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Now to Dan. Monday, Monday. Well, I appreciate you being here, let us see how much of a delay we have and they will go until they come back in. Yeah, well, I mean, we'll make it happen, you know, maybe we have. In a corridor to get in here, a type of transcript or something. We may we may need it tonight, but I appreciate you, you want to dive right in. Oh, yeah, unless you want to wait for the guys, but yeah, man, like no need to.

No need to thank me. Like I said, I'm here to be of service. Love what you guys are doing and. If I can be. I can be a resource. I think it's important that people have this information and get it from an unbiased source with no agenda. I heard the disclaimer I'm going to throw on my own. So I'm definitely not serving in an advisory capacity. These views are my own, not a CNBC, not of XP investments, my company or any other affiliate.

I'm just here to give you guys the real the way I see it. But I would always encourage everybody to do to do their own research.

And I'm going to try to, you know, hear a little bit earlier today, hopefully I can get into the weeds a little bit and give you guys some some some more in-depth type of analysis on what you should be looking at, how to look at it and really try to equip you with the tools needed to kind of make your own decisions, which is which is really what this is about. Right. I like I'll let you kind of lead this in, but I did want to kind of kick off by saying, like, there is no cookie cutter way to do this.

I mean, I know for you personally and I know myself, like a lot of this stuff is it's trial and error. You know, you learn from your victories and your defeats. And so I would I would caution anyone from just following anything that you read or consume via digital media or whatever else blindly from anyone, myself included. I don't care if it comes from Ray Dalio. You should pick up the book or the article or kind of tear through the company's balance sheet yourself because and in hats off to you.

So when you have mentors that can lead you in the right direction, that the information that they're giving you is technical. It's a how to do this. There is no replication or how to think about doing this. So I hopefully I can come here and gives you not only the technical know how in terms of how to execute X, Y and Z, but the critical thinking that goes behind being able to execute X, Y. So it's want to say that really looking forward to it.

We can kick it off. Can we back? Yes, you're back. Look. All right, what about this one? We've got a brilliant brother. OK, it's going to be OK. They know I have high levels of anxiety.

So he got the he got the ah, the hand up right now. Absolutely. Zone. He's going to be the last day. Good actually.

But but if I can stop being so fine. Absolutely. By the way, I'm seeing a lot of misinformation on social media.

Can you walk us through the proper way that a professional would structure a portfolio so people aren't getting caught up in the hype of what is being posted online and on social media today? Absolutely, I mean, that's a great question and kind of ties into what I was saying earlier, I thought about coming on and I know some people I've seen some of the questions like what Woodstock is this X, Y and Z. I'm like, I really want to listen.

I'm here to serve out. This won't be my first time. My first time with my last time. I'll get all the questions, but. In terms of how to structure your portfolio, in terms of how I would structure our portfolio, you have to have like a core holding, right? And I think that depending on whether or not the first question is you need to ask yourself, what's your risk tolerance? I know that sounds kind of cliche, but is it super important?

Right. Like, are you trying to maintain wealth or are you trying to create wealth? So maintenance is really about just making sure is really about protecting your downside. So your volatility of returns, the amount of risk that you want to take to be significantly lower than if you're actually trying to generate and create wealth. So a lot of stuff that I see is like, OK, let's have this all options portfolio or what stocks should I buy? Excuse me, for how long should I hold X, Y and Z?

For me, it's always easier for me to make small alterations when I have a proposition that I like. So let's give you an example. 70 percent stocks, 30 percent bonds. Right. That's something supervene out or 60 percent stocks, 40 percent bonds or an index fund that does that. Because now I'm not suggesting that you actually trade different bonds because that that's that becomes much more complicated if you have an institutional backer or institutional firm that will deploy this capital for you.

Sure. Stocks and bonds and any kind of balance that that works for you or someone who's like kind of just getting started, I would look at either like a Vanguard index fund or SBI ETF and that will give you general exposure. And we'll get more on ETF later. But personally and some of my investments, I'm like 80 to. I'm relatively young, I'm thirty seven years old, and I'm not risk averse and I've had to kind of like get this out of the mud, right.

So I'm fine with the risk. But, yeah, if you're asking me, like, kind of what I have for someone like my four one kay allocations are different tranches of investing and we can get into that later. But there's a core position. I think if you have 60 to 70 percent, anywhere between 60 and 80 percent stock, anywhere between 20 to 40 percent bonds. And if you want to sprinkle in or like a bond index like AG will give you that you want to sprinkle in commodities or something like that, that's fine, too.

But I think the basics are stocks and bonds. And that's because when you look at a company, you have debt and you have equity. Either you are a financer of a company or you are an equity holder of a company. And I think that breaks it down in its most. Like, breaks it down and it's like real core essence and essentially make yourself like you would a bank, a bank either lends money or bank takes a position in something.

And personally, I try to replicate that. But what about the people say, that's great, that's safe, but I need to make money? I mean, 70, 80 percent stock isn't safe. I mean, it's you know, the long term returns are seven to 10 percent, but it's not safe. Look at look at what the market has done from February to March. Look at what the market has done from March to now. I don't think that's that's safe.

Look at what the market did in Q4. Twenty eighteen. Safe is a relative word if you're trying to. And I'm probably going to regret saying this if you're trying to make trapped like returns. I mean, this isn't that's not what this is, right? This isn't this isn't make 50 into one hundred fifty overnight. I'm not going to get it. I can't get up here in good conscience and and suggest that to anyone. If you want an increased amount of risk, you can still take that core portfolio and have that be your core.

And then you slice off small pieces and take much higher risk, much higher beta if you want to get it into some of the technical terms, much higher R-squared of volatility, types of investment. But the key is having a core position because if you don't have a base, you just you don't know where you're going. You don't know where you need to tweak. And you're just not involved in the market, generally speaking. So bottom line, real quick, you said that, you know, the bases would be stocks and bonds, right?

So I'm thinking a lot of our audience is like they're into options. I always suggest like 500 jump shots when you're trading. When do you think it would be a good time or is it a good time or a certain amount of trees that somebody should do or be involved in before they get into the options play?

OK, that's a good question. Let me can I take a quick step back before I move forward, if you don't mind? So when I say 70, 30, right. What I'm trying to do is, is give you something that's what we call an investible or replicable portfolio. But clearly, I'm a I'm a proponent of owning real estate. I'm a proponent of holding a holding operating company. I'm a proponent of all of that. But I want to be able I want to make sure that I'm giving you guys information that's actionable for me to go say, hey, you should buy this type of company or a private company.

I mean, you have to be an accredited, accredited investor to invest in private. So, yeah, I definitely think that should be part of your portfolio. But right now we're assuming I'm assuming that we're trying to make money and that you don't have a quarter million dollars of disposable income, that you can invest and not care one to be an accredited investor. I believe you have to have like a million dollars of liquid assets or make QUARTERMAIN dollars a year.

And that that's that's super high risk. I do think that there is room for that in a portfolio, but I'm purely talking about publicly traded securities. So I just wanted to clarify that in terms of options trading, listen, I love options. Options have been good to me. That's that's my bread and butter. But man like Ian, great question. And some of the stuff that I'm seeing is like literally having a portfolio of options. I mentioned this last last episode or the last episode I was on, right options give you leverage to and control.

