“My experience was the great financial crisis. I was 30. I had properties. I thought I was the man. I had money in the bank. I had money in the market -- all that. Guess what? Two years later, I had nothing except my single family home and short sales and everything else.” Tunde Ogunlana with Axial Family Advisors.

If you believe we can change the narrative, if you believe we can change our communities, if you believe we can change the outcomes then we can change the world. I’m Rob Richardson. Welcome to Disruption Now.

ROB: Welcome to Disruption Now. I’m your host and moderator, Rob Richardson. With me are some of my partners in crime -- Michael Dean and Tunde Ogunlana with Axial Family Advisors.

We want to talk about GameStop and AMC and all this craziness in the market. Even people that are not into the market or just seeing this, they're like, “Wow, what's going on? Could I have gotten rich? Should I get in? Should I invest in GameStop? Should I invest in AMC?”

How is this happening? There are people that all of a sudden puts a few thousands in and they're millionaires. People feel they're missing out on stuff and they got to come in.

So I want to talk to folks about that and explain it to people, understand this. Understand what's going on in the market or understand the market, generally. And I also want to just kind of give my commentary.

You know, whenever you get AOC and Ted Cruz to agree on something, you know the world is in a weird place. So we got two people who are outraged by the fact that there's lot of powers trying to stop people from trading these stocks.

So I will give my basic understanding of what's happening. You have some folks in Reddit, which is an application that allows people to communicate in these small micro communities, and there are people that--

Some of them were gamers. Some of them, people that just wanted to stick it to the system. They saw an opportunity to do so. And so they got together on a Reddit thread and they said, “Let's go in on GameStop.” -- And I’m going to explain it from my point of view and I’ll have the experts explain. -- “We see that there are some people on Wall Street that are trying to manipulate and make some money by betting against GameStop and we want to cost them money and interrupt the system in the process.”

So they got together, decided to do that. No one thought anything of it. All of a sudden, in a matter of a few weeks, GameStop, which is a company that was worth relatively nothing from the overall perspective on the market, started just skyrocketing -- just going through the roof.

And then they started this conversation really going on across the United States and it's caused a lot of disruption now within the market. If you're paying attention to the market, you can see that that's what's going on now.

So this is my perspective. I've heard people say, “This is outrageous what they're doing.” These are, I think, really the big boys -- the insiders, the hedge funds. Like, “This is awful. They're out here causing all of this disruption. They're manipulating the market. They shouldn't be doing this. This is not what a free market is about.”

My thing is I see them just manipulating the market the same way the market always is manipulated. It's just people are doing it in a method that we haven't seen them do before. And that's making people uncomfortable and that's making people figure out a way to try to stop them which I think makes things worse, in my perspective.

I love to hear the perspective of the experts because I’ve been ranting on a lot, just giving you my perspective without really being an expert or something. So Tunde, Michael, you guys have at it.
MICHAEL: Well first of all, thanks, Rob, for having us both on. Again, obviously, it's always a pleasure.

I'll kind of start through your settlement. This is actually what every brokerage firm has done for decades. That's where the phrase, “Get long, get loud” came from, right?

For many years, hedge funds have been controlling Wall Street. But now, due to speed, due to no interest trades, due to the density of information, retail trading is kind of giving that advantage to the little guy. And it's the true essence of, to your point, disruption to which--

