#1421 Tom Sosnoff | World’s Greatest Trader Reveals His Secrets

Tom Sosnoff is the Founder of TastyTrade and the CEO of TastyLive. He is also an entrepreneur with over $2 billion in exits. In this conversation, we discuss economic data points that may be wrong, how he built such great products, how he thinks about trading 100 positions a day, why he makes 18,000 trades per year, and the daily mindset of a trader. ======================= Buy book: https://www.amazon.com/Live-Extraordinary-Life-Anthony-Pompliano/dp/0857199927/ ======================= Gemini is the safe and secure way to trade crypto. Gemini is offering eligible new users the opportunity to earn $100 in BTC when they trade $1000 in crypto within their first 30 days of signing up. Head over to ⁠⁠⁠⁠https://www.gemini.com/partners/pomp⁠⁠⁠⁠ and start trading crypto to earn $100 in BTC. ======================= Wondering where to go for financial advice? Domain Money makes financial planning simple. No hidden fees and no sales pitches - you get a personalized roadmap to your goals, from dream vacations to retirement. Flat-fee advisors create a plan tailored to you, with zero pressure to invest. Don’t be like most people who’ve never had a real conversation about their financial plan. Book a free strategy session today at ⁠⁠⁠⁠⁠⁠https://www.domainmoney.com/pomp⁠⁠⁠⁠⁠⁠While I'm not a Domain Money client and they are paying me, I've seen first hand the value of their service through the free plan they did for one of my brothers. Yes, I might have an interest in promoting Domain Money, so just like any major financial decision, it's important you understand what the service is and if it's right for you so make sure to see important disclaimer at ⁠⁠⁠⁠⁠⁠https://www.domainmoney.com/t/legal⁠⁠⁠⁠⁠⁠ ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's up guys? Today I've got a great episode with Tom Sosnoff. He is the founder of Tasty Trade and the CEO of Tasty Live. He also happens to be an entrepreneur with nearly $2 billion in exits, including selling Thinkorswim, the great brokerage account, for $750 million

• 0:45Anthony Pompliano?

  back during the global financial crisis. This conversation will blow your mind. Tom brings a fresh perspective to understand why many of the data points that you've been told, they're wrong, why he built such great products, how he thinks about trading 100 positions per day, why he makes 18,000 trades a year, and what exactly is going on in the trader's mindset throughout the day, given so much information, so many different moves in financial assets, and why he also thinks that he could literally just tell you all the answers to various economic outcomes or political outcomes, and you still couldn't trade it correctly. This conversation will make you laugh, and it also will inform you. Here's my conversation with Tom Sosnov.

• 1:22Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:45Anthony Pompliano?

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• 2:27Anthony Pompliano?

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• 3:10Anthony Pompliano?

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• 3:54Anthony Pompliano?

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• 4:37Anthony Pompliano?

  And if it's right for you, so make sure to see the important disclaimer at DM and MNY.co slash X. How about that? Go check it out today. Go to domain money.com slash pop. All right, guys, I've got Tom here. Tom, I thought a great place to start the conversation is you built the same company twice and you sold it for 1.8 billion dollars, give or take, combined. You built these interfaces that have been the gateway to trading for millions of people. Over the years, you built Think or Swim, then Tasty Trade. Help me understand, what was the insight that you had as to why a new interface would lead to such value creation?

• 5:19Anthony Pompliano?

  Right? I mean, it's just incredible that you were able to do this two different times and sell these companies for so much money.

• 5:25Speaker 02

  Well, the easy answer is why not us? Why not us?

• 5:32Speaker 02

  I'm a weird entrepreneur. I don't really care. Like, I'm never trying to solve a problem. I don't believe that good entrepreneurs should ever try to solve a problem. I believe you should just kind of do, you know, stay in your, whatever your strength is, wherever your know-how is strongest. Stay in that kind of lane and just do it better than everybody else. And I think we were lucky, we were able to pull it off twice.

• 5:56Anthony Pompliano?

  When you talk about staying in your lane, you are a trader. You started your career in the pits and I think you told me that you do between 13,000 to 18,000 trades per year. Yep. Is that right? What are you trading? 18,000 times per year is a lot of trading. That's like, what, over 100 trades per day?

• 6:14Speaker 02

  It's probably, it averages probably seventy-five plus, you know, I don't know exactly.

• 6:18Anthony Pompliano?

  Yeah.

• 6:19Speaker 02

  But, uh, yeah, most days like between seventy-five and a hundred trades.

• 6:23Anthony Pompliano?

  And is this like you put a position on and five minutes later, you're selling the same position? Or you just have a massive portfolio?

• 6:29Speaker 02

  So I have a lot of, so, so I'm a very short, my perspective is basically forty-five days. So I'm not like a typical passive investor. I don't, I mean, I do have a stock portfolio that with some stocks I hold for a long time. But for the most part, I have about, I'd say on average, about a hundred different positions in everything. We're talking commodities, all listed products. So commodities, stocks and mostly option strategies. And so all those positions need, need adjustments. They need, you need to put on new ones. You need to take off old ones. My timeframe on average is thirty to forty-five days, like the whole duration of the trade. So things can be adjusted every single day.

• 7:11Anthony Pompliano?

  And what does it take to make it into the long-term portfolio versus the short-term portfolio? So you see a company, you see a commodity.

• 7:18Speaker 02

  A loss.

• 7:19Anthony Pompliano?

  A loss? Okay, explain.

• 7:20Speaker 02

  A paper loss. You know, you buy, you buy a stock, it goes down, it's a long-term hold. You know, I mean, in the option world, you don't have to deal with that, but in the stock world, that's, you know, that's my life.

• 7:29Anthony Pompliano?

  Okay. Uh, and then when you're looking at something, walk us through, let's say that you're looking at equities.

• 7:34Speaker 02

  Sure.

• 7:34Anthony Pompliano?

  Um, and you know that your proclivity is for thirty to forty-five days. What are you looking for to say, hey, I'm going to put this position on? And then do you go into the trade knowing what are the milestones or kind of things we're going to look for? That's going to tell you to sell that?

• 7:49Speaker 02

  I go into the trade, um, I'm, I'm a very simple trader. I don't care about fundamental analysis, cyclical analysis, anything. I don't care about anything macro or anything like that. I'm strictly base everything off implied volatility and I base everything off expected move. Now, that doesn't mean I'm not directional because I am. So part of my portfolio is non-directional, delta neutrals, we say in the option world. And part of my portfolio is very directional and, um, but I set my kind of mental targets at where expected move is.

• 8:21Anthony Pompliano?

  And let's just walk through, um, you know, you wake up. Do you immediately run to the computer and like, let me check these hundred positions that I have? Okay. So like, how do you manage these hundred positions? What does the day look like for you?

• 8:33Speaker 02

  Oh, well, I'm always on, you know, like I'm always, I'm always involved in, but, but my day, so I have a weird schedule. I, I usually get up at four and I live in Chicago. I'm an email junkie too. So I answer, you know, about an hour of emails from four to five because my brain works best really early in the morning.

• 8:55Anthony Pompliano?

  Same.

• 8:55Speaker 02

  Late in the day, I start to, everything starts to get fuzzy. I start to melt down, but four in the morning, man, I'm good. So four in the morning, I'm answering emails. I'm going to look at the market, but I usually don't trade that early. The only thing open, by the way, at early in the morning is the futures markets. And I would say about 20% of my positions are futures and futures options. So I may adjust futures options around five in the morning, but for the most part, I'm not going to put on new trades. I'm just going to adjust existing trades. Like, let's say crude oil moves $2 overnight. I'm going to adjust my crude oil position, flatten it out, and then answer emails some more. And then after the market opens in the morning, that's when we start to get, you know, it opens 8:30 Chicago time. So that's when we start to get more aggressive.

• 9:40Anthony Pompliano?

  Now, what is your target? Do you have like, I want to make 1% a day? Do you have a 1% a week? Is it just no target at all? And yours is like, hey, I'm just looking at the assets?

