1,379% Return in 3 years | Interview with David Ryan | 3X US Investing Champion

[Music] hello everyone welcome back to the trail line podcast i'm your host richard moglin joining us today is a very special guest david ryan david is extremely experienced investor and trader and was profiled in jack schwager's market wizards along with his mentor william o'neill he also won the us investing championship for three straight years in 1985 86 and 87 with triple digit returns each year uh david thank you so much for taking the time to speak with me today and uh welcome it's truly an honor okay thank you for for having me on my pleasure

uh so to start things off i always think it's really interesting to hear about people's backgrounds and how you first got interested in the stock market and uh maybe even purchase your first share of a stock so yeah could you talk tell us a little bit about your journey and and where it all began okay well it actually really began around the dinner table uh and this is you know this dates me but back in the late probably mid to late 60s my dad would come home he developed real estate and we would sit around

the dinner table and he would say oh i just bought a new stock for you guys for your college education and he said i i bought you uh some shares in this new concept in in food or fast food and he said i bought you some kentucky fried chicken and so that was one of the first fast food uh stocks or you would say i came home and i bought um i bought some disney for you and at that time all there was was disneyland there was no disney world and the wonderful world of disney

which would be on at i think seven o'clock on sunday night so we would watch that as kids all the time so things like that he was actually very good in in selecting themes he was it's extremely early on cable television stocks i mean people don't even talk about cable anymore um and he's just he just reads and he thinks of these themes that he actually gets aboard and he has some nice runs so that's where it first started but he would bring home the you know the evening newspaper that's where you'd only get quotes

at the time and i remember going through and i was looking through the different quotes and i found a stock trading at a dollar and i asked my dad i said look if i go into my room open my drawer get a dollar out of my drawer can we buy you know a share in the stock said it doesn't work that way we got to do some research we got to find some companies that that are doing well and a few nights later he came home with wall street journal there was an article on a

company called ward's foods they met made and you can probably still find these out there bit of honey and chunky candy bars and um so i thought you know at that time when i was probably i was in my early teens going to junior high school and i bought 10 shares of wards foods at 10 i think a 10 and a quarter i still have the confirm on my wall that uh that i bought it and um i still remember standing out in front of the student store where kids were lining up to get stuff

snacks between at lunch time and i'd said you got to buy these two candy bars it never worked out the stock went from 12 or so 10 down to 2 but i became fascinated of why my stock went down and i saw other stocks that kept on going up so i mean even i mean this is very strange for someone who was in junior high and then high school getting trial subscriptions to um to to actually daily graphs uh which is the precursor to markets market smiths um uh and then also value line i if

i haven't seen a value line in a long time but i know value line i would get trials to that and just fascinated so that's that's where that's where it all all started and um and then but and then i actually worked then i graduated ucla and i had a friend who was on this the floor of the p coast or the pacifico stock exchange he got me as a job as a runner and that was literally uh it was actually shaped like a circle and there would be specialists making markets in stocks they would

make it they would do a transact piece of paper i'd take the piece of paper and i'd walk it to someone who would teletype it in and that would go across the board i thought i was going to be after a few months picked up by one of these specialists and be an assistant and learn how to trade through them and that never never happened and so i started you know i was only there for about three months but then i started thinking why don't i get a job at the company that i already get

products from and i was getting daily graphs and so i walked right up the front stairs to william o'neal and company and went to the receptionist and said is there anybody i can talk to about a part-time job an internship anything i'll work for free all i want to do is learn from this guy william o'neill who i've heard has done extremely well so i actually talked to his assistant for about a half an hour right after that and then i had an interview with uh with bill the very next day wow and i don't

even remember what i i hopefully i was wearing a jacket and a tie but i no one had ever trained tested you know or coached me on how to go through an interview but it turned out that i liked some of the stocks that they were recommending so he offered me a part-time job i did that for a few months and then it worked into a full-time job and i ended up staying for 17 years so that's kind of the short quick story of how i got started that's awesome and uh going back to the

the candy company being your your first company that you owned that's kind of uh almost the genesis of your idea that you want to look around the world around you to find ideas find companies i know you've said that in previous interviews and often it's it's the products that we use ourselves that are going to go out and be those true market leaders yeah and and i i think people they i think people make the market so complicated it really comes down to two things one what are you doing with your life what are you

buying were you eating out where's your restaurants what car do you drive what phone do you use what are your friends talking about and then just matching up those concepts right with some rules is the stock in an uptrend does it have good earnings you combine those two things and and then they also have some sell rules and you should be able to find some very very good stocks because just think of it you're going to be trying to find the best product at the best price or the best service at the best price and

millions of other people are probably very similar to you and they'll be doing the same thing so you're going to be you're going to be finding some great names and as long as as long as the tax structure is uh rewards innovation and entrepreneurship these companies are just going to keep on coming right and you've called it the treasure hunt that that's the name of your chapter and market wizards the yeah yeah i mean the whole thing it's a game it's like what's going to be the next concept the next company that's going to do

really really well and that's to to me that's why it's it's it's fun it's ongoing um and it's yeah it's just just a lot of fun 100 and uh going back to your very early days at william o'neill and company um tell us about kind of how you built a relationship with bill o'neil what kind of mentor was he uh was he strict with you tell me a little bit about those interpersonal relationships and and yeah how you basically learned from him and and developed your style okay well it it wasn't as you might think

it would be where where i came in and then he would just sit down with me every day no i mean i was just a uh a peon i was just i i was working in the institutional department which was a great experience because i was around probably 15 15 men who had been men and women who had been in the markets and talking to large institutions fidelity all these different mutual funds and banks and and and um and i got to ask them questions and and some of them were good in the market a

lot of them were were okay but most of the time i was filing i was making charts on sales projections or how well you know everybody's doing and things like that it wasn't until um until i actually won a us investing championships that i actually started getting attention from william o'neill and was actually able to go in they would have a monday morning sales meeting where they would go over their ideas his ideas for the week and what he wanted to do and things like that and you know as as a you know if i

would say of i mean that was a good thing but it is it was actually a little bit of a fault in terms of hiring people um with with o'neill because he would place so much emphasis on how well you could pick stocks that sometimes he would look past you know other things so so that's you know that was a a good thing that i did well in the market but um so uh yeah so that's then i then eventually i started giving him ideas for for their institutional product uh recommendations and then started working

more closely with them uh as i started doing that and then i guess i'm not sure if it was an 87 or 86 i think it was at 87 where he actually gave me some of the company's money to invest and uh and would be rewarded if i made money in that account so i was i guess the first pm or portfolio manager within the company and and i guess they went on to have a lot more after after i left or so absolutely and uh going back to how you learned obviously you learned from

the other people institutional sales but were there any books that you read any other top traders that really influenced you and helped you along your path yeah you know so much of it was you know it was i i don't want to say it was self-taught but um yeah the institutional salesmen they didn't you know i mean they it just kind of gave me an idea of what was going on out there but um and then o'neil hadn't written the book yet i mean that book was not for at least another three or four years

