Stock Expert: Here’s My “Cheat Code” That Turned $35,000 Into $10M In 5 Years!

20:23Graham Stephan:What are some of the red flags that stop you from investing into a company? Recently, if the wrong type of promoters are talking about it, right? Like, there's a lot of, you know, shady people on X, a lot of shady things happening. People are promoting penny stocks and, you know, these people have, they're anonymous and they're not transparent. Like, I'm super transparent. Like, I've been, actually, I was thinking about it. I've been sharing every single trade I've made since 2020. like either on reddit or on after hour or on x now like i'm extremely transparent about when i buy and when i sell and other people they'll talk about like when they buy but they'll never talk about when they sell or they're sharing you know obviously photoshop screenshots or screenshots they took for someone else's uh someone else on their discord uh and so if you know i i post video trade receipts and so i i well that's the biggest red flag like recently there is a stock that's come across my radar uh people keep dming it to me that's another red flag if someone ever dms me Like, hey, you should check this out, Kyle.

21:22I'm like, automatically, like, no. You know, like, you probably have some ulterior motive. How often do you see pump and dumps? Back in the day, I saw it quite often. I think the algorithm has done a much better job of, like, filtering that kind of stuff out. Or maybe I just, like, I just don't care about that stuff, right? If, you know, if it's a sub-billion-dollar market cap, that's automatically, like, pretty much like an orange flag for me because that's easy to manipulate, yeah. And how do you know when to sell? I sell a stock or swing trade a stock, right? either when the thesis has been validated, invalidated, or I find a sexier play.

22:00And so, you know, if a stock, like for example, I'm playing earnings, right? And earnings was good, it popped 26%, which was my recent trade on paying. Perfect. It was earnings play, thesis validated, sell, right? Or it's other times I'm just holding a stock, right? Because I'm just waiting for a catalyst to happen. Maybe it's just like bobbing sideways for a little bit and I find something else that's like more exciting. right, that has like a news coming up next week or they just launched a partnership. I'm like, okay, then maybe I'll swing to there and then swing back. That's actually, that's how I missed out on GameStop.

22:29Tell us about that. What happened to GameStop? Yeah. So I was one of the earliest whales on GameStop. I put in$1.3 million into GameStop in October of 2020. Okay. And my cost was around$13 a share back then. And I held until December of 2020. So I missed the squeeze by a month. How much would you have made? Oh my God. I, uh, I believe a hundred dollars would have been $120 would have been 10 million. So it went up to four 20. Uh, so probably around 30 to 40 million if I, if I held to the top of the squeeze.

23:07Graham Stephan:You would have 40 X'd. Yeah. Yeah. How often do you think about that? I don't think about that at all. Okay. During those days, I was ecstatic because we were right. You know, the, the, the, the short squeeze and, and, and all the kind of stuff like the thesis was right i'll celebrate i was dancing it alongside you know roman kitty every day you know it's funny i actually bought gamestop when it was three dollars and something cents a share i put five thousand dollars into it because i saw it on wall street bets and i just thought this sounds funny i'm just gonna do it and i bought it i completely forgot about it and then the whole gamestop stuff happened and i sold i think it was right after robin hood disabled the trading.

23:46Graham Stephan:And I was like, oh, man, this is going to kill the momentum. And immediately it started falling. And then I remember, I think I went to you and I'm like, dude, Jack, should I sell? And it had turned into over like 150 grand, I think at the time from a$5 ,000 investment. And I sold. And I was so happy that I didn't quite get the peak. But to be able to get that price for that, I mean, that was a Hail Mary just for fun. Profit is profit. Profit is profit. So why do so many people miss these signals? I don't know. Psychologically, I've always been curious why some people get married to the stock.

24:23That's another one of my principles, like never get married to a stock, right? Like there are people who just, they made their money on Tesla. They made their money on Bitcoin. Now with memory stocks, right? Like Santa is going to M.U. And they're just like obsessed with it or holding them out. That's all they talk about. And I don't get it. If you're an investor, you don't care about the short-term movements at all. and you'll just kind of, you know, ride it for 10, 20, 30 years. If you're thinking about the stock, you're essentially thinking like, should I sell, right? And so you should be okay with selling.

24:54Graham Stephan:What would you say are the shortcomings that a lot of investors fall into? They play with margin. Like you could play this game for a very long time as long as you're responsible and take profit and minimize your losses, right? Like you're up 20, you're up 20%, maybe take some more risk. If you're down 20%, maybe play a little more conservatively or add money back to it. I think when people go on margin, when people go on full tilt, right? And trying to make that gain back as much as possible, that's when they lose it all. And so what do you think about Chris Camilla? I'm sure you're very familiar with who he is.

25:32He fully endorses margin. And if anything, he looked at my portfolio, he's like, if I could critique anything, I think you should have a little bit more margin. I mean, that's extreme conviction. uh i wonder if he has always had that view especially when he was just starting out or that's now when he has more of a cushion right to maybe take a blow from margin i mean you have to be patient right like this is this is also like a a patient man's game in order to uh be happy with you know 20 swings 20 swings versus like oh it could have been 40 or something like that i mean i think the math is like you only need like four 20 swings for a double right i think that's very possible if you find good stocks.

26:09I'm curious, by winning a million dollars in the stock market in one day and then losing a million dollars the following day, what does this do to your mental? How does this affect your nights when you're trying to sleep or just the overall gravity of daily existence? To be honest, it happened so fast, it didn't quite register. The million that you'd made had not quite settled yet. Exactly. And so it didn't feel like your net worth increased by a million. I think also psychologically, it's very different than losing a million, right? First or from your cost basis, right? Like I gained a million and then it disappeared, right?

26:46So I think that's why I also prioritize like entry price a lot. That's again, back to like my don't chase rule, right? Like if you bought a stock and it went up 20 % and then went back down 20%, that's that you could hold that a lot better psychologically than if you bought something at the top and just drop the next day.

27:03Graham Stephan:Now, in terms of getting started though, back in 2017, weren't you able to turn$8 ,000 into$300 ,000 with cryptocurrency? Yes. And then you lost it down to$35 ,000. Yeah. Yeah. So I call this like paying tuition. This was all in crypto, right? And this is, I mean, this is kind of where I learned everything, I guess. I mean, I've been aware of Bitcoin for a long time. I learned about it in college. I had some friends that were doing mining and stuff like that. So I kind of missed that kind of 2012 or 2013 bubble for Bitcoin. coin but when i learned about ethereum uh in 2016 i went all in with everything i had at the time which was only eight thousand dollars from my from like working how much were you making at that time during 2016 2017 not even that much like i you know i did a startup between 2013 and 15 i didn't go anywhere uh then i started my first you know big boy job at stripe i was a software engineer over there and there were i mean there still are private startups they're only paying me like 150k and so how did you only have eight grand though after like i only started working there like oh so it was just oh i just started working yeah yeah yeah so i i had only 8k and then ethereum was i think maybe 16 or something like that and so i just decided to go all in that and then ethereum went up to 100 pretty quickly and so now i'm sitting at like you know 30 or 50k uh and then this was like ico mania there were so many you know random alt coins uh taking off and so i was actually doing the exact same style i was going all in one random coin at a time back then there was a lot more sentiment based because you know these coins really don't have any fundamental value.

28:32So it's just like whatever the next hot one is as a funny story. And so, you know, that 2017 run brought me all the way to 300k. And then 2018 happened and I lost it all, but unfortunately owed taxes on the realized gains from 2017. So the way the counter math works out, it could really, really hit you. And yeah, that was a hard lesson. And that also why I've never touched crypto ever since. You owed how much in taxes? Probably around 150k. How did you owe$150K when you brought it down to$30K, though? Oh, that happened in 2018, right? So the top was December of 2017. And so I was trading all the time, right?

29:11So all the capital gains got realized in 2017.

29:15Graham Stephan:You would think that you should be able to use losses of the next year to offset the prior. You would think, right? Right? Yeah, but you're only allowed to maximize$3 ,000. Or$3 ,000, you can offset your income by$3 ,000 for that, right? I mean, this was also the early days of crypto and taxes. and I just wanted to do everything by the books. So after having this crazy run up and then crash in your crypto account, a few years later, you finally decide that you want to start investing in equities and stocks in your 401k. You started with$35 ,000. Let's talk about a few of the specific trades that you did to take your account up to like 8 million now at 10, 11 million dollars.

29:55And what did you learn from these trades? The first trade that you made was what company? it was called alpha protec apt they made face masks and they were based out of salt lake city utah and again this was like back in the early covid days right where people were just like learning about it the pandemic that shut down the lockdown didn't quite happen yet uh and so i thought the thesis was really simple like american made face masks that should be a big thing right uh and so that brought me from 35k to 90k and i was like oh wow that happened fast uh and then in a similar vein, my next stock was CODX, co-diagnostics, PCR testing, the nose swabs.

30:30Remember that? Right? So they were building that and they were signing up all these contracts in all these states. I'm like, they should have good earnings. And so I rode that for like a 2X. So now all of a sudden 90 turned into 180. And then we were approaching the summertime now and Norwegian cruise lines had like absolutely got tanked. It was down like 80%, basically priced for bankruptcy. Right? And there was like a rumor. I was like getting all these like Facebook groups for like cruise moms and stuff. They were like buying like all these like on sale items that, you know, cruise lines are not going to go under.

