Don’t Marry Your Stocks | Podcast Episode #386

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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.

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Learn what it means to trade profitably and consistently, managing risk, avoiding the pitfalls of trading, and most importantly, to let those winners run wild.

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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.

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In today’s episode, we’re going to call it Don’t Marry Your Stocks. And I think as traders, especially new traders, we tend to marry our stocks.

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Trading involves money. And when trading anything really involves money, there’s passion.

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I mean, you go down to Las Vegas, right? I mean, I remember going down to Las Vegas for a convention one time, a trading convention, and that

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night the Dolphins were playing the Chicago Bears and there was a boxing fight that was on that. A lot of people had money on this underdog to win.

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I don’t even remember who it was that was fighting. It probably was some, no names, but there was a lot of people betting on it and the underdog who had

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the odds stacked against them won. And everybody’s cheering and celebrating.

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They’re passionate. They’re excited.

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Me, I didn’t have a dog in the fight. I didn’t have any wager on that fight.

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So did I care that the underdog won? No, couldn’t have cared less.

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But the people that had money on it were very passionate about the outcome. In a sense, they were married to the outcome or to that boxer and what he did in that boxing match.

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And so you can take that same mentality and that same thought process and put it towards stock trading.

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We tend to become very passionate about our trade. And then the more passionate that we become, the more irrational that we are.

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This past week, the Miami Dolphins. To keep talking about the Miami Dolphins, I really trust me.

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I don’t want to. But the Miami Dolphins, they played the Buffalo Bills for the division title.

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The week before that, they played the Ravens for the number one seed. If you follow NFL football, you know that the Dolphins lost both of them.

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I’m very irrational about the Dolphins this year because they there’s so much potential there to win the Super Bowl and every time they go against the Ravens or the Buffalo Bills or the worst was the

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Tennessee Titans, there’s such a huge let down because the passion is there.

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Now you take other sports teams. I’m very passionate about the Astros. I like the Astros, I like the Orlando Magic, but I’m not near as passionate as I am about the

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Dolphins. Dolphins is something that nine months before I was born, I was a fan.

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And as a Miami Dolphins fan, outside of 1984 when Dan Moreno took him to the Super Bowl to lose to the 49ers, there hasn’t been a lot to be very happy about as a Dolphin fan.

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Nonetheless, I’ve been a huge fan of them over the years now, in years where there hasn’t been as much potential.

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Yeah, I could miss a game or two here and there and not care because I pretty much knew that they were going to lose.

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There was one season where they went like one and 15. It was a given.

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They were going to lose every week. Didn’t care because I knew there was no chance for them.

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I think their starting wide receiver that year was a guy named Greg Camarillo. If you know who that is, props to you, but the guy was not starting material.

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But all of this is to say is that we get incredibly wrapped up and very passionate about our traits. Now if it’s a trade, like, I don’t know, let’s say it’s a riot, we might not be as passionate about

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that. That might be like rooting for the Orlando Magic.

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But if it’s Apple, or, or better yet, if you go on StockTwits and you go on social media, or you go into the comments section of some of my YouTube videos, holy cow.

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The passion that people have for certain stocks is unbelievable and it’s completely irrational. In most cases.

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There’s a stock on StockTwits that I don’t know, I think it’s trading at fractions of a penny. Now MULN I believe is what it is.

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People are crazy passionate about that stock. They’re probably down 99.9% on the trade that they’re in, but they’re still very passionate about

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it. It’s got to come back up.

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They’ve got this technology that’s gonna change the future or the automotive business or whatever it is that they do.

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You look at another one that I’ve always found very interesting is Sofi stock symbol Sofi incredible irrational behavior around that stock.

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And it doesn’t mean that, look, I because it’s so irrational, I have to actually put, you know, a disclaimer here that I’m not saying that it we can’t do well in the future.

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But I’m just saying the level of passion and the irrational behavior surrounding those, that a lot of those at least that are in the stock is very, very irrational.

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And what happens when we have that kind of passion associated with the stock, What happens when we have that kind of passion associated with a football team or a sports team in general, we become

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very irrational. And so when it comes to stocks, what do we do?

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We make irrational decisions. The trade starts to go against us.

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What do we do? We double down.

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Because we’re so passionate and because that passion translates into being irrational. We make stupid trading decisions.

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We’ll buy further out of the money. Option calls.

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We will double down. We’ll triple down.

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We’ll quadruple down. We’ll go get a new credit card and take the money out as a cash loan and put it all down on that

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stock. I’m not exaggerating.

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This kind of stuff happens. Then why does that happen?

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Because we get married to our stocks. Let’s face it, there’s a lot about stock trading that we cannot control.

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When I think about the Miami Dolphins playing, one of the things that get me more worked up is injuries, which you can’t do nothing about.

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If a person blows out an ACL, he blows out an ACL. And referees, Referees drive me crazy.

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They’re kind of like the analysts on Wall Street and I can’t really control how a rough interprets something.

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I can’t control whether or not somebody gets injured. Those kinds of variables are a part of every trade analyst, upgrades, news events, market risks.

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There’s so much that can go right and wrong for a stock. And when it goes right, we think that we are something special when it comes to trading.