That's very different than ownership, right? Options are all about timing. Amongst other things, volatility and but I'll dive into all that stuff, but you're betting that something is going to happen by a certain period of time. That is very dangerous to have all of your investable capital in a portfolio of options, because I think of a portfolio as a going concern if you listen to Bhogle Duilio. I mean, that the Oracle of Omaha grabbed all of the great all of them, right?

What they'll tell you was that time value of money is the thing that's working behind you. It's like the core tenet of finance. So you need compounding over time. And so what you need are securities that can that can be a linchpin of your investment portfolio, about 10, 20, 30, 50, 100 years. And then you tweak around that. So at what point should you have an options portfolio? Personally, I would for me, never I'm never going to have a portfolio of option.

At what point should you trade options of. As soon as you're comfortable and understand the risks associated with those options, I don't want you to shy away from them. I wouldn't suggest I would never guess, depending when not used all the tools available to them in their tool kit. I just want to be very clear about investing, trading or holding or trading positions, positions. Investing is about holding for the long term or about holding for a certain target return on investment or IRR or whatever you want to judge your return.

That does that answer your question? Thoroughly enough, if I can play the short question, the bottom line is they want to do 50 percent. You know, now it seems like. Yes, we recommend you. No, go ahead. And the. OK, so the question that I heard was shocking. I didn't I didn't hear Troy or I heard you say something about, OK, so what I did was advocate what percentage you allocate to options versus stocks.

Your options typically are probably break it down in terms of like a return on investment or percentage return, right. So. If you're going to own an option, you're going to pay, I don't know, a dollar or two dollars for that versus paying 50 dollars or 100 hundred dollars for a stock right to your two dollars. You know, that's going to be about five percent of. You know, of of that fifty dollar that you would allocate, you can make a similar return on a much lower portion of capital, would spend it right.

So I would say, OK, well, if you're expecting to make twenty or five percent will be twenty X, what you're making on your corporate or portfolio, then you should only I would allocate a fifth to that particular option three. Right. It's all about like balancing the ratio in terms of expected returns. If I expect to make 10x X on an option, then I'm only going to really probably do it right. If you are playing something that's like longer dated or you don't expect to make the same type of returns, I think you can invest a bit more.

But options decay, right? Like stock isn't going to zero unless the thing goes bankrupt. You're going to you're going to recoup something. And bankruptcies happen. Gessen's. If they don't finish in the money, quite literally. Dedicated to zero. So I want to ask the question that everyone is going to ask later. And if I can get 10 X and a year, why only put one foot in when I'm only going to get 10 to 20 percent long term?

I'm playing devil's advocate because I'm going to get a thousand people to ask me this question. If you're I'm saying if you can get 10 x Investa 10. You have been so OK. Because people want to laugh and have yeah. I can't tell people what to do right, I want to be very cautious about saying do this, don't do that. We're all adults here. And ultimately your risk tolerance will determine how you're willing, you know, how you're willing to deploy capital.

What I'm saying is looking at the returns is half, probably not even half of the equation, particularly when you're a professional investor and a retail person could still be a professional investor. If this is what you say you do and this is a hobby and you kind of want to just put a little money in the game, go for it. Right. Because it's all about the learning experience and your enjoyment if you're saying this is what I do. You go to raise capital or you're talking to your clients and you talk about returns.

Any astute investor, the next question out of their mouth is going to say, what's your volatility of returns? How much risk do you take to get those returns? And so I really want to touch on the volatility in your portfolio variance. You have things like Standard Deviation, R-squared, Sharpe Ratios, all of these things measure. And these are like, I would suggest you put these terms up. These are measures of return as they pertain to risk taking to achieve that return.

So if you go back to like your most basic, like, capital asset pricing model, right. You move up risk, you should move up and return. But if I can take. One unit of risk and get one unit of return, and you're taking two units efforts to get that same return. You're not doing something. I would sell what I would sell, whatever it is to you and buy whatever. I'm getting older. And so I think that the next part of that is so for four options, people talk about, OK, I can make 10x.

You can make 10x or a certain factor of it's what I would say is you can find something safer, deploy capital there and just scale. Because you can grow the amount of capital that you're allocating there or your notional exposure is what we call it. But if you keep your risk low, all you need to do is scale that same that same exposure. It's what banks do, it's what sovereign entities do. It's I mean, it's it's the basic of the banking system.

It's like if you go to the bank, you put in deposits. They lend nine times on that. Not super safe. Yeah. Excuse me, a super safe business model. They just scale it. And you I mean, I'll be the bank. You show me a bank that doesn't print money. Right. They don't exist because if they don't make money, they go out of business. So sorry. Again, I wanted to dive in a bit deeper.

I know that answer buried a bit, but. It's not cut and dry like 50 percent, unless you're in options that are as safe as whatever else you're up, whatever other alternative asset you'd be investing in. I just don't think you can say this return versus this return. And and therefore, I should structure my portfolio this way. It's like it's the whole reason you have stocks versus bonds. Like, why would I even bother suggesting that you allocate any money towards bonds, which is the largest market.

Right. Treasuries like the largest asset. Why bother even investing in that stuff if it's all about return? That's a great point. So what's a good safety range for volatility in your portfolio? So if you look like you're also index or anything similar, like what's a safe range that you want to be in? Overall portfolio, I mean. You know, I wouldn't I mean, a pullback or correction in equities is considered.

I'm fine with that from an index standpoint. When it comes to trading single stocks. And much more much more of a stellar individual companies. 20, 30 percent. But again, this is me now and then I want to take it a step further, if I'm looking at a growth company. Twenty five, 50 percent, that's just that's what you're signing up for. Yes. I'm talking about like a more cyclical utility company or something that's like not going to grow.

I'm going to probably cut that down by it by two thirds. Right.

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Oh my thirty percent. OK, I'll take about ten percent there. My sixty percent account to take about twenty percent there. You know it's really about to ask us and then when it comes to bonds, much lower, much lower volatility of returns. Really typically what the stuff is measured on is like standard deviation. So you're going to go back and you're going to say, OK, how much is this mood from the life of this investment? And that's my average move.

And then how many how many multiples of that average am I willing to take? So anything within a standard deviation? I'm fine. Right. That's that's your standard normal distribution. You should expect things to move there. When I start to see what we call two, three, four sigma for standard deviations, you shouldn't be holding on to things that and then, you know, there's a term called Six Sigma event, which is like your black swan, things that really shouldn't happen.

Things that are happening now, right now. Yes. So, you know, I'm really trying to give you kind of an all seasons type of investing strategy. But truthfully, it's going to you're going to really what I would do is, I think an index, because if you're looking at investing, right, you always have some type of benchmark. And that's why I would go back to saying, listen, you've got to have a core, you've got to have something to compare to.