30:59CEC was like maybe going to lift the ban on them, whatever. And so again, that's hope, right? There's a story. There's a potential catalyst. And I got lucky and I caught the bounce perfectly. And so I caught like a 60 % bounce and now all of a sudden like 180 turned into like, you know, 250, 300. And I just kept doing that. You know, I got a dog and a Chewy. I learned about Chewy, right? And like, you know, a lot of people got dogs. So like e-commerce, dogs, perfect, right? And that was maybe like a 25 % pop. So I just kept doing this. And so what then was your first like real loss

31:31Graham Stephan:in your 401k account? And really quick, I just want to say that when your business is growing, you need more hands on deck, but training someone new takes time you don't have. That's why smart businesses are using our sponsor, Upwork. Upwork is a one-stop platform to find, hire, and pay expert freelancers across web and software development, marketing, business operations, and over 125 other categories. You could browse real profiles, check past work, and see exactly what you're getting before you hire. With Business Plus, you can access the top 1 % of talent on Upwork, and AI-powered matching gets you connected in under 6 hours.

32:04Graham Stephan:Upwork also handles the contracts and payments in one place, so the whole process stays simple from start to finish. I've personally used Upwork several times in the 7 years that I've been running a media business, and it genuinely makes the entire process easier. It's super affordable with industry low fees, and signing up is free, and posting a job takes minutes. Visit Upwork.com slash coffee right now and post your job for free. That is Upwork.com slash coffee or click the link down below in the description to connect with top talent ready to help your business grow. Now really quick, I just want to say that when Jack and I first started the Ice Coffee Hour, we were winging it.

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33:08Including the part most people get stuck on checkout. Shopify makes it extremely fast with saved info and one tap for returning customers. so more people actually complete the purchase instead of just dropping off.

33:19Graham Stephan:And then once your checkout's not something you're worried about, your time shifts from building the store to actually growing the business and bringing in more sales. Some of you may not know this, but before I was working with Graham, I set up probably six different Shopify stores because I was trying dropshipping just like everybody else. And it actually kind of worked. I had no idea what I was doing, but I found an eyebrow epilator to be the product to sell, set up a Shopify store, and actually got some sales. So it's just a testament to how good Shopify's conversions and checkout processes.

33:48I highly recommend it if you're trying to sell stuff online.

33:50Graham Stephan:With Shopify, nothing stands between your idea and a real business. So go and make it one. Start your free trial at shopify.com slash ICH. That's shopify.com slash ICH or click the link down below in the description to get started. Shopify.com slash ICH. And so what then was your first like real loss in your 401k account? The first loss was actually Slack before they got bought by Salesforce, right? I mean, it just made sense, right? Zoom was like taking off, right? Peloton was taking off. And I was like, Slack has not really moved yet, right? And that was it. That was a thesis. And then they had earnings and it was horrible, like down like 25%.

34:26And I think I kind of misunderstood the dynamics between Microsoft Teams and Slack, which was kind of a miscalculation. And so that was my first big loss. So your first investment that you kind of lost money on was Slack. How much money was your account at that time? And how much did you lose? probably around like 700, 800K, right? So your first loss was after taking your account from 35K to 700, 800K. I would say so, yes. And then how much did you lose on the Slack trade? Yeah, probably like 200K or something like that. And what did you learn from that loss? Like, was this an important lesson or was this just like, you were taking the same kind of like outsized bet over and over again, you kept winning.

35:03And then, hey, this one just like, the cards didn't fall in your favor. I have this lesson still to this day, like earnings are a coin flip, you know? Like no matter how much you think you know about a company's revenue numbers or the climate or whatever, earnings are a coin flip, right? And so, and it could be pretty, pretty expensive at that time too. And so I think what I learned is you, if you, if you have enough of a buffer of safety, right? Maybe you're up a lot recently, right? Like you could afford to take that coin flip, just like I think, you know, anyone at a casino, they're kind of hot streak, right?

35:34Maybe you could, you could take that extra, extra bet. but um yeah if it goes if it doesn't go your favor you gotta be conservative with your next play do you think that the volatility or the the percentage price change is greater if earnings are good or if they're bad like does a stock respond more aggressively positively or negatively if earnings are positive or negative or is it just like is it still just like a coin flip so it's like 50 50 every time it's really 50 50 there's these there's like a lot of complicated math using options for like implied volatility and trying to figure out like what do they expect and move in the upside or downside right and so this all this is kind of published out there but essentially you never know if it's actually already priced in or not right so like a lot of people you know even some of the biggest companies right now like nvidia like you just there's so much data about them you would think it's priced in because they're up so much right and then yet still they surprise to the upside and then it also depends on like how much of that surprise is so So there's a lot of variables that go into it.

36:31And like, I mean, you could obsess over trying to figure it out, but it's just it's a coin flip at the end of the day. I think it's actually more intellectually honest to treat it as so, you know, that like I'm putting this on a coin flip.

36:44Graham Stephan:Do people ever reach out to you with inside information and they say, hey, here's a tip. If so, Graham's looking for that exact information. I'm just curious because. Actually, no, actually, no. And I'm very careful to not even like accept those kind of DMs if it kind of feels like that. I'm surprised because I thought for sure that people would say like if you've helped them make money, that they might try to say like, hey, here's some info. Thank me later. Everything I use is public information. I don't ever, I don't have any insider information, right? Like I just connect the dots. Like a lot of that is like, you know, hope or copium or insane kind of theories about like, you know, this guy liked this post on LinkedIn and like, oh yeah, they're in Miami together or whatever.

37:24But again, that's public information, right? And it's just, it's kind of more of a fun side story than the actual play. What do you think are some of the biggest lies that are spread about investing online? Or the information that's being said that if the average person followed, it's just not going to help them? I don't know why. Some people get obsessed with trying to make a trade every day. You know, some people think being a trader or day trader, option trader is making$1 ,000 every day. I think it's because it's like, it feels like work. you know it feels like activity that's i don't think that to me is is not how i don't endorse that i think that's a lot of energy that's wasted because yes you can make a thousand dollars for a couple days and you lose five dollars one day you kind of break even right i think swing trading to me is kind of the best roi on like your energy on your time on your sanity on your returns because generally the stock market goes up right like you know it has to be 500 goes up good companies should go up, what I'm trying to do as a swing trader is to maximize the gains in a shorter timeframe, right?

38:27Because the market goes up and it also goes down. And if you try to catch things on bottom and sell them on the top, you are basically compounding your gains every single time. And that's how I was able to do 285X in 21 months. But that's also a very tax inefficient strategy. And I know a lot of people probably like, oh, Jack's talking about taxes. Like, you know, this doesn't really apply to me. But in actuality, taxes can cut into your gains substantially. And then that compounded year over year, you have just a smaller amount. post-tax that you're able to build, let's say, 30%, 40 % year-over-year returns on.

38:56I joke, just make more money. I mean, yeah, my situation was really unique. This was done in my 401k. So it was no taxes. I didn't pay a single cent on taxes until I withdraw. But even though I'm doing this in a Robinhood, normal brokerage account right now, I mean, if you're trying to maximize for long-term gains, but the stock goes down, you kind of wipe out those potential gains anyways, right? So I don't know. I think short-term gains are fine.

39:27Graham Stephan:So how much time should the average person spend a day researching and trading? I mean, I don't think it takes more than like an hour in the beginning of the day and maybe like, you know, at the end of the day, right? Just like reviewing like what's trending, going on CNBC, see what people are talking about, follow a couple of people on X and see what stocks they mentioned. The algorithm, to be honest, is really good now. You know, like a lot of people have lamented how the X algorithm has changed over the last few years. But I think it's really, really good now. So if you follow the right people, you'll be getting your, you know, intake of stock use.

39:56And you can also turn the bell on for certain influencers and get their posts as soon as they make them. To get more specific, who are those people that you should be following on X, not including yourself? Like, who do you look for for information? The first one that comes to my mind is Amit is investing. He's the GOAT. He's got like 500 followers. He was early on Pound here. who was early on Robin Hood, posting all these deep dives and interviews with these folks. Another, you know, he's a buddy of mine, but Michael Saccond, he recently, you know, was posting a lot about the photonics trade and like all these kind of bottlenecks related to the AI infrastructure, like picks and shovels kind of play.

40:31And again, like these amazing deep dives. Because like, you know, it used to be that you could only get these deep dives from like these Morgan Stanley, you know, 30 page PDFs, right? It was like really, really dry. But I think in the kind of more modern era, people are reading bite-sized tweets and learning a lot from that kind of drip feed of information. And then I think another one is Serenity, this anonymous, white-haired anime profile picture. She or he blew up from nothing to almost a million followers just in the last six months. And it's really, really good deep takes on the AI infrastructure build out.

41:02Graham Stephan:I really want to get down to what separates you, though, from all the people who want to try this or have tried it and fail. Because I am worried that people go and they see your story going all in and they say, oh, I'm going to go all into, and they just lose a ton of money. What separates you? Like at the end of the day, have you just gotten lucky? Is there a skill? Is there something you look for specifically? Are you able to avoid red flags? Is it an intelligence thing? Is it like a personality trait thing? I get very obsessed. And I think that is probably one of my strengths that like once I'm in the stock, I'm like obsessively watching it like all day.

