Welcome to Stocks and ░░░░░░░░ Broadcasting from the New ░░░░░░░░ Stock Exchange I m ░░░░░░░░ Blicky your host and ░░░░░░░░ me is Alexandra Canal ░░░░░░░░ People s Voice is ░░░░░░░░ assignment Kindly like subscribe ░░░░░░░░ comment on Stocks and ░░░░░░░░ on Spotify Apple Music ░░░░░░░░ or YouTube and today ░░░░░░░░ are welcoming for the ░░░░░░░░ time James E Demmert ░░░░░░░░ is a founder and ░░░░░░░░ of Main Street Research ░░░░░░░░ 2 4 billion registered ░░░░░░░░ advisory for He has ░░░░░░░░ 40 years of experience ░░░░░░░░ has authored 3 award ░░░░░░░░ books His latest is ░░░░░░░░ Wall Street Lessons which ░░░░░░░░ behavioral finance and investor ░░░░░░░░ So welcome James And ░░░░░░░░ we re gonna be ░░░░░░░░ into investor psychology throughout ░░░░░░░░ show along with a ░░░░░░░░ dose of markets talk ░░░░░░░░ first we re gonna ░░░░░░░░ on the upheaval in ░░░░░░░░ policy which is reshaping ░░░░░░░░ economics leading to our ░░░░░░░░ of the day new ░░░░░░░░ order how trade wars ░░░░░░░░ and French shoring are ░░░░░░░░ global economic power and ░░░░░░░░ And this episode is ░░░░░░░░ to you by the ░░░░░░░░ 13 That is the ░░░░░░░░ of psychological blunders investors ░░░░░░░░ according to James We ░░░░░░░░ in carefully So James ░░░░░░░░ re taping this right ░░░░░░░░ the 1st 100 days ░░░░░░░░ Trump s presidency here ░░░░░░░░ ve seen a lot ░░░░░░░░ volatility What are you ░░░░░░░░ of all of it ░░░░░░░░ know I think the ░░░░░░░░ is expressing what s ░░░░░░░░ internally was the administration ░░░░░░░░ really changes policy economic ░░░░░░░░ that was in place ░░░░░░░░ gosh decades So this ░░░░░░░░ was investors overconfident at ░░░░░░░░ beginning of the year ░░░░░░░░ a little too complacent ░░░░░░░░ overdue correction turned into ░░░░░░░░ much worse as those ░░░░░░░░ came in much more ░░░░░░░░ Then we sort of ░░░░░░░░ off to a very ░░░░░░░░ Level high level of ░░░░░░░░ which we can talk ░░░░░░░░ psychologically and now we ░░░░░░░░ sort of seeming to ░░░░░░░░ on on right in ░░░░░░░░ middle back by the ░░░░░░░░ of that correction uh ░░░░░░░░ we would suggest here ░░░░░░░░ should be really careful ░░░░░░░░ new leadership from here ░░░░░░░░ going to be different ░░░░░░░░ what was happening last ░░░░░░░░ and the year before ░░░░░░░░ and there s still ░░░░░░░░ here uh certainly of ░░░░░░░░ down and testing lows ░░░░░░░░ even going lower So ░░░░░░░░ is a time to ░░░░░░░░ really have your wits ░░░░░░░░ you So this is ░░░░░░░░ good time to pivot ░░░░░░░░ our phrase of the ░░░░░░░░ which is new world ░░░░░░░░ It describes how shifting ░░░░░░░░ policies like trade wars ░░░░░░░░ tariffs and French shoring ░░░░░░░░ reshaping global economic power ░░░░░░░░ the investment landscape So ░░░░░░░░ phrase kind of reminds ░░░░░░░░ of the Latin motto ░░░░░░░░ the Great Seal of ░░░░░░░░ United States Nouss ordoschorum ░░░░░░░░ means new order of ░░░░░░░░ ages Uh it s ░░░░░░░░ there on the dollar ░░░░░░░░ and it was coined ░░░░░░░░ the Founders to highlight ░░░░░░░░ s emergence as a ░░░░░░░░ new economic and political ░░░░░░░░ So I m wondering ░░░░░░░░ we seeing echoes of ░░░░░░░░ How much of this ░░░░░░░░ due to Trump How ░░░░░░░░ of it was just ░░░░░░░░ because the old ways ░░░░░░░░ just getting sclerotic and ░░░░░░░░ Well I think that ░░░░░░░░ know the policies that ░░░░░░░░ administration has really changes ░░░░░░░░ world economy significantly You ░░░░░░░░ got the US being ░░░░░░░░ more protectionist obviously with ░░░░░░░░ tariffs You ve got ░░░░░░░░ US policy within Washington ░░░░░░░░ more of fiscal austerity ░░░░░░░░ what that all does ░░░░░░░░ it turns down the ░░░░░░░░ of growth So it ░░░░░░░░ be no surprise that ░░░░░░░░ morning we have GDP ░░░░░░░░ in a little negative ░░░░░░░░ s other reasons for ░░░░░░░░ maybe a little more ░░░░░░░░ than it needs to ░░░░░░░░ but I think investors ░░░░░░░░ recognize all these policies ░░░░░░░░ don t look like ░░░░░░░░ re going to be ░░░░░░░░ at least in in ░░░░░░░░ total are going to ░░░░░░░░ to slower US growth ░░░░░░░░ um you know the ░░░░░░░░ American exceptionalism Which we ░░░░░░░░ been living with now ░░░░░░░░ for gosh decades uh ░░░░░░░░ be in question here ░░░░░░░░ that s why we ░░░░░░░░ investors should also look ░░░░░░░░ where there s changes ░░░░░░░░ occurring because of US ░░░░░░░░ They re changing in ░░░░░░░░ fashion that might give ░░░░░░░░ better growth Do you ░░░░░░░░ this is a fundamental ░░░░░░░░ you know every 4 ░░░░░░░░ we sometimes continue on ░░░░░░░░ the current administration We ░░░░░░░░ we get a new ░░░░░░░░ but do you think ░░░░░░░░ s going on now ░░░░░░░░ if things are reversed ░░░░░░░░ if in 4 years ░░░░░░░░ have a Democrat president ░░░░░░░░ place he has different ░░░░░░░░ he or she I ░░░░░░░░ say is this you ░░░░░░░░ a new order that ░░░░░░░░ last longer than the ░░░░░░░░ 4 years right Yeah ░░░░░░░░ I think that s ░░░░░░░░ great question You know ░░░░░░░░ of the problems we ░░░░░░░░ in the US before ░░░░░░░░ policy even got started ░░░░░░░░ we have an overburdened ░░░░░░░░ of debt And that ░░░░░░░░ was just escalating out ░░░░░░░░ control I m not ░░░░░░░░ this is the right ░░░░░░░░ to handle the debt ░░░░░░░░ I don t think ░░░░░░░░ go back even after ░░░░░░░░ years with a with ░░░░░░░░ new party because the ░░░░░░░░ idea of getting our ░░░░░░░░ level more manageable is ░░░░░░░░ really important for the ░░░░░░░░ of this country So ░░░░░░░░ lot of pain now ░░░░░░░░ later on we can ░░░░░░░░ healthier and markets are ░░░░░░░░ exhibiting that pain certainly ░░░░░░░░ the last few weeks ░░░░░░░░ so our view is ░░░░░░░░ the global economy It ░░░░░░░░ going to be tilted ░░░░░░░░ s going to be ░░░░░░░░ now for the next ░░░░░░░░ s say 5 to ░░░░░░░░ years until the US ░░░░░░░░ gets in better health ░░░░░░░░ that will create opportunities ░░░░░░░░ in parts of the ░░░░░░░░ market but also outside ░░░░░░░░ market the US market ░░░░░░░░ has kind of been ░░░░░░░░ for the Let s ░░░░░░░░ about those international markets ░░░░░░░░ know you re keen ░░░░░░░░ that and we ve ░░░░░░░░ other countries like Spain ░░░░░░░░ had a block Having ░░░░░░░░ blockbuster month in time ░░░░░░░░ their loss of electricity ░░░░░░░░ other day but to ░░░░░░░░ about these international opportunities ░░░░░░░░ you know what s ░░░░░░░░ is what s happening ░░░░░░░░ the US particularly overseas ░░░░░░░░ you have the opposite ░░░░░░░░ you know here we ░░░░░░░░ the fiscal restraint and ░░░░░░░░ have monetary policy tight ░░░░░░░░ because the US has ░░░░░░░░ of funding particularly in ░░░░░░░░ like Germany they re ░░░░░░░░ to turn on the ░░░░░░░░ Spending that s hugely ░░░░░░░░ for the Germans too ░░░░░░░░ they re very inflation ░░░░░░░░ because of you know ░░░░░░░░ old times That s ░░░░░░░░ right but they ve ░░░░░░░░ to billions of dollars ░░░░░░░░ spending over the next ░░░░░░░░ just 1 year but ░░░░░░░░ the next 456 years ░░░░░░░░ that s going to ░░░░░░░░ very stimulative to the ░░░░░░░░ That s why you ░░░░░░░░ seeing those stocks after ░░░░░░░░ of just lingering around ░░░░░░░░ to hit new new ░░░░░░░░ Yeah so I I ░░░░░░░░ curious and it s ░░░░░░░░ to hear that ripple ░░░░░░░░ there too right because ░░░░░░░░ US is restricting funding ░░░░░░░░ you re having all ░░░░░░░░ fiscal measures overseas What ░░░░░░░░ exact what are the ░░░░░░░░ areas then in that ░░░░░░░░ Is it sort of ░░░░░░░░ at these currencies What ░░░░░░░░ are you assessing that ░░░░░░░░ in the US market ░░░░░░░░ globally yeah overseas you ░░░░░░░░ want to think about ░░░░░░░░ if we re gonna ░░░░░░░░ those economies where is ░░░░░░░░ earnings growth going to ░░░░░░░░ And and generally speaking ░░░░░░░░ the beginning of what ░░░░░░░░ would call a new ░░░░░░░░ there you want to ░░░░░░░░ to those cyclical industries ░░░░░░░░ industrials the financial companies ░░░░░░░░ there s a lot ░░░░░░░░ really great quality companies ░░░░░░░░ telecom is another example ░░░░░░░░ I think the whole ░░░░░░░░ there But I would ░░░░░░░░ away from maybe the ░░░░░░░░ staples overseas and focus ░░░░░░░░ on those cyclical names ░░░░░░░░ the euro currency has ░░░░░░░░ really well versus the ░░░░░░░░ That s another way ░░░░░░░░ play it What about ░░░░░░░░ US investors who are ░░░░░░░░ we ve had the ░░░░░░░░ experience of having these ░░░░░░░░ markets for the last ░░░░░░░░ decades where it was ░░░░░░░░ place to be How ░░░░░░░░ you dip your feet ░░░░░░░░ toes into these international ░░░░░░░░ where the average person ░░░░░░░░ not be Familiar with ░░░░░░░░ of these German industrial ░░░░░░░░ How do you find ░░░░░░░░ What kind of filters ░░░░░░░░ you use What sources ░░░░░░░░ you look at Yeah ░░░░░░░░ name is Main Street ░░░░░░░░ and that last part ░░░░░░░░ about the research We ░░░░░░░░ digging in We only ░░░░░░░░ individual securities so we ░░░░░░░░ all over the world ░░░░░░░░ great opportunities and we ░░░░░░░░ a lot of research ░░░░░░░░ in house looking at ░░░░░░░░ publicly traded how much ░░░░░░░░ they have what their ░░░░░░░░ are We like companies ░░░░░░░░ high cash flow return ░░░░░░░░ equity And uh we ░░░░░░░░ them in certain sectors ░░░░░░░░ as you were mentioning ░░░░░░░░ might have that earnings ░░░░░░░░ with all this stimulation ░░░░░░░░ s going on with ░░░░░░░░ economies So let me ░░░░░░░░ it back to kind ░░░░░░░░ the new world order ░░░░░░░░ It seems like every ░░░░░░░░ decades we get a ░░░░░░░░ break in the action ░░░░░░░░ could go back to ░░░░░░░░ War II where right ░░░░░░░░ we had the Bretton ░░░░░░░░ agreement and that was ░░░░░░░░ regime of global fixed ░░░░░░░░ that gave way in ░░░░░░░░ with Nixon closing the ░░░░░░░░ window Then we had ░░░░░░░░ currencies and now it ░░░░░░░░ like we re morphing ░░░░░░░░ something different And we ░░░░░░░░ kind of a template ░░░░░░░░ what Trump might want ░░░░░░░░ do in terms of ░░░░░░░░ Mar a Lago accords ░░░░░░░░ that has um there ░░░░░░░░ a few pillars there ░░░░░░░░ s deregulation It s ░░░░░░░░ getting the rest of ░░░░░░░░ world to kind of ░░░░░░░░ the security burden by ░░░░░░░░ on longer term US ░░░░░░░░ We re talking 100 ░░░░░░░░ bonds that haven t ░░░░░░░░ been formed yet which ░░░░░░░░ t even exist yet ░░░░░░░░ do you how are ░░░░░░░░ Deciphering this and are ░░░░░░░░ looking for opportunities based ░░░░░░░░ all of these recent ░░░░░░░░ Yeah we are