Talking Money w/ The Einstein of Wall Street (Peter Tuchman)

17:42Peter Tuchman:Because when in the and also their other job is in the absence of the public buying during the crash of 87, during the financial crisis, when the public walks away, they have to buy. When people are buying a stock that's short and it's running up from two to 483 and we know what stock that was, they're the ones who are having to sell it, right? And so their job is there. They're flying that plane for us. And they're there when the stock dislocates 7%, we go into slow mode to identify what's happening. Is it news? Is it a fat finger? What's happening? If it dislocates 10%, we stop trading. It's called limit up, limit down.

18:17Peter Tuchman:And then we identify the situation so that the investor is never compromised. If you go to NASDAQ, and no disrespect to NASDAQ, there are no market makers. The stock can go from 2 to 30 and back to 7 strictly because it's just trading electronically without any guardrails, circuit breakers or whatnot. You will all remember that during COVID, we actually, our circuit breakers are 7 % and 10%. Was that four in one day? Exactly. And GameStop stopped trading 29 times that day that it went from two to 483. But the market itself, circuit breakers that we have on the NYC, we remember, if you'll remember, we opened the market and closed it instantly because it was already trading down more than 10 % pre-market.

18:59Peter Tuchman:And the screens went black and we went, oh my God, the market's down. and then we all sort of recouped. We got ourselves together. We started identifying what's going on. We reopened, but then we closed once more. So those are incredibly necessary guidelines to protect the investor, right? They do not disadvantage the investor in any respect. You ask me what I do on a daily basis. I wake up in the morning on my way to work. I avail myself of as much information as I can, what's been happening pre-market. I look at the futures market, I see what's happening globally. I get down to the floor. The opening bell is a very important thing for those who are still on the floor.

19:35Peter Tuchman:We're able to, I built a trade that is, it trades the dislocation between, we know that the futures market trades 23 and a half hours a day. It's basically when we're not open, when the NYSE is not open, it trades on opinion, right? It's people are buying and selling because Microsoft earnings were light or Mr. Trump had said something about this or whatever. When we come in in the morning, the S &P 500 may be down 30 or 40 handles, points, based on something that happened overnight or the night before. Our order flow that comes in for the opening bell at the NYSE is a number that you can quantify, qualify and quantify.

20:09Peter Tuchman:It's a real number that Bloomberg puts out that says there's$300 million to buy on the opening bell. That's notional dollar value for all the stocks that come in for the auction market. Our biggest auction is the open and the close on the NYSE. We do a lot of stuff during the day, but those are the largest auctions. That's where a lot of people put their order flow. They embed it there because they don't necessarily want everybody to see what they're doing. So I have created, I have figured out a trade that I'm able to trade a bit of a dislocation based on, let's say, the market is down 40 handles, as I said, based on something happened overnight.

20:42Peter Tuchman:But the New York Stock Exchange has$300 million to buy for the opening bell. Well, then there's an arbitrage there.

20:49Robert Croak:Sure.

20:49Peter Tuchman:Right? I happen to know. And there are other people on the floor who get the same info. It's just a matter of what you do with the info. That's why I said it's not inside info, it's info. A lot of people have access to it. Then what I would do is I would buy the S &P knowing that there's not enough downside to take the market to where that is and the market would open and there'd be a little lift.

21:07Robert Croak:Got it.

21:07Peter Tuchman:That's just one of the trades. So that's my opening bell. Then basically a lot of people sort of go into algo mode, right? If I have a million shares to buy for a customer, I buy a couple hundred thousand on the opening.

21:16Robert Croak:When you say customer, who are your customers?

21:18Peter Tuchman:My customers are hedge funds and some institutional and some high wealth individuals who are broker dealers. And I've been, I've had the same three customers for 25 years. And that's a good business. It's a good business. It shows that, you know, we're all about customer service and we're all about transparency and we've become friends. And if they work with the strategy that I built and now my son has adopted it and they, they, he has the same relationship with them over the years. And so there's that trust. It's all about trust, right? We know this business is all about customer and, and your relationship.

21:47Peter Tuchman:It's a relation game, really, is what it is. Because, look, they can choose to just use a machine, hit a button upstairs, and never have to deal with a broker. In the old days, they have to use us. Now they don't. So we need to give them a reason to use the NYSE. And I'm, you know, screaming from mountaintops that we have so much added value quickly. I can say that a number of things that we do offer that the NYSE gives us is what's called parity priority model. If you enter an order from upstairs, as you said, through Publix on your iPhone, nothing against Publix, then you're going to get in the back of a queue.