41:40like back in you know the pandemic era like i would even be like you know on a on a zoom call right and i have like my chart open over here if you mean if you were following me i think the most important thing to learn really i mean is learn how i do things right i i endorse independent thinking like i'm here trying to share my my my research my train of thoughts like why i'm thinking this right what i noticed uh how i'm connecting the dots and obviously my my trades themselves uh and i'm really hoping that people kind of pick up that like if you you know have figured out okay i'm willing to all in this much amount of my money right only to one stock follow it okay and and now you're basically watching it play out in real time i think that's much more better than kind of a simulation or kind of backtesting or reading a book right because when you're reading about i bought here about sold here but when you're actually watching it play out in real time you'll kind of feel it that like oh yeah he sold this because you know everyone on twitter is is scared of this news or the Fed chairperson did these things.

42:40And like Kevin kind of connected all these dots and decided this was the top is time to sell. And I think that's much more going to, you're going to get that much more ingrained in you by kind of following me and watching how I trade in real time.

42:50Graham Stephan:Do you ever set limits where it's like, Hey, if it automatically, if it's down 20%, even if I'm sleeping or I'm just wasn't paying it, it's going to sell. Or if it goes up a certain amount, it's automatically going to sell. I've also never set a stop limit. I'm very weird. I I'm very afraid of actually, you know, know, your situation, right, where it's like randomly down 20 % one day for reasons that I disagree with, right, just some random macro or some fear headline. And then I get automatically stopped out when no, you know, so I've never said a stop limit my whole life. Now, you've previously said that every man should trade stocks like they date women only one at a time.

43:27Graham Stephan:Why don't you like diversification? Yeah, that's my my specialty on Twitter. It's a financial rage bait. Why don't you like polygamy? well i've been very why shouldn't men date 10 women at a time yeah so like jack

43:46props props that's just not even true concentration creates wealth diversification keeps it right that's that's just true and i think you know we go all in on things all the time in our lives right when you're a job that's an all-in on your time right a woman that's an all in right i'm saying like and it's true like you know when i met my wife it was like only like six weeks in we decided to move in together right because i was like this is it like i i think i love her and i want to move in i want to get to know her right i'm just i just went all in and i think i don't know a lot of people try to hedge right and and like you know try to especially in the dating world like oh yeah let me try to beat and find the best person no i think you should go all in and i think that's really important you also uh um really quickly find out whether is working or not.

44:34Either with a relationship or even with a stock. You really quickly get obsessed with it. You research everything about it and you figure out like, oh yeah, if you're only in like 5 % or only 5K, you're like, you know, eh, whatever. I don't really care about this.

44:43Graham Stephan:But this seems like this is your personality type is you're an all-in type of person. You're either 100 % in or you're out. Yeah, yeah. I will say that's my personality type. Do you think most people should follow that personality type or do you think some people would be better off not doing that? Or maybe they're a bit indecisive and when they go all-in on something, they don't really think it through i think it depends on your goals right and your time frame um i mean just use your view on life uh i have always been a very impatient person right i've always wanted uh gain success whatever as big and as fast as possible and obviously i've been willing to risk it and i've made many losses right i lost 300k in crypto right i did my startup uh back in 2013 and i failed uh and so i you know i failed a lot but i also kind of uh you know over the course of my life, taking like a very TikTok kind of pattern in my life, a risk on, a risk off, right?

45:35You do something risky, didn't work out. Okay, you know, quiet down for a couple of years. And once you kind of regain that financial buffer, that mental sanity, maybe try on some risk again, right? So I think there's like phases in your life too, where it's appropriate to kind of take on risk. Does it worry you right now that stock market valuations are seemingly pretty high? Not really, because of how insane this AI build out is going to be. Like this is essentially our version of the industrial revolution you know and i think especially the modern investor may be a little bit too used to these on a very quick bubbles right like a crypto is maybe a year or two right meme stocks maybe a year or two but like people don't understand like how big and and still there's so much more to come uh with building out these ai dentists eight data centers you have to just like try building an app with codex once and you'll realize it uh my view is the future of ai work is uh long-running compute intensive uh workloads uh basically you know most people just use ask you just ask how to do a question right and it's basically you know quick answer uh but what what people are doing in silicon valley right now is they're running these like 24 7 jobs right to basically uh keep churning tokens uh to do work you know the one example is like solve cancer right like you can imagine just giving uh an agent access to your lab and and all this data and other agents that it could spawn or whatever and just keeps running in a loop right trying to figure out how to solve cancer and so that is very compute intensive and we don't have enough gpus or cpus or memory or anything that the status of what like trillions of dollars in capex build out uh over over the next five years right and so we we just we just don't have enough and i think it's going to continue going into the into the future how could you be wrong either there is some technological innovation that increases the supply right uh that maybe you know China develops like their own NVIDIA style GPU really, really fast.

47:25That increases supply all of a sudden. Or these workloads don't really transpire. So right now, especially Silicon Valley, like coding is what most people use these LLMs for, right? Because it works. So you can build these websites and apps now. But can LLMs really replace, you know, accountant, right? A lawyer, a doctor, right? Can it really build robots? Like that's another like 100x, 1000x thematic bet that I have. Like robotics is actually the next inflection point for something called physical AI that requires like all the kind of same things, right? Like if that stuff doesn't transpire, there's no need for it.

48:02It just kind of stays in coding. Then a lot of this kind of bullseys just falls out. What are your robot plays?

48:07Graham Stephan:Because I tend to agree with you that it seems like the next thing would be taking ChatGBT but making it physical. turning it into a person or a robot that could do something. So how do you see that playing out and where are you investing in that? Yeah, I mean, I think this is going to change the world just as much as like Chachipiti did. There is just so much investment. Recently, A16Z produced a report that says like venture investment in robotics at all-time high, like, you know, 5X in the last quarter. I think, you know, humanoid robotics specifically is really, really interesting because a lot of the world is already designed for humans, right?

48:43Like how you open a door, how you put in a screw, et cetera, et cetera. And so if you have a robotic, just, I mean, they don't ask for insurance. They don't ask for sick leaves, vacation leaves. They could work all day. They don't even have to be perfect because humans are not perfect, right? They could show up late. Exactly. Slip and fall. And so there's so much investment in robotics right now. And actually what's really frustrating is that there's no way as a retail investor to really play this. that's been really frustrating. Just like every other kind of way before, right? It's always been happening in the private sector, right?

49:18Like, you know, it's from startups to AI stocks right now. There are two or three stocks that are interesting in the robotics world, if you're interested in playing it. One is called OUST, O-U-S-T. They make LiDAR tech, right? So like the lasers, you know, they kind of tell you how far away things are. Most recently they invented colored LiDAR. So they're the only ones to make it. And so that replaces two cameras. Before, you used to have a camera for color and one for LiDAR, and now you just have one. And so they're signing up a lot of customers. They're a public stock. Another one is a SPAC that's coming out pretty soon called CCXI, Agility Robotics.

49:54And it's gotten a lot of hype recently because of some Twitter influencers talking about it. But it is one of the only pure robotics companies to actually list on the stock. And then actually one that I've played a few times is called RoboStrategy. And they have the best ticker, BOT, bot. and the quick story behind that is this guy andrew kang he basically was an early investor in all these robotics names through his family office and decided to turn that into a closed-end fund uh basically let anybody you know invested in uh hey you know there's a lot of mechanics behind it very similar to micro strategy for bitcoin and like a creative dilution uh but basically uh yeah it holds like equity stakes and figure ai do you remember that live stream yeah with uh the robot you know uh for nine days straight right like sorting packages right that was like a media moment right and so like that's that's one of the biggest holdings in blt so like you know you basically get access to that so what do you think is going to happen over the next five years in terms of the economy k-shaped man everything is unfortunately k-shaped and and you know i think there's that's why there's this desire this angst that i notice in the general population especially young people to bridge that gap right uh from from one end of the k to the other uh and a lot of age to stay behind this but i mean i mean like i don't know uh my my fringe theory is that like this last like 50 or 80 years of the middle class was the exception to the norm like across like general history right most of history it was like you know you got the rich people and you got the poor people and uh because of the internet the internet and globalization whatever and america was able to kind of create this middle class uh but it does seem like it's kind of going back in the other direction right people talk about the wealth wealth income gap and etc and so uh the most important thing is to own assets.

51:37So how can someone increase their chances maximally that are on the lower part of the K-shaped recovery to then go to the higher part? Is it focusing just broad strokes here on income or on investment and buying the right assets? The most important thing is you first have to build your base, right? You have to take care of your debts and you have to build your base. And what I mean by base is, you know, your financial based your security based you know you can't be worried about when you take risks you can't be worried about your livelihood right and so what that means is you know get a good job right like like like make sure it's like safe and secure um find you know just make sure you're in a good place to actually go take out risk and then you can take a risk in many ways right like if you find find find where you're good at uh and just go do it i think a lot of people just get caught up like trying to think too much and trying to take like baby steps when i say go all in you know it means many things it could just be going and start making youtube videos right just go just go just go do it uh if you you know want to trade stocks or even do sports betting right like go all in and try and figure out do you have an edge uh i mean don't go on don't go in blindly without feedback loop otherwise you do end up losing money or like you know not growing your youtube channel uh set a timeline and i you know set a timeline like by one year i hope to achieve these things and really have a close feedback loop of like am i developing an edge here because i think the world is more and more rewarding people that are unique and have something different to offer in the world.