You've got to be tethered to something or you just look you look at your benchmark and you say, OK, that thing has a standard deviation. I don't know. But all right. Now, how many more standard deviations, if I'm willing to take, if what I'm trying to replicate is tethered to that? And that would answer, I think that that not only answers the question directly, that gives you the right to determine what it is at your benchmarks in that particular investment to and then determine how much risk you're willing to bear around that and how much you should be willing to draw down, let's say, if you do.

OK, so you have long term, you have bonds.

What about options, futures and any exotic derivatives, if you like, structure and the are left for options, futures and anything exotic.

OK, so in terms of the exotic stuff. You know, that you'll need like an insider to trade at least what we define as exotics, which are like bespoke option investments that are tailored to you. Yeah, so you're going to have to have an insider with a bank to be able to do that. You have to be a high net worth individual, whereas institutions are going to have to have what you call an asset. So I'm going to just like take that off the table because I don't think it's very relevant.

I think that if you are. If you're young and risk loving. And you have like a stable source of income. I think you should go for more intelligently, that doesn't mean just go buying a strip of art, right. But the same the same portfolio that you have at twenty five or thirty five is not the same portfolio that you should have a fifty five or sixty five. So I want to make sure I answer these questions in a way that apply to everyone, but that I don't give like a blanket statement that is damaging.

Right. Back to your first question. Like these one size fits all answers are often given by people that don't have the information to give you a more specific answer. Yes, so in terms of options and futures, right, it's about opportunity cost. So if you're saying, OK, right now what I own is I own spy, I own I own the AG. And then I sprinkled in a little bit of Apple and Amazon and Zoom or whatever else.

Right. I would say, OK, so you have a clear position. You clearly are have a risk appetite because you're investing in growth companies that. Have revenues oftentimes that are like my father in the future, and that's why these companies are sensitive to inflation, because you're discounting their cash flows over a certain period of time. I would say if you if you truly understand options and you're willing to trade them. Then I would say, sure, like sure, take five, 10, 15, maybe 20 percent.

The thing is, if you're trading options properly, you don't need that much. Not that that's really the point I'm trying to make. Like, you don't you don't you don't need much like you can literally make money like that. The issues that people aren't willing to take doubles and singles, triple like all or nothing home runs. So if you're investing a dollar in options and you make 30 cents, you're like stuck. Since it's nothing like you just make 30 percent.

Sell me a fund that returns 30 percent year on year. And I'm saying if you can do that routinely to scale your position.

Mm hmm. That's a great point, Richard wanted me to ask you, what are your thoughts on like I.B. in the pharma sector going into the next four years since Trump is seeming like he's going to concede here pretty soon? I mean, I'm not going to speculate on what's Trump's going to do, but, yeah, it's going that way. That's a good question and timely question. As for IBP, I mentioned a couple of times, really, I have been unwilling to take stock specific risk on vaccine companies.

Right. You've seen Pfizer biotech came out with a vaccine, which and this stuff is kind of funny to me right here. And I think the efficacy rate was like 90 percent then. But Dorna came out and they had ninety four and a half percent in Pfizer was like, oh, we didn't finish. Our trial is actually ninety five percent in AstraZeneca. Came out today and was like, OK, well we have one. If we give the proper dosing, which is two doses, I think it was 65 or 70 percent, but we actually gave a half a dose and then followed up by another dose and that one's 80 or close to 90 percent.

So it's like and what you've seen is on the news, those particular stocks run up. Then the next interest comes out and that stock sells off and the new stock pops. And it's kind of been somewhat of a of a domino effect. So that's why I suggested I be like a biotech ETF that gives you the systematic exposure right here. I don't have a strong view. So my view on it in a vaccine is not the same as me having a view on this particular company.

This is an isolated event, an isolated pandemic. There's a solution here. There's going to be a truncated timeline in terms of when you're going to be able to derive revenue and profitability from this particular event. So I'm I find it challenging for me to try to extrapolate like a whole business use case off of this one a bit. And that's why I liked IVP. I think there was actually CNBC shameless plug. There's a I think it was an analyst of Jefferies who came out, made some really good points in terms of, OK, so one thing now to have the clinical trials and have this going, see, it's a completely different it's completely different structural and administrative, logistical issues, challenges in terms of manufacturing and distributing the vaccine.

And that's where the challenge really is going to be. IPB, if I remember correctly, was treating it like this one thirty to one forty five type of range. I think that range kind of old, I don't really I don't really see a ton of upside in that here. So I think, I think it be challenged and those individual. Now, given you've told us how to structure portfolio, why do you think it's hard for people to stick to a plan even though you're a professional and you do this for a living?

Why do you think people still try and debate? And can you explain that if you continue to tinker and try and accelerate your plan, that you can end up breaking something that does work?

Yeah, it's human nature, it's all right, it's like there's always and, you know, it's it's political in nature. It's media coverage. Like you always get bombarded and looks like the new hot thing no one talks about, like the slow and steady race. Slow and steady kind of grind to where you've got an. And I just I think it's really I think people are. Want instant gratification, and that's just not what this game really is, it's about I mean, you can make it, but for every winner there's probably two or three losers.

And the game, at least the way I played it and the way it's worked for me, the game isn't about just celebrating winners. It's about cutting those losses before they become cancerous and ruining your portfolio. And so, yeah, and that's equally as important, if not more important, is being disciplined in a way that allows you to remove things from your life. Generally speaking, you know what you guys are always on? You're talking about like I love how you give holistic advice.

Right. Removing things from your life before they grow and just fester and create irreparable damage. Right. I'm speaking about investments here, but I think that, like, just generally applicable across the board. I really hope that kind of answers your question. I just think it's like it's a lack of discipline. I think that what you're kind of bombarded by social media, especially now and even traditional media that's always talking about the next hot thing. You've got to be in this.

You got to be in that. You've got to be in this. Things take time. Good things take a lot of time. Don't be afraid to kind of bite slow, cook your stew, keep it to yourself and keep things kind of moving onward and upward. So. Yeah, profitability is boring. Being healthy is boring, owning assets is boring, it's not flashy, it's it's the antithesis of that, like not being a consumer. Is boring.

Mm hmm. Like so. Like for me and I know for you guys, like. It's like you kind of nerd out on this stuff, right? Like, I genuinely like I want to know about this company. Oh, someone's wearing that. Who makes that? And so when you when you kind of shift your mindset to that, like, fine, go buy some Nike and then spend two hundred fifty dollars that you spend on some days, go by two dollars worth of Nike stuff.

If you're going to go by the Loui bag, not my thing, but if you do buy the same amount of LVMH, hell, you're helping to drive the revenues. And so, you know, it's getting into that that that ownership, that ownership mindset. Well, wants to know what are the catalyst that will make an ETF optional and they want to know what do you think the prospects of marijuana over the next four or five years? I know you've talked about MJ before, but do you think that it's going to be viable within the next four to 10 years and kind of go on a cataclysmic run maybe here in the next half decade or so?

So. Yeah, MJ, I've mentioned one of the guys on the show actually on the scene. Yes, I just I'm going to mention it. I want to make sure that all those are there, which is definitely more than I sat down and had a chance to talk with them is much more of a use of a sitting expert on that topic than I am in terms of the actual nitty gritty financial details of each one of those companies. And his ETF, CNBC, which I'm also an owner up on, MJ, is a bit more tailored to US domestic.

