He Went From $20K to $70M Using a Strategy Anyone Can Learn

You really only need one great trade to

be a top 1% investor. The most

inherently ground truth thing of

investing. The most important thing, the

thing that matters more than anything

else is I don't look at valuation. I

don't look at PE. All I look about is

there is new information. I've been

reading Tik Tok comments. That's where I

get most of my alpha from. You have

Buffett or Munger and who are like

reading the Moody's manual cover to

cover just company financials and you're

like I scroll the Tik Tok comments

>> that year I made like 30 million in one

year and it was a wild ride.

>> You will try to beat the market. You'll

trade with leverage. You're moving in

and out of positions. You're not a buy

and hold forever kind of guy.

>> Just before the pandemic I had made the

worst trade of my life. I lost a third

of my portfolio on a single trade. Okay,

so let's break it down

>> in this is where the biggest mistake I

ever made [snorts] was

you break all the rules of investing.

You know, all what I normally hear is

you should just index, don't try to beat

the market, don't take any leverage,

[laughter] you know, and so but you do

the exact opposite, right? You will try

to beat the market. You'll trade with

leverage. You're moving in and out of

positions. You're not a buy and hold

forever kind of guy. According to the

internet, you've done pretty well. So,

um, I've seen some different numbers

that have been floating around. Can you

set the record straight? What is the

actual story? Yeah, I I I started with

20,000 in 2007 to try this new

methodology,

which is the way I was investing when I

was way, way younger that worked for me.

I I call it social ARB investing today,

but what it essentially is is

observational investing. You're you're

looking for any change that's happening

in the world, whether it's, you know,

change in consumer behavior, uh change

in culture, change in technology, change

in the weather, politics,

anything that has the potential to be

meaningfully impactful to one or more

publicly traded companies in either a

positive or negative way. So if you can

surface that change early and connect

the dots back to a company that would

benefit or be harmed by that change,

that's essentially the entire

methodology. Uh it doesn't really

incorporate much fundamental analysis.

It definitely doesn't incorporate any

technical analyses

in in its purest form. You really don't

even need to know what the stock is

trading at when you open up a position

or what it's trading at when you exit.

So like ideally you'd be completely

blind to stock price, completely blind

to everything other than the extent to

which other investors were aware of that

one thing that you surfaced that you

feel would ultimately be impactful to

that company. And you know, you enter

your position at the point of

information asymmetry, right? When when

you know that thing and very few others

do and you exit the position at the

point of information parody when other

investors start to learn about that

thing that you uncovered first. And it's

it sounds so simple and it really is,

but there are nuances to it. And like

everything else to do it to be great at

it, it takes time and a and and a little

effort and some regimented processes

that you have to go through like is the

information that you found actually

meaningful? Uh is it a needle mover for

that sector or for that company?

>> You know, is the information you found

really off radar? Uh or do institutional

and retail investors are they already

accounting for it? And are there any

other things that are happening at that

moment of time or within the window of

that trade that are equal to more

important than that piece of information

that you're trading, right? So there is

a process there

>> of course. Yes. So and and I want to go

through a bunch of examples of it. So

you take this idea of observational

investing of arbitrageing information

without being you know a guy who grew up

on you know you weren't working on Wall

Street you didn't have an MBA

you didn't have the what what would be

like you know some 20 year 20 years of

experience doing this the story is you

take 20 grand you start doing this type

of investing and you run it up it's just

it's it works pretty well for you it's

successful I don't know the exact

numbers but I've seen something like,

you know, 60 million, 70 million, 80

million is how you've grown that

portfolio starting at 20,000. Is that

right, by the way? Cuz I mean, that

sounds in some sense too good to be

true.

>> Yeah, it it certainly is. It does sound

too good to be true. It it is accurate.

It's I don't know the exact number, 70

or $80 million of returns from the 20k.

Um, but I've been audited over the past

17 years. I'll be reodited at the end of

this year and I'll fall somewhere around

75%

annualized returns total portfolio over

the 17 or I think it might be 18 year

period now since 2007.

[music]

Hey, let's take a quick break because

the team at HubSpot has put together

something pretty cool. You know, in this

episode, Chris is talking about the way

he knows how to make money, identifying

these trends, scouting the Tik Tok

comments, making these big leverage

bets. That's great for him. It is

amazing. Some people will like that. I

personally don't know how to make money

that way. I wouldn't do it. But I've

talked before about the way that I know

how to make money, about how to build a

money-making skill, about how to

leverage your time and energy. And the

team at HubSpot actually went through

the video where I explained all that and

turned it into a free downloadable cheat

sheet on my four rules of how to make

money. Now, this is not, you know, get

rich quick advice. It's just core

principles, foundational principles

about building wealth, things that I

wish I knew when I was, you know, just

getting started. And so if you want to

download it, it's in the description

below. It's totally free. You can go get

it. Thanks to the folks at HubSpot for

doing the research, making this

document, and making it available to all

you guys. All right, back to this

episode.

Okay, so let's break it down. So you uh

you said, "I started doing this as a

kid." You I felt I went to the type of

investing I was doing as a kid. I I I I

had read your book uh laughing at Wall

Street and you talk about like basically

kind of like starting with like you know

garage sailing and uh very simple stuff

when you were a kid noticing things

talking to your brother talking to your

dad hey could this mean this and um and

taking you know getting learning lessons

with very small bankroll you know 100

bucks uh type of deal. So could you just

take us like early days? What was the

where did you kind of have this sort of

aha moment that this style of investing

can work?

>> Yeah, you know, I was an entrepreneurial

kid. Uh I was really interested in

making money before that was a cool

thing to do. You know, the the new

generation now all these all these kids

are traders. They're trading crypto. I

mean, it's all it's like every kid now

is like I was back in the, you know,

'8s.

>> And by the way, that makes sense now cuz

if you're a kid, you're on YouTube,

you're on TikTok, you'll you'll see

things. But what why did you have that

itch? What what made you want to to to

get on that hustle? What who did you