53:05Graham Stephan:So for the average person who's making$60 ,000 a year, a few thousand dollars invested, what should they focus on first? A quick thanks to Ethos for sponsoring this episode. Most of you guys don't know this about me, but when I was in college, my house burned down in a wildfire. And it's very human to think that nothing bad will happen to you, but the unfortunate reality of life is everything can change in an instant. And when it does, the last thing you want is your family scrambling financially. That's why we partnered with Ethos. They make getting life insurance fast and easy. What's really great about this is that it's 100 % online.

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54:11Graham Stephan:So take 10 minutes to get covered today with life insurance through Ethos. Get your free quote at ethos.com slash iced coffee. Again, that is E-T-H-O-S dot com slash iced coffee. The link is also down below in the description. application times may vary and rates may vary. So for the average person who's making$60 ,000 a year, a few thousand dollars invested, what should they focus on first? I mean, just load up your Robinhood account, buy something, right? It doesn't have to be an individual stock. I think most people have never even bought a stock in their life. They have their phone, okay, automatically buy one or something.

54:45But buy Spy, buy KikiQ, maybe buy$1 of Google, right? Once you have money invested in something, you just care so much more about it and start tracking it, right? Start seeing what people are thinking about it. Start watching YouTube videos about it. Start educating yourself about what it means to be either an investor or trader. And then gradually, basically, kind of do paper trades in your head. Like, oh yeah, that guy I was talking about, NVIDIA might have good earnings. I'm not going to do it, but imagine I did today. And then, oh, it was right. And it basically kind of retroactively analyzed, oh, why was it right?

55:16Maybe I'll do the next one or something like that. I agree. For a lot of my friends that do have a little bit of margin in their life, meaning like money between what they earn and what they need to spend on their necessity expenses. So like this kind of like entertainment budget, whatever the budget is that they can, the discretionary spending. I always say of that money, invest first, spend later. Like you should, as soon as I get paid, like even when I was getting paid like 4 ,000 bucks a month, like immediately I was shipping off 1500 into my Robin hood account. And then the additional 2 ,500 was just like rent taxes.

55:50and then like I had a little bit of money for food. And that was really it. Like invest first and then everything else comes later. Yeah, that's also great advice.

55:58Graham Stephan:Do you think people spend too much time though trying to find the next 10X stock and not enough time just trying to increase their income? It really depends on your growth potential at your job, right? Like a lot of people, I mean, you could work really, really hard and get a 3 % increase that year. And maybe that time was better spent elsewhere. I mean, that's kind of where I bring it back to this weird like angst that I noticed. It's called financial nihilism. You know, a lot of people have written about it. That just feels like your effort does not translate into results anymore. But there's this app on your phone now that does translate your effort into results, good or bad.

56:36Right. And I think that that agency, that field of control is like more and more important for people these days. I think generally, I think if you're just like aware of like what you're doing and also aware of like what the payback time period is, right? So like you mentioned your early example, if you're making$60 ,000 a year and you have a thousand dollars that discuss your income, you know, you make that back in like a week, right? And so like, if you, you know, did something and it costs you a week of time, then don't do anything for a week, you know, recuperate, then figure out as long as you're learning something.

57:04If you were to start from zero and build back to 10 million, ideally, what stocks would you explore and how exactly would you do it? Like what are like maybe three main picks you'd look into my pick right now is shaz right sharing ai to neocloud based in australia because i think this data center build out is only going to continue another one that's actually really interesting is nokia really yeah yeah because they recently got a billion dollar investment from nvidia itself and they also make these local edge node chips so basically as compute increases, they get slower too, right? And so you want them to go really, really fast.

57:43And so instead of like everything like happening in the cloud and coming back, it could happen at your local like telco, like a tower or something like that. And so that's kind of another really interesting one.

57:53Graham Stephan:And for someone who does not want to trade stocks or swing trade, but they want to build their wealth over the next 10 years, what do you recommend? Buy Google. I mean, if I were to distill it down to the simplest piece of advice, right like by google why google they're at the center of everything right they're they they have consumers right via google youtube google maps android everything like that they're building the you know one of the best models out there they have google deep brain all these really really intelligent people they're the only one at that intersection actually if you think about it like there are a bunch of you know ai infrastructure specifically plays and there are a bunch of companies that have a lot of consumers, but there's no other company in the world that has both.

58:38And I think that's just, it's an incredible moment. It'll just continue growing.

58:42Graham Stephan:What's a realistic annualized return that you think someone could expect over the next five, 10 years? I mean, I think the SPY is going to make like 10 to 20%. I think it's going to continue that trajectory. Yeah. Like I think the profits, the revenue numbers are all there. The big companies are going to continue getting bigger. Like I said, this is our version of the industrial revolution. uh and so i think if you're trying to trade you're actually trying to beat that didn't that somewhat end though with the 1920s great depression there was a lot of margin or a lot of other factors like the dust bowl and stuff like that right we're seeing a mini version of that right now in korea i don't know you know i'm watching i get the twitter notification where it's like your stock market circuit breaker just you know down 10 but then i'm looking at the u.s markets and we're up Yeah, yeah.

59:30I think, you know, we have developed a lot of rules and regulations and guardrails since the 1920s, right? I think the market also moves a lot faster and any bubbles, you know, have a mini pop and any corrections get a mini bounce a lot faster. And so I don't think we're going to get like some kind of crazy depression. I think we'll have a lot of volatility, but I still expect, you know, like a good 10 plus percent per year over the next five years.

59:56Graham Stephan:I am always worried that we've gone up so much over these last 15, 16 years since 2010. I'm like, how much longer can this continue before we start averaging like... It's 2 % to 6 % a year for a while. Maybe like a forgotten period, right? Right. And then people kind of grow bored of it. And then they reallocate their assets somewhere else because the stock market's not doing anything. I mean, what else do you invest in, right? Like America's - T-bills. Graham has, what, 25 % cash? It's 20, 25 % somewhere. Cash right now. Yeah, I have - That's not cash. It's tax-free muni bonds. Tax-free muni bonds.

1:00:31Graham Stephan:Making blended 4 % tax-free. It's great. It's great. No state income tax. You should transfer it to X money, 6%. You know what's so funny? So I could take out a pledged asset line below that 6%. I did all the math on this and net taxes. It's not worth it for me to transfer. It's such a small increase that I would be able to get. And I would have to take millions of dollars to even make it worthwhile. And I'm like, am I really going to risk millions of dollars for like a point something percent? No, simplicity is better. Annualized return is not worth it. But I thought of it. And I worked every which way.

1:01:08Graham Stephan:If I could take margin, I could take a pledged asset line and move it over here. Wasn't worth it. But it is very appealing. The line only goes up, right? Like America is still the number one country. The US dollar is still the most important currency. You have 401ks still reinvesting into the spy every year. You have Trump accounts now. They're also going to be invested into the markets, right? The best companies are in America. And like I said, they're only going to keep growing. I don't see a bear case. Man, I feel like that's what everyone says, though, right before. It's like we cut to like a month later and something happened.

1:01:40Even the 2022 blip is a blip now, right? I mean, yes. I mean, this is, you know, we're young to remember, like, what was 2001-2008 like? Right? Because that, in theory, was kind of like a flat line for the U.S. stock market. Albeit, that's from top to top, 2001-2008, right? Like maybe people have talked about how euphoric and senseless the dot-com bubble actually was with, you know, really fake revenue and stuff like that. We're not seeing that now. And again, I think everything just gets corrected now because you have social media, because you have like this forum of people arguing every single bear case that exists out there.

1:02:15All the ideas kind of get out. Like people talk about like, you know, the circular financial engineering, whatever, like companies. People are talking about it openly, right? Like, you know, no one's finding anything. It's not scaring billions of dollars to keep getting pushed in. So I think, yeah.

1:02:28Graham Stephan:What about any black swan event? So like a, like a COVID-25 or something. Yeah. I tend to think it's something nuclear. I tend to think all it takes is, why are you laughing? I'm just saying, because like, dude, if, if like, if we have, you know, nuclear fallout, I am not caring about my Schwab account. It's like, I'm not going to care that like, you know, I really shouldn't have taken on an additional$100 ,000 margin to buy like Google stock. That's why you should be buying. That's why Jack doesn't buy the bottoms. He only buys the tops. Excuse me. I invested in Bloom. It plummeted. And then I also bought the bottom.

1:03:05So I do sometimes buy the bottom. After I've already lost a lot. Let's just say all of a sudden, you know, some country, I'm not going to say which one, drops 10 nukes on America. Right. On America.

1:03:19Graham Stephan:But there would be some fear. Right. Or there would be something on the other side. I mean, it's impossible to predict. So it's like, it's hard to like live or kind of invest like that. Right. And I don't know if you're going to get the push notification early enough to sell before it happens. Get the Amber alert. Yeah. Immediately sell everything. Yeah. Yeah. I mean, I mean, in that sense, like, you know, build up as much money as you can and then switch to gold. Is there a specific type or style of investing that you have officially banned yourself from ever doing again? And you would recommend people ban themselves from doing that same thing?