Right. And so if you look at right now, it's really like a legal situation right now, which. Is do you believe over the long term that the state legislation will be robust and then lead to federal legislation and I would liken it to prohibition, right? Like, fine, you've got. Bud or Miller and all these other InBev and all these other companies, but like I personally don't want to be on the front lines trying to pick individual companies like enmasse like thematically, I definitely believe I do.

I believe I think it's the next hot thing. So, you know, what you have is a local youth that recreational use. You have a government that needs an increased tax base. Kind of have all the makings or thematically why I think this has long term staying power. The issue is that. You can't really invest as an institution, you can't really bank as a marijuana company, right? So the money has yet to really be injected into our financial system in a way that allows there to be institutional investment on a large scale.

You're seeing it with Bitcoin now because it's been here before. The difference is that institutions can allocate capital. Right. So we're all talking about what should I buy, which I sell? What should I trade? Or the largest asset manager. A lot of them are like allocating towards something. It's not about buying it and then selling out of it. It's like we're going to keep a portion of our holdings in this asset at once. Marijuana. The marijuana industry is accepted and adopted and that type of way.

I think it's I personally think you have massive upside, but I don't want it. I don't want exposure to the individual fraud cases, which undoubtedly will come. I don't want the one off exposure to poor management or robberies or raids or noncompliance or any of that. So that's why I like playing it through a dramatic way, and that's why I suggest an ETF. Or I played it from a strategy point. Woody. From a strategy point, what do you wish that you knew from the very beginning?

That would have made your career and getting gains a lot easier. Man. So that nobody knows. That nobody knows that you that you have as much information, ability and know how at your own fingertips as anybody else that's going to get up and talk their head off about it. Not that's not to say that there's no experts, but don't victimize yourself in terms of your ability to do this right. Don't sell yourself short. And like for me, that was and I'm not saying that's the most important lesson.

That is the most important lesson for me, because I'm the type of person that's kind of a perfectionist. And I'm like, I need to read this. I need to read that. I got to make sure I do this. I got to check this. I got to check that. Well, what happens if this happens? And if I had just. If I had just gotten started earlier and been willing to take the risk earlier, understanding my temperament, right, like I'm not the type, I don't I don't skydive, I don't bungee jump.

I'm but too many life risks already as right. So knowing my personality type, I'm going to do the due diligence and what I and I think very early on in my career, I was so awestruck by the ethos of Wall Street to the best and the brightest. And and the truth of the matter is we and this is the reason why I'm here, because we belong. We belong here. We deserve to be. And and that would that would have been that would have been powerful for me early on to really recognize that.

So last time you were here, you gave us the calculation what the mix of how to determine the true range and Internet went crazy. Do you have any other calculations or formulas like that that you can give us so you can burn it again?

I mean, I already broke the Internet, but yeah, I. I have a couple for you, so, yeah, I want to make sure I go back over this. Right. So. You want to. So this is like options one on one, right? And what I was talking about was the fix. And so the fix is in implied volatility index. So any time you have an implied volatility, it's normalized. So take that.

Divided by roughly 16, really divided by the square root of two fifty two, and that will give you the implied move on an annualized basis, the implied daily move on an annualized basis. Taking that a step further, I would say, and this is for all my options, traders out there look at the spread and the ratio of implied versus realized volatility. That said, you can't say that one more time. So I would like I think it would be very helpful and something that I look at.

Take a look at the implied volatility and if all your trading, all the option trading montages will have, it'll be like Ivy, that just tells you what the implied. Actually, I'm going to I'm I'm going to sit on this. I'm going to spend some time that will tell you what the implied volatility is. The other half of that is what the realized volatility implied is. It is it is an assumption and an input into a model that kicks out which you have when you take as your options.

Correct. The realized volatility is how much that stock actually real. And so if you continue to purchase implied volatility, but the stock doesn't realize that you might think you're winning, but guys on the other side are also winning. It doesn't necessarily have to be a zero sum game. So like I said, I'm going to you can tell me to shut up, but I'm going to spend a little bit of time here because I know this is as powerful as that.

OK, so for most people, retail investors, when you're buying a call or you're buying call because you think a stock is going to go up, you're buying a book because you think a stock is going to go down and vice versa by selling or writing those particular attention to. What I'm saying is, for me, the way that I grew up trading and this is on the institutional side. You will look at the dollar price and I'm like, I don't care what that is.

You need directional exposure for you to win. I don't care whether the stock goes up, down, left, right or anything in between, I'm betting because what I'm doing is I'm stripping out all of that and I'm trading volatility. So when you when you look at your yard, TD Ameritrade or E-Trade or now I got to see them all stock trades in interactive broker Robinhood, all of them, none of none of them are better than any of the other ones.

When you see your implied volatility there. But that is telling you is. You take your price for stock price, give it into some strange interest rates, blah, blah, blah, all of this stuff, right. And what you can do is you can strip out. Excuse me, you can strip out the implied volatility, and that's the most powerful piece, that's the most powerful input in terms of your option price. And so you may say, hey, Apple's a great stock, I'm going to buy called.

Whether it's at the one he calls in the money, calls up titles like I Want Exposure to Apple stocks, the options only cost me five bucks. Stock trades at four hundred bucks. This is a good trade. And I go, OK, that that five dollars that you just paid. That actually is a one hundred and sixty. But it's a nice round number implying that the stock is going to move 10 percent a day from now until that expiration when I'm going to do something.

So you that call I'm going to go buy the stock and I'm a Delta hedge and I don't care if it goes up or down, as long as it doesn't go up or down its rate of change that I'm trading, as long as it doesn't go up or down by the 10 percent that you just paid for it, I went. And that's what you're that's what you are. No, go ahead, go ahead. And so I just. And that's why I like the volatility that you're paying for these options.

So critical. And and you ask about it earlier. But I'm getting into it now, and I knew I'd get a chance to kind of get to this is the nitty gritty of offshore trading. So and this is why I was I was hesitant to give you a cut and dry answer in terms of how much my portfolio should be in stocks, bonds or whatever, how much my portfolio should be an option, because it depends on what the implied.

Volatility you're paying. If you're paying an implied volatility, that's go back and look historically. So we had another thing to look at, the implied volatility of a stock and look at the historical implied volatility, the same way that you look at a stock stock chart and look at the range of the stock. And I would say stock price is one thing which should probably look at is like the price to earnings ratio or price to earnings to growth, but some ratio that tethers you to something that gives you a base.

I'm going to keep coming back to that word based. So go back and and see, OK, this has had this implied volatility over the life cycle of this company or over whatever time period you think is applicable and then look and see what it's what it is right now. If you're buying that stuff on the highs, then one that the amount that the stock has for you finish in the money is much higher. You're probably better off just buying the.

It could, if you're using options, take a directional cue. That's that's the first part, right? So options look at your implied volatility. Look at the realize volatility and then look at where I mean, for me, like I'm looking more statistics. Look at what percentile those particular things are. So if I'm seeing something that's in like the top, you know. Yes. Right. Like that, the top 10 percent of implied volatility, I probably don't want to buy that.