i still have a copy of like the original the original which was just a of pieces of paper with a binding on it and had no cover and things like that and so so and he he rarely gave you know i mean every once in a while he would kind of give an in in-house kind of can slim type of talk um so it really was it was i i guess i learned from they had books of their recommendations it's called new stock market ideas and i would go through and i would start i would

start looking at see where they would make the recommendation and then where it was taken out and so i would learn that from that but my biggest learning experience was from studying my own mistakes right because uh ice in 1982 i had an account that was at 30 000 i think i had 30 000 and and then you know the market exploded in august of 82 and i had you know had a great move uh and i doubled the account well it was just i was just part of a huge bull market it wasn't really

all my skill and i really didn't know what i was doing and and so i was already at the company for a year and then then we got into a horrible market or it just growth stopped working nothing was working i started getting chopped up completely and that account went from 16 sorry 60 000 down to 16 000 so i completely i mean that's that's pretty much blowing up i finally sat down one weekend and i went through every single stock i bought for the prior year and found out what i was doing wrong and

i just found out that i there was a pattern that just kept on showing up over and over and over again it was i was buying extended stocks so when i cut that when i stopped doing that i finally said okay i'm gonna i'm i'm only gonna buy exactly at the buy point exactly where the stock was coming out into new highs or above the majority of the base right i'm going to look for the right characteristics and from that point on that's i mean i think very shortly after that i got my first great

winner and it was a stock called uh it was actually called wards which is very similar towards foods but wards incorporated which was an electronic retailer which then changed its name to circuit city there you go and um and so had a great win out of that and then then just i was so focused i wasn't buying pullbacks i wasn't buying extended stocks i was buying exactly right i didn't care what the rest of the market looked like and so i was buying one setup and one setup only and that's where i just started hitting

one after another after another focusing on one specific setup and just trying to master that right i mean you try to do a number of different things you try to drive you try to buy breakouts and pull backs and all sorts of different things or you start mixing styles that's where you can get into trouble and you just want to try to simplify the whole thing absolutely and how would you describe your own personal uh time frame like our would you classify yourself as a swing trader position trader and could you give kind of people

a sense of your average gain average loss and kind of holding periods for both winners and losers um you know i haven't calculated it in it in a while but i when i buy a stock i want to stay in that stock as long as i possibly can i do not like going in and out in and out you have to make so many decisions whereas i i find a good stock that has all the characteristics i want to keep in this thing as long as it keeps on going and if it's if it's if

it's only three weeks that's fine if it's six months if it's a year that that'll that'll be even better because i always found the stocks usually that i held the longest were the ones where i had my biggest gains on them um when i was um and so well so then in so in terms of time frames i don't know exactly what my average holding period is a lot of it depends on the market right depends on what stocks are working in the market sometimes you know technology can be very volatile and so those are

a little bit faster but things like retailers that can be a little slower and steady sometimes they can hold those a lot longer so it uh it all depends i've always said that i you know even if you have a number of losers in a year if you keep those small but you have one two three really nice gains you should do extremely well in the market absolutely and going back to your us investing championship wins um how how is it different competing in a championship versus your own personal training are you are you taking

up a different approach or are you are you still doing the same thing that you would use today to trade your own account um well i think in in something like that you you want to turn over a little bit faster and always keep the money moving and i think when i was doing when i was investing in those uh in those competitions i would be much more i would have fewer positions i would probably have three or four positions name four or five positions and then every starting position would be at least 10 percent

and then if the stock started doing well i would quickly get to a 20 position and then if it had a really nice run then i would sell that thing down once it looked like it was about to stall so that was probably shorter term and i would be just constantly moving the money from one horse to the next horse to the next horse and and getting those getting those gains the interesting thing about that is that though after three years of doing i i and i also entered a fourth year in a row and

there i was so focused on the results that i started uh i started getting away from from what i had done well i was more focused on the results and not enacting the strategy the way it should be right and so i started i you know i i would be taking two big big of a position and so i would have too much in any one stock and i wouldn't give it enough room and so actually the fourth year i was flat and then the fifth year i actually came in second so um so that's

i that's just sort of like the end of the story other than the three times that i won that that yes you can get so focused on the results that you don't do what you should be doing right and as somebody who's been doing this for decades you can answer this question how how is it different today trading versus back in the 80s back in the 90s um well i think that you know the the prices of stocks i mean i remember well most of the time before that before probably the year 2000 is that

there were very few stocks that ever traded over 100 a share now you've got all these stocks that are trading at ridiculous prices and they're moving you know they're moving 20 points in a day or 50 points it's just it's i wish they would split them so there would be just a it just it just gets it's still hard to get used to stocks making such uh such big moves um but in terms of uh you know in terms of how it's really different you know i i i am a big believer in well i

mean if you want to at least step back one second you know we're talking about investment books and things like that my my biggest investment uh influence is actually and this would be a shock because no one ever talks about this is is the bible god's word there is more investment advice in there than any book ever written in terms of in terms of just controlling your emotions fear and greed and discipline and and probably one thing that i base all my um uh almost you know all my investment uh uh criteria on is is

a is a passage found in in ecclesiastes and it's something that a lot of people have heard before ecclesiastes 1 9 it talks about there's nothing new under the sun what was before it has has already you know it will not you know you think things are new but it's already existed before right and so so when you talk about well you know how were things back in the 80s or in in these investing championships i'm buying the exact same stocks the same characteristics now as i did then and you can look back at charts

from the i mean i was looking at a bethlehem steel chart in 1915 yeah had all the exact same characteristics as as a lot of these stocks do today so there's really nothing new it just repeats over and over again and the only thing that's different is the name at the top of the chart because they have very very similar characteristics and those are the this the canceling characteristics yes earning sales yeah exactly that's you know the the things the the things that um i i you know as i find i find you know p

everybody's looking for truth these days where can i what what is true well god's word to me is true and it's been true for 2000 years and i say the same thing about what o'neill laid down i think what he's laid down and the characteristics he originally found is really the truth of what that's how the market works so there's of so many parallels between the two what he's discovered and what god laid down is that is that this is how stocks they operate if a company has great earnings or a great product they're going

to have great earnings people are going to want to own that company right and stock price is going to go up i don't know how that's going to how that's going to change unless there are you know unless again um tax reasons clamps down on entrepreneurship and we don't have any new products and nothing new was made so um so anyway that's i you know i find truth in really one in terms of the market and how you should act and and how you should trade in the market and then how you should believe and

how you should live your life right right and um going back a little bit to your time at o'neill and and being the chief market strategist uh what are kind of a few key things that o'neill would kind of repeat what are some keys that he passed on to you about how to trade and and how to manage your emotions and manage positions um you know i actually i i spoke for a a conference uh i think it was the last i don't know what they called it the the last or last investment um seminar

that that uh williams yeah that they gave that was a few years ago in in santa monica and actually i wrote down all these things and i had um and so if i could just i'll just quickly just go through what i've i got i mean you know he's always said he's always it was an optimist he's never never forget that this is the greatest country in the world and you have just so much opportunity he would say that all the time he would always stay positive and he would also stay he would stay humble