1:03:51Yeah. I mean, I don't touch options. I don't, I don't touch options at all. It's just, it's too enticing. What do you think about Jack's option strategy? Wait, do you buy or sell? I sell options. You sell options. So I sell puts to enter positions and I'll find something with a high implied volatility on a blue chip company that I really like, such as Robinhood, such as, you know, I have a little bit of Elf, I have a little bit of Bloom and I sell puts to enter the positions and then I sell calls to, you know, ideally make some weekly premium. And if I'm buying options, I buy them over leaps where it's essentially just leveraged money.

1:04:26Does it increase your stress at all? Like, are you watching it close to the strike? No, if anything, it decreases my stress because it's a hedge against the position. So like my stress would be amplified if I was just owning the stock outright because that's technically a more aggressive strategy than hedging against it, which would be like a covered call. Yeah, yeah. So like the way I see it is if I can make two, if I have to collect 2 % premium per week on a company, 3 % premium per week on a company selling covered calls, then I know if the company goes down 3%, I'm exactly where I was. If it goes up however much it is, I collect 3%.

1:05:02If it stays the same, I collect 3%. If it goes down 10%, the IV spikes. And if the IV spikes, so do premiums. And then I'll just sell another covered call to continually decrease my tax basis. And the same logic that you said, how the only thing you really consider is the average cost or like your enterprise. That's essentially what I'm doing too by selling calls to decrease, you know, it's one way of looking at it, my average cost. Yeah, I don't know. I'm a very simple person, right? And that's a lot of math. And to me, if it makes sense to you, right? And the math is easy and it doesn't add stress or take too much time to kind of analyze and figure out what the right options to sell are, I think it is good.

1:05:41I mean, many people have recommended it to me. I just like to try to keep things simple. Let's compare Robinhood accounts. We're all going to compare Robinhood accounts at the end of this podcast, guys. I have to ask you, why were you banned from Wall Street bets? Oh, I don't know. i think someone just got really jealous and kind of like rage banned me and deleted a bunch of my posts because you were kind of famous on wall street bets yeah yeah like i didn't do anything wrong um i was posting you know just screenshots of my trades right and like they got tons of upvotes um i mean i had someone uh dm me uh who's apparently part of the mod team right and she said like there's just one random person who like hates you and just like a moderator that hates Yeah.

1:06:21When did you get banned? I don't know. This is probably like mid 2021 or something. Do you have any idea why? I mean, I've perused your Reddit account. You do say some things that are, you know, maybe a little bit abrasive to some with, you know, moms or mother-in-laws. It's Reddit culture, right? It was Wall Street culture. So I was obviously just kind of playing into it. No, I think probably they just saw me getting too big and just wanted to cut it out.

1:06:49Graham Stephan:You think it would help their forum, though, to have you on there and bring in more views, more engaging? I mean, these moderators on Reddit are weird. It seems like they like lost porn more than they enjoy the games. Yeah, yeah. You're one of the few people on Wall Street Bets that turned 30. You made effectively$10 million from nothing, and they banned you. But then all of a sudden, you post yourself losing 99 % of your portfolio. What I've learned online is that everything, all hate is just jealousy, you know? And so probably they hate to see a winner, right? And yeah, the moderators on Reddit are just extremely power hungry.

1:07:29They just love banning people for any reason. It's basically like a power trip. And what's more toxic, X or Reddit? 100 % Reddit. 100 % Reddit. Yeah, people say like X is bad. I'm like, this is nothing compared to what I used to deal with. What makes Reddit so toxic? Do you think that the stereotype of like the neck beard, you know, sitting at like the, you got like some sauce from the night before dribbling down your chin or whatever, you know, like your belly's hanging over your desk. Yeah. Like, is that accurate, you think, of Reddit users? They call it like the internet hive mind theory, right?

1:07:59When you take like a bunch of people and you anonymize them and put them in a group, it just descends into like the scum of the earth. It's the anonymity, you think? Exactly. Exactly. Like I've connected with several people on Reddit. And, but the problem is I had to use like my own thinking skills and reading skills to articulate, okay, this guy actually sounds like a well-educated adult versus like some 10 year old kid. Right. And I would actually connect with them and, you know, et cetera, et cetera. And I trusted the word more. But generally the way the algorithm works and the upvotes work is just, you know, very much based on dunking and extreme content.

1:08:32And yeah, you just don't know who these people are. On the topic of Reddit, you created r slash the race to 10 million. I'm curious, why did this resonate with so many people? Because it has like 500 ,000 members. And what is so important about getting a$10 million net worth? It all started as a kind of inside joke with me and a couple other Redditors that like we were all kind of racing our own ways to 10 million and see who gets there first. I mean, obviously, it's just like a nice big number. And we created a subreddit. We're basically posting updates and screenshots. And like, you know, I made it first.

1:09:04And there was like a spreadsheet of like, you know, where one was at. and it actually kind of died down for a little bit uh between like 2020 2023 but somewhere in the middle i think it crossed like a magical number just like on its own like around like 25 000 members and i think that's when it started getting trending on the front page right and i mean that was my favorite part of wall street bets it was the the game porn and loss porn right like the big kind of numbers on the screenshots and so people just started posting their crazy games on the race of 10 million it was like the perfect forum for it uh and so i kind of cleaned it up a little bit uh i started promoting it um and wall street bets at that time i mean it just started turning into like a instagram meme page right it turned a bit into a cesspool exactly exactly no one was actually sharing any real dd people you couldn't follow like people's stories uh and so i think the rates were to really kind of fill that gap what gets unlocked at a 10 million dollar net worth why is that number so important i mean first and foremost i live in california it's a very very expensive state um and i think you know if you want the modern life that social media it sells to you these days right it is very expensive like whenever i post something like that people are like oh you can move to southeast asia you could just like you know buy this kind of house in uh in tennessee or something like that right but like that's yes you can live and i can retire you know for 50 60 years probably in thailand right but do i want to right like you know and i think you've talked about this on your videos often right like the the what people want in a house yeah right compared to like 30 years ago people can't stay on single pane windows right they want central air like that'd be this that's a quality of life that we want uh has dramatically increased and you could blame social media for that you can blame a lot of things for that but we're also just still humans right like we get fed you know this information unwillingly and that kind of raises our own bar for like what we expect and happiness is basically expectation meets uh minus reality right and so if your expectation because of just various social media and life tells you that you need to you know be able to send your kids to this kind of daycare or go on vacation twice a year or something like that like that's kind of like unfortunately what you expect from life now and so like you know even at 10 million dollars that's not going to survive me for 60 plus years like i've done i've done the math like it's very expensive to live and you're not even taking into account inflation and like who knows what happens in the future right because again like if you retire, you're probably not going to be able to get a job if you're out of the workforce for 10 years, right?

1:11:24So are people misguided then and they have their sights set on$10 million when in actuality it should be more? I think so, actually. How much higher? There's this really good report from the Hampton Club and they had this PDF where they kind of did a survey and got all these numbers and results and feelings around them, right? And I think it quoted$50 million as the number where you just stop worrying. Right? You just stop worrying. And no matter what happens, you could tank it, you know, the market go down. But I will say,

1:11:54Graham Stephan:because I saw that survey and I did a whole video on that survey because I found it very interesting. A lot of those people don't have 50 million liquid. It's 50 million net worth. That's fair. And a lot of that net worth could be tied up in their company or private equity. Who knows? So the liquid amount is lower. I would argue that the liquid amount is lower, but according to that, it was a 50 million net worth. That was the point. Psychologically. Where people cared more about legacy and doing something with purpose than they did about making more money. But under$50 million, they cared more about making more money in terms of importance of, you know, there's that and also family and everything else.

1:12:36Graham Stephan:But that was still on the radar. It was still worried, still stressed. Like, oh, if the market had a bad year, oh crap, Now I need to like grind again. So explain then your logic in, I mean, you had this race to 10 million Reddit. This was clearly your fire or your fat fire goal was 10 million financial independence, retire early. You wanted to race to$10 million net worth. You did exactly that swing trading, going all in on individual stocks. But then once you hit that net worth, you threw it all into ETFs. And so explain this cognitive dissonance where you think that actual freedom is higher than 10 million.

1:13:11you raced to 10 million, but then once you hit it, you did exactly what it, what one would do to kind of slow down and preserve their capital instead of like race to a higher net worth. Yeah. So, I mean, this was my grind, right? Like I made it to$10 million and essentially it's my nest egg now. I think it's also compounded by the fact that I can't really access it. You know, it's in my 401k. If I withdraw from it, I get taxed. It turns into income tax and a 10 % early withdraw a penalty, right? And that's really significant, right? So essentially I kind of think of it like a trust fund that I created that you're not supposed to touch.

