Ep674: Jesse Felder – Don’t Rationalize a Lousy Trade

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community. We know that to win an investing you must take risk but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives to join me go to my worst investment ever.com and sign up for my free weekly become a better investor newsletter, where I share how to reduce risks and create grow and protect your wealth fellow risk takers this is your worst podcast host Andrew Stotz from Ace Dance Academy, and I'm here with featured guests, Jesse Felder, Jessie, are you ready to join the mission?

Jesse Felder 00:40
Absolutely. Let's do it. Andrew.

Andrew Stotz 00:42
Yeah, I'm excited to have you on. And let me just introduce you to the audience. After starting his career at Bear Stearns and then co founding a multi billion dollar hedge fund, Jesse left Wall Street to focus his energies on research and writing. Today, he publishes the Felder report and hosts the super investors podcast, Jesse, take a minute and tell us about the unique value that you are bringing to this wonderful world.

Jesse Felder 01:13
Well, I've been on a mission, I think, for my whole career to try and find new ways to reduce risk. I love the idea of your podcast. I think this is a mission that I think all succinct, successful investors have been on throughout their career, how do I find ways to reduce risk and, and so whether it's through, you know, I mean, I first came to markets through value investing in the idea of a margin of safety really appealed to me, I think that's one of the most important fundamental ways to try and reduce risk. But over time, I've added things like technical analysis, and risk management in terms of just price, I think is very valuable, looking at things like momentum in markets. And one of the things that we did back in the hedge fund is paying very close, very close attention to insiders, what are the corporate managers doing with their own money? Are they buying shares, the same shares, and then how to look at that as a way to validate your thesis. So for me, I try and put together a lot of these different things to reduce risk and find you know, and essentially just raise my batting average, we're all gonna make mistakes, it's going to happen, no matter how good you are at what you do. But being able to limit the number of mistakes you make, and how painful they are, I think is absolutely critical.

Andrew Stotz 02:34
You know, I, before we turn on the recorder, we were talking kind of about our developments and your development and kind of careers and how things went. And sometimes when I think about risk, what after I've, after that discussion, I was kind of thinking like, outside of the world of finance, you know, what is risk? And for me, I think a risk in life that I always felt was that the risk that I would not be happy with what I'm doing, like, what is the negative outcome in life, and I've kind of gone through a lot of changes and a lot of searching for where I fit. And in the end, I believe that that is actually somewhat of a risk reduction, you know, process. But I'm curious, maybe you can just talk about, you know, your own progression from where you started to where you are now, because I think it's an interesting journey.

Jesse Felder 03:29
Yeah, absolutely. And I think that's one of the things that's, you know, you learn through, you know, 30 years, it's business or close to it, is that you have to enjoy the day in day out process. I first went to work at Bear Stearns, for with group guys, who were some of the most successful brokers in there. You know, they had an incredible book of business. But essentially, I quickly realized they were really good salespeople and had no clue how to trade or make money in the markets. And I, you know, I quickly realized this, you know, selling is not something I'm naturally good at, it's not something I'm interested in, in really learning how to be good at. And, you know, I think we ended up a lot of times, you know, just kind of banging our head against the wall working at something thinking, well, if I work at this long enough, hard enough, I'll eventually get to a place where I enjoy, you know where I'm at. And I think that's backwards. You really need to find something that you enjoy doing. And you know, because if you don't enjoy it, you're just not going to be you're not you're really not going to get as good as you could in something you enjoy. So I think for me, that was my process was going finding an area in, you know, the markets and finance where I could spend my time doing things that I enjoy most and that turns out that that's, you know, research and writing. And so that's kind of where I'm at

Andrew Stotz 05:00
Yeah, I mean, I the reason why I wanted to talk about that, I think, you know, there's a lot of young listeners who are trying to explore where they belong, you know, in this world, and it's a lot of people kind of idolize, or I want to be an investment banker or a big a big fund manager, or whatever. And I think what lesson I've learned is no, no, what you really want to do is be happy, right now, like, that's the secret. Because if you're strutting into work every day happy and enjoying what you're doing, you have, so there's just so much more good that comes out of it. And I think that also, the other thing that I've learned is that, it's, we can't always know exactly what it is that we want to do or be particularly when we're young. But we can know what we don't want or don't like. And I think that not enough people walk away, like you did, and said, Okay, I'm out of my depth, or it's not my interest, I just don't want to and then and then switch and say, Okay, I'm gonna go in to something else. And that, to me, I think is part of how you reduce risk of being unhappy in your life.