um and you know even against unrealistic odds against going against the wall street journal uh you know he he promoted a newspaper and and was fairly successful that with that newspaper um even up against incredible odds and um and then a few other things he said always know the direction of the economy if there's underlying strength to the economy that usually corresponds with a with a good market be flexible to change your market stance is something that he was a master at doing when uh i just remember there would be bear markets that go on

for months and months and months and everybody's in a bad mood or no one can make any money and all of a sudden he gets his follow-through day and he's in there buying stocks while everybody's just sitting around saying well it's such a bad market i can't you know what and he's actually getting fully invested and everybody's else is sitting on their hands so so it's good to be flexible details are really important that's something he'd stressed in the products that we put out at the company and uh and in the same thing in in

reading a chart and looking at the characteristics of a stock the littlest detail can make a big difference between a stock being just an okay stock and something being a gigantic uh winner um another thing you never need a manual to the most successful products ever and and you know he he's he gave the example of the car you know you either push the button now or just turn the key and step on the gas and off you go you don't need a manual right uh and that's the same way when when i remember in

the the mid to late 1890s we started coming out with online products and i was one of the first ones to sit down with a programmer and bloomberg was it was out at the time and but we wanted to put everything online and i just kept on telling the guy we don't want to have anybody to know keystrokes or any backslash things that i think a bloomberg terminal you need to work with i said uh maybe this is an insult but i said develop develop it it for the village idiot so anybody can sit down

anybody without any technical know-how and just be able to point and click making intuitive yeah very easy you don't need to read the manual and and what's going on um so then always do things the legal way buy the book never cut corners because you especially when you're working for a firm or you're in the business there's um there's also compliance that you have to go along with you never want to get into trouble with that stuff keep it simple bill only looked at weekly charts he wouldn't look at daily charts not until i think

i showed him started showing him daily charts but he would always concentrate on the weekly and wouldn't go back and forth but the weekly actually just takes out a lot of noise that's going on intraday and inter-week in the market um and then always challenge the common wisdom of wall street um and um you know you know the common there's just a lot of common fallacies in the market that people keep on repeating over and over again and he would always challenge that and then the last thing was work hard and remember what's important you

know success comes through hard work um and uh but i you know i i add on to that is that don't work i mean work hard but there are things that are more important than your performance in the market because i've seen so many tragedies in the markets over 40 years i've seen people commit suicide i've seen people have families break up marriages break up because it becomes so important and it's over overriding it's it's not worth it um so keep a perspective of what's really i i go faith family and friends are the three

things that are really important out there absolutely that's well put um and and being in the industry for 40 years i'm sure you've had your ups and downs and dealt with losses how do you get out of a rut when you're you're not trading to the best of your ability and and nothing seems to be going right what kind of steps do you take to kind of uh try to turn things around and get back to your a-game uh i just if if i've had a number of stocks and let's say it's three four five

stocks in a row that i'm buying and they're just not working out uh then i just immediately start slowing down i i don't take as big of a positions in the stocks the stocks that i'm buying smaller positions and i just wait until things start working and then i start increasing my positions because if if if things aren't working either even either the market's getting tough and it's about to go into a downtrend or a choppy period yeah um or you're just not picking the right stocks and and so why keep on forcing more money

and taking bigger positions and saying well i gotta make it back i get it it's really just taking it one stock at a time and try to get that one winner and then get another one and then start getting that confidence back and increasing the size of the the positions absolutely and um do you have any advice for for mindset or or risk management for for younger shares out there who just got started in the in the past few years um if they're just getting started and you know they even if you've had a few

years of experience i mean i mean just like i i think about somebody who just started um you know since uh march of 2020 and all they've seen is mostly an up market with very few corrections uh that that type of market and even the market you know today is to me is not it comes along once every 20 years this happened in 2000 1999 and 2000 and it's happened again in 2020 through 2021 there are i mean a lot of people don't know what a bear market is and they just think it's just one

stock after another and we all jump aboard this one and everybody's talking about this one but it's uh they're going to be bad markets that come along and if you really don't have that much experience and you've only been in for a few years i would actually take a majority of your money and put it somewhere else where you can't trade with it because sooner or later we're going to get into a bad market and you're going to lose back probably a lot of of what you've made because you you've had just the experience of

it everything only goes up and you don't really have to sell because you'll get bailed out eventually right so it's it to me it's not really i mean yeah again it sooner or later it's it's going to happen we just have an event of so much liquidity i mean the amount of money that the fed has pushed into the economy has found its way into the market and until they start tapering or starting raising interest rates this is probably going to go on for a while where we're going to have this rotation one group one

week and then the next group and it just keeps on rotating around so but i would i tell them to go slow and also to get use a smaller portion of their money learn from your mistakes you'll learn more about yourself and your own trading by studying what you do right or wrong and diving into that a little bit what what kind of recommendations you have for people who want to do post-trade analysis what's kind of your process did you pick the the best five winners you had worst five losers what how do you kind

of go about it yeah you can i mean uh now these days everything's online every all your trading is online and so you can go and see what have been your biggest gainers and biggest losers and then go in and start studying those and and the other thing too is it's good to do is to uh screenshot charts of the stocks that you're buying right put them in into a file and then just go back go back uh you know a month later six months later and just study where you went in and and why

were you buying at that point it's also good it's also good i used to print the charts out because we couldn't save them to anything and you just print them out and write on them and then just look at them and see and then print out the chart after you've uh after the transaction's over to see where you went right or where you went wrong but that will expose things about yourself that you probably didn't know it's it's actually very hard to study your mistakes too a lot of people they don't want to ex they

don't want to admit they've made mistakes but if you can be humble enough to admit that you're wrong study where you went wrong and then correct that then you'll be you'll you'll do a lot better in the market um so but it it it takes it takes humility to be able to do that yeah and it's it's almost like athletes studying game film of the good and the bad games and trying to find their weaknesses and and also what they're doing right as well right because yeah i've had people who've you know written me or

or asked me i said okay you know can i just sit right next to you and see what you're doing and or you can see what i'm doing but i don't know the thoughts in your head i don't know your your mental makeup i think there's a certain makeup of of an individual who can be successful in the market they have to be very disciplined they also have to have a background of being able to take risks uh be able to admit mistakes and say and take a loss um that's that's so important um you

know i've always said you gotta when you come into your trading office or room or wherever it is you have to take your ego and throw it in the trash can and just be able to admit hey i'm gonna make a mistake i'm probably gonna make a number of mistakes and i just gotta learn from them and move on absolutely and uh you've kind of already touched on this a few times but um how important is lifestyle when when it comes to trading and investing you've talked about how you don't want to be too active

because then you have to make so many decisions um so yeah how do you take that into account how how much time in front of the screens and uh yeah what are your thoughts on that um yeah i think you know i i almost think it's sometimes it's better not to be sitting in front of the screen the whole time and um and actually get away or or just even turn and maybe not turn it off but go to another room and do your reading and do your research on individual companies um than sitting there

and watching every little tick going up and down and i guess you have to do that if you're a day trader if you're very very short term but but if you like to take positions and try to stay with them for a long period of time then it's actually better not to look at the inner day swings because sometimes you know these a 10-minute chart can get you you could start going oh my gosh this thing's getting killed where then you step back and you look at a weekly chart and you go there's nothing wrong