• 9:48Speaker 02

  My target, and this is what I say to anybody, because first of all, it's hard for me to put into, you know, like, I don't want to, the easiest way to explain for, about active trading targets is to talk about it as a multiple of risk-free rates, because nobody should be actively trading if you're targeting to make 7%. If risk-free rates are, let's just say 5%, and, and you know, you need some multiple of risk-free rates to make it all worthwhile. So the way I like to explain targets has nothing to do with, you know, daily, weekly, monthly, or anything like that. But at the end of the year, you know, you need to set up a target base and whatever your risk profile is, at a minimum of three times risk-free rates and a maximum is usually, you know, who knows? It could be anything you want, but for, for most people, it's somewhere between,

• 10:33Speaker 02

  let's say 22 and 32. Like somewhere in there, that's your target. Doesn't mean you get there by any stretch. It just means if you're going to put in all this work, all these resources, you know, all the time it takes to manage all this stuff, and a lot of it's fun, too. You have to have some in your head, some multiple risk-free rates. So sure, 20%, 30% in that range. I think that's fair.

• 10:54Anthony Pompliano?

  Is it just like a big video game?

• 10:56Speaker 02

  Yeah.

• 10:56Anthony Pompliano?

  And how do you know you're winning? Is it just literally the return or is there some other measurement?

• 11:00Speaker 02

  It's literally the return, but you know you're winning if you do a lot of other things, right? Like, I can't put a, like, I don't know if I would have built these companies if I hadn't traded my whole life and was totally okay with, you know, when we built Thincerson, we just rolled the dice with all the money we had, you know, literally for 20 years, just rolled the dice. And we built Tasty, we almost did the same thing. There is, you know, you have to have a certain tolerance for risk that you develop through all trading. Trading makes you think faster. It makes your brain process decisions way faster. I mean, you trade, you know. And so you do everything faster and the most successful entrepreneurs make fast decisions, period.

• 11:43Anthony Pompliano?

  And as you're trading, you have 100 different positions.

• 11:46Speaker 02

  Yeah.

• 11:48Anthony Pompliano?

  I think a lot of people would say, hey, concentration builds wealth, diversification would protect it, but you're still trying to make money. You're still trying to build wealth. And so does the diversification actually hurt you in that pursuit?

• 12:02Speaker 02

  It may. I don't know. Like in bull markets, like when you have a, when you have, um, let's talk about like the last, you know, decade or something, or the last five years, when you have a concentration of seven or 12 stocks that basically, you know, controlled this market as far as returns go, it definitely hurts, you know, because you're not going to be in those stocks. And if anything, you're probably going to be short them.

• 12:25Speaker 02

  I think in a flat market to a down market to just kind of a normal, more, more normal market, I should say more normal. It probably helps, you know, non-correlated positions are great when, when something ugly happens. When the shit hits the fan, non-correlated positions save your ass. When everything's going up and everything's very concentrated, you know, I mean, You would have rather been in five tech stocks over the last five years.

• 12:48Anthony Pompliano?

  Yeah, I think I saw a statistic that over the last five years, the tech sector of the S and P 500 was up like 25.9% or something. Compounded, which means that you actually outperformed majority of the venture funds during that same five year time period. And you had the public liquidity. And so is that something where you're almost barbelled? Like you have all 100 public positions. But then you had a massive concentrated bet in the private market and building Think or Swim and then Tasty?

• 13:16Speaker 02

  Yeah, I mean, listen, that that's, it's interesting how that works. And I, you know, I always say that the reason we were able to do it is because that's just the way our minds work. You know, like, there's just, that's, we were comfortable with that risk. Yeah, I mean, it's, it's hard to say that it's hard to, it's hard to rationalize it any other way.

• 13:38Anthony Pompliano?

  I don't think it's that risky, right? Like you are by all measures, an expert in trading. Because you've been doing it for so long.

• 13:45Speaker 02

  Well, what's risky is that in the industry, you know, you're talking about a business that runs at 50%. Let's call it 50% net margins, which is pretty, pretty good. There should be 100 firms, but there's not. So it's not that easy.

• 13:58Anthony Pompliano?

  Why?

• 13:59Speaker 02

  Because building the technology and building the right, attracting customers to a space that's this narrow. And attracting customers to a space that has kind of, you know, not necessarily a great reputation. Because, because big passive firms that annuitize, that annuitize money management don't want it to be. It's a challenge. There should be more firms. There's not.

• 14:24Anthony Pompliano?

  How do you look at the difference between a Think or Swim or Tasty versus let's say a Robinhood or a public kind of, you know, some of these firms that I think are kind of mobile first, design heavy. Pioneer, payment for order flow stuff, etc. Like, are they all competitive with each other? Or are they kind of different parts of the market?

• 14:39Speaker 02

  No, they're, they're all pretty competitive. I mean, we, we view every customer, whether you're Robinhood customer, public customer. You know, Schwab customer, fidelity customer, we view them all the same. They all should be our customers.

• 14:52Speaker 02

  But, you know, that's, that's like, I don't know. I mean, those companies have done a great job, you know, with, I've always been impressed with Robinhood. And there's a couple of companies out there that are, you know, to me have always been impressive, but. You know, we, we've always also been impressive in our own right.

• 15:11Anthony Pompliano?

  You sold Thinkorswim for 750 million, give or take, and you sold Tasty for 1.1 billion. Second time, you just had more knowledge and experience. You got a bigger number? Or were there things that you did differently the second time that kind of drove a better outcome?

• 15:27Speaker 02

  Well, Thinkorswim was, we sold Thinkorswim in 2009 and that was, you know, during the big meltdown. So we, it was a billion dollar company before that. We were public. And then it sold off a little bit, you know, in the, kind of all the financial stocks in 2008, 2009 sold, sold off. But we were very particular about not taking cash. So they tried, because cash is accretive to company, you know, if a big company is buying you out, they want to give you cash because then it makes the deal accretive. We wanted stock. So if you want to hear a fun story.

• 15:59Anthony Pompliano?

  I would love it.

• 16:00Speaker 02

  Okay. So fun story. So TD Ameritrade was started by the Ricketts. Joe Ricketts started it, I think for $25,000 in like the late 70s, early 80s. Joe's an incredible entrepreneur. I don't know if you know him, but whatever. He's, he's still alive today and I think he's a rancher in Montana or something like that. But anyway, so Joe started it and built it up. But then in 2009, TD Ameritrade wanted to buy, wanted to buy Thinkorswim, but the Ricketts also wanted to buy the Cubs. And the, and the Ricketts needed cash to buy the Cubs. So what never has actually been discussed is we did kind of a three-way trade.

• 16:41Speaker 02

  I don't know if you remember when Joe Ricketts gave the money to buy the Cubs to his son, Tom Ricketts, who, who runs, but that's a close family. So they needed about $800 million to buy the Cubs. They had about, let's say, they had plenty of money, billions, but they only had a certain amount of cash. So to raise the cash and we wanted stock. So we got the stock from the Ricketts. The Ricketts got the cash from TD Ameritrade. We did a three-way trade.

• 17:05Anthony Pompliano?

  No way. So you actually didn't get stock from TD Ameritrade?

• 17:10Speaker 02

  We did, we did, but that's how it worked out on paper.

• 17:12Anthony Pompliano?

  It was like a three-way trade.

• 17:13Speaker 02

  It was a three-way trade.

• 17:14Anthony Pompliano?

  That's pretty cool.

• 17:15Speaker 02

  Yeah, it was really cool.

• 17:16Anthony Pompliano?

  Did they bring that idea to you guys, or did you somehow know that they wanted to buy the Cubs?

• 17:19Speaker 02

  Well, it was pretty public that they wanted to buy the Cubs and the CEO of TD Ameritrade worked the whole deal, Fred Tomczak, who's now the CEO of the, of the CBOE. So it's a small world and Fred is a great guy and we've stayed friends, you know, all the way, all throughout the years.

• 17:36Anthony Pompliano?

  If you had to give yourself a grade on taking the TD Ameritrade stock, A+, F-, where?

• 17:42Speaker 02

  Well, we took the stock at, at 11 or $12. So I don't remember the exact price, but it was around, let's say $12.

• 17:49Anthony Pompliano?

  Okay.

• 17:49Speaker 02

  And, you know, we were able to, it never traded lower. So that was a good trade.

