How to get rich with stocks (without math, charts or models)

**SPEAKER_1** (0:00)
You really only need one great trade to be a top 1% investor. The most inherently ground true thing of investing, the most important thing, the thing that matters more than anything else is, I don't look at valuation, I don't look at PE. All I look about is there is new information. I've been reading TikTok comments. That's where I get most of my alpha from.

**SPEAKER_2** (0:22)
You have Buffett or Munger who are like, reading the Moody's manual, cover to cover, just company financials. And you're like, I scroll the TikTok comments.

**SPEAKER_1** (0:30)
That year I made like 30 million in one year and it was a wild ride.

**SPEAKER_2** (0:34)
You will try to beat the market, you'll trade with leverage, you're moving in and out of positions, you're not a buy and hold forever kind of guy.

**SPEAKER_1** (0:41)
Just before the pandemic, I had made the worst trade of my life. I lost a third of my portfolio on a single trade.

**SPEAKER_2** (0:50)
Okay, so let's break it down.

**SPEAKER_1** (0:52)
This is where the biggest mistake ever was.

**SPEAKER_2** (1:03)
You break all the rules of investing. What I normally hear is you should just index, don't try to beat the market, don't take any leverage.
You do the exact opposite, right? You will try to beat the market, you'll trade with leverage, you're moving in and out of positions, you're not a buy and hold forever kind of guy. According to the Internet, you've done pretty well. So I've seen some different numbers that have floated around. Can you set the record straight? What is the actual story?

**SPEAKER_1** (1:31)
Yeah, I started with 20,000 in 2007 to try this new methodology, which is the way I was investing when I was way, way younger that worked for me. I call it Social Arb Investing today. But what it essentially is, is Observational Investing. You're looking for any change that's happening in the world, whether it's change in consumer behavior, change in culture, change in technology, change in the weather, politics, anything that has the potential to be meaningfully impactful to one or more publicly traded companies, in either a positive or negative way. So if you can surface that change early and connect the dots back to a company that would benefit or be harmed by that change, that's essentially the entire methodology. It doesn't really incorporate much fundamental analysis. It definitely doesn't incorporate any technical analyses. In its purest form, you really don't even need to know what the stock is trading at when you open up a position or what it's trading at when you exit. So ideally, you'd be completely blind to stock price, completely blind to everything other than the extent to which other investors were aware of that one thing that you surface that you feel would ultimately be impactful to that company. And you enter your position at the point of information asymmetry when you know that thing, and very few others do, and you exit the position at the point of information parity when other investors start to learn about that thing that you uncovered first. And it sounds so simple, and it really is, but there are nuances to it, and like everything else, to be great at it. It takes time and a little effort and some regimented processes that you have to go through. Like, is the information that you found actually meaningful? Is it a needle mover for that sector or for that company? You know, is the information you found really off radar? Or do institutional and retail investors, are they already accounting for it?
And are there any other things that are happening at that moment of time or within the window of that trade that are equal to more important than that piece of information that you're trading? Right. Right? So, there is a process there.

**SPEAKER_2** (4:17)
Of course, yes. And I want to go through a bunch of examples of it. So, you take this idea of observational investing, of arbitraging information without being, you know, a guy who grew up on, you know, you weren't working on Wall Street. You didn't have an MBA. You didn't have the, what would be like, you know, some 20 year, 20 years of experience doing this. The story is you take 20 grand, you start doing this type of investing and you run it up.
It works pretty well for you. It's successful. I don't know the exact numbers, but I've seen something like 60 million, 70 million, 80 million is how you've grown that portfolio starting at 20,000. Is that right by the way? Because that sounds, in some sense, too good to be true.