here right so you have to i guess decide on what time frame you want to be trading and that's that will dictate how much time you're sitting in in front of the screen absolutely and um i've done a lot of interviews uh with uh some veteran veteran traders like like mark minovini um and one thing i always like to hear about is their their weekend and also daily routines and how they go about like preparing for the next day to set themselves up for success co uh so would you mind kind of walking us through

what you do on a weekend to analyze the market find stocks to trade for the next week and and kind of yeah narrow narrow your focus to only the best the best opportunities well i um i spend a lot of time uh usually on a sunday afternoon sunday evening uh going through as many stocks as i possibly can um i look at the i'm almost exclusively using the market smith charts and i'm going through a bunch of screens i go through they've got a market smith 250 which is the best stocks based on earnings and

relative strength i go through all of those i have my own i call it my own monitor i called data monitor after a product that that o'neill used to put out where it's it's just a list of stocks that i i constantly add some to i take the ones that aren't performing well and i take those out i go through those and then um and then i'll go through maybe a few different other screens that i have set um and i'm just trying oh then i go through a lot of group charts i like to

look at the top 50 i like to see what's moving in the top 50 groups out of 297 they have um and so i'm trying to see is there a group theme that's coming on because lots of times when a stock makes a great move it's along with the group um so if i can i try i actually try to get through as many hundreds and hundreds of stocks as i possibly can um and that's one i've always said it's one problem and they're trying to correct it at market smith where uh most of the

time you can only go through one stock at a time on your screen now on the ipad you can go through about four at a time yeah yeah and so that that helps because i used to go through when daily gr when um yeah it was daily graphs you would have a blue book you'd have a green book one was new york one was over the counter in american and that was 2000 stocks and i could flip through those really quickly and i can go through both books in a couple of hours now it takes

me twice as long to go through 600 or 700 stocks but you know i think they're working on it and so uh i think the technology will finally kept up but that was a step back um when they actually went when they eliminated the printed product and went only to this one so looking at all those stocks kind of give you a sense of what groups are setting up what where to focus your attention and also on the overall market health as well oh yeah yeah i get the greatest feel for the market from looking

at so many individual stocks and are there new stocks that are are breaking out or setting up um and the thing about this market is that it's been uh even as the market has been coming off there's still stocks that are holding up or they're breaking out usually in the past when we'd go into a correction there wouldn't be anything to buy and they would all be rolling over and so um so yeah so this rotation that keeps on going on but you can find that by going through as many stocks as you possibly can

to see these these different uh these different trends and um uh on on sunday how many stocks do you have on your focus list for that next week uh kind of how many stocks are you narrowly kind of choosing between for potential buy opportunities going into the next week well i probably come up i mean i i don't know it looks like this week when i look at the list that i have um there are a lot of setups this week yeah yeah i yeah i don't know there was i probably had i probably had

about 15 different stocks that looked pretty good but i narrowed it down to um to a few stocks but then i also have a number of alerts set on other stocks so when the market starts off um i you know i start having all sorts of alerts going on so it's not just the list that i went over this week but some of the alerts i set on stocks from the prior weeks right makes sense and then yeah yeah then during the week you know every day i'm going through and i'm running you know also

running screens or just seeing what's you know what's acting well what sectors are acting well and and just doing more research looking at more stocks awesome and getting into your daily routine can you kind of also walk me through a typical day starting from the pre-market to when the bell rings what time are you waiting until to potentially enter position and also what are you doing after the market closes yeah uh one disadvantage it's it's a good thing it's a bad thing about being on the west coast in that the market opens at 6 30.

yeah and so you know you have to get up you have to get up very very early and now that i'm not managing money for other people i don't have to get up as early but i'm usually sitting down at around six so i got a half an hour to kind of catch up on the news and look at the stocks that i'm i might be buying or adding to um and then but the good thing on that is that the market closes at one and i usually spend another hour or two but then i've

got the whole afternoon to do stuff um if you have a family this i thought actually thought this was good because i would get off to work early before anybody woke up and so we have five kids now they're all fully grown and uh but i miss the chaos of the morning when everybody's losing their lunch and they forget their homework and things like that but i would be able to pick them up from school at three o'clock and things like that so there is advantages on the other side to all that um but i

would do more work after the market closes looking for more other ideas things i missed and such but i would yeah go again look through market smith 250 to see what might have broken out what i missed and such so i i a lot of it on sunday and then additional stuff during the week and when that bell rings um and the stock pushes through a pivot that you're watching are you waiting until half an hour after the bell 45 minutes after the belt because often stuff can reverse very early on in the day so

i was wondering how you kind of handled that yeah i i usually like to wait i i if i make more mistakes where i make most of my mistakes is if i if i actually start trading too early because it's amazing how some of these things they're just gonna they gap up two points they look like oh my gosh here we go the thing's breaking out you buy it and then a half an hour later you're already down a couple points because it's just pulled right back in same thing on the on the downside you

think oh my gosh i got to kick this thing out because it just broke support 45 minutes later it starts marching on back so i like i actually like to wait for the market to calm down and sometimes i miss something sometimes it breaks out and it gaps up and then it just keeps on going but what you can do is is just maybe even wait the first 10 minutes and see if it makes a new high or and and go with that but i've seen so many stocks i i go i i you know

they actually gap down i go why did it gap down i mean not a huge gap but the thing's down three percent two percent and i look around i can't find any news and then the thing starts marching on back so you just gotta go a little bit slower in those first 10 15 20 minutes because there's just all sorts of strange things going on absolutely and um now i think it'd be awesome to talk about kind of the the current market conditions and also get into some leaders and stocks you're watching maybe you could

go ahead and share your screen and bring up market smith and maybe we can uh to start things off i'll bring up a chart of the qqq another index that you're watching and talk about how you're viewing the current market conditions okay uh sure okay you're seeing it okay um well there's qqq's um actually you know i mean it's it's actually coming back up to highs but if if you look at this and if i can let me get my line pan going this actually hasn't been out really out outperforming the s p for since

february of of this year and so i'm thinking it's losing a little bit of steam i mean it's it's still nice it's still back into an uptrend but the other thing it actually came down on some pretty big volume right and now it's rallying on some pretty light volume so it's it's just something to keep an eye on um and then the spiders you know the s p looks stronger it's gone into new high ground because it's a little bit more diversified and now you got oils and and financials which hadn't performed well um and

it's and so this is not so much concentrated uh as as like the nasdaq or the the triple q's are and then the russell russell same thing the thing's been look at look at the look at the relative strength that this has been going against for the longest time so it's it's still you know mega caps these are russell is smaller but i would think this would start doing well because it does have a lot of financials in it um so it's it's been a really i mean i i called it's it's a huge rotation

market moving from group to group to group and at the beginning of the year i i was on ibd live and i i was i think it was the first week of the year and i was i was saying hey a lot of these technology stocks have had a huge move and they're starting to to get very very volatile and volatile and i said you got to start looking at these other groups and this is this is one that actually started performing well and i'll give you that's a daily here's a weekly here's an here's

