From Beating Cancer… To Beating Wall Street
EPISODE 7 – Thomas Watts, Co-Founder of The Financial Cloud
Listen in to this in-depth conversation with Thomas Watts, Co-Founder of The Financial Cloud.
- how he started a business in middle school
- how he overcame his battle with cancer
- how he generates market beating returns via trading & investing
- advice for new traders entering the market
- his thoughts on the current economy
- and much much more!
Podcast episode & show notes below!
- Check out Jontay’s episode (iTunes | Spotify)
- Naval’s Twitter
- Blog post – Bend in the Road
- The Financial Cloud – Website | Discord | Twitter
- The Little Book of Common Sense Investing – Book on index investing
- Ray Dalio – A Changing World Order
- List of Dividend Aristocrats
- Compounding Returns Spreadsheet
- Optimists vs Realists (Prisoner of War Story) – Stockdale Paradox
- ATM’s Twitter
- Cantillon Effect
This transcript was automatically generated using Descript.
Ismail: Welcome to The Bound to Be Rich podcast, where I attempt to reverse engineer people who seem to be successful, no matter the circumstances, so that you can apply those lessons to your own life. I’m your host, is Meed. In this episode, we are joined by Thomas Sws, co-founder of The Financial Cloud. We cover a lot of ground in this conversation from Thomas, starting a video game accessory business in school to beating cancer, to beating Wall Street.
What’s the story behind starting the Financial Cloud? An online trading community powered by algorithms and ai. How does a 23 year old consistently generate market beating returns, and how can you do the same? Let’s dive in.
Thomas, thanks for coming on the show, man. Happy to
Thomas: have you. Yeah. Appreciate it. Thanks for allowing me to come on.
Ismail: um, I’m curious, how old are you again?
Thomas: So I’m 23, about to turn 24 in March.
Ismail: And I think, um, You’re pretty much exactly what we try to uncover on this show, right? It’s, it’s young people who have overcome so much and have had so much success at a young age.
Uh, you just seem like Destin, you’re bound to be rich. That’s exactly what the podcast is all about. So I’m excited to unpack this and dive in. Um, I’m curious if you don’t mind starting right in the beginning, like,
[00:01:28] Interested in stocks at a young age.
Ismail: why did you get so interested in stocks at a young age?
Thomas: Yeah, definitely. That’s a good question actually.
So I remember as a young age, always having an interest in, in business. And so probably right around 13, 14 years old, I was just got a brand new iPhone and I pulled it open and back in the old days, and I think they still have the app, but they have the regular stocks app. And I don’t know how many people still use it, but uh, I pulled it open and I just had a bunch of random stocks on there and I asked my dad, I was like, Hey, can we, can we buy one and let me watch it?
And so I watched it and he kinda explained what it was, what happened with it, what’s the point of a stock and you’re owning equity in a company. And the funniest thing was is Yahoo. And it was like $13 at the time, 13 or $14. And so obviously we know where that went, and it’s no longer publicly traded and it got bought out, but, you know, for, for less than what it’s worth now.
But, um, it was just interesting to me to see how you can let your money work for itself and, and not the other way around and spending your, your life as a nine to five. So that always intrigued me at a young age. And then, Um, I guess I can just kind of dive right into this. The point is when I turned 16, I, two of my cousins actually, we decided to start a, a little business.
And so it’s a little bit different than what a lot of people had, but I felt like we were a little ahead of our time in the sense of the whole Amazon, uh, reselling nowadays. And so what we would do was buy the business was called Thumb Grips, and we would buy, you know, a package of 20 or 30 of these grips that would go on, like Xbox controllers, PS4 controllers, and they were like real cheap to make.
They were like 99 cents a pair is what we got ’em for. And we’d sell ’em for five or six bucks and I mean, we’re 16 year olds. I mean, we’re mailing ’em out ourselves. We got the whole business operation going at my cousin’s house. I’d go over there after school in days and we’d package order and fill ’em.
Uh, it was definitely a unique entrepreneurial spirit that we had. But obviously we, you know, we got around two to $3,000 in sales and it got to the point where we were just trying to enjoy life and be a kid at 16, 17 years old. And necessarily we weren’t the best in the business. Obviously didn’t have the marketing, didn’t have the know how, didn’t have the knowledge of, you know, these industry powerhouses that are there now, like control freak and things like that.
But again, I think I was, we were ahead of our time in that too, because now, you know, a couple years ago, you know, two or three years ago when I was, you know, 20, 21, they were hitting off big with control freak and they were getting sponsorships. And so definitely one of those, uh, ahead of your moments or ahead of your time moments, which was very interesting, uh, for us.
But that we just always had the entrepreneurial spirit and it was, it was definitely nice to have some people around you to kind of, to guide you and help you.
Ismail: You’d be surprised how common stories like that are, like where people I interview on the show, were doing things in school, selling things in school, and I think, uh, it’s kind, it’s, when you look back, it’s easy to spot the entrepreneurs in school.
In hindsight, uh, I wanna dig into that a little bit more, but before I do, I just wanna make sure I ask this question cuz you said like,
[00:04:09] Thomas’s background
Ismail: was your dad in the financial world? What did he do? Like why did the stocks come up between you and him? Yeah. Was there, did he have a background
Thomas: in it? No, I wouldn’t necessarily say the background.
I, I know he is always financially, he, he just is financially aware and responsible in that way. And that’s mostly where I learned, you know, invest in yourself, invest in the future. Um, he actually, he built houses right up into the oh eight bubble and then got out the perfect time and then now he’s, uh, dealing with sales and operations at a medium sized business.
And so he has that business acumen there and he has the knowledge and knowhow and I think it, obviously he just kind of instilled that into me at a young.
Ismail: Awesome. Uh, so, so the thumb grips enterprise that you started with your cousins, uh, you said you only made like a couple thousand dollars, but I think at that age, that’s a good chunk of money.
Thomas: yeah, we thought we were on top of the world selling, you know, three grand in, in revenue. Obviously. We, we, we garnered, you know, three or 4,000 followers on Twitter at the time, which we felt like we were on top of the world. Like I said, we had, um, you know, these followers we had, we were trying to sponsor.
People would say, Hey, you know, can I send you a pair of these grips? And you just kind of post about it on social media. And so we had everything up and going. We had my uncle, uh, his name is uncle bj, and he’s literally had all the business aspect, like he was taking care of, you know, if we, if we had to have any taxes, that we had to do this, the business name, the website, and he, he was a tech guy and so he took care of the website and so it was a legitimate business at 16.
It was just very interesting to see. How everybody used their skillset to come together and just fulfilled this entrepreneurial spirit that we had. But like I said, eventually it kind of fit, falter off when you, when you wanna be a kid, but,
Ismail: Well, that’s what I was gonna ask, ask if you picture people at that age, everyone’s kinda like playing baseball or playing basketball, uh, talking about video games.
[00:05:46] Thinking of starting the business.
Ismail: What was different about you and your cousins where you guys were thinking about, let’s start a business like now. Now it’s more common with Shark Tank and all this stuff, but back then it wasn’t as common.
Thomas: Yeah, definitely. Uh, one of the biggest things actually was we actually played baseball Growing up together.
We would spend hours on practice. Uh, they played at a, a high school, 20 or 30 minutes for me, and so we played baseball together. I eventually quit. They quit, and then I think this was right around the time we were actually doing. 15 or 16 years old. So it got a lot, honestly, it became just too much with school and everything now.
It’s probably another reason we closed it down. But yeah, I think we’ve always been different. I know for myself, I never really fit in, in school, wasn’t, you know, the most popular, but didn’t really, really care about that stuff. I just kind of was looking for towards the future, looking to work, looking to my own business.
Uh, and so, so I’ve always had that like, I guess in me and not necessarily a bad thing to not be popular or to not be the best thing, but I’ve always, you know, I started reading finance and business books at a young age and just kind of trying to garner myself, myself, knowledge and just like teaching myself off YouTube videos and books and how tos and, and that’s really where I learned most of my knowledge that I have.
So I usually get
Ismail: into that in the end of the episodes, but since you brought it up, I’d love to dive into that. Like, that’s also a very common thing where, uh, people feel different, Right? When you’re studying, listening to podcasts or reading books, starting businesses, you don’t really, you kinda stand out.
You’re not like all the other kids in school, the other kids in your neighborhood. Um, have you ever thought about
[00:07:09] Being different from others.
Ismail: why you were like that or are there any like, specific examples or stories about, uh, you not fitting in or you being different? Like, for example, the story of you starting this thumb grips thing is one example.
A lot of kids don’t do that, that immediately makes it stand out. Is there any other things like that, uh, that would say that you were different or you felt different you didn’t fit
Thomas: in? Yeah, I mean, I think for a young age I knew that I didn’t fit in, just in normal life, right? I, I had three sisters growing up.
Uh, I lived with two of them. Some, they were, you know, they were mis dancer, they were mis cheerleader. They were, they were that in that atmosphere. I was never fitting at that point. I never really cared for that. Never really fit in. I tried for a while, but then I got to a point, I was like, you know, I really don’t care what people think of me.
I’m just gonna become the best I can. Um, and I think, you know, with the John Deontay episode right before this, he made a good point that I related to it, was that if you can just get better at something every single day, even if it’s 1%, you’re gonna, over time that’s gonna compound, you become better and better and better, and you gotta feel more productive every single day.
So whether that’s books, whether that’s whatever you’re doing, even if you enjoy yourself with video games, like, I love video games, but I try and do something productive every day. Um, whether that’s learning, you know, financial, more financial skills or, or just something random every day. So, uh, yeah, I, I would definitely say that I definitely did not fit in, but there was always something different about me.
Ismail: if, if you’re open to discussing it, I know that you, you’ve battled cancer, uh,
[00:08:29] Battling cancer
Ismail: so can you, whatever you’re open to getting into, but I’m more curious about. How did that change you? Because a lot of times, like we all go through our own obstacles, right? Everyone’s got their own barriers and obstacles that they go through, and I find that every successful person has obstacles, they have barriers, and it seems to make them better in a way.
Like you wouldn’t wish for those things to happen, but in some weird way, like John ta talked about his injury in the previous episode, uh, and if he didn’t get injured and he wasn’t like bedridden, he may not have gotten into stocks, right? So it’s not like you wish for them to happen, but oftentimes, uh, it leads to improvement or other good things.
