Knock Off The Penny Stocks | Podcast Episode #135

0:07
Hey, I’m Ryan Mallory and this is my Swing Trading the Stock Market podcast. I’m here to teach you how to trade in a complex ever-changing, world of Finance, learn what it means to, trace profitably, and consistently managing risk of avoiding the pitfalls of trading. And most importantly, to let those winners run wild, you can succeed at the stock market and I’m ready to show you how, hey, everybody, this is Ryan Mallory with Swing Trading the Stock Market.

0:34
Got a good episode for you guys here today, I’m doing an email, it’s an involuntary email. This guy doesn’t even know that the email he sent me is going to be used. I’m not using his real name. Definitely not using his real name, given him the name based off of the advice of the people and the trading block, I asked him.

0:51
Hey, I need a good name. They told me to use Merle Merle and I like the name Merle, man. This is, this is a moral like email, right. And I got this email last night and I’ll give you a little bit of a back story on her. And I really don’t want to Blast. This guy too hard here because he’s actually a listener, the podcast.

1:09
So he’s going to hear it and I’m not trying to attack him at all. I just really want to get through to him. That’s all I want to do. I’m going to dedicate an entire podcast episode, trying to get through to this guy because I want him to make a good career out of trading or at least if it’s part-time to make it part time but I’m seeing what this guys doing and the road that he’s going down and I’m afraid for I really am.

1:31
I noticed this morning when I woke up and I was like, man, this guy Merle subscribed to the trading block and then he unsubscribed literally like an hour later. It was like in the middle of night was even like, there was something that happened during the trading day that would have caused him. I was like, man, why did Merle cancel the service?

1:47
Who does that after like an hour? I don’t know if I’ve ever had that before but any case I reached out to the guy just send them emails. Hey, Merle just curious as to why you canceled your subscription? Yeah, I mean, it comes with a seven day trial, right? I’m you got seven days to try it out. No, it was like an hour later, the guy was gone, but anyways, I didn’t really expect to get an actual email back from the guy, but I actually did he say Ryan, I listened to your podcast.

2:10
I really like it, but I was reading through the rules of your trading and I see that you don’t deal with penny stocks and yes, that’s a big hell. No on the penny stocks. I will not touch a freaking Penny Stock, and it’s not because I think I’m better than the penny stocks. It’s because I don’t want to lose my Capital. I don’t care how good of a traitor.

2:26
You are, you can’t trade penny stocks successfully, you just can’t. I can’t trade them, I guarantee you, I will lose. And I’ve been doing this going on, like I don’t know, almost 30 years, I’ll lose. If I do penny stocks, I will I’m not going to do it. I want to go where I can make money. At and it’s not penny stocks. He goes on to say and as a new investor without a lot of capital to start with buying stocks over $10, a share, really limits me to only a couple of shares.

2:51
I started with nine hundred dollars, and I built it up to 1400 dollars through penny stock, but I’m applying your principles of opportunity cost because we did a podcast on opportunity cost right in your Capital tied up in a stock and then you’re missing out on all these other traits that you could have had, if you would have just taken a small loss, instead of waiting for it to come back to break even so he is listening to it.

3:10
Cuz that’s that’s definitely a key word that he’s dropping their he says I’m definitely applying the principle of opportunity cost. Now to maximize my gains and decrease my potential loss. Look a lot of what he’s saying is fine. I’m a skeptical. Somebody who’s just started trading goes from 900 to $1400 trading, and it’s easier when it’s small amounts to go from 900 to $1400.

3:33
Because if you lose it all, it’s not a big deal. If you have a million dollars in the stock market or a hundred million dollars, or if you’re like, Rick and Mark Zuckerberg or something, you got a few billion dollars on a stock market. You’re gonna think twice about going after penny stocks. Not only will you move them to like high heaven but the risks that you take are going to be far less because what you stand to lose is so much greater.

3:55
So I’m not impressed necessarily with somebody that can take $900 and turn it to $1400 because it’s like paper trading, right? No offense to nine hundred dollar trading accounts, but it’s not too much different than paper trading because there is not that level I love emotion that comes with trading when you’re only trading $900, you start trading like a lot more money where you’re getting into like tens of thousands of dollars on every one of your trading.

