like on the floor? And I go back. Look, I got COVID March 15th, 2020. I was patient zero. You know, I almost died. I was given 4 days to live. I got meningitis. I've had nine surgeries. So my life is was completely upended by COVID. I ended up going into isolation. I had 103.7 for almost 3 months. I had swelling on the brain. My cervical spine collapsed. It was a [ __ ] storm. And my son ended up running my business which was an amazing thing. He really stepped up which was great. But the market which is important to note so 2007-2008 the financial crisis, the Federal Reserve who's got we all know what they do but they they've got tools to deal with inflation with all the different things that the economy goes through. Right? They're given tools to control and affect the money supply. So, the crash of 2007 was they threw $800 into the market as a stimulus to basically bankroll the companies that were going bankrupt and the banks and the brokerage firms that were going under. It took they did that they put that 800 billion into the market over 18 months and it took 9 years for the market to get back to even. So, COVID came along and um the Federal Reserve realized that we were in a huge potentially global shutdown here and it was already happening. The market had crashed. Dow down 10,800 points. S&P double digits. Right? And so they realized that they had a tool which was the stimulus package once again. They looked back at what happened in 2007 and realized that that was not going to fly. And so they put $3 trillion Okay? 800 million over 18 months of '07, 9 years to get back to even. 3 trillion in 3 months we were back to even by August 19th. In 3 and 1/2 months we got back to even. We were up 20% in 2020, 28% in 2021. Right? Extraordinary. Everyone was saying if you remember people were going like everyone's dying. There's 3 million people dead. The world's coming to an end and the market stock market is going up. Right? So, that kind of changed the trajectory of everything. That kind of is where the economy and the world and the stock market kind of took a divergence. Right? And now there are times in history where they traded together. The economy's good, market's good. Economy's bad, market's bad. Or sometimes they go their opposite ways cuz if you think about it the stock market people who's invested in the stock market? Not people who are struggling living paycheck to paycheck. It's more people who have money. The 1% of the 1% It's a K-shaped recovery. It's growing with the Exactly. And they're fulfilling their own destiny here. The wealthier people are putting money in the market. Okay. So, post-COVID world everything kind of changed. The world changed, markets changed and what not. We saw 2022 which was basically So, suddenly we're sitting here in 2021 we're we're we're trying to get back online after COVID. Basically everything had shut down. Oil production, lumber production. Nobody was building houses. Nobody was flying planes. Nobody was doing and suddenly inflation took off. Right? We suddenly had 8 and 1/2% inflation. Everything got super expensive. Nobody wanted to go back to work anymore. And so we're in this situation where I said, what does the Federal Reserve do? And also we printed $3 trillion. You know, I think if we hadn't have done it we'd all be on breadlines today. So, I'm a fan of Jay Powell what he did. Some people believe that that's why the inflation was happening cuz we printed all this money. But if we didn't print it we would be in worse shape in my opinion. Anyway, um So, suddenly we have a major inflation. What do you do? The Federal Reserve has a tool to take get money out How do you make inflation go down? To take money out of the system. We were trading on zero interest rates. Bank to bank, business to bank. They were able to borrow money for zero. Free money. That's why the tech sector grew. All R&D, biotechs were on fire. That's why that happened. So, people need to understand what makes up the market and the market going up and down. So, and I think it's important for them to understand why we are where we are today. That's why I'm sort of telling the story this way. So, suddenly you have high and high People aren't going back to work. We're still in this COVID mode, and the Federal Reserve decides that, "Okay, we were part of the problem. Now we got to be part of the solution. So, what are we going to do? We're going to raise interest rates so that these firms that have been borrowing money and companies and and banks and businesses for zero are less likely to borrow money. We're going to start to In order to curb inflation, we need to take money out of the money supply. The only way to do that is to raise interest rates. People are less likely to borrow." So, we spent the next 18 months, consecutive months, raising interest rates, right, to pull money out of the money supply. And we were able to get inflation down from 8.5% almost 2.5 now. Once again, job well done. Okay? Uh throughout all of this, we're in the middle of this AI phenomenon, this crazy check trade, you know, we've got bank crises, we've got wars going on, we've got so much going on, yet and we've got this meme phenomenon, and we've got crypto, and we've got like this is a wild storm we're living in, right? And so, net net at the end of the day, the market going higher and higher is a bit of a self-fulfilled prophecy because those people who have been in the market throughout all of this, people who bought the market during the crash of COVID or who have been in it since then or were in it before and have have been able to experience this amazing rally have made a lot of money. And they're reinvesting that money. And at net net at the end of the day, when you're presented as a wealthy person on where to put my money, and you see the real estate sort of dead because interest rates are going up and la la, and crypto is questionable, and the stock market's going up double digits every year, well, I'm going to put my money there. So, we fulfilled this this destiny by putting more money and more money more money into the market. We are in the second inning of an incredible game in the AI game, and Nvidia is obviously best of breed. That this is a in the near term, we're all going to be living the life of the Jetsons. Yeah, you know, you remember the cartoon The Jetsons when you were growing up? Like robots in your house and and so much expansion within the AI and that and that whole tech game. And so, that is that's a huge part of the marketplace. I'm saying all this to say you're asking me the question, "Well, why are we where we are and what is what do people think about the market?" The market is incredible There're always going to be people who are saying we're going to say, "I know how we got to where I uh that it can't go any higher. Uh that you've got to short the market. I mean, this is crazy. How could it go Yet, I'm a I'm a forensic broker. I'm not a financial advisor. I'm not invested in the market. I'm there to forensically try and understand why the market does what it does. That's my secret sauce. And that I that's what gets me up in the morning. I I love that part of it. And if I do that on a daily basis and I'm looking at the market wondering, "Is it overbought? Is it frothy? Is it going to crash? Is this a bubble?" Uh it's not point it's not telling me that story, right? The story that I'm being told is that the market has a lot more room to grow. That tech is a big part of it. That there are a lot of other sectors that are powerful. That we've got 12 trillion dollars on the sidelines selling cash and mutual funds that have yet to be put into the market. That there are tranches of people who have never wanted to never were always afraid to buy into this crazy wild trajectory that the market is doing that are eventually going to have to hop on board this train that's leaving the station. So, net net, yeah, markets go up, markets go down. You know, we This is the longest time I think in decades that we've not had at least a 1 or 5% pullback in the market in his almost in history but decades, right? I mean, every selloff that we've seen over the last 8 months or a year has been so We had a 10% selloff in April, it was the end of the world. It was an opportunity. It was a buying opportunity, right? Nvidia went from 940, nobody wanted to buy it at 940, it's too frothy, it's too expensive. It went down to 736. It's now trading at 1,500 post-split. So, look, uh you know, the the economy is sort of catching up with the market, I think. People are