11/26/24 Retirement Planning, Trading Apps & Steps to be Moneywise

The Moneywise Radio Show and Podcast Tuesday, November 26th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management instagram: MoneywiseWealthManagement

• 0:00Speaker 00

  From the padded radio room off Stockdale Highway, here is Money Wise. Call or text in at 661-396-1000.

• 0:09Speaker 01

  I need a dollar, dollar, dollar, that's what I need. Hey, hey. Well, I need a dollar, dollar, dollar, that's what I need. Hey, hey. Said I need a dollar, dollar, dollar, that's what I need. And if I share with you my story, would you share your dollar with me?

• 0:30Speaker 02

  Securities offered through S E F Securities, Inc., member FINRA, SIPC. Investment advisory services offered through S E F Investment Advisors, Inc. S E F Securities, Inc. and Money Wise Wealth Management are independently owned and operated.

• 0:40Speaker 00

  Now, let's start the Money Wise Show.

• 0:42Speaker 03

  Welcome to the Money Wise Show. We are live from the padded radio room off Stockdale Highway on ESPN Bakersfield, 1230 AM, 101.1 FM, and always streaming at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. I'm Sharad Waiters, and here with me is...

• 1:04Speaker 04

  Frank Lee.

• 1:05Speaker 03

  Hey Frank!

• 1:05Speaker 04

  Hey.

• 1:06Speaker 03

  Happy Tuesday.

• 1:07Speaker 04

  Happy Tuesday.

• 1:07Speaker 03

  Almost time for Thanksgiving.

• 1:09Speaker 04

  It is, it is. Already had two Friendsgiving, so ready for the actual Thanksgiving.

• 1:13Speaker 03

  We mentioned Friendsgiving yesterday. There's a promo that runs here on the station. Who is it, the host?

• 1:20Speaker 00

  Greenie. Yeah, he is not a big fan of the Friendsgiving.

• 1:23Speaker 03

  Yeah, he just hates Friendsgiving and baby reveals.

• 1:27Speaker 00

  Yes.

• 1:28Speaker 04

  Oh, okay, okay.

• 1:30Speaker 00

  He said those are the two worst parties.

• 1:32Speaker 03

  Yeah. He's very anti-Friendsgiving, so you've hit two of them already, so congratulations.

• 1:38Speaker 04

  Hey, we didn't do a baby reveal, so...

• 1:40Speaker 03

  Oh, yeah. But you know, right?

• 1:43Speaker 04

  No.

• 1:44Speaker 03

  You don't know.

• 1:44Speaker 04

  No, no, no.

• 1:45Speaker 03

  It's gonna be a complete surprise for both of you.

• 1:46Speaker 04

  Yeah, yeah, a complete surprise.

• 1:47Speaker 03

  That's really cool.

• 1:48Speaker 04

  Every time we tell people that, they're like, "Oh, no, you have to know." It's like, no, if we did, we wouldn't be able to, you know, keep it in. We would tell everyone.

• 1:56Speaker 00

  Just one healthy baby, that's it.

• 1:58Speaker 04

  Yeah, yeah, exactly. Just one healthy baby.

• 2:00Speaker 03

  Oh, that's exciting, that's exciting. All right, well, I want to get right to a listener question, because the last few shows, we've gotten some great listener response and messages, so we're gonna go right to... The message board and then I want to talk to you about this Frank says, "Good afternoon and happy Thanksgiving to your crew. I was wondering if you guys have personally used Robinhood or other trading apps? Are there certain downsides of using Robinhood compared to other apps? Thank you." So Frank, this is perfect because both you and I have had some experience in trading. And we're talking about not investing, but more speculative trades. And so I think what the listeners asking about is what's our experience?

• 2:43Speaker 03

  And what are sort of the pros and cons with the different trading apps? And let's maybe we can just start right away with Robinhood because I think Robinhood is an interesting story.

• 2:53Speaker 04

  And yeah, I mean, there's been a lot of headwinds with Robinhood and just not really good ones in itself.

• 3:01Speaker 03

  Kind of from the foundation of the company. Now, now there's different people that are involved in running the company now, but from the get go is this gunslinger attitude of we're just gonna, you know, open up the world or we're gonna revolutionize and be a disruptor in the trading world.

• 3:19Speaker 04

  Yep.

• 3:19Speaker 03

  And they got started to play with the big boys and then immediately realized that they were in over their heads. They had, they were just, they completely bumbled.

• 3:28Speaker 04

  I mean, it definitely made some moves in the, in the, in the big markets as far as like the big players. Cause weren't they the ones that introduced free, free trades?

• 3:39Speaker 03

  Sort of.

• 3:39Speaker 04

  It's like buying, because when you buy stocks, there was, there used to be a small fee, like a platform fee.

• 3:46Speaker 03

  Yeah.

• 3:46Speaker 04

  But I think they really moved the market on that one.

• 3:49Speaker 03

  They really, yeah, correct. I think they, they, I mean, we already had free trades. We had Ameritrade, we had Schwab, we have, you know, Fidelity, I want to say was free, but essentially they were incentivizing people to open up an account. And there were certain free trading availability, but it was Robinhood that popularized it and really made, tried to make it mainstream. And it coincided with meme stock trading.