4:19
Yeah. The emotions are going to get kicked up into high gear but what really kills me is when he starts talking about the penny stocks and not liking the fact that he can’t buy a lot of shares of stocks that are over ten dollars a share. But before I really start, going off the rails here, okay?

4:36
I’m not drinking it particular whiskey. Well, I am but I it’s a mixed drink. It’s an It’s my go-to drink and when it comes to cocktails, my old fashioned is usually done with Knob Creek, small batch, 100 Proof. This one is like Clyde maze. It’s like 46%, and it is 92 proof, but I have a good old-fashioned.

4:56
The only criticism sometimes people will say is that it’s too strong. Put, like two ounces of whiskey in it. I like the Knob Creek under proof. I don’t drink Knob Creek by itself, but I will use it most of the time and my old Fashions, just has a nice little hotness to it when you When you drink it, but also use the, I’m going to give you my recipe here real quick.

5:15
And I’m going to tell you what really works well with it. I put about six dashes of the aromatic bitters in it, 2 ounces of the orange bitters in it. And then I put, like, about 3/8 of an ounce of simple syrup to make that at your house. It’s pretty easy. Don’t go out to the store, buy it and then I’ll put the whiskey in there.

5:31
Stir It Up. Express an orange peel over the top of it. Put a cherry in there. Cherries are important to you. Got to get good stuff here. Filthy cherries, are the way to go. But what I’ve started doing recently with Amis, smoking them. Yes, there’s this company called Middleton Mixology.

5:49
They’re not paying me to plug it. They sent me their product. I said, hey, I’m going to check this out, man. I’m kind of excited about this thing because I saw a video on it. I wanted to see it for myself. Put that sucker on the top as this little piece of wood, you put some wood chips in the middle of it’s like a freaking chimney on top of your old-fashioned.

6:06
You take one of those butane put torches and you just blast it and you get the perfect smoked old-fashioned. It is crazy. If you go to SharePlanner, Whiskey on Instagram, all one word, I’ve actually got a video on it. You need to check it out, you need to, go to Middleton Mixology and buy one of these things.

6:23
Again, they’re not compensated me to do this. They sent me one, checked it out. I love it. I use it at all my drinks. Huge party favor to when I, when I bust that sucker out. But anyways, back to Merle Burl’s. Got me revved up here, guys. He sent me revved up all day long.

6:39
This email got to me, I don’t know why it got to me, but it got to me. Look, I care about my Traders. Okay, I care about the people who come into the trading block, who listen to the podcast, who send me the emails, I want you guys to do good because I know you guys can but there’s so much bad information out there.

6:55
There’s so many bad characters out there that are trying to sell you, these pipe dreams of getting rich on these penny stocks who the freak cares. If you can buy a bazillion shares of a stock at point zero zero, zero, zero one cents, a share, who cares?

7:11
If you can buy 1000 shares of a stock at one dollar a share. Or if you can buy one share of Chipotle at like thirteen hundred dollars a share, the shares don’t make you money. I have shares of stock my portfolio right now, I couldn’t tell you how many shares of any stock that I own right now and my swing trading portfolio.

7:32
I have Adobe. I have lows. I have DraftKings. I have PayPal. I have Starbucks. I cannot tell you offhand. How many shares? I own a Vinny of those If somebody asks me, I don’t know, I just have a position in them. I know how much capital I allocate to each one of them but I don’t know how many shares that represents.

7:50
I don’t care because shares don’t make me money, people. Get all worked up about. Oh my gosh, Tesla splitting their stock. What was it? Four to one. And I’m going to get four times the shares. Well, breaking news. They’re also cutting the price of your shares by 4.

8:08
So, whatever the stock was trading up before, they’re dividing it by 4, because here’s the thing. If you own Chipotle at thirteen hundred dollars a share, or if you own some crappy stock trading at $1 a share, but you on thirteen hundred shares of it and the stock that you have thirteen hundred shares of at one dollar.

8:29
Goes up 5% and the stock that you only have one share of Chipotle goes up. 10%. I know this is a stupid question but it needs to be asked. What did you make more money in? Of course it’s Chipotle. It’s because the reason why I bring this up is because it’s the percentages that matter.