I’m just curious, whatever you feel like getting into, how did it change you for the better or was there anything that you took from that experience that helps you and whatever you’re doing now?
Thomas: Yeah, it definitely did. Uh, so I actually, just a rough, rough rundown on the cancer story. I was a junior in college actually, and just enjoying a fall.
Um, it was in the fall, roughly around September, October. Went on the mission trip to Texas. It was out there just kind of helping people with yard work and I started getting really like. Faint, like real, real lightheaded and, and not really feeling like myself. And I took like a six hour power nap. Well, when I woke up, I got back in bed and slept for another 12 hours overnight and just kind of kept getting lightheaded and dizzy.
Well come back, you know, run a bunch of tests eventually. We didn’t know what it was for months on, months and months. Finally, in December of 2017, got diagnosed, uh, was stage three classical Hodgkin’s lymphoma. And so that was definitely a blow. I wasn’t really never worried about it to begin with. I was, you know, I think what scared me more was not knowing what it was.
I think people in general have more of a fear of the unknown than the known. And I’m think I’m one of those in a sense of like, Hey, I don’t know what the heck’s out there. I don’t know what’s in front of me. I don’t know what’s. But I’m comfortable where I’m at, and so I challenge myself to not be scared, not be fearful.
Now, obviously you get in that point, you know your life’s on the line, you know, something can happen. You, you don’t know if you’re gonna make it or not, but, but definitely going through chemo and going through being in that atmosphere definitely does change you on the inside from, from every perspective, right?
If you ask any of my friends beforehand, Do you like Thomas? Is he cool? Is he, is he, is he nice? A lot of ’em say like, Yeah, he’s all right. He’s cool, but he can be mean sometimes. He can be upset with you. He can do all these other things. And, um, but eventually after that, the whole cancer thing, the whole chemo kind of changed my mind, my perspective and my heart and my, my soul really.
And it really gave me a new perspective on life. And I kind of looked out and said, Look, I wanna be a better human being in this life. I only have one life to live. And I think I, I read a quote the other day from Naval on Twitter, and it said, Every person has two lives and the second one begins when he realizes he only has one.
And that’s at that moment, I knew I said, Okay, I’m gonna, I’m gonna be a better person. And honestly, I, I just got married back in January and I don’t think I would’ve met my wife. I don’t think we would’ve dated, I don’t think we would’ve gotten married if it had not been for cancer. And there’s a lot of other things I can say about that.
But there’s just something about going through a process that, that breaks you down mentally, physically, and emotionally in a specific part by part or piece by piece process. And when you get built back up in whatever that is, if it’s faith, if it’s, if it’s something you cling to family or loved ones, whatever it is.
And mine’s faith. I, I clung to God, I clung to Jesus and said, Look, this is all you. This is all you got. And he kind of took her from there. And yeah, so after four chemos I was actually into in remission actually. So I was very thankful for that and grateful. Uh, and that definitely changed my mind from there on out.
I actually had chemo on my 21st birthday, which was. It was always, uh, not the funnest , it was definitely not the most fun at all being surrounded by needles and drugs on your birthday. But I knew that God had destined me for bigger things. And, and so I started thinking, What could I do? What could I do? Um, and I knew I was destined for, for greater things down the line.
And then obviously we can get into later, I mean, the companies I’ve started and, and where I’m at now, but I really don’t think I’m successful yet. I don’t think you’ll ever reach successful because successful is such a, such a subjective meaning that you really can’t objectify it.
Ismail: To me, it’s a fascinating thing, man, like you, you kind of alluded to, Oh, you wouldn’t have met your wife if it was, if it wasn’t for that experience.
And I feel like whether it was jante with getting injured and getting into stock, like I just seems to be such a common thing. I don’t know, man. Like do, I guess you believe in fate, right?
[00:12:41] Believe in Fate
Ismail: Do you believe in fate? Do you feel like you’re kind of, in a way it’s weird to be grateful? I, I guess I don’t know where I’m going with this.
I don’t know if it’s a gratitude for that happening, Uh, or just acknowledging that, hey, some good comes out of this. It’s kinda like that blog post that you wrote about, uh, was it the bend, uh, in the road? I think it was, If you wanna elaborate on that a little bit for people to understand. Yeah. So
Thomas: for some, just some preface, I, when I was undergoing chemo and, and cancer, obviously you never know if you’re gonna make it or not.
I didn’t know, you know, I had a pretty good survival chance around, you know, 80% depending upon what stage it was and how bad it was. Um, and I was one of the lucky ones and blessed ones that actually was able to overcome it. And, you know, my heart goes out to everyone that, that has been affected by cancer.
I can definitely relate on personal. But yeah, so been to the roads. Basically just navigating the, the bends in your life. You know, obviously everything’s not gonna go from point A to point B in a straight line. There’s gonna be things thrown in, there’s gonna be health hazards, there’s gonna be losses of job stability, there’s gonna be financial troubles, losses of loved one.
There’s gonna be something thrown in your life and it’s how you navigate these bends in your roads that’s gonna navigate how well you can drive the rest of your life. And so it makes the scenery more beautiful when you have bends. It makes it more beautiful in the terms of life when you have these struggles and these setbacks because it builds you up to be a better person to overcome stronger things and, and more difficult things in your future.
[00:14:07] Advice for cancer patients.
Ismail: So I know for a fact that there’s people listening to this that either are personally dealing with a health problem or have someone that is close to them in their life that’s dealing with something. Uh, before we move on from this topic, do you have any advice for people, whether they’re going through it or they have a loved one going through it on how to, um, I guess how to.
Treat them or, or act around them or the people themselves that are going through something. Is there any advice from your experience? Cause it sounds like you kind of got to the other side. Um, so any wisdom that you share?
Thomas: I think the biggest thing for me is I know as a person that had cancer, and I don’t mean this in any light way for me, I think the hardest thing as a person that is, that is always the spotlight’s always on them.
I think it’s also even more harder for the family. Right. I saw my parents sit there and come to every single chemo that I had and sit there and watch me. And I think it hurt me more to watch them see me in pain. And cuz I knew I could take it and, and a lot of people that have that go through chemo, it’s, it’s painful.
Especially when you get into radiation. There’s a lot of painful things that, that necessarily, we have nothing better yet. And they’re, and they’re doing some research on like stem cell and, and other things. But, but when it comes down to it, it’s a painful experience and emotionally, physically, like they’re scarring in, in your, in your soul on your body.
So it definitely is a mental roadblock, but I think one of the biggest things I can say is you have to keep pushing. A lot of people want to get to the point of where they’ll just dig, dig, dig, deep, deep, deep, deep, and then they’ll stop. But what they don’t realize is if they would’ve kept digging for an extra minute or two, or an extra day or two, they would’ve been at the end, they would’ve reached this point of where they knew they could have struggled.
They knew that they could have beat it. They knew that they could have gotten through that roadblock. So I think the biggest thing is just saying, Hey, you need to keep pushing. You have to dig deep, find yourself, and ultimately rely on, on whatever your faith mind’s. Faith, obviously, God, but if you have something there to lean on, a loved one or a family member or God, that’s where you need to.
Ismail: Yeah, this kind of reminds me of this story that I’m probably gonna butcher. I, I don’t remember it exactly, maybe you heard this kind of, um, it, it was a, I think a general who was a prisoner of war, and he talked about something he observed, If I find this story, I’m gonna put in the show notes. But he found something that he observed with his, uh, fellow soldiers that got, uh, taken his prisoners in war.
It was the people that were optimists that ended up, uh, losing, losing their minds quicker because they’d always think like, Hey, uh, it’s almost Christmas. We’ll be rescued by Christmas. And then when Christmas came and they weren’t rescued, uh, they got into depression and then they, they’d do it again. Oh, it’s gonna be New Year’s.
We’ll get out by New Year’s. And again and again, uh, that mind game really messed with them. And he found that the people that were realists were the ones that lasted where, like you just kind of said, you just dig in and you, you go to battle. And however long it takes, it takes, you can take it. Those are the kinds of people that end up making it through versus the people who are optimist and just think it’s gonna be over this next time.
Um, probably butcher that story. Um, I dunno if you’ve heard that before, but I’m gonna see if I can find the story. Put it in the show notes.
Thomas: Yeah. I believe I’ve heard it before and it’s actually, it’s ironic or not ironic. It’s actually funny you say that because you ask any of my friends, you ask my wife.
I’m not known to be an optimist at all. I’m, I’m very real. I’m very pragmatist. I will tell you like it is to your face, not afraid of conflict. I will, I’ll say what’s on my heart and what’s on my mind, and I’m not gonna be afraid. Like if I think something’s gonna go wrong, I’m gonna tell you. And I think that’s, I wouldn’t say that’s defining quality, it’s just something that’s very different than the norm, right?
You have somebody that might be super optimistic, super upbeat, and then here I come and here I am just being honest with you, saying, I see a flaw in this or I see this and I don’t mean to be that way. It’s just how I’m built and how I’m wired.
Ismail: Yeah, I’m similar. And I found that to work very well for me.
Um, even when I was working in the corporate world, I found that people were afraid to be honest, and they would come to me and say, Hey, can you tell this to the boss? Can you tell this to the boss? And the managers appreciated me more because I was very direct with them as opposed to, uh, being political and dancing around issues.
So I find that it, it helps in the long run. Uh, but before we move on from this, how’s your health now? How’s everything going now?
Thomas: Everything’s good. Complete remission. Been in remission for a few years now. I was declared cancer free in February of 2018, and so we’re coming up actually right now on, uh, three years, I believe now cancer free.
So everything’s good. And, uh, just, just blessed to be alive.
Ismail: Awesome, man. I mean, it sounds like, um, you went from beating cancer to beating Wall Street. Um, so before, maybe that’ll be the topic, the title of the episode, but before we get into that, I,
[00:18:39] Starting Clothing Line
Ismail: I think there was another part of your story, um, I don’t know how this ties in, like once you got healthy, What happened?
You, you started a clothing line at some point, so how did that tie into once you were done and, and healthy?
