okay hello everybody and welcome to
investing with IBD I’m Irusha Pierce your host and this is a bonus podcast
episode of holiday edition we have Jim Roppel here in the studio it’s still
December 11th but we ran out of time for a regular segment and we wanted to add a
special episode that we like to call war stories with Jim Roppel so we’re gonna
go over a number of really cool stories that Jim has had over his 30-year career
and hopefully these will be there gonna be a lot of great lessons for all of us
to take from them so Jim let’s start off with your upbringing because you had a
tough upbringing and there are obviously a lot of lessons that we can all learn
from this yeah it was you know I everything was great you know I had
great parents we were once we were poor like we went
on food stamps or anything but we didn’t have any money and we kind of we grew up
in a town that has a lot of kind of hidden deep wealth in it and uh that was
a defining moment for me because I was poor or broke I couldn’t buy nice
clothes and I had friends who would this is 30 years ago they’d spend a thousand
dollars without even asking their parents long and I said you know that
really built a fire in me I said I really want that and to give you an
example like my dad bought his first house for $7,000 oh my god and so right
around third grade the whole world kind of shifted under my feet because I
realized these kids are reading and doing math and I was just looking at it
like it was Chinese III and they realized I had dyslexia and I was also
I’m about five feet tall I’m a dwarf and I was a super easy target for being in
these LD classes and I was bullied a lot I mean I wouldn’t say I didn’t get beat
up every day but I got pushed around a lot and picked on and so the two
defining moments well my parents got divorced also and so the defining things
when I was young was people who had a lot of money and I had none and being
dyslexic and being bullied so it you kind of made me work very hard I would
literally would shovel for driveways on snowy days before school Wow and I I was
always a very hard worker and I think that seeing what money could buy
and what other people had built a fire in me so I don’t think raising children
with a lot of money is a good idea and so those those are my mother was my
like Savior she every night when I would go to bed she knew I was struggling
deeply and she asked me every night tell me three bad things that happened today
and three good and she got me through all that well I mean my mom is the
reason that I am where I am today but things got a lot better and I I overcame
my dyslexic issues and I went to college and I met so two really great guys one
of them’s dad was a stockbroker and the other one had inherited a bunch of money
and was in the market and the three of us just Dovan to the market and then the
crash of 87 happened and I was just hooked
I mean captivated and I went on and in my first interview right out of college
the very first one they hired me as a cold call stock jockey but the problem
was I had no idea what I was doing zero and I would spend all this time building
big positions in stocks and then they would blow up in my face I mean this is
about biotech I built a big position in a stock called Centocor I mean I spent
like nine months cold-calling opening accounts it’s very hard to do
and they had a drug called sin toxin which was it cured septicemia the FDA
approves it and then in the boomerang odd ball of all things they rescind
their approval oh and so I was buying it eighteen to thirty dollars it goes to
sixty they pulled the FDA approval on the
stock implodes to back to like eighteen and it went there in like a couple days
yeah so earnings matter really matter and so I blew up my book many times but
then I found the system I found the first the paper than the book and I kept
studying and reading and cutting losses and I really started to get success from
it and my business really started to grow as I
started to make money the problem was as all my customers were making money over
time I started to realize that the brokerage firm was not our friend and
I’m not really going to go into why but I realized that it was rigged against
the customer they were only interested in making money and I I could make a lot
more money running a hedge fund so I left and I started to get kind of closer
to Bill back then well I was a customer and Bill and I would talk on the phone a
bunch and I got so fortunate that bill really took a lot of time with me and I
would send him FedEx packages and he would hand write on these notes I mean I
brought some of them yeah yeah and he would just write out pages six I just
showed you five one incredible and so I really got I was very fortunate that
Bill spent time with me and he helped me hone and another guy named Lee Freestone
who we used to work here Lee and I became friends and he spent time with me
and so it that’s kind of the story yeah and it’s interesting a few other things
you’ve told me it’s that you know you were cutting your losses and you knew
that one day you’re gonna stumble onto a monster right one day you’re going to
find yourself in one of those great stocks it’s kind of like if you want to
be a big wave surfer you have to get off the beach and get in that water and you
have to have the wave curl over on ya and curl over you and but if you cut those
losses and you’re doing everything right one day that wave you’re gonna catch it