the fertilizer group and i was saying hey look at the fertilizers look at the steels look at some of these ones and everybody was going what are you kidding these aren't gross stocks well there are times when growth stocks don't work and things that haven't done well in a while or commodities and prices start moving higher and i got a terrific move in the first three or four months of the year by looking at this and looking at some of the other uh you know the other stocks oil and gas stocks started doing well steel

started doing well and then and then technology started coming back again it rotated back in see so here's so you know here's the here's the beginning of the year in january you had a just a continuation move of this whole move from the bottom for just another month or so and then it turned into a real chop for the next three or four uh well that was almost five months period of time and then then we got this move so it it it was cyclicals then it was back to growth and then and now it's

it's kind of now it's like every week it's a different a different group a different area and so what i'm constantly doing is i'm just going to look and see what has done what has done well during this year what has sat out for the last two months and what what could be coming on again and that worked um and that just worked extremely well today because last in the last couple of weeks i've been starting to look at the steel stocks again because they had this great move and everybody was talking about them but

then they got out of favor or the group and and it came down but really if you look at it only got a couple days of bad volume and then they report them and look at the earnings now and you have to be careful when the earnings are extremely good on cyclicals you're usually towards the top but really you've only gotten about four quarters so far of big earnings and i think you've got you've got some more some more quarters to come on these on these stocks but anyway but you just take the groups that

were strong that are out of favor for four five six weeks you start looking for a turn and that that worked well their steel dynamics similar um um and then uh oil and gas these had a great move at the beginning of the year see i mean here's since december here's callum petroleum went from you know 15 16 all the way up to 60. yeah came down now and and corrected much too much that i like but i still still bought this as it was starting to turn and the price of oil took off and

it had a terrific move but but other ones in the group like uh oasis um you can see all the alerts i had on this one yeah this this setup again after a terrific move set up really a cup and a a lower handle and then uh and then that has had a move out den berry i think this is a little bit slower not acting as well a little bit choppier but uh let's see oasis oh wait that's i already went on that but uh eog uh that's another one see had a nice move

came down and then started turning and and set up a consolidation and is is moving out again and then i mean then you've had other you've had uh you know technology stocks that have had uh have had oops wrong one um that have had great moves i mean this this one really only gave you one chance and this was only a couple week pullback but that's that's been a good mover so and then you have some new issues too that have done well so but it's it's constant rotation and you just have to try to

stay in front of it uh and and almost and and by when they break down trends because lots of times they get to highs and then they start stalling and then they pull back and it's a little bit harder to buy uh to buy pullbacks that that have worked rather than get in a little bit earlier before the stocks move higher and uh david when you first bring up a stock chart that you haven't seen before what does your eye go to first and how do you kind of move around the screen and analyze both

the technicals and fundamentals of a stock you've never heard out heard about before um well i i i usually just let's let me just like i was looking at this one today um advancic uh asix the first thing i do is i look to see and you can see the different trend lines i've i've put on here i i look to see first of all is the stock in an uptrend is it close to its high and then i focus in is it okay now is it extended this one is this has only gone sideways

for a couple weeks so i actually like to see longer bases i mean this is a better buy situation right here where the stock's been in an uptrend goes back and forth for five or six weeks and then it comes through um to me i like the longer buy points better than these short bases because i think short bases usually get short moves out of and so but i i first focus on i'm always just looking over here and and within a few seconds i can i can say if i'm going to spend any more

time with this stock let me just i'll bring up randomly here's uh here's ibm okay gap down bad relative strength i don't have to spend more than us you know a fraction of a second on that saying it's gone i don't i don't want to look at that um let's see dupont 37 relative strength downtrend no so uh okay here's here's a better one uh amd okay amd yes this has been a strong stock it's been an uptrend okay but now i look at this and i go okay well it should have been bought somewhere

down in here where the majority of the base was it's up here it's extended i think it looks it looks strong i guess they have earnings in a day that's another thing i don't want to buy right before earnings it's extended i'll put that i click this button i put it into my data monitor and so i'll look at it again but within seconds i within a fraction a second i can tell if i should spend any more time on it and then once let's say find something let's see i i i look at something

that's got a nice longer base on it okay this is about a five or six week base on it nice nice uptrend the group is not in a great group but if they ever pass uh infrastructure then this this this company would will do well i've done well in the past on this stock a few different times and but then i from there i go to i say that the chart looks good now it looks like it's breaking out but then i go to the earnings down here all those look good then i go to

the weekly um and i i like to see are the institutions well this the institutions actually have dropped in the last couple of quarters so that's not a good sign um and then what kind of growth rate uh 28 growth rate so i just started going through the canceling characteristics but it all starts with looking at the uh at the uptrend and the consolidation of the stock so just to kind of summarize what you're saying you're looking for a strong uptrend and then within a base you're looking for price tightness is that kind of what

you're looking for very quickly yeah okay yeah and um i i think it's really interesting i've heard you say this a few times you're looking for um a breakout through the majority of the base basically it doesn't have to be the high of the base which is kind of the standard pivot so could you tell talk a little bit about that kind of any alternate buy points that you use or consolidation pivots that type of thing uh to get a little bit earlier than the true breakout yeah i mean for something like this i mean

the the high at this point was 101.96 but if i take this and i just draw i try to make it so simple and and this i think has helped a lot of people i just say draw the line find where the majority of the base was built under and that's where your buy point is so many people they're looking for cups and handles they're looking for double bottoms triple bottoms they're looking for pocket pivots they're looking for low cheats high cheats mid sheets they call they're looking for all these things and i just say

look don't make it complicated just draw the line over the majority of the bass and i'm saying like 90 of the base and that's probably where your best buy point is yes you can buy you can look for lower lower areas but i would say that would that's only for people who are more advanced to to look at these buy points because you still have overhead supply on on these things that are lower are lower down in the base right and i just you know i just don't know if those work as well as something

that a little you know higher in the bass and still has all the all the different characteristics makes sense and um could you talk me a little bit about how you incorporate the relative strength line into your analysis because i think this is really a hidden gem that uh a lot of traders don't even use um and i was wondering how you use the relative strength line versus the rs rating the 12 month rs rating into your process yeah i this the rs rating the number itself is is just a general idea of how the

stock is done but the problem is and i don't know if i can think of one right off off the top of my head of a stock that had it had a great move and now is correct at 50 it could still have a 99 relative strength if you think zoom last year uh that was the case with zoom yeah yeah i don't think it's rs rating is that strong anymore but back when it was correcting 50 off the highs it's still out of 99 i think just because of the super strong powerful move yeah

let me let me i'm just thinking of things that it oh yeah a lot of these are now their relative strengths are a lot lower but yeah but um yeah because what what is what is happening is the relative strength number is calculated over a year period of time and if i take like this this is a year well that's the beginning of the year if i take uh if i take where we are this is a year period of time on on peloton and so 20 uh 20 of the rating is is this is