Thomas: It actually has to do with cancer. Um, so it was called five and two clothing, and so it actually dealt with cancer As we, we dove, we donated a, a portion of our profits to cancer research, and so that really gave me the inspiration to start it.
Now, obviously, I think both of you, both of us know, at that point in time, I just wanted to own a business. I enjoyed the, the hustle. I enjoyed telling people, Hey, I got this product, I got this, this, this. It was never about the money. It’s almost never about the money. I mean, it, it’s about the freedom that you get from owning your own business.
You can, you can work when you want, how you want and who you want with. And so starting this, obviously I knew it was a crowded industry. It’s through peril industry. It’s one of the most heavily crowded industries in probably the entire world. You have, I mean, Nike, if you want to go into athletic type things, you have gap.
You have Ralph Lauren, you have Polo. I mean, you have all these different brands that are there. But I really saw an opening in the Christian Apparel brand. Um, and that’s, and I’m a Christian, I’m not afraid to say it, but there are subec of Christian that you can kind of get into in Christianity. And I saw it and I was like, Okay, let me take my shot.
I drew a business plan. I said, This is it. It’s called five and two. I was outta the five loaves of bread and two fish in the Bible. And when I, I, I laid it out to all my friends, like, Oh, this is awesome. You should do it. So my biggest hurdle was designs. I had no idea how to design. So being myself and, and I was like, Okay, I’m gonna do this.
Instead of paying somebody to do this, you know, $150 for one logo. I started YouTube and how to use Photoshop, how to use Photoshop. And I had delve, you know, I dabbled in it a few years ago with the thumb grips, doing some Twitter promotions when I was like 16, 17. So I knew a little bit, but when I started coming up with designs, everybody’s like, Man, this is awesome.
And so, you know, we sold, uh, roughly around two or $3,000. Again, not a lot. Just enough to make a little bit of profit and, you know, But other than that, it was really about the hustle to grind and having some friends around me and having a true brand to stand behind and say, Look, I’m, I’m, I’m, or I’m basically contributing to society in a sense of giving back to cancer research, which is affecting me so, so near and dear to my heart, but also providing the economic stability that I wanted, or extra side income, I guess you could say, to, to be able to do things I wanted.
Ismail: Were you also working a job at any point or long along this time? Yes.
Thomas: So five and two was actually started a little bit after I got a full-time job. So I started a job in May of 2019. I graduated in early May, and then two weeks after I graduated, I started my full time job. And so I work at a bank. I worked a, a bank in investment portfolio analytics and, uh, so yeah.
Ismail: So So you’ve, you
[00:21:33] Getting into trading.
Ismail: got a finance degree. You had a job in finance and I assume, like, maybe I’m wrong, were you like studying trading all this time? Were you learning about the markets kind of in the background? Like how did you go from all the stuff we just talked about into getting really more into trading?
Thomas: It was actually a funny story. Um, I think in Ante’s episode, I know we keep referencing that, so I think it, to even listen to this podcast, you’re gonna have to go back and listen to that one. But Jante mentioned that there were these Discord groups and I think they’ve got a lot of publicity now with these, these trading groups, whether it’s red, at Discord, uh, Twitter, anything like that.
While I was a part of this before as this huge big deal, I was back in 2018 actually after, uh, while I was going through chemo actually at school. Um, I could have taken a withdrawal. Left school finished a year later. I was like, No, I wanna push through. My mom really pushed me and said, Let’s just get it through, you know, like, I think you can do this.
And so it really did give me something else to think about. It took my mind off cancer. It took my mind off chemo. When you really, I think chemo is a big thing about, or even cancer just in general, you wanna push it to the back of your head. You don’t wanna think about that. You wanna put something else in the forefront cuz if you don’t have something else to focus on, then your mind’s always gonna be on like, Oh my gosh, am I dying?
Is this the last time I’m gonna show up here? You know, those type of thoughts. And so I definitely started looking into trading. I found a Discord group. I’d always been interested in stocks, but I didn’t really know. And then being the person I am, I wanted YouTube and on articles, what is options trading, what is equity trading?
What we know, what is a short sale? Uh, what, what is, what is cash balance, what’s a margin account, what’s a Roth ira? Just starting to do a ton of stuff. And obviously I learned some of this stuff and as a finance degree obviously, but I’m just getting into those higher level courses and I actually started trading probably around, you know, March or April of 2018.
Right in the midst of chemo. And, but I had plenty of time to do it. I was sitting in a chair for three or four hours every other Wednesday doing chemo. And so it gave me plenty of time to look at stocks, um, kind of talk to other traders and see what they were doing. And then again, I think it just propelled from there.
I just had a passion for it and said, Man, my hobby can make money. . Not a lot of other people can say that about their hobbies and like, you have a potential to make this extra cash or this extra little side income. Um, and so it’s definitely been a blessing to me just to, to have something to put your passion towards and have something that you’re, you’re truly passionate about and that you would, you could see yourself doing for the rest of your life.
Ismail: You know, someone, as someone who is in these DISC group groups, I’m just always been curious. Like I, I think Ace Ventures is like 60,000, 70,000 people. Um, and, and you guys have the financial cloud one now, two thousands of people as well.
[00:23:59] Becoming an experienced trader.
Ismail: How do you, like, as someone in there seeing all these experienced traders commenting, how’d you get to be in that role?
Like, does someone see you tweeting about charts and stuff and say, Hey, this guy knows what he is talking about. Is it because someone referred you? Like how do you get to be in that role that everyone’s seeing what you recommend, what you post?
Thomas: Yeah, so actually the first group I was in was something, it was one of the groups that Danny, who’s the, the owner of Ace Ventures, uh, was in, and he was actually like the head of options trading at that in that group.
And so I hit him up one day and said, Hey man, you know, if you ever need another, you know, mod is what they were called, or another experienced trader let me know. And he is like, Okay, what do you do? And I was like, Man, what do I do? And then I, I figured out you have to have a specialization, right? If you could look at any of these groups, they have swing traders, they have day traders, they have scalpers, they have macroeconomic analyst.
I was trying to figure out what the heck I was gonna be, and I didn’t know ta, I didn’t know technical analysis at that point that. I knew it a little bit, but I didn’t know it that well. And so what I did know was a lot about was economics. And I was in the midst of like an intermediate macroeconomics course.
So I said, Oh, I, I can, I can talk about economics. And so he’s like, Okay. And then he added me as a mod and he was like, Gimme a weekly update. And so for every week I, I’d post in like, Hey, we have GDP this week. We have initial jobless claims. Watch out for this. You know, if, if non-farm payrolls drop below their average estimate, you know, the, the stock market could fall.
Um, you can look at maybe the unemployment rate, You can look at, uh, the way the US dollars affecting the, the, the currency in four x markets, which in relative affects the stock market. And so that’s really how I got into there. And then the more and more I got into that, I said, Okay, I probably need to learn the, the ins and outs of technical analysis.
And so learning chart formations, learning pens, bull flags, uh, all, all of that stuff came later. But you really have to find an in, if you’re gonna try and get into one of these groups, I guess.
Ismail: It’s crazy cuz growing up, maybe I’m getting old, old, but it was, I don’t remember a lot of young people like that, passionate about this stuff that they’re in these disc core groups and like typing free analyses up for like thousands of people to follow.
It’s just a different era that we’re in, which is, it’s great that younger people are getting into this stuff now. I think it’s awesome. Uh, but
[00:26:05] Finding it worth to be trader
Ismail: why did you find it to be worth it? I assume, um, like many of these online groups and forums, like there’s not really a financial incentive or at least not a big one.
Why was it worth it for you to type up these reports every week and, uh, like put work.
Thomas: Yeah, and let me preface something. So I think that the era of traders now is completely different from the era of traders. Iowas when I grew up, or I guess in 20 18, 20 19, because back when we were doing it, there was no gambling, is what it, what I would say is now, right?
You have all of these talks. TikTok is basically taken finance to a new level on a sense of these generation Z millennials, uh, mean my generation, all these younger kids, you know, probably from 13 to to 25, 26, 27, the TikTok is their market. And so when people are posting, hey, you can post, you can do a a hundred dollars, uh, call debit spread on Tesla to make, you know, $27,000.
I mean, yeah, technically it’s possible, but to me that’s more of gambling and you’re not taking a theoretical, systematic approach on your risk management. You’re not just throwing money in random places and hoping it works out. So I think for me, it was more of, I wanted to learn the ins and outs of the stock market, and there was no better way than being involved with, with traders day in and day out on these groups and talking and asking, Hey, you know, what do you think about GE earnings?
What do you think about Apple earnings? What do you think about Tesla earnings? And again, pre this is pre Tesla hype. This is Tesla $150 a share pre split too. So that’s probably like four or five, You know, it’d probably be a four or five grand, uh, what it would be now after split. So anyways, I think it’s just, there’s a, there’s a difference in the two, right?
So I think gambling is, is now what I would prefer it to be called, because a lot of these groups are just pushing, uh, just, Hey, follow what I say, follow what I say. And a lot of people just want alert. Honestly, people just say, Hey, tell me what to buy. Tell me when to sell. I’m gonna get in, get out and make my cash.
Thank you. They never wanna think for themselves. And so that’s what, you know, one of the, the things that Tom and, and me and Jte have basically started, and I guess in the financial cloud, was we wanted to push independent thinkers, but shared success. We wanted people to think for themselves, trade for themselves, learn the ins and outs of the system, learn how it works, learn what technical analysis, how to couple it with other things in, in the stock market to actually make a systematic approach and say, I can consistently make money even if I lose something.
The, the risk to reward ratio, the risk to reward ratio basically says, I’m gonna make money nine times outta 10 if I, if I keep this system. So
Ismail: I, I’m like, you were, I find myself to be better at like the macro picture and see where things are going at a big level. Um, that’s my background was more of a value investor, more fundamentals.
I’ve been investing for a long time and just in the last year or so I got into trading and options and stuff like that. I, I just saw the. There’s an opportunity now, um, to make, I don’t want, I don’t wanna say easy money, but easier than it’s been. Um, if you plug the proper risk management and, and you do it the right way, not go crazy, you can, like, I remember when it was like making 15% a year was considered amazing, and now you can do that, uh, a lot quicker, like a week and not take a significant amount of risk.