8:48
Not how many shares you can buy. Why do people get so hung up on how many shares they can buy? I feel like it’s like a it’s like a flex move. Oh, I don’t 1000 shares. Shares of that company. Well, it’s trading at a dollar a share who cares? They don’t want to say, well I own a one share of Chipotle holy cow, I just don’t get it and there’s fractional shares out there now.

9:11
But Merle, I mean I feel like Merle is shooting himself in the foot before you even really gets into this whole training by worried about how many shares you can buy. And look, I like Merle. I kind of I’ll be first, am it? I responded to this email.

9:27
Probably not in the best of ways. Okay. Because I was just kind of a annoyed that he was going with penny stocks because I’m thinking to myself, if you’ve listened to my podcast, it’s at least one out of every two podcast episodes, I probably say, don’t ever trade freaking penny stocks It’s a road to nowhere, you’re going to lose.

9:47
He throws it out there. Like I’m going to endorse it or something. I don’t know. So I wrote him back. I said penny stocks ruined portfolios. Who cares about how many shares 10% on a one dollar stock is no different than 10% on a hundred dollar stock successful, penny stock Traders, really don’t exist. I don’t know.

10:03
It’s probably a little bit crass to right back like that, and then this guy, he, He blesses me with niceness, he really does. He says, I live in Kentucky, about 20 minutes from all the bourbon distilleries. Man, this guy’s already got my I heard already he tells me about how it’s good bourbon up in Kentucky, because they have limestone in the water.

10:21
And it just adds to materials to help filter the water. And the sky is going all out, man. He’s like turning the other cheek on me, he says, then it goes downhill again. It says, I’m going to start my economics. Be a and I plan on learning a lot. That’s good. Economics, I did economics in college and I probably learned a lot more from that than I did, my political science degree and it does apply to the stock market, right?

10:44
But not not directly. It’s just there’s some indirect correlations there in terms of knowledge that you can apply to it. But he says I’m 30 years old and just recently gone to trading but doing it for about six weeks. When I build up more Capital, I’m going to come back to the trading block. That’s cool, man. I really want him to come back.

11:00
Look, the reason why I’m making an episode out of this podcast is out of labor of love. It really is because I want you guys to know I really care about you guys succeeding. I want you guys to succeed. But you can’t be going down this penny stock route, guys. Look, I’ve traded penny stocks.

11:18
It’s not like a movie or something, where I’m like, I’m not gonna do penny stocks, it’s beneath me. No, I’ve trading penny stocks, and you just don’t want, I mean, there’s different rules for penny stocks. There’s certain order types that you can’t do and I haven’t traded him in such a long time.

11:34
I don’t even know. I don’t think you can do stop losses. I’m not positive on that, but I think it’s all limit orders when it comes to penny, stocks, double check me on that. If I’m wrong know that it’s genuinely, I’m kind of glad that I’m wrong about it. That I don’t know this stuff because cuz I don’t want to ever touch penny stocks ever again, but there’s all sorts of different rules and it’s there’s so much corruption and there’s so much fraud.

11:54
There’s, there’s infinite headline risk and penny stocks. I swear, I wouldn’t be surprised if penny stocks can go – and I say that in jest. Some some somebody out there might take me serious but I’m also one of the things I’ve learned about this podcast.

12:09
Is that When there’s one person, asking something in an email, there’s probably a thousand people asking the same question, but they’re not telling you this, so it’s not just Merle that I’m coming. After here, it’s all the morals out there that are not email me.

12:27
This question, Merle have the guts, but I need to address this with the others that are listening to this podcast because I want you guys to succeed. I want you guys to succeed so bad, he’s been trading for six weeks. Does he know what he’s doing yet know? Doesn’t know what he’s doing. There’s a lot of experience left to be made and you want to know something.

12:46
When you make a mistake with penny stocks, you pay for it. Yes, you may have five or ten penny, stock trades in a row that. Turn out really well for you. God bless you, if you do, but it only takes one, just one penny stock to completely ruin it for you.

13:04
So he’s moved his account from 900 to 1400 again. There’s not as much emotion when you’re dealing with $1400. I’m glad he’s starting. You got to start somewhere, you do. So I’m not, I know there’s a lot of you guys. Guys, that probably are trading with small amounts like that, and that’s okay, too. There’s nothing wrong, dude. You got to start somewhere, but you can’t get hung up on how many shares you’re able to buy who cares.