Now you have platforms like Reddit which have 2.7 million people within Wall Street bets that they can function as a hedge fund and can pick particular stocks to target. And now you have something in which now the figure here at the top have to acknowledge and be able to try to defense against because they're going against all of the positions of short and then a lot of low float stocks and making those people have to cover at a very high rate. So to your point, it's definitely investment disruption.
ROB: Right. Just to make sure people are… “Short” is you're betting that you're going to buy a stock and you're betting that it's going to go down and you'll make money for it going down. Is that essentially right?
MICHAEL: That's correct. So when someone is short of stock, they're buying a stock with the thought that the stock is going to go down. They're borrowing a stock and so they'll have to pay a broker a short interest fee to borrow that particular stock. And then if that stock goes down or up, they have to buy back the stock at that particular price.
ROB: So it's really bad if you bought a stock hoping it would go down… It’s going to cost you a lot of money if it goes way up.
MICHAEL: Absolutely. And short interest is the number of shares that have been sold but not yet covered. So when you hear that short interest percentage… as with GameStop in which their short interest percentage was 136%. So just think about that. That's almost 40% more than the actual shares that's on the open market. So it was a heavily shorted stock for a lot of different reasons due to that factor plus it being a low float stock of 15 years.
ROB: What does a “Low float stock” mean? Try to break that down for people in the most simplest terms possible. What does that mean?
MICHAEL: Absolutely. So the term “Float” comes from the number of shares that's issued to the public that is available for investors to trade. So obviously, the higher the float, the less volatility that stock is going to have because there's not as many shares on the open market comparable to [crosstalk - 06:11].
ROB: Got it. So all you mean is that the regular person has more ability to buy a part of that stock.
MICHAEL: Absolutely. The regular person has more capabilities of affecting the stock price due to the fact that there is lower shares in the open market.
ROB: Got it. Okay. And Tunde, I want to get to you. I try to just really make this as basic as possible for people.
MICHAEL: Of course.
ROB: So like if you're betting on a team and you were betting that the Los Angeles Lakers were going to lose in the finals by 10 and instead they win the finals by 20, now you have to pay $30 million.
MICHAEL: You have to pay those 10 points.
ROB: Yeah, you got to pay. Not only did they not lose, now you got to pay on top of the amount they won by.
MICHAEL: Absolutely.
ROB: They were supposed to lose by 10 so you would have made, let's say, $10 million. Now instead of making $10 million, they won by 30, you are losing $40 million. So you're losing the 10 -- the difference that they were supposed to lose by -- plus you got to pay the 30 points that they ended up winning by. So you are losing a lot of money.

This is why people are so pissed. And this is why I want to get to what happened with Robinhood. -- And Tunde, I know you have some good comments on this. -- I say people, hedge fund managers who have been doing this game for a long time are mad because these people outmaneuvered them. It almost took them under or might have actually taken under some of these hedge funds that are used to dealing in--

They don't deal with small deals. They're dealing hundreds of millions. They're dealing billions. And they're losing billions of dollars because of this. I don't know.

My perspective is that's how the market works. When you take a bet -- a short is a bet -- it is a big risk. And they probably thought it wasn't that big of a risk because if you look at the fundamentals of GameStop, they certainly look they're going down. But it's still a risk. You take that type of risk, you have to live with the consequences if things like this happen.

Tunde, Robinhood, they advertise that they are democratizing the process of investing. And they call themselves “Robinhood” which is about empowering poor people against the powerful. When this happened, Robinhood stopped because… They really didn't give a good answer. They said maybe fraud or something. We partly know the reason. They’re owned by one of these hedge fund companies that are getting affected. It’s just so interesting. What do you think about Robinhood’s response in just this whole environment at this moment?
TUNDE: I mean their response is their response, obviously.
ROB: I’ll say it was a stupid response. I think [Inaudible - 08:59] response. [Laughs]
TUNDE: I’m sure they're caught flat-footed right now. And obviously, like you're saying, this disrupted their situation a thousand-fold. You know, their response is their response. I think you've identified the bigger issues in this whole thing which is a disruption of the norms of trading in Wall Street.

And I just wanted to kind of piggyback a little bit on what Michael was saying about why this happened this week because… There’s a term called the “Short squeeze” and that's exactly what describes what Michael was talking about because the fact that the stock was not going down and these hedge funds were forced to buy the stock back at a higher price means that you still have a certain amount of shares out there.

And the stock market is no different than [indiscernible - 09:54]. It’s all supply and demand. So what happens is that buying that the hedge fund community was forced to do on top of the demand that was coming from the retail, the couple of million people through the Robinhood and all the Reddit users, created now an artificial demand for the same bucket of shares. And that's why you see a stock go from $30 to $300 in just two-three weeks.

So that is what the real issue is, is that somebody is going to be the human being that buys that stock at the last, what we call, uptick -- at the top -- just like someone was the last person to buy that piece of real estate in 2007 at the top. And what happened after that? Right? So that's the risk here that you run when you're chasing this kind of companies.

