Podcast Episode- Be On The Right Side Of Change
Investing, Saving Money, Stocks
February 07, 2021
Listen to Podcast Episode:
On this podcast, we get an update from Suze on the latest with GameStop and then we go to “Suze School” about investing in Bitcoin.
Podcast Transcript:
February 7, 2021. Today is seriously Super Day, don't you think? I love football. I love football. I love football. What I love most is that KT always sits next to me as we watch football and she gets so into it without even having a clue why she's into it. I just get such a kick out of that. So, who are you rooting for today? I'm personally rooting for the Tampa Bay Buccaneers, even though I love Maholmes, who's the quarterback for the Kansas City Chiefs? Um, because I just want Brady to go out on top. What can I say? I just want that. Anyway, today we are going back to Suze School because I think what's happening out there. There are so many great lessons for us to learn how to be really good investors, how to make money in a way that makes sense and not just flashes. Just not make a lot of money once, and that's it, or whatever it may be, but slow and steady always wins the race. I don't care what anybody says so I just briefly want to reiterate a few of my opinions on GameStop just so we can see. Where are we right now? Almost two weeks after this whole thing happened. Where do we sit right now? You know, GameStop, as of Friday was at $63.77 a share. That is a tremendous loss from where it had gone up to, and especially given that the average price that everybody bought into was about $320 a share. That's a big loss. It's about an 80% loss. And while I know that there are people out there saying don't sell, don't sell, don't sell. It's very hard when you're just an everyday person and maybe you invested your student loan money or your stimulus check or something and you see it go all the way down by almost 80%. And then you hear me say well for you to just break even, it has to go up 400%. It's hard not to sell. It really is. It's a big lesson to learn. When you do not have money to lose, and I know I know everybody's out there saying, But, Suze, this is how we're going make money. This is how we can be for the little guys. Yeah, that's true. Possibly. But the way I personally look at it is this is how you could make a lot of money or the little amount of money that you may have. A lot littler in most of the cases. So, I ask all of you to just watch what happened. And are you happy you bought? Are you happy that you decided not to buy? Do you really think that this could be done again? Really? Maybe yes, maybe. No. It's probably changed the way of investing forever in many ways. But it's something that I hope most of you if you participated in it. I hope you took your profits when they were there. You know, it's a crazy thing. I read that. One of the people that originated this has lost $30 million and he's still holding on. Really? You didn't want to sell when it was up by $30 million? Are you kidding me? But okay. I just wanted to go there for a second, but where I really want to go right now in Suze School is to Bitcoin, because it's just so confusing as to why I'm talking about it and why I'm wanting to educate you on it a little bit and why I'm encouraging you to just experience it in a very small amount of money or an amount of money that really doesn't matter to you. And so, to do that, I kind of want to start with a story and what I learned over all the years that I've been doing this. It was 1980 when I first became a stockbroker, and back then when you worked for a brokerage firm and you were there for a long, long time, you are known as a dinosaur. You had been through it all and you were really stayed in your ways and back then a new type of trading, was starting. It had been started for a while, but it was hadn't gained the popularity that it has today, and that was known as options training. And I really took an interest in options, and I figured out a way to make a lot of money for my clients by selling covered calls. We don't need to go into what that is. But that's what I started to specialize in. And I was very easily making 20 to 25% for my clients on their money. And I wanted to learn from the dinosaurs because obviously, if this was something that I was interested in, then they could possibly teach me. And I'll never forget going to them and saying Suze, that is not how you make money for people. This is how you do it. We're not interested in options. It's not something that we really know much about because this is how we invest. And I remember thinking to myself at that time, man, we should always be open to new things, things they're going to change as times goes on things they're going to change. And we need to know how to take advantage of the change. And it's even true to this day. You know that a company really needs to know how to change itself. And if there are companies out there and they're not on the like the right side of change and what's happening out there with technology and everything, these are companies that probably won't be around like they used to be, so you always have to be on the right side of change. The other change that has happened since I started was that in 1980 the baby boomers now baby boomers, if you remember I happen to be a baby boomer were those that were born from 1946 to 1964 and in 1980 that made most baby boomers between the ages of 16 and 34. And the reason that that mattered is because I remember having a sales meeting every single Tuesday, and people would keep saying that people that would be giving these talks to teach us how to invest, is invest with what baby boomers would want to buy. Stocks that would interest them because it's these baby boomers that, as they get older, will inherit money, there is 76 million of them and blah blah, blah, blah. Let's gear everything towards them. All right, and that's kind of what we did. But that was 1980. We are now in 2021 and now we need to look at the millennials because the millennials