starting to do better. Some people are starting to go back to work. The, you know, the the labor market is still a bit of a quandary, but net net, the market seems good to me. Yeah, from my perspective, it seems like the narrative is that there's all this money sitting on the sidelines in money market accounts that's making 5%. And that when the Federal Reserve lowers interest rates, that money's going to be making 4%, and they're going to say, "Well, you know, stocks have done even better. Let me finally invest in stocks," which will push stocks higher. What do you think the biggest risk is to the stock market over the next 2 years? I've been asked that question a lot over the last couple of weeks. What could the market get tossed that would dislocate this crazy rally? Right? And if I'm to analyze it, and I will go over it, and I will tell you what if we say, "What has been thrown at it over the last 2 years that had that the market has completely rebuffed?" We had a major banking crisis last year. It was a very short-term selloff. That should have That should have dislocated the market. For sure. We have two wars going on, major. Both of them are in a demographic where oil is involved, so it's got a it's got a multi-component axe to it, right? Once you have oil, if you have a war in a place that nobody really cares, that's one thing, but you're talking about a place that is as we saw that, remember, with the beginning of Ukraine thing and then the beginning of the Middle East thing and the Gulf of Hormuz and the can't get the, you know, people were blowing up you know, oil couldn't get to where it wanted, and oil went from negative 25 to 125. So, um what could the what could the market get tossed at that it would politics have no effect on the market whatsoever. Once again, confirmed. The debate, if you're a pro-Trump guy and and you watched poor Mr. Biden completely implode, market did not respond to that. If you're a Trump guy and Trump just got attempted assassination over the weekend, the market did not respond to that. So, that's not it. The banking crisis, that's not it. Two wars, that's not it. Earnings, some, you know, we have great earnings quarters and we have mediocre earnings quarters. You know what? That's just part of the the cost of doing business. So, what is it that could get get tossed at the market that would dislocate this? I don't know. And I don't know is the answer to that. It seems like there's the assumption that the Federal Reserve could always step in, and that seems to be a backstop. It almost does. That no matter what happens, like let's say the banking crisis, the Federal Reserve in a way stepped in and said that we're going to make sure all the customers get are are 100% whole in the situation. There's not going to be any disruptions, and sure enough the next day, cuz I remember that happening on a Saturday, by Monday morning, everyone was running as normal. And so, there's this belief that no matter what happens, the Fed could always step in. Do you think they're always going to continue stepping in and almost acting as a backstop that no matter what happens, the Fed has these levers to pull of either we could print more money or we could lower interest rates. And if we do 100%. It's almost like it's too big to fail. Why would they not? They're there to support the economy. Nobody benefits from a an imploding economy. It just nobody does in any respect. say that the economy's then rigged because in a way it's like if the Fed is just there to help the economy, they could just keep pushing things forward. to look, that's some more conspiracy theories than I would want to go. We're all in this We're all on this boat together. Right. Right? We can take each other down, we can take each other up, we can dislocate the [ __ ] and throw the wrench in the in the in the in in in the boiler room and really blow the thing up. At the end of the day, nobody benefits from that, right? Now, are there people who see you're kind of think, "Is it rigged?" Well, I don't like the term rigged, but is it Is there a bit of a control going on? Yes, but that's their job. A Federal Reserve has been given tools to help support the markets and whatnot. Not everybody gets what they want all the time. Le If it was completely rigged, well, then everybody should have been bailed out. Not everyone was bailed out. GM got bailed out. AIG got bailed out. Those turned out to be bailouts that worked out because whoever the Federal Reserve, some of the big players, think about it. We live in this system where, you know, if it wasn't the Federal Reserve that helped the banking system during that crash last year, Warren Buffett steps in, right? He bailed out General Motors, he bought stock in, you know, in a number of stocks went So, there are wealthy wealthy J One of the people who bankrolled the the banking crisis last year was was was Jamie Dimon. Right? So, it's not just the Federal Reserve, and I don't I just don't like the word rigged. But before we get into that, let's get real. Being an adult has its high points. Like you can eat ice cream for dinner, you can play video games whenever you want. In fact, you can even eat ice cream while you're playing video games. But it's not all fun because you have to do your taxes, figure out what's for dinner every night, and of course, make doctors' appointments. But fortunately for that one, there is our sponsor Zocdoc, the healthcare app that makes adulting just that much easier. For those unaware, Zocdoc is a free app and website where you can search and compare high-quality in-network doctors, choose the one that's the right fit for you, and then click to instantly book an appointment. about in-network appointments with more than 100,000 healthcare providers across every specialty from mental health to dental health, eye care to skin care, and so much more. You can filter for doctors who take your insurance, are located nearby, are a great fit for any medical need you may have, and of course, are highly rated by verified patients. You can also see their actual appointment openings, choose a time that works best for you, and then click to instantly book a visit. And Zocdoc appointments happen fast, usually within 24 to 72 hours of booking, and you can even score same-day appointments. I'd highly recommend checking out and trying Zocdoc because they just make the entire process incredibly simple. I'll tell you, I booked doctors' appointments in the past, and it's all incredibly complicated. It's overwhelming. Anything that makes the process simpler is 100% worth it. So, stop putting off these doctor's appointments and go to zocdoc.com/iced to find and instantly book a top-rated doctor today. That's zocdoc.com/iced zocdoc.com/iced with the link down below in the description. Thank you again to Zocdoc for sponsoring today's episode and now let's get back to the podcast. But what do you say to the people that feel like it seems like a house of cards because I mean the economy appears to be doing well. The stock market continues to hit record highs, but at the same time a lot of people are struggling with like the basic necessities like groceries. I mean housing is incredibly expensive if you want to buy a house. And if people are doing really poorly and that that's a lot of people shouldn't the stock market be a little bit reflective of the people that are doing poor financially. I'm sure a lot of viewers are probably thinking like how does this, you know, it seems like the economy is doing well and one administration saying it's doing incredibly well, one saying it's not doing well. And they just feel conflicted cuz they're struggling. I understand. Uh look, as I started to say to you sometimes the market and the economy are in concert and sometimes they are not. You just said to me shouldn't the market reflect that? Well, the market can only reflect what it is. If a company is doing poorly and they have poor earnings, the stock goes down. Right? That's a function of uh uh uh uh of of of of of their customers. Right? At the end of the day that that's how things go. Right? So, um I cannot speak to Yes, there are people who are struggling and I that's unfortunate. I also look at Think about it, too. We have if you look at inflation, you look at the cost of of of food, you look at the cost of living, and you uh uh cost of gasoline, the things that are the components that make up inflation, net net on a global level, we are actually uh uh way better than 80% of the rest of the world. Right? So, it's a matter of how you look