22:16Peter Tuchman:If you put in a limit order, you'll get into a back of a queue based on when you entered your order. If you're at the front, it's like going to the movies and getting your ticket. If you give me your order, the minute 100 shares ticks at that limit, you're on parity with the book that you get a sliver of every trade that happens after that. Well, that's a big difference. If you're a trader, you don't want to buy it when everyone else is done buying it. You want to buy it when there's still a whole line behind you. So that's one of the big reasons. And then there are things you can enter an order through a human on the floor now all the way to 359.50.

22:48Peter Tuchman:If you enter an order through your phone, you can't enter an order for the close after 350. That leaves nine minutes for a trader to make money off of what's happening in the marketplaces. You have probably noticed a lot happens between 350 and 4 o 'clock. That's a lot of the volatility of a day. And the volume is happening in those 10 minutes. So those are the advantages. And so during the day, people usually put their orders in an hour ago to try to sort of track the consolidated volume all over the place. I've found another side of this business, which is social media. And I do. I run an academy called Wall Street Global Trading Academy with a former market maker who started on Wall Street with me in 85 named David Green.

23:29Peter Tuchman:We built this when COVID came along and all these apps gave access to the market to everybody. We realized that not one of them had an educational component to it. Weeble, Robinhood, all these people are just here, take the keys to my plane, and I hope it works out for you. So we built an academy to teach people technical analysis. We're now working with a company called Apex to access the market for people wanting to trade the futures. So I do a lot of that. I have a couple of podcasts. We do a lot of TV to educate. It's all about education and motivating and inspiring those 50 million plus new retail traders who now are pretty savvy, who have now access to the market.

24:07Peter Tuchman:Everybody's been invited to this party, but now you need to tell them what the rules are, right?

24:11Austin Hankwitz:I want to click back on that for a second because I've been around since 1985, back when I had two monitors on my desk, day trading, swing trading. Yeah, it was crazy. And so when I think of now, similar to how I bet you feel, I feel blessed to be educating people with Austin in real time of what's going on now because I feel like finally building wealth in personal finance, the playing field is leveled. And I love that because even the events that you guys are having here, this new studio, all the things you guys are doing here at the NYSE is so cool to see because I feel it's all based on the future and education for our younger investors.

24:51Austin Hankwitz:And I'm so glad you touched on it because I feel that is one of the reasons the markets have been so strong is because we have these tens of millions of new investors that feel confident enough because of the public dot coms, the Robin Hoods of the world that have allowed them entry. because back in the 80s, 90s, like people would come into my desk back then and be like, what are you doing? And I'm like, I'm just trading my stocks. And they're like, well, I thought that was only for like crazy people that were in these firms. And now it's just a couple clicks of the button and you're in and you're up and running.

25:23Austin Hankwitz:And that can hurt some people. But because there's so much education out there, like the Rich Habits podcast, like what you're doing, I just think it's incredible because it helps everyone get in the game. And that's the most meaningful thing for what I do every day with Austin.

25:37Peter Tuchman:I agree with you. And I love that. The accessibility. Look, you can now, you can learn to trade. You can trade. You can get paid to trade. You have accessibility and funding to trade. Just, I beg everyone to vet whoever they're getting their info from because there are a lot of bad actors on all the social media platforms. There are people who are signal services and the Uncle Herbie's on the internet who are telling you what to do and all that kind of thing. Just be watchful who you take your information from because there are bad actors in the space. But for me, it's so exciting to have seen that time that you and I have seen, be here still for this time, have this new, I mean, the doors are open.

26:13Peter Tuchman:It's amazing. And I've found it necessary to take advantage of our platforms, to be able to educate. A lot of people took their money and ran, right? And what I'm embracing are, there are so many young people who are inspired by me and probably by you, okay? Who are now trading the market, who immediately, the minute they made some money, embrace their community and is now it's like, I don't need to be standing on the mountaintop all by myself with a bunch of cash sitting on the back of a Bugatti. It does nothing for me. Right. But if I then embrace all these new young people to all be successful in this and develop rich habits, which is amazing to see.

26:48Peter Tuchman:Look, some of them, you know, they'll learn their lesson. They may be thinking that it's all about the cash and prizes. It's not right. At the end of the day, you don't trade for money. You trade for money is the end result of what you do. And if that's the case, then you become like what we're doing here, which is inspiring and motivating the next generation. 100%.