• 4:16Speaker 03

  That's what like you put those two things together all of a sudden and you had covid. So you had people with a lot of time on their hands with some cash. And it was just cash that they were getting in many ways from covid relief funds. You know, what's what was the PPP? There are all these different programs that were government was basically dropping money from the sky. And it was just enough to keep the economy going, but it started to feed this other economy of day traders, of people who had a little bit of change, a little bit of cheddar in their pockets and certainly some time.

• 5:00Speaker 03

  And now what in their eyes, well, these are this doesn't cost me anything to trade. And so Robinhood really leaned in on that, had some problems. They weren't funded and weren't weren't regulated properly. They were fined. A lot of people lost a lot of money because they were starting to make these quick day meme trades, stock trades. Not options tradings, but the risky leveraged trades that were essentially eventually sort of canceled out. So a lot of people lost money. So Robinhood is still suffering from those headwinds or there's other headwinds that you were thinking of.

• 5:34Speaker 04

  Yeah, I mean, I don't really know. I personally haven't used Robinhood to, you know, going back to the listener's question. So I don't really know the pros and cons of it. I just know that it was easy to use. User interface was very easy to to understand like what you're doing. There weren't a lot of complicated tools that people could feel like they get overwhelmed by using. I also have heard that they have lower leveraging requirements than other.

• 6:08Speaker 04

  Platforms as well. So that could get you in some serious trouble if you don't know how to really utilize the leveraging system.

• 6:18Speaker 03

  Was it Robin Hood user of that tragic story of the young man who took his own life, thinking that he had lost more money than he'd actually lost?

• 6:27Speaker 04

  Yeah, it was a substantial amount, but I forget exactly how the story went or what it was exactly, like how much he was down. But yeah, he, short story, you know, he thought he was down more than half a mil.

• 6:42Speaker 03

  It was big, it was a big number.

• 6:44Speaker 04

  Or that he thought he owed, I think that's what it was. That he thought he owed more than half a million dollars of, of margin and unfortunately just took his life.

• 6:56Speaker 03

  Yeah. So it runs into the, it's not just Robin Hood where you can have this problem, but any of the trading apps that you would be involved in, you have the potential to get sort of sucked into a world where you can be overconfident, you can have a lot of miscues and blind spots and biases that can appear when you're sort of stuck in this world. And especially in a world that we've seen in the stock market since 2020, really, we've just seen pretty much an up market. It hasn't felt like it, but it has been a substantial bull market since 2020.

• 7:41Speaker 03

  And so there's a lot of people that have built up this overconfidence, I think, and thinking, well, this is easy, you know, it's easy to pick stocks and, you know, make some money, but it's just not the case when you look at, when you step back and go through more than a couple of business cycles, you realize it gets real tricky, real hard.

• 8:02Speaker 04

  Yeah. I mean, it also boils down to what this listener's goal is. If he's just using it to, if he's using it for day trading, active trading, or if he's using it just to put away some funds for like a TOD. Account if it's just easier to use because I know some people like to use that. But it just depends on what his objectives are.

• 8:24Speaker 03

  Yeah.

• 8:24Speaker 04

  And understanding that because then Robin Hood could be useful if it's just easier, but you know, you can get away with any platforms really. Of buying and selling or just buying and holding certain stocks that you know, that you like.

• 8:39Speaker 03

  Yeah. So we're talking about kind of more the hobbyist investor. This is almost like a way to save, a saver. It can incentivize you to save. Great. Go for it. You don't want to get yourself in trouble. People can get in trouble though, when you start buying. Individual stocks or individual securities for short term, you know, profit rather than more of a fundamental approach sort of. You know, buying blue chip, for example, or buying into an index. So there's great ways that you as an individual investor can diversify. And still be involved in the stock market, but not have to track an individual stock or two. And some people take it even a step further and there's a lot of become very popular these days to do options trading. So.

• 9:23Speaker 03

  There's some really great technologies out there that make options trading pretty easy to do right from your phone.

• 9:31Speaker 04

  Yeah, yeah. And Robin Hood is one of them. Cause I myself have done a lot of options trading back in the past and that was my bread and butter. Before coming on as a financial advisor. But again, as a disclaimer, options trading is very, very different. And you should definitely do your research before you go into any types of option trading because.

• 9:58Speaker 04

  You, there are a lot of different methods and strategies to implement, but you can also get yourself into a lot of trouble if you.

• 10:08Speaker 04

  Accidentally implement the wrong strategy.

• 10:11Speaker 03

  Yeah, because there's actually ways when you're options trading, which options trade, people get really excited about it because there's a lot of YouTube channels and Tik Tok. And you name it, get rich, get rich quick scheme. And essentially what it is, is you're leveraging because you're, you're, you're, you're. Buying an option to either buy or sell a security. And that can be very cheap. And so you're leveraged, you can leverage a large amount with a very little bit of money. And that's where people can get in trouble because in some of these options, there's no, there's unlimited downside.

• 10:44Speaker 04

  Yeah, well, especially if you get into the naked options.

• 10:47Speaker 03

  Yeah.

• 10:48Speaker 04

  What we mean by naked options is by selling or short the underlying. So if you're bullish, then you're selling a put option. Uh, if you're bearish, then you're selling a call option.

• 11:01Speaker 03

  Yeah.

• 11:01Speaker 04

  But if the stock, uh, goes one way, uh, goes against your trade, then you have that unlimited risk or unlimited downfall.

• 11:14Speaker 03

  Correct.

• 11:15Speaker 04

  Of what you're talking about.