and it’s gonna be a monster and I was literally sitting at my dad’s desk in
his office and I was writing down what I paid what I cut the loss and over and
over and I go you know one of these days I’m gonna catch a monster
yeah and sure enough they all came yeah and and you will make you also realize
that you will make money over time if you take the time to learn the system
and and keep going to and really do things that no one else wants to do
absolutely time I mean over long stretches of time I mean my wife my wife
literally said the first several years of me as a retail broker I lost money
every year my wife’s like you are in the wrong business full-blown I want you to
quit and get a different industry yeah go be a lawyer sell insurance or
something but and she was probably right I mean their tax returns were a disaster
but I was not give I mean I read a book called a random
walk down Wall Street and I took it I was like a quest to prove it wrong I
knew that was crap yeah well it’s crap for people who won’t apply themselves
and do all the right things but I’m sorry it’s crap for people who will do
all the right things so and and so in the end with Europe bringing all the
kind of odds against you you know you’re proof that you can make it if you put
put enough time and effort I’ll just tell you I mean I my grades were not
really good they were bad they were horrible I couldn’t read and do math in
eighth grade they just pushed me along no in college I I got a lot better by
the my senior year but you know like the only class I did grading in college was
like economics because I was fascinated by it so being a great student is not
that relevant to making money in the stock market but having great discipline
over long long stretches certainly is awesome so let’s go to let’s go to the
next story what we’ll call this story three amigos and and this is about some
analysts who made a prediction about a few stocks that were gonna I think they
were predicting it was gonna they’re gonna go to zero or they weren’t gonna
do very well yeah I was working in a large wire house at the time and I had
built a really big position in eBay and I come into work one morning and the
well-known analyst and CNBC all the time comes out with a report and it’s called
the three amigos and it was eBay Amazon and Yahoo and she’s like are all there
they had it was a ten page report with 30 thousand reasons why these stocks
were going down they were over vent there’s a thousand reasons and again
they rattle all the sacks that rattled the whole sector but I the charts were
speaking to be I know I couldn’t imagine all that accumulation just going away
and immediately so the report is right here and it’s dated May 1st 2003 and
eBay went for split adjusted from 9 to 25 and about a year and a half and and
that and eBay was Bill’s biggest position at that point – yeah I mean
when you looked at eBay if there’s 30 variables in a cans limb
template stock it had 29 I mean you could lose money but you’re just if you
buy stocks that have 29 variables on out of 30 over time you’re you have an edge
a significant edge and I knew I had it and it went from 9 to 25 so it adjusted
Amazon went from 22 to 60 it’s a 200 percent gain I don’t have the stats on
Yahoo but again it went way out everyone did really well the sope analysts they
don’t have any skin in the game yeah and so the three amigos happen to be the
three good amigos so you pay attention to analysts they don’t be skin in the
game right and also it’s in the markets always right if you learn how to read
charts you learn to analyze the way we do here you’re going to find yourself in
the best stocks because you’re actually following the the real action or the
buying action of the smartest people in the room and they’re slowly acquiring
these these great stocks at the right time absolutely and you will get you’re
absolutely going to get down grades and leading stocks because valuation people
want to rattle them down but I think Bill said three hours to three days a
downgrade that’s not worthy of its if it’s an incredible report the
institutions are going to come in and that’s why it’s really important to have
great institutional support a lot of these stocks trading in the first 30
minutes of the day is got to be the worst thing you can do yeah I mean
there’s a rare case on the gap up on earnings we’re having the experience to
know this is a time when you have to break that rule and get in there but
most of the time you’ll have Maria Bartiromo jumping up and down saying
upgrade on this and the institutions are going to sell into that about 20 minutes
later yeah so the three amigos great story but Institute analysts are just
taken with a grain of salt okay let’s take a quick break here and we will be
back in a second hey Irusha here with a big announcement
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investing with IBD and this special episode of war stories with Jim Roppel
let’s go to the third story and and this is about ego and this was a valuable
lesson that you learned the hard way so I was having a really really good year
in 2011 and you do really crazy things like buy expensive cars or fly on
private jets and I love love love to play golf and I rent a jet and we fly to
a place called Bandhan dunes which is mecca for golfers and my ego was running
high and I knew we had to get there early so we fly out before the markets