looking ░░░░░░░░ opportunities and I would ░░░░░░░░ that investors not to ░░░░░░░░ Jared the US market ░░░░░░░░ be a lot more ░░░░░░░░ than they ve been ░░░░░░░░ had to be for ░░░░░░░░ last 5 or 10 ░░░░░░░░ I like that you ░░░░░░░░ up the Bretton Woods ░░░░░░░░ some of these earmarked ░░░░░░░░ that where the economy ░░░░░░░░ changed for many many ░░░░░░░░ I think we re ░░░░░░░░ of in that position ░░░░░░░░ the US has to ░░░░░░░░ very careful here to ░░░░░░░░ a fine line to ░░░░░░░░ put the economy in ░░░░░░░░ s way I think ░░░░░░░░ s where the Fed ░░░░░░░░ going to be very ░░░░░░░░ over the next year ░░░░░░░░ two but there s ░░░░░░░░ great places here If ░░░░░░░░ think slower growth in ░░░░░░░░ US what kind of ░░░░░░░░ thrive in a softer ░░░░░░░░ And I think it ░░░░░░░░ investors should not disregard ░░░░░░░░ artificial intelligence is real ░░░░░░░░ it s gonna have ░░░░░░░░ lot of tailwind I ░░░░░░░░ gonna just ask about ░░░░░░░░ because tech the fundamental ░░░░░░░░ there is still the ░░░░░░░░ right even though we ░░░░░░░░ a lot of the ░░░░░░░░ AI is is a ░░░░░░░░ play So how do ░░░░░░░░ view more of those ░░░░░░░░ growth names those the ░░░░░░░░ tech sector overall Well ░░░░░░░░ is uh could easily ░░░░░░░░ us out of this ░░░░░░░░ with debt right If ░░░░░░░░ can get we can ░░░░░░░░ better productivity growth which ░░░░░░░░ what it should bring ░░░░░░░░ we ve already seen ░░░░░░░░ has that should fuel ░░░░░░░░ corporate profits even in ░░░░░░░░ slower economy which helps ░░░░░░░░ corporate taxes to come ░░░░░░░░ Fill that hole So ░░░░░░░░ believe that AI is ░░░░░░░░ important part of our ░░░░░░░░ and I think investors ░░░░░░░░ really should look at ░░░░░░░░ know those leaders in ░░░░░░░░ A lot of them ░░░░░░░░ we have Microsoft and ░░░░░░░░ tonight reporting Amazon Apple ░░░░░░░░ So is it the ░░░░░░░░ scales or the knock ░░░░░░░░ kind of side bets ░░░░░░░░ We think you go ░░░░░░░░ the best in breed ░░░░░░░░ when you go to ░░░░░░░░ semis you go to ░░░░░░░░ When you go to ░░░░░░░░ second tier right that ░░░░░░░░ derivative you go to ░░░░░░░░ metas you go to ░░░░░░░░ Google Which numbers were ░░░░░░░░ and you can buy ░░░░░░░░ now at growth rates ░░░░░░░░ here but PE ratios ░░░░░░░░ lower than those growth ░░░░░░░░ So stick with really ░░░░░░░░ quality names Um I ░░░░░░░░ t think investors should ░░░░░░░░ it on their tech ░░░░░░░░ like maybe worked for ░░░░░░░░ in the last few ░░░░░░░░ So maybe take some ░░░░░░░░ that tech overexposure and ░░░░░░░░ elsewhere overseas your passport ░░░░░░░░ I m going in ░░░░░░░░ couple weeks What what ░░░░░░░░ China China has just ░░░░░░░░ an incredible story and ░░░░░░░░ s it s it ░░░░░░░░ to have been uninvestable ░░░░░░░░ a period of time ░░░░░░░░ because of the very ░░░░░░░░ seeming policies of the ░░░░░░░░ government But last September ░░░░░░░░ got a wake up ░░░░░░░░ and they just released ░░░░░░░░ bazooka stimulus They ve ░░░░░░░░ some follow up and ░░░░░░░░ on and now of ░░░░░░░░ tariffs is the main ░░░░░░░░ with China Do you ░░░░░░░░ that China as investable ░░░░░░░░ it was uninvestable There ░░░░░░░░ every metric you look ░░░░░░░░ just stay away and ░░░░░░░░ threw everything but the ░░░░░░░░ sink at this right ░░░░░░░░ waiting for the kitchen ░░░░░░░░ s the last thing ░░░░░░░░ come Um they ve ░░░░░░░░ ve used the fiscal ░░░░░░░░ They ve used everything ░░░░░░░░ can and our view ░░░░░░░░ China about six months ░░░░░░░░ is that hey we ░░░░░░░░ to be getting close ░░░░░░░░ investable But here we ░░░░░░░░ to also think a ░░░░░░░░ world order They can ░░░░░░░░ export as much to ░░░░░░░░ US or they probably ░░░░░░░░ t So look at ░░░░░░░░ like BYD right The ░░░░░░░░ vehicle maker they don ░░░░░░░░ even do business than ░░░░░░░░ you know in certain ░░░░░░░░ That s correct and ░░░░░░░░ do a lot of ░░░░░░░░ in Europe and around ░░░░░░░░ rest of the world ░░░░░░░░ right hold that thought ░░░░░░░░ need to take a ░░░░░░░░ break but coming up ░░░░░░░░ re gonna be talking ░░░░░░░░ the 13 psychological blunders ░░░░░░░░ make from FOMO to ░░░░░░░░ and a magical who ░░░░░░░░ better where investing meets ░░░░░░░░ Stay tuned This episode ░░░░░░░░ brought to you by ░░░░░░░░ number Lucky 13 That ░░░░░░░░ the number of psychological ░░░░░░░░ that James here identifies ░░░░░░░░ his book Wall Street ░░░░░░░░ Here is a sampling ░░░░░░░░ Tina Perma beer permabo ░░░░░░░░ bias loss aversion fear ░░░░░░░░ capital gains tax tax ░░░░░░░░ cost and lost opportunity ░░░░░░░░ in the headlights procrastination ░░░░░░░░ and I like how ░░░░░░░░ is on its own ░░░░░░░░ there as a potential ░░░░░░░░ but tell us how ░░░░░░░░ approach Some of these ░░░░░░░░ here in your book ░░░░░░░░ we have the book ░░░░░░░░ here Thank you Thank ░░░░░░░░ for showing the book ░░░░░░░░ years of doing this ░░░░░░░░ ve seen and heard ░░░░░░░░ horrible mistakes almost always ░░░░░░░░ to their own psychology ░░░░░░░░ Our human brains are ░░░░░░░░ not great at investing ░░░░░░░░ can be our own ░░░░░░░░ enemy because of fear ░░░░░░░░ greed and I think ░░░░░░░░ recent months in the ░░░░░░░░ are a really good ░░░░░░░░ People were too optimistic ░░░░░░░░ the beginning of the ░░░░░░░░ investing too aggressively And ░░░░░░░░ you find people don ░░░░░░░░ even want to go ░░░░░░░░ the stock market and ░░░░░░░░ think it s you ░░░░░░░░ uninvestable So uh I ░░░░░░░░ learned a lot of ░░░░░░░░ over the years So ░░░░░░░░ do you how do ░░░░░░░░ as an average investor ░░░░░░░░ let s take a ░░░░░░░░ investor how do you ░░░░░░░░ the field of investing ░░░░░░░░ without having to rearrange ░░░░░░░░ brain and going to ░░░░░░░░ therapist every every week ░░░░░░░░ really I mean there ░░░░░░░░ a reason why professional ░░░░░░░░ often say retail usually ░░░░░░░░ not always gets it ░░░░░░░░ Because they re at ░░░░░░░░ lows there s just ░░░░░░░░ pervasive fear That s ░░░░░░░░ people tend to get ░░░░░░░░ and they think OK ░░░░░░░░ m gonna get back ░░░░░░░░ when things are good ░░░░░░░░ guess what the market ░░░░░░░░ already back up at ░░░░░░░░ and then it s ░░░░░░░░ late and you re ░░░░░░░░ re sitting there on ░░░░░░░░ this cash That is ░░░░░░░░ pervasive problem and I ░░░░░░░░ been there myself so ░░░░░░░░ m I m not ░░░░░░░░ to that Uh how ░░░░░░░░ you approach that Well ░░░░░░░░ know the first thing ░░░░░░░░ would suggest is um ░░░░░░░░ know if if you ░░░░░░░░ t seen therapy or ░░░░░░░░ can t work on ░░░░░░░░ to try to retrain ░░░░░░░░ brain which is really ░░░░░░░░ to do Um you ░░░░░░░░ I ll speak as ░░░░░░░░ biased investment event manager ░░░░░░░░ a partner to help ░░░░░░░░ get an advisor who ░░░░░░░░ see through the psychological ░░░░░░░░ and downs and give ░░░░░░░░ advice that you know ░░░░░░░░ of gets you away ░░░░░░░░ your own brain making ░░░░░░░░ mistakes But second to ░░░░░░░░ and the book really ░░░░░░░░ through this um use ░░░░░░░░ and