• 17:55Anthony Pompliano?

  And what do you think you ended up selling it at?

• 17:57Speaker 02

  Probably between 18 and 30.

• 18:01Anthony Pompliano?

  Okay, so you really sold for way more than $750 million once you actually got out of the position?

• 18:05Speaker 02

  Yeah, but don't tell anybody.

• 18:06Anthony Pompliano?

  Yeah, I won't. Nobody listens to this, don't worry.

• 18:08Speaker 02

  Okay.

• 18:10Anthony Pompliano?

  Okay, and then what did you learn from the first acquisition that you then went and implemented in the second one? Was there another three-way trade?

• 18:16Speaker 02

  No, but what I learned is that, so when we built, we started building Thinkorswim in 1999 and we were just a bunch of floor traders. We didn't really know anything about building technology, not at that level. So we learned a lot about building technology, but when we sold it, we realized there was a missing piece, or at least I thought there was a missing piece. And the missing piece was the content piece. Like we built this cool technology and we did some content, but we didn't, like we never took the content to the next level. And things like CNBC and Bloomberg and, you know, Wall Street Journal, all the content, financial media drove me crazy because it was such, it just wasn't interesting to me. It wasn't, you know, it wasn't engaging.

• 18:57Speaker 02

  And so I thought there was room for a digital financial network. So we had this crazy idea about building a content-based, you know, digital network and it turned out to be the largest digital network, financial digital network in the world. And we started it in 2011 as Tasty Trade and the first investor was TD Ameritrade.

• 19:17Anthony Pompliano?

  So you got the people who bought your company to be your first investor in your new thing?

• 19:20Speaker 02

  Our only investor.

• 19:21Anthony Pompliano?

  And they did that because they were just like, you're amazing? Or was there some sort of competitive dynamic where they were like, we can't let this guy squeeze out of our

• 19:30Speaker 02

  No, they did it because for the right reason. I said, listen, you guys are amazing entrepreneurs and we knew you weren't going to stay here. And we would be foolish not to roll the dice with you one more time. And they did. And they actually tried to buy Tasty again, a couple of years later, you know, five years later, but we,

• 19:52Speaker 02

  do you remember Theo Epstein when he was, when he, okay. So, so Theo Epstein, once I heard him give a talk and he said, you know, 10 years is like my number. That's what he said. That's when he left like Boston to go to the Cubs. And we held Think or Swim, we built it in 99, 2000, we sold it in 2009. And we built Tasty in 2011, we sold it in 2021, 10 years. And in both times, that entire 10 year period, there was no like real activity. Like nobody really came after us in either company, like in, we built Tasty, not one person talked to us for 10 years. But 10 years into it, five companies tried to buy us. 10, 10 years into Think or Swim, three or four companies tried to buy us at the same time.

• 20:35Speaker 02

  Like somehow like word gets out. I don't know how it happens.

• 20:38Anthony Pompliano?

  Do you think it's that you crossed over some sort of financial milestone? Do you think that it's like?

• 20:42Speaker 02

  Bankers can't keep their mouth shut.

• 20:43Anthony Pompliano?

  Yeah, they just go to some conference and everyone talks about it or something?

• 20:46Speaker 02

  They're like, holy cow, who are these guys? And yeah, so you know, the reason we did the deal with IG Group, with their London based public company, is I wanted to go global and I couldn't do it. My, it's just too hard, you know? It's really hard. Where I am in my life, it was too hard for me to start getting licensed in all these different countries and everything. So I really wanted an opportunity to take Tasty global. So we chose IG Group as a partner and. You know, they've been a good partner. We'll see what happens.

• 21:17Anthony Pompliano?

  So in 2009, you sold at the bottom of the market. In 2021, it sounds like you sold at the top of the market or close to it. And was that intentional in terms of understanding where the market?

• 21:26Speaker 02

  No, it wasn't intentional. Just that that was the 10 year period that was up. But you know, what's funny is in 2021, if you remember, that was the SPAC mania.

• 21:35Anthony Pompliano?

  Yep.

• 21:35Speaker 02

  And we had all these SPAC offers for like double, like, you know, we'll give you two billion, we'll give you 1.8, like crazy numbers. And we're traders and we were looking at each other like, okay, we're not worth that. Like, why would somebody give us like 1.85 billion dollars, you know, in a SPAC deal for Tasty when we think we're worth like 1.1, 1.2, 1, 1 billion, somewhere in that range. And like, it didn't make any sense to us. And we're always like, if something is too good to be true,

• 22:08Speaker 02

  it's, you can't, it's, the markets are too efficient. They can't, something has to be broken. So we didn't take that. We took the lowest number that made the most sense to us. Because we thought that meant that we were probably, you know, at least that made that that deal seem like it was sustainable. And it was.

• 22:25Anthony Pompliano?

  What was the concern that you were going to take all stock in the SPAC? And then it would trade down. And so your 1.8 would become like 500 million?

• 22:34Speaker 02

  Part of it, I mean, we would have got a couple hundred million out of it and we would have had to turn that couple hundred million. You know, we had two concerns. One is that we're, we're really good at what we do. But what we're not really good at is we're not like a traditional marketing firm. So a couple hundred million dollars extra wouldn't mean that much to us if we had to spend it on marketing. Because it's not our strength, like, like global, global marketing. When I mean global, I mean, you know, all US and, and some big, huge national campaign. I'm not sure we would have converted on that. So that was one of our concerns. The other concern was. Hey, you know what? These SPAC deals, they look stupid. Like, it didn't make any sense to us. If I could have shorted every one of them, we would have.

• 23:18Anthony Pompliano?

  Do you shorten your portfolio?

• 23:19Speaker 02

  Oh, my God. Yes.

• 23:21Anthony Pompliano?

  Okay, so why didn't you short the SPACs?

• 23:23Speaker 02

  It's really hard to. When the new issue comes out, you virtually can't sell it for a certain number of days, and then they're hard to borrow, and there are issues with SPACs. It's very hard to sell. There's no options right away. It's almost impossible. It was almost impossible to short SPACs.

• 23:42Anthony Pompliano?

  So, shorting in general, there's some very good short sellers who have, over the last couple of years, maybe even months, kind of throwing their hands up in the air and said, "Hey, I'm not shorting anymore." We obviously have the GameStops of the world and things like that. But these are people who really weren't on the wrong side of those specific mania-type trades. Are they just getting old and they don't know what they're doing anymore? Or is shorting now much less desirable than maybe it was previously?

• 24:09Speaker 02

  Well, I mean, the market's, you know, shorting's tough when the market just doesn't do anything but go up. Every time it sells off, it goes higher. I think that, you know, my history in markets is, I spent almost 20 years as a market maker, which means you're just the counterparty. You know, when you're standing there making markets, you just do the opposite of what anybody else wants to. You're almost like a bookie in that sense. Okay, what do you want to do? And I'll buy the bid, I'll sell the offer, I don't care what you want to do. So you're the counterparty. So for me, I've always been a contrarian. Something goes up, I sell it. Something goes down, I buy it. It's not that I'm not a short seller. Like, I only sell short. I'm a short seller because if something goes up, I sell it.

• 24:48Anthony Pompliano?

  Now, how do you kind of balance that with a data point I saw recently is that the single best day to buy the market is at an all-time high? Because one, three, and five years out, the outperformance of buying on the all-time high price versus any other day of the month, or any other day of the year, is hundreds of basis points? And so is it just like the longer the time period?

• 25:11Speaker 02

  It's just that is the most curve-fit, ridiculous, like, data I've ever heard in my life. That is only applicable in hindsight. In a bull market, if you were to say the absolute, so, so we, so Tasty's a think tank, just so you know, and you could not have come up with a more, that is, that is crap, total.

• 25:31Anthony Pompliano?

  You think so?

• 25:31Speaker 02

  Oh, yeah, we've researched this because people have said that. So, so we have a think tank, which is just a bunch of PhDs, physicists, mathematicians, everything.

• 25:40Anthony Pompliano?

  Smart people.