at it. Now you judge it. I kind of think people are better off than they were 2 years ago. It's not ideal, right? Food is expensive. I get that, right? And and a lot of expenses and I feel for everybody as far as that goes, but we are we're working towards that a better place on that. That's the best you can have. I mean it's a matter of Look, you can say it say where you are and [ __ ] about it or you can say, "You know what? We were there and we're now here, so we're doing a lot better. Let's hope we keep going." So, do you think people, the average viewer listening right now, can beat the S&P 500 because Graham and I are of the type where like he's done a little bit of swing trading, a little bit of stock picking back in the day. Right. But now we're both at a point I've I lost a lot of money trying to do that. I got a little bit greedy and uh Trying to beat the S&P? Well, I I got into options trading and I was selling options. It was doing really well and I'm like, "You know what? Well, maybe I should try buying options cuz I made money selling them." That's when I lost everything. But we're a firm believers that the only thing, not financial advice, that we would ever feel comfortable like openly talking about our own investing would be like uh S&P 500 index funds. index funds, stuff like that. Do you think the average person listening right now could make money doing other strategies or would you just recommend index fund investing? So, I can't recommend anything. Disclaimer disclaimer, everybody. Uh look, there's there's I've heard a birdie say that if you put $250 into the S&P 500 every month from the age of 18 to the age of 60, you'll have $1.5 billion of passive income. Great. Sexy, right? A sexy is you'd want it. Think about that. The S&P historically dollar cost averaging, you can make money putting some money aside and let's go. And not everybody has 250, put $10, put $5. One of my big things that I always talk about is investing in stocks and not stuff. Right? People need to really look at their lives, think about it. We are the greatest consumer generation in the world. We love to buy stuff. Right? Everybody's got a closet full of stuff, right? One of the the stories I always tell is if your iPhone 14 is not broken, you don't need the iPhone 15, but everybody goes out and buys it. How about we change the mindset and instead of your buy go out and buy the iPhone 15, go buy yourself four shares of Apple stock. If you did that and the I'm Tony Robbins is now using my freaking line on this one. Investing in stocks and not stuff. And the fact is that if we take all the things that we use on a daily basis and we cut back a little of that, you don't need nine coffee lattes, go buy a little Starbucks. You don't need nine yoga suits, go buy a buy a little couple of Lululemons or whatever. But invest in stocks and not stuff. Identify things that potentially may go up in value. It's very hard to beat the S&P 500. I have a school with my partner David Green called Wall Street Global Trading Academy where we teach thousands of retail traders around the world technical analysis and risk management on how to trade. There's a successful way of trading and there's an unsuccessful way of trading. You were making money because you were collecting premium. You decided to go out there and become a stock picker and buy stock you had to confront the fact that, you know what? Wow, if I put up $1,000 to buy an option and it expires, money lost. Right? So, it's a matter of really learning the game. There is a playbook, right? For beating the S&P 500 and it's surely not easy. So, there are certain rules and we teach them every month in our master class, right? Have a stop. Have a plan when you get into a trade. Why am I buying it? Right? Because the charts tell me to. Okay? Have a stop order on every trade. Have a plan when you get into a trade. Take a profit when you can, not when you have to. Okay? Never turn a winning day into a losing day. That means that if you're up $1,000, you reached your goal. Have a goal of how much you want to make in a day. If you reach your goal, turn the machine off. It's the best you're going to get. If I'm up $1,000 and I insist that I got diamond hands and I got to keep trading, the 20% rule. If I lose 20% of my what I made on the day, then you got to turn the machine off. Right? Hire someone to stand behind you and hit you in the head with a 2x4 and you'll probably do well trading. If I'm having a bad day trading and I have three losing trades of $50, I turn the machine off. I'm having a bad day. I'll come back from a bad day. No revenge trading. So, there are rules that make you a successful trader that may make you able to beat the S&P. But how many people have the emotional maturity to follow that? Like I feel like all of these things Very Yeah. It's The psychology of trading is the hardest part of this game. I can teach you David Green, my partner, who's a master technician, who was a market maker on the floor. He left the floor. He thought he knew everything. He lost 300 grand in the first 3 months. He said, "This isn't sustainable." He went out and learned technical analysis and built a strategy around successful trading and the psychology around it. It is very hard. That's the hardest part of this because we get wrapped up. I'll give you one quick analogy. There's two kinds of gamblers. Two people go to Vegas. There's one guy who's got a thousand bucks. He's going to play $1,000. If he makes a thousand he has a goal. If I make a thousand, I'm going to turn off I'm going to step away from the table, go see Celine Dion, and go to dinner at Ruth's Chris with the family. Great scenario. Great plan. Or the other guy who goes in with a thousand dollar and has no plan. He's up a thousand. He's got diamond hands. He's great. He goes all in. He doubles up. He's up three grand, up four grand. Suddenly, he's overdone it. He starts losing. He's to lose down a thousand, down two thousand. He goes to the ATM four times and by the end of the night he's sitting out on the curb, you know, smoking Lucky Strikes, you know, drinking Hennessy. Right? There's two different people the way they trade and the way they gamble. Right? It is it's a it's a mindset that you have to go in. This market has never been as volatile as this. So, if that's the case, why can't you get an algorithm to trade on those beliefs? Because I feel like that would not get emotional. You could set certain parameters, certain things that it could look for, set the stop losses, trailing stops, and just have that trading on autopilot in the background. I Well, you know why? First of all, I don't know how to code and I don't know how to That's fair. I'm a really anti-tech guy. I don't even know how to freaking computer. I'm a people person. I'm a humanist and I'm like one person to another. Yeah. Maybe there is an algorithm, but you have to realize there are a lot of extenuating circumstances. There's a lot of nuance around the market and things can go wrong. Right? And it it's not like shooting fish in a barrel. So, you know, I'm willing to bet that there's probably some kind of algorithm that you may be able to build that may be able to lock in some profits. I don't think so, though. There's a lot of There's human error. There's a lot of emotions around it. Um it's not easy. That's why 80% of people who try day trading fail. Right? That's why in our class in our school in our academy, the main thing we teach is the psychology of trading. Right? Yeah. How is Nancy Pelosi such a good investor? Wouldn't it make sense for a hedge fund to go and hire her? I'm not sure you'd really want her around the house all the time and and fund. So, let's that's a great question. And you know, why and I've I've I've met I've brought it up a lot. Why is it that, you know, people in Congress are able to get informa It's inside information. Let's be honest. It's got to be. These people are not traders, but they're making hundreds of millions of dollars. So, if I get prior knowledge that COVID is attacking the United States and I buy a bunch of uh Moderna and I sell a bunch of airline stocks and make a million dollars, well, then then I it's not my smarts. It's inside information. You know, if you know the show Billions, right? And with which is the story of Stevie Cohen, okay? Uh uh who's who runs 0.72, one of the great hedge fund managers of our time, right? The belief was that he made a shitload of money off of um the the 9/11, the World Trade Center. Right? There are people who take situations, analyze