The exact opposite in the bottom 10 percent. Most of the time, it's going to be moving around like the median or the me. But when you start to see and then and then earnings listen up.

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If you if you also do this an Excel spreadsheet. But. Average or mean median, you can do standard deviation, Stoebe. You can do variants or Excel, we'll do all this for you. And if I'm if I'm if I'm buying something in the top quartile or top decile, I'm. No, no, thank you. I'll just buy the stock if that's if I'm playing it for a directional point of view and the exact opposite, if things are in like very low quartile or percentile.

The other thing is so another thing for options is if you're along the stock and you notice that the implied volatility is super high, that I like doing is selling coal. Even though you love the stock, it's not about the fact that, oh, I have to buy calls because I want the stock, that the implied volatility is too high for that call. Which is going to drive the higher the implied volatility and you guys tell me from get your point that we know you're good.

Go ahead. You have your delta, right? Your delta is your it's many things. Hedge ratio for one, but it's your probability of finishing in the month and then taking it to the next question. So how do I pick to be in the money at the money out of the money. All right. Take a look at the delta of that thing. 50 delta means 50 percent, that is going to be in the money 50 percent, that it's not going to be on the money and the lower the delta, the lower the probability.

The lower the probability of those things finishing in the. And I think this is the big moment. The the higher the implied volatility. Dry your delta back towards 50. So the more expensive the option. Well, drive your delta back to. Those are the times where I'm not laying options that are close to the money because the implied volatility is so high, but the out of the money options, it means that that Delta can change so much higher and get driven to 50.

So a 20 Delta, if I'm going to play option and I'm going to and it's going to be a lot a lot of implied volatility, I'm probably going to play something out of the money because it will, at least for my Delta, closer to. As long as that implied volatility stays on. I kind of went off. No, no, no, that's great, and everybody on YouTube is loving it, too. I got a follow up from Troy, so obviously there's no way to time a treat.

But what you give after quadruple witching, which you give a time to settle or what you invest when the chain opens.

Sorry I missed the last part. What would you invest as soon as the chain is open or would you give it time to settle? Post, quote, watching. Sorry, can you could you start the question from the beginning? I apologize. No. So during quadruple, which is it that's the trade with the Chinese, or should you invest as soon as it opens? So you're a quadruple witching is going to be when you have, like your futures and all your options, like index stocks and everything, like expiring.

So I'm a little confused by the question because like. Those things are gone. If you're talking about by rote, like rolling them, you're going to have to roll before that waiting period or expiry or expiration is, as what I call it. So and that's really the risk there with option. It's like, OK, has a time period. The witching period that you're referring to is when all this stuff rolls off for futures, you're going to need to roll out of whatever you're long into the next contract.

Yeah. And, you know, if you're taking like, say, or Sploofus, it's like H.M.S.. Right, your your March, June, September. The issue, though, is a lot of that stuff is institutionally driven. So if you're waiting right to before that stuff expires, you're in trouble. You're like. Always going to pay some premium to roll up and a. Like you are, because these people need these futures positions to have they have to put them on and the amount of notional that's being traded is is going to push it against you.

And it's not going to be because of these futures contracts should be higher. It's purely supply and demand for options. When I'm writing options, I'm going to let them expire. When I'm buying options, I very rarely. OK. And from a health perspective, so let's say if VIX is at 24, we divide by 16, that puts us at one point five. So if you were looking to place a stop, what percentage of that range, what you place your stop?

If you know that you're going to have a range of maybe one one and a half or two percent for the day. So that's like, OK, so that's going to be an implied right. So things can move less or more than that. Just to be very clear, it's not a crystal ball. It's so. OK, so if the big to the fix is twenty four for that particular day. For that day. What an A to accept.

OK. And, of course, everyone traditionally says to invest in bonds and go to hedge, but depending on what the timing of it may not have worked, what is the best way you think that people should be hedging their portfolio?

Like, should you add certain commodities, a certain percentage of gold, because everything is running high? The bond market was high in August. Gold is still running. Almost feels like an index. What do you think is the best way to hedge truly in this market for like an all seasons type strategy for people that are lost?

Yeah, let's let's let's talk about that a little bit. My I'm going to answer your question with the question, what are you trying to hit? Because. Like, I'm and I'm not trying to be like speeches or difficult, like I just want to make sure I really want to take this time to make sure that the audience is like, understand, because you hear like these buzz words thrown out so bold. It's typically like a store of wealth, and so it's considered kind of an all all scenario head, right?

It's a commodity. So it's an inflation hedge. It is considered a store of wealth. So it's a hedge against people running for running for banks or sell off in other risky assets. But gold is still a commodity, which means that it's like bought and sold just as a store of well meaning, like it doesn't really have a use case and so on. And I think that's kind of getting exposed now and kind of why you're seeing Bitcoin and some of these all the other alternative assets kind of come into play.

One one important thing to keep in mind is that like commodities, generally speaking internationally, are listed in dollars. And that's the real reason that these things that it's considered a hedge and the way that it is, if you have like massive inflationary pressure, you typically want to want more exposure to commodities. But it's not because the commodities are it's more like a technical situation. Right. Crude is not made in dollars or oil. Sorry, I guess denominated in dollars, old lady on platinum, everything else denominated in dollars.

So if it takes more of the dollars to buy whatever it is, it's it's like a tactical or technical type of a mechanical type of hedge. OK. I think people's biggest fear is, OK, well, what if I invest in tech 10 indexes and I don't have exposure to anything else in a bottoms out unless we have a 50 percent correction? I should have been hedged with gold bonds. And of course, you know the news cycle.

OK, ok. OK, got it. Got it. Got it. So maybe like 20 to 25 percent drawdowns. What.

Not you guys. OK. Sorry, I didn't understand very well. So yeah. So the bonds typically and I say typically only because you, we saw bonds get absolutely destroyed. That's that's a rare event, but bonds typically have a much narrower now when I'm talking about bonds among about Treasuries and I'm talking about high grade corporate airplane and high yield, that's more like equity return. So, like, I want to be very clear when I say bonds.

Excuse me, those are typically going to have much narrower band volatility, so even when the stock market crashes off in even in the same company and I think this might answer your question. So when you look at the capital structure of a company or how a company funds itself. Right. It has bonds or debt bonds if you want to classify those and then it has equity. And that's pretty much all sources of cash for a company. If a company crashes is crazy, but still has enough money to service its debt, that debt can still continue to to earn whatever interest rate that it was scheduled to earn, even though the equity is getting destroyed.

In a bankruptcy situation. What's typically going to happen is that all of the equity holders are going to be wiped out if it's a Chapter 11 or kind of a real murder, you're going to restructure the debt. You're going to allow yourself to pay back your bondholders over maybe different terms, different period of time, different interest rate, so forth and so on. And that's going to come at the expense of equity holders. So I think that's why bonds are thought of as a hedge.

The general market, I think I've explained to you why gold is considered a hedge, but I also think volatility should be a hedge. If you're going to spend a ton of money buying calls, you should consider buying some bullets as well. And do that when all is at low range, it's now it's insurance, right? But that's the ultimate hedge is insurance. And you have insurance, if anything. Typically you don't need it. You pay this premium.