• 11:16Speaker 03

  Yeah.

• 11:16Speaker 04

  Um.

• 11:17Speaker 03

  That's where people can get themselves in trouble. They were talking about this young man again, that was clearly was doing some sort of options trading, leveraged trading. And all of a sudden realized, oh, man, my trade did not go the way I thought it would. Now you have, especially if you're trading on margin. So when we, when we talk about again, some of the dangers of, of, of day trading or trading on your own. A lot of people will trade on margin, which means you're borrowing from the broker based off of a certain amount of, of money that you have on the account. You can, you can essentially borrow against that. So, but if you, if your trade starts to lose, you have what's called a margin call.

• 11:57Speaker 04

  Yep.

• 11:57Speaker 03

  And the bank says, give me my money or your, your trading, the trading platform says you, you gotta come up with some money to cover your, cover your, your, uh, your option here. Uh, your, your margin and.

• 12:09Speaker 04

  And there's interest on that.

• 12:10Speaker 03

  Yeah, there's get interest and penalties. If you don't have it, now you gotta get out of, out of, out of your positions and then you've lost a whole bunch of money.

• 12:17Speaker 04

  Exactly. So they'll sell your holdings and everything.

• 12:20Speaker 03

  Yeah. So people get into trouble real quick, but it can be really fun. Like I, I got it out of my system when I was in college. I have my degree in finance and at that time, you know, the brand spanking new internet at that time had just come out where you could do the simulated trades.

• 12:37Speaker 04

  Oh, yes. I remember playing around with that a lot.

• 12:40Speaker 03

  It was great. And you kind of compete with your classmates, too. And anything goes. You could buy anything, you know, in terms of futures contracts, you name it, you could go for it. And the sky was the limit. And that was really good for me because I did really well, but I knew that that wasn't sustainable. And I got it kind of out of my system. I was like, man, I kind of got it out of my system there. I still fool around a little bit to this day, just for funsies, you know, buying individual holdings or trading on something that I'm interested in, or I've done some research in, or I'm passionate about. But again, I'm not doing it with my entire 401K.

• 13:20Speaker 04

  No, no.

• 13:22Speaker 03

  I'm letting that ride in the broad market.

• 13:24Speaker 04

  Yeah, exactly. And I think that's why options can be very attractive in a sense, because if you were to buy Apple, you know, whatever the price is for Apple, you have to come up with that amount of capital for just one share.

• 13:38Speaker 03

  Right.

• 13:39Speaker 04

  Versus an option contract where the contract itself is the contract for the underlying stock, but you have an option contract worth of 100 shares. And that's where the leveraging comes in. So if you get something out of the money, and it shoots up close to it, then the contract itself is worth so much because there's all that intrinsic and extrinsic value going into that contract.

• 14:03Speaker 03

  It's exciting.

• 14:04Speaker 04

  Exactly. And that's why it's exciting. It's exciting and people can really get into it and it's attractive. But the odds of that happening are very slim to none, right?

• 14:14Speaker 03

  Right.

• 14:15Speaker 04

  Unless if you're trying to do earnings play, but even then, it's very, not even 50/50. Because you have to be very selective of the stocks and your strategy, but it doesn't play out as.

• 14:30Speaker 04

  As well as people think.

• 14:31Speaker 03

  Well, there's a fallacy that's involved with this that's similar to gamblers where you hear about the people who win way more. They're way more vocal than those who lose. Nobody's going to go out there and talk about how terrible their weekend was in Vegas, or how terrible of a trade they made and how much money they lost. That usually kind of keep that part to themselves. What you hear more are the victories. So it can give this false sense that, oh, everybody's doing this. Everybody can make a bunch of money and it's easy. And that is just not the case. Again, over and over again, studies have shown investing in the broad market, trying not to

• 15:09Speaker 03

  beat benchmarks, that most people don't beat benchmarks. And consistently, it's a fool's errand if you're trying to beat the overall market. It's just, it's impossible. It's nearly impossible. There are few exceptions out there. But generally speaking, for, I've never met anybody who has been a successful day trader and have been able to do it over multiple business cycles. Because essentially, you just become prey to your own biases. Especially if you're just kind of your do it yourselfer, and you're just, you're running the show on your own, then just be very careful. And be careful. Following up, here's the message

• 15:51Speaker 03

  board, it says, following up, I meant, is it the best app to use? I read on the market sites that some other apps are better. For example, crypto.com, or Weebull. I've never heard of either of those. So, again, it's the best app to use, I think it's just going to be a personal preference. Do you have user interfaces that are much more easier? Robinhood, like you said, is a mass market product that's designed to make it as simple and easy to use for people?

• 16:21Speaker 04

  Yeah. I have nothing against Robinhood in that sense, if you're just using it to make those trades. Because I use Think or Swim personally, for my own self. It has, I use the desktop platform, as well as my, the app on my phone. But as far as it being a best app, it's just user preference. And again-

• 16:44Speaker 00

  It's kind of the same thing with-

• 16:45Speaker 04

  Right.

• 16:46Speaker 00

  Like a lot of people with sports use DraftKings, but there's like 20 other ones. I personally like Underground or, you know, there's so many damn apps for everything.

• 16:57Speaker 03

  Yeah.

• 16:58Speaker 00

  You know, but they all kind of do the same thing.