So, yeah, um, if you keep that mindset in, in, in mind, then don’t go crazy. You can make a lot of money in this current environment. I
Thomas: mean, it, it, it doesn’t take a genius to figure out that if you bought any stock on the march and April dip, You’d be up 60, 70, 80, 90% right now, right? You go look at Peloton in March, you go look at Apple, you go look at Tesla for all that matter.
You buy any, really, any real stock besides maybe a few of the K shape recovery. So like maybe a little bit of airlines, any type of retail, any type of data. If you bought any good quality stock, a high growth stock, you’re up a hundred percent. And so all these gurus that are out there saying, Oh, look at me, I made, you know, 90% returns in the market this year.
I mean, well, so did like 90, 98% of other traders if you just bought and hold, If you didn’t sell in March, you’re probably up more than you were obviously back in, in, in March. Obviously, you know, you see it, the spy or s and ps higher than it was in March. So I think specialties now have kind of shifted from, hey, let’s, let’s be theoretical or let’s be systematic about our approaches to, to trading instead of it’s now.
Okay, well let’s, let’s just take it day by day. Let’s just throw a hundred dollars a Tesla here, a hundred dollars at Apple here. Let’s play earnings. Let’s just take a random gamble. And so I do think it’s turning into gambling and I think it’s gonna be a negative feedback loop in the sense of all these people are just signing up for these discord groups and this one person calling out alerts saying, Hey, buy this, buy that.
And then I think even with the Wall Street Bets thing blowing up now, I think we’re gonna see more and more pump and dump schemes if nothing’s done about that. So I don’t think the Wall Street bets Readit Discord or Reddit or Discord was in any, any fault of their own, any legal matter. But when you have Discords that it’s one person pumping a hundred million dollar small cap, then you start getting into the problem of that’s a technical pump and dump, and it’s meaning pump and dump.
And anybody doesn’t know it. Essentially someone saying, shouting outta stock saying, Hey, buy this stock for no other reason than them just saying it’s. And they’ve already bought in. So when everybody else buys in, it drives the share price out, then the person who called it out dumps their shares at a higher price and makes a profit.
Everybody else is left bag holding. So I think that’s really where it’s going right now. Um, but I think specialty, obviously I think this market is like, like TA said, the, the technical analysis is probably 90% of it right now. A momentum runners can just keep running and running and running and you go on Wall Street, probably like majority of the hedge funds, I guarantee you, you go to a hedge fund, they have at least one strategy there that’s working on momentum, if not two or three.
So, I mean, it’s obviously not just a retail investor pushing this momentum. It’s, it’s a Wall Street Fed, um, run and rally. But eventually it’s gonna end. There’s gonna come a point to where, um, the greatest bull run of history besides, you know, the stock, the.com bubble in 99 0 1 and oh two, uh, is eventually gonna come to an.
Yeah, I mean, I
Ismail: don’t think any, uh,
[00:31:54] Logic behind stock market working.
Ismail: logical person would argue against you that it’s, it’s like not even rational anymore, the valuations and where things are going. I mean, I, I guess you could argue, uh, you probably know more about this, where the, the stocks are valued, like on discounted cash flows, and if interest rates are low and your, your discounting cash flows, obviously with lower rates, the value of the company’s gonna be much higher.
So maybe there is some logic somewhere. Uh, but what are people supposed to do when this is what’s going on in the market? Um, like just tune out and, and cash add and wait for it to get more rational or try to ride the wave and take a piece along the way. I don’t know. It seems like everyone’s trying to take a piece along the way.
Thomas: think a lot of people are just trying to, to trade here and there. So, I mean, I have my long term accounts and I think most people do, and I’m advising you. If you’re not within five or six years of retirement, you’re fine. Just leave it. Don’t even touch it. Your emotions will get involved. You’re gonna make irrational decision decisions.
You’re not gonna, you’re not gonna know what the heck’s going on. You’re gonna, you’re gonna think that you know more about the market than the market knows about the market. And that’s not true. I don’t care who you are, You can’t time the market. And I think Warren Buffet had a, a great quote that I’m always gonna say is timing.
Timing in the market is better than timing the market. And so using that, I’ve always just said, Just leave my money in. I don’t care if it goes down 30, 40%, it’s gonna bounce back. This is America. And the day that America’s American stocks don’t bounce back is probably the day that the, the Constitutional Republic dies.
And I don’t mean that in any bad way, but that’s just usually how it works. Our, our recessions are almost always followed by just these grand, grand expansions. We see it in oh eight after, in oh 1, 0 9, and basically 2010 through 2019. We saw it after. the.com bubble in 2002 to 2007. Uh, there’s a lot of, lot of things that, that the Mac economic environment is definitely primed and ready to go.
I just think that with the amount of stimulus right now, there’s no reason to pull your money out. I mean, with interest rates so low, you started talking about the discounted cash flow model. Well, there’s obviously the discounted, uh, dividend model. You can go look at the, the DDM and say, Okay, well how much they’re paying the dividend.
I can see the growth rate here. It doesn’t make sense. The valuations really don’t make sense at all, and they’re starting to rival, if not topping the oh eight. I mean the, the, the.com bubble in oh one and oh two.
Ismail: So if you don’t mind, lift to riff with you a little bit about like the markets right now, and just for people’s knowledge, we’re recording this on February 1st after market hours.
Um, if I say something wrong in the future, you guys can yell at me. I was wrong. There’s evidence, but I, I, I think what, what I’m seeing and it things are changing so quickly that by the time this episode goes out in a few days, it may be totally different, but I find myself getting more defensive today.
Um, I don’t know Thomas, what you think, but I feel. With, I’m just seeing these different data points of like these hedge funds, um, pulling money out, uh, selling other stocks maybe to cover their short positions. And the retailers are pushing that up and I just feel like there’s a reckoning happening and I was trying to dive into how the clearinghouse work and the brokers don’t seem to have enough capital to put in there.
Um, it just seems like there’s a, there’s a lot of potential, um, liquidity issues brewing, and I, I found myself like hoping that there was a big pop Monday for me to take some, uh, some cash in some positions, just so the, my logic was if I missed out on some upside, um, this is my trading account, by the way, not my long term invest.
Um, I’m fine with that. I just don’t wanna risk staying in and losing a big chunk if there’s another major leg down. Um, but, but on the other side, and I’ll hand it to over to you, Thomas, to hear what you think. I, I still think as long as, uh,
[00:35:27] How can the market really go down?
Ismail: a couple things don’t change, we’re still gonna keep going higher because you have record low interest rates almost zero.
You have, um, stimulus constantly becoming out and printing of money. And then you have the fed propping up, uh, markets in, in a whole bunch of different ways where like even they’re buying corporate bonds and I think they’re buying some corporate equities in some, some instances. So like, how can the market really go down?
In my mind, maybe there’s a liquidity issue where there’s a short term drop. Uh, but otherwise that will probably be a, a short lived one. And in the long run, as long as those factors don’t change, I don’t see anything really keeping the market from going up. Um, what do you think?
Thomas: I think I agree with you in, in certain parts, obviously.
I mean, obviously we take. Uh, okay, let me, let me preface this. So the way the world has gone now and the way the stock market is, we have two things. You have technical analysis, which is looking at charge, looking at price action. What is the stock or what has the index done over the past X amount of days, or X amount of hours?
X amount of minutes. Then you have fundamental analysis, which looks at financials. How is the company performing? What are their, what are the revenues? What’s their profit? What’s their, what’s their kegar, what’s their, I mean, all these different ratios you can look at. Well, the market is becoming more and more and more, especially when you add retail in this and, and momentum.
I think we’re becoming, we’re we’re shifting from fundamental to technical. So if you go look at like Neo, right? Neo for the longest time had almost zero revenue and then all of a sudden they start talking about growth. One of the craziest things I’ve seen there, they actually had a share offering and said, We are putting more shares in the hands of shareholders and you’re buying it from us.
Which theoretically, in stock market theory, that should cause the stock price to go down because you’re diluting other shareholders. The stock went up like 8% and so I honestly think we’re in this era of technical analysis is. Taking over. I think it’s more of like, you know, 75% technical analysis, 25 fundamental.
If there’s no, you know, it doesn’t matter what the company makes. I think I’m with you on that. Now, in the whole macroeconomic, macroeconomic environment, I do think that we are gonna see a, I wouldn’t see a full correction here. I think we’re gonna see a good drop. Obviously, I look at technicals when looking at spy.
I look at the daily chart, see if it starts trending under the nine ema. If it bounces below the 21, that’s when I start getting defensive. That’s when I’m like, Okay, I might put some hedges on here to see how far we go down. Obviously if you put a hedge on, Right before the march drop, your hedge hopefully was large enough to, to, you know, cancel out your other losses on your portfolio, obviously.
But I think that’s usually my, my approach on it. But I’m never really one of those that tries to, you know, rotate through sectors or change and get defensive. I always have cash on hand though. I will say that I will never use a percentage of, or I never use all my cash. I’ll take a percentage of a percentage of a percentage, so it never gets to zero, but I always have some cash on hand just to keep investing into the dip.
Ismail: Yeah, same. I think there’s an opportunity cost to be fully invested. Um, even if you don’t think cash is really valuable now, if you think it’s getting, uh, the currency getting devalued, there’s still the opportunity cost. Like you wanna have cash to capitalize on any dips or any opportunities that come up.
Um, so you talked about technical analysis. Cause I remember back when I was first starting, I was working on Wall Street and I had this mentor was getting into stocks and he gave me this book, um, I think it was by John Bole about index investing. And he, the whole point of the book was, you know, you can’t beat the market.
Technical analysis doesn’t work just by an index fund. Um, so that was kind of my first, uh, like real learning and, and reading into, into investing.
[00:38:55] Technical analysis of stocks & trends
Ismail: I’m curious, what would you say to people, um, obviously like you just said, now technical analysis is working right now, but for people who, who are skeptical about that and think, Hey, you can’t tell anything from the chart, that’s just a chart.
Like why is everyone making decisions based on that it doesn’t work? What would you say to that?
Thomas: Well, first I think I would say, I think indexing and, and just buying and holding an index or an etf technically is using technical analysis. If you go look at all the stocks that are held within your ETF or your index, I guarantee you, you have high momentum runners, you have pe Like if you go look at arc for good example, they’re innovation etf, they have Peloton, they have Tesla.