It sucks. But like, you go on about your day. But if you do that in like in in low in it is you're paying small premium. You have the ultimate hedge. Mm hmm. So the best hedge would be if you're buying like a an index to put on that index, but buy it. Out of the money, like I'm not I don't think you should continue. So I bought this for one hundred dollars and get the handshake.

But I know, like the 90 strike or you're you're really worried about a 50 percent sell off by the put. That's down 30 percent. You'll pay close to nothing for it. And you you don't have to worry about it. What we call correlation or proxy hedging, because there are times where stocks go down and bonds go down and you're seeing it out. Stocks up, gold up, credit up. So, you know, these are these are proxy hedges, but it's never perfect.

The best head would be insurance on what you own. And I just think, you know, if you're buying it for low volatility out of the money, typically going to pay a very small percentage for the the a bit that you're really trying to protect against. And that event is something that cripples your capital base level where you can't really come back from 10 percent, 15 percent, 20 percent. That's that's what you're signing up for. That's that's a standard issue in terms of equity performance.

But you shouldn't allow your portfolio to get down. Thirty five forty forty five percent. No stocks would be another another form of insurance, which I would always suggest with the stock.

And what what percentage do you think would be a safe allocation for those who are going to ask you to be 20 percent. Twenty five percent? What will be your options or for stocks?

For stocks? Those are some stocks as to, you know, stocks. OK, OK. Got you. The the. The options, I would say, OK, if you have one hundred units invested. How much does it cost you? To protect 100 units, that's the amount that you should that you should put it, or, OK, if if I have 100 units and I'm and I'm willing to lose 20 units, how much does it cost you to recoup 80 units?

And again, I, I wish there was just like this uniform answer. But the answer you like that's.

That's kind of what I'm talking like, it doesn't it doesn't work that way, right? Like, you got to put in you put in the time or someone like you puts in the time and then kind of schools you to the game. But it's a zero sum game. So you don't have 13 years, 15 years, 20 years to kind of replicate the amount of time that that is spent learning lessons in the game. Fine. But you've got to make that up with sweat equity and and rigorous study and dedication and like, that's just kind of kind of what it is.

Generally speaking, I pick my stocks based on previous technical levels. This is when I'm just trading my my portfolio. I have, like my core holdings, I've only, like, gone to cash in that situation on a bulk of that, but once and I don't want to miss it one time and it's March and I'm not going to get into that. I got that. I understand, but.

Yes, I but with that said, I always keep a certain amount of money in the market. OK, even in periods like March, OK, because my own or that particular bucket is. 40 years, 30 years, and given where we are in a macro cycle, what do you think ASX and the IPO market? Exactly the questions that people want to know, no, no, no, I would say that my response wasn't like that's a dumb question.

I was just like, it's just shocking the proliferation of these things. Listen, I think I think I think specs have some good aspects to them in terms of like. They allow you to get allow you to kind of get revenue projections, right, which is like some type of visibility. I I'm always hesitant to, like, be so old school and buck against, like new innovation, so I think the market is ripe for what really what I think it is.

The market is telling you it wants growth and the reason why it wants growth, because growth is outperform for the last, I don't know, decade plus additionally. And I and I realize that there's been a rotation into value, as with a with interest rates so low, the rate at which you're discounting future revenues is extremely low, which makes those very attractive. As for the specs, I want to make sure I answer the question very, very directly.

I think there's like a 20 percent rate in terms of, like, management fee, which it's like that's high up. And I I think you have like a two year period to identify what your target is, so you're kind of essentially saying, OK, X wins the investor, here's money. Go find something to deploy capital that is that is deserving of this investment. I mean, it's just. I think it's a bit frothy, I think the IPO market is a is a bit frothy.

I think the stock market is a bit frothy, but I think it's a function of where we are in terms of like our fiscal situation. Interest rates are so low, people want growth. The market is kind of continue to trend higher. Passive passive investments have done extremely well. And I mentioned this last time, if you're if you're an asset manager or money manager, you have to put money to work like you just you just have to. But it does feel a little top ish.

I'm a skeptic, but that's how I am by nature. So I think the stock market is either matched or overtaken the IPO market. I was reading something earlier today, stock market this year has done more in terms of notional diploid than like the last five or 10 years.

That's crazy.

Definitely a sign of the times on the institutional side. So what publications or sources are you using to gather some of your data to get an edge that us as retail investors?

Don't have and how can we maybe get our hands on some of that so, you know, I read I read research reports, some of this stuff is like our in-house stuff. So we have economists have strategies. I read that. I mean, I don't I don't know everything. And I like to hear smart people's opinions. You know, I'm on Bloomberg all day. And so there's a lot of information there, you know, like in terms of basic stuff, like daily reading, like the journal Barron's Financial Times.

I don't read all of those every day, but I read at least one or two of those every day. For me, Bloomberg kind of gives me access to a lot of WSJ articles. Barron's I absolutely love, I think. Harvard Business Review, The Economist and Life and Research Report and Strategy Report. And your experience, how does partisanship affect. The market and then or do you think I have a big effect on how things are going to play out the next four or five years?

Great question. Super timely as well. Same with same with Richard's question about IVP. So there's like this misnomer that. Republicans are better for the market. And if you go back, there's done there's been many studies done like. There is no definitive statistical correlation between any party and the market, there is higher convicted or higher statistically significant data correlated to economic performance as defined by rate of employment, GDP, output, things of that nature. But I want to be very clear by the market and the economy are not the same.

Yeah, they are not. And if this year didn't teach you anything else, that is that is abundantly clear. There is a bit more around that. But what there is, again, great question. And I and I'm hammering this point home and I'm sorry to say this ad nauseum, but it's supercritical.

Where there is a correlation between returns is long term investing. Those are just the facts. So, yeah, there is OK to follow up what are maybe like I'm like Republicans buy sneakers, Democrats buy sneakers, so I don't care.

But are there any like four or five economic speeches that you're looking at? There will be a catalyst. Oh, surely pushed the market up, employment rate defaults. GDP output. And. Forward, forward looking price car. OK, can you say those one more time, because I'm sure some people missed him sorry, GDP, so GDP, employment rate or unemployment rate, however you want to, however you want to look at that. Defaults, so that's on the credit side, that's huge and forward looking price per.

OK. And my final question for you, what is one final piece of advice that you want to give everyone here to make them a better investor so we can have returns like you?

One piece of. Don't listen to. Much more. All right, go into more detail on that. So there is a book I'll probably post at some point reminiscences of a stock operator.

And it's a Shasti game, it's a ball game, right? And this dude has had made and lost a ton of money many times over, and he got trapped into a situation where someone suggested that he buy a product first to his wife and then to him while they were shorting. And I say that now, particularly because this brings you back to the first question you ask, right? The information age and the last two questions, actually, the first question and the question you just ask.

The information is no longer at a premium, like, yes, I'm going to have analysts that are producing information that you don't have and what information is not at a premium anymore right before it's like, OK, I actually have information that other people don't have. What's at a premium is filtration of that information, because you're you're you're on social media, whatever people like to buy this, you should sell this or Phonte Sisters cousin did this or I turned this into this or.