• 17:00Speaker 03

  We're a little partial, like we're not recommending that anybody use any of these apps or any of these tradings, but we are, would be partial to using companies that have a track record. And there are many companies out there that have been doing this for a long time. Fidelity being one of them, E-Trade, we've mentioned TD Ameritrade, who's now part of Schwab. So these are, these are companies that have, you know, an established track record. And, and so you're, you know, you can't, you know, generally I think you're gonna, the problem won't be the app with people. It's going to be what they're doing with the app more so than, hey, this is a good one.

• 17:45Speaker 03

  The other thing is if you're doing the free trades and you're really into trading where it really matters, you know, down to the cent of what you're, you gotta get, you have to have trades that are executed very accurately and quickly. You're not going to get that in a free app.

• 18:03Speaker 04

  Yeah. Assuming that he's looking at this or they're looking at this as an active trading platform, there might be some other platforms out there, but again, when it comes down to just that platform to utilize for simple trades or long-term trades.

• 18:22Speaker 03

  Yeah.

• 18:23Speaker 04

  Then it really just comes down to, to preference because I know even SoFi has their own

• 18:29Speaker 03

  Right.

• 18:29Speaker 04

  platform app or to utilize. So.

• 18:32Speaker 03

  Yeah. Well, there you have it. Great question. Great message. Keep them coming our way. We're going to take our first break of the day and we'll be right back.

• 18:39Speaker 00

  Need to get your financial fix on the go? If so, subscribe to the Money Wise Podcast and catch up on all past shows whenever and wherever you want.

• 18:55Speaker 03

  It's my student in with the Money Wise Show. I'm Jared Wait here with Frank Lee. Great messages and comments 661 396 1000. Talking about headlines today, just finished discussion on trading platforms and apps and things like that. Today, we're seeing markets reach new all time highs, at least the dumb Dow and the S and P 500. Reaching all time highs today, just two days before Thanksgiving 2024. Along with it, though, not everything is up. There's been a big sudden drop just in the last day with Bitcoin.

• 19:34Speaker 03

  I don't know if you've seen this, Frank, but Bitcoin lost about just today $200 billion in market capitalization.

• 19:45Speaker 04

  200 billion?

• 19:46Speaker 03

  Well, it dropped from almost $100,000 to around $90,000. I'm gonna post a 10% drop.

• 19:53Speaker 04

  Right.

• 19:54Speaker 03

  But that's, you know, $10,000 per coin. The crypto price correction wiped out about $200 billion from the combined 3.2 trillion dollar market. The biggest crypto being Bitcoin, followed by Ethereum. And now there's a bunch of others that are starting to come up. And now essentially what one of the things that may have sparked this was a leak that was revealed somewhere. I don't believe it's in the Wall Street, maybe in Wall Street Journal. Basically, somebody saying that there is going to be a crypto. Like earthquake is gonna hit.

• 20:34Speaker 03

  Crypto earthquake gonna hit next year had something to do with the convergence of the SEC approving something. And essentially there being some sort of big correction.

• 20:48Speaker 00

  And that happens, do I have to get under my desk?

• 20:51Speaker 03

  Yeah.

• 20:52Speaker 04

  Good one.

• 20:54Speaker 03

  Yeah, fortunately, it's made make believe, right? It's all crypto make believes is a little fantasy earthquake that could happen. This is the big problem with crypto is the, you know, the fundamentals on it are just very shaky.

• 21:08Speaker 04

  Well, with the SEC, there was that recent news of Gary Gensler stepping down as the head.

• 21:17Speaker 04

  Excuse me, head SEC, head of SEC.

• 21:20Speaker 03

  Oh, right.

• 21:21Speaker 04

  I wonder if, if they're talking about that and how that's correlated.

• 21:27Speaker 03

  You know, there's a lot happening because of the Trump trade, essentially. There's still Trump trade that's happening. You see it in crypto because of President Trump's positive stance towards cryptocurrencies. But there's other industries that are also potentially reacting to some of the words that are coming out of President Trump's mouth. And today and yesterday, big news and from him, at least through his social media outlet, is talking about a tariff that is not quite as dramatic as the size of tariff that he was saying on the campaign trail, but it's still pretty broad.

• 22:11Speaker 03

  It's 25, is it 25% Frank?

• 22:14Speaker 04

  Yeah, so on those tariffs, it was 10% on Chinese imports, 25% on goods from Mexico and Canada. And you're telling me how back then, when he was first elected into the office, he made that same promise or whatever it is and, and that backfired.

• 22:32Speaker 03

  It backfired and, you know, backfiring a little bit today because Wall Street sort of shook it off. Initially, Wall Street was, was, you know, a little taken off guard, I guess, by his words, but essentially, Wall Street shook it off, shook off this news. And I think it's in part because if you look at his rhetoric, President Trump's rhetoric during his first term was very anti NAFTA, which is the North American Free Trade Agreement. That, it was, it was an adjustment that was, he was proposing to NAFTA. And when he was elected and came out and gave the framework of what he was talking and what he was thinking of doing in terms of increasing tariffs, he threw in this idea

• 23:17Speaker 03

  of we're going to increase tariffs until you stop immigrants or weapons or drugs from coming across the border. So he's using, he's being very Open about using tariffs as a tool to push a political agenda, which is yeah, that's what that's what tariffs are for.

• 23:36Speaker 04

  Yeah.

