Hey.

There, it's financial expert, Nicole Lappin. And I'm Magnify, your AI Investing Assistant. We're working together on this new podcast, Money Assistant, where we talk to people about their money problems and then help them.

Create an actionable plan to solve them. If we take a look at how.

That will impact.

Future of Paola, she will be dead free in under six years and have a million dollars in retirement.

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Meet Money Assistant, premiering.

September fourth, wherever you get your.

Favorite podcast.

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Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. When the New York Stock Exchange was established, the very first thing it did was shut people out. Seriously. In 1792, all the reputable stockbrokers in New York got together to sign what they called the buttonwood agreement. A truce basically that set out to make investing more trustworthy by keeping con artists who claim to be stock brokers outside the exchange. At the time, this was a pretty significant problem. These con artists would basically sell people stocks based on flatout lies about the investment opportunities, and the prevalence of this made Americans skeptical about the whole investing system. So brokers started to trade behind closed doors of the stock exchange to keep out the scammers. But closed doors didn't shut out only the bad guys. It shuts out everyone.

Since the buttonwood agreement, retail investors don't have the same access to the stock exchange as brokers do. Until today. In today's episode, I actually go to the New York Stock Exchange to chat with Peter Tuckman, a Stockbroker at the New York Stock Exchange who has been called the Einstein of Wall Street. And he definitely has.

The.

Personality to back up such a big reputation. I wanted to ask the most common questions about how stock exchanges work, who's who on Wall Street, and what a seasoned broker is anticipating to be the biggest investing opportunities of 2023. I had spoken with Peter eons ago when I was at CNBC and have been a huge.

Fan of his.

Ever since. But this conversation exceeded even my high expectations, which is rare on Wall Street. In fact, it exceeded those expectations so much that I gave Peter a whole podcast on our network, Moneynews Network. To be the first to hear more about the official announcement and to hear more about the show, of course, follow Moneynews Network on Instagram. It's @Moneynews. But let's get to the main event. Here's my conversation with Peter. Welcome to.

Money Rehab. Thank you. Let's start at the beginning. Okay. When did.

You start here? I started here 137 years ago. I went to high school with Alexander Hamilton, and I was here for the inauguration of George. He's outside. It happened right outside the building. I started here in 1985.

When did the Einstein Stik come about?

The Einstein Stik. It's actually Aaron Burnett, who is on CNN, and she used to be with the - The CNBC? -cnbc on the floor. We were friends and Mark Haynes, who was another man, he's unfortunately passed away. They used to call me Einstein. I think it was really Aaron who started. They would always joke. Mark Haynes would sit outside smoking a cigarette every morning on the fire hydrant. When I'd walk in, he'd go, Hey, Einstein, you're having a good hair day. That means that the market's going to be up today.

But you are the most photographed guy on Wall Street. How did.

That happen? I am. Look, the floor was not a place where there was a lot of media back in the old days. There was just no place for it. There was always a couple of straight pictures that came out. There was a guy named Alan Gershwitz, who they called the Market Dude. Whenever they took a picture, he was the one. Then in 2007, I'm not sure, it was one of the biggest down days we had, he was about to retire. They took a photograph of me. That day they interviewed him and he said he was retiring and he was going to pass the baton to me as the next market dude. That picture, it turned out, was on the front page of the Daily News, and then—and it was a big hit. It was me throwing my hands up in the air. Then the post ended up interviewing me the next day to see like, Who is this guy? What does he do? Is he really the next market dude? That started this deluge of photographs that ended up with Reuters and Getty Images and the Associated Press.

Just to clarify, these are the pictures. If you're reading a story about the market, these are the stock photos that are used?

Correct. Absolutely. They are real photos. They're notyou're not allowed to pose for those photos. That's real emotion. I trade other people's money, and so it's important to me if we have a successful day. I'm a very emotional guy. I'm adrenaline-driven, and I love the energy and I love what I do. Those emotions tend to be real. So on an up day, you'll see emotions. On a down day, you'll see emotions. And look, media loves to capture excitement and faces and emotion, right? So I'm the.

Most-.

Trauma. Exactly. Trauma, drama, trauma, excitement, depression and all of it. And I'm the most expressive guy down here, so I became the face of Wall Street.

And you bring the energy of the olden days, as you said. So when I started on the floor of the Merck, there was open outcry trading. Everybody was yelling. Everybody was screaming. I think a lot of people think of the stock exchange like that still. They don't realize that it's quiet vibes now. So you would give anything to have open outcry trading come back. But can you explain why that left and what the heck they were doing back then when they were yelling, screaming, making hand motions?