techniques that will ░░░░░░░░ a discipline for your ░░░░░░░░ Let s say for ░░░░░░░░ I shouldn t have ░░░░░░░░ than 1 of stocks ░░░░░░░░ any Time so that ░░░░░░░░ if I keep that ░░░░░░░░ let s say 60 ░░░░░░░░ even in a raging ░░░░░░░░ market it reminds me ░░░░░░░░ got 60 in let ░░░░░░░░ not increase it That ░░░░░░░░ where people get in ░░░░░░░░ They start to investing ░░░░░░░░ than they should and ░░░░░░░░ aggressively I think also ░░░░░░░░ this market particularly is ░░░░░░░░ really good example is ░░░░░░░░ wary of the sectors ░░░░░░░░ re investing in right ░░░░░░░░ s a lot of ░░░░░░░░ maybe that are that ░░░░░░░░ beaten down that people ░░░░░░░░ because the trend isn ░░░░░░░░ there but they re ░░░░░░░░ and that s Way ░░░░░░░░ diversify and lastly use ░░░░░░░░ like stop loss orders ░░░░░░░░ stop the loss of ░░░░░░░░ decline even even in ░░░░░░░░ market So we can ░░░░░░░░ about that more But ░░░░░░░░ use tools and strategies ░░░░░░░░ commit to those as ░░░░░░░░ investor or use an ░░░░░░░░ that does either way ░░░░░░░░ were just talking about ░░░░░░░░ and I m curious ░░░░░░░░ you think AI or ░░░░░░░░ advisory tools are changing ░░░░░░░░ investor Psychology I mean ░░░░░░░░ m not gonna lie ░░░░░░░░ when we re having ░░░░░░░░ bad day Chad GBT ░░░░░░░░ can help me out ░░░░░░░░ little bit and can ░░░░░░░░ my little AI therapist ░░░░░░░░ do you view the ░░░░░░░░ of AI in all ░░░░░░░░ this Yeah Chad is ░░░░░░░░ of our best friends ░░░░░░░░ But you know the ░░░░░░░░ with so far Robo ░░░░░░░░ in that field it ░░░░░░░░ not come up with ░░░░░░░░ good investment ideas or ░░░░░░░░ and GBT is not ░░░░░░░░ at math so far ░░░░░░░░ I think that will ░░░░░░░░ and evolve One of ░░░░░░░░ problems with humans and ░░░░░░░░ investing even given a ░░░░░░░░ that OK I won ░░░░░░░░ touch this I ll ░░░░░░░░ this model do what ░░░░░░░░ needs to do it ░░░░░░░░ save me Generally speaking ░░░░░░░░ things look really bad ░░░░░░░░ go unplug the model ░░░░░░░░ stop it from you ░░░░░░░░ because we re fearful ░░░░░░░░ the market will continue ░░░░░░░░ go down So I ░░░░░░░░ the human brain has ░░░░░░░░ tendency even with the ░░░░░░░░ rules in place to ░░░░░░░░ it because of the ░░░░░░░░ they might have or ░░░░░░░░ greed Well yeah it ░░░░░░░░ interesting I used to ░░░░░░░░ a portfolio systems automated ░░░░░░░░ systems and what I ░░░░░░░░ is that emotions don ░░░░░░░░ go away if you ░░░░░░░░ a trading system because ░░░░░░░░ the market is making ░░░░░░░░ is making money without ░░░░░░░░ participation Uh then you ░░░░░░░░ s this there s ░░░░░░░░ uh you want to ░░░░░░░░ the rules you want ░░░░░░░░ rewrite things you want ░░░░░░░░ tinker with things then ░░░░░░░░ change the rules and ░░░░░░░░ guess what the market ░░░░░░░░ something and you re ░░░░░░░░ participating again and then ░░░░░░░░ re just rewriting and ░░░░░░░░ So I I haven ░░░░░░░░ found that you know ░░░░░░░░ totally automated system doesn ░░░░░░░░ even solve all these ░░░░░░░░ psychological problems that we ░░░░░░░░ So what do we ░░░░░░░░ to attack this Well ░░░░░░░░ think that s a ░░░░░░░░ good point right You ░░░░░░░░ make an algorithm that ░░░░░░░░ do certain things in ░░░░░░░░ markets and that s ░░░░░░░░ I think the human ░░░░░░░░ is important you know ░░░░░░░░ ve been doing this ░░░░░░░░ 40 years I know ░░░░░░░░ the bearishness gets so ░░░░░░░░ in a certain sector ░░░░░░░░ the market even if ░░░░░░░░ models say we shouldn ░░░░░░░░ be there I want ░░░░░░░░ go because I know ░░░░░░░░ that neglect of that ░░░░░░░░ is Be where the ░░░░░░░░ is So I think ░░░░░░░░ disciplines and tools like ░░░░░░░░ mentioned but also use ░░░░░░░░ subjectivity to adapt the ░░░░░░░░ on the on the ░░░░░░░░ to take advantage of ░░░░░░░░ All right we re ░░░░░░░░ to do a hard ░░░░░░░░ here This week s ░░░░░░░░ showdown is all about ░░░░░░░░ magic and the psychological ░░░░░░░░ of the trade that ░░░░░░░░ with it So first ░░░░░░░░ the catwalk is sleight ░░░░░░░░ hand It is a ░░░░░░░░ of misdirection sporting the ░░░░░░░░ of quick trades and ░░░░░░░░ volatility It is a ░░░░░░░░ that captivates the crowd ░░░░░░░░ immediate gratification but often ░░░░░░░░ risks in plain sight ░░░░░░░░ behind poised and patient ░░░░░░░░ the grand reveal elegantly ░░░░░░░░ in careful asset allocation ░░░░░░░░ long term planning but ░░░░░░░░ s no immediate applause ░░░░░░░░ Instead this magician savors ░░░░░░░░ dramatic Pay off years ░░░░░░░░ the road unveiling returns ░░░░░░░░ magically compound So James ░░░░░░░░ style holds a true ░░░░░░░░ in today s market ░░░░░░░░ Is it the fast ░░░░░░░░ flashy hand that can ░░░░░░░░ and light or the ░░░░░░░░ strategist waiting for the ░░░░░░░░ payoff We think it ░░░░░░░░ a patient strategist I ░░░░░░░░ that s love the ░░░░░░░░ I think you go ░░░░░░░░ the David Copperfield stage ░░░░░░░░ the smoke and the ░░░░░░░░ illusion Copperfields Warren Buffett ░░░░░░░░ you go I love ░░░░░░░░ Yeah and you know ░░░░░░░░ Adapt it right here ░░░░░░░░ re talking about not ░░░░░░░░ being a US investor ░░░░░░░░ Be global adapt slowly ░░░░░░░░ but yeah keep that ░░░░░░░░ term view OK longer ░░░░░░░░ view but how do ░░░░░░░░ avoid having FOMO I ░░░░░░░░ FOMO in my everyday ░░░░░░░░ You say FOMO is ░░░░░░░░ mistake One of the ░░░░░░░░ of the 13 in ░░░░░░░░ book So talk to ░░░░░░░░ about that because you ░░░░░░░░ it s really really ░░░░░░░░ not to feel like ░░░░░░░░ re in the party ░░░░░░░░ yeah I try to ░░░░░░░░ FOMO in other parts ░░░░░░░░ my life Not in ░░░░░░░░ market for the clients ░░░░░░░░ my family s portfolio ░░░░░░░░ I think that you ░░░░░░░░ it s very important ░░░░░░░░ s a lot of ░░░░░░░░ information even an individual ░░░░░░░░ can use to see ░░░░░░░░ people have piled into ░░░░░░░░ so much that the ░░░░░░░░ is bubble like and ░░░░░░░░ think we saw a ░░░░░░░░ bit of that last ░░░░░░░░ where I would meet ░░░░░░░░ clients and they d ░░░░░░░░ me their portfolio and ░░░░░░░░ was Nvidia Nvidia Nvidia ░░░░░░░░ then other semiconductors Yeah ░░░░░░░░ they had a ton ░░░░░░░░ you know that that ░░░░░░░░ FOMO just got the ░░░░░░░░ of them of course ░░░░░░░░ came to a horrible ░░░░░░░░ in the first quarter ░░░░░░░░ this year So I ░░░░░░░░ really importantly investors can ░░░░░░░░ their own FOMO by ░░░░░░░░ to themselves OK I ░░░░░░░░ only gonna have this ░░░░░░░░ stock And in each ░░░░░░░░ I m going to ░░░░░░░░ no matter how I ░░░░░░░░ emotionally I m gonna ░░░░░░░░ how far I m ░░░░░░░░ into let s say ░░░░░░░░ or the semis create ░░░░░░░░ boundaries create some rules ░░░░░░░░ stick to them Or ░░░░░░░░ you can t do ░░░░░░░░ get an advisor who ░░░░░░░░ I want to get ░░░░░░░░ to magic here because ░░░░░░░░ re talking before the ░░░░░░░░ that and the reason ░░░░░░░░ crafted this particular segment ░░░░░░░░ because that is part ░░░░░░░░ your background Just tell ░░░░░░░░ a little bit about ░░░░░░░░ Yeah when