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And so we start to see a stock go up 10–20%. Perfect example was the Wall Street bets crowd, you know, the stock start going up, you know 100%.

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All of a sudden, all these people think they’re really good traders. And then all of a sudden a couple weeks later, they realized, oh, I was robbed of my money.

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I was scammed. They’ll blame some kind of broker on Wall Street for taking their money.

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The the popular ones, all of the market makers, they took my, my shares. But when in in reality, you were just so passionate and that passion translated to irrational

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behavior, that you were too blinded to see the risks that were associated with the trade.

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I think about fantasy football, even, and I think we get so wrapped up in fantasy football, and it’s fun.

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I mean, I’ve been in a league since 2000 with friends from my early 20s that I went to college with

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and we had this trophy and it’s practically falling apart at this point. But if you win, you get your name emblazoned on the trophy.

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I have yet to get my name emblazoned on the trophy along with a handful of others in the league, but in the end, so much of fantasy football comes down to parameters you have no control over.

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You might have drafted really good players, like for instance this year I drafted Travis Kelsey.

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Did I have any idea that the dude was going to go out and start dating Taylor Swift and just completely wreck his fantasy football season?

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No.

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I also had Stefan Diggs who after week 6 didn’t have 100 yard receiving game the entire rest of the season.

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I had injuries left and right and injuries for instance. That’s kind of like downgrades right?

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On a stock. You wake up the next morning, you find out that one of the banks downgraded your stock and now it’s

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down 6 or 7% at the open.

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Or talking about extreme things that you have no control over. Look at what happened last year with Damar Hamlin against the Cincinnati Bengals.

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What happened to him was awful, but they ended up canceling the game.

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I think that was like the Week 17 of the NFL season, which equated to the championship week of fantasy football.

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And that was a game where you had Josh Allen, you had Stefan Diggs, you had Joe Mixon and Joe Burrow and Jamar Chase and T Higgins playing against each other.

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Yeah, there was a lot of players that were probably in the finals and that game got canceled and probably people lost, you know, hundreds or thousands of dollars that they bet on their team winning

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fantasy football that year because a lot of leagues are paid to play.

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And so you take like something so crazy as the event with Damar Hamlin and the cancellation of the game and you roll it over into the stock market and you get crazy things that happens there.

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Like this weekend if you were long on Boeing, the stock had an amazing run in November and December.

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It starts to pull back. You’re like, OK, this is probably just a light volume pull back.

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I can get into and I can write it back up.

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But then all of a sudden an Alaskan airline flight has an emergency window where the door get

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completely blown out and now your stock’s down 7%.

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Is that really something that you did wrong?

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No.

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But I say all this because it goes back to being overly passionate about your trades, because when

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you’re overly passionate about your trades, you don’t think these things can happen.

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You don’t think that you need to use stop losses.

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You don’t think that you need to avoid stocks that have had a history like Boeing over the past few years of some really crazy events happening.

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Instead, if you get blinded by the fact that you know the stock’s been good for you the last couple of months, you might stay in it longer than you should.

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You might not take profits along the way.

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In case something like what just happened this past weekend in Boeing happened.

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You’re like, no, I’m not taking any profits. This thing’s going, you know, up another 100%.

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Heck, if I’m going to sell it and then all of a sudden something like he’s like, how could this happen?

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The market makers must have made that door blow out on that airplane.

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No, things happen in the stock market.

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It’s way beyond our control and so So being too passionate means we become married to our stocks and passion is good in various areas of life.

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Like being married to an individual, passion is good for marriage, passion for things in life is good, Passion towards your stocks is bad, but passion in your trading is good.

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Being a passionate trader, loving to trade, that’s a good thing.

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But we can’t be passionate about our stocks that we’re trading because we have to be clear minded,

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be able to evaluate the risk and move on.

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There’s a lot of people right now, for instance, that are married to Apple.

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People’s retirements are built off of Apple and I can understand why you would be probably a little bit sensitive if you have done that with your portfolio, where your whole portfolio is based off of

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Apple.

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It’s probably because it’s made you hundreds of thousands of dollars if you have held on for, you know, a couple of decades.

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But there’s going to come a time where Apple is not the greatest stock to be in anymore, and it will

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probably behoove you to get out of the position entirely.

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I don’t know when that’ll be, but look at GE.

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For the longest time, that was the golden child of the stock market, and now nobody really cares too much about GE.

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Yes, people trade it, but nobody’s really married to it anymore.

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Nobody said passionate about it.

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But it probably took that thing falling to pieces at the height of the dot com bubble, where essentially it went from like 380 all the way down to 20 for people to realize that I probably shouldn’t be too

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passionate about this stock.

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It might not love me back like I love it.

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And to be honest, no stock is going to love you like you might wanna love it doesn’t care about you.

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And let’s talk about the passion for the stock even further and equating it to sports analogies.

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And some people may not like sports analogies.

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I get emails from people about everything that I do.

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It seems to be that people they gives you a lot with everything I say on this podcast.

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But nonetheless, let’s talk a little bit more about sports.

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Fandom and sports are passion towards teams, let’s say.