currently make up about one third of the workforce in the United States of America, and very shortly before you know it, they're going to be making up 75% of the work force. And a millennial is somebody that was born between 1981 and 1996. So that makes them between 25 and 40. Not a whole lot different than the baby boomers back in 1980 when I first started. And it's these millennials, these millennials are about to inherit one of the greatest transfers of wealth out there. If you think about it, then I'm getting older. A lot of the baby boomers are getting really older, and we will transfer our wealth down to who the millennials and so the millennials. Not only are they making up a big part of the workforce and more and more every year that passes. But they're also going to be incredibly wealthy, inheriting money from the baby boomers. What are the millennials interested in today? They are interested in technology; they are interested in innovation and they are also interested in Bitcoins. They're interested in crypto currency and therefore we have to understand their buying power and where they could take investments. You just have to understand that. But it's not just the millennials that we have to look at. We also have to look at what our institutions doing today with their money because, you know, the other thing that I learned back in 1980 when I first started and I knew absolutely nothing about money, nothing, and people would come and they would become my clients because I was the broker of the day. What that meant, was that everybody that came into Merrill Lynch that day that did not have a stockbroker, they came to see you and it was back in 1980 really the discount brokers and 0% commissions and no-load mutual funds. They really weren't as popular, obviously as they are today. So, most people still did business through full-service brokerage firms. It was the only way to buy and sell. Charles Schwab was there, but really the majority of people were still doing it through the Merrill Lynch's and the Dean Witter's and all those people. I realized back then that I didn't know anything on. What's great about life is when you know something and what's greater about life is when you know you don't know something. And when a client would sit down with me, I would be honest with them. I would say, you know what? I don't know about any of this. I'm learning, I don't have any money. And I remember them saying to me, don't worry, Suze. We have money. That's why we're here. But we also know what we want to invest in. So just do what I tell you and we'll be fine. And that's how I started. And I then started to realize that there were certain people with large sums of money that when they did something, I would call up my other clients and tell them to do the same thing. So, I was going where the big money was going, and that made me money. Not all the time. Sometimes we lost, but the majority of the times we did not. And so now we have to look at where is the big money starting to go? What is starting to change for the first time since crypto currency has come out on, one of the things that is starting to change is that major corporations are putting their cash into Bitcoins. That is starting to be a big deal. I started to notice this a while ago and it was really around my birthday, June 5th, last year when I was just looking at, you know, certain corporations in certain companies and how much cash do they have on hand and blah, blah, blah, blah. And then I came across this company that had been brought to my attention, actually, and they were at $125 a share on around June 4th or June 5th, because that is when I bought in. I do currently still own the stock, and I started to look at it and the CEO. He decided that he was going to put all of the cash of this company, a technology company, into Bitcoin versus letting to just sit there in cash reserves, making like half a percent, 1% whatever it may have been. And I'm thinking this guy is so whacked out it's not even funny, but I'm thinking, let's see what happens. Bitcoin started to go up and up and up, and I started to notice that as Bitcoin went up the price of this stock started to go up and up. In fact, on Friday it closed at $806 a share. That's a 544% gain from where I bought it back in June. This corporation is playing Bitcoin with its reserves and because Bitcoin is going up and is Bitcoin going up because corporations are starting to put their money into Bitcoin. Is this a very interesting thing that's happening to Bitcoin? And then I started to look at other companies such as Square, which put 1% of its assets into Bitcoin. And if you don't know what square is squares this company that was created by Jack Dorsey, who created Twitter, where you know you can swipe your little cards and everything fabulous little company that's made a lot of money. But what really is crazy is that seriously conservative institutions are starting to put their cash reserves into Bitcoin. Another one that was called to my attention was that Mass Mutual put some of its money about $100 million which is nothing to them, by the way, just so you know nothing, it's like pennies to them into Bitcoin. Now the reason that I'm telling you this is that Bitcoin now is starting in many ways to become very legitimate when you see corporations starting to do this and I understand that there are many Cryptocurrencies out there. But currently, as we speak, Bitcoin really is one of the most secure. So not only that, but now you have all these other places because remember, for all these years, I remember sitting down with somebody so many years ago who had hundreds of thousands of dollars in Bitcoin in this wallet and I couldn't understand the concept of this wallet. And she kept the wallet in India with her father so nobody could steal it. And I'm like and Bitcoin was so cheap back then and I'm like, I don't think so. Where do you get a wallet? I don't understand passcodes. What if you forget your passcode and I wasn't interested until seriously, I started