this action 20 is this action another 20 is this action and the last 40 percent is is this action so there's more waiting on the last quarter but if you have this huge move here then and the stock's off 50 you still might have a very very high relative strength number i like to look at the relative strength line and that line may be easier to see if you look at the weekly that line is against the s p 500 which is a little bit more constant and so so you can see even as this

stock was you know still staying at it at highs the relative strength line was starting to break so i put a lot more weight in how this is how this stock is acting relative to this line and you can see you can see even this you know a lot of people are going okay maybe this is a buy spot on this stock it looks like it's starting to break out and it's formed a big cup but look how it's acting on a relative basis this is where the relative strength line was the last time it

was at 124 now the stock actually hits 129 and the relative strength line is actually lower right saying that this thing's not it's just not acting well versus the market so i put a lot more weight into how this is doing so you can see some real divergences that are occurring when stocks are making new highs and the relative strength line is not making new highs and i mean here's i here's an example look at it look how well amazon was acting on a relative basis back here right stock actually breaks out of a base

everybody's getting excited it goes for three days look where the relative strength line is now at this point versus where it was even at lower prices back before it's not the same stock it's not as strong as it was before and so that's where you have to be careful of stocks breaking out if the relative strength line is nowhere near the high you have to be very suspect and so it and then you can also use it on the on the downside when the relative strength line is starting to rally yeah and this isn't a

good example when the market's in a downtrend and the relative strength line is starting to rally in a bad market that's a very good sign if you actually look at amazon back in the 2020 correction you had a great example of that the rs line is making new highs uh before the price within the base yeah here it is here it is back here yeah look at the relative strength line going up but yeah now look at the relative strength line yeah yeah and that's where a lot of people have to get out of their

mind a great company versus a great stock you want you want a great company and a great stock and i bill said this i think a lot of people have said this the only good companies are the are the only good stocks are the ones that are going up who wants to hold the one that's underperforming and going down exactly exactly i was curious to to know uh your thoughts on this what do you think about concentration being in only a few stocks at a time and how many stocks are in your typical portfolio now

and and how is it different back when you're kind of um trading in the us investing championships and kind of building up your capital over the years yeah now i i tend to spread out more i usually go 10 stocks but and you know 10 in each position but if something is acting well and actually even has had some nice upside then that could go to a 15 to a 20 position i'm not as concentrated as as much i don't have to push it as hard but i still have that voice in the back of

my head from o'neill's you know saying you got to take advantage of of great stocks and um and you know if you're not up 100 every year you're a failure so you know so i've always had that in the back of my mind and that was the pressure about working there is that you know you had to you had to keep up with him or and and you know he was he was so good he was he was somebody i've never seen anybody do this and do it as as as well as he has is

take the whole market and boil it down to one stock and put everything in that one stock fully margined and stay with it the whole time i mean i i still remember talking to the cfo of the company and and he said yeah what bill would ask him every day is how much buying power do i have and just keep on buying and buying and buying you know something that and he but he was able to take the whole market and identify the real big leader and be able to put everything in it um you

know i want to sleep at night i want to make sure my family's taken care of i know i don't want to be fully margined i i don't think i've been on margin in uh in like seven or eight years because it was but the one and then the thinking about that it's not like oh the guy's a chicken and i don't want to go on margin if you're dealing with very strong very i call them high octane stocks you know it's a lot of can slim stocks are very high growth they have more volatility

and so when i'm 80 invested and i've got a number of these stocks to me that's the equivalent of being 140 invested because they have much bigger swings than a general market and these days i like to i like to have a mix have a few very high octane but then some other ones that are just stronger growth stocks and and and some that are a little bit you know a little bit slower but uh because it again i i've been there where it's like one day all of a sudden click the the light goes

out on your growth stocks and they start falling so fast you can't get out fast enough and you can you start losing 10 in a day and you go oh my gosh and you can't sell fast enough so anyway that's that's you know and then as you get older maybe get more conservative and you don't have to push it so gotcha and i was just wondering um if you kind of have a favorite bill story that you'd like to share with everybody listening um yeah a favorite bill story um i kind of put you on

the spot there yeah i don't know if i have a he was you know he was very you know very uh focused on really pushing and and really emphasizing that this is the best way to make money in the market through these these growth stocks and i still remember meetings um monday morning meetings with the sales people well when somebody would come up and says hey well i've got a i've got a manager who is a value manager and is there a way we can develop a product for him or a screen for him to

help him pick stocks and and bill would just chop that guy to pieces and everybody no one wanted to look up because we just knew what was coming and it because he would say what is that guy doing you got to convince him he's got to be a growth manager that's the only way to make money and so he could be he could be kind of ruthless going after people who didn't really fall into in into his philosophy so um i don't know the other thing it's i guess this is a just a minor thing

is that around when i first started doing well and i was able to to place orders in the trading room the institutional trading room it would call him the bullet and i would be called the bb because i was the younger one the smaller one and uh when that would how they would designate our trades of who it was for so that was my nickname going way back a long time ago and uh also just curious uh what was it like being interviewed for for market wizards way back when uh along with o'neill um well

i guess he was interviewed in his office i was in a cubicle among uh probably about 20 other cubicles and i think if you i haven't read in a long time but if you if you read the description of where i worked i mean back in those days these the terminals where you would get quotes on there were these bunker bunker ramo machines and they were very expensive and you would actually share it with the person on the other cubicle on the other side of the wall and there would be a divider cut in and

you just move this thing back and back and forth and that's you know we didn't have all these charts and computers and that's that's all we had you had to update your daily graphs by hand you would put a mark in on your chart and so um yeah i think jack swaggart uh that he just sat i had a chair in my cubicle and that's that's where he interviewed me but you know hey that was fine as long as i had i had quotes and i had the charts to look at and all the information

i was i was happy it doesn't you don't have to have a zillion monitors and a giant office you can do this now anywhere on on your on your iphone yeah yeah uh again back a little bit into into into how you trade um when you establish a position in a stock and you've kind of got a desired amount of your portfolio you want to invest into that stock do you go in all at once or are you kind of waiting for the market to confirm um that that you're actually right and kind of pyramiding

up into the position yeah i i like to um i usually like to start with uh get two and a half position and then even on that day if it starts confirming then i might go to a five percent position and then the next day if it continues to follow through then i'll try to quickly go to a 10 position when i'm buying a stock i'm feeling that i my expectation is that stock should go up immediately when i'm buying if i've timed that stock correctly and so i have the expectations that it's going to

start going up if it doesn't go up then i'm not going to add to it if the market doesn't confirm my thinking then then i just won't make it a bigger position you know especially if it starts going down i'm not going to be adding to a losing position um so then you know if it turns around then i i will but uh yeah if my i i i i'm so sure on on on my timing that that it should almost be hard to buy too i i should be buying it and it starts taking

off and it's actually hard to buy stock and getting and getting a position the best stocks are the stocks you're up immediately on those you will usually be your your really big winners so and and that's only add to the the really big winners or only add to the stocks that you're you already have a profit in and then where you make the big money is if you do it i think you know you get a a multi-month mult and then even a multi-year move where a stock you buy it once and it takes off