open it so I’m not watching for the first hour so we land and I mean the
second wheels are down I pull up my handheld I’m like this can’t be right
I’m like this is there’s a glitch so I call the trading desk in like No
everything you have is down like 20 points and I am like kind of freaking
out and the driver looks Amiga Street you look a little distressed he goes are
you gonna need your phone I’m like yeah I was a hundred and fifty million long
75 million on margin I was really long the world he goes there’s a snag the we
had a huge storm at the golf course last night up on the hill and goes there’s no
cell service and I’m looking at this and I’m freaking out and I look
all the charts really quick and I made a snap decision I sold fifty million
dollars for the stock on the spot so we get to the course play golf and I can’t
I’m with my three best friends at Mecca I can’t hit a golf ball I can’t do
anything I’m walking down the fair with the handheld ruin my whole day and at
that point this might have been my biggest loss I think I lost four million
dollars that day so we finished golf all my buddies go off into the bar they’re
having a great time I go into the clubhouse and I go to one of their
computers and I download Wanda and I fired up and I spent about two hours in
there and I’m like well it’s just a disasterous day but you know it was a
charity event I was gonna make a contribution so I get my ego was just
raging but I like I go I go back to the bar and have a drink and I’m like it was
a bad day but tomorrow will be better it’s not not that big of a deal the next
day I think it might have been a app begin with an a acme packet I think okay
Acme packet misses and it just I’ll leave her this the next day I lost like
six million or whatever it was day one I lost thirty percent more than next day
it was just and I’m thinking in hindsight I’m like what was going on I
fly leaving the market naked on the open I’m in a private jet I mean all these
crazy things happen after your and I by the way I was a way up that year and I
ended up having a mediocre year so when you’re doing things like extravagant
things you’re feeling overly confident you’re gonna get pummeled so and
especially when your driver says do you need your phone and you’re not gonna
have it all day that just was like I think went like white like Casper the
girl yeah okay let’s go into SDL I and and this was a really interesting really
interesting story about patterns repeating yeah this is um in early or
mid 2000 I think the market had already peaked because I was reviewing this the
other night I was like it’s really odd that this stock roared I think the
market at peak before but the pattern to me an stl I looked very much like
Broadcom which had up to that point but my largest gain and I said oh this is
going to be great so I I buy some around 200
and I remember I was playing golf about three days later after the market closed
and I got stopped out of it I’m so disgusted I walked off after nine and I
was just frustrated but the stock turned around about five or six days later
crossed the high by a thousand it crosses the next high by another
thousand and then the third high so I was three looks like a stair step down
okay I’m long and this stack roars from 200
to like exactly 320 and so I remember I was in my old house and I’m in bed and I
wake up and I look at the pre-market I could pull the covers on and look at the
tape and I’m like it’s down 70 points and I just took the covers pulled them
over my head and I’m like I just lost like you know big money yeah so I’ve had
none of the covers for a few minutes I pulled the covers back up and I’m
looking I’m like it’s not down 60 it’s up like a hundred it was like 80 because
Jay Deus unifies made a bid for it Wow and so it explode it wasn’t down it was
up so it’s trading around three six three twenty and it on the takeover it
wasn’t a cash deal with a stock deal and yoonah phase then blew off and it roars
to 480 and just this whole thing happened in like a month so I went from
walking off a golf course gotta get stopped out right to freaking out
thinking I took a giant loss to having one of the biggest games I ever had
yeah but so but you once you got stopped out once it started doing something
better you started to get back into the stock though – yeah the the memory of
baidu was I’m sorry Broadcom was so fresh in my mind I and I
the pattern looked really similar and again earnings were up triple digits the
prior three quarters it had a chip that had to be had for fiber-optic
multiplexers which there was a bandwidth shortage at that time okay
and the for everything it all lined up but I just found that um when you wake
up in the morning and think you’d lost like a huge amount of money and actually
you’d made a huge amount of money is something to wake up not wake up to and
then wake up ya know I mean that was a good case scenario right there of things
turning around now let’s talk about Enzo biochem and and uh a mayor that you were
talking would okay this was a thinner stock back and again I think it’s right
around 2000 and there was a the mayor of our town of this little town called Lake
Forest was a broker in our office and he specialized in biotech and I see Enzo
make like a perfect cup and handle and I buy a bunch of he’s like hey welcome to
the club man this is the greatest stock in the world and it has a great pattern
in it it really it was an exceptional blow off and it I can’t remember psyche