27:07Robert Croak:So I don't only have like eight more minutes. So this can't be asked this question. And I really like this question a lot. Respectfully, you and Robert are both much older than me. I'm turning 30 this year. You guys have gray hair. I'm not going to say how old you guys are. But anyway, you guys are a little bit older than me. You, Peter, have seen a lot of cycles. You've seen the great financial crisis. You've seen COVID. You've seen the AI bubble. You've seen the dot-com bubble. You've seen the nifty 50. You've seen so many things throughout your life. Can you please, for everyone listening right now, break down your decision making process or your framework as to how you say and identify this is a real regime change, right?

27:48Robert Croak:AI is real or beanie babies are not real. I don't want to invest in that. Like, how do you black and white figure out this is going to be a thing or this isn't something I'm not paying attention to?

28:00Peter Tuchman:Wow. That's a great, great question. That's a long one. So first of all, everyone needs to know that up until very recently, I never owned a share of stock in my life. Okay. Because I'm a registered broker, I'm not allowed to buy stock within a 30-day period of my customer buying stock. And since I built this strategy 23 years ago, trading the S &P, I'm in every stock every day. So I kind of made a decision many, many years ago that I would invest in my children. They graduated college without a penny of debt and I wish them the best. And and so I didn't invest in the market. Right. I just I you know, I spent as I said, I spent most of my money on my family and my children.

28:38Peter Tuchman:Unfortunately, my wife passed away a year and a half ago. And so she left a little money. And so I found a way that I could open up a, you know, a managed account that I don't have any involvement with. And so I am invested in the market, but it's not my decision making. However, that doesn't keep me from answering the question and being able to identify what you're talking about. You know, look, it's fascinating. I love, I feel like I'm an investigative reporter. I call myself a forensic broker. I'm not a financial advisor, disclaimer across the board. I love to analyze market movement on a day-to-day basis.

29:08Peter Tuchman:And so what I do is I surround myself with really smart people like you guys, like Dan Ives, right? Who, you know, when I thought AI was going to be the thing that was going to be really a bad thing, I found out it's actually a really great thing, that it's going to benefit our lives in an amazing way. You know, the fact that you, you know, in the old days, We used to go to like an Oscar party and now they're going to an NVIDIA earnings release party. The world has changed. How amazing is that? You know what? Sometimes you never really know if something is really hot or it's not. You know, I mean, like crypto for a while.

29:39Peter Tuchman:I like to understand something. And so there are things I don't understand. And I think Bitcoin and crypto is one of those things that I didn't understand. I kind of stayed away from. And then I realized I better at least know something about that. And it kind of was fun for me because, you know, today I was at this crypto conference and we were talking about the blockchain and ledgers. I mean, the blockchain, which for me, the way I understand it, it's like the ultimate ledger. If you go back to the New York Stock Exchange in 1985, there was a guy in the open outcry crowd that was putting on all the trades.

30:10Peter Tuchman:He had to, you know, because we used to trade T plus seven. So the trades were never cleared for seven days. So you needed to be able to go back. and they were called reporters. And they had a little hard metal thing where they, like a lottery, a lotto ticket thing on it. And when a trade happened, whether it was a hundred shares or a million shares, he put on who bought, who sold, what company they represented, what badge number they were, what time, all of the things necessary, right? And then it went into a little machine and went up and created the ticker tape. That was the original blockchain.

30:43Peter Tuchman:That was a way for us to go back seven days later and identify because there were errors. There were problems you needed. You know, I bought I bought 15 ,000 at a quarter. You thought you sold me 18 ,000 at an eighth in an open outcry screaming, yelling, I'm trading over there with him and over there with him. Things like that happen. So I had to go back to do that. So then once I understood that, well, that's what that's all about, that you actually now it's about ownership. Back then it was about identification, right? But, you know, the first thing is headlines can be very confusing. You know, I know that we're living in a world where there's no— Why did I—that thing happened in November over Palantir.

31:25Peter Tuchman:It was like suddenly—there was no headline in the fact that they would have said, back in the old days, this would have been called, buy the rumor, sell the news, right? Everyone was long Palantir. There was something going on. The government was shut down. You know, people were on margin call from crypto. They needed to raise some money. So they sold Palantir. It was up as high as it could go for now. It had nothing to do with why do I need to look at they catastrophized everything. Right. So my gut is that, you know, when sometimes the most quiet story is some of the most significant story, the things that they catastrophize tend to be things that need to be given, you know, need to gasoline to be poured on it to become a headline.

32:00Peter Tuchman:And so that's kind of how I identify things. But you also know, last thing I'll say is, you know, when the guy outside the exchange selling hot dogs is talking about it. Your Uber driver is talking about it. And this 14-year-old kid who stops me on his way to a lacrosse practice asks me a question about it. It's probably something good.