• 23:36Speaker 03

  Yeah, that's that's what you do. I think where the disconnect is and where Wall Street, where Wall Street understands it and where corporations understand it is a tariff is paid by Americans. It's a tax that American consumers pay. It's not a tax that other countries pay. It's going to be paid by the people that are buying those things and that would be us. And so if you're talking about like in today's news, President Trump saying a 25% tariff on Canada and and Mexico, you immediately, what we saw today is a pullback in some of those auto manufacturers that are completely reliant on building these cars. I drive a truck right now that's half-built in Mexico and half-built in Texas and it's shipped back and forth.

• 24:20Speaker 03

  You know, if you start adding on these tariffs, well, it just doesn't work out.

• 24:24Speaker 04

  Yeah.

• 24:25Speaker 03

  For that manufacturer.

• 24:26Speaker 04

  Yeah, because then I think this sort of goes into the discussion of how Trump is trying to make US a manufacturing powerhouse, correct?

• 24:36Speaker 03

  Right.

• 24:37Speaker 04

  Like if you're putting these types of tariffs on on these countries, you're wanting, I understand like protecting a certain industry, like let's say the the automakers of putting a tariff on Chinese imports and you're wanting to protect the the manufacturing of the automakers. Maybe that's where he's trying to gear us into or?

• 25:01Speaker 03

  Or he's trying to, you know, just like today, he's threatening Canada and Mexico, not just with the terrorists, but threatening to for them to get in order their immigration policies, their border protection policies. So he's throwing in other parts of his political agenda and using this economic tool. It's really a medieval tool, you know, to to try to enforce these because you're playing around with free market economics and that that is a something that doesn't have a lot of leeway. So for example, going back.

• 25:36Speaker 03

  Back to that his NAFTA proposal, yeah, he ended up, once he released the framework, he got so much pushback from the industries that it was, you know, a week or 10 days later, you can kind of scaled way back what that is. And now we're kind of seeing a similar move. He's saying you went from, I think, a 60% tariff on China to now 10%. Well, that's a dramatic drop there. Maybe it's because he feels like he wants to enforce more political will to our neighbors here in North America. But it's a, it's a, it's a big gamble because a tariff is nothing but a tax and it's a tax on the consumer. And that's an inflationary tool. All that does is create a higher cost.

• 26:20Speaker 03

  We all want to have more localized manufacturing where it makes sense, I believe. We don't want to be dependent on, on other countries for real critical manufacturing items and, and, and certain technologies. I'm all for that, but I'm also for us not, you know, putting too much money into manufacturing a T-shirt factory when, you know, T-shirts can be made in other places for a lot better. I understand we don't want eight-year-olds making T-shirts, but you know, we also don't want, you know, we can't, we also can't afford to pay 28-year-olds $28 an hour to make a T-shirt.

• 27:00Speaker 03

  You know, I think people, we have to find, we have to find some better ways to be able to have, you know, promote humanitarian efforts. But also, you know, lean into the power that the free market economy can provide. Cause that is what I believe where a lot of our hope is to be able to get out of the mess that we've created for ourselves on this planet. We've got to be able to use these strong forces in an efficient way. Tariffs is not the way to do that, in my opinion. But we'll find out. Part of the consequence is not just in auto manufacturers that are reeling from the potential tariff increase. You also have constellation brands. I don't know if you saw this in today's headlines. Oh, no.

• 27:41Speaker 03

  Their stock down about three and a half percent today after President-elect Donald Trump announcing plans. For the 25% Mexican import. Well, Mexico, we import Modelo and Corona Constellation Brands, which owns those, account for about 86% of their sales is beer that is imported from Mexico. I'm a big fan of both of those beers, Modelo and Corona.

• 28:05Speaker 04

  Yeah, Modelo really hit off its popularity, what, in the past few years?

• 28:10Speaker 03

  Yeah.

• 28:11Speaker 04

  Cause that just came out of nowhere.

• 28:12Speaker 03

  Right.

• 28:13Speaker 04

  I think it it beat, what was the leading Budweiser or Bud Light?

• 28:17Speaker 03

  Bud Light or Coors?

• 28:18Speaker 04

  Yeah, one of those.

• 28:20Speaker 03

  Yeah.

• 28:20Speaker 04

  I know it it it beat in, man, I'm blinking on on.

• 28:26Speaker 03

  Oh, probably Anheuser Busch.

• 28:28Speaker 04

  Yeah.

• 28:28Speaker 03

  Yeah.

• 28:30Speaker 04

  But it was the most popular drink, or I think is right now.

• 28:33Speaker 03

  Yes, I I know it was way up there and it also got caught up and benefited from the, was it? I think it was a Bud Light controversy where it was, it was, do you remember, Stephen? I think it was Kid Rock got in an argument, like Bud Light was too woke. And then ended up like, you know, on YouTube, shooting the Bud Light cans. But then there was a pushback, the way that Bud Light handled it backfired. Like Bud Light was trying to still appease the left.

• 29:05Speaker 00

  He was boycotting Bud Light a while back. And then he came back out and said, I'm done, I'm done.

• 29:12Speaker 03

  Yeah, he went right back to Bud Light. Yeah.

• 29:16Speaker 03

  It was all marketing. It seems like with these beers, it's all just, you know, how much they're putting in market. I don't think Modelo's like recipe has changed much. Like maybe the cans a little bit different. They added the tin foil, you know, the the gold foil on the top or whatever. But come on, you know, it's beer, it's beer. All right, we're going to take a break right now. We're Money Wise. We'll be back after this quick break.