them, and trade on them, whether it's good news, bad news, people getting hurt, whatever. Right? The stock market is you know, it's it's not rigged. It's just a matter of what you do with the information you have. Right? I mean, you know, there look, if you want to be the there are funds now. There are trading apps. Right? I've spoken to them all. You can go to Quint Quantitative on Instagram and they'll print every trade that's in in Nancy Pelosi's portfolio. If you there are there are um trading apps that can actually copycat all the trades of people in Congress. If you want to open up those accounts and and copycat them, you can do it, too. The problem is though that isn't it? Don't they give them like a 30-day window to report that stuff? If you're a government official so some of it's nowadays the information comes out a little earlier. But look, that's look Warren Buffett announces he's taking a 5% stake in XYZ. Everyone runs in to buy it. The bottom line is he may have done that 6 months ago. Right? So it's a matter of knowledge, information is gold. It's a matter of what you do with the information. You know, is it is it a little bit rigged in that way? Yeah. Should those guys in Congress have privy to the information that could be tradeable in the stock market? I don't think they should. I don't think that's fair. I like a fair I like a fair playing field. What are your thoughts on Wall Street Bets and what was the New York Stock Exchange floor like when the whole GameStop thing was happening? I'm sure cuz there is like a a Citadel booth in there. They're they're market makers and they they were the stock that traded the GameStop. And they they were the ones suffering. They were the ones that all the people were blaming. And they benefited and they suffered. And I don't want to get too much into name-calling cuz I work with them every day. But yeah, that was a little bit of a wall that got crossed there because Citadel was the one that is the market maker for GameStop and then there was Melvin Capital and then all the short stuff and whatnot. Wall Street Bets look, I actually know the guy who started who was the first Wall Street Bet guy, Jamie Rogozinski, who was We had him on the podcast. Jamie's a genius and he's a sweetheart. He's a good guy. He ended up getting ousted by his own his own rats. Right? I just spoke to him a couple weeks ago, actually, and he's wonderful. You know, there's nothing there's nothing to say nothing better than to say about what there's some smart people out there, you know, and a lot of them are willing to share their their smarts. I like Jamie. Jamie's amazing that way. You know what? It was wild and crazy time on Wall Street that day. GameStop stopped trading 29 times. Okay, you know, I we felt it was an attack on us. We felt that it compromised the integrity of the floor. But you know what? At the end of the day, I mean, look, I'm not a I don't like to shoulda woulda coulda [ __ ] and holler about stuff like that. At the end of the day, the game was made and if somebody's able to to you know, figure out a way to mess with it, you know what? Until we find out that it's really fugazi, then you know, it's going to happen have to happen. What ended up out look, it was a fascinating phenomenon. You know, that happened then. Now, what I'd love to talk about is the recent resurgence of Roaring Kitty. So Roaring Kitty, in my opinion, was a good bad guy. The guy obviously came along. He had a bit of a he had a good streak. He made a bunch of money. Right? But what ended up happening with him and what I really am angry about recently is that he what he's doing now, what he did by coming out and saying I'm long a billion shares a day and he got everybody to buy GameStop to $67 after the close of market business that day. And for for no you have to real when when you have a platform, you need to know who's following you and you need to know the effect of your words on them. I'm not going to have a platform and say [ __ ] that's going to make some kid jump out a [ __ ] window. Excuse my language. You know, more people lost money that day because he went out there and touted that stuff. Right? That's irresponsible. In fact, in my opinion, it should be completely illegal. You need to know that people are following you and they're going to follow you to the end of the earth because you said what was the mindset behind that? When he went out and he said I got I'm I'm coming back, you know, I'm in GameStop and I've got I own a billion dollars worth of that stock. What is the retail amateur irresponsible you know, first time newbie trader thinking? Well, he's never going to let it go down cuz he has a billion dollars. He's not he doesn't want to lose money. So everybody ran into the stock. The next day it went down to 20 again. Right? And everybody lost money but him. He may have lost money, but we don't know what he's really doing. I mean, you know, look, you can hide behind the mask of social media in so many different ways. You know, um Yeah, my understanding was that he didn't sell and they're trying to get him for market manipulation, but he's trying to say his whole live stream, I thought was a genius play from his perspective to show that he that he's not pumping the stock because when he went live the stock went down. And so that's his argument of saying, look, I don't have a positive impact on this. I went live and it went down and here's proof that I'm not manipulating the stocks. I see I see the perspective personally, I do tend to side with it being closer to market manipulation because he's posting about such big positions. But then you get to the point of where do you draw the line of if you know, if let's just say Jack's uncle goes and posts on Facebook saying, I bought a million dollars of the stock. It's going to have zero effect versus if someone else with a large following says the same thing, it will. And where do you draw that line? Is it like at a certain follower account, a view count? What if Jack's uncle posts has zero following, but that post for whatever reason just goes viral? Now all of a sudden is he liable for something he said that happened to go viral by chance? It's such a weird I agree with you. It's a fine line. And then also personal responsibility if someone is following Roaring Kitty and you know, then it's gambling at that point. 100%. Everyone is responsible for their own hitting of buttons. So look, if you're going to get into bed and do that kind of stuff, then you're you're on your own in a way. I felt that what he did was market manipulation. I think his his live stream was a bit of a psychotic rant and the guy doesn't, in my opinion, look particularly stable, but that's not I'm not a doctor. But at the end of the day, I felt that was irresponsible in so many different ways and we don't really know what's going on in the backdrop. He may have had somebody selling it. He may not even be long all that stuff. I mean, how do we know what's really going on? Right? At the end of the day. So, you know what? I'm not look, at the time, I thought it was fascinating what happened, the fact that you can use social media to corral the troops to take a stock that is bankrupt and take it from two to 483 and back to three. Fascinating. For me as a trader and somebody who is an educator and is trying to get people you have no idea how many thousands of people have come to us, me and David Green, and said I'm still long Rivian at $98. I'm still long a GameStop at 480. I analyze these meme stocks. I know that a majority of the volume is at the highest highest price and most people have gotten caught long these things at a higher price. And as as as your point, everyone is responsible for hitting their own button. But at the end of the day, I'm my my job is to try and level the playing field and educate people about what really goes on and how to make some money and do the best they can. And so yes, at the end of the day, it's everybody's responsibility. If you do that, but look, we saw some guy jump out a window who was trading Robinhood, if you remember. Some kid committed look, so social media is is a two-sided coin. It can be really good. It's a matter of what you do with your platform and it can be a dangerous space, too. You know, one needs to have personal responsibility for what you do and if you're a notable person on social media, you should have a some responsibility in what you're saying. Who do you think is the most effective investor of all time and what's the best investment you've ever