You and I joked about on the phone yesterday when we spoke that I have clients of mine calling me this week asking me to get into GameStop and my answer is, “If you're calling me, it's too late” because you don't put “new money” on a stock like this when it's already this high.

I definitely want to be clear. I’m securities licensed. I’m not here to give any stock advice on the show.

My joke to one of my clients was, I took real quick look at my phone. GameStop's earnings 2020 numbers are already out. They had $6.8 billion in revenue last year. They actually lost $470 million. As the comparison to Apple that just came out with their earnings, just in the fourth quarter, they made $111 billion.
ROB: Yeah.
TUNDE: So if you're going to ask me which company would I want to put my dollar to trust that that dollar is going to work the right way and grow over time, it wouldn't be GameStop because I don't like putting money into companies that lose money.
ROB: And not only that -- because we talked about this, too -- it's not only that they're losing money, it's the model of what they're doing. It's not like Amazon. Amazon was losing the money, I want to say for 15-20 years, but at least, if you have an understanding of what you're investing in and you have some ability to see like this could generate money… That's still more risky but at least it's following a strategy that's based upon something that, hopefully, you understand.

So when I tell people… And I’m not giving advice either because I’m not a stock expert. But I go back to what Warren Buffett said, pretty simple pragmatic advice, “Invest in what you understand.” Invest in what you understand and have a long-term strategy for doing so.

I should have invested in Zoom. I was doing Zoom years ago and I knew it was going to get big. And during the pandemic, I should have done that because I knew that it was easy to use. I knew that people would use it eventually at some point. And I knew they would grow in scale because I understood how the technology worked and I understood how the business worked. And I saw that it was a sound strategy and it was a sound infrastructure.

The problem with GameStop as well as AMC and others is that GameStop is built upon brick and mortar -- brick and mortar; getting your games and exchanging them in person. Unless I’m wrong, I don't see any other model they have to make money. That model is going to end. It is ending. It is dying. Some say a slow death. But it's going to die. It's going to probably quicken in pace.
TUNDE: Let me jump in because you're explaining exactly why what Michael explained was so true, why there was 136% short interest in it and why the hedge funds said this stock should be shorted -- because they probably will go out of business. And they're hedge funds, right? They're supposed to make money up or down. So they're saying, “Let's make money with this thing on the way down.”

That's why I would never advise anyone to buy GameStop stock today because, to your point, the valuation of that company has been bid up so much, they're not going to be able to meet that through sales of video games and other things through brick and mortar because that ain’t going to happen.

So getting back to the question you asked me about Robinhood, you know, I’ve got kind of a way, I think, sometimes, “If it ain't broke, don't fix it,” meaning--

I never understood Robinhood or Betterment or any of those kind of companies. And again, not to sit here and disparage them. But what I’m saying is Fidelity is great. Vanguard is great, E-Trade, Ameritrade. I’m not trying to favoritize one discount broker. But there are so many areas that have already existed for many years that you can go buy stocks and invest in the market and some at no cost.

Now I think Fidelity and many other companies, they've had this race to the bottom on cost. Charles Schwab, I believe, is another one where in certain part of their platforms, you may have no transaction costs -- no trading costs, no nothing.

So when this kind of newer things like the Betterments and Robinhoods came up, I kind of look at those with suspicion. Like, “Why would I need to go there when these things already exist and they're pretty much going to be free to trade?”

You know, it goes back to the Facebook, all these kind of things, right? At some point, you're kind of the product. So that's where I got suspicious with Robinhood. What's going on? What are they selling behind-the-scenes? How are they making money if it's so good and great for the little guy here?

And then they just recently got fined $75 million for something that had nothing to do with what's going on now. It was for, I think, point shaving and all that. Meaning, they were taking little penny profits off trades from their own customers.
ROB: Yep. It goes to your point, “If you're not the customer, you're the product.” They're leveraging your information. Nothing is completely free -- nothing is. You got to pay for it.
TUNDE: Yeah. And now they're doing this. You know, if I was a customer of Robinhood and they stopped me from trading one of these stocks, yeah, I’d be upset too because if I’m on Fidelity or Vanguard or E-Trade platform, they're not stopping me.
ROB: Yeah. And their name is “Robinhood.” It also goes against just their core marketing theme. I don't get the strategy but okay.
TUNDE: What upsets me about this kind of things when they happen is the financial markets are kind of their own ecosystem. In all ecosystems, there's big boys at the top that take advantage of things and they got lobbying and all that.