1:13:44Maybe I'll withdraw from it to top off or I want to buy something nice. I have withdrawn like a few million from it, right? For life stuff. But you're not supposed to. And I think that keeps me hungry too. Like I want to make my legacy, I want to make my impact and success through my startup, through the old-fashioned way, right? Actually make something impactful for people, a real business. and this is just it's a safety buffer now right so rather than continue to go all in on that and the stresses that come with you know trying to do that for 10 million dollars that's parked in index funds it's gonna double in 10 years that's 20 right it's gonna double again in 10 years like why not just wait and use my time uh and something else and so then how is your current net worth divided up how much money is in your 401k yeah i have currently i think 11.5 million dollars in the 401k uh that's divided up in uh 55 million in spy 5.5 million is qqq uh and i think like you know close to millions in d ram uh you know memory chips uh and and and then i have the robin hood all-in account that's currently at 52k uh that you know i trade with and look at every day uh and

1:14:47Graham Stephan:then the rest is just yeah just like savings and the house see i never liked the 401k yeah i hated it. I hated the idea of foregoing taxes today and paying taxes later. Because in my perspective, taxes, I think, are going to be higher in the future. Especially, I think, in California, where you are. This gives me options. I don't have to be in California when I withdraw. But you're still going to have to pay federal income taxes. Sure. Sure. Yes. And that can change in the future. Right. And so, yeah, that is a small risk I'm taking. But I like to have, you know, now I'm, you know, kind of like, you know, trying to justify it and how it works and all that stuff and strategize around it.

1:15:27But this was all a happy accident.

1:15:29Graham Stephan:But if you could have done it differently, would you prefer to have done it in a Roth or in a taxable account? Anything other than a 401k? Definitely a Roth. I get quite depressed when I run the numbers. And you know what's funny is the reason I didn't do it in a Roth, right? Like I said, I started January 2020 with 35k in the 401k. I had the option to transfer to Roth to do the rollover. but then that means i would have had to use my own cash to pay the tax for the rollover which was around 12k i was like i don't want to pay 12k out of pocket for this rollover but it was a few million dollar mistake yeah yeah i mean in hindsight right but you could never you never know no one expects a 401k to turn into 10 million right well you did you certainly did and you still didn't pay i still would um suggest doing it in a 401k of Roth because again, psychologically you can't touch it.

1:16:22And I think that that saves you a lot of stress and pressure from like down days or whatever. And also, um, uh, it just, it just feels compartmentalized. Right. Versus like in your taxable mortgage account, I got to worry about all these things and taxes and you can withdraw from it anytime you want. So how much should the average person aim to save? I mean, you just got to figure out the life you want to live. Right. and double it. I mean, there's a fire map, right? 4 % of your net worth, right? As your kind of average yearly spend, right? And so, but I think it is important to double it. I think I don't, you know, there's very few people who've actually retired early and tell stories about like, I mean, you always want to avoid the worst case scenario.

1:17:08And to me, a worst case scenario is you retire early because you thought you hit a number, right? Five to 10 years pass. Something happens, maybe like a black spot or something like that, a market tank, so you made a mistake or accident, who knows, whatever, right? Something miscalculated. Now you're 10 years out of a job. How do you bounce back?

1:17:23Graham Stephan:So for you, doesn't that mean$20 million? So now it's a race to$20 million. Yes. I think$20 million is kind of my next target, and I will feel a lot safer with$20 million. And now you say double it. What if someone has$20 million? Is it$40 million? I mean, at$20 million, what is 4 % a year? $800 ,000. $800 ,000 a year. So yeah, I mean, I think that's a pretty good life. $20 ,000, you don't have to double. No, no. I mean,$800 ,000, I mean, a million dollar salary a year, right? You think about what kind of life you could live with that. I think that's pretty good. I mean, other people have different ambitions.

1:17:57They want to travel every day. They want a private jet. I get it. But for me, I'm a pretty simple guy in real life, you know?

1:18:03Graham Stephan:So at what point does taking on additional risk just not become worth it? Hey, by the way, really quick, if you want extra content just like this, as well as early access and a bonus post show posted every single week, feel free to join as a channel member to get immediate access to all of that, as well as early access to everything else that we post, along with priority responses to all of your comments. So if that sounds cool, feel free to join. Would love to have you on board. Thanks so much. We'll get back to the podcast now. So at what point does taking on additional risk just not become worth it?

1:18:35Graham Stephan:I would say it's at 10 million. you know there's something nice about that number i think you're i think you know the first million is nice but it's really meaningless these days right and i think you need to kind of keep going uh and i think it's also important to kind of stay hungry through that uh through that journey right either the grind whether you're you know doing youtube or investing or trading or whatever it is uh to stay hungry until you hit like 10 million i think 10 million is pretty important and so have you fully retired from your job uh no i'm as busy as ever so you're still working your career.

1:19:03Yeah, yeah, yeah. You know, I'm the founder and CEO of this company called Alpha AI. We built a proactive agentic trading companion. So it's like a mobile app that you could talk to and it'll trade for you. And I guess you could call me an ex-influencer now. You know, my ex-journey is kind of crazy. Like I started posting just to kind of market the startup, right? And I grew from like a couple thousand followers to over 160 ,000 followers now.

1:19:25Graham Stephan:How much do you make on ex? It's kind of funny. So on RevShare, I make like a thousand dollars a week, I think is the kind of average rate um but uh i've kind of blown up my x subscriptions uh quite a lot and so the story behind it is another happy accident i turned on x subscriptions because i thought it might help me with the algo like that's it um and i said at the highest price because i didn't want anyone to actually buy how much was the price i said at 200 a month yeah yeah and i didn't have any content i was like i'm not i don't want to post like subscriber only content i don't want i don't want this like you know extra you know thing to do right and then like you know one person subscribed you know two persons subscribed accidentally i asked him like what do you want they're like oh i'm just happy to support i'm like okay cool thanks um and then 20 people subscribed and then 100 people subscribed and a couple hundred people subscribed how many people do you now have subscribed to you uh i think people are gonna go crazy about it and this is the most transparent financial influencer on X, right?

1:20:27Oh, thank you. Thank you. Yeah, yeah. Repeat that. Okay, I'm the most transparent financial influencer. I need to show you this now. Okay. Yeah. I can show you my Creator Studio subscriptions panel.

1:20:39Graham Stephan:Oh, wow. Oh, my gosh. Okay, so you have about 600 active subscribers paying you $200 a month. Wow. Yeah. I feel like we got to be uh and this is michael take note of that this is only started in the last two months wait a second i can't do math yeah 120 grand a month yeah i mean that's gross revenue you got to take out the apple fees and stripe fees and all that kind of stuff right so that's a lot of jack yeah 25 off and then taxes so you're making i don't know like 80 grand a month post all t fees everything on on twitter it's kind of crazy i think there's a strong desire for you know transparent and authentic financial media.

1:21:24Like, I mean, I'd love to flip the interview back to you a little bit and just get your thoughts on like where do you think the future of like financial influencers is going to go? Like no one's watching CNBC anymore. It's true.

1:21:34Graham Stephan:I think there's such a fine line because I noticed with any sort of stock trading person, subscriptions are like the number one way to make money. But in a way, you're almost selling money because there's this idea that, oh, I'll pay$200. I get some proprietary information that'll make me more than that. And so it's a very easy push of like, hey, if I pay 200, I could see an ROI of even$100. I make$100 a month paying 200 is an example. It just, it sells itself in such a way. So I see a lot of success with that. The gray area becomes, what's the success rate of the stocks? And do you have an influence on the price going up?

1:22:21Graham Stephan:Oh, yeah. If you buy something, does that cause the price to go up? And then all of a sudden, now is this the self-fulfilling prophecy of like, I buy a stock and it goes up because I buy it. Yeah. And, you know, I take this matter very seriously, right? Like it affects like the stocks I pick and like when I post about it. I mean, I think the number one thing is I'm very transparent, right? I post my buys and my sells. Like people know exactly what I'm talking about. I don't have any other accounts. I only have those two accounts, the 401k and my Robinhood account, right? I post my exact thoughts.

1:22:53Recently, I only post my trades after market closed now. To me, this is no different than someone going on TV and saying, I own this stock. Like Jim Cramer. Yeah, yeah, yeah. Or like Michael Berry. He has a sub stack. He's making multi-millions. Yeah, yeah. He's definitely aware if he was in a movie. I think that's freedom of speech is very important. But I think where people get, you know, just the bad people are doing very bad things. I've been in these discords. I have read the SEC filings, the lawsuits against these people, right? Where they're just lying. They're just straight up lying. They're saying like, my price target is$1 ,000.

1:23:29I'm holding this forever. And they just sold. Like, you just, you just, it's just blatant lying.

1:23:35Graham Stephan:So what should they do to prevent that from happening? Or what disclosures do you think should be required to crack down on that? The SEC can only go after big people, right? Like the reason went after Andrew left, right? The Citron short seller guy because he was doing this exact same thing, right? He was telling people, I'm still holding his my price target and that he would just be selling into that movement that he created, right? I think that's just, that is wrong and that is deceitful. That's what the SEC defines as manipulation and deceitful. I think transparency is really important, right?

1:24:04Like how much are you playing with, when you buy, when you sell? That's why I post all my trade receipts. It's like a video too. Like it's like, you know, completely real. Um, and I think, uh, directly to your question, you have to teach everyone how to do independent thinking, right? You have to teach people how to recognize these scams and these like deceitful people. Like that's really how you protect the masses. Cause no matter what, the SEC can't go after everyone. So how much money are you making on X? I mean, I currently, I guess you could say I'm making a million dollars a year. That is absurd.

1:24:35A million dollars a year. And that's from$200 a month subscription fee that people pay into your membership. Yeah. from the X subscription I started only about two months ago.