Jesse Felder 06:07
Yeah, well, I think, you know, there's, there's an important mindset you can apply to both the markets and to your career, which is, you know, I can't remember this is maybe from Market Wizards, or, you know, the Jesse Livermore book, I can't remember which one, but he talks about looking at losses in the mark as tuition paid in the School of trading. And I think that's a really important way to look at it. Like, when you make mistakes in the market, you have the opportunity to learn something, making money in the markets, you know, you don't really have a terrific opportunity to learn from that, when things work out the way you wanted them to. But they don't always work out that way. And I think if you have the mindset of, of looking at things as tuition in the School of trading, or tuition in the school of life, like I went and tried this career didn't work out, you know, what can I learn from this? Why can the simplest thing I can learn is I don't want to be a broker. Or, you know, I left the hedge fund after several years, because I just disagreements with my partner over, you know, ethical issues. And I thought I don't, I don't really want to be pushing the ethical envelope, you know, and kind of tiptoeing around the line of what's legal and not legal, and that makes me deeply uncomfortable. And so, you know, if that's what it takes to be, you know, a top performing hedge fund, I don't, I'm not interested. So I think it's Yeah, I think it's a great point that you make that, you know, people think of, you know, I failed, because I didn't, you know, achieve what I set out to in this one field or not, but, but, you know, I think my dad was really good and teaching me you know, go try different things. And, you know, learning that you didn't like something is can be very valuable, and help you on that path towards finding something you do enjoy.

Andrew Stotz 08:02
So maybe, maybe just you could go through your, a short kind of progression of how you then transformed into your writing. And you know, what you're doing now and what you're providing for, for clients?

Jesse Felder 08:15
Yeah. So yeah, I can give a little more detail on the hedge fund, we had a long short hedge fund was our primary kind of flagship fund. And it was based on a value discipline, we wanted to buy cheap stocks and, you know, short things that we thought were overvalued. And, like insider activity was a big piece of that. We want to find cheap stocks were insiders were buying, you know, net buyers in significant size. You know, it's just nice when you see met company management, you know, putting their money where their mouths are not just saying things are great, but, you know, I'm putting a significant amount of my net worth into a stock to kind of back that up. And conversely, you can, you can see that insider selling is a little bit harder to parse. But we saw, you know, Bernie Evers go and sell 100% of his shares a WorldCom. And you know, it, you know, the fraud allegation stuff come up within a month or two later, it's if you can see things like that, when you have a founder, who's massively invested and decides to liquidate, you know, in a very short period of time, can be a red flag, especially when you pair it with, you know, cash flow, red flags and the cash flow statement. It's kind of like a really good sign that this is a stock to stay away from or potentially look at as a short sale opportunity. We got to the point, though, in March of 2000, and through 1999, my partner and I started having some, you know, getting into shouting matches over some of the ideas we were putting into the fund. You know, he started wanting to buy some of the tech stocks that in the day were just flying right and it was really hard to as a value investor, resist those urges. But when you came back and said, well, our mandate is not momentum trading. It's not, you know, high flying growth stocks, our mandate is value. This is why people bought this fund, because we told them, This is our process. And so we'd be getting into it measures, we can't put that stock in the fund. And, you know, he obviously was senior partner to me, so he would do it anyways. And then I had all these great value ideas, which I don't know if you remember in, in that 2000 timeframe, all these old economy stocks were left forget, I mean, he had terrific businesses that were boring, but trading 5678 times earnings, that why are we not buying these, they have terrific insider buying the middle or criteria. I know they're boring as hell, but this is what we're supposed to be. Yeah, this is what we're supposed to be doing. And, you know, eventually, I just decided, you know, it was literally March of 2000. The month the NASDAQ peaked and blew off and rolled over. And I didn't, I didn't have any intent and timing it that way. But I guess my emotions boiled over, you know, this kind of the same time as the market. And so that's when I quit fund, and essentially decided to manage my own money, and some friends and family money. And then I started writing up markets in 2005. After just kind of, you know, having a front row seat to the real estate bubble, in little Bend, Oregon, where I moved to in 2000. And watching, you know, it'd be become the number one or two most overvalued real estate market in the United States. And the speculation on it. So I just, you know, sized, I had to start writing about things and eventually turned the writing into, you know, the website, which is the Felder report.com. In 2015, that became my full time gig. So