• 25:41Speaker 02

  Smart, way, way smarter than any, than I am. And so we studied that exact fact using a lot of data. We, we basically, so we have our own database, but we use, essentially, we go back to 2005. Most of our data goes back to, we go back to 1990 with some stuff, but we've studied that since 2005. And, and I'm not talking about one, two, and five years out, or one, three, and five years out, but there is absolutely zero, because I've always heard, you know, you should buy, you know, buy breakouts, all this stuff. There is zero truth to that. Markets are completely random. There's no statistical significance whatsoever that you should buy tops.

• 26:20Anthony Pompliano?

  Now, why does momentum investing work so well?

• 26:24Speaker 02

  Who says it does?

• 26:26Anthony Pompliano?

  Well, you look at returns. I'm not saying that it's better than other investment strategies, but it does seem to work in the sense that people who buy on momentum tend to make money more times than they would necessarily sell, or lose money on.

• 26:40Speaker 02

  Again, there's a difference between a bull, bull market phenomena and, and random, you know, efficient markets.

• 26:49Anthony Pompliano?

  Do we have efficient markets?

• 26:51Speaker 02

  I think we do.

• 26:51Anthony Pompliano?

  Do you? No, I think that the market is, we're just in a perpetual bull market forever because the central bank.

• 26:57Speaker 02

  I believe in positive drift.

• 26:58Anthony Pompliano?

  Yeah.

• 26:58Speaker 02

  So I believe in.

• 26:59Anthony Pompliano?

  What is that?

• 27:00Speaker 02

  So positive drift is just that over time, everything gets better. Like, I believe positive for everybody. Like, like, if you said to me, hey, here's where I am in my life right now, my argument's, well, 10 years from now, you are going to be doing better than you're doing today. And 20 years from now, you're going to be better. I think that everybody that commits themselves to me, there's, there's, we have positive drift in our lives, and we should. And we have positive drift in the markets. Over time, the markets are going to go higher. But I don't think that we, I don't think that's an easy perspective to have, and I don't think. That that I don't think that with respect to markets that actually helps people.

• 27:32Anthony Pompliano?

  Mm hmm. See, my thought has always been, and we should call out that you have a very kind of trading centric perspective.

• 27:39Speaker 02

  That's fair.

• 27:40Anthony Pompliano?

  I, as I told you, started out trading and very quickly realized, hey, maybe I should just buy and hold. And whether I'm losing or winning on paper, like just hold is a little bit better.

• 27:50Anthony Pompliano?

  But my thought process has always been, if you are younger, which I think is an important caveat, so call it, you know, sub 50 years old or so.

• 27:58Speaker 02

  Okay.

• 27:58Anthony Pompliano?

  You have 10 to 20 year, you know, kind of timeline based on a whole bunch of different factors. It is very hard to make an argument that markets will not be higher over a 10 to 20 year time period. It sounds similar to your positive drift.

• 28:12Anthony Pompliano?

  But in the last, I don't know, five years, maybe, um, may maybe eight years. It seems like the central bank has perfected the playbook where if we get near a market downturn, they're just going to stimulate the hell out of the market and economy to the point where you could ask yourselves, like, have they outlawed a bear market? Do you think that we'll ever see another three to five year kind of sideways to down market?

• 28:35Speaker 02

  Yes.

• 28:36Anthony Pompliano?

  You think so?

• 28:36Speaker 02

  Yes. I don't know. So the one thing that's changed to me is, first of all,

• 28:43Speaker 02

  the movie, the script really doesn't change, but what's changed is the speed at which things change.

• 28:49Anthony Pompliano?

  Okay.

• 28:49Speaker 02

  So the, I don't know if we're ever going to see another five to 10 year bear market. I don't think like the seventies is going to happen again. And I'm not so sure that we're going to see another, you know, 2008, 2009, which was what? 500 days or something like that, because the speed at which things move now is just so crazy fast.

• 29:09Speaker 02

  So we call that like the, the rate of change or the gamma with respect to the markets has completely changed. So you, you might be right in that sense.

• 29:16Anthony Pompliano?

  We have like weekend bear markets now, right?

• 29:20Anthony Pompliano?

  Like in crypto, I always laugh, like everyone goes home on Friday, they're euphoric. Somehow on Saturday, everyone's like, oh my God, it's over. And then by Monday again, the markets are up and everyone's happy.

• 29:28Speaker 02

  I mean, we haven't, there's an entire generation that's never seen, you know, It's really never seen a prolonged pullback.

• 29:35Anthony Pompliano?

  Yeah, I mean, look, I remember in 2021, there's this particular person that was, you know, beware of the bear market, beware of the bear market, doing the whole thing.

• 29:43Speaker 02

  You mean Goldman Sachs?

• 29:45Anthony Pompliano?

  This is like a venture capitalist. And I remember I wrote a piece, I said, you know, the difference here is, one, I think that the markets are now heavily manipulated, not in a nefarious or malicious way, but just, they have a stimulus playbook and they're going to stimulate, like literally the word stimulate means they're going to push the stuff back up.

• 30:02Anthony Pompliano?

  But two, and maybe most importantly is, there's an entire generation of people who, I'm going to call them the crypto generation, but it could be GameStop or, you know, whatever assets. The volatility that they experience, let's say in holding Bitcoin, where there are, you know, thousand percent upswings, 80% drops, and happened multiple times. And in those thousand percent upswings, there are five, six, seven, eight, 50% drops or 30% drops along the way. They're just used to a level of volatility that you wouldn't normally see in the traditional stock market. And so they kind of have like the diamond hand, maybe the better thing is like there's like the diamond hands generation, right? Just like the volatility and the speed and all stuff, like they're used to this.

• 30:41Anthony Pompliano?

  And so my argument was, if a bear market comes, you think that like, oh, the younger generation is going to get punished. Because like they committed all these, you know, sins of the timeless investing principles or whatever. And my point was like, no, dude, these people are crazy. They're just going to get on the internet and be like, hold.

• 30:59Anthony Pompliano?

  And they're not going to sell and they're going to come out the other side and be like, look how smart I am. And so if you actually look over the last two or three years.

• 31:05Speaker 02

  Yeah, that's.

• 31:06Anthony Pompliano?

  I mean, sure, some people sold, but actually, most of them just held for two years. And not even two years, maybe it was a year of kind of down. And now we're hitting new all time highs, you know, it seems like every week or whatever. And so in a weird way, you're almost training people to behave in a way that also helps to mitigate bear markets.

• 31:28Speaker 02

  Yeah, the crypto world has not helped the active trading world. There's no question about that. It's not. So the beauty about crypto is that it's, like you said, super high volatility and it's essentially a tech stock with super high volatility. It's a tech play with super high volatility, which we love. The bad thing about crypto is that it's dead money. And so

• 31:48Anthony Pompliano?

  What does that mean?

• 31:49Speaker 02

  Meaning that most people buy crypto and that's it. It's just like, that's the play. You, you go out and

• 31:55Anthony Pompliano?

  Oh, buy, just like buy and hold.

• 31:56Speaker 02

  You buy and hold.

• 31:57Anthony Pompliano?

  Yep.

• 31:57Speaker 02

  Yeah, it's, it's just, and, and you can't borrow against it and you can't sell anything against it. So you can't reduce your basis. Like you can't sell calls against it. You, you can't sell puts to get long it. You can't borrow against it. It's absolute dead money. So in the brokerage world, we offer crypto and digital assets as much as we can with the, with, you know, with the SEC overreach, but we do as much as we can do, but the money goes in and it never comes out. Like that money never gets turned. It never gets played. It never, it's, it's never in play.

• 32:27Anthony Pompliano?

  Which I think is definitely Bitcoin, maybe some of the other cryptos that, that is part of the pitch is like, hey, buy, hold, you know, forever give it to your kids and it'll be worth more money. Whether that ends up being true or not, what I do find interesting is now that these assets, you know, we have the Bitcoin ETFs. We have E3 ETFs. Do you think that all of the options, all of the borrowing, like the financialization of these assets is coming in. So 10 years from now, people will be able to have access to all those tools. And therefore that might change the dead money.

• 32:55Speaker 02

  There's, there's no question that all the derivatives are coming, but sometimes it's the first to market play. And I don't really think that the cash market in digital assets is going to change dramatically because the, that particular marketplace and the players in that marketplace are very different than traditional derivatives traders and everything else. So I don't see that dynamic changing, but the bad thing about it is you have this entire generation of young people that loved getting involved in digital assets, loved crypto, love all the stories, but love all the technology.