All of those are huge momentum runners. And if you’re just indexing or if you’re just buying their ETF and holding and you’re like, Oh, I’m just gonna, you know, that’s, that’s it, type of thing. I’m just gonna do that. Not gonna worry about ta. Well, technically you’re investing in technical analysis and, and the same thing with indexing, right?
Um, it, it might have some more value stocks in it. So something along the lines of maybe like First Energy or GE or industrials, chemicals, things that really don’t move as much as, say, technological companies or high growth like EV sectors, uh, information technology, security, computer science, things like that, that may not move or those will move more than say, value names.
So, Uh, I, I don’t think indexing is a bad thing. I think some of the greatest appreciation in capital comes from buying and holding, uh, dividends, uh, dividend paying companies, so having a dividend reinvestment. So buying, you know, Gilead scientists with a 5% dividend yield, or maybe even first energy with a five or 6% yield dividend yield, buying companies that make sense that, you know, are stable while yet having a good, you know, low, higher single digit to lower double digit growth rate is not a bad thing.
People want these 30, 40, 50, maybe even hundreds percent of growth rates. They’re trying to pick the next Tesla. And that’s where I think this market’s headed is they’re trying to pick these penny stocks that don’t make any sense. And you see all these penny stocks pumping and you see these a hundred million dollar small caps, pumping, pumping, pumping, cuz everybody thinks, Oh, they’re gonna be it, they’re gonna be it, but this company’s losing probably, you know, a million or two a quarter and they’re not making any revenue.
But yet they, you know, a good example is Nick Nicola, or Nicola, however you say it, in Kla, they, they bumped up to what, $90 a share at one point just because the, they announced a, or a, a collaboration with General Motors, which doesn’t make any sense logically if you think about it. They were gonna, you know, provide some things for each other, but there was no.
Actual incentive for either company to do that because General Motors doesn’t need Nicola, and Nicola probably really needs General Motors, but all these investors got hyped up and took the momentum train with technical analysis, Oh, there’s a bull, there’s a bull flag here. I’m gonna buy here, watch for the breakout.
And then another bull flag, then another bull flag, and then he goes, parabolic. Well then you have a TA for parabolic. And so for, for the people that say technical analysis doesn’t work, it works. You know, 90% of the time, you know, obviously there, there’s ways to play it, right? You wait for the validation point, you wait for it to break out, and then you can get into play.
And that’s why you see stocks just go berserk when they, when they enter a breakout zone. So I, I do think index investing is for 95% of investors in the world. Now, if you wanna become one of those gurus that wanna learn how to trade, it’s not a get rich quick scheme. I mean, you have to spend years and years and years and truly losing money to actually understand, like it takes a lot of time, patience, and emotional intelligence just to be able to do it.
Ismail: That’s also another common thing I’ve heard is people blowing their accounts several times before they really learn. Um, and I find, and I, again, this something I said to ante as well is, um, it seems like people think that it’s a get rich quick thing. Um, and they invest, they lose their money and they give up.
And that’s why you have these fake stats about, oh, 95% of traders fail, uh, while they, they gave up too soon. It’s like, um, if you wanna be a doctor, you gotta go through all these years of schooling and, and it’s not anybody can take a thousand dollars and get into the market and be a trader so called.
Right. So I guess
[00:42:48] Advice to aspiring traders.
Ismail: what is your advice, um, cuz there’s a lot of new people like entering the market now, everyone’s kind of just running around throwing money into things that don’t make sense, like dot coin. Uh, what’s your advice to people that are getting in now? Like from the things that you’ve learned, what are things that people have gotten wrong?
Like any wisdom that you can share with people?
Thomas: I think the biggest thing is, is know what you’re investing in. So people that just pull up a company, look at their, look at their, uh, financials for five or six minutes and say, Oh, okay, it looks like they’re making money. And then they go invest. That’s the wrong way to go about it.
That’s not the way to do it. You could find a company that’s losing money, but you have a very high confidence in because you’ve been to their stores. Right? So the biggest thing I tell people to begin to begin investing with is think of companies you shop with. Think of if you’re big, you know, NBA fan, look at Nike, look at Under Armor, Look at, uh, Footlocker.
I mean, look at stocks that you understand. Starbucks, McDonald’s, they may not be the highest growth or the, you know, the prettiest stocks, but there’s something that can get you to a different point and level in your understanding of investing and, and trading and allows you to see, okay, if I walk into Starbucks and I see it’s bumping and I go to another Starbucks and I see it’s bumping as well, and there’s a ton of people.
Then it’s one of those things like, Okay, Starbucks must be doing pretty well, but then they go read up on Starbucks. Why are they doing well? What type of season is it? And then they read up, right? You do in your due diligence is the biggest thing. Now, if you don’t wanna deal with that, just just buy the s and p 500.
Don’t deal with it. But if you’re like me and you like to pick and choose and you’re like, Okay, I don’t wanna lose out on some returns because I think I can pick better stocks, well you can do that. But majority of my holdings in in, in just my personal preference in my 401k and Roth IRA and other investment.
I’m just indexing. I am, I mean, I’m not, I’m not discrediting that. I think indexing is great. I don’t have to pick and choose winners. But then there’s this other side of me that says, I would love to try and pick the next Tesla, which I said everybody’s moving towards. That’s what the market’s going towards.
Uh, you just have to be very careful in the way you do it. So some, some advice would be don’t stress yourself out, number one. Number two, don’t try and overload yourself with 12 or or 13 different companies. Pick pick three good companies that you can go in. You can tell me in five seconds what they do, who they sell to, and what they sell.
You know, where are they making their money? Where do they make most of the revenue from? Is it United States? Is it multinational corporation? What is it? So just, just understanding your investments is probably my biggest point of, of emphasis.
Ismail: Yeah, I totally agree with you. I think as I, as I mentioned before, I feel like I’m better at the big picture.
So I, especially in this, in this environment where it’s so hard to pick individual companies that are gonna do well. Cause there’s not really a lot of emphasis on fundamentals. Um, I basically look at the macro picture and I’ve read Ray Dalio’s a Changing World Order. Um, Thomas, I dunno if you’ve read that, but I’ll, I’ll link to it in the show and notes everybody else where.
Um, and I, I was fortunate to read it and, and I basically, it clicked with me that there is an inflation environment really brewing. And I was like, Okay, so what do I shift my portfolio to, uh, in a world of inflation? And I started going more towards, uh, things like gold miners, like gdx and getting into, into more Bitcoin exposure, um, real estate stuff because those, to me were inflation hedges.
Now, at the same time, like you, I have, uh, IRA and I Roth ira. One of them I just really focus on dividend investing. That’s it. Um, for people who are curious, there are companies, I think they’re called dividend aristocrats or Dividend King. Where they’ve increased their dividends every year for like 30, 40, 50 years.
Every year. Depression, financial crisis, doesn’t matter. Um, so they have a track record of constantly in, in, uh, increasing the amount of money they pay out the shareholders. Um, so even if you’re getting it now, and it’s a 5% dividend theory says that, uh, maybe next year it’ll be 6%, 7% on the initial capital that you put in.
So that to me was a more, uh, less risky way of building cash flow over time. Um, then I have my macro movements that I do my other account and then I have a smaller account for trading. Um, I think people get the brung impression where they think everyone’s putting all their money into trading and going all in on Tesla and becoming rich.
I think the smart people really aren’t doing that. It’s a, it’s a portion of the portfolio that they’re doing it with. And like I said, if I can make 10% in a week or 10% a month, that’s awesome because I remember when it was making 50% of a year was great. So, uh,
[00:47:00] Building a Profitable portfolio.
Ismail: what do you think about the strategy time?
It my way off there.
Thomas: No, I think you hit the nail in the head. Um, I think people take it the wrong way. You have this new generation of traders saying, Hey, I can make, you know, $500 if I put a hundred dollars in here, Boom. That’s why I’m talking about he’s coming more into a gambling phase than it is of a like, I’m gonna think about this trade, I’m gonna analyze it.
What is my risk to reward? How much am I risking of my account? So say you have a thousand dollars account and you put a hundred dollars into a trade that’s only 10% of your portfolio, that’s a pretty good risk adjusted return. If you ask me if you make 10 to 15% on that, all you really need to do is if you make 10% a day or even 10% a week, that’s, that’s amazing.
They don’t understand, Some people don’t understand the, the process of compounding. Cuz if you make $10. If you make, say, you know, have a thousand bucks and you make 10%, you have, obviously you have a thousand in, you know, whatever it is, 1,100. Well then when you have 1,100, you make another 10% in the next week, it is gonna go up farther than that, and then it just compounds just like dividends.
And so you really don’t need to knock it out the part every day. You just need to have a consistent small, you know, 50 to a hundred dollars a day. Just have a goal and say, Okay, if I can make a hundred dollars this week, let’s do it. So if you hit your a hundred dollars goal, don’t try and give it back.
Don’t try and revenge trade. Don’t try and go back in the market and say, I’m gonna really risk it now, but protect your capital. That’s rule number one. Rule number two is follow. Rule number one, never lose money. And that’s the biggest thing in trading is I think people have just gotten away from the, the systemic approach.
And I know I’ve, I’ve harped upon that, but that’s the biggest thing is, is people are just risking too much money, being stupid with their money, following traders blindly, not doing their own due diligence and looking at the trade and figuring out if it’s worth taking.
Ismail: I’m so glad you said that because I’ve, I’ve literally, I’m the weirdo that actually puts together like Excel models and, um, I’m like, All right, what if I just make 10% a week?
This is how much money I start with. And then it’s mind blowing how big the account gets, right? If you just make 10% a week or 5% a day, but it’s not exciting for people. Um, so I, I actually may, uh, you know what I’ll do? I’ll probably put something simple together and put it on the show notes where people to look at and punch their own numbers in.
Um, it’s mind blowing how much bigger your account can get with those slow and steady consistent gains as opposed to trying to go for, you know, the 10 bagger, um, that are extremely risky, where you most likely will use your lose your money. Um, so Thomas,
[00:49:17] What type of trader you are?
Ismail: what kind of a trader are you mostly? Are you a swing trader, a scalper?
What would you qualify yourself as?