made? The best investment I ever made was in my children. Up until recently, I never owned a share of stock in my life. I am as a registered broker, I'm not allowed to be in a stock for myself and for my customers in a 30-day period. So I decided many many years ago I wasn't going to invest in the stock market and I've never invested in the stock market. Recently, I inherited a little money and I gave it to some wonderful guy who is trading it, but I don't know what I'm in. I never picked it. I never called it. I said, here's a couple of shekels. Make me some money. But but so I so there I always drew a strict line between that. What about compounding growth? Like knowing about all this stuff when you were young like, you know, you could have invested say 30 years ago. You didn't think to like, okay, all these other people are doing it and I see I see them getting very wealthy. So as long as for the 37 years that I've been a broker, for me to invest in the market in stocks that I'm not in for customers was a pretty complicated thing. Yeah, are there people on the floor who trade stocks that they're not in for customers? Is it legal restrictions? Yeah. I'm a registered broker. I'm not allowed to do that. So I can't be in a Also, I did not want to go into my job. I'm I'm a customer guy. I like So if I'm if I have a position for me, I'm long a thousand shares of, you know, Union Pacific and my customer gives me a million shares to sell. No matter how good I am, it's going to taint the way I I'm going to, you know, look, I was on the floor when Jordan Belfort came down to the floor and recruited eight brokers. He offered everybody a million freaking dollars to become one of his stoolies, one of his front-running scum. And eight brokers followed him. Okay? They said, yeah, I'll sell my integrity for you. Right? And what he wanted to do was he wanted to front-run orders. He found brokers who had large businesses. They were There used to be brokers who would stand in IBM, would stand in Berkshire Hathaway and they had all everybody gave them their orders. They had huge order flow. Right? So if I have a billion it's not it's not rocket science. If I have a billion shares of IBM to buy, Jordan wanted what Jordan wanted people to do was buy the first 5,000 for him. And then when you're done on a what's called on a clean up, at the end of your order when you're about to buy your last 5,000, sell my 5,000. That's called front running. Wow. So, that's what he did. That was one of the things he did. And there were people who are willing to sell their integrity for a million bucks to work for Jordan. They got taken off the floor in handcuffs by the guys in windbreakers. Okay? Look, and I'm not a fan of his. I think he's a bad guy. He's still not paid back 80% of the people he took money from. I'm a firm believer in second chances. I'm happy to speak to him the minute he's done paying every single person back who he did. He makes half a million dollars doing motivational speaking about selling a freaking pen when the little old lady who he took 300 grand from on the last day when he knew he was being indicted has not been paid back yet. So, look, there are good people and bad people. I try and be one of the good guys as far as that goes. Uh but you asked me my best investment was to I made a deal with myself that I uh was going to uh put my kids through school, give them a great education so that they graduated without any debt. I saw so many of their friends who uh ended up graduating with owing uh student loans and all that, and it just affected their mind. So, that's where I put all Everyone said like you make a good living on Wall Street. Yes. What did you do with your money? I put my kids through private school and college, and there's a couple million bucks right there. And who's the most effective investor of all time? Um Well, you know, they're probably their hedge for effective meaning they did their return on investment was the best or What do you mean by effective? I would say return on investment over you know, enough time to reflect on that. obviously we we all look up to Warren Buffett, right? Incredibly smart man, conservative at best in his investments, and you know, he buys companies. Right? He doesn't buy stock. He buys, you know, I love I'm a fan of Marcus Lemonis, you know, who's a He was a CEO, I believe, of Camping World, and he talks about people, process, product, and profitability, the three Ps or the four Ps, right? You know, um Uh there are smart people. Look, I'm I'm friends with Kevin O'Leary, another really smart investor. I love Kevin's, you know, the idea that he's a big a big investor in dividend stocks, right? He He has an ETF that are all dividend stocks. Smart investor. Probably Mark Cuban is as well. Bill Ackman, smart investor. Carl Icahn, smart investor. Have you ever met Buffett? I met Buffett many times. So, Warren Buffett used to come to the floor a lot. Uh he would come in and he would stand next to Berkshire Hathaway, which was being run by Jimmy Maguire. Jimmy Maguire, wonderful man, market maker, governor of the stock exchange. Uh he was the only guy who Warren would let trade his stock. Obviously, Warren got carte blanche when he came on the floor. He got to do whatever he wanted to. But he was an incredibly sweet, humble man. I saw him actually, you know, like get down on his knee to pick up a pen or something that this young lady had and he was already too old be bending over to pick up a pen. But he was sweet. He was humble. He was super nice. Um he is. Uh and yeah, I probably met him four or five times. But before we get into that, men, real talk for a second. We are all afraid of losing our hair. 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So guys, start your absolutely free online visit today at hims.com/ich. That's hims.com/ich for your personalized hair loss treatment options, or you could click the link down below in the description. hims.com/ich. Results vary. Based on studies of topical and oral minoxidil, prescription products require an online consultation with a health care provider who will determine if a prescription is appropriate. Restrictions apply. See website for full details and important safety information. Thank you to Hims for sponsoring this episode, and back to the podcast. So, I'm curious about this. Do you think the stock market should be open 24/7? Absolutely not. Um you know, that rumor came out a little while ago, and it was a pretty short-lived rumor. Market, you have to realize in the old days, markets traded from 9:00 to 4:00. Years ago, they used to trade and they were closed on Wednesdays, way, way back in the day. Uh because they had to do all the clearing. Uh now markets actually are open 24/7, right? So, the question would be should the stock market, the New York Stock Exchange, be open? Because you can trade S&P 500s all year all all night long. The the the the the spread is very wide, and after-hours trading, people do after-hours trading a lot. You know, the economic data comes out at 8:30. That tends to jolt the market. People will trade from 8:30 to 9:30 because there's a lot of volatility. However, if people need to realize that the spread is very thin, the liquidity is very thin, but right now you can trade 24/7. Right? It's just a matter of what instrument you're going to trade. You can trade futures sometimes until till 6:00 after hours. You can trade S&P 500 24/7. You can trade a lot of individual stocks after hours as well. So, the question would be should the New York NYSE be open 24/7? No. There's absolutely no reason for that to happen. What are your thoughts on cryptocurrency? You know what? Cryptocurrency was something that I rejected for a long time. I just thought it was a bunch of hooey. I you know, I'm always sort of wavering in my mind because I don't invest I'm not an investor in markets, and I'm sort of restricted in that way, and I kind of Maybe I got angry at it because I didn't invest in it and I cuz I missed the boat in it. You know, sometimes you got to wonder. I like Did I not Did I not make a bunch of money in that so I'm going to diss it cuz I didn't like it or I didn't get invested in it. Um so, I kind of poo-pooed it and never really addressed it, and I kind of didn't understand it. I like things I understand, right? And you know, I I obviously it's an entity and you can buy and sell it and la-la, but I I didn't get what was behind it. I didn't get how real it was. Is it all made up? And You know, I like to be able to see what's behind the