Andrew Stotz 11:46
if somebody goes there now, what do they get? You know, and just maybe we can understand kind of how you progressed in what you provide, compared to, let's say, back then.

Jesse Felder 11:57
Yeah, you know, it's a, I put up a, there's a blog, free blog on the site, I try and put up a blog post once a week. And just indicators, I'm watching trends, you know, that, that I'm reading about? Or kind of, you know, just finding things, you know, that are that are of interest. To me, usually, they're excerpts from some of the premium reports, but I also have a premium product that does a weekly market comment, plus, you know, a couple of model ETF portfolios. And that's all just based on on the research that I do, and how the way I kind of look at markets from that perspective, you know, with with a valley Foundation, and yeah, I also, you know, I've been on hiatus recently, but I started the podcast a few years ago, for investors kind of a nod to Warren Buffett and Charlie Munger, who have been a, you know, an important source of inspiration and education for me for a long time. And I've been fortunate to just be able to pick the brains of some of the people in this business that I admire most so and

Andrew Stotz 13:06
what's your plan for the future for Super investors?

Jesse Felder 13:10
You know, I'm gonna get back to I think this summer. It's just you know, I miss getting out and talking to people a couple years ago, right after the pandemic actually hit the road in my Airstream and when interviewed people in person. So I went up to whitefish Montana, interview Jim stack in person, just fantastic. I went out to

Andrew Stotz 13:32
driving in this Yeah, you know, vehicle.

Jesse Felder 13:36
Yeah. You know, in Breckenridge, Colorado, you know, Julian brickton came out and we use the airstream as a recording studio. And just to do it, you know, one on one, like, that is fantastic. And so yeah, I want to get back out and, and, and just talk to people because I find there's so many brilliant people out there that are willing to and, you know, enthusiastic about talking, you know, talking about their process and what they're seeing in the world.

Andrew Stotz 14:04
It's funny because I, you know, I've thought about doing more interviews of people in Thailand, just because that's where I am. And I thought about, you know, having them come to my home studio and you know, have lunch and talk, but I never thought about making a van and going out.

Jesse Felder 14:23
Well, that was kind of a product of some Cabin Fever right through the pandemic lockdown zone, like, I gotta get out of here. Why don't I just go to them? A great excuse to hit the road.

Andrew Stotz 14:34
Yeah, in my case, it would probably be a van and then I would be like, That guy living in a van down by the river. But I love I know, during the COVID time, part of what kind of really helped me was my podcast because it kept me communicating and that type of stuff. So I feel I know, I think that's, that's great stuff. Well, it's, it's fascinating. I'm looking afford to, you know, the new episodes that are coming out on Super investors. And I'll have the links to the Felder report to your website to super investors in the show notes. So for everybody out there, check it out. But now it's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be telling us a bit about the circumstances leading up to then tell us your story.