where I bought it but it went up like a couple hundred percent in a very brief
period and so one morning I walk in and it gaps open and call it 20 points or
more and uh listen and watching it and next thing you know it’s up five and
then it’s even and next thing you know it’s like down five or ten so I call I
literally called the floor I said sell everything I had one big block and the
guy freaks I was like there’s no buyers at all and then they halted the stock
and they reopen and they blow all my stock out and it’s down like I think it
was down 18 points down Wow and the mayor in the back office comes running
down the hallways like you idiot they have a cure for AIDS he goes if you lose
like it’s gonna go to a thousand you can’t sell I’m like I go dude I go I
don’t know whether they have a cure for AIDS or not button the market doesn’t
think so he’s like you this is the biggest winning stack is this gonna
change your life and um as far as I know he still has it and it’s gone I think
it’s certainly to the single-digits if it’s not even around anymore but it’s
kind of hard having somebody go this has got they have a cure for AIDS yeah and
the stock is just made you so much money you’re you’ve got that intoxication
feeling but it was only at about say I was buying it in 30 40 50 60 was a
hundred and fifty or more and when someone says it’s gonna go to a thousand
right do the math right I know you’ve got a cell yeah because it’s reversed
yeah so that’s the story of the mayor I am it is a good lesson though the –
regardless of what people say and what stories are promised you have to listen
to the mark and listen to what the stock is doing because clearly the
market didn’t agree that I had the cure well they didn’t have a cure for it what
exactly I mean the market knows the market is gonna ferret out bs every time
I mean maybe not the market can do funny things for a few days or so prices can
get out of whack a little bit yeah but the markets gonna figure it out
right anyways in the end it’s gonna go it’s going to go to the fundamentals
whether whether it were to you whether you like it or not
absolutely so let’s go to Baidu and and this was a this was a stock that that
you were trading uh during what 2006 went when it really started going so I’m
watching Baidu it has an IPO and it explodes up right and it was a lot of
hype and then it just kind of went dormant and it went and I was very
enamored with it because there was what 1.5 billion people in China right and I
read that only a hundred million or something like that were online but
every day thirty thousand people were going online it’s a mine bog and I’m
like this is a lock and then I find out that the Chinese government is in a
battle with Google over privacy or over free speech so Google says you know do
no harm we’re at work we’re not gonna acquiesce to you so what does China do
they redirect every query to Google to Baidu
so now I know there’s a massive total adjustable market they the leading
competitions blacked out and so this stock just takes off and it goes wild
and I really it had like many weeks in a row up and I
built a really really big position I think it was around 750 dollars a share
or something and I had and it might have gone to a thousand yeah and I had 75,000
shares and it splits ten for one and one morning their report earnings and during
the call they say oh by the way we’re gonna completely change our whole
platform from what you know now to something called Phoenix nest and it it
gapped down really big and I this was the biggest I had 750 thoughts
I think it’s 750,000 shares which was just a Earthshaker position yeah and the
loss on the day what it was really big and I you know just
made my stomach not up and I ended up selling off a bunch of it but it turned
around it just it seems like days later and I add it all back and it went into a
phenomenal climax run and I got out of it in many different pieces but it it
was well my notes the bottom line is you’ve got to have the fundamentals when
you know you’ve got a story where the total adjustable market is enormous the
government’s on your side all these things line up the every stock that I’ve
had where I’ve done exceedingly well I knew intimately the fundamentals and
they just seemed to all line up and they’ll have these bloat they’ll act
just like the prior stocks with earnings and just all the variables yeah but
let’s also talk about there’s a stock that’s gapping down on you right and or
and in starting across a threshold that we’re there you’re taking on a lot more
risk that there’s a point where you can’t freeze right you have to act well
what if I was what if it did blow out like I had so much it could it could
have ended me yeah it was a that was a monster position and I had to sell some
you you cannot freeze but again you have to be vigilant you’ve got to understand
that both things can happen so I trimmed a bunch I might have sold twenty or
thirty percent but what it started coming back up I add it right back in
yeah and again this didn’t happen overnight this one took I was in it for
eighteen months and so there was a lot of selling a little bit when it got
really excessively high adding back in but it was my biggest gainer ever I mean
I think I mean really it was it was like twenty five million dollars on and I
think so my fund crushed it yeah but so knowing your fundamentals intimately and
having a blockbuster story not just an okay sort of like one of the best you’ve