curtain. And then and then I became fascinated by it, and then I you know, and then People started asking me a lot of questions about it, so I had to do research to find out about it. You know, look, I've gotten involved in meme coins, and I I you know, I I I I I I I I launched an NFT, you know, and I'm watching crypto, and I'm watching its acceptance across the board. Uh you know, I don't know yet if it is an actual hedge to the market and a hedge to the S&P at all or whatnot. I find it fascinating. I still don't know if it's real. You know, there's that great Saturday Night Live skit with Elon Musk where they asked him what's Dogecoin, and he answers it in They said, "But what is Dogecoin?" Right? Does anybody know what the heck Bitcoin is or what it is? You know, it's a funny thing about about, you know, like art. Art is an unregulated entity or it's like People will will What's a coin worth? There are 30,000 meme coins come out every day. Things are worth what people are willing to pay for it, right? So, I'm fascinated by it. I I think it's it's become something real because of its acceptance across the board by governments and by entities and by a lot of the big players in the game, and it's something that's gotten my attention, and everybody should pay attention to it. What are your thoughts on the US dollar and losing its potential dominance over time? Do you think that's an issue, or do you think that's something that is just overhyped? You know what? I I don't Look, I'm not an economist, and I don't It's not really one of my specialties, so I don't really like to speak to things like that. You know, the fact that a lot of the countries around the world are stepping away from the dollar as its main form of currency and and standard, it feels a little disappointing. I feel like we're getting ganged up on. I'm not really sure what the mindset is behind it. So, and I don't know how it will affect the value or the US economy. But look, I'm an American, and I love this country, and so when we get ganged up on by guys who I don't think are really nice players and bad actors, I'm not not a fan of it. How did you get started on Wall Street? I've had an amazing life, right? My parents My parents are both Holocaust survivors. They came here in 1949. They fell in love after four years in Auschwitz and in camps, and came to the states, had me and my brother. I grew up on the Upper West Side here in New York City. I was a bit of a hustler, entrepreneurial through high school. I had a T-shirt company. I was selling it at rock shows, this and that, and I graduated high school in early early '70s, not to age myself. I've been 55 for 10 years. If you're going to ask me my age, that's my age. I capped myself out at 55. Um but I ended up graduating high school. I spent a year in Israel. Then I came back to the states, and I went to the University of Massachusetts. My love back then was agriculture. I had this dream, especially after I'd been in Israel. I was working on a farm where we were doing a lot of hybridizing of plants, and that was I don't know where it came from, but uh it was one of my dreams to do something in agriculture. I ended up getting a degree in plant and soil science from UMass, which is one of the top ag schools. And then after a couple of years of that, I realized that was not my future. I have a much older brother. My father, during the war, in the camps, adopted this young boy at the age of eight. His parents had been killed. My grandfather was a well-known businessman. He was the president of Suchard chocolate before the war. So, in the camps, they used to use prominent businessmen to sort of put together prisoners to get them to be efficient and work hard. And my grandfather was asked to put together a factory to build the firing pins for the B-1 bombers for the Germans. Can I ask how they survived the camps? You know what? My If I were to ask my mother that question, she would say a day at a time. You know, they're they're Most of the people in their family were They were gassed. They were sent to the gas chambers by Josef Mengele, who was the death doctor. I mean, I could tell you stories all all across the board about that. My mother, uh one of the sole survivors of her family. She had seven seven siblings, and everybody was sent into the gas chambers at the end uh by Dr. Mengele. Who was known as the gentleman who stood out front the camps, and he did the finger separation. Where he'd send people to the gas chamber, he'd send people to work. Is it Was that random? You know what? Being able to survive it was random in so many ways. It was a lot of it was luck. My father's written a book called My Choice of Survival. Where there were these just crossroads. There were times during the war where he could have been killed, and something happened. You know, whether it was God's intervention or what. But there was a lot of It was just random whether you were able to survive the war. It was obviously internal spiritual strength. You know, my mother had two siblings who actually died the day of liberation. So, how they survived is really it's a it's a quandary to me. But I would say just you know, they were really incredibly strong individuals, and they There was some luck there for sure. How did the siblings die on the day of liberation? Was it that eating thing? typhus, and they died of starvation. Mhm. So, on the day that the Russian forces and the US forces came in to liberate the camps, my mother was sitting in a field with these with two of her sisters. Both who were very sick, and one who was just completely emaciated who was starving to death. And they actually died died on that day. You know, and they ended up being carted off to the gas chamber. And my mother with one other sister were able to walk out of the camps with the the liberating forces. They ended up going into what was called a displaced person camp. Which is where after the war they would put all the people who had survived. I mean, think about it. Out through Auschwitz, you know, millions and millions of people went through Auschwitz and literally 20, 30,000 actually survived. So, they you know, the survival rate was very small. I was just going to say I know this podcast isn't about the Holocaust, but one thing I mean, we've thrown this out a couple of times. So, Graham and I are both ethnically Jewish, I would say is probably the proper term. And so, I've always grown up with like a natural curiosity to the Holocaust. Was there anything that your your parents like told you about it as far as like lessons that they learned? Maybe you recognize something in your parents that you didn't recognize in other people that hadn't gone through such a hard I guess a few years in Auschwitz. Great question, and I appreciate the question because yes, it definitely for everything that they went through and shared with me formed my whole my whole nature, my whole being, my whole internal strength and spirit. You know, very many people who survived the war there are two kinds of people. And I actually wrote a paper about it in college. What effect it had on their you know, on their ability to deal with life, with religion, with spirituality, and whatnot. My parents met, they fell in love, they came to America, had an American dream, had a couple of kids, were very successful, and came out of the war not really believing in God, and sort of believed in their own inner strength and spirit. A lot of people who came out of the war, and it really depended on what age you were. My parents were 17 and 18 when the war broke out. So, they had finished basically high school, beginning of college. People who were a lot younger who basically by the time they came to America as immigrants who had missed that period of education came here and ended up not having a skill. Didn't have a job. By the time My father was one of the first Jewish students in in a German medical school. He literally sat There's a There's an article been written about it. He sat next to SS officers in the Heidelberg Medical School after the war. Next to the people who incarcerated him. So, you know, very many people who survived the war sort of were very closed. They were so scarred emotionally that they didn't talk about it with their children. There is a movement of children of survivors, right? And And I've gone to some of these I'm not a professional kid of a survivor. There are these large groups of people who spend a lot of time together talking about the trauma of it all. And I've seen that their parents who never discussed