13:20
If you buy one share, he can buy one share Chipotle, you know the broke out today. He could have bought one share of that. He could made you know a few percent off of and that’s good. He’s not going to get hit by the commission costs there’s no more commissions at least here in the United States. Take it from somebody who’s been doing this for almost 30 years.

13:39
I know I’m flexing a little bit. I’ve said that second time in this particular podcast episode, but when you’ve been training for 6 weeks, man, that’s just like, there’s just not enough to learn in that time, right now. I’m glad you’re listening, man. Merle. Keep listening to this podcast, okay?

13:55
I’m trying to keep you on the straight and narrow. I’m trying to keep you in line here. You got me fired up today, man. You got me fired up, dude. Like you more? Oh but you’ve been training for six weeks and there’s still a lot to learn and I want you to learn trading quality stocks that are not as likely to burn you as penny stocks.

14:17
I feel like you’re stunting your growth when you start trading penny stocks, because the less you’re not really going to learn the lessons that are applicable to trading the bigger stocks, the large caps, the mid caps, the small caps know, you’re trading these things that are Probably going to be bankrupt in two or three years.

14:34
Max, find me a penny stock, that’s Been in business for The Last 5 Years, I’ll wait. These things just don’t do well and I know we want to hit home runs and everything else. But with commission-free trading, we really don’t have an excuse for not trading, good quality stocks.

14:54
I get that you’re not going to go trade Berkshire, Hathaway, you’re not going to trade Amazon. You could you can trade, fractional shares. I don’t know, offhand, the brokerage’s that do the fractional shares but there’s plenty of them out there, okay? But don’t get into this penny stock stuff, man, you’re killing me Merle.

15:12
All right. You know what more could really benefit from going to my patreon account. swingtradingthestockmarket.com. He’s going to get all of my analysis on the S&P 500. The Russell, the NASDAQ multiple times each week is going to get updates on all the fangs, stocks Facebook, Amazon Apple Netflix, Google Microsoft, and Tesla, top of that.

15:32
He’s going to get daily setups for me. The stocks that I’m finding that he needs to be looking at for his daily setups to charts that I’m looking at on a daily basis and and I do say, and My watch lists twice a week updated.

15:48
My master watchlists, bullish, and bearish, both of them. It’s a steel. Guys. Go to it. Swing trading the stock market Merle. You need to be going to this man, okay? And if you like this podcast, make sure to leave a review on the Apple platform. Guys, I really want to help you guys.

16:04
I really did. That’s why I encourage you. I want to, I want to hear about your problems, I want to know about it, but I’m going through all of y’all’s emails, I get them all. I have a dear Ryan folder. I put everything in my, Ryan folder. Actually, what would be really great? I’m going to create a rule for this tonight. If you have a question for me, say dear Ryan in the beginning, and then I can create an Outlook rule that it puts it in the dear Ryan.

16:25
So, when I do my next podcast episode, it’s right there. So do a dear Ryan. Okay. And then, and then I can, I don’t have to organize it by hand. You guys are the best. Okay? I really appreciate it, man. I love the emails. I like Merle a lot, man. Merle’s a good dude, but he just needs a little bit of direction here.

16:43
I’m scared. That, that 900. Dollars that’s turned into fourteen hundred dollars is going to go down to zero and I don’t want that to happen. And I want you guys to leave me a positive review on the Apple podcast platform. If you’re an Apple user, you’re a Google, do the same. If you’re on Spotify, subscribe or follow or whatever platform you’re using.

17:01
Make sure just to help brother out. Okay. All right guys, take care. Thank you. God bless. Thanks for listening to my podcast. Swing trading the stock market. I like to encourage you to join me in the SharePlanner Trading Block, where I navigate the stock market, each day with Traders from around the world with your membership, you will get a 7 day trial and access to my trading room including alerts via text email and WhatsApp.

17:27
So go ahead, sign up by going to shareplanner.com trading block, that’s www.shareplanner.com/trading-block. And follow me on SharePlanner’s, Twitter, Instagram, and Facebook, where I provide unique market and trading information every day. You have any questions Please feel free to email me at ryan@shareplanner.com all the best to you and I look forward to trading with you soon.