ever heard and then sitting for the distance knowing the average winning
stock like the longest winner in history was waste management I think it went up
222 weeks but the average is about 95 98 weeks in
if you’re gonna catch these monsters you’re gonna have to sit through
many pull back to the 50-day and I and you’re gonna probably have a couple
earnings misses along or maybe one miss and but when you understand the
fundamentals it gives you the the fortitude to stay with it and and and
you have to set through a number yeah and and yeah as you said sitting you
have to sit through a number of these earnings reports and the big winners or
when they’re on that great run they’re gonna have good reports one after the
other they may there might be one out there a
few of them or they’re gonna get hit and test you but at that point you already
have a low-cost basis you’re hopefully up a decent amount that you could ride
through that yeah the cockroach theory prevails in most leaders with a beat
they beat they beat and that’s you have to sit you have to know history you have
to know history the leaders history the market and once you once you have that
and you have some confidence you’ll be much more likely to sit so let’s talk
about SanDisk and now this this was a stock that came
up on your your screen your volume up screen and and well let’s go over this
story then now these guys have been acquired right they they’re they’re no
longer yes wait way down the road they were but yeah I know in saying this
because it’s just been a semiconductor company for a long time and I thought it
was a semiconductor company but I’d recently had my second child and we this
is 2003 I think and so you have to come to the office early and you have to run
your volume screen and I look and there’s this stack its SanDisk and it’s
up I think average daily volume was somewhere around a million a million
five a day it that day it treated 23 million shares I think Wow
so it wasn’t just a gap up on a massive earnings I mean they and again I’m gonna
overstate the case but say they were supposed to earn seven cents that day
they earned like 21 it was a crushing beat so I buy I buy this in every
account I’m managing I mean I load up it’s a little bit of a misnomer I bought
I bought it for everybody yeah but I write on the the second I saw that I
bought it across the board for a half a position for everybody and about an hour
later my wife calls and I’m like what are you
doing she’s like oh you know we’ve got that digital camera I’m like yeah she’s
like can you believe it’ll only hold five pictures you have to buy this thing
called a memory stick and it’s made by sand discs and I’m like little do you
know I just put half your IRA in this thing and I’m like I heard that and I’m
like oh my god now I have the fundamentals and the earnings beats and
the volume and as the day progressed it was like every other hour I added added
added and the thing sand is closed at the dead high and it went on a run of
many months and it at one point after it was up significantly I was very lucky
and it was it was really luck it was super extended over the 50 and I
said you know this thing’s gonna pull back to the 50 it’ll probably take a
couple weeks to get there you know whatever so I I leaked out about 30
percent of the whole position across the board and to my surprise about a week
later sandy cove to the 50-day in about two days or more and I when it broke the
50 it broke it so violently I just I just let all of it rip because it was
such a big game for me but the the story again is fundamentals yeah yeah if you
have children this is Peter Lynch follow your
daughter’s around the shopping mall I call my wife the procurement department
so you know whatever you need Leo gets she just goes out and gets whatever we
need so she’s follow your wife follow those kids get the fundamentals and when
you realize there’s a revolution in photography that has to have a memory
stick in SanDisk is the leader and they blew earnings up by 300% ask them above
estimates yeah it’s the fundamentals bill would say I’m more of a
fundamentalist than a technical Chartist and I think people got very confused
with that because he’d get so excited about charts he would speak more about
the reversal or the whatever and he he overstated may be the case build you the
greatest but now I also talked about you being impulsive right and and acting so
so SanDisk was up huge on that day and you didn’t really hesitate you started
buying at that time and sometimes now a lot
sometimes you have to do that right especially if it’s after an earnings
report there they’re blowing out there that they’re completely blown away
expectations and there’s a great story there sometimes you just have to go over
after it kind of like a decks come it’s a more recent example of that it’s if
you don’t understand exactly what it looks like through a lot of experience
you can make a lot of dumb purchases right and sometimes even really good
ones are gonna revert you have to be ready for them to reverse but it’s being
impulsive is a double-edge so you slow and determined waiting for that perfect
pitch like I said overtrading is is the death knell for so many people
you should only be buying a couple times a year on great cup of cups and handles
how often they form you’ve got to have a correction yeah but then there’s those
rare occurrences when you just have got you see it you line it all up and you