1:24:45Graham Stephan:It's only going to go up, man. Especially with the amount that you're tweeting. I mean, I'm not even doing much. I post like, you know, a few posts a day. I post my early thoughts, my watch list, you know, my trades, right? I think there's just so much, there's a latent opportunity, right? And a small window to become, I think, you know, I think X is going to be the most important platform for all the tastemakers in the world. Like, I mean, the vision for, X or SpaceX AI, right, is for it to be the operating system on Mars, right? The social platform, the chat platform, the money platform, etc.

1:25:17But even here on Earth, I mean, Zuckerberg tweeted the latest model release on X. It got 12 million views, right? Like the chief AI officer, Alexander Wang, I met, posts like 400 times on X and like a few times on threads, your own product, right? So that just shows you how important X is to kind of the general kind of talking points and population. and it's all downstream from there. And so I think it's really important to be an influencer there. So I skim Twitter or X daily. Like I'm constantly looking at X and you started showing up in my feed and I would see your tweets and I liked them and I would kind of like keep tabs on you because I thought the transparency was really interesting.

1:25:56I'm like, okay, like I wonder if he's making money, losing money, what is he buying? What is he selling? When is he doing all of this trading activity? And I enjoyed it, but I also found myself like a little annoyed by your account too. And I think obviously that's kind of like you do it on purpose. You post like rage bait. And I wanted you to correct any of my observations because I could be wrong about some of these things, but these are the main contending points that I have to the stuff that you say on Twitter. And I want to hear your opinion on this. Obviously you publicly shared that your net worth was like$10 million,$11 million ish, $12 million close to now.

1:26:29It's in my bio. It's in your bio. So you're like, you showed your net worth, but then for some time you created this challenge account. And in the challenge account, you said, I'm going all in, like I'm full porting. But I think for a while, you didn't really stipulate that that was your challenge account. And so some could be led astray thinking you're putting$11 million into some company when in actuality, it was less than point whatever, zero 3 % of your net worth. Was this true or was this? I assume that people were following me and aware of the entire story, right? Like people have seen me post about my journey.

1:27:01People have seen me post about my 401k$11 million screenshots, and they'll see that this is a Rob McClure screenshot is completely different, right? And this is an all-in challenge account, which I also do mention in various kind of replies and comments, right? Yes, not everyone follows every single tweet. Sometimes they just see one tweet and that's your first time exposure for you. So I do, you know, make sure I add an asterisk. I saw that you started doing that recently. Yes, yes, yes. Which I appreciated because you said, I'm going all in, added an asterisk. Yes, yes. And then you said down in the bottom of the tweet, you clarified this is all in on a challenge account.

1:27:31So it's not actually like my public$11 million net worth. it's just like the 35 or so thousand. But then another thing that I saw that you do that I was like a little about was you started the new challenge account with$35 ,000. You ran it up to what was the peak? Oh yes. I did run up to about a hundred K. So you ran it up to a hundred K. How quickly? Um, I mean like a month or two. Yeah. A month or two, but then you ran it back down to like 35 K. Yeah. Basically exactly what you were in the beginning. And then you recently tweeted, I turned 35K into 50K in a matter of like a couple months. Yes, you did do that because now you're at 50K.

1:28:07And so you did that, but it was from the second time of being at 35K, which I also thought was like, okay, this seems like it's lacking a little bit of transparency because technically you're still down, you know, 50K from your all time high. Granted, the returns are still solid. Yes, yes, yes. It's, it's, it's, it's very hard to, you know, explain all that nuance and disclaimers on Twitter, right? And especially, you know, you're trying to balance, you know, engagement and going viral and content, whatever. Like people say that in the comments, right? And I like them and I retweet them too, right?

1:28:39But like, you know, kind of tongue in cheek, right? Like, shh, right? Like, dude, like, I don't try to hide that, right? Like other people, you know, expose that. I'm like, you're right, right? Like I really kind of lean into the fact that like, you know, I round tripped already, right? To me, it's, you know, it's marketing, right? Like Twitter, I mean, it's similar to, I think, how Apple always says every iPhone is the best iPhone they've ever made, right? Like when the common person hears that, they're like, oh my God, this is the best phone ever made, right? But only kind of tech insiders are like, oh yeah, that's a very specific sentence they said.

1:29:12And similar to me, when I say I went from 35K to 52K in two weeks, that is technically accurate, right? And so in terms of disclaimers and is there other information people are not getting, this is why, again, I endorse independent thinking and doing our research like you have to kind of click in the profile see the other tweets and kind of catch up on the story right like there's just so much like i can't be explaining the whole story to you every single time uh otherwise none of the posts will go viral so when's the last time you were wrong uh the worst trade i made in this uh this new account is uh has been a rcat uh red cat drones uh because i thought that you know the pentagon they approved like a billion dollars spending and the whole you know ukraine war kind of changed how the the war uh story works and there's going to be a lot of investment in drones.

1:29:56Like that is actually true. That did not reflect in the stock price at all, you know? And so I kind of held this down and all the way, that's what kind of made me round trip all the way down to back to 35K. What I was curious about is I know you bought RCAT and then it went down a lot, but then you doubled down by buying RCACs, which is the 2X leveraged RCAT stock. And I'm curious, did your thesis change or did your conviction level change in order for you to go from, you know, just the base share of RCAT to the 2X leverage? I had never done any leverage ETM ever before, right? I tried to stay away from those.

1:30:35And that was a rule I set, but, you know, rules are meant to be changed, right? Different market conditions, different styles, whatever is meant to be, you know, played with. You got to experiment with yourself too. And so I did get successful with Palu, which was a 2X version of Palu to networks, right? And that went well because of earnings and whatever like that. uh so i was like oh you know maybe 2x leverage things are worth playing with right if you have extremely high conviction uh and with the red cat play you know i thought like i could catch the bounce uh and with a 2x levered play you only have to bounce halfway there in order to make it all the way back uh but again the bounce never came and i think my main takeaway there is yeah you don't that was almost essentially going off all tilt and so the mental kind of stop loss was 35k because you didn't want to go probably beneath the original.

1:31:19That is fair. That is fair. Yeah. I don't do real stop losses like systematically. Right. But I do have mental stop losses. Right. If something's, you know, down 20 percent, 30 percent and the chart just looks absolutely ugly, you know, then. I'm curious how your membership fees changed from, you know, taking it 35K to 100K. Like how many members did you have paying you$200 a month? And then how did that change after you were incorrect about the RCAT and RCACS thesis? The analytics behind extra subscriptions are actually very light there's not that much information about churn rate and who's canceled and when they cancel whatever right so the gross number yeah yeah i mean i've seen it dip down i mean it's i mean like like you know i i'm not sure if it's related to the rcap play or just like you know they subscribe for one month i want to see what was behind the content they liked it or didn't like it uh and then they churn like i think like you know similar to me like a lot of times you sign up for a subscription right yeah and the first thing you do is just go cancel right so i'm not sure if that's not if it's related to the play itself or they just wanted to try for a month what's funny to me is like technically speaking you did bring it back up to 50 or 55 is where you're at right now who's to say you'll be in a week or two weeks or a month who's to say but the funny thing is you bring it up and then everyone starts subscribing and i imagine like like the gross amount of subscribers that you had went down right after yeah yeah rcat and rcax like once you were incorrect about that thesis then people unsubscribed and and stop paying you.

1:32:43But then probably as you're going back up again, the people are like resubscribing. It's, but they don't have the foresight to look over a long period of time. And this is not my endorsement into you as an investor. I'm just saying like, technically speaking, if you do look at the data over a long period of time, you have been correct more than you've been wrong. And it's funny how it just kind of like, there is a clear correlation between how you're doing and how you're not doing, like in a, in a small window of time. Well, that's investors across.

1:33:08Graham Stephan:Yeah, exactly. It's just, it's just funny. Yeah, buying it and the hype and selling the fear, always. I share this message with every new subscriber. I highly endorse independent thinking, right? I share my thesis. It's up to you to decide whether you like it or not, right? And for the RCAT one, a lot of people disagree with me, you know? And I noticed that. A lot of people did not enter the play with me because it was a fairly weak thesis, like looking back on it, right? And so I'm happy that, you know, a lot of people skipped on that one. Do you think that you felt pressured to go big to like prove yourself again in that trade?

1:33:42Yes. There was another lesson I posted about recently, which was don't force a trade.

1:33:46Graham Stephan:Yeah. Right. I think because of whatever was happening at that time, right? I was like, ah, let me find another trade. And like the thesis just wasn't strong enough. And so it's actually funny because even like last week when the market was down a little bit, I'm like, oh, should I like swing again? I'm like, no, no, no. Like just cool down. Right. If you're like trying to force it, if your thesis is not strong enough, just like cool down. It's fine. You can even stay in cash for a little bit. until you feel like you understand the market. And so a lot of lessons, yeah. Who do you think is the best investor alive right now?

1:34:12There's a clear answer for that, actually. It's Leopold Machenbrenner, right? The ex-OpenAI guy that started his situational awareness fund and invested in all these picks and shovels, right? Like he's, I think, up to like$20 billion in AUM, which is from, this is from like a two-year track record, by the way, right? This is equal to Bill Ackman's Pershing Square that he's developed over 20 years, right? Man, this guy, because, you know, he wrote his early thesis on the AI infrastructure build out, invested in all the picks and shovels along the way. Now that's why he's up to like$20 billion now.