No, you shouldn't flip. You should be you should be a middleman or execute with the target. No, you shouldn't take special lending. You should take our money lending. No, you shouldn't buy traditional assets. You should only buy growth companies or I happen to buy Apple and you know, they said I should diversify on the stock that I had. And I'll ask questions like, OK, but like, what other decisions have you made? So you.

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Head over there to other tangents. Just as I said. No, I'm, I'm a veteran across asset classes. But my question again, to simply stop taking advice or at the very least be super critical in your thinking about who you're taking advice from at the person who's giving you advice, hasn't done it and doesn't not just hasn't done it because I've been doing this for 20 years. Yeah, man. Things change.

Yeah. So don't take advice from people that don't do it or haven't done it. And temper the advice that you take from people that used to do it no longer do it because the game has changed. Yeah, yeah.

I put my my last final question for sure. Are there any when when you're training, are there any technical indicators that you're looking at or are you going for more of a fundamental standpoint to make a decision?

If you're going to buy or sell a particular asset trading, trading, you've got to look at technicals? I definitely think so. I mean, fundamental analysis will give you like an understanding of the company and will make it so that when maybe something breaks down with the technicals, you're not like don't have that oh, snap moment, you know what I mean? But trading is about like momentum and where things have been and volumes. But in general, generally, if I'm looking at like fundamental stuff, because what you have now is like a cross pollination between so people talk about quantitative research, quantitative analysis, like it's like a cross pollination between like very technical analysis and then the statistical analysis of the actual balance sheet or fundamental.

So, for example. People were asking me about the cruise lines or the airline, and I see these stocks have popped back, I'll tell you, I don't understand why those companies have so much debt on their balance sheet. Now, like if you were saying, OK. These were operating at capacity, but like 90 percent capacity. It's down to 50. Now, these companies have like another I don't know, I think American has like 50 billion dollars of debt or something like that.

Yeah, it's got to pay that debt before the equity holders see a penny. And it's not going to happen at 60 percent capacity or 30 percent capacity or wherever we are right now. Moreover, companies are in the business of making money, and I'm going to kill myself, sure, I want to get on with it, but I think that part of the work from home situation is here to stay. If I can you hear this term operational by sincerely expanding margins, by cutting costs.

I'm like dumbing it down. But like, I want to use the word sorry, I'm simplifying and cutting it and simplifying it in a way. And I just don't want to like. I don't want to I come here and I really try to give you guys, like, detailed information, so. I think that part of the work from home is here to stay, right, because, you know, for a lot of people, the revenue producing units of a company may need to be in-house, but the support, the support roles like that, the processing, the back office, the middle office Logistics Administration.

You don't need to rent, I mean, office space in San Francisco or New York on Park Avenue, if those things can be done from the comfort of someone's home, so. I think part of that is kind of to stay, and I think that is going to kind of change the way everything is done, the technicals and I'll bring the technicals, keep me from getting so out of whack one way or another that that I that I kind of miss a trick.

And that's why the technicals are important. Even if I'm looking at the fundamentals of a company, it's really hard, particularly for new companies or growth companies. The previous performance doesn't tell me anything. So it doesn't it doesn't like it doesn't reconcile with why I'm buying into it, because I'm looking at a company that I think has at the Mattick reason the state Zoome, for example. What is who made money? But what you've seen is like a pull forward and you can say is, OK, I have all this user engagement and so I'll be able to offer this service or that service and you can extrapolate that forward.

And that's why I need the technical, even though I can say, all right, well, the company only did a five hundred dollars in revenue two years ago. I need to see a growth rate so that I think it can get to X by the next five years or so. So technical indicators, I would say two hundred fifty day moving average, 200 day, 50 day price to earnings is not really a technical thing. But I'm definitely looking at price to earnings.

I'm looking at implied volatility and looking at realisable.

And what what PE ratio do you like. For what type of company I mean, if you're looking at like the Fang's, I mean, it's got like 60 or something like that, right. So for a growth stock, you're going to pay a much higher P for like a value company. Some of these, you know, but 16. But it's it's like. It's like. What I do is I look at what historical price to earnings has been and try to buy things that aren't necessarily on their highs.

That's part of the issue right now is that everything is trading close to their statistical highs from price to earnings. And that's where the technicals come in. All right, my last question, because I want to get a bit of our shot in Troy. What's your favorite technical indicator, the most retail trade we do not know about?

I have to ask because I'm a dad.

I don't know every technical indicator the most because my friends are working.

OK, great. Go ahead.

I think I gave it to you in terms of the vics men like. That that will tell you what one should expect in terms of price. OK. I mean, I'm not going to just sit here and make stuff up, man. I appreciate that. Yeah, no, I mean, yeah. Do I have to I have things in my models that I'm like, OK, well ok. So OK, fine, I'll, I'll try to drop something different.

Thank you. I will look at. I will take a basket. Yes, let's take like, actually, it's OK. Excellent. Sorry, I took his Takacs Industrial use utilities, Exelis financials. That's OK. Aztek. It's a B is health care. What else do we have? I told the AP, that'll be your staples, X or Y will be discretionary, so fine, so I'll take a basket, right. And I'll look at maybe the S&P as well and I'll say, All right.

So for one, for E index or ETF, what you're going to have is a rebalancing so that companies or companies that don't mean to all get taken out. So like you naturally get rid of, like, idiosyncratic risk. So a bankruptcy, for example, isn't going to shock that far, but the same way. Oh, and I'll use market cap. I don't like price weighted. So the Dow, I don't do it. I don't like it as much.

And honestly, that's a big reason why institutional investors look at the S&P versus Dow. Like, I don't like volume weighted indexes because what happens is an event happens and a particular stock trades a ton and then it becomes a disproportionate waiting for that index. So I'll take like a basket. Let's take those ETF, for example. I'll compare them to Spot and I'll say, OK, what's the average what's the average implied volatility? What's the average, what's the average realized volatility.

And then I'll say I'll take that over that basket and then I'll say, OK, what what is moving much more than that to the right or the left? And then I'll get like an indicator that something looks like something looks to me that gives me an indicator to go do some digging into something. But that's like a quick quantitative screen, one that like that I that I feel right. So and it's like something that's like that. You can replicate, take a basket of index it so it doesn't work for stocks because you have it is you've got to pick something that is routinely rebalance so that you remove Taleban's idiosyncratically or take that, compare that versus a benchmark.

You can use S&P if you use a Dow Jones, I'll give you why I don't particularly like you. Can you choose you can use whatever. And then what you do is take the mean and median and this and then you're also going to use your standard deviation of those things. I look at the implied volatilities there because again, this is this is option three. And I'll say, OK, the implied that the implied versus realized ratio typically is here for these names.

When I see something that's like and then and you have your standard deviation. So, you know, things typically are sixty seven percent between deviation higher or lower than for me. So if I see something that's like two standard deviations or two and a half cent aviations high, it screens it to two a.m. deviations, low streets at once. And then that lets me go, OK, this is something that I should take a look at what's going on here and why.