From like Goldman Sachs or Morgan Stanley does certain things versus me doing it as the little guy in this industry, they might get away with it. I might get a slap on the wrist. That's real life and that's something we all live with in various business sectors or real life stuff, right?

I've had some clients tell me, “Oh I really like what happened this week because…” You know, stick it to the big guys and all that. It ain't pretty. You know what, because--

It’s funny. Those same clients are the ones telling me, “Hey man, can you get me out of the market because I’m scared it's going to drop now.” And that's kind of my point. I’m like, “Yeah.” David and Goliath is a fun story but in the world of finance, Goliath means stability.
ROB: Sometimes.
TUNDE: No. Goliath means “Stability.” I know this system, meaning, the big banks and all that. I’m not saying that they're always doing everything above board and that they don't have any blame. What I’m saying though is that those are the norms of our system…
ROB: That's true, yeah.
TUNDE: …and the way that the big banks operate, the way that they do things on margin.

If you want to see hedge funds get margin calls, that's not going to be fun for us on the retail side because that's what happened last year in March when the market dropped 35% in three weeks. So you could sit there--

And that's what I started thinking this week. The internet is so amazing because we've seen it disrupt the norms in our political world and our cultural world over the last decade or so which culminated in the insurrection in Washington, right? Meaning, the internet, through social media and all these groups, you had people that were on the fringes of a lot of conversations that were able to coordinate into groups online and mobilize to storm the capital. That wouldn't have happened 30 years ago, 20 years ago because there wasn't a way for people to communicate like that. And it disrupts the norms of our political system, right?

Whether you like it or not what happened, all of us seem a little bit uncomfortable with where the country is, politically. No matter what your politics are, everyone's kind of in the same boat of, “I don't like this.”

And what I saw this week was, “Wow, the internet is doing this now to the markets.” The same thing -- groups, otherwise small retail investors that are on the fringe of the market society have been able to gather and collude together in groups online to manipulate the price of stocks and then also to disrupt the applecart of the norms and the people that are normally at the top just like the insurrection upset of the applecarts of people at the top of politics -- senators, congress people, presidents, whatever. This is upsetting the applecart of those at the top of Wall Street.
ROB: I have a little different view on that. Let me just jump in a little bit. I do think it interrupted the norms. I don't equate it to what happened as an exact metaphor to January 6. I think it's more accurate to say the election of Donald trump was more accurate to what happened with Reddit and the GameStop because no one expected Trump to win. And Trump did win based upon the same thing.
TUNDE: You’re right. Based on internet, right, [different - 19:36] norms.
ROB: Then he took that and then he weaponized that to levels we haven't seen which I think led to January 6. Why I think these are important distinctions is because we're not going to get back to a point where we're--

We have the internet, we have human nature and what we got to do is figure out how do we build an ecosystem that is more equitable across the board because people are--

It used to be that people in hedge funds and Wall Street or political class could have one conversation, kind of hide it and pretend like it didn't happen or have one conversation--

And maybe there were some benefits to that. Like Lyndon Johnson used to be able to say crazy stuff to his white supporters that was probably racist, say another thing to black supporters but then he was able to pass the 1965 Civil Rights Act. And no one was able to tell the difference because they couldn't record exactly what he said a year ago versus now that could be used against him. Perhaps that was a world when we can get more accomplished.

We don't live in that world anymore because now there is no secrets. We know what's happening all across the board. And I don't have the answer to this -- we are in a world where we have more information, doesn't make us more informed. We have more connection. And we have to figure out how we're going to make more equitable and more transparent, at the same time, a world we can get along better. And that requires us to possibly build new and better systems to respond to what's going on in this moment.