• 33:34Speaker 02

  But they're not learning anything. They're just stuck in this, again, in this dead money, this dead pool of money that doesn't mean anything, because even if it goes higher, who cares? They're not learning anything. They're not learning anything about finance, or anything about strategy, or anything about the rest of like, all market structure, which to me is so important. Like, just being long Bitcoin, great. So what, it goes higher? Who cares? So you made a little money. Now what? You didn't learn a damn thing. And that's my biggest issue with crypto. And, and listen, we're huge advocates of the space. We're the lead investor in ZeroHash, which is one of the largest digital asset settlement companies in the US. We, we help to, we finance that company. We're, we, I'm on the board there.

• 34:15Speaker 02

  I mean, we've, we've been fighting for crypto assets on our platform from day one. You know, I love the space. I love the technology. There's so much. I think, I think the whole world's going to be tokenized.

• 34:27Anthony Pompliano?

  Do you really?

• 34:28Speaker 02

  Yeah.

• 34:28Anthony Pompliano?

  You think like the US stock market as well?

• 34:31Speaker 02

  Not exactly, but I think US investors will be able to trade in a lot of other places that we currently can't trade, because we have to deal with currency conversion, quotes, clearing, all that kind of crap. And I think that will be tokenized.

• 34:43Anthony Pompliano?

  Yeah. What, what about like hours of operations? Well, you know, one of the things I think people like about crypto is it trades 24/7, 365. It's a lie that the stock market only trades in the kind of the narrow hours of operations. There's now overnight trading. At times, there's been studies that show overnight trading actually performs better than, you know, kind of regular hour trading. Sometimes it's not true. Do you think we just eventually moved to 24/7 trading in US stocks?

• 35:05Speaker 02

  I think, well, we already have 24/5 in futures. So the futures markets have been 24/5 for years now. And crypto's been 27, you know, 24/7. So the problem with stocks is that the liquidity doesn't necessarily dry up that much in the stocks, but it dries up in like, the options and places like that, because there's no place to lay everything off. And the high-frequency firms, it is really hard for us to find high-frequency firms that want to make markets over, you know, overnight.

• 35:35Anthony Pompliano?

  Why?

• 35:36Speaker 02

  Because they don't want to. Because they don't make any money. Because there's not enough liquidity. And so the problem is that we're stuck with exchanges. And exchanges, you know, remember what a crypto exchange is. Not really an exchange. It's, you know, it's a high-frequency market making firm. The, the problem with, you know, the New York Stock Exchange and, and all the different option exchanges and all the different, you know, NASDAQ is, they stink. Their technology stinks, they stink, nobody makes markets for them. You know, if you take the high-frequency traders out of the equation, there's nothing there. Like, these whole markets are run by, you know, high-frequency, high-frequency prop firms that essentially are, are the most important and dominant factor of creating a marketplace efficiency.

• 36:16Anthony Pompliano?

  When we look at, let's say, Tasty, what are the assets people are trading that would surprise us? Like, what are the most popular assets that are being traded on the platform?

• 36:26Speaker 02

  Well, I mean, I, I don't think it would be any different than the most liquid assets. Like, if you're talking about equities, probably the two most outside of ETFs. I mean, obviously, the SPX because of the zero days and, and the big product that it is, and the spies and queues and things like that. If you're talking about equities, Tesla and Nvidia are the two biggest that trade from customer perspective. I mean, occasionally you'll find, you know, something that's hot all of a sudden, or something that has earnings, you know, that, so a lot of people might play it for earnings or stuff like that. But if you're talking about just like, you're probably talking about 20 or so stocks dominate about what feels like 75-plus percent of the Doritos business.

• 37:10Speaker 02

  And it starts with Tesla and Nvidia, and it works its way down.

• 37:14Anthony Pompliano?

  You mentioned zero-day options. I believe that's now more than 50% of all options trading in the United States is zero-day. What has been the impact of the introduction of those assets?

• 37:25Speaker 02

  I mean, the more, the more, the more the merrier, you know, the more the better. I mean, I don't know, we shouldn't take full credit for this, but they were our idea.

• 37:37Anthony Pompliano?

  Really?

• 37:37Speaker 02

  And we introduced those to the CBOE in 2006. And we introduced dailies and weeklies, and they didn't have them, and they started them in the SPX. And so we actually put the whole proposal in front of the CBOE back then, and they adopted it.

• 37:51Anthony Pompliano?

  Wow.

• 37:54Anthony Pompliano?

  What do you think about people who say that the stock market is just a casino now and people are just gambling?

• 37:58Speaker 02

  Yeah, it's ridiculous.

• 38:00Anthony Pompliano?

  You think so?

• 38:00Speaker 02

  Yeah, I think so, because the difference is that gambling has an embedded negative edge and the stock market doesn't. So, so the, the challenge here is that in the stock market right now, you can trade, you know, let's say the, using the SPY ETF as an example, you trade 200 shares of SPY, it's $100,000, right? A little over $110,000, $116,000, 200 shares of SPY. And the market's a penny wide. So basically, for $2, you can buy or sell $116,000 worth of notional in the S and the S and P 500. How's that gambling? In gambling, you did $116,000 notional at Caesars Palace, give them extra 10,000,

• 38:45Speaker 02

  you know, or, or more, 11,600, whatever you want to say, but give them that, that's the juice, the vig that they're going to take off the top. That's gambling. When you can't possibly win, because you can't make that back. It's mathematically impossible to make back that negative edge, because after you lose a couple of times, you've got to essentially win twice as many times. In the, in the stock market, everything is, without mechanics, everything is relatively close to a zero sum game.

• 39:15Anthony Pompliano?

  And as you see many of these assets and kind of investors, you know, kind of learning about this stuff, how much of your trading is just, you sit in front of a screen, you can look at a chart, you know, Steve Kohn's like famous for this, he can just look at the chart, start trading. He didn't even need to know what it necessarily is. Versus, are you reading mainstream media? Are you consuming other content? But like, how are you deciding what to do?

• 39:40Speaker 02

  Well, I love, I don't really consume other content at all, but we have all our own content, so I love to fade our own hosts. Like, I, I love to fade our own hosts, our own guys on, on, on our own network, because if, if any of them have a macro idea, I'll take, I'll do the actual opposite. I think that's the best thing.

• 39:57Anthony Pompliano?

  Why?

• 39:58Speaker 02

  Just because I know they're probably going to be wrong. But we...

• 40:03Speaker 02

  We

• 40:04Anthony Pompliano?

  Is that just because everyone is usually wrong when talking about Max?

• 40:07Speaker 02

  Sure. Everyone's usually wrong about everything they want. If they think, if people are really sure that they know something, like if you said to me, Tom, I, it's Tuesday, so there's no games tonight. But if you said to me like last night, I really love the Dolphins, you know, I would said, fine, I'll take Tennessee, you know, I'm just, that's just the way my mind works. But I don't look at charts. So, but I do follow a lot of stocks and a lot of commodities. And so, um, you know, I have my own opinions about price extreme, both ways. Two, something gets too cheap, something gets too expensive. I have my own idea.

• 40:40Anthony Pompliano?

  And is that just gut, intuition?

• 40:42Speaker 02

  Yeah.

• 40:42Anthony Pompliano?

  And it's just dialed in over, you know, 40 plus years of just looking at these charts and understanding prices and well, just looking at the prices of these assets and understanding, hey, Nvidia has been trading in a certain range and is that towards the bottom of the range right now? And so it's a buy versus, you know, tomorrow.

• 40:58Speaker 02

  I'll tell you a funny story. When we built Thinkersum, because you use Thinkersum. When we built Thinkersum, you said you were in college, right? So we came off the trading floor. We had never used a chart ever. So we built Thinkersum. We didn't build charts.

• 41:10Anthony Pompliano?

  Clues.

• 41:10Speaker 02

  And we launched the platform without charts and people were like, what the F is wrong with you guys? How do you launch a brokerage platform without charts? Everybody uses charts. We're like, they do? Cause I had never seen anybody use charts. Spent 20 years of business and never saw a person use charts. So we're like, really? So, so

• 41:30Anthony Pompliano?