1:34:42Graham Stephan:Doesn't that concern you, though, because Cathie Wood had a similar upswing 2020, 2021? Yeah. I mean, I think the game changes at different scales, right? Like, I think he knows this industry well. There's obviously the right timing for that. But who knows what wave happens in the future, right? that he or me or not benefit from. And also, you know, honestly speaking, like all these hedge fund managers, at a certain point, you're like, you know, trying to increase your AOM because you can kind of bank the fees, right? You're not necessarily in it for the gains themselves. That's an interesting point.

1:35:13Yeah, that they're probably not so focused on taking risk that could on average yield them 40 % if that means they have some years where it goes down 10. That is my critique of that quote that like hedge fund managers statistically don't beat SPY because I think most managers are playing a different game. Right. You're playing a game of delivering good reports to your bosses. You're playing a game of like, I better make sure I don't lose money so that, you know, my LPs don't don't don't exit. Right. And they're playing a game of like, hey, we develop, you know, we double this year. Give us more money.

1:35:46Right. Versus if you're playing with your own money, you're actually really invested in concentrating these bets and thinking deeply about your own net worth and stuff. It's easier to sell a product that guarantees, you know, positive return, even if the positive return is like three to five percent than it is to sell something that could have negative 10 percent one year, but up 40 percent. And like that volatility because people don't have the stomachs. The dirty secret on Wall Street is most people just want to make that one year claim to fame. Right. Start their own fund and then just coast for the rest of their life.

1:36:16What are your thoughts on Chris Camillo? Love Chris. Yeah. I watched the podcast with you guys. He was on another live stream with Amit and Wolf recently talking about AI agentic trading. I think he's the GOAT. We asked him what he thought about you. And he said, I actually don't know much about him and can't remember why I started following him. But there must be a reason. Since he is a course guy that likely regularly shares trade ideas with traders who will pour money into each of them, I'd ask the question about exactly what parameters he puts in place to ensure that he's not profiting off of the trading flow of his subscribers.

1:36:49How many days minimum does he wait before exiting a published buy trade? Does he fully disclose his exits? By Kevin Hsu's own words in his article, Embracing Degeneracy, he seems to be the byproduct of right time, right place, luck fueled by a methodology that is highly concentrated. Feels like he is better than an average investor who spends time researching and taking concentrated bets that have worked out. But most of this appears to have been fueled by a bull market. So not necessarily a genius investor with a meaningfully differentiated strategy as much as a bold investor who is benefiting from simply bringing aggressive, long and concentrated in high risk growth equities.

1:37:27It's a relatable story, as most anyone can replicate that success to some extent. What do you say to that? Thank you. I think it's a fairly accurate critique. I am very bold because I like I like big rewards, like small rewards don't excite me that much. Right. It's not worth the time and effort. um and uh there's definitely a huge degree of luck right like i'm doing this in these bull markets right but i also i mean the way the reason i post on x and and try to get engaged in bait is because i'm trying to i think you need to put yourself in positions of luck too right i think a lot of people uh don't uh i think a lot of people are are very conservative they can't deal with any money loss at all like i i know people with millions in cash and they've been in cash for the last five years, right?

1:38:13I'm like, what are you doing? At least put it in the spot. You're like, oh, but I could be buying a top or et cetera. I don't get it. I'm just like, I think you need to put yourself in positions to become lucky, right? And also just like minimize your loss, right? And that stuff. In terms of like the course guy, it's funny, I don't have a course. I don't have a Discord. I don't have any of that stuff, right? I told you the story of X subscriptions and people, I'm very thankful and people enjoy my kind of like more longer form rambling thoughts right because like on x you have to kind of be more polished and you know maybe tightening concise to go viral etc versus um i sub only pull like a kind of more long form terms of like what i'm thinking about etc etc and i i take that duty uh very importantly right and so i do have some guardrails i set for myself right i never touch a company like less than a billion dollar market cap um i never sell same day you know i i i mean that's generally just because i i i want to see the thesis play out right and so i don't really have like a strict time like i must hold for this amount of time right but if you actually do look at my track record i never sold a stock like within three days right like i kind of again like i want to see the thesis kind of play out and i'm very upfront with folks that like i might trade at any at a whims notice right i like i add it i add that disclaimer uh i even give a heads up they're like hey look uh i'm looking the market's looking weak today i'm not like this, you know, I might exit in like the next few hours or something like that.

1:39:37Right. And so like, I'm not, I'm not, there's, I'm not front running anybody. Here's an interesting question. Do you think people should have savings accounts if they don't have any thing in the foreseeable future that they're planning on spending their savings on? Or should it just, should a savings account for those types of people just be spy? I'll say yes to that, but I feel like I'm a little bit of a hypocrite because I do have 400K in S-Gov, you know, basically like bonds as well as the emergency fund, right? But I think that's just because of my, you know, cash flow these days. I just want to make sure I have a bigger fund.

1:40:08I think, I mean, establish an emergency fund, like hands down, right? But then everything else beyond that, yeah, definitely put it in SPY. Oh yeah, let's compare our Robinhood accounts. Sure, sure. All right, Graham, pull yours out. Well, I don't have, don't you have

1:40:21Graham Stephan:something in there? I have something. Want to do like a race to a million dollars in our robloids i would do this for the members would you put 10k yeah for sure i'll do this is something right up here and then we could and i just deposit money if this is something that you guys would be interested in let us know this is something that i i would be i would be down for but first let's just show off our show off you know whatever you want to call it technically for me it's not really showing off but mine is 169 000 and it's because bitcoin is up uh quite a bit today okay and then what's your monthly and then your yearly.

1:40:57Graham Stephan:Oh, we don't want to see the yearly. That's not important. Weekly, I'm up by 2.5%. Monthly, I'm up 5.4%. And then what's your one year? We don't want to see that, Jack. Come on. We have to catch a flight. Yeah, but that's just because crypto is down. And then what's your all-time? It's about that. No, I don't know because I don't really use this account. I just moved it away for the bonus. Dude, so how are you going to hate on me when you've lost more than I've... The thing is, The thing is, I only moved this in because Robinhood gave me the 3 % crypto bonus. So I moved something into here. Right.

1:41:31So that$90 ,000 loss is kind of fake.

1:41:34Graham Stephan:It is fake because it doesn't know my cost basis. My cost basis of Bitcoin in this was like$28 ,000 to$32 ,000. Sure. So this only tracks from when I put it in. Whatever your portfolio is, you're choosing to buy those holdings every single day. And so just because you bought Robinhood a while ago doesn't mean that you continued to hold it through the overpriced valuation. Tax loss, harvest, and offset gains. Here's mine. This account, as you can see in my all-time graph, I ran it from like 40K to 81K. This was selling options right here and then buying options right here. And so like selling options was working out great.

1:42:09And then I got greedy because I'm like, I know how to do this. Started buying options, also Dogecoin, lost everything. And then I restart and I tried it again, lost everything. I'm like, okay, this time what I'm going to do is something different. and I'm only going to let myself sell options because every time I've sold options, it's worked out really well for me. So I started with like basically 10K. I'm up, I don't know, 11.4 % in two months-ish. And then if I go to my other account, my Gamble account, this is the account that I loaded with 100K. And so it's fresh, only ever had 100 grand in it.

1:42:39And the idea was I would make enough money to purchase this watch. And so in two months, I'm up about 13.3%. which is not bad. And I'm really only selling options. This is kind of what I'm doing right now. But that's it. Pretty good. What you got? I'm at 53K right now, up 3 % today, all in. Shaz, one stock, keeping it simple. Over the last week, up 23%. And over the last month, technically down 8%. So you can see here, this is what I hit at 35K. You never went down, though. I never went down, yes. I kind of, you know, I'm very big on psychological numbers, right? and so i started with 35k you kind of don't want to go below that uh and then i tell i say i locked in and i made my next uh my next uh trades count and so on june 24th yeah i went back to 35k and you know it's technically let me see the one year 50 since then um i think the one year yeah so this is where you see like uh you know if you look at all time it's like all weird like i've had this account since like you know 2015 or whatever so it's like all the different deposits and withdrawals and whatever the lines get messed up right um uh and then like i started this account on e-trade uh because i got in like the reddit ipo and they forced to create e-trade account and etc etc then i transferred over here for bonus as well uh so that's why all the kind of numbers look weird but if you see here yeah like i traded it the 35k challenge account up to let's say 44k right and then kind of pause it for a bit to work on my startup uh and then uh basically around november December last year, I started up again and it's been up and down.

1:44:13Graham Stephan:Cool. Kevin, thank you so much for coming out, filming with us. We'll link to all of your information down below in the description. Really appreciate it. We got to go on a flight right now. Yep. We got to catch a flight to Florida. So hope you guys enjoyed. Thank you so much for watching. Thank you. As always, we would not be here if not for you guys. And also, if you want early access to videos just like this, as well as extra content, feel free to join the channel memberships. We're also posting extra episodes of Jack and I. We have occasional guests. We do post shows. So really hope you enjoy it.

1:44:43Graham Stephan:Feel free to join the membership. Thank you so much. And until next time. Until next time.