Speaker 1: Welcome to another episode of the Chicks on the Right
podcast where we talk to our friend and sponsor of
the show, Zach Abraham from Bulwark Capital Management, and we're
going to talk about something today which admittedly I know
very little about because I'm not a day trader, but
I know a lot of people are into that sort
of thing, and apparently there's just been a recent rules
change that the SEC made where they have eliminated this
pattern day trader designation, which means that you no longer
have to have twenty five grand as a minimum equity
requirement for day trading. And so that's ostensibly something that
will help entice more small, smaller investors into day trading,
I guess, but is this a good thing? I'm sure
you know a lot about day trading and maybe you
can enlighten us on what this all means.
Speaker 2: Yeah, so personally, and I have not looked into the
legislation intimately, but I feel like that's almost like a
tip of the cap, if you will, to the asset
management industry, just because when you look at when you
look at the type of access people have to things
that they can find on kushi now right betting markets,
the leverage you can access in some of those different apps,
the leverage that's very easy to access on Robinhood.
Speaker 1: Like, I.
Speaker 2: Think that it only makes sense that they kind of
lowered some of those requirements. Is it a good thing? Look,
I'm a big believer that I think the more freer
markets are, the better they are. However, a big part
of a market functioning properly is caveat emptour right, buyer beware.
Meaning I think market I don't think, I know. I
think markets work best when there is less regulation and
more consequence. Right. I think that people act rationally, and
I think it is much easier to make somebody responsible
for their own financial wellbeing and they govern their own
trades as opposed to passing you know, my whole thing.
And you guys know this, but you cannot legislate out
human stupidity, right, Right, If somebody wants to do something stupid,
you're good luck stopping them, right. And if you don't
believe me and ne Brad kids, right, so yeah, no, no,
don't hit your brother with a hammer. Right. It's stuff
you didn't think you're gonna have to say to somebody.
Is that should that make people day? Look? I'm never
gonna say that somebody shouldn't try to become a trader
or this or that. What I am a proponent of
is people understanding the statistics. If you start off trying
to be a day trader, and you do it right,
and you work your tail off, probably ninety ninety five
percent of you will leave that exercise with more money
than you started. Okay, And that's not me telling you
can't do it. The percentage is in my industry. Actually
we're exactly the same. So I'm proof that you can
overcome those kinds of odds. Should you. That's another thing entirely.
I'm of the big mind that if you want to
be an active manager like we are right like picking
individual securities, making individual bets things like that, I can't
imagine trying to do that in a non full time capacity.
And when I say full time, I mean I'm paying,
you know, over a million dollars a year out of
our firm's own money for analysts and trading machines. And
that's how serious we take it. Right, So if you,
in my opinion, if you're not willing to take it
that serious yourself, I would not do that, And it
doesn't mean you can't, right, doesn't mean that you don't
have a skill. But this is the most competitive game
in the world. It just is, right, financial markets, and
you know, when you're going to take them on and
you want to start day trading or do that, you
need to understand that's what you're competing against, so you know,
and that's one of the reasons that when we're quote
unquote trading, we do it in selective markets. We do
it in markets where we think that we have an
aedgurin advantage. If we don't think that we have an
edgerin advantage, we're not going to operate in that market.
And people are like, well, how do you know if
you've got an edge your advantage, And you go, well,
if you don't know that, you shouldn't be betting, right,
Like it's it really is like poker, like if you
can't spot the sucker at the table, you're that. And
one of the things that scares me about this environment
is that so many of those types of dream machine
investments like bitcoin and crypto and so much of this
stuff has worked, and so what it's kind of led
people to believe is that that's that's how you do things.
Speaker 1: You guys.
Speaker 2: Know this, one of the worst things that can possibly
happen to a young person or a neophyte in any
career is like instant success, right, because because it's usually
confirmation of all of the wrong things, you know what
I mean. Like one of a guy that I really
look up to a lot in the investment world, he
talks about how his career started off. He came right
into this bull market and everything he touched went to gold,
and eight or nine years in he's just like, man,
I'm really good, right, I'm really good. Well, the market
shifted and he went bankrupt, right, oh my god. Yeah.
Now he's ended up being a billionaire investor and been
successful despite that. But he talks about like how you know,
getting confirmation of you know, getting positive outcomes when you
don't really know how they're coming. You know. The old
adage in Wall Street is don't confuse brains with a
bull market, and I think that's probably the best way
to say it. There's a lot of people that are
over confident right now on the investment side because so
many of these dream machine type things have gone up
and the only way you were wrong is if you sold.