That's what I see going on as a bigger picture because we're not going to make people just be satisfied with hedge funds manipulating but then telling people they can't do the same thing. It’s just very hard.
TUNDE: But my thing about the hedge funds is I don't really see anything wrong that's happened this week with GameStop. I mean this is the market and this is a time you get in.
ROB: Neither do I. But they do though, right?
TUNDE: No. But the issue is really that Robinhood is partially owned by a hedge fund.
ROB: That’s the issue.
MICHAEL: Exactly.
TUNDE: I’m sure that hedge fund is upset because they probably had short interest in a lot of these stocks. But what I’m saying is that's more to that situation as opposed to… because there could have been hedge funds out there that were long, meaning, they weren't shorting but they owned the stocks hoping they'd depreciate for GameStop and [crosstalk - 21:54].
ROB: I have no problem with that. Look, this is the game.
TUNDE: And they may have made money.
ROB: Exactly. This is the game. Like, you were caught up in the wrong side of it. This is why it's risky to short even when you think it's not. It's still a major risk and hedge funds make their money off of it. I want to get to a point because--

Michael, you haven't been in in a while. We talked about this before we started the broadcast. We can use this opportunity to learn, to see that the folks in Reddit had a strategy for investing. And perhaps us, as a community, can think about how we can do that. Speak a little more of that.
MICHAEL: Yeah, absolutely. Honestly, guys, this is no different than anything that happens in the day trading world. This is just traditional momentum trading. In a normal day trading world, the day trader wakes up, he looks for earnings, he looks for partnerships, he looks for mergers, he looks for press releases and that's how he strategizes as to trade that particular day.

If you think back to last September in which the Black Lives Matter thing with George Floyd and everything started to transpire, they coined these stocks “BLM stocks.” And they were Urban One and Carver and [corner - 23:04] company. And those stocks traditionally ran anytime there were any types of riot news or what have you.

So if you look at the other way, we, as a community in a race, can learn from what's going on and focus on black-owned companies or companies that have great social missions and really see the power of influence that you can't have if you were able to rally together and purchase these strong-situated stocks and be able to, not only benefit from them from a short-term perspective but also help these businesses grow and evolve and become strong companies as well.

So not only just looking at it from just a disruption perspective but how can we take the same premise and be able to make sure that we do the analytics and make sure that we do due diligence but be able to go and support black-owned companies and help substantiate themselves in the private market and also have ownership in those firms as well.
ROB: Yeah, that’s right. I mean think about a strategy that we… These tools now exist as the process has been democratized. There's definitely going to be disruption. It's definitely going to disrupt norms. I think what we have to figure out is, “How do we make a way to have more generational impact as a long-term strategy?”

What people in Reddit and other folks are doing, perhaps some people got rich -- good. More people are going to lose their money than get rich. It's going to all play out, right? At the end of the day--

We talk about bubbles. I want to just talk about that briefly. One of our shows is with Robert Greene -- we had a section there -- who's the author of “The Laws of Human Nature” and “The 48 Laws of Power.” We talked with him a lot about bubbles. He said the most dangerous language in all of human history is, “This time it's different.” Like, everybody feels like this time is different.

In 2006, it was different. With GameStop now, it's different. We have a movement. It's going to keep going. We're going to keep rising. It's going to end like every single bubble has ended in the history of the world.

It's going to pop. A lot of people are going to get screwed. Mostly, retail investors, regular investors, they're going to try to put their money in, their savings that a lot can't afford to lose. And they're going to lose it because GameStop is not worth $300 a share. It is not. AMC is not worth that. No stock that shoots up 1500% or whatever in a couple of weeks is worth that. You should always be very, very--

If you see a stock rising or you see any bubble trending that way, don't feel like you're being left out. Just be thankful that you didn't lose your money in the process like lots of other people are going to.

I don't know if you guys have thoughts about how you really keep clients or people out of the mode of wanting to just feel like they're not missing out. That's kind of the thing. Humans don't want to miss out.

Before I go to you, guys, this point that Robert Greene brought up was just, I think, enlightening. He brought up an old point from one of the bubbles that go back about three or 400 years. It might be longer than that. Sir Isaac Newton was around then. It was the South Sea stock bubble. Same type of thing. I’m not going to go through it but it was a bubble. Everybody thought they were getting rich. Everyone looked they were getting rich.

Isaac Newton saw it for what it was. He was the founder of mathematics. You would think he would see the logic behind it, and he did. But then he saw all these people getting rich. He said, “Okay, I got to get into it.” Then he got into it and he lost his money.