Thomas: Most, uh, most people in the Discord actually know me as the Spy Put King. So we Spy could be up, you know, like today it was up a a percent and a half. Uh, but I played puts, I, I rarely played calls on Spy. I can name maybe it on five times I’ve played calls on, on Spy, but Spy for anybody doesn’t know is the, the, the ETF or the s and p 500 and, and no matter what I play, Spy put, so I’m more of a scalper in that sense is I see a weakness in the market.
And if that’s news, if that’s, if that’s hitting a trend line or something like that, I scalp it in a quick, you know, five to 10 minutes trade. I can net probably 30, 40% and then be done for the day and, and takes five to 10 minutes. Now that’s not for everybody cuz you have to have your eyes glued to the screen if you’re trading that, or, or even if it’s pre-market or something like that.
And equity wise, but, but I’m more of like a get in, get out, scalping. And then I do a lot of swing trading and long term investing. So I like to, to watch my money work for me. And so I do a lot of investing in dividends. Our dividend paying companies, like you said, aristocrats and kings. And, um, so, you know, like you think of like the co cola, the McDonald’s, the, the j and j or the, the Johnson and Johnson, uh, 3m, a lot of those things is what I, I invested in my long term portfolio just to, to accumulate wealth over the long term.
Uh, but a lot of my trading style has to do with scalping and just looking at the economic sentiment and and environment. I’m
[00:50:36] Spy Options Trading.
Ismail: what you saw today that made you place buy puts. Cause I also did the same thing. So I’m just curious, uh, if you can explain a little bit about what you saw or what you look for to place buy puts.
Thomas: Yeah, so this morning it was actually interesting. Um, I actually will, we’ll go at bat with some of the other traders in our, in our chat and they’ll be like, Oh, I’m going on spy calls. Which obviously if anybody doesn’t know that’s watching this, if you play calls, you’re hope the market goes up. If you’re playing puts, you hope the market goes down and so you benefit each way if you think it’s going the right way.
So I was like, Okay, I think this market’s gonna go down. We saw Spy one of the. The easiest ways I can tell you is I watch the, the pre level markets of spy. So in the morning, why? As it opens up at my time at, you know, 3:00 AM uh, central time spy will open up obviously based on futures where it depends where it’s at.
Well, I chart out, you know, 15 minutes before the bell where the pre-market highs, what are the pre-market lows. And so obviously today I saw Spy go up, touch the pre-market highs, and it was having some weakness, some candlewicks formed, uh, on the 15 minute chart, and then it started to head back down. I said, This is a good point to get put because I think it’s gonna continue to go down.
And so, uh, it did, I played it down to the pre-market lows, made about 40, 50%, you know, on investment, you know, couple hundred dollars, which isn’t a lot, but as you said, you know, you make a couple hundred dollars a week and you know, that’s a great side income. Uh, so when you hit the Premarket lows soul, it’s just playing levels of resistance.
And just knowing that, uh, I’ve, I’ve played it for so long too. I mean, I play spy almost every single Monday, Wednesday, and Friday. And that’s just like my days to play it on. And when it happens, it happens. Sometimes I lose, sometimes I lose. But as long as you take a systemic approach, you have the right risk to reward ratio and you know, I’m getting out at this position and I’m taking profit of this position, then you know exactly what you can kind of get into and, and what type of profit you can make, if any.
Ismail: It’s, it’s, it’s crazy. You said you, you played Monday, Wednesday, Friday. How often would you say you’ve been? Right?
Thomas: Um, spy is actually probably, and I don’t, you know, not in a bragging term, but Spy is probably my biggest winner, I guess you could say. Just because you could, it’s so much easier to play. It’s so much more predictable because it’s 505 stocks being traded versus just one volatile stock.
You go play p here you go Play Space or Virgin Galactic, you go play something like that, it’s gonna have a high bid ass spread. So the candles get real jumpy. But when you add derivatives on top of that, if you’re playing options, uh, you have the bid ask on the options, which can drive up the implied volatility, but you also have the bid ask on the stock.
So the option is deriving, its its value on the equity. But you also have to take in a note of the bid ass spread on the, the option or the derivative. And so when you add that in, then it can cause it to be overinflated. Even if you’re right and it goes down, you can still lose money with the deflation and iv.
And so, um, you know, most of the time when you’re right, you know, 80, 80%, I mean, that’s, that’s a good win rate. 70, 70 to 80% is good because obviously if I get a, a two to one risk to ratio or two to one reward to risk, obviously I can make twice as much as I would lose. So I only have to win one every two times to, to make a profit or to even break even.
So if you do more than that, then you’re gonna make money.
Ismail: It’s interesting to me cuz it feels like it might be like a self-fulfilling prophecy where like the way you outlined what you do, the pre-market level, the highs, the lows. I do the same thing. Um, so I wonder how many people are doing the same thing.
Uh, maybe that’s why technical analysis works. Everybody’s looking at the same pattern. If everyone sees that bull flag and starts acting on it or whatever pattern that they see, it may be like a self-fulfilling thing where it causes it to
Thomas: happen. It is. And I think that’s, that’s the derive we’ve seen in technical analysis.
There’s been this explosion of, Hey, I’m gonna chart, I’m gonna figure out what the heck’s going on in this stock. I’m gonna see what it is. You know, obviously you said if you see a bull flag, people say, Oh, it’s a bull flag. The stock’s gonna continue to go up. So they buy it, they buy it right then and there.
And then obviously the more and more people that can recognize a bull flag, the more true it will become, the higher and higher win rate it will have. And that’s just my, I wouldn’t say a prop, but that’s my vision of the stock market in the future is it’s gonna become like a 95% technical analysis to like 5% fundamental.
Now, I think fundamentals are important in choosing the companies you do, right? Because if you’re getting in and out of a trade within a minutes or even a day or. The, the, the current ratio really doesn’t matter or like the, the risk of bankruptcy doesn’t matter because the chance of that company going bankrupt in like a day or two when you’re holding that trade is very, very low.
Now, when you start swing trading and you’re holding long term in investments, that’s where more fundamentals come at play. But just because you have a fundamental investment doesn’t mean people aren’t using TA on it or using technical analysis because as you said, it’s like a, a, a feedback loop. It’s when more and more people know what it is, the more right it’s gonna be, and then the more right it’s be, the more people are gonna recognize, well, hey, this pattern works.
Than these other patterns and more people are gonna hop on the train. And so it’s just a positive feedback loop that will continue on and on and on until a decoupling in the system comes.
Ismail: I dunno. Thomas, you said it’s unlikely. It is unlikely, but I’ve had it happen to me. Maybe I’m just, I remember like a few weeks ago, I think amd, I literally like clicked.
To enter amd and like as soon as I entered Microsoft announced are doing their own chips and the stock tanked. I dunno if you remember that day I was that day. That is just really bad luck. So it could happen ,
Thomas: it could happen, but, but yeah, you also have to watch out for news. And that’s the biggest thing in this environment, especially with the covid thing, man, there could be a piece of news that came out in April or June and that was a very volatile market.
And obviously we, we bounced in in early April, late ju or late March, early April. But any piece of news of covid deaths or, or cases rising would send the market just crazy. I mean, it just becomes super volatile. Any type of fed movement, any type of f OMC meetings and, and it just gets super volatile. I mean, you could see a percent or two move in a one minute candle, which is just unheard of for SPY or the s and p.
So, uh, yeah, it’s definitely, it’s a definitely news driven market with technical analysis leading the way. But, but news is definitely another big factor.
Ismail: So, So it sounds, uh,
[00:56:14] Starting Financial Cloud.
Ismail: obviously you GTE and, uh, another partner Tom. Co-founded the Financial Cloud. Maybe we’ll get Tom on here next as well. Um, get the whole leadership team talking about stocks.
Uh, can you tell us a little bit about what it is and why you guys started it? Because I think it’s pretty cool. There’s like thousands of traders following you guys. You guys clearly know. I mean, anyone listened to this conversation, uh, can tell you clearly know what you’re talking about. So tell us about like the story behind 20 inch Cloud.
Why’d you start it? What’s it about? How’d you meet the partners? Stuff like.
Thomas: Absolutely. So it actually started as a newsletter idea. Um, so Tom and I had been friends for, for three or four years on these, these Discord groups and that’s where I met him was in that first server I was in. We became good friends cuz we, we obviously have the same name.
His name’s Thomas, but he goes by Tom and I’m just Thomas and I go by Tom or I go by Thomas and we just, we, we hit it off and we were like, Man, this would be so interesting to start a business in the sense of, uh, the stock market. And we just kept brainstorming and brainstorming and we got invited to New Discord service to be like these, uh, air quote, experienced traders to where people would wanna wa put or let us put charts out and let us see what we had to say about the stock market and, and technical analysis.
Well, I told Tom, I said, Hey man, I love to write and read. Like, let, let’s put out a newsletter every single week. Let’s send out some stock picks. There’s a lot of other people doing it, but I think we had the following to do it. Um, so we started doing that, and then the financial cloud actually started as a newsletter company.
And then actually just recently, actually just today was our launch day for our software plans too. So we transitioned over our, our newsletter and we have a lot of software. So Tom has been instrumental in, in with the coders that we have. Um, shout out to all of them. I mean, they’ve built our entire server.
They’ve built all the software that we have that has, uh, artificial intelligence flow, bots on demand, flow bots. We have. Uh, a Super Fortuna, which is our own indicator stock market indicator, which is, has a hundred percent win rate. We have, uh, those flow alerts that I was talking about, level one through fives, which have a win rate of like 93 to 94%.
So we have some, some insane stuff and, and obviously I think a lot of people are like, Well, that’s just the, you know, that’s, that, that’s software. I think I would trust software more than a human being with their emotions. Well, that’s what we try to do with the financial cloud was say we have a newsletter on Sundays.
This is all handpicked by his name’s ATM or Avery, and we have Ace or Air Drake. And they, those two will and Tom will all make stock market picks. They’ll say, Hey, this is what the chart’s doing, This is what I think could happen. And obviously this is not financial advice. We say take it at your own risk.
It’s this disclaimer. Um, but we decided to do that and then switch to software and now we’re doing. And so we really just wanted to create, you know, our slogan is independent thinkers, but shared success or independent traders and shared Success. We really just wanted to, to harp upon not being a sheep, uh, not being someone that just blindly follows somebody else’s callouts.