• 29:35Speaker 00

  Are you curious to learn more about how you can be money wise? Check out the Money Wise website at MoneyWiseGuys.com to get more info about what we do and how we can help you.

• 29:55Speaker 03

  Welcome to the Money Wise Show, a place where you can come to be money wise. We have so many great taglines. One of these days we'll get organized.

• 30:06Speaker 04

  I like the tagline.

• 30:08Speaker 03

  Yeah, me too.

• 30:09Speaker 00

  We're working on a jingle though.

• 30:10Speaker 03

  Oh yeah, I've been working on a jingle for a few months as I'm learning.

• 30:15Speaker 04

  Is this gonna be part of the new Money Wise TikTok?

• 30:20Speaker 03

  Speaking of TikTok, here's a message. It says Kern County is big in giving and I know Money Wise helps out a lot all over town. I'm an assistant over at the mission and just wanted to let your listeners know that if they'd like to donate or help out at the mission, we are still in need of frozen turkeys, eggs, gravy, milk, potatoes, butter, brown sugar, and much more. Happy Thanksgiving and big fan of your show. God bless Bakersfield. And God bless you. That great, great message. We're huge fans of the mission. Does an amazing work here.

• 30:54Speaker 04

  Yeah, yeah, exactly. And our team is part of the give back for the mission. So I know we've done a couple events, or not events, but activities helping out at the kitchen. So cutting vegetables, getting meals prepped for them. And I think we're trying to look at other opportunities as well because there's plenty of activities to do to help out at the mission. So if you guys have time, definitely look out or reach out and see if you guys can donate the items.

• 31:25Speaker 03

  Yeah, so again, we're talking about the mission here in Bakersfield. A great cause. Thank you listener for sending that in. If you can help out, they're in need of frozen turkeys, eggs, gravy, milk, potatoes, butter, brown sugar, and much more. Of course, they can always use volunteers. Yeah, Frank, you're part of a... Money Wise does, annually, we have done now for over 10 years where during business hours, either as a group or in broken up as groups, we sponsor...

• 31:58Speaker 03

  Local nonprofits or essentially go in and either volunteer or give donations or give cash or learn, get educated on what their drive, what their mission is. And this has been a big part of who MoneyWise is, is not only to help us give back to the community, but it really keeps us, I think, grounded in what's really important in life. And why, you know, we pride ourselves in being a community-based wealth management firm, and that involves, you know, giving back. What's the point of having, of accumulating money and wealth and assets if you don't do anything with it?

• 32:36Speaker 04

  Right.

• 32:36Speaker 03

  And there's nothing better to do with what you've been given than to give back, give back to those who are in need, especially during this time.

• 32:44Speaker 04

  Exactly.

• 32:45Speaker 03

  A great reminder.

• 32:46Speaker 04

  Yeah.

• 32:46Speaker 03

  We've got another message here, Frank, and it's kind of, you know, we have somebody who's actively listening, so we love this. I'm going to get right to it. It says, "I know you guys can't tell people where to put their money, but with crypto having a huge drop, isn't this the best time to jump in?" So, yeah, we were talking about this just during the break, Frank.

• 33:06Speaker 04

  Yeah.

• 33:06Speaker 03

  Share what you're saying.

• 33:08Speaker 04

  Well, I mean, if this, again, goes back to the whole depends, right? It depends, it depends. But the reason why we say this is because what is your value proposition of crypto? What's your belief in it? You know, other than crypto, like Microsoft, Apple, Google, Amazon, like, we believe that this has, these companies have future value, hence why we invest in, or even just the market in general, right? Because there's, there's going to be some future value in this. So when you're asking whether it's the right time or not, that's irrelevant, because we can't time the market, we can only, what was the saying?

• 33:51Speaker 03

  Have time in.

• 33:52Speaker 04

  Have time in the market, yes.

• 33:53Speaker 03

  Yeah.

• 33:54Speaker 04

  So if you're asking about it now, then I think you're in the wrong markets.

• 34:01Speaker 03

  Right.

• 34:01Speaker 04

  You know, if you're, if you're a believer of crypto, then, you know, you should... Do what you think is best.

• 34:09Speaker 03

  Yeah, I mean, it's believers. This is this is kind of the running joke now is that, you know, crypto, people who are into crypto are basically part of a cult. I mean, their behavior is very cult like where it's, you know, I'm going to ignore any outside influence. I bought into a worldview that, you know, that I'm not going to agree to any the outside. If you are all in on crypto, you are an outlier in terms of the, you know, general, the general investing public and those that are in the know. Now, that doesn't mean that people have been wrong. Nobody's, nobody's always right in terms of the overall

• 34:50Speaker 03

  general investor world. But the, those who consider the academic approach to investing, which is what kind of what you mentioned, where it, there is, it comes back down to the fundamentals of the company. Does it make a good product or offer a good service that brings value to a consumer and to the shareholder? And are they, do they have the management and the processes and the scale in place to continue to do that on an ongoing basis? Are they investing in research and development to create whatever the next new thing is going

• 35:27Speaker 03

  to be is very different than the cryptocurrency world, which is you, you have to take several leaps of faith down the road in the future to, to, to envision and see a world where cryptocurrency has taken over. And now it is worth what some people are saying is going to be 30 times more than what its current value is. So we see cryptocurrency go to $100,000, drop back down to $90,000. What does that mean? I don't know. It means maybe that a bunch of people are some, for some reason, interested in it, but it's not because of necessarily we know what the fundamental value is, or because we know what the future

• 36:12Speaker 03

  of it is going to be. You have regulatory risks. You have the most extreme of political risks involved in this investment. Which is why it's referred to rat poison squared. And why, you know, most of those that have been in the investment world, myself included, and money wise, and our investment philosophy, is that we wouldn't touch it with a 10-foot pole if you're looking at it in terms of a true legitimate investment. You could look at it as pure speculation, and there's maybe a place for it in a very small percentage of your portfolio as some sort of section of your alternatives, or maybe it's a little bit of your fun money that you want to go and trade.