And that tells you, somebody as smart as him could be fooled. We got to pull ourselves back and don't allow ourselves to fall into the emotion of the moment where it looks we're missing out on this chance to get rich. That's my thoughts. I don't know. Any thoughts about bubbles?
MICHAEL: Yeah, that's the one thing, Rob, that I love about Axial and what we afford our clients is that we really preach diversification but also risk tolerance. We want to make sure that any of our clients do not have all their eggs in one basket. We really want to make sure that they diversify through a plethora of different investment platforms so that they can have strong investments across the spectrum and then also tie those portfolios into their risk tolerance.

So to your point, day trading is not for everyone. It should not be something that generates long-term investable wealth. It's something that has a very high risk tolerance. It has a high risk and reward and it should be approached as such.

So to your point, having your portfolio solely focused on these penny stocks is not the most feasible way of creating substantial generational wealth but then it is a way to create short-term funds and you have a lot of successful individuals in that space that does so on a daily basis.

I definitely would not recommend anyone just jumping in due to the fact of fear or missing out and jumping into GameStop or AMC just to try to make a quick buck. I definitely think they should be able to understand the risk tolerance that comes as such but also be able to have a financial entity that they trust to help them substantiate their long-term financial goals and be able to map those goals to the market as well.
ROB: Yeah. Tunde, back to your point -- this is where you and I do find agreement -- I think despite how much disruption there is, there are still fundamentals that apply. And you should still understand what you're investing in. I think people should still get advisors.

There are people that have the time and capacity and have the capability to implement their own strategy and they should do it. But I also think people should get advice. People should get advice. People should seek advice.

And while we have a lot of information, it doesn't make you more informed because you've got to figure out where you're getting the information. And the information has to be verified. The information has to be quality. There's a whole lot of information out there that is not accurate. That's just a bunch of opinion and people are just trying to sell you something. They don't really have any tangible knowledge.

So I really advise people, it’s… You know why I work with you. But also I just tell people, you should still stick to the basics even when you are investing in disruptive technology. If you don't have an understanding of how it can grow, if you don't know how you can value it then you shouldn't invest in it.
TUNDE: Yeah. I think, for me, psychology is key. What I realized in doing this now 20 years… -- I can't believe it's that long.
ROB: Yeah, you get [indiscernible - 29:58].
TUNDE: Yeah. You really got to look at the psychology of, in my case, the client, right, the person I’m working with. One of my favorite things to tell people when I start working with them is I look them in the eye and tell them, “My job is not to make you rich. That's your job.”

That's partially why I like working with entrepreneurs and that type of folks because… You know, what I’ll usually say, especially if it's a business owner, that they can probably make a lot more money investing a dollar in their company than I will make them investing in the stock market over time because to your point, we've got to determine this kind of industry called “Everything reverts back to the mean.” And that's why things like bubbles are real. Things don't go like this forever. Gravity brings them back down.

I just saw something recently as we've hit the New Year here in 2021 and it was a study about the last 100 years of the Dow Jones, of the S&P 500 -- basically, the broad U.S. stock market. And like clockwork, it was basically averaged 10% a year from 1920 to 2020. That's with all the ups and downs and the world wars and the Great Depression and all that. You're just averaging a solid 10% a year.

Last year, the Nasdaq did 43% return in 2020 so that just tells me, it's going to revert back to the mean at some point. I don't know when. I don't have a crystal ball. But it's not going to sustain 40% a year forever. That's just too far divergent from the historical average.

And when you really extrapolate it out 30,000 ft., why is the market somewhat predictable over long periods of time? And to Michael’s point about day trading and all that, it's very unpredictable in short periods of time -- days, weeks, months -- is because in the end, all we're talking about is the collective behavior of human beings, right?

And that's what we're talking about -- the fear of missing out. That's why I say things like “Psychology.” And that's why I like to be upfront about my attitude when I’m working with someone. “Don't come here giving me a hundred grand expecting me to turn it to $5 million in six months. This isn't a casino. This isn't hitting the lottery.” Slow and steady wins the race. Tortoise, not the hare.

With that said, what is the psychology behind the person that's investing? Are they the type that want to gamble and treat it like it's poker game or are they the one that wants to be the long-term one? All that's important.