and it makes it and it and it has a great run it makes a new base and then it form then it breaks out and goes again well you can double your position at that point you can add more to it and then because that's that's where you get the compounding effect of of just adding more money to those winning positions gotcha and uh just to start to to wrap things up i think it'd be awesome to uh walk through a base um i don't know if you've got an idea in mind a recent stock

that you bought maybe and kind of see how you you analyze that base look for those little details that tell you that's under accumulation or it's under distribution and um yeah just kind of how to see how you read a chart pattern and and uh basically uh let the stock tell you that it's it could be a high potential leader well this is this is a good example um and this gets back to this is uh generac and i've actually done the gun over this a few times but here's a stock that had a five-year

base and here's a stock that i had a need for in the um in actually three years almost three years uh a little under three years there was a huge fire that came through malibu and it it burned down thousands of utility lines and poles utility poles and we were out of power for 18 days and i needed a generator i was actually looking for one even before the fire came because every time southern california edison would there would be high winds they would turn off the power right so anyway i looked into the generator

i actually bought a generac generator and this is i actually bought well it was um it was actually this is where the fire hit and then i i got it installed like right about here and then it's set up just perfectly and but i love the long base and and you can see that the stock broke out and it's and it broke out on a lot of volume and you can see that had a great move up i mean it doubled in price it went from 60 to 120 then we got into covid and the

lockdown and then it set up another base and then this so here was a whole new buy point and um and you can see it's had it's actually had a few bases along the way here's another one and maybe i can go into the daily and show you that um yeah this is this is more here it is breaking that down trend and it got it got well i don't i'm not sure why it had this this there wasn't any earnings here it might have been a secondary it had one huge day of volume and

it and it did have some distribution here but look how this stock how it started changing right around at this point where look at the just look at the color of the of the blue volume how the volume changed and you've got multiple days in a row and i always love to see that the bigger the volume the better and it had actually had three days down i mean if you take from you take from really from almost this point to this point this stock looks like it traded i'm just guessing 22 days up and

maybe four or five days down right and just showing you that you know just a tremendous amount of buying especially when you get it above average daily volume the other thing i like to see when a a base is forming is sometimes i call this an undercut some people call it shakeout it's the same term and what this is is that it undercut it didn't undercut over here it undercut this price and and so what it does it scares all these people who bought the stock during during this section and here so you get up

you get out the week holders and what you want to see is you want to see the stock turn and turn very very quickly and we'll see that yes now the volume started picking up and it started coming up and out of there so then i mean you could have gotten an early start but here is just make it simple let's draw a line over a majority of the downtrend and that gets you in right you would buy it on this breakout pulls back and then you can add to it and then you get a

terrific run out of that stock now it's chopping back and forth but it's still it's still in an uptrend relative strength line is still confirming and along the way too you know all the new highs have been confirmed by by the relative strength line so now they're about to earn about to report in another eight days but from what i i've heard and read is that you have you put in an order for their generator and you're waiting six months to get delivery so there's a huge demand out there i mean every time there's a

storm i mean even the electrical grid is not very good and i mean all the different problems we've had over the last year from freezing and you know freezing in texas to fires in california it's almost like this is you almost need one of these now because you can't depend on the utility company right and all those days up in a row or basically with very few down days that's kind of similar to your ants indicator right yes yeah can you talk about a little bit of what that is yeah yeah that's something i'd i

came up with back when i was running the mutual fund for uh william o'neill and company the new usa growth fund because what would happen is that we would stick to stopping our buy at 10 out of the base and i would i would see that the buying would just continue on afterwards and now those turned out to be some of the biggest stocks where we would finish their buying there were still other institutions that were out there buying it so i just started i asked the question what's the difference between a stock that's going

to make just a 20 move and and be done with it or a stock that's going to have a multi-year move or a multi-month move and have huge performance and i found it it was usually the buying at the beginning of the move and you can actually see it occurred a few different times i mean here it occurred over in here and uh then you can see it occurring over here and so it just what it tells you is that there are institutions out there that they and they do a you know a tremendous amount

of research that they found that hey this is a company that could have a great growth for a while and they have three million shares to buy and they can't get it done especially let's say i mean today the stock trades 600 000 so even if they're they're buying three or four million shares it's going to take them a number of days if not weeks to complete if you have more than one institution doing the same thing then this can go on for weeks and that's what i found this is just showing you huge institutional

money getting aboard a stock and taking a long-term position in it and that's what creates the trends that we can provide as as uh right investors yeah and the characteristics are this is what i kind of boil it down to is you want you want a stock that is up 12 out of 15 days you want a stock that has at about a 25 move during those 15 days and you also want the volume up 25 during those 15 days that's just the mark of a number of institutions taking a big position uh in a

in a company the other the one other thing you have to be careful of though is if the stock has been moving for a long time and you get those exact same characteristics like it could might have actually happened here yeah is that it's actually it's it's sometimes i it was just a great indicator because we found it was showing up at the beginning of the move and it was showing up at the end of the move when the stock was getting very extended and so i i it was the first time i'd ever seen

an indicator that could work both ways and you know the climactic move is when you know everybody recognizes it and everybody can't take it any more and they've all got to buy it and that's usually the climactic move and the stock's over in this case it was over for about three or four months but in other cases that's the end of the move for years so um it actually works um it's it's worked very very well and going along those lines uh net if you could bring up net and cloud flare i'd be curious to

hear your take on this one because this is showing a little bit of a change in slope and accelerated move on volume so yeah uh what are your thoughts on this chart yeah well this this is uh to me it's it's getting it's well i mean it's extremely extended and you have to always go back and look and see where the stock has been and i mean you look at this and even before well i guess you know even before it went through somewhat of a correction in uh for the first six months of this

year um you know the stock is you know has already gone from it went from 20 to 80. okay built a new base and now it's gone from 80 to 189 so it's gone a long way and now it's getting you know i i've always yesterday okay look at the the angle of of assault the angle of the uh the the move and it's going like that and now it's going like this and to me that's that's probably telling you that it's probably getting closer to the end of the move um and not the beginning

of the move because of how far it's already gone if this was happening you know back here and it almost looks like it happened back here yeah i mean look at this look at this period from you know from this spot to you know i don't know this pot you really had one day down two days down and it looks like you had that looks like about 12 or 13 days up so um so again it but if you've if you get that and you've you had a move like this it's telling me the odds

are in your favor that it's probably getting close to the the end of the move and you gotta be careful if you own it then i would probably be looking for a reversal um and just piecing a little bit out every day gotcha and uh not necessarily with this stock but a stock that you own that that goes through a base and then and then kind of fails a breakout or or breaks key moving averages what would cause you to basically sell a position that you have if that makes sense well if it um if

it comes back if i'm i mean if it's a stock that i had just bought and if it breaks out and then pulls back uh then it would be the stock coming back down into the base and also coming back i mean like this one i know i owned this during this this period and then i think i sold it on on this break and i never bought it back i mean this is just crazy it's very very rarely do you see a stock that breaks down that quickly and then comes back so much but