have to make a decision right now in in it sometimes in the first 30 minutes and
but then you don’t plunge you take half your position and as the day progresses
you add it just keep adding and adding and adding and if it closes the dead
high and the volumes you know it’s supposed to trade a million five and it
trades twenty three million shares right well you know that was that was clearly
some whales and they’re not there analysts are doing very good work yes
so all you have to do is follow those whales and they’re really doing that the
research first you’re gonna I would say half the stocks that I’ve had good
success with we’re gap ups on earnings I mean it’s and it’s scary maybe the
volume wasn’t twenty three million shares the stock would it closed up
twenty three percent on the day now how many people are gonna go sure
I’ll put a third of my account into that stock right up twenty three percent
right that’s scary very scary yeah okay so
let’s take a quick break here and we will be back in a second hey guys if you really enjoy listening
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get your feedback thanks so much for listening and we’re back with this
special episode holiday version of Investing with IBD war stories with Jim Roppel and so let’s get into more stories so now let’s talk about disappointments
and hypes because this is something that everyone
can fall prey to especially if they read some article and say that you know this
new technology is the the next great thing and and I think we all fell prey
to this because it sounded so cool but 3d printing 3d printing I honestly
thought by this time in history that a third of the country would have a 3d
printer in their house I mean I saw that print product would be printed at
point-of-use yeah I saw so many uses for this I was overwhelmed by the
fundamentals but I wasn’t using the product and I didn’t understand that it
was very very complicated and complex than the average person was never gonna
be able to program this thing and so the hype around these and the stacks did
have to go on pretty good runs though they had some good runs but they they
just didn’t follow through for the long term and they I would say almost all of
them ended up going into the single digits so I think the one that I really
is the weed stocks the hype around the weed stocks
it was so enormous yeah and they just proved look at him today
the tax-loss selling is gonna drive these things into the low single digits
before before the new year’s eve yeah hype is I gotta tell you the I made one
of the biggest bogeys of my life I I put some money in a cryptocurrency and it
was I put I’ll just tell you it went from almost nothing to in my own
personal account three million dollars and I didn’t quite understand that it
wasn’t as durable as a concept or they weren’t as evolved in the process as I’d
thought so number one when you have something like that
you have life-changing money you need to take take some of that off your table so
you bought kryptos yeah oh okay yeah well I actually have a crypto hedge fund
also stocks okay but when you have a game like that and the hype is just
insane like everyone is talking about out of the Christmas table yeah that’s
right Thanksgiving table and then they reloaded Christmas yeah there’s there’s
too much hype in it that’s when Bitcoin was like about twenty thousand yeah
right there right I remember those two years ago and I’ve seen people I there
was a secretary when I was at Morgan Stanley who bought a tiny little stock
and it went to 27 it was a it was maybe a dollar and she didn’t take any of it
yeah and it went to zero I mean I’ve seen this in my life I know probably six
instances where people had life-changing money where it went to zero so you’ve
got to take these things and they invariably are on these junk little
names that and it’s all about the hype and you just if there’s like when
Facebook came public when you’re when somebody knows nothing about the stock
market should we buy Facebook no right yeah or or the weird thing about
Facebook cuz you you could get actually get the pre IPO shares of Facebook that
it was just kind of being no ed you want to people are trying to get out of it at
that point I don’t think I’ve ever seen anything like that where for such a such
a big stock thing to come out that you could actually get the normal person can
go and get shares before the IPO and people weren’t just getting what they
asked for they were getting all of what they I mean they were some people I know
a guy who got more wow that’s just that’s the death and I’m the converse
the opposite side of that when you’re in a bear market if a stock can go public
that is of the very very highest quality now the market may be in a wicked
downtrend but when they launched a deal in a bear or yeah you absolutely have
got that is that’s value that’s an awful thing
but it’s valuable information that some of the biggest biggest winners were
launched in bears so the opposite the opposite of hype yeah if they can get
people to pony up their cash when they’re getting mauled there’s something
special there so let’s let’s end with one more story here and and this is Eve
and and Eve is a shopper right she she’s she’s she’s part of your team yeah and
and she’s a shopper and she she’s she’s managing money and she she’s really into
the system and she’s here a lot of times at the master’s program but she goes out