it. You know, I have this adopted brother who my father adopted this young man in the camp, and he is I consider him my older brother. He's still alive. He's 92. And there's another great story there cuz he went on to become a a major Wall Street titan, which is exciting, and that's why I ended up on Wall Street. But many people came out of it really quiet and really scarred, and never talked about it. And some people came out In my house, there was not one night but that by the end of dinner, the conversation was not about the Holocaust. My mother used to wake me up at 2:00 in the morning, and we would sit and watch musicals on TV, and she would tell me about the experiences of her of her incarceration. Stories that were so horrifying were definitely not not not for a primetime, and shouldn't have probably been shared with a 7-year-old. I mean, lying in a in a stack of cots where there were four or five people in each cot and four levels. And she would wait for the woman next to her to die so that she could steal her shoes and her and her her um burlap uh skirt that they gave them. Right? Because they gave them one one burlap skirt to wear. Women wore wooden shoes. They wore clogs. And basically it was every man for himself. You know, and basically to survive it took every bit of you know, resilience. My mother um They were fed turnip peel soup and 3-day-old bread. That was the food that they were served. And my mother used to sell her bread for cigarettes. Okay? She had been a smoker before the war, and her mindset was that she couldn't imagine eating a meal without a cigarette. So, she preferred to smoke. And at different points during the war she almost starved to death because of that. But anyway, so I spent my whole life hearing the stories. Hearing about their lives. And I think for me that really you know, I grew up understanding that it could be worse. You know, I mean, they didn't pound that into me. But you know, I mean, if I would complain about stuff, they would look at me and go, you know, like really? You know, you can't You can't complain to a Holocaust survivor. You can't do that. That is But they did it in a nice way. And you know, and they said, you know, basically that resilience of spirit, that inner inner strength that we go to when we are going through trauma or we're under a situation that's really difficult is really what makes our you know, our inner core. So, I mean, I could tell you stories about it forever and ever. But you know, they they went on to be um successful. My father was a doctor, became a well-known doctor. My mother was his secretary. They were inseparable. They fell in love on a blind date. My father went to have a date. He was in medical school in Heidelberg after the war. He was set up on a blind date with this woman who he went to meet her. She got caught on a train. She came home late, and her roommate opened the door. That was my mother. And um And they fell in love at first sight. They met each other. But what is that How do you do that if you're on a date with another woman? No. They were He was on He was going to have a date with her roommate. She was She didn't make it home from work on time. So, my mother opened the door. Okay? And they they just She They looked at each other and just said, you know, we we're going to be together. It was like love at first sight. But they went They They ended up becoming incredible an amazing couple. They did a lot of great things for a lot of people around the world. They bore me and my brother. And And we had an amazing unconditional love childhood. But you know, there was obviously there was some scarring there was some trauma by being their kid and by hearing these stories at a young age. So, while it really built me up you know, spiritually and emotionally with some real strength. Because down the road I've gone through some some things on my own that I sort of look back and I kind of had to dig really deep and go, you know, so like this is the this is the DNA I come from. And so, I'm not going to get tossed around by you know, may perhaps petty things. Yeah. Was it ever difficult to relate to other kids growing up because of those experiences that you heard about? You know what? I think in retrospect, yes. At the time I was in it, you know, and I you know, I don't think I talked about it with other people. You know, I mean, it was as I said, there was literally no dinner table conversation by by the end of the night where it was not talked about. Right? And the experience they went through. And whether we you know, we had friends over or whatnot. I felt separate in a way because of I came from that experience. And you know, my parents had numbers branded on their arm, and they survived you know, probably the worst obviously the worst Holocaust in history. Although there are others that were were similarly as bad, but not at least in my experience. Yes. Yeah, I never really thought of it. But in retrospect, that's possible. See, I would love to just continue talking about stuff like this cuz I'm just wildly curious. And by the way, if you guys want to learn more, I don't know, I'm sure you've read Man's Search for Meaning, Victor Frankl. You know, I actually haven't. I'm not a book reader. I haven't read a book since The Cat in the Hat. I've got my mind is a little spectrumy, and so I'm not able to read books, but I've heard of the book, and I know it's amazing. Love the book. Highly encourage you guys to read it if you want more insights on what the Holocaust was like from a survivor. Fantastic book with a lot of really good philosophy. father's book, which is called Remember My Stories of Survival. What's amazing about it is it was it's a small short vignettes about experiences that he had where literally that was at a crossroads where it would have gone one way it would have died, and it would have and and something happened that made him survive. Just to give one last little story. My grandmother, who unfortunately was murdered by Gestapo in one of the selections one night, my grandmother, unbeknownst to my father, sewed a $20 gold piece into the lapel of his jacket. Right? That's kind of that was a ghetto mentality. Used to do things like that. Because before they were sent to the camps, the way if you read about the final solution, and I would imagine it's in that book, the way the Germans got the Jews to really basically end up walking into the camps like sheep to slaughter, as the quote is, is that they would surround them, they would ghettoize them, they would put yellow stars on them, everyone knew who they were, they would start starving them or shutting down their businesses, stealing their belongings. They put barbed wire around the neighborhoods where they lived, and slowly slowly they isolated them from the rest of society until the point where they finally deported them. It was just like, you know, take me, let's go. What's the next step in this long sorted tale. My father went out to steal some food because they were hungry, and he ended up going through one of the cross checks where there was barbed wire, and he ended up getting It was late in the middle of the night, and he got caught by Gestapo, and who grabbed him and threw him up against the gates, and was going to shoot him. And when he grabbed my father by his lapels of his jacket, he felt something in the jacket, and it was this $20 gold piece that my father my mother grandmother had sewn into his jacket. And the guy rips it out and takes it and said, "Okay." He took the coin and let my father go. So, that would have been he was about to be killed, and that was sort of one of those. So, it's these short little small stories about where life could have gone really wrong, and it winded up going right. Do you believe that everything happens for a reason? Yeah, I do. Because of those experiences, do you think? It's possible. You know, I mean the chances of them surviving were so slight, you know, and and and as I hear stories like that, and I've it's happened in my life, too, you know, where there are things happen, and and you know, where you feel like maybe God intervened on your behalf or or you know, coincidence, right? There no coin People say there no coincidences, things happen for a reason. So, yeah, I kind of do. Yeah, even us meeting was such a crazy story, but Macy Macy wanted to visit Wall Street. Right. And it just it happened to be that we were walking down. We finished a podcast right before, so we met up with her. We went down Wall Street, and Jack was like, "No, the front's over