Absolutely. If anyone's ever been to an auction, look, an auction market is you have buyers and sellers. You've got reasons why people are willing to engage in that. The stock market is where we trade thousands of equities. Openoutcry is basically screaming and yelling. That engagement is what happened. It was crazy. It was wild. You have to realize that when somebody's buying something, depending on their intent behind it and why they're doing it, they're taking a position, they're spending money. There's emotion behind it, there's intent, and cash is being spent. There's excitement and emotion around it. I love that energy, and I would bring it back in a minute if I could.

You're talking about other markets just negotiating.

It's a negotiation.

And there were hand signals too, almost like in baseball.

So the New York Stock Exchange did not use hand signals as much as the American Stock Exchange, right? So there was American Stock Exchange, New York Stock Exchange, and then you had the Cboe, you were trading commodity, right? You guys traded orange juice and plywood and gold and oil and stuff like that. You were actually in the pits, open out, cried, doing stuff like that. Here, we did use hand signals, but it was more screaming and yelling. The hand signals that people think of were done on the American Stock Exchange. The way the American Stock Exchange was just a few blocks down from here that traded equities, the same as we did, but the way the room was set up, there was a balcony on the top and the pits were down below. You wanted to explain to your trader who was in the pit what his instructions were without telling anyone next to him what you wanted to do. Because if everyone knew, it's like if you walk out to a poker game and you've got four aces and you put them forward, everyone knows you have four aces, no one's going to play against you.

The same thing in an auction market. There are certain things that you hold close to your cuff. There was a way to get information down from the balcony to the pits. Here, we use phones, we use squads, and we would run back and forth and start to scream and yell. Our voice.

I'm sure.

You won those. I did. I was the loudest, most obnoxious trader in history, for sure.

So when somebody says they need a stock broker, they're probably thinking of a financial advisor who's working for them. A broker isn't working for a customer. Correct.

So in the old days, a stock broker who represents a brokerage firm, whether it's Merrill Lynch or Smith Barney, the old school brokers, were the guys who were your financial advisor who took your money and they created a portfolio for you and traded it. Those were called stock brokers. We are traders. Those guys would actually send us orders right down to the floor, and then we would get them as brokers. Once I received an order to buy 100,000 shares of Disney, I would have to go to the market maker who traded Disney. Now, all the order flow from around the world who want to trade the Disney stock would go through that market maker. I would then walk in and say, Hey, Joe, how is Disney? And he'd say, We've got three buyers. They're willing to pay a quarter. We've got a seller at three-eighths and a seller at a half. Hey, Peter, what do you want to do? And then I would open up my, either, depending on what my instructions were, I would either say, I'll take stock at three-eighths and I'll bid a quarter, it would then initiate or commence the negotiation.

I'd look at the other buyer and say, Hey, guys, I'm a buyer of 100, thou. What do you want to do? Maybe we should pay a half. And so we would together start talking to engage each other to find out what does everybody want to do. I mean, it was a wonderful… We may spend a minute there and we'd be aggressive buyers, or we'd spend an hour there talking to our buddies, deciding what to do. It's like a poker game that way. But the market maker was there to orchestrate putting buyers and.

Sellers together. You keep saying market maker. If somebody's listening and doesn't know what that is, can you explain how that works? Sure.

There are brokers. Brokers represent institutions or customers, high wealth people or hedge funds or institutions.

And these are not financial advisors.

Not at all. Now these are people, boots on the ground, traders on the crowd at the.

Point of execution. It's important to make.

That distinction. A broker and a trader is the person who actually executes stuff. A market maker is basically it's a totally different job. They represent the market making firm that they work under. They are allocated stocks by the New York Stock Exchange, and they're there to create a smooth and active market. You think of it as a broker, trader, I'm a passenger on a plane. If you think the market maker, he's the pilot. The pilot of the plane is there to create a smooth and active market. If you run into turbulence, that market maker will step in. If there are three sellers and two buyers, the market maker will step in and be the third buyer to consummate a trade. If there are three buyers and two sellers, the market maker will sell stock. When there's nothing but sellers and there are no buyers, the market maker needs to step in to stabilize the stock. If there's nothing but buyers and no sellers, the market maker, that's his job. He's there to create liquidity within a stock, and he buys and sells all day representing the corporation to keep the stock smooth.

And active. And so if somebody is listening to this and they want to start investing, they would want to look for a financial advisor who almost like a dietitian versus a broker who is like a butcher. So the dietitian is working for you and your goals, and.

Then the butcher- The butcher would be there to make your meal for you type.

Of thing? Yeah, and just sell you the meat and not say, Hey, you should have some vegetables. You're not going to a butcher. He's not going to say, Actually, have some broccoli.