  Let's get some charts.

• 41:31Speaker 02

  So the guy you were watching, when you said to me, this is your network, his name is Tim Knight. He built a company called Profit Charts. I met Tim in 1999 and he was one of the first entrepreneurs in Palo Alto and he built this platform called Profit Charts. I called him up. I didn't know him. Called him up and said, hey, can we, you built yours in Java, we're a Java platform. Can we embed ours, your charts in our platform? Because we, we needed, we needed some time to build a charting platform. He goes, sure, I'll lease it to you. So he leased it to us and that's how we became friends 25 years ago. But we had no idea. We built the whole platform without charts.

• 42:04Anthony Pompliano?

  That's incredible.

• 42:05Speaker 02

  Anybody used charts?

• 42:07Anthony Pompliano?

  Are there charts in Tasty now?

• 42:08Speaker 02

  There are reluctantly because we want people to use numbers, like charts don't mean anything. That there is, and I'm going to get a lot of shit for this, I'm sure from your listeners, but there is, there is no proof that you can look at a chart and something that happened historically has anything to do with what's going to happen in the future.

• 42:27Anthony Pompliano?

  So what are you looking at then?

• 42:29Speaker 02

  When I look at price?

• 42:30Anthony Pompliano?

  Yeah.

• 42:31Speaker 02

  I was just, you know, just, I'm just thinking, hey, this thing was 100 two days ago and now it's 80. Maybe it's cheap.

• 42:38Anthony Pompliano?

  So let's use that example. Uh, how do you know it's not going to 70 or 50?

• 42:41Speaker 02

  You don't.

• 42:42Anthony Pompliano?

  Or 50?

• 42:42Speaker 02

  You don't.

• 42:42Anthony Pompliano?

  Okay. You don't. So you just buy and close your eyes?

• 42:45Speaker 02

  Well, we don't really buy anything. We will sell it out of the money put. So, you know, I'm an option trader more than I'm a stock buyer. So, um, but I, I, I don't get me wrong. I do buy stocks, um, but, um, I would sell the put.

• 42:58Anthony Pompliano?

  And so you're basically saying, hey, with that gut feel and the instrument that you're using, you've got a higher probability of winning than not.

• 43:06Speaker 02

  Sure.

• 43:07Anthony Pompliano?

  Okay.

• 43:07Speaker 02

  Exactly.

• 43:08Anthony Pompliano?

  What's the best trade that you've ever made?

• 43:12Anthony Pompliano?

  He's like selling my company.

• 43:14Speaker 02

  No, no, no, no.

• 43:15Anthony Pompliano?

  The American trade at 12 bucks?

• 43:17Speaker 02

  No.

• 43:20Anthony Pompliano?

  It might be.

• 43:21Speaker 02

  No, no, no, that's, there, there's a lot of, not company wise.

• 43:26Anthony Pompliano?

  Yeah.

• 43:26Speaker 02

  Um, the best trade ever, um, well, I have a best story about a trade.

• 43:31Anthony Pompliano?

  Okay.

• 43:32Speaker 02

  Okay. You're probably, how old are you?

• 43:35Anthony Pompliano?

  36.

• 43:35Speaker 02

  You're too young. Um, you remember Desert Storm?

• 43:40Anthony Pompliano?

  Yeah. Well, I know what it is.

• 43:42Speaker 02

  Yeah, right, right. So there was a kid that used to, um, clerk in the OEX pit, which was the S and P 100 at the time. And he always wanted to be a cameraman. And, and he got a job, you know, clerking in on the floor of the exchanges was kind of like a, a low paying job. You're hoping to get a job as a trader. Well, this kid didn't want to trade, be a trader. He wanted to be a cameraman. He got a job to go to the front lines in Iraq and with CNN for, this was like the first televised war.

• 44:09Anthony Pompliano?

  Okay.

• 44:09Speaker 02

  And this kid was like standing behind us for like two or three years. And he, we get a call from the, literally from the front lines in Iraq that he goes, we're going to war tonight. Okay. And the whole pit, you know, within two seconds, but everybody else had noted too. I, we did, we just didn't watch news.

• 44:25Anthony Pompliano?

  Yeah.

• 44:26Speaker 02

  We didn't know the whole world already knew this. And so, but we thought we were like, so everybody in the pit, four or 500 guys are all fighting over each other, trying to buy every put they can get their hands on. You know, thinking the market's going to crash tomorrow morning. And some broker that was standing next to me, because when you're a trader, you can't be a broker. You have to be one or the other. Some broker standing next to me sold me like a 50 lot of calls that were in the money because he couldn't get rid of them. And he said, you gotta take these for me because I owe the customer fill. So I took the 50 lot of calls. I buy buying like as many puts I can give me hands. I took this 50 lot of calls. We're all got giant short that night thinking the market's going to crash the next day. We opened lock limit up the next day after all, everything was televised the night before we opened

• 45:10Speaker 02

  lock limit up. That 50 lot of calls.

• 45:13Anthony Pompliano?

  Paid for everything else.

• 45:14Speaker 02

  No, no, it paid for like the whole year. And, and it was insane because I didn't want that trade. I would have given it to you for like, like, like a $10,000 loss, but I couldn't find anybody to take it from me. And that, that whole trade was like, probably the best single trade I've ever made.

• 45:31Anthony Pompliano?

  Why do you think that it went up when everyone thought it was going to go down?

• 45:33Speaker 02

  Because nobody ever knows anything. It's the beauty of markets. The greatest thing about what we do is that absolutely, I don't care how long you've been doing this. If I've been doing this for 40 something years and somebody had never looked at the market before, and you said, what's X, Y, is he going to do tomorrow? I have no better chance than that person does of knowing what it's going to do.

• 45:51Anthony Pompliano?

  You don't think so?

• 45:51Speaker 02

  No.

• 45:52Anthony Pompliano?

  You couldn't tell me, let's say somebody doesn't even know what Nvidia is, which actually I met somebody recently who told me what's Nvidia. And I had a, like, remember that we're all just in a big echo chamber. But you don't think that you've got a little bit more knowledge than they do?

• 46:06Speaker 02

  Oh, I have more knowledge about like, things about the market, but I don't think I can tell you any better than they can what Nvidia's.

• 46:13Anthony Pompliano?

  Up or down tomorrow?

• 46:14Speaker 02

  Up or down tomorrow. Yeah, I really don't.

• 46:17Anthony Pompliano?

  I mean, if you're right, that's pretty important detail for people to know.

• 46:21Speaker 02

  But, but God knows I'm going to try. Every fricking day. Like, that's what I do. I'm going to try.

• 46:28Anthony Pompliano?

  Now you told me your best trade. What's your worst?

• 46:33Speaker 02

  Money wise?

• 46:34Anthony Pompliano?

  Yeah.

• 46:36Speaker 02

  Like, you know, just you mean in one day?

• 46:39Anthony Pompliano?

  Sure.

• 46:39Speaker 02

  My best and worst trades in one day are probably, you know, seven figures.

• 46:44Anthony Pompliano?

  Okay, but like, what was like the worst?

• 46:46Speaker 02

  Oh, just being short S and Ps.

• 46:49Anthony Pompliano?

  And it's just ripping?

• 46:50Speaker 02

  And just ripping.

• 46:51Anthony Pompliano?

  Yeah.

• 46:52Speaker 02

  I had one day in, I think, two thousand and fourteen or two thousand and thirteen, I think it's two thousand and fourteen. Cause I kind of remember every trade where I was just short S and Ps and bonds, thinking they they're, you know, they're not, they're inversely correlated, right? S and Ps and bonds, S and Ps go up, bonds go down, same thing. So, and they both moved together, bonds, I think, were up two and a half points and S and Ps were up like a hundred and I was short them both big. Yeah, that was a bad day.

• 47:18Anthony Pompliano?

  And what do you do? Like, you're like, shit, okay, that that sucked. You just like go home and cry or like, do you go home and just drink, go to sleep? Like, forget about it?