Jesse Felder 15:23
Okay, this was about, Gosh, 1010 years ago, first of all, I have to say I love this idea of talking about your worst investment. I think, you know, in this day and age, especially right, we have social media of Instagram, you know, hashtag best life, and people just want to highlight all the good things and kind of really give a false impression of what their lives look like that's better than the reality of it. I think, you know, Fin twit, I'm a huge fan of Twitter and you know, but even then, it's like, everybody's an amazing trader, they never have any losses. And so I think I love this idea of let's talk about this, because I think I mentioned to you beforehand, you know, you listen to people like you know, Stan Druckenmiller, and he says that, you know, when he gets together with other hedge fund managers on his stature, which is you know, there's really a handful of them in the world. They don't talk about, you know, what their successes, they want to talk about the mistakes and what they learn from them. So, thank you, Andrew, for this opportunity. I think this is a great idea. Anyhow, about 10 years ago, I came across an idea that seemed to tick all the boxes for a cheap stock had some insider buying. And it looked really compelling. It was I think, kind of towards the, into the fall of that year, I think it was maybe 2014 If I remember correctly, might have been a year or two before that. But this was a company called Corinthian colleges for profit college in the US. And they the stocks had started getting hurt, due to potentially regulatory, you know, risks that were coming up, the Obama administration, you know, just generally didn't like for profit college didn't think it was a, you know, that it was it was taking advantage of students by having them take on a bunch of debt and get essentially a degree that maybe wasn't as worth as much as it is, it was Corinthian had a lot of, you know, had nursing a lot of health care, jobs. You know, things, you know, like trades. And so, you know, I thought it was a decent business, I had really good profit margins. And the stock was trading, like three times cash flow, and a bunch of had a bunch of insider buying. So I thought, you know, also we're getting towards the end of the year, usually get that kind of small cap fact, at the beginning of the year, like people had been selling the stock to take tax losses towards the end of the year. And that selling could potentially abate after the new year. And I thought, you know, I'm gonna take a position in this thing, and it looked from a technical standpoint that has turned it around and pretty positive. I knew that this was a cigar butt type of type of situation. And so, you know, Warren Buffett has talked about cigar butts, where you know, you can go buy a cigar, right and pay full price and have a nice long smoke for an hour. Or you can find a cigar butt on the sidewalk, and it's free, you maybe get a couple of puffs out of it. And so you get something for nothing. For free. So you can find stocks like this, yeah, you can find socks like us where, you know, it's very cheap stock. And, you know, you're probably not taking a lot of risk, but also not a wonderful company, right? I mean, a cigar butt on the side of the street is not not a beautiful thing. So I you know, I took a position in it, and I took a pretty sizable position I you know, I only like to own a handful of stocks and time. It's kind of the, you know, you know, put all your eggs in one basket and watch that basket closely is kind of the last guy I like to utilize. So I took a big position. The stock did actually, you know, really nothing for the next couple of months. It took off actually in January, February, small cap effect, the stock doubled in a very short period of time. In fact, it might have been 150 200%. And one of my friends who was managing money for at the time, called me up and said I've never This has never happened to me before. I've never owned a stock that's you know, that's done this in such a short period of time. He goes, do me a favor. Hold it for at least a year. I don't want short term capital gains want long term capital gains. And so this stock which I knew the cigar butt and I knew I should take profits. You know, I started to rationalize in my head you know, Well, you know, this is working out, why don't we just hang on to it and we'll see maybe this is a turnaround, and the company is going to do fine. So I held on to it, I, you know, I didn't, I didn't, I might have sold a little bit. But I held on to it. And I kept monitoring it. And as time went on, over the course of the year, it became clear that the Obama administration was going to limit for profit colleges ability to offer student loans that could be, you know, subsidized by the government. And that was essentially a death knell for these companies, if their students could not get, you know, debt financing to pay tuition. They were going out of business, because that was 90% of their business were people that borrowing money to pay tuition. You know, I naively thought that there's no way that the government is going to put out an entire segment of the entire industry out of be

Andrew Stotz 20:57
like China, cracking down on an industry. Yeah,

Jesse Felder 21:00
but there's no way right, all right. You can't, you know, pick winners and losers. That's not a really a kind of a capitalist mindset, but neither is you know, subsidizing student loans. And so I, you know, held on to the stock, gave back all of the gains, and then some ended up, you know, being, you know, going down about 50%, below my purchase price being a pretty painful because it was a large position, especially painful, because when you go from having, you know, terrific gains in the stock to giving them all back, and then some, you know, it became a very painful thing. I did, you know, to my credit, sell it before it essentially went out of business. You know, I, yeah, I'm not gonna run a stock to zero. But that said, it was one of the worst losses that I've taken as an investor in my career.

Andrew Stotz 21:50
And how were you justifying it as it was falling? And even as it fell through your original purchase price? What was going on in your head? Because I mean, obviously, either it was falling because of the market, assuming that the Obama administration is going to do this, or the Obama administration is giving signals? And, you know, and I'm just curious, like, how did you justify continuing to hold it during that time?