and tries a lot of these products to really understand them talk about that
no matter the price like a Tesla is not out of range for a market research yeah
she whoa Green Mountain Coffee yeah the cured me she bought that she I mean she
buys almost all of these but one time there was this Chinese I think it was a
software security stack and we’re looking at it and she so she goes she
didn’t even tell me so she goes on the website and this stock had all the
variables it looked great I I do think it might not I had institutional
sponsorship but all everything seemed to be in place so she goes on the website
and she calls me the next day and she’s like Jim I couldn’t make it work she’s
like I’m not even sure this is a real company she’s like there’s something
wrong well the stock procedure to do pretty well and the next thing I come
into my office like a month or two later and it’s halted it never I think it
never reopened it was a fraud oh my god so having a shopper like she’s a varsity
player yeah go and use those products and if you could using the products
knowing what people are buying in mass kind of surveying people like I just
talked to a lot of people very recently what do you want for Christmas and
several people said you know I’m investing in my house I’m not buying a
new one and I thought Restoration Hardware yeah and it just kind of had a
nice gap up and it was sitting it came down to the 50 yeah but it never broke
it and it just sat there I’m doing something special by me and so
I had the knowledge of what people were you know it’s it’s kind of a it’s
anecdotal yeah not hardcore research right but it’s valuable
yeah a lot of times you’ll stumble onto it a great idea if you just kind of keep
your ear eyes and ears open I mean that’s how I stumbled on Tesla years ago
I just saw the the car it was right near where the master’s program is it’s on
Third Street Promenade right there they had a shop and I I was like I’ve never
seen a car as amazing as this and it’s 90,000 and they’re selling out of it
left and right they can’t make them fast enough right and there’s all these
haters and now it’s like the truck is it’s better than any other truck out
there and there’s people saying I literally a well-known hedge fund
manager came out and said I doubt it will ever be produced we’re talking
about possibly the Thomas Edison of our time here yeah he’s he’s proved the
haters wrong over and over and over with PayPal with SpaceX the whole thing yep
and if you drive one of these I’ve driven a couple of them you talk to
these owners they love these cars yeah so now there’s a time to be in it and
then there’s a time to let it digest right now is a time to be and I would
have actually liked to have talked about Tesla it’s current talked about right
now well it you know it had a monster
earning speed it has excuse me one second yep so it’s had a big beat back
in October on October 24th and had a massive gap up 17% at that point and
it’s right near new highs now it’s slowly just kind of grinding higher and
right in your new highs they beat by 542 percent the volume signatures been
really good it had a little digestion it’s it’s running up the estimates are
they’re expected to make 540 next year the up to down volume is 1.6 now here’s
the beauty the group strength is number six Ferrari is in here that’s right no
what does it say about this the current economy when Ferraris like they can’t
really good point well I guess people are making some money right now yeah and
this stock just acts great now I think like 25% of this float is short
if this makes a new high this is gonna be a very very bad day for the shorter
right eye and you know tilray was a short squeeze now that’s a very
different situation there was a illiquid stock but tell a doc I I don’t want to
overstate the case but tella dock might be like 35 percent short yeah and it is
acting pretty well Tesla has a lot of the variables I look for it’s a
revolutionary product and you tell me show me a Tesla owner who doesn’t like
it okay then I might actually won’t sell because most people do yeah Tesla looks
would have been an I own Tesla right now Yvonne’s Tesla Eve is a pro shopper I
mean who is so dutiful that she’s willing to spend that kind of money
that’s true to do market research that’s right and
with Tesla with the with these all the owners there they I’ve seen on the
internet they they get together they have like Tesla events like at a place
it’s pretty remarkable it’s kind of like a club yeah I think European auto
manufacturers came out and said we’re not going to design internal combustion
engine cars they people work wow I think I was just in China it’s stunning how
the the mass of humanity it’s quiet they’re all on electric
scooters and a significant amount of the cars there’s no engine noise you the
noise you hear is the rubber on the road though the whirring oh that’s wild
there’s no question it’s more efficient it’s just a wildly superior product so
shorts I Merry Christmas and so let’s end this bonus episode of investing with
IBD war stories with Jim rope old Jim thanks for taking extra time to share
more stories with us it’s been very valuable my pleasure
I just want to say you know optimist prevail never ever ever give up your
time and dutiful attention to it but never give up your edge never sacrifice
with lower quality and just if I can do this
anybody can do this so Merry Christmas well said thanks everybody and thanks for
listening you