to see this one stock and what they were doing. And then I had noticed that PayPal you could actually buy Bitcoin on PayPal. And then I'm thinking, Oh, my God, they're now making it so everybody, everybody could invest in Bitcoin. And then you see Fidelity wanting to get in to being into Bitcoin, being able to, hold the Bitcoin assets and you have all these other exchanges now and everything that are making Bitcoins seriously legitimate. So, for those reasons, those reasons from the millennials to the corporations and to the future off the $600 billion market. Now this is not a GameStop play. But those are the reasons that I am starting to get really, really interested in Bitcoin. Now, I haven't checked Bitcoin today because I am so busy getting ready for the Super Bowl. But yesterday, last time I looked, it was backed up at almost $41,000 a Bitcoin. Now, so many of you got mad at me because I first start talking about this to all of you. When it was around $42,000 a Bitcoin, then it went down to $29,000 a Bitcoin. Remember, this isn't where you go in and you buy a big sum a Bitcoin right now. And that's that. Little by little, Didn't I say to you if it was $50 a month or $100 a month. But the main thing that you need to understand is that I really do think that there's something here that we need to examine, and I do think on some level it is the future. I don't know where the future is going to go. I don't know where the millennials they're going to take the future, but I do think it's something that we should be involved in now. KT says to me the other day, Suze, you have to explain to everybody who owns Bitcoin, who owns them, because you know, Suze, you talk about a stock and we know individuals own stock, but they're buying stock of a company. They know the company. They know the CEO. What do they know about Bitcoin? And I said, KT, that is the point. No, nobody owns Bitcoin. And because nobody owns Bitcoin, that's why it could be democratized. That's why nobody can really stop this. It's not like Libra now. Libera was the name of a crypto currency and is the name of a crypto currency for Facebook. And because Facebook, in essence created and owned in its own way, Libra, the United States and China was able to come and say we do not want Libra to trade and kind of came in and kiboshed libra because they had a place to go, because somebody kind of owned it. With Bitcoin, they can't do that even when China shut down Bitcoin saying you cannot trade Bitcoin here. It didn't matter. It didn't matter because people just did it in Japan and all these other places and so they weren't able to shut it down, really. And so, Bitcoin is, a whole different entity because nobody is in charge of it, which, believe it or not, makes it great. Now I don't know if this was all too much for all of you, but I don't think it is. But what's important about today's podcast is I want all of you to start to put on a, whole new type of investing hat, which allows you to bring in different alternatives, different ways to think and what the future may bring. You know, and I've told you this before, and I'm going to tell you this again. One of my favorite investors is a woman by the name of Kathy Wood. And I really think that a lot of you should look into her Arc Innovations Funds because I think as time goes on, it's going to become more and more difficult in terms of what stock? What should I do? How do I do it? Unless you really get involved with it. And at least in Cathy's exchange traded funds and I think there's 3,4, or 5 of them, she knows when to sell. She knows when to buy, and I think you would be in really good hands. You might even be in better hands. Now you're all just going to think I've lost my mind here than even the Vanguard Total Stock Market Index funds. Or they're standing and pours index funds because I think things are going to start to change. Now, the great thing about Kathy is that she does all of her research and everything and puts it online for all of you to read. So, if really you're interested on any level to continue to, learn about these things, then you would go to ark-invest.com and just start to get to know this. So, this is a little bit more of a heavy Suze school today, but one that I think we need to go to one thing more before I end here. Which is I was being interviewed. Um, I don't know. I did so many interviews last week by somebody, and they said to me, Suze, when women want to learn how to invest, where do they go? Where do they want? You know, what should they do? They need to learn, how do they do that? And my response to them was very simple. There are so many places out there that you can learn what you need to learn. But the problem is, do you want to learn? Because if you don't want to learn, you're not going to learn. But there are thousands of places, whether it's watching CNBC or again listening to this podcast or reading one of my books or going to ark-invest.com or whatever it may be. There're so many places, and I think it's so important that you really do get involved with your money and you start to learn about it in even more detail. Obviously, we have to do personal finance. You have to know. Do you do a Roth or a traditional student Loans? Mortgages will always do that. But I also want you to learn how to become really a little bit more independent with the investment decisions that you make. Because when you're powerful over your money, then you're powerful over your life. And that is the goal off the women and money podcast. So, this is another podcast that you might just want to play over and over again. So, you can understand what I'm trying to teach you here. And I'm trying to teach you because I want you all to be strong, smart and secure. Enjoy Super Bowl today. May the team you're rooting for absolutely win. And may you always remember that when it comes to money, there is only one thing that matters. And it is this people first, then money, then things. Now you, stay safe.
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