I think that's a particular indicator probably most retail investors don't have. So you could build yourself in an Excel spreadsheet and it will give you a Sabal to start.

By doing so, you use a screener to tell you what is outside of the deviation. Oh, Mark.

OK, thank you. Um. Not one that will work for any mean reverting ass, because stock price is not mean reverting. Oh, maybe. Sorry, I should have mentioned this moment. Volatility is mean reverting. OK, tell everyone what that means. It means that when you use you can expect things to snap back to that, to the average, because, I mean, in terms of like the long winded explanation, like a stock price can continue to go up.

Right. It's not like you can say stock over the last hundred years was fifty dollars. If it gets one hundred, it's going back to 50. No. Volatility, assuming a company doesn't get bought out or or or go bankrupt. Volatility being that it is statistically derived, formulaic tool, it is mean reverting by mathematical definition. So when you see things got high or gap low. Let me take a step back and do it and put it in kind of like later to a company comes out of revenues just for a start, and it's probably more probably more volatile and then the company becomes more mature.

You understand the revenues a bit more. You understand the cost structure a bit more. People understand what it is and you'll see like. The stock trades in a range or it moves up kind of lockstep. Now, again, it's the rate of change of volatility. How fast something is changing is mean for not where it's going. That's going to be very, very, very, very. But that's that's that's I think that's powerful information for all the options traders out there, right.

Like. You when you see things move away from the mean or the median, they should be similar unless you have some tail risk, but a standard normal distribution, your B equals your median. And I think it's sixty six point seven percent of observations fall within the nation below or above that mean, which would be when you see moves that are multiples of that standard deviation. I tend to fade, though, and you can express those views directionally if you so choose.

So when I see a stock. When I see an index. And I see the implied volatility at, let's call it 30 to two percent roughly, and I see a move for.

I'm probably not going to just go buy that stock, but I'm probably going to go sell some books there because it's now a gap that the implied volatility has jumped. I know over longer periods of time that the stock doesn't do that. And I'm going to say, OK, that's fine. I'm looking at technical level. I'm going to say, here's support. I'm on the sell plot here. And in addition to that, I'm going to use this strike with this implied volatility, because I know over longer periods of time that it does not continue to move at this rate continuous.

I appreciate that. I hope everyone I feel like you're a little disappointed. Come on, man. No, no, no, no, no, no.

But even on the equity people catch, you are essentially saying that since it doesn't revert, it is going to turn to the upside. And then, of course, volatility is going to mean revert and slide back in.

That's very insightful and helpful on its own for people to stop trying to short quality companies because they're called short Intellisense 310 or 250.

And they've been getting torn apart, so I can keep you here all night. I want to be respectful of your time and also my brother's a while and we can start to because we have some technical difficulties. The devil is trying to play some tricks on us. But, you know, I mean, I love chatting with you. We can be on here to midnight, but I don't want to ruin our friendship and our friendship.

I'm sure he will table it for another day. Man, I greatly appreciate you and you've helped me a lot. Even tonight, so I want to thank you again for being amazing, always being a. You know, gracious is and you know, you family, so whenever you come on, I want you to just have the floor and I appreciate it. It's a pleasure. Guys, thanks for letting me come back. And to the viewer and the audience.

Man, thank you guys for like sticking with me and showing me love. It's important that we get this information. I'm not right about everything, but I don't have. Not not selling anything like we deserve to have this information shouldn't be locked up in the safe. A lot of other people have this passed down by their fathers or uncles or grandfathers or mentors. And it it's important that we get it. And I hope that my hope is that there is another young up and coming sister or brother, that I can sit down and go, yes, yo, yo.

But tell me tell me how it's moving now. But it's important that the information that that people aren't intimidated by the market are intimidated by investments. Yeah, it's. Investing is timeless. It's been around forever. Mm hmm. Now, I tell you, I appreciate you taking a for everyone also listening. It's not often that you're going to get a chance to sit down and listen to a brother who is on this side of the investment table. So everyone say thank you in the comments to him, because if you try to get someone like him to give you a consult and break that down, it's going to cost you a pretty penny.

So. And thank you for being willing, being on the institutional side to actually share some information that will give us, on a retail side, an edge as well. So thank you.

Absolutely. My pleasure. Thank you for oversight.

I'm sorry I promised you I didn't plan this was on. We're going to have to do it like a part of how you can hear us. We go, yeah, we can hear you. Yeah, man, that I mean, he said he wanted his Oprah moment.

And like I said, they saw it, though that was super impressive. Appreciates me, but I was good. We got to call him King both. Now, a bottle in the game. Shout out you while you are at university. Margaret Mondays contributor.

Man Another another amazing fireboat is pleased by emoji of fire. For those of you who trade options too, I know he bless you with something. But equities traders and futures traders even on the futures, are they help me. I'm like, OK, great. If I never go above two percent, like having a one point five percent target of one point two percent, that helped the hell of a lot from when you share that. So thank you.

I gotta go. I got some notes, man. I got notes. Yes.

Real for me to appreciate. Appreciate that, man. Thank you. Thank you both for you guys for holding down and show spectators today what it was. It was good to watch it. I appreciate it. Just like the one game on the bench player, like get 20, you got to put up 80 next week, man, you still Kobe is off.

No, I appreciate you for. No, I think so.

All right. Yeah. Any last words here, man, is Thanksgiving week. So we want to make sure that everybody stay safe, but also people get to reach out and, you know, help people if they can and spend time with your family, your loved ones on a super important. And we want to thank every one of you, everybody that's watching right now. Thank you. You have made this year a spectacular one for us. Yeah.

Yeah. Also, we want to give things to you, because without you, you know, believing in us and spreading the word and telling a friend to tell a friend, it won't be possible. So we are indebted to you. So thank you for that. Yeah, for sure. And don't forget, tomorrow we got a Wall Street big trap eio one hundred and ten crazy 110 episodes that quickly. And and we're going to be on trappin Tuesdays as well.

And then he's coming back on Wednesday.

So it's a full week of all investing this whole week. Hopefully you could just learn something. And apply it and then, yes, we are one in that 50 percent of Yale University 24 flash sale, put it in here if you guys are interested, the code is Etoile 50. And once again, thank both of you guys for holding it down. No, no, definitely hate it almost as part of that. Like I said, that's part of business is always problems in any type of business that you run is always a problem.

So it's about just, you know, managing the problems. And like they say on Broadway, the show must go on. It's got to go, man.

We got big snow in the back side of the guy and that that epic battle and I pushed aside. We got trapped music up to as it's been announced, I'll put it out there for this to be like what Steve Kerr felt like when he hit the shower on the ball.

Yes. I love you, man. I appreciate you all so much. Oh, real quick shout out to you are alleging it was his birthday today, man.

Shout out to none other than my God. My God. This killer, Nacho Benga. Today's his birthday Mashi birthday. He's a legend. Happy birthday to you. All right, guys, I shall be good and have a good day and enjoy yourselves.

Enjoy your family, but be safe.

Most importantly, peace holiday season. Thanks, gentlemen.

Thank you, brother.

On Monday.