Jesse Felder 22:18
Well, you know, it's, I think you rationalize, you know, it's, it's, you know, one of the classic mistakes is your, you know, thesis migrates, right. The original thesis was,

Andrew Stotz 22:29
never heard that this migration.

Jesse Felder 22:33
Yeah, the thesis migrates from this is a cigar butt, and we might get a couple of good puffs out of it into this is a turnaround play. And there's no way they're going to put this company out of business. And this sector, I mean, out of business, because, you know, there aren't any more, you know, for profit colleges that trade on the exchange anymore, they all essentially had to shut down. Because when 90% of your business is subsidized by the government, that government says, we're not doing that anymore, you don't have a business anymore. And yeah, so I, you know, I think, you know, that was one of the things that learned from that, which is when the government decides that, you know, we don't think that this should be a viable business. And you need to sit up and pay attention to that. And that's a risk, you know, when the government decides to put you out of business, that's it, that's a major risk, you should be paying very close attention to

Andrew Stotz 23:27
it, but also, by the way, just to I understand, because I want to think about it in terms of today. When you're hearing mumblings, or rumblings from a government about a particular sector or about, you know, something that they don't like, how, what was it? You know, what, what should we be looking for?

Jesse Felder 23:48
Um, you know, I, honestly, I, the reason I didn't think that they would, they would put them out of businesses, because when you look at so many other industries that are selling, even if they do, act as you know, a predator to you know, their customer base, the government very rarely does anything about him because of regulatory capture, and, you know, lobbyists and all these things, right. I mean, usually, these industries are so successful that they can hire lobbyists and, you know, and have an effect in government, which is the sad truth of the situation. But I do think once sentiment turns, there's a tipping point, right? I really loved Malcolm Gladwell book on the topic, but there's a tipping point where sentiment, you know, is building, you know, negative sentiment towards something and all of a sudden, it's, you know, it's like something going viral. It reaches a point where the negative sentiment outweighs, you know, the government or whatever politicians willingness to listen and take those law billion dollars. You know, and so I think it's important to watch that, you know, there are people that do really good. I think, you know, Ben hunt, epsilon theory is, you know, does some really interesting analysis on narrative dynamics, and how do these narratives play out in the markets? And that's something that I pay very close attention to also, is how, you know, are how much pushback do we have here, one that I've been watching closely for several years now and hasn't quite yet had the effect that I, that I would have imagined is kind of the negative pushback on big tech, for, you know, especially social media. You know, it's been, I think, evident for a long time now, that Facebook, especially meta has tuned its algorithms, such that they create engagement, right. And that engagement is vastly skewed towards negative negativity, towards getting people to be angry, getting people to be upset, getting people to feel depressed, and so that they act out of that negativity. And that's what we're the engagement comes from. When you see things like teenage suicide rates have exploded as a result of, you know, as partly as a result of this, you would think that the push back, you know, would create greater regulation things. And maybe it's just kind of a creative destruction force, you know, with more people gravitating to Tik Tok, and, you know, and away from Instagram and things because of that. And so maybe there are market forces that work there, too. But, you know, when I watched the narrative surrounding those types of things, that's something I watch very carefully. And I think it's something that, you know, it's probably the biggest thing I took away from this. It's one major mistake.

Andrew Stotz 26:55
So let's, if you could, maybe you could just summarize the main lessons that you learned from this,

Jesse Felder 27:02
for sure. The first is thesis creep, don't let your thesis migrate, need to remember why did I buy something and come back to? Is it working out the way that I anticipated? Or is it not? And, you know, in, you know, Jesse Livermore, you know, I'm gonna bungle the quote, I'm gonna paraphrase it famously said, when you found that you've made a mistake, there's only one thing to do. And that's get out of the trade. Right? Don't Don't rationalize it. Don't say I made a mistake, get out. Right. That's, and I think that's, that's a critical thing. Because you can always, when you own something, your natural biases, and you're going to be to rationalize why I should continue to own it, why things are going to be better than maybe the markets are, are working out. And when you actually sell something that's, you know, then you can actually, you know, quiet those biases and say, Okay, what's the real situation here? And maybe, maybe I should buy it again. And I think my trading standpoint, that's critical. I think the other thing is, is, you know, never underestimate the government's willingness to put the entire industry out of business, if it serves a, you know, a political or economic purpose. And in this case, I think it served both. Yeah.