• 47:26Speaker 02

  Get really mad. You get really mad, but it's all part of the, you know, I really, the only thing that kills you in this business is size. Like, if you get, if you control, the one thing I've learned in the last 20 years is just, like, just have fun. Like, I love trading, so I just try to have fun with it. I, I just keep your size small. Like, that's the whole key.

• 47:47Anthony Pompliano?

  The only way is like the average portfolio size for trading, you have a hundred positions. So what is it like 1% each or half a percent?

• 47:53Speaker 02

  Yeah, it depends, but 1% would be for undefined risk, it'd be a little higher than 1%. For defined risk, it'd be less than like a half a percent. So undefined risk, you know, for me would be between like one and 3%, one and 2%.

• 48:10Anthony Pompliano?

  Do you have anyone that like checks your trades or are you doing this all yourself?

• 48:13Speaker 02

  No, I do myself.

• 48:13Anthony Pompliano?

  Okay, so like, right now, if I asked you, you probably couldn't name all 100 positions that you have, like, you'd have to like go look? Or could you, I'm not gonna ask you to do it, but like, could you name all 100, you think?

• 48:23Speaker 02

  No, I couldn't, but I could, I could, I mean, if I, if I just look at my portfolio.

• 48:27Anthony Pompliano?

  You know, very quickly.

• 48:28Speaker 02

  Oh, yeah, yeah, sure.

• 48:28Anthony Pompliano?

  Of course.

• 48:29Speaker 02

  Now, I look at my positions like multiple times a day.

• 48:32Anthony Pompliano?

  I was gonna say, one time I looked at my phone and there's screen time, which people pay attention to. Uh, but there's also something about like, I think it's like wake or notifications or something like, you can tell you basically how many times your phone light up? Even if you don't pick it up?

• 48:44Speaker 02

  I don't know that.

• 48:45Anthony Pompliano?

  Mine was like 750.

• 48:47Speaker 02

  Oh, no.

• 48:47Anthony Pompliano?

  And I just like went and I was like, I immediately had to start shutting off notifications. I was like, oh, my God, this is like not good.

• 48:52Speaker 02

  Yeah, you don't want that.

• 48:52Anthony Pompliano?

  You just take like, how many minutes in a day, right? Divide by seven, oh, shit. And so, uh, how many times do you think you check?

• 49:01Speaker 02

  Check my phone per day?

• 49:02Anthony Pompliano?

  Like your positions, your phone or computer?

• 49:05Speaker 02

  Um, I don't want to act like a complete psychopath, but sociopath, but um,

• 49:13Anthony Pompliano?

  A hundred?

• 49:13Speaker 02

  No, but a lot, maybe.

• 49:17Anthony Pompliano?

  Every 10 minutes?

• 49:19Speaker 02

  Every, yeah.

• 49:21Anthony Pompliano?

  Okay.

• 49:21Speaker 02

  Ish.

• 49:23Anthony Pompliano?

  Are you okay? Like, I mean, I'm kind of like that with Twitter. Like I, you know, I check a lot. So uh,

• 49:29Speaker 02

  I abandoned Twitter strictly for, I, I only, the only social media rabbit hole I go down is TikTok.

• 49:36Anthony Pompliano?

  Oh, wow. Okay. That's like.

• 49:37Speaker 02

  That I know.

• 49:38Anthony Pompliano?

  Twitter on steroids.

• 49:39Speaker 02

  I know it's bad. It's TikTok is really bad.

• 49:41Anthony Pompliano?

  What kind of content? Like trading content?

• 49:43Speaker 02

  No.

• 49:43Anthony Pompliano?

  No, just like whatever crazy video or whatever.

• 49:45Speaker 02

  No, anything but trading. I don't want to be down a trading rabbit hole. Um, but TikTok, whoever thought of that was evil.

• 49:53Anthony Pompliano?

  Yeah.

• 49:55Anthony Pompliano?

  Maybe a more ways than one.

• 49:57Speaker 02

  It's freaking genius. It's genius. I wish I invested in it because it's absolutely genius, but it's evil.

• 50:03Anthony Pompliano?

  Yeah.

• 50:06Anthony Pompliano?

  This is gonna be a really weird question.

• 50:07Speaker 02

  Sure.

• 50:07Anthony Pompliano?

  I know, uh, two brothers from Chicago trade options. Uh, they see them on TV sometimes.

• 50:13Speaker 02

  The Jerrons?

• 50:14Anthony Pompliano?

  Yeah, of course. Uh, they got nice hair. You got nice hair. What's up with the guys in Chicago trading options with nice hair?

• 50:19Speaker 02

  You know, the funny thing is that John and I actually started, um, I mean, we're all friends.

• 50:25Anthony Pompliano?

  Yeah, of course.

• 50:25Speaker 02

  We go back, we started like the same time.

• 50:27Anthony Pompliano?

  Yeah. Were you guys like elbowing each other in the pits?

• 50:29Speaker 02

  No, no, no. He was an equity trader.

• 50:31Anthony Pompliano?

  Okay.

• 50:31Speaker 02

  But we've been friends for 40 years, I guess, you know? I mean, not close friends, like we don't call it, but I, I mean, I had.

• 50:39Anthony Pompliano?

  You go to conferences, you're like, you have nice hair. I have nice hair, both from Chicago.

• 50:42Speaker 02

  Well, we have dinner when we run into each other. Like, you know, last time I saw him, I think he had kind of moved to Puerto Rico. So I was kind of like, we had dinner in Puerto Rico. I was there for doing a conference. I do a lot of travel. I speak all over the world. So I, I saw him there. We had dinner together. You know, these guys, you know, we're friends.

• 50:57Anthony Pompliano?

  Yeah.

• 50:58Speaker 02

  We got, we have the same background.

• 50:59Anthony Pompliano?

  Yeah. Well, what about the hair? Like same shampoo too, or?

• 51:02Speaker 02

  Yeah, probably, probably. I never asked him. Yeah. We don't talk hair.

• 51:07Anthony Pompliano?

  Yeah, that's, that's fine. You're busy trading. You gotta check your phone a hundred times. But by the way, your life is not that much different than mine. It's just that you're checking like moving numbers. I'm checking like moving words on Twitter. So.

• 51:17Speaker 02

  Yeah, there you go.

• 51:17Anthony Pompliano?

  Pretty much the same thing. Uh, some, some people would say actually, uh, things like Twitter now are moving markets. Do you worry about that?

• 51:25Speaker 02

  Um, do I worry about it? No, absolutely. I like things that move markets. I am a true efficient market theorist. I don't, I want like, I want everybody to trade. I want politicians to trade. I want everybody in Congress. I want every, I want everybody to trade. Do whatever the hell you want to do. Cause I don't think anybody has any edge. I want everybody to trade.

• 51:48Anthony Pompliano?

  You don't think Nancy Pelosi?

• 51:49Speaker 02

  No, I do not.

• 51:50Anthony Pompliano?

  No?

• 51:50Speaker 02

  Not even for a second.

• 51:51Anthony Pompliano?

  What if like she gets some information?

• 51:54Speaker 02

  Good. Trade on it. I hope they, I hope, you know, it's so crazy that people think that, that anybody, especially Nancy Pelosi, when people think that people have an edge. I, I, Nancy Pelosi will never vote against anything that's going to hurt traders. And that's all I care about. The, we have so many horrible politicians that don't understand how free markets work. You know, the whole reason.

• 52:19Anthony Pompliano?

  Are you making an argument that Nancy Pelosi is a free market trader?

• 52:23Speaker 02

  Of course.

• 52:26Anthony Pompliano?

  I mean, you're kind of not wrong, but yeah, go ahead.

• 52:28Speaker 02

  I, here's my issue. I'm scared that we're going to end up with the Gary Gensos of the world in, in mass. I'm scared that we're going to have a lot of politicians that vote for stupid things like transaction tax and that vote, you know, look, you've seen what's happened in crypto, you know, just all these, all these restrictions, all these fences, all these limitations. And I think as soon as people trade, all that's off the table. None of that stuff happens. And so we need politicians that actually understand how markets work. I also believe that the reason that the US is so powerful and has such dynamic growth compared to everywhere else in the world is because we have created a system with the largest pool of liquidity where investors, you can invest in something, private equity,

• 53:11Speaker 02

  venture, whatever you want. And there's a pool of liquidation that allows you to get out and which attracts money, which nobody else in the world has, which is why no money flows anywhere else. And all the money flows here and is, and if we blow that because of some idiot politicians that don't understand how markets work, that's why I don't care if Nancy Pelosi makes an extra, you know, a hundred thousand dollars or a million, I could keep, I don't give a rat's ass.