And I think for people that are investing, it's important to look inward and learn who you are as an investor or as one of this type of risk-takers.

And then the other thing is, I think the three of us here because we're in our 40s… I can’t believe, Mike, we're middle aged.
ROB: You claim that. I’m not claiming that.
TUNDE: Yeah, I know. [Laughter] You're the youngest one on here, by the way. We'll give you that credit. But you're still in your 40s.
ROB: [Laughs]
TUNDE: You can't escape this. -- But my point is, is that this is what I like about being in this age range is we’re old enough where I can say I worked in this industry 20 years but we're still young enough where I can say, “Okay, I look forward to the next 20 years.” What my point is getting is that I think it takes a lot of… You know, you got to go through it.

My experience was the great financial crisis. I was 30. I had properties. I thought I was the man. I had money in the bank. I had money in the market -- all that. Guess what? Two years later, I had nothing except my single family home and short sales and everything else.

And I’m not ashamed to share it. I feel like it made me a much better financial planner over time having gone through those negative experiences and learning that it's not that easy to buy low and sell high like it sounds.

And when it's your own money, you're emotional. You end up a lot of times buying high and selling low because that's what the emotional state forces you to do.

So you got to train yourself. You got to go through these things. Like other things in life, you got to fail a bit and then learn how you deal with the failure and then you can start disciplining your emotions to move forward and not fail again in the same way. I think all that comes into play and that's why you guys are right.

My nervousness about this is we've got two plus million retail investors that have never done this really much before. Most of them young. Most of them even on margin which just basically mean, in our world, that's on credit, that they borrowed the money from the Robinhoods or the other brokerage firms to buy more stock. And usually, people that are inexperienced, when they start seeing their money go down, the first thing they do is sell.

And like I said, you don't want the banks putting margin calls on the hedge funds and other big institutions because what that does is it forces everybody to sell at the same time.

Just under a year ago, March of 2020, that happened and it caused the market to go down 35% in three weeks because when everyone's selling at the same time, what does that mean? That means there's no buyer out there to make a floor.

So what you want to do, for those listening, is you want to have cash when that happens because usually what happens is the selling pressure is so strong, that if something has a fair value of here and it was here when they started selling, it may end up going down below actually what the fair market value really would be because the selling pressure is so strong.

So that's when those with cash -- that old term “When there's blood in the streets” -- you want to be buying. The problem is most people don't have cash because they're all selling at a loss. That's why strategic patience is key.

And also the last thing I’ll put here is you want to have a sell discipline. So anyone listening to this that does own GameStop… I don't know when this gets released. Because GameStop is moving so fast, in two-three weeks, maybe it's worth nothing.

But let's say today, Friday, it closed at 300 bucks. So someone that's listening to this, let's say, owned it at 30 bucks, I would say you want to have a sell discipline. You want to start selling at some point. Remember, the point is “Buy low, sell high.”

And I find that a lot with my clients with psychology as well. Once it goes high and they've made the money and I’m hammering them, “Hey, let’s harvest some of these gains. Don't get greedy,” “No, no, no. We got to stay. I’m not going to sell.” “Okay.” And then a year later, it careens back down, “Oh Tunde, we should have sold” or “Why didn't you tell me to sell?” “Well I did tell you.”

That’s why case notes are important and emails. [Laughter] But on a serious note, that's where I think we all got to look internally and say, “Who am I and how do I exist in this space of investing and risk taking?”

And going back to the point earlier is, you got to try it and fail a bit and see how you react to that. And if you can react to it well and stay disciplined and get back up and fight another day, great.

And we have a lot of clients that aren't in the market. They don't like stocks. They don't like the ups and downs and that's okay, too. I’m not here to convince someone to do something that they're not comfortable with.

But yeah, this is going to be interesting however this ends. We should have another show after the [first - 37:10].
ROB: Yeah. I’m going to make a prediction how this ends. I see no ending other than GameStop being a lot lower than what it is right now. [Laughter]
TUNDE: Out of everything I’ve read through Wall Street this week, that was the smartest thing I’ve heard.
ROB: Until next time, I’m Rob Richardson.
TUNDE: I’m Tunde Ogunlana.
MICHAEL: I’m Michael Dean.
ROB: And we'll see you next time. [Music]

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