Andrew Stotz 28:27
Maybe I'll, I'll say some things that I took away from the story. It's interesting, because on the one hand, you would say that kind of private education, private colleges, there should be a real good market in there in the US for that. I think that's the first thing, so I can see some of the attractiveness. But the problem, I would say, so there's a couple of different things that I was thinking about, as you were going through it. The first is you're selling to people who have no money, students, young people. And that's already a difficulty in any business model. Right. The second thing is I am saying nowadays is government ruins everything. And basically, the government, originally, when, when, when I was young, we could get a loan from a bank that was somehow government guaranteed, or supported, let's say, and, but it wasn't, you know, a huge amount of money and we'd get that and I spent that I got my student loans and I spent that on my college, but it didn't bankrupt me. You know, I mean, it was it allowed me to get through school. So there's a good side of that. But when the government then eventually took over student loan, and basically kind of took it in as a government program, and put that on the government's balance sheet. Now you have a huge problem, because now they just dole out cash and when you flood any industry with cash, that you No, it naturally is going to bring out people that are going to try to get that cash. So you're gonna have some crooks in there. And then it also brings a huge volume of new participants in the market, who wouldn't have been able to necessarily access that product or service, which, you know, Matt massively increases demand, which then drives the price. And the same thing they do in mortgage loans where they think everybody needs to have a mortgage loan they have That's right. And so they push out mortgage loans from the 80s, and the 90s. And all of that, and mandate Fannie, Freddie, Fannie Mae and Freddie Mac to take on low income mortgage loans, knowing that there's a lot of risk there, and that they're expanding the market massively, and then it pushes up price. So the first lesson I want to highlight is just be very careful about when you're in a situation that's being the pump is being primed by the government, and particularly in an industry where the potential customers are poor, they don't have any money. And so those are kind of the bigger themes that I was thinking about. The other thing that I look, I remember what you said was, I don't want short term gains, you know, you mentioned about that discussion about I want long term. Yeah. And, you know, that, ultimately, you don't want to be driven, particularly that can be driven by tax, because of tax. So all the

Jesse Felder 31:31
driving factor, yeah, tax

Andrew Stotz 31:33
is not a good motivator. Occasionally, there are times, but generally, tax is not a good motivator for, you know, building that position. And then finally, I would just say that, the idea about kind of getting out, I think one of the things that I always say is that if I was a, if I was running a fund management company, and I had fund managers, every three months, I would bring them into the conference room, and I'd say, Oh, I've got good news and bad news. And then they'd say, what is it and I say, oh, yesterday, I sold all of your positions, and now everybody's portfolio is cash. Right? You can do anything you want. You know, like the idea that practice of going that, and that's what we do in our strategies is we every quarter, we reevaluate everything. And we imagine that we're in cash. And so that helps us to deal with the thesis creep and not trying to be in you know, not staying in something that we probably shouldn't be in. So those are some things I'd take away. Anything else you'd add to that?

Jesse Felder 32:39
No, I just I love that framework . If I didn't own it today, would I be buying today? Because that's a great question to ask yourself, I think a lot of times, you get stuck in a stuck, you know, people get stuck and stuck. And they go well, you know, if I just get back to even, you know, I'll sell it. And you know, that is probably one of the most dangerous mindsets that I've I've come across is the idea of, when I get back to even, you don't have to make it back the same way you lost it, I think that's another Jesse Livermore trope is that you there's tons of opportunities out there. And the ideal thing is to focus the money that you have in your best ideas, and not in ideas that maybe were you thought were a good idea, and they're not so good anymore, but I'm gonna hang on because I don't want to take a loss. You know, I think that, you know, ego has no place in this business, and it can be very dangerous.

Andrew Stotz 33:40
So I'm going to ask you the most difficult question of my whole podcast, which was not the question you just answered about your worst investment. This one's difficult, because I'm asking for one thing, not three. And so based upon what you learned from this, and what you continue to learn, let's think about a young person out there who's, you know, getting into this situation? What's one action that you recommend our listeners take to avoid suffering the same fate?