here." And we were going to walk the other way, and we walked down, and sure enough, I see you right out front. And I'm like, "I can't believe it's you." Because I've seen you on CNBC, I've seen your photos everywhere. Apparently, you would send me a Instagram message years ago that I just missed by mistake. And now here we are because of that. Had we not gone at that exact time, this would not be happening. I love that. And when it happens, it feels so good, and it's so it can be so right. So, yeah. I agree. So, going back to your older brother, his impact on you getting into Wall Street, how did that come about? Okay. Second year of college, he called me up, and he had been a big part of my life growing up, and he said, "Enough with this, you know, this agriculture crap. You're going to Wall Street. I want you to get into finance. You're going to be great at it, and I'll I'll I'll help you out." And so, it wasn't him, it was his sort of pushing me that made me do it, but I ended up getting a degree in international business and finance at UMass. I came back to New York after that. I registered to at Baruch to get an MBA. I was getting an MBA during the day. I was the doorman at Studio 54 at night, and uh and and that was it. And I did Oh, and I was trading commodities. That was my first inroad into trading. What sort of commodities were you I was trading orange juice futures, lumber, and potatoes, and it was just sort of arbitrary. I was something I got I got into back in the old days used to get the Wall Street Journal, and they would have the quotes for all the commodities. So, orange juice, soybeans, all those kind of things. And I just started reading it, and it just seemed fascinating to me. He was big on Wall Street, Harvey. So, I knew that, and I started trading them. He had given me a couple thousand 3,000 bucks, actually. I think maybe it was bar mitzvah money. Um And so, I tapped into that. I started trading orange juice futures, and I ended up turning the $3,000 into 45 grand. How do you do that trading orange juice? You know, well, you know what? I I guess I had a good strategy. I developed a strategy which served me well in my in my new life. But, I don't know. You know, it was a long time ago. analysis? You know what? It wasn't actually technical analysis. You know, the way if you go back to the old newspapers, the way the futures trade in orange juice, they give you the futures price. Now, it's based on obviously weather and all these other things, right? And so, go back to Trading Places, right? That great movie where there was a there was a the Mr. Beaks, you know the movie, I'm sure. Yes. Yeah. Yeah, yeah, yeah. It's in New York, of course. So, anyway, I got on the right side of a trade. I ended up making a bunch of money, and I lost it in one day. I spent 4 months building this great portfolio from 3,000 to 45 grand, and I lost it in in a in a debacle over actually an orange juice freeze, and I couldn't get out of the market, and I ended up losing it all. All that being said, I um uh I left New York. That was 1980 81. Life had gotten a little bit crazy. I don't need to elaborate too much. It was the '80s. It was New York City. I was hanging out at Studio 54, and I realized maybe I should get out of town. I never finished my degree at the MBA. I got probably 10 10 credits away from completing it. And I had a friend who was running a oil company in uh in Norway, and they were spending 2 years in West Africa doing exploration off the coast of Benin was the name of the country. And so, I went there, and I spent a year and a half there doing the accounting for this Norwegian oil company. Uh after a year and a half there, it was time to put on my big boy pants. Once again, my brother called called me and said, "Let's go. Get back to New York. It's time to get a real job." So, I came back to New York, and I got a summer internship. I start on the floor of the New York Stock Exchange. My father had a patient who was a market maker in AT&T, and he and one patient who was a partner at Cowen & Company, which was a big brokerage firm back then. They gave me a summer internship on May 23rd, 1985, and uh the minute I walked onto the floor, I knew it was for me. It was chaotic, it was wild, adrenaline filled, it was super exciting, it was full of humans. And I I'm also that was what I inherited from my dad was that love for the human element in life. I got a question. Yeah. So, the hair. What's the plan with the hair? Are you going to keep it growing it out, or you get like why This I don't mean this for this to be offensive at all. Why not a toupee, you know? Yeah, well, first of all, no toupee. It you're Toupees are just ridiculous. Well, people would also know, I guess, because they've seen your face so much that like you don't just grow hair like that overnight. I'm a purist, right? I like I I'm I'm a short, funny looking guy with wild hair, and I got to own who I am, right? I don't want to be anybody but me. I'm happy with me, you know? And so, that's cool. I love my hair. My hair is my power. Right? You know, I'll show you a picture because I just found it, but I used to have 18 in. I had an 18-in ponytail. I still have it somewhere in a box. I was known for a massive mane of hair. I had from the age of, you know, from 18 on cuz I cut my hair off in one fell swoop when it was literally down to my waist. I had I was known as the longest I had the longest hair on Wall Street for the longest time. Finally, everybody came up to me and said, "Beat, it's about time you got to you got to cut that stuff down." And I said, "Fine, you guys know me better. You raise $25,000 for charity, and I'll shave my head on the floor." I said it kind of flippantly. 2 days later, they handed me 25 grand in cash, and they said, "You're shaving it, bro." And we used to have a guy named Luigi who is a the barber shop guy on the floor of the Stock Exchange who had a beautiful little old Italian barber shop. He didn't speak any English with a big chair with the leather and the bronze and the copper, you know, like if you've ever been to an old old barber shop, right? Had a barber shop thing. And we all went there, and we filmed it, and we they shaved my head, and there's a photo of me with the shaved head, and I gave the money to UNICEF and a couple of other children's charities, and it was a big thing. So, I I love my hair. It's a big part of my power. You know, I There was a guy named Mark Haines who worked for CNBC. Used to sit out He passed away recently. The person who nicknamed me the Einstein of Wall Street was Erin Burnett. She is a CNN reporter. She works She used to work on the floor. Mark Haines was her co-host. He used to sit outside the Stock Exchange smoking a cigarette on the Johnny Pump there, and every day I would walk into work, and he would say, "If Tuckman's having a good hair day, the market's going to be up." And we used to track it, and it was true, right? It was sort of a funny coincidence. So, um I feel very strongly my that my that my hair is a big part of my personality. I love it, you know, I my wife recently passed away, unfortunately, uh from cancer and she uh she in 2019 she got cancer, we got rid of it, came back in '21 and unfortunately it killed her. She next week will be a year since she passed away. She ended up having chemotherapy and she lost all her hair and uh in uh in solidarity for her one day when she called me and said, "I'm starting to lose my hair. I got to go get a wig." I shaved my head. And I went to the barber shop and I shaved my head. And I came into work and uh and nobody knew. I had not told anyone she was sick. So everyone's going like, "What What did you do?" And they ended up I told them what had happened and it made a big splash. It got on CNN that you know that that uh you know, we know how important Peter Tuckman's hair is to him and uh Obviously his wife is more important to him than his hair. So I had, you know, and it took a while. It actually took So I shaved it to the bone and it felt great because the two of us had shaved heads. She shaved her head too cuz she had lost most of the hair. And so the two of us walked around for like a year and change with uh She She wore a wig which I bought her a wig which she rarely wore. And so the two of us were like the bald duo and it looked I looked different completely different. Thank you so much. Really appreciate it. I'll link to all of your information down below in the description. This has been such an honor. I really appreciate it. me too. Thanks, guys. Till next time.