• 36:55Speaker 03

  It's almost like gambling, you know. Casinos have figured out this a long time ago. Heck, Chuck E. Cheese figured this out. Go to John's Incredible Pizza, it's the capital of it, where you get people to trade in real dollars for tickets, or now they give you a card where you get your credits on it. Now you're spending credits and not dollars. And I think that there's a lot of this psychologically in play with investors when it comes to cryptocurrency. It's like, it's not real dollars, but they're real dollars that are going into it, but then from there on off, it's just like unicorn dollars. And we're going to see what happens when the world all of a sudden adopts the unicorn philosophy, and the central banks have all shifted, and we've made this massive change.

• 37:38Speaker 03

  And in the meantime, you've now made a bunch of money just sitting there and holding this thing. I don't know. It's just, I think this is no different than all of the other schemes that have come about, that where this might be different is how it plays out in terms of the underlying technology, the blockchain technology, the decentralized ledger. That's fantastic. Let's focus on how that can be implemented, but that's going to be implemented by the companies that are already, the central banks, and the companies, multinational corporations and banks that are all kind of running that show. I would love for us to see a swap and a change in the direction of the world order. I get that.

• 38:23Speaker 03

  There's so much of the world order that's happening that nobody is happy about, and we need to have some changes in that. I just have not, I've not seen, I just can't see the unicorn. I can't believe in the unicorn yet, Frank. Did I cover it? Yeah. Did we cover it?

• 38:40Speaker 00

  Did you scare him?

• 38:43Speaker 03

  It's this delicate balance of, I don't want somebody to feel dumb. I mean, we hear it money-wise, personally, a lot of us have some ownership in cryptocurrency. But I can promise you, it's not a huge percentage of anybody's assets. It's nothing that would make a significant difference in our lives if this thing were to turn south tomorrow and go from $90,000 to a dollar. For most of us, it wouldn't sting a whole lot. That's because we're just playing with it and we're viewing it as sort of a play thing, but not as something that we would recommend if you're trying to construct a long-term investment portfolio. It's just not there. Although, they're fighting tooth and nail to make this more and more legitimate with

• 39:27Speaker 03

  ETFs, exchange-traded funds that are out and available now to make it easier for people to own it. It still doesn't make it a legitimate investment. I mean, you can buy, there's publicly traded companies that are on the market right now that don't have any value, but are worth billions of dollars. But at the bottom of it, there's no revenues. In fact, their forward earnings are negative. But they're worth billions of dollars? What is that about? Did we not learn our lesson from the dot-com bubble bursting? Of like, you can't, it's so easy for us to fall prey to this idea of making it rich quick and happen to be lucky that you picked that one company that was worth 30 cents

• 40:12Speaker 03

  and now it's worth 30 bucks and you made a billion dollars. That happens, but it's, your odds are much greater of getting struck by lightning or some other odd thing that can happen to you. Increase your odds by investing in ways like in yourself, invest in your own human capital first. Your own ability to make more money is going to be far more effective than you trying to learn how to day trade. Maybe you'll be successful at it, but learn how to actually make money doing something, producing something, working something.

• 40:49Speaker 04

  Yeah, well, I think you touched on a good point. It's like even for me with my own day trading, or not day trading, but just trading activities, that's not something I see myself doing full time. That's something to where as, like you say, as a hobby, this is something where my, my job as, as a financial advisor or whatever it was within in the tech industry or in healthcare, that's my full-time job. This is, this is something to where I don't want to consume myself with and, and just get myself in a lot of trouble doing. It's fun, but again-

• 41:25Speaker 03

  It's like your fantasy football.

• 41:27Speaker 04

  Yeah, yeah, yeah, yeah. Let's do that. Yeah.

• 41:29Speaker 03

  Don't get too involved in it.

• 41:31Speaker 04

  Yeah, yeah.

• 41:32Speaker 03

  I, I've talked about it on this show for years that I've, anybody who I've met who have been a day trader where they're speculating and they're just down in the basement, day in and day out. After a few years, their health is terrible, they're stressed out, they're just, they're a little, what's the word, like, um, just secluded and- Eccentric? Yeah, eccentric. And it's because they've created this, they've had to create this world to push back against the biases that are involved in the games that you play mentally. Cause very few people are disciplined to say, this is my investment strategy. I'm going to stick to it. Like you have a strategy. Like when you trade on the side, it's, it's, you know what you're doing and why you're doing it. It's not just, well, I wonder what happens if I buy this option.

• 42:16Speaker 03

  I wonder what happens if I do this. You know, you're going, no, okay, I'm going to try this. I know where my limits are. I know where my, my stop losses are. You have all of these things set in place so that you're not going to, you're, you're just kind of, you feel like you know, you know what you're doing at least.