We want you to learn for yourself. Learn, learn derivatives, learn options, learn how the stock market works. What’s a bid ass spread? What’s a margin account? Cash account. Just really understanding the ins and outs before you just go ask all these questions and you go in and say, I don’t know what I’m doing, but I’m gonna throw a hundred grand at it.
We don’t want that. We want somebody that, that, that cares about their knowledge, cares about their, their, uh, their wellbeing and the financial markets and wants to create a better financial freedom for them.
Ismail: Yeah, I’m familiar with ATM too. I’m a fan of his. I didn’t know he was involved with you guys as well.
That’s awesome. Um, I’ll link to his Twitter in the show notes. Everybody else as well,
[00:59:34] Incredible win rate.
Ismail: you mentioned some incredible stats, like a hundred percent win. 94% like to someone listening that’s like, Come on, Thomas. Really a hundred percent wind rate. That’s skeptical. That thinks like, it sounds fancy, the algorithm that does this, Like how do you address the skeptics?
Because I, I’ve heard people rave about super fortune, like, and I’ve heard the same thing. It’s never been wrong. So how’s that possible and how do you measure that?
Thomas: So we, we measure it based on share percentage, move after. Um, so we don’t even get into the derivative side. We just say basically solely on equity prices after that.
So we take a seven day average, we take a 10 day average, then we take a 30 day average. And so on our first, on our flow alerts, we have like a 93% win. If you held the stock, or if you held the option or stock from between 1% or from, from the day of that, that the alert is given to seven days out, you would have a 93% win rate.
Um, so when we came up with super Fortu, Tom has been just, he has a crazy mind. He can come up with brand new things and he, he’s always a our visionary and he’s always dreaming. So he said, Let’s come up with an indicator that will basically call out marker market sentiment. And so, Super Fortuna has been wrong 0% of the time, and every single time it’s had a call out, it’s been at least a 40% gain on an option.
Right? So, so I think if you’re listening to this, this is February 1st, like we talked about. The day before, this was a weekend or, or the weekend before this on Friday Super for called down and said, Hey, I’m bullish on Spy. It said, grab some calls. And so everybody was skeptical when we opened up, down as futures were down probably what of 120 basis points, Something crazy like that.
And then we wake up this morning and spy ends the day at, you know, 140 basis points up. So it’s a 1.4% upwards. And people are like, Man, super for Tune is crazy. Like, how does it know that? Honestly, I can’t tell you how it knows that I, I’m, I’m not in the, the weeds on that, but there’s, there’s so, such a strict parameters around it.
Um, and to the skeptics, I don’t know what to tell you besides, it hasn’t been wrong. Ask any of our 5,000 members in our Discord group or any of our thousand subscribers, just ask them. I mean, they will tell you that it’s been right every single time. Now obviously there’s gonna come a time where it may be wrong.
That’s just part of statistics. But I mean, even then in 98 to the a hundred percent win rate, you really can’t find that anywhere else.
Ismail: Have you guys thought about like pooling capital together and investing it based on the AI for yourself? Like kinda like a hedge fund kind of thing? We have
Thomas: thought about that.
There’s a lot of legal issues, a lot of regulatory issues we have to get into. I think we’re just kind of focusing on providing value and education to our members. I think that was our sole goal and our mission statement in the company was to just create these people that are truly wanting to know more and wanting to year for, for more knowledge and more, more experience in this.
And that’s what we’re focusing on. And then if we ever get to the point where we’re big enough to do that, then I think we’ll explore the option. But I, I don’t think right now that’s on the table. What do
Ismail: you think about, like, I know the market’s huge, there’s a ton of money flowing through, but I’ve noticed when you get a big enough audience of people following your calls, like for example, you probably know Trader Stewy on Twitter, um, every time he makes a call, like immediately the stock goes up cuz everyone just kind of follows him and jumps into it right away.
[01:02:50] Call out a stock
Ismail: Um, do you think we’re getting into like questionable territory where um, you may accumulate 50,000 traders that are following you as soon as you make a call? It’s easy to manipulate the market and, and cash out or, I don’t know. I don’t even know if I’m asking, but I feel like I’ve seen that. I’m like, man, if I had that kind of following, it’d be easy to make money.
Thomas: I mean if you go look on Twitter, there’s, there’s plenty of, of of people that are, I wouldn’t call ’em pumping dumps. I mean cuz they’re not doing anything illegal. They’ve obviously read the laws. We have a, a lawyer friend of ours that’s, that’s in the discord and it’s a very fine line of where you get into the point of is it illegal or is it not illegal to call out stock.
Now if you’re calling outta stock just for no apparent reason and there’s no support behind it, Then there may be like in the effect, and like you wanting it to gain share and you’re actually wanting to dump your shares at a higher percentage, then yeah, that might be illegal. It, it probably is illegal, but there are, there, I know what you’re saying.
When you see Twitter or Twitter people saying, Okay, go buy this stock, Especially like we see with the Wall Street bets, right? We see everybody pumping, amc, pumping, uh, blackberry, pumping, nok, random stocks that have nothing to do besides, they have a little bit of a short interest. Everybody’s pumping it.
So, um, I don’t know. That’s gonna be a very tricky rodeo for the, uh, the Fed and SCC to kind of navigate, especially for the Biden administration. Um, something that they’re gonna definitely gonna have to keep on track. And, and I do think there are gonna be regulatory pressures coming down. The SCC said they’re gonna be investigating both sides, retail and hedge funds and market makers to.
If there was any wrongdoing, if there’s gonna be any, you know, penalties behind that or fines, I don’t know. Usually people just get a slap on the wrist for that type of stuff and find them, you know, a million or $2 for hedge funds, but that’s nothing for them. So I really don’t know. But, but you know, early in the show you referenced the brokerages having the liquidity problem.
That’s a big problem too. Uh, they have to have as much capital, especially when the, the regulatory agencies say you have to hold as much capital as your shareholder trade or as much as your, your users trade. But when every single millennial just download Robin Hood to, to join this Hold the Line movement to buy AMC and Game Stop, uh, it, it just caused them to have a ton of liquidity problems and restrict it.
And then that just made the problem exponentially worse. And so you get into this, again, like a feedback loop of just something’s gonna happen, something’s gonna blow. Uh, you, you’ve seen the game stop and the, and the, uh, the AMC things affecting the market and impacting the market. And, uh, just because all the money, the retail money was flowing to AMC and gme, it wasn’t flow into, to the index funds.
And you can go look, check the data on that. So, I mean, there is just a whirlwind of emotions and whirlwind of things going on right now in the market, but eventually I do think it’ll calm down with, with either fines or penalties or maybe just a slap on the wrist. I don. I feel like I got a,
Ismail: um, a little bit of a controversial view with, with the whole Robin Hood and broker thing.
I get that like, you can’t get away from this. Like, I wanted to get a haircut with my barber yesterday and as soon as I walked in, like, Hey, what’s going on with these rods? Trying to stick it to the little guy. And I’m like, I get it. The, the story looks very bad. It definitely looks like they’re taking advantage of the retail trader and helping the, the big Wall Street guys.
And I would say that they are, uh, benefiting the Wall Street guys. I’m not, I’m not denying that, but if you look at what is really happening, uh, there’s really a liquidity problem. When everyone’s buying all these stocks on Robin Hood and they don’t have the capital to put into the clearing house, um, what are they supposed to do?
Right? So I don’t think it was a motivation of trying to stick it to the little guy. I think it was a self like survival thing where they had to do something cuz they don’t have capital. And I think you just saw today and then on Friday they were raising a bunch of capital and loosening the restrictions.
So I feel like, uh, maybe once I think tomorrow, Tuesday, the trades from last week settle, you’ll start to see more things, more restrictions, loosening, cause they got more capital as well. I don’t think that they relished being in that role. I don’t think that that’s what they wanted to do. I think they had to do it, but yeah, it helped those big Wall Street guys I would say.
Um, do you have any thoughts on that, Tom? Do am I wrong?
Thomas: No, I, I think you hit the nail on the head again. I think that’s, that’s exactly right. That, you know, obviously emotions run high and people just wanna blame the first person they see. And obviously that was Robin Hood, but I mean, you gotta go look at it.
There were other brokerages that did it. There were other brokerages that restricted trading and, and obviously it was the, the, the clearinghouse. And for more explicitly it was Apex Clearinghouse that did that. So we both Robin Hood, a lot of the other brokerages and so obviously we both corrected the situation after two or three hours where Robin Hood kept putting on restrictions.
And so that really does tell the story of which broker. Is, uh, you know, I wouldn’t say better, but I prefer a weeble of a Robin Hood just because the interface is better. And, and actually after the whole Robin Hood fiasco, even if it wasn’t their fault, we both saw like a quintupling of their account signups.
Just because of that. The whole boycott, Robin Hood canceled Robin Hood. So even if it wasn’t their fault, Robin Hood’s taken the, the, the, the blame for it. It took ’em seven or eight years to build a brand and it fell in one.
Ismail: I definitely congratulate you guys on starting the financial cloud or, or at least launching the software portion today.
I think anyone listening that’s, you know, remotely interested in the market, which I would say probably everybody is, um, you should definitely check them out. At the very least, you can join the DISC group, um, and get in the community and see what people are talking about. Um, so I’ll link to all that stuff in the show notes.
Um, but I do have a few other questions. Thomas, if you don’t, I like to wrap these shows up with the same kind of questions. But first,
[01:08:01] Thoughts on Crypto currency.
Ismail: what do you, do you have any thoughts on crypto as a macro guy? Like what do you think about Bitcoin and stuff like that?
Thomas: Yeah, I think obviously the crypto in our group of, of traders on our team, um, at TFC is definitely John Tay Jante is more of the crypto head.
I mean, he, in his episode, he talked about it was, I know we’ve referenced him like four times, but the man keeps coming up. He, he referenced crypto from being like 14, 15 years old. He had a passion for, for, for business and then eventually got into crypto trading. I don’t necessarily do crypto trading. Um, I’ll take opportunities in the market, so like, do coin that the other day.