And so what did that teach them no matter how
bad the asset is, just hold it forever. Yeah, well
that's gonna lead to some serious zeros right in the portfolio.
So look, I I and I even tell our clients.
I go, they go, Zach, do you want me trading?
And they always assume I don't want them trading? And
I go, no, the more you know, the best Usually
with our clients, it's like that, our most educated clients,
those are the ones that we have the best relationships with.
They understand what we're doing and therefore they understand the
value in it. Right, So it's a pretty good relationship.
Speaker 1: And I'm the least educated.
Speaker 3: Yeah, well yes, so hey, but hey, those are the
two types of clients, right, Those are the two types
the ones that go, hey, I know, I don't know,
or the ones that say, I know, and that's.
Speaker 2: Why I hired you, right, That's why I hired you. Right.
And the funny thing is is when I say the
best kind of clients, I don't even just mean for us.
And I want everybody to hear this, because you guys
are hearing me talk about things that you know, guys
don't say this stuff publicly, right, This is stuff we
keep behind closed doors. Really, but it really the clients
that have the best results are those kinds of clients. Yeah, right,
because either they know a lot, which is why they
trust us, or they acknowledge that they don't, which is
why they trust us. It's the ones in the middle
they get involved. I tell a story and I really
like this guy. If he hears this, I don't want
him to think I'm dogging on him. But he got
freaked out. He called me about a little over a
year ago. Our portfolios are up about five percent on
the year. This is last year, and he's freaked out.
He said he wanted to sit in cash. Okay, since
that day he pulled out, I begged him not to.
I said, look, the market may have issues, but I
really love the stuff we're invested in. Since he pulled
out fourteen months ago, our portfolios are up fifty three percent.
Speaker 1: Is he kicking himself?
Speaker 2: Oh?
Speaker 1: He is.
Speaker 2: But now here's the other issue, because he's dealing with
another challenge right now, and that is when that happens.
What do you do now? Right right? Because now he's
sitting understandably so sitting there going well, I don't want
to buy into this now. I like I said, go,
I think you're making the same mistake now that you
were making back then, which is just because we're up
that much. The question you should have is why, And
I think we're just at the beginning of that inflection point.
But my point is is it's that middle ground or
you know, or how many times right before we started
this recent run where we're beating the market like by
I want to say, thirty five percent over the last
two years. We had a slow year the year before
where we didn't. We had clients leave, and it was
those clients in the middle ground again that thought they
knew enough. They're like, well you've underperformed the S and
P for the last year and a half, and go,
well you just missed on a thirty five forty percent
out performance. It just right right?
Speaker 1: Yeah.
Speaker 2: Yeah, So so long story shore, I think anytime you
make markets more open and more free is a good thing,
whether you should do it, and I'll just say it
right now, don't ever use leverage. Don't use leverage, don't
use margin, don't use debt to invest. That's stupid. But yeah,
is it a good thing? I think generally speaking, it's
a good thing for markets. Should people jump in there
and take advantage of it? Probably not. Probably.
Speaker 1: It sounds to me like what I've taken away from
this session with you is that there is no bad
client for you. I mean, there's no client that cannot
be helped by you if they just listen. And I'm
sure there's a lot of people in our audience who
could benefit. So how can people get in touch with
you and find out more about Bulwark?
Speaker 3: Yeah?
Speaker 2: So really easy. Go to Bullworkcapital Management dot com. Check
out our daily podcast that we put out every day
called the Daily Dots. You can get that at Know
Your Risk Podcast dot com. Search just search to Know
Your Risk Podcast on YouTube. Get the video feed pretty
easy to find. Just google Zach Abraham Bullwarkcapitalmanagement dot com
and ignore anything bad that somebody says about me. That's
all great? Oh great, Thank you ladies, yep, thank you.
Investment advisory services offered through Trek financialc and SEC Registered
Investment advisor. The opinions expressed in this programmer for general
informational purposes only and are not.
Speaker 3: Intended to provide specific advice or recommendations for any individual
around any specific security.
Speaker 2: Any references to performance of security so are thought to
be materially accurate, and actual performance may differ.
Speaker 3: Investments involved risk and are not guaranteed. Past performance doesn't
guarantee future results.
Speaker 2: Track twenty four three zero eight