• 53:34Anthony Pompliano?

  A hundred million allegedly.

• 53:35Speaker 02

  A hundred million. I don't care what they make. I don't care.

• 53:38Anthony Pompliano?

  Is there a number that if they made, you'd be like, all right, that's egregious? Like what if politicians were making a billion dollars a year trading on inside information?

• 53:46Speaker 02

  They are, you're, they are so stupid that if there was even a chance, if two of them tried to do the same thing, here, I'll tell you this, if you, this would be the bet I would make with you. I don't care if you tell every politician, like if you could tell them who is going to win the election, who's going to win this year's presidential election, or any single election, or vote on anything that comes up for a vote. And you tell, if you tell, ask the Fed governors, what's going to happen if you lower, you know, lower by 50 basis points, or 25 or 75, what it is. Nobody would know what to do and they would all do, 50% of people do one thing and 50% of people do another thing. Nobody knows what to do, even if they had the information. I got one more story for, on this.

• 54:27Speaker 02

  I was at a conference once and Bernanke was talking and, and so Bernanke's students talking and it was sponsored by Citadel.

• 54:37Anthony Pompliano?

  Okay.

• 54:37Speaker 02

  I think they paid him like $5 million for one year and he gave one speech. Comes out, he tells a couple of stories and then they, they say anybody in the audience can ask Bernanke a question.

• 54:49Anthony Pompliano?

  Like anonymously?

• 54:51Speaker 02

  Anonymously, or you can just, they give us tablets.

• 54:54Anthony Pompliano?

  Okay.

• 54:55Speaker 02

  And on the tablet, there was some kind of software that you could, you could ask questions and the moderator would read it off to Bernanke. So they, they picked my question, which was essentially, you know, if you could here, would you buy bonds? You know, just trying to get an idea of like what he thought interest rates were going to do. This is like 10 years ago and his response was to this day was like, was, he said, well, I have no idea what bonds are going to do. That's why I leave it to my Merrill Lynch advisor. And I'm thinking, okay.

• 55:27Speaker 02

  If Bernanke can't answer the question, who in the world can? Like if he's the one making the decision and he's the chairman of the Fed and he's leaving it to a Merrill Lynch advisor that he's been friends with since he was in high school or college. It's such a ridiculous thing that anybody else thinks they know what's going to happen to the market and.

• 55:47Anthony Pompliano?

  I do think that a good recent example of this is the 50 basis point rate cut in September. You know, people were 25 to 50, they do the jumbo cut and everything trades down. And I had a friend who texted me, he goes, I don't get it. Like, you know, they cut the rates, why did it go down? And I said to him, I said, look, you know, who knows? But he kind of talked it down in the press conference. So maybe that's what it is. And

• 56:10Speaker 02

  Nobody ever knows.

• 56:10Anthony Pompliano?

  Well, even in hindsight, you don't know.

• 56:12Speaker 02

  Exactly. That's my whole point. So tell everybody everything. Don't let them do whatever they want to do. They'll have no idea and they'll all do opposite stuff.

• 56:18Anthony Pompliano?

  Do you think we should just get rid of insider trading laws?

• 56:20Speaker 02

  Not material, non-public information for, you know, because I think

• 56:24Anthony Pompliano?

  Like, if you know the sales numbers of a company before their earnings reports.

• 56:27Speaker 02

  Right. Or you're, you know, you're the CEO. There's, there's, there needs, in general, some of the insider stuff is ridiculous. But if you're talking about, if you're, if you're a true insider and you're, and you're, you have access to material, non-public information, like you're doing a deal or something like that, you shouldn't be able to turn that.

• 56:43Anthony Pompliano?

  Yeah. Like, if you know that an acquisition is coming, you can't, yeah, yeah, yeah. Okay. What are you most excited about in finance going forward?

• 56:51Speaker 02

  I think all the different things we're going to get into. Like, I, I, I sense that we're on the verge. For me, digital assets was a new frontier that I think opened the door just a crack. And it is going to, somebody's going to push their way through. So this is means we're going to get into event-based, you know, politics, markets are going to be, there'll be exchange markets on politics. I think you'll, you'll see sports sooner than later. And I think you'll see tokenization, you know, to complement. I think you'll also see a much broader, I think you'll see a lot more digital assets come back into play.

• 57:34Anthony Pompliano?

  Interesting.

• 57:35Speaker 02

  Which I think all of that's good, by the way.

• 57:38Anthony Pompliano?

  Probably. Yeah. I mean, it makes sense. Yeah. Um, are you worried about anything?

• 57:46Speaker 02

  I'm not worried about anything except somebody that gets in the way of like I what bothers me the most is when people try to take things backwards. So, so anything that slows up the technology, anything that puts like regulatory rings around things bothers me. But I think in order for our dollar and in order for our economy to stay super strong compared to the rest of the world, we have to, you know, remain kind of the center of liquidity. And I don't like when people mess with that. It's like messing with mother nature. I don't like it.

• 58:23Anthony Pompliano?

  Yeah. Well, it's manipulating the market to a degree.

• 58:28Speaker 02

  Yeah, or it's not trusting the market really. It's not about manipulation as much as it's just about not trusting it. It works.

• 58:35Anthony Pompliano?

  I agree with that. Definitely agree with that. Where can we send people to find you on the internet?

• 58:40Speaker 02

  Every morning I'm on tasty live.com for three hours in the afternoon on markets closed for a half hour. And then if you pretty much Google Tom Slausner, you'll find maybe more stuff than you want to know. My email is just Tom at tasty live too. I'm an email junkie.

• 58:56Anthony Pompliano?

  If somebody watches tasty live, what should they expect? Are you funny? Are you serious? Are you giving out like hot stock tips?

• 59:03Speaker 02

  Definitely not giving out hot stock tips. You're going to hear a lot of stuff about maybe my favorite restaurants, our personal lives, you know, we're about 50 50 about personal crap like we just, you know, have fun with each other. It's a little bit like a locker room. And the kind of the stuff you can't do on normal financial networks and then 50% hardcore research. Like I said, we're a think tank. So we do 60 hours of research a day to which which we boil down into probably four or five 15 minute segments every single day. It's hardcore.

• 59:42Anthony Pompliano?

  All right. I'm going to watch tomorrow morning. You're going to be on. Yeah. All right. When I, when I watch, we're going to see if it funny, serious, hot stock tips, whatever you got.

• 59:50Speaker 02

  Oh, they'll, they'll make, they'll make fun of me for the first 25 minutes and then

• 59:53Anthony Pompliano?

  Perfect. That'd be, that'd be the funny part. All right. Thank you so much for doing this. I really appreciate it. We'll definitely do it again.

• 59:59Speaker 02

  Love it. That was great. Thanks.

• 1:00:01Anthony Pompliano?

  What's up guys? I hope you're enjoying this episode, but I got a quick message for you. I just released my very first book. It's called How to Live an Extraordinary Life. In this book, there are 65 life lessons that I've picked up over the years. These lessons will teach you about money, investing, relationships, work, health, happiness, and much more. In this book, I wrote letters to each one of my children and I tried to share those life lessons with them. If you pick up this book, there's three things that I can promise you. The first is that it is very concise. The audio book is only three hours. You can listen to it on a long drive or on a rainy afternoon. The second thing is that you're going to learn something. It's worth the price of admission just for the lessons themselves. And then the third thing is it will make you think

• 1:00:43Anthony Pompliano?

  more deeply about your life and how you try to live it. So go pick up How to Live an Extraordinary Life today. It's a quick read. It's very impactful. It's very concise and it would mean the world to me for the support. Go check it out today on Amazon, Barnes and Noble, or wherever you buy your books, hardcover, audiobook, it all works. Thank you so much for the support and I'd love to hear what you think about the new book.