32:18Robert Croak:Do you think right now there's, not to put you on the spot, anything interesting to you right now in the markets? Is it emerging markets? Is it international developed markets? Is metals mania is happening right now? What's interesting to you right now?

32:32Peter Tuchman:You know what? One of the most interesting things for me right now is this Mr. Jensen, right? Jensen Wong of NVIDIA started talking in December about the only impediment or catalyst that is going to draw us towards or keep us away from the data centers being built and becoming viable forms. for anyone who doesn't know, that's where the GPUs are made that fuel the AI revolution that's going on is energy. And, you know, how are we going to be able to get that energy? We know that, you know, a few winters ago, Texas shut down because of a bad winter. What can you imagine if there are five data centers that is fueling AI from around the world in your backyard?

33:11Peter Tuchman:Does it mean that your air conditioner is not going to be cool and that you're not going to have heat in things. And so obviously we don't know yet what's going to happen, whether it'll be solar or nuclear gas or whatever. I interviewed a gentleman the other day. His name is Tom Healy. He was the youngest man ever to be a CEO of a listed company on the floor. He is the inventor of the electric 18-wheel truck. If you'll remember, the stock exchange did a commercial called Connecting People to Opportunity. It was on CNBC. I was on it and a bunch of other sort of influencers. He was one of the people on it.

33:43Peter Tuchman:That company rode the wave from 10 to 60. It's called H-Y-L-N. It's the stock. Disclaimer, I'm not recommending it.

33:49Robert Croak:They rode the wave from 10 to 60 when electric

33:53Peter Tuchman:cars were a thing. And then we all know that kind of turned on everybody with Rivian and all that other stuff. The stock went to 50 cents. I just interviewed him the other day. He pivoted when he saw that, you know what, he's not going to make it in that industry and sector he was in. He bought a company from GE that makes a generator. That's one of the only generators that has enough, I guess, GBZs or something. I'd sell a lot of my comfort zone that is strong enough to fuel data centers. And that's going to be his business. So that's fascinating to me. I interviewed this kid on who has this magazine that talks about space and SpaceX.

34:26Peter Tuchman:They just partnered with the stock exchange. He was telling me about data centers in space, that that's actually now going to be considering one of the possibilities because solar in space is like a direct, it's a lot more efficient than solar on the ground. Makes sense. So things that intrigue me that are curious, that are interesting. And especially like everyone is at a quandary now, what is going to be, what's the next thing? Look, maybe the, you know, you're never going to get a chance to buy, probably not NVIDIA at$36 again, and you don't want to pay$180. But you may want to get, Dan Ives always talks about, there's a secondary and tertiary derivative trade around the AI phenomenon and around the AI revolution.

35:04Peter Tuchman:That could be quantitative computing. I find that thing a little fascinating. And this energy space thing. We don't know what's going to be the solution. So I love problems. I love to try and solve them. And then I love finding a solution. So that's kind of where I think that's sort of exciting for the future. And then I think, you know, obviously, we're going to have to figure out the interest rate story. You know, I think we got just rug pulled yesterday by El Presidente when he hired a guy who was the farthest choice. I think we were going to hire somebody who was dovish and we got the biggest hawk and then everything got thrown into a flux and silver went down 30 percent.

35:37Peter Tuchman:And what's happening now. So I think, you know, I think that the big players are sort of in very interest rate sensitive positions. And I think that we're going to have to figure that one out.

35:46Robert Croak:Peter, thank you so much for joining us on the show.

35:48Peter Tuchman:My pleasure. I would love to come back anytime. This is great.

35:51Austin Hankwitz:We love it. Yeah, we are big believers in everything you're doing and agree with you a lot on the energy play because we need a lot of help there to make all the data centers work. So we appreciate you coming. You've been here for four decades now doing your thing. And we just love to have your insights on the show to share with our audience. So we really appreciate it.

36:12Peter Tuchman:Thank you for look for me doing what I do is like being in the Superbowl every day. So, you know, then I I'm here and I'm at your disposal.

36:18Robert Croak:Thank you, Peter.

36:19Peter Tuchman:Thank you. Love it. Thank you. Thank you guys.

36:21Robert Croak:Everyone. There's going to be a ton of information in the show notes to find Peter on Instagram, on X, on the internet to figure out everything he's doing. What's all going to be in the show notes below. So please consider checking them out.

36:31Austin Hankwitz:And again, always thank you guys for joining us each and every week. We are here bringing guests like Peter to help you guys figure it all out and stay ahead of the markets and build your own personal wealth.

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