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And this may age horribly.

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OK, but Dolphins go into Arrowhead Stadium this upcoming weekend.

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They’re playing them in the playoffs.

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Let’s say they beat the Kansas City Chiefs in Arrowhead.

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Whoever they play in the next round, they beat them.

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They beat the next team in the AFC Championships, and they go on to win the Super Bowl.

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Great.

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What happened? They won the Super Bowl, of course.

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Did my life change?

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No.

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But I’ve been a fan for 43 years.

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Something should have happened.

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I’ve been cheering for them all these years.

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No, I’ll go to bed that night.

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It might even be a little disappointing because as a little child, I always dreamed of the Miami

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Dolphins winning the Super Bowl and that kind of carries over into your adulthood.

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And then if it actually happens, it’s probably going to be a let down.

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Yes.

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I’ve never seen the Dolphins win a Super Bowl before hoping to see that before I die one day.

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So if you’re married to a stock and it makes you 100% and you finally come to your senses and realize, OK, this is a good time to get out and you get out, OK, what?

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Now It’s on to the next trade. That’s it, that it’s all you do.

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It’s on to the next trade. What if you make 100% on this trade that you weren’t even passionate about?

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But if the position sizes were the same as in the stock that you were married to, the returns are the same, but you don’t have the same passion, really.

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That’s the what we want. We don’t want to have the passion for the stocks.

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Like for instance, in my dividend portfolio, I have Intel and I’ve had Intel for a while, had like a 5% dividend when I was getting into it and then they cut their dividend down to like 1.7% at that

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point particular point in time. I was disappointed in it and everything, but I wasn’t like passionate about it.

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I mean, anytime your stock gets the divvy cut, you’re going to be a little bit annoyed by it, right?

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But I stayed in the stock.

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There wasn’t a reason for me to sell it and it’s stock goes up and to my surprise, it goes up 70 plus percent.

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I sell like a third of my position the other day. I really didn’t have any passion for that stock.

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I care less about the stock. But it did make me 70% over the course of last year.

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And that was pretty nice.

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But I didn’t have any emotions with it.

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I didn’t like, I can’t sell it. Look, it’s done me so good.

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No, I was like this. This freaking thing gave me 70%.

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I would never imagine that. That’s great.

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Let’s go sell. Let’s go sell a third of it.

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Right.

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But I was able to see it that way because I didn’t have passion for Intel.

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Now I’m telling you, it sounds crazy that I’m talking about this like, oh, how can you get married to your stocks, Ryan, I’m telling you, people get crazy about their stocks.

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Go on, StockTwits. It is absolutely crazy.

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I’ve been threatened. I’ve had people dox me.

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It’s nuts how passionate they get about their stocks. And if you say something wrong about it, I did a 60 second reel years ago, a couple years ago about Sofi.

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Going back to Sofi, these people are still watching the video like, oh, it’s gone up 30% since you did this video or 40%.

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I was like that was two years ago. Of course the stock’s going to go up and down.

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The people are still getting worked up about something I said a couple of years ago. Why?

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Because they’re irrational about it. They’ll probably lose money on it one day because they won’t listen to this podcast and they’ll

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continue to be irrational about it, and they’ll make irrational decisions. They might even blow up their account, because if it ever goes against them again, they may start

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doubling, tripling down, thinking there’s no way that this stock could betray me like this. Yes, stocks will ruin you if you give them the chance.

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In any case, I had a lot of other things to say too on this one, but the bottom line is passion for trading is good, but passion for your stocks is bad.

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Think about Apple, you know, and how people are married to that or to Sofi. Think about how people are acting on Sofi.

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You don’t want to be like that about your stocks. If somebody has a different opinion about your stock, who cares?

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Who really cares?

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There’s very few people that can move a stock out there.

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Yeah, I might not like it when a bank goes and downgrades my stock because that does impact the trade.

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But if somebody posts something on social media who gives a rip, it has no bearing on the actual stock.

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And if you find yourself not able to imagine life without that particular stock being in your portfolio, you’re probably married to a good chance that you need to have a little bit of self

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reflection. Like my Intel trade.

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I had to take it or leave it. If it if it works out for me, great, 70%, that’s cool.

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But if it didn’t work out, I would have sold it at a point that I had to find where it had crossed the red line.

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And that’s really where you have no passion there for the stock. And it’s like those bad sports teams that we might like the team itself but you know that the roster

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may not have enough there to be overly excited about and so you’re not gonna have any passion for it.

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And that’s kind of almost even with trades that you’re optimistic about it turning out well for. You still need to have no passion for that stock.

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If you enjoyed this podcast episode and I hope you did leave me a five star review. I get a lot of people that are trying to tear me down a little bit here these days in some of the

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reviews. But leave me a five star review.

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I would appreciate it and make sure to send me your questions. Next episode I will do an e-mail from you guys and would love to get you all’s thoughts on or

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questions that you might have. Tell me your story. ryan@shareplanner.com.

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I’ll read it and most certainly I’ll make it a podcast episode at some point. So do that for me.

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Thank you guys and God bless.

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All the best to you and I look forward to trading with you soon.