• 42:31Speaker 04

  Exactly. And then to, you know, the whole point about that is risk management, you know? Most often, people focus on the capital gains, the 10, 20, 30, 50, 100% returns. Like, they focus on that when they should be focusing 90% of their time on risk management.

• 42:50Speaker 03

  Right.

• 42:51Speaker 04

  You know, like, that's, you shouldn't be worried about if I can 2X this, or if I can 3X this. Like, no, that's, that's not, that's not how to do it.

• 42:58Speaker 03

  It's the, it's the common misconception about what risk is. People that are risk tolerant or risk averse usually haven't had a proper discussion, usually with an investment advisor, about what risk is. You know, we do this here, we're talking about like our nitrogen approach and the different tools that we have. Or any good risk tolerance, uh, practice, uh, method and discussion will usually, if you're work, it's almost like therapy, but if you're using that with another person and individual, it really shifts people's perception of what risk is. And you're right, it gives a healthier balance towards people just thinking about, oh, I'm just focused on growth, I'm just, I'm, you know, I'm pure thinking about growth here.

• 43:44Speaker 03

  I'm not thinking about, you know, value, I'm not thinking about any of these other, other ideas. And you're generally, you're gonna miss out on some opportunity if you don't think of it that way.

• 43:55Speaker 04

  Exactly. I'd rather think of it as in like, oh, like, yeah, I only made 8% over the year, rather than, oh, I lost 50%.

• 44:03Speaker 03

  Yeah.

• 44:04Speaker 04

  It's like, which one do you want?

• 44:06Speaker 03

  Exactly.

• 44:06Speaker 04

  You know?

• 44:07Speaker 03

  Yeah, it's like, well, eight, you know, hey, some, you could, I've heard people say, oh, I've lost 8%. And the answer is, wow, that's fantastic, that's great. Like, that's just as rational as somebody saying, I've made 8%. And you go, well, that's terrible. It's, well, terrible compared to what? Or great compared to what?

• 44:29Speaker 04

  Yeah.

• 44:29Speaker 03

  And, and there, for example, if you lost 8% and the overall market was down 50%, you killed it. Right? But how many discussions have we had over the years with somebody during a down market? And they're, they're, they don't feel that, even though it's like, you just killed it. You just killed the market. What do you mean I killed it? I lost money. No, you you gotta lose money every once in a while. It's not everything's not going to go straight up and look at how little you lost. How much you were to manage that risk on the downside and participate up on the upside. That's that's what you want. You want to got to manage both of those things. There's no such thing as a free lunch. There's no way to disconnect the risk and reward relationship. Everybody wants to have this incredible reward without any of the risks, right?

• 45:14Speaker 03

  They're not willing to take the risk or they want to have that they they just they want to have their cake and eat it too.

• 45:18Speaker 04

  It's the whole zero sum game theory. It's like there's there's got to be winners and losers, but your odds are greater when you're in it for the long haul.

• 45:28Speaker 03

  That's right. Yeah. Here's some listener questions or comments. I agree with you, but wasn't Amazon once worth billions? Despite never having made a dollar in profit is a perfect example of that. So Amazon went nearly 20 years, yeah, being worth billions and not making a profit. But what did they have? They were doing something. They were building warehouses. They were building a delivery system. They were they were buying an airline company to be able to move these things around. They were investing in automation. They were investing in incredibly complex web server, online server, AWS.

• 46:10Speaker 03

  They're doing all of these things where it was like, okay, it was a little bit more is certainly still a gamble. But you were looking beyond just the fact that they were losing money. There's other metrics that can be played. Can you go in there?

• 46:25Speaker 04

  So when you're looking at a company based value, it's like, what is that? What's the value? You know, investing in this, like, what are they going to bring? Yeah. So I think that's where we the economy is with that and then crypto.

• 46:37Speaker 03

  Yeah. And, you know, of course, your your your bank, there there is a whole sector of investors that specialize just in in growth companies or just in tech companies. So tech is the world where this happens the most, where people are banking on or tech or biomedical. Or pharmaceutical, where people are banking on a breakthrough technology of some kind that is then going to open up and dominate a market. Right? It happened just today. There's some weight loss drug by some pharmaceutical company gets a bad, you know,

• 47:12Speaker 03

  release on the impact of weight loss and all of a sudden stock dumps, right? But it could have gone the other way. Oh, it's a new breakthrough drug. People can lose weight, blah, blah, blah. Yeah, there's, there's gamble, there's risk involved when going with this, but there's ways that you can spread out that risk. So you can diversify among not just the types of companies, whether it's a growth company or a value company, but where it's located, what country it's located in, what sector it's in. All of those things can go into play. Man, that's great. Great discussion, Frank.

• 47:45Speaker 04

  Yeah, good discussions.

• 47:46Speaker 03

  Yeah, really, really appreciate our listeners, those who are listening and giving comments and questions. Keep them coming our way. You can do it 24/7. Find out more about us at MoneyWiseGuys.com. We're going to take our final break. This is it. We're done for the day. Be smart, be safe and be money wise.

• 48:07Speaker 02

  Securities offered through SCF Securities, Inc., member FINRA/SIPC. Investment advisory services offered through SCF Investment Advisors, Inc. SCF Securities, Inc. and MoneyWise Wealth Management are independently owned and operated.