my dad ░░░░░░░░ was a teenager he ░░░░░░░░ a professional magician And ░░░░░░░░ I was a teenager ░░░░░░░░ showed me this box ░░░░░░░░ stuff that he had ░░░░░░░░ carting around for decades ░░░░░░░░ sort of introduced me ░░░░░░░░ that And and then ░░░░░░░░ sort of took the ░░░░░░░░ and became a young ░░░░░░░░ magician through my teenage ░░░░░░░░ which was really fun ░░░░░░░░ it seems like you ░░░░░░░░ a very curious person ░░░░░░░░ Your dad had this ░░░░░░░░ you were asking about ░░░░░░░░ You were just saying ░░░░░░░░ uncle used to read ░░░░░░░░ Wall Street Journal You ░░░░░░░░ telling us before the ░░░░░░░░ and that really is ░░░░░░░░ got you interested in ░░░░░░░░ So how do you ░░░░░░░░ that curiosity In your ░░░░░░░░ life now Ali it ░░░░░░░░ a it s a ░░░░░░░░ you The curiosity is ░░░░░░░░ think a driving force ░░░░░░░░ what I do and ░░░░░░░░ important element to doing ░░░░░░░░ you know just having ░░░░░░░░ curiosity Where are the ░░░░░░░░ investment ideas today right ░░░░░░░░ this looks expensive let ░░░░░░░░ look everywhere we can ░░░░░░░░ the earth for publicly ░░░░░░░░ companies That curiosity is ░░░░░░░░ big driver not just ░░░░░░░░ myself but I think ░░░░░░░░ bleeds through my whole ░░░░░░░░ at the firm We ░░░░░░░░ about 30 seconds Would ░░░░░░░░ to hear your final ░░░░░░░░ Maybe something on risk ░░░░░░░░ but I ll give ░░░░░░░░ the floor here for ░░░░░░░░ viewers Yeah thanks You ░░░░░░░░ I think that risk ░░░░░░░░ is the most important ░░░░░░░░ Building wealth over the ░░░░░░░░ run is really about ░░░░░░░░ participating in bull markets ░░░░░░░░ mitigating the catastrophic declines ░░░░░░░░ happen in one stock ░░░░░░░░ the whole market you ░░░░░░░░ from time to time ░░░░░░░░ most important thing investors ░░░░░░░░ do is when the ░░░░░░░░ s falling dramatically Don ░░░░░░░░ have the deer in ░░░░░░░░ headlights type of do ░░░░░░░░ mitigate the risk It ░░░░░░░░ OK to be out ░░░░░░░░ the market at least ░░░░░░░░ of it and you ░░░░░░░░ getting back in later ░░░░░░░░ it goes up is ░░░░░░░░ than being down 50 ░░░░░░░░ you re down 50 ░░░░░░░░ you ve got to ░░░░░░░░ up 100 to get ░░░░░░░░ and I always try ░░░░░░░░ tell my clients about ░░░░░░░░ So I m curious ░░░░░░░░ you think are underrated ░░░░░░░░ right now because we ░░░░░░░░ a lot about the ░░░░░░░░ How that often creates ░░░░░░░░ Are there sectors or ░░░░░░░░ that you re thinking ░░░░░░░░ one s talking enough ░░░░░░░░ this and you re ░░░░░░░░ those names to your ░░░░░░░░ Well I think the ░░░░░░░░ investing is for sure ░░░░░░░░ starting to come into ░░░░░░░░ a little bit more ░░░░░░░░ that s just the ░░░░░░░░ stages we re in ░░░░░░░░ first few months of ░░░░░░░░ I think is a ░░░░░░░░ long bull market So ░░░░░░░░ s one place to ░░░░░░░░ There are some ignored ░░░░░░░░ in the market and ░░░░░░░░ think I was That ░░░░░░░░ healthcare sector where AI ░░░░░░░░ healthcare makes us all ░░░░░░░░ a lot longer is ░░░░░░░░ to be a great ░░░░░░░░ over the next 4 ░░░░░░░░ 5 years I d ░░░░░░░░ satisfied if they get ░░░░░░░░ records straight but that ░░░░░░░░ are officially out of ░░░░░░░░ I ve got the ░░░░░░░░ right finally and we ░░░░░░░░ got to wind things ░░░░░░░░ here at Stocks and ░░░░░░░░ So make sure you ░░░░░░░░ out all our other ░░░░░░░░ on the Yahoo Finance ░░░░░░░░ wherever you find your ░░░░░░░░ platforms Amazon YouTube you ░░░░░░░░ the drill We ll ░░░░░░░░ you next time on ░░░░░░░░ and Translation.