Put a hundred bucks in, makes like 70 bucks off of it. I’m not gonna risk a major capital. I’m not gonna invest in cryptocurrency. I just personally don’t see Bitcoin. I don’t see Bitcoin being used for its original purpose. It’s, it’s original purpose was for currency, but how can a currency fluctuate that much?
And I know everybody has a different opinion on it, but the, it, it has no value besides the blockchain. And so I think there are other cryptocurrencies, maybe like Ethereum that have probably a better chance of, of making it. Um, but I, that being said, I’m not invested in any crypto crypto.
Ismail: What do, what do you think about the, and we don’t have to get into this whole debate, I’m just curious, like, what about the whole store value concept?
Like, it doesn’t have to be a currency if all these, uh, wealthy institutions, these central banks, these governments, these billionaires are using it as a store of value, eventually the volatility will decrease and it would be, uh, sustainable store of value. What do you think about that? I think
Thomas: that’s possible for sure.
But you know, again, I’m not a crypto guy. I don’t necessarily delve into these topics. Um, I like to have an asset that will pay me so dividends, if that’s a, a re e i t or a re, you know, real estate investment trust or dividend paying company, Those are the companies I like to own because most capital appreciation comes that way and then reinvest in the dividends.
Uh, so that I’m not necessarily a, a big crypto guy, but, uh, I would direct all questions to John.
Ismail: Um, No, I appreciate that. And it’s, it’s, there’s so many different aspects of like trading and investing that everyone’s got their own lane. So it’s, it’s really a benefit to know like what your thing is and what your thing is not.
So I definitely appreciate that.
[01:10:13] Inflation & Currency Devaluation.
Ismail: Are you concerned at all with your dividend investments, your index funds? Um, are you concerned about inflation or, or the currency devaluing with all this money printing, or do you think that that would benefit
Thomas: you? No, I, I do think there’s concern. Obviously inflation is gonna be running high.
We’re probably gonna see it around five to 7% in the coming years. I mean, that’s just based off a 0% interest rate. And then pumping, you know what, 30% of all the money that’s ever been printed has been printed in the past year and a half. So that’s, that’s scary for sure. And then also you add that to the national deficit in our debt.
Um, then you start getting some weird, weird numbers that, that do not look good and they’re kind of contrarian, but. I’m not necessarily concerned because if you find the right business, they’re gonna outperform the market. You find the right business. So, I mean, that’s something that Warren Buffet’s always said, and I take a lot of my sayings and wisdom from him is if you find a company and he’s referencing more of like Seas, candy, or even like Geico, he bought all this stuff and through the recessions, they’ve still outperform because it’s a business that’s gonna stick around.
They have a sustainable competitive advantage in their industry and they can utilize it. So, So like Coca-Cola, that’s not going anywhere, right? They’re still gonna pay a hefty dividend now. Their growth is not gonna be there. But necessarily, you could find high growth, high dividend. Plans or, or high growth, high dividend companies that you can invest in that necessarily won’t, won’t increase your, uh, risk for losing out on, on potential gains, especially when inflation’s gonna be that high.
And that, you know, if you think about, like my grandparents, they’re asking me, Hey, the interest rates are literally zero and, and CDs are 60 to 70 basis points. Where can we invest our money? There is no good. I mean, there’s no good place. I mean, we have to wait for yields to tick back up to kind of put a, a, you know, X amount of dollars in a, in a bank account here, X amount of dollars in a cd just to take a percentage of that and just to even have a chance, remote chance of even coming close to beating inflation.
Um, and so that’s, that’s gonna be a huge problem for my generation. I mean, I’m 23, I’m not really worried. Most of my, almost all my money is in stocks, probably. Um, cuz I’m not really worried I have to be at inflation somehow. But for those elderly generations, where do they put their money in? Because it is technically, you know, 0% bond yields or 0% interest rates in bond yields are super low.
What do you do? I don’t know that, that, that’s the generational question.
Ismail: Yeah, I mean, I think, I think you just, man, you, you just like hooked onto the main point in my view. Like with all my friends around me, I, I give the same advice. I think Ray Dalio first said it, cash is trash and people kinda laughed at him.
Uh, but you just hit on it where you said, where are you gonna put your money, right? So in a world with low rates, with inflation being high, all these wealthy people, all these people with money that are, that have to invest, where are they gonna put it? If you put in the bank, you’re gonna lose value. Um, so they’re kind of forced to invest in the stock market.
And, and that’s what’s kind of feeding this, this frenzy. And I don’t see it stopping because as like the factors that I mentioned, the, the, uh, interest rate, the inflation and the fed printing money, if those don’t change, I don’t see it changing and you even see it. Uh, I’m always skeptical about the inflation rate, the, the official inflation rate, because to me it’s a little bit manipulated where they don’t include.
Things that are really inflating, like it’s a, you know, it’s still under 2% the inflation rate, but they’re not including real estate or they’re not including, you know, equities Yeah. Or stuff like that. And that’s where you see if, if you let Google the Cantel in effect, that’s where all the new money is, is, is flowing.
Um, so to me it’s a much higher inflation rate. And that’s why you see even like, I mean like Pokemon cards and magic to gathering and, and sports cards even, they’re booming. Um, because pretty much owning anything other than cash is, is better than holding cash. I could be wrong. Uh, what do I know? But that’s just my
I agree with you. I mean, if you look at the, if you actually go and, and dig deep into economic indicators, if you go look at the core, uh, PCE or the, even just the core ppi, just the core inflation, they exclude gas and food. Well those are the two of the most highly sensitive to inflation. Like why would we not be including that?
And I think they don’t want it to fluctuate too much. The same thing with the, the unemployment rate and the labor rate. In the labor market, they, the, the unemployment rate is not the official unemployment rate cuz it doesn’t include people that, that could not find a job or are not looking for a job but still don’t have a job.
And so there’s all these like, little tweaks that they make to make it look better. And I mean, I don’t know if that’s just the government or if that’s just, um, trying to make the presidency look good. I don’t know. But
Ismail: you always, you’re exactly right. And I, my my personal opinion is that I think it’s because they have to, because a lot of things are based on like the cpi, if you’ve got a job, you get, oh, you get a, uh, you know, cost of living, race adjustment, or a lot of things are kind of piggybacked on that CPI number.
So they, they manipulate it to keep it lower, uh, to not have a domino effect that, that like spreads throughout everywhere else. At least that’s my theory. I don’t know.
Thomas: Yeah. And that could, that could be true. I just, I wish people pay more attention to the true inflation rate than the one that’s altered is my, my only.
Ismail: I’m totally with you on that one. Um, man, I, I love getting into the nitty gritty with you in this conversation. I hope people find it valuable. Uh, but, but there’s two last things that I, I ask everybody. Um, so Thomas,
[01:15:17] Any hint of future successful entrepreneur as a young kid.
Ismail: if I interviewed people around you at a young age, we kind of talked about a few stories about you at a younger age, uh, being different, doing things that most people weren’t doing.
Um, what would people say about you? Like would they, if I talked to them, would they say, Hey, this kid was destined to be successful. Like, we always knew it. He, he always had it in him, or would they say something.
Thomas: Yeah, I mean, I think it really depends who you ask. Um, I mean, obviously people close to me are probably like, Oh yeah, he’d be successful.
I mean, just out of the curiosity and the generosity of their heart. But I think, you know, most people when I grew up in high school, didn’t have a lot of friends, didn’t really, didn’t really care for that type of stuff, as I mentioned. Um, I didn’t really care what people think about me. I still don’t really care what people think about me, but I don’t really think it matters.
If they can think I can make it, if that makes any sense. I, if I know I can make it and I know I can do it, like starting my own business and, and if somebody says, Oh, that’s awesome, or, you know, very sarcastic, like, Okay, go have fun with your business. I’ll be like, I will. I mean, that’s what I enjoy doing.
You have fun with your day too. So I don’t think it’s a, it’s a negative thing when people think that I can’t do it, because even if they say I can’t do it, I’ll be like, All right, watch and I’ll show ’em. I mean, that’s just how I am. I’ll put my head down. I’ll keep pushing through, like, everything in my life.
I’ll just break through the wall and, and break another barrier.
Ismail: That’s a great answer. Um, and, and we talked about a lot of different things. Uh, obviously you have a different perspective than most people probably at your age. Um, but I ask everybody, like, obviously a rich life is not just about money. So when people see the, the podcast title bound to be Rich, they think, Oh, this is just about money.
It’s not just about money. Um, so I guess from everything that you’ve been through, from what you’ve seen, what you’ve learned,
[01:16:54] What is a rich life to you?
Ismail: what, what is a rich life to you? To
Thomas: be honest, I would give up every single, every single thing I know about the stock market, about finances, about everything. If I could live a simple life with my wife and our future kids, and our future families, and our families now, and just live a very, very meaningful life without any materialistic, if any, if you ask anybody, I know I’m not materialistic.
Hey, what do you want for your birthday? I don’t care. I don’t want anything. I just wanna spend time with you. That is my biggest thing. I enjoy spending time because we only have a limited amount. And if you know an economics, if you have a limited amount, Then it’s much more valuable. It’s much more valuable.
And so people need to realize that in life is, you could spend years and years and years building for something and then all always realize that you just wasted your entire life not spending with your family and your friends. You’re not taking time away to spend it with whatever, you know, focusing on something else.
So I think the biggest thing is just making sure that you’re not focusing on the materialistic things, but you’re focusing on what’s, what’s above and what’s ahead.
Ismail: Awesome, awesome. Thomas, I really appreciate you coming on. I personally really enjoyed the conversation. Um, hopefully people get a lot of value out of it.
We got to nerd out a little bit about, um, some in depth stuff about economics. Is there anything that you wanna end the show with? Anything you wanna pass people off to? Anything, any parting words?
Thomas: So, yeah, I think the biggest thing I would, I would end with is just making yourself the best person possible and keep pushing, keep grinding and get better every single day, even if it’s only one.
Ismail: Thomas, man,
[01:18:23] Thank & Wrap up!
Ismail: thank you so much for coming on. Uh, I really
Thomas: appreciate it. Yeah, absolutely. Thank you for having me.
Ismail: And there you have it. If you enjoy this episode, please remember to leave a review. I may even give you a shout out and read yours out on the show for any and all resources that we discussed.
Check out the show notes or head on over to bound to be rich.com. Until next time.