that's to me again it's it's sort of the the times we are in with so much liquidity some of these things are doing things that that are just very very un uh unexpected but basically if you do have a position it's trending nicely above the moving averages and then starts breaking the 50-day 10-week on volume is that kind of your indication that the trend might be changing yeah yeah yeah and you just you're always looking for change you're looking for you know what what's happening in the demand ratios of the stock and this you know

right now yes this is very very strong but just even uh i guess last week it got some huge volume on the downside which is almost i think it's about as big as all the volume on the upside but but today with the market being fairly strong this one kept on going out but so you're you're looking for a change in characteristic and right now yes that's a change because it's now going up almost vertically and that's i've always said that's like this the air shows that you you'd see you go to the airport and

the the you know the plane's flying along the runway and then it starts going up a little bit faster and then a little bit faster and then it starts doing this and at some point it's going to start stalling right and it's you know if you can get it's great to have one of those but you still have to treat it the right way and and sell some of it out when it's going through that because eventually it's going to stop makes sense and uh you had upsc on here earlier but i'd love to hear

your thoughts maybe on some other growth leaders like afrm which doesn't have the earnings but the price actually super strong and just kind of go through the the true record leaders in the growth space that you think um basically what you think the true market leaders are at this moment uh well i mean up up start like that's 150 to 400 in in like in like three months or two months or so um you know i i guess if you're again if your time frame is shorter you can look for pullbacks to little prior base

or back to very close to the you know 21 day moving average um this uh but you always keep on looking at that volume and we haven't gotten any bad volume on the on the downside but today it was up but the volume wasn't as heavy as some of the the down days so right uh i you got to be careful on buying on buying pullbacks um what's uh what's uh is it a afrm a firm yeah yeah a firm um you can see it's extended and it looks like today it's stalled but it's just

when i see a stock that goes from 70 70 to 160 i just you know i i don't own it i wish i did but um i i just wait until a whole new base is built i i don't spend a whole lot of time and if i owned it um you know so far it really doesn't look like it's done anything wrong so you just you just stay with it but to buy it uh you know right here i it just you take too much risk gotcha um yeah and maybe one more coi and

coinbase which is a recent ipo the the entire kind of crypto theme is also kind of working at this moment which i don't know if that's something you're uh you're interested in or um yeah looking at yeah well this this is uh you know this is again straight up from from 250 325. i've been in and this is only because of instructions from my son sean um we had i mean this guy he picked it perfectly back here we were getting in down here and we rode this thing up into that area and then when

it started turning again back in here he said let's get back on this thing and we've had a nice little run not as big of a position as before um but that's that's the only he's the one who has told me we should be buying this dog um uh so i again i just think there's this is where i i you know maybe i'm getting old but i just think there's just so much speculation going on that sooner or later if there's going to be a time where it's going to uh and i only felt

this once before this was during the 2000 period where there were stocks internet stocks that would correct 50 percent turn around and double and triple from there and i always my rule was if a stock dropped more than 50 percent i wouldn't even look at it anymore because it did have to double to get back to the old highs but you're seeing things that that are happening i mean the same thing in bitcoin it's already doubled from the low and and this goes on it can go on for a while but at some point um

and i heard this so many times in 2000 2001 where people said i made so much money in the internet stocks and then i i didn't sell and i lost it all back you have to have a cell discipline if you're operating in the market and you're just buying based on what everybody's talking about or or just a you know a chart that's going straight up you have to have a cell discipline you have to have how do you get out and you know it's always how do you get out in how do you get

out you have to have both sides because some of these things are going to correct and they're going to correct dramatically and if you don't have cell rules you're going to lose a lot of money um and this is again this is a period which i've only seen a few different times and they don't last that long but try to take as much advantage as you can while it's happening absolutely is there are there any other concepts you want to you wanted to cover when it comes to charting or i always like to wrap it

up with one last question but if there's something else you'd like to mention or you think it's important for for people to realize about how to interpret charts go for it i think the way you interpret churches you study you just study the great winters you look i look at them week by week day by day i look at their moves i look at their volume i look at their price patterns and i get that i get the way you're gonna do better is you're gonna get what a move looks like if you can get

that ingrained in your head i mean even on let me let me go back uh you know you can just take this one stock generac you and you study it on the breakout and on the move and on the continued move and you look at the correction and you look at all the ways that the stock has moved during this period you're going to develop the you're going to start realizing what the characteristics look like of a of a great performing stock and you got to get that memorized in your mind so when you see

it show up again you'll be able to act upon it that's the best way to to do that you can read all the books you can and i have a little bit problem with you know books that have been written since o'neill's book because a lot of the books that have come out now some of them they add a little bit to our knowledge b but so much of the literature out there and the stuff on the internet is just regurgitating the same things that bill put down 20 20 years 30 years ago and they're

they change the concepts they change or they don't change the concepts they just change the names and they're just putting new names on things that have already existed and have already been pointed out and pointed out and then and but i guess that that sells book but i just have i just have a problem with people keep on coming you know repeating the same things that are out there again there's nothing new under the sun a great winter is going to act the same way it did decades ago as it as it is now absolutely

and even going back to jesse livermore with the pivotal points the same patterns repeat over and over again 100 yeah well david thank you so much for your time i always like to end it with uh one last question uh what kind of general advice would you have for a trader who's just getting started or maybe has been doing this for two three years but is struggling to stick with the system find something that works and and become consistently profitable yeah i i first go slower i mean use don't use all your money use a

a portion of your money until you can start making progress in the market that would be one thing the second thing is you know it's study the great winners uh and and get those characteristics you know down in your mind of what to look for uh and just study those spend hours i've spent you know hundreds and hundreds of hours studying these great winning stocks and um and then you know then you know read bill's book and read that over again read there's they're not that many classics that that you should be reading um and

then and then just have an a very humble attitude be willing to examine your yourself your mistakes and see where you're going wrong and correct those mistakes because that's where you're going to learn as much as you will from reading every investment book out there and um outside of a bill's book how to make money in stocks of course which everybody should read what are what are a few titles that you think are definitely worth it for new traders to pick up and and take a look at i you know i think darvis's book how

i made two million dollars in the stock market that's a classic you can read that in a night that's a great that's a great book um i am mark minervini he's got a couple books out i think those are good um and and he just he kind of expands on on some some things and i think some of his best uh best parts are on risk management yeah um because bill doesn't talk too much about risk management um other than other than that i you know i as i said this bible behind me that's it's

just it's wisdom for investing it's wisdom for life and it's to me it's truth and and and just keep everything in perspective this market's going to come and go there'll be another markets there'll be another great winners don't get so upset if you're underperforming or you miss the great big winner this year there'll be another one coming this year because you know that's what's so good about this country they're always successful companies are being formed and those will be on the market in a couple years and sooner or later you're going to get a big

winning stock and you're going to go boy this is this is terrific so just stay optimistic stay humble and and work hard is is i think the key perfect uh well david thank thanks again so much for your time it was really a pleasure for me to have this chance to sit down with you i told you before we started recording how much uh you kind of taught me through videos and books from afar so this has been really been awesome um so everybody watching i hope you enjoyed as well remember leave a like down

below and subscribe to the trail and channel if you haven't already and we'll see you guys in future videos thanks [Music] you