Jesse Felder 34:07
I think it's it's learn to take losses. Learn to be proud of yourself for taking losses early. I mean, I think that is something that the most successful investors and traders in the world all have in common, is they're not afraid of taking losses. They're not they're not ashamed of taking losses. In fact, they pat themselves on the back for taking a loss early, when they recognize it made a mistake. And so I think that's a skill that we can cultivate. Is you know, you have a thesis be very clear about what the thesis is, when things don't play out, like you expected. Move on, you know, take your loss and move on. And I think that's, you know, if there's one skill, you know, Paul Tudor Jones talks about this, you know, focus on risk and let you know the gains take gains will take care of themselves and So if you can focus on that risk management and discipline, you know, you'll be way ahead of, you know, most investors out there.

Andrew Stotz 35:06
Yeah. And it's probably true in life overall, when you're in a situation and a lot has been lost. And it didn't go according to plan. Don't be afraid to just say, Hey, I'm packing up.

Jesse Felder 35:20
Yeah, yeah, it's a great point. Because, you know, we talk about, you know, the throwing good money after bad, right? Paul Tudor Jones would call you know, call it you know, losers average losers, anymore. But something that's not working, throwing good money after bad, that's a great metaphor for life. Right? When you're in a situation that's not working out as you would hope. Rather than dig the hole deeper, say, you know, what I'm gonna move on find something different. It's just, I think it's a helpful metaphor for life. Also.

Andrew Stotz 35:52
We have the resources that you've got, like the Felder, report.com, and super investors, outside of those resources, is there any other resource that you'd recommend to our listeners?

Jesse Felder 36:05
You know, I mentioned Twitter, you know, I'm, I've been, you know, pretty high, maybe hyperactive on Twitter for a long time. I don't get, I don't engage much. But I do share a lot of, you know, I do a lot of reading every day. And I try and share on Twitter, some of the most interesting things that I find whether it's articles, charts, that kind of stuff. And I found Twitter to be very valuable. I follow, you know, less than 100 accounts. But every one of those accounts has taught something valuable. And so I for me, you know, that platform specifically has been one that has a lot of value.

Andrew Stotz 36:47
Yeah, it's incredible the amount of, you know, value that people are sharing and information and analysis. I mean, absolutely. So last question. What's your number one goal for the next 12 months?

Jesse Felder 37:00
Number one goal for the next 12 months? You know, I have found, you know, so goal setting to be kind of counterproductive, productive. You know, I think I like to ask my podcasts, I like to talk about sports and hobbies and things with people, because I think they have good metaphors for what we do in the markets. And, you know, I've been watching this new golf show on Netflix. And it's full swan. And Scottie, Scheffler best golfer in the world number one ranked guy, and he just talks about, look, you know, when I'm in I got the lead on Sunday, and I'm going out to try and win a golf tournament, he goes, I'm not, you know, trying to shoot a certain number of not trying to do anything specific, you're just trying to play better on a golf that I can and control what I can control and, you know, be okay with whatever the outcome is. So I think that's a good philosophy for a lot of different things. I'm just going to focus on the things that I love to do. And he continued plugging away and, you know, put my best efforts forward. And whatever happens happens.

Andrew Stotz 38:03
Hmm, that's an interesting answer. And I think is appealing in the sense that, in the end, when we do that, we get great outcomes. So it's a little bit of a counterintuitive thing, but I think it's a very interesting answer. Well, listeners, there you have it another story of loss to keep you winning. Remember, I'm on a mission to help 1 million people reduce risk in their lives. If you've not yet joined that mission, just go to my worst investment ever.com and join my free weekly become a better investor newsletter to reduce risk in your life. As we conclude, Jesse, I want to thank you again for joining our mission and on behalf of ACE Dance Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Jesse Felder 38:51
No, this has been a lot of fun, and I really appreciate the opportunity. You made this very enjoyable. So as enjoyable as it could be. So I appreciate it.

Andrew Stotz 39:01
We walk hand in hand through the pain. Well, you did a great job. We learned a lot. And that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. Let's celebrate that today. We added one more person to our mission to help 1 million people reduce risk in their lives. This is your worst podcast hose Andrew Stotz saying. I'll see you on the upside.