Exactly. Yes, you're absolutely right. If I want to invest in the market and it's not something I want to get involved in personally, I would go out and find a financial advisor. That's really not an easy thing to do. They're all different kinds of them. I beg everyone who's listening, who's a first-time investor, to do your due diligence, find out who these people are, go to one of the more established ones if you're trying to trade and create a large portfolio. What's happening now over the last number of years is a lot of people, because stock market has become cool, whether it's COVID, the meme stocks, the free trading apps, the democratization of the whole investment community, you have to realize that what happened for 100 years was there were barriers to entry for most people who did not have money to get into the stock market. You had to become an accredited investor in order to invest in the stock market. That means, to be very particular, meant that you had to, if whatever money you were investing, you had to actually sign a piece of paper that said 100 % of your investment, if you were to lose it, would have no effect on your standard of living for five years.

Now, I don't know that many people who can actually say that because that means you're a rich person. That's why there are only very wealthy people involved in the stock market. That's a shame. Your basic Joe or Mary on the street could not actually invest in stock. What ended up happening during COVID was it was this phenomenon, this movement. Whether it had to do with COVID, everyone was at home, Wall Street, Bets, or Reddit, whether it was RobinHood or Webo, whatever ended up happening was there was this perfect storm that happened where suddenly anybody with an iPhone and 10 bucks could suddenly be a trader or an investor in the stock market. I think it's a good thing. What's ended up how… I thought you knew.

I was.

Going to ask. Well, it turns out it's a great thing. Not everyone's embracing it. I'm embracing it because at the end of the day, these people will be the future of the investment community. The stock market has been a bit of exclusive, and now it's very inclusive for anybody who wants to invest in the market. That's a good thing.

However- I knew there.

Was a but. However, what's super important, which is what I've taken on as somebody who's been here for 137 years is that everyone who was given an iPhone and $10 and the access to the stock market, they were not given the rulebook or the playbook on how to do it successfully. So everybody who bought stock on May 20th, 2020, with their stimulus check, when they were quarantined at home with COVID and they bought GameStop or AMC at $2, $4, $10, and they watched it go up and they suddenly were posting pictures of them on their Bugatti with $10,000, did not realize that the stock that goes from two to $483, can go right back down to two. If you don't sell it when it's up at 400, it's not about how much money you make, it's how much you keep. That rulebook, it's like if I wanted to become a pilot, I could not go to Teeterborough. I was going to say it's like giving them… I don't know how.

This is crazy ESP. It is. To me, it seems like you're just letting somebody in the cockpit.

Without teaching them in a nuclear reactor.

It's 100% like that. In a nuclear reactor. Just because you can doesn't mean you should.

Exactly. If you got in and you got out and you made a bunch of money, I wish you the best, because don't they hate it? It's a beautiful thing. But if you didn't and you thought you suddenly had diamond hands and you were not humble about the fact that... And honest about the fact that you actually ended up losing money and not making money and you did not do the homework and you did not get that memo, that stocks not only go up, they do go down, and that you need to learn the tools to make yourself a profitable trader and negotiate this market successfully, well, then it's a shame because nine out of 10, this is a fact, nine out of 10 people who attempt day trading do not succeed. I took it upon myself with my partner, David Green, right around the beginning of COVID, we saw this influx of 40 million new retail traders, and we knew that nine out of 39, 900 of them were not going to make it. We thought, What a great opportunity to share what we know. We've learned about technical analysis, risk management, and the rulebook, and share it with them.

And that's what we've done.

Hold onto your wallets. Money Rehab will be right back. And now for some more Money Rehab.

Well, you did two interesting things. You made this distinction whether you're a trader or an investor. Correct. Super different things.

Super different things. We are teaching them to be traders. An investor is someone who makes a long-term bet in the market, investing in a company that they like responsible investing. But people invest in a company because they like the product, they like their guidance, they like what they're doing from a profitable point of view. I like Nikes. Everyone's wearing them. I'm going to buy Nike. I love Apple. Everyone's got an iPhone. I think the company is going to do good. I want to be in it for the long term. That's investing. Trading is making short bits of money on a daily basis. At the end of the day, I have make some green. At the end of the week, I'm greener. At the end of the month, I'm greener. That is day trading. That is scalping. People call it scalping. Whether it's day trading or not, it's making small bits of money on short-term trades. Whether it's a minute, five minutes an hour or a day, every day trying to become profitable on a daily basis, creating some disposable income. Totally different experiences, totally different mindset, totally different thing.

Who is trading for versus long-term investing?

In the old days, you had money, you gave it to a broker, they did the trading for you. Then people took it upon themselves. They have a good job, they have a 401(k) or what it may be, they make a judgment. People who love the stock market, who love investing will make a decision that they want to invest for themselves. They'll do their homework, and it takes a lot of homework to analyze the stock, what products are on the pipeline, what the guidance looks like going forward, and they'll invest in a company for the long term. A trader is a young person or an older person who likes the action. Some people are gamblers. Some people like to go to a sports game and just watch the game. Then some people like to bet on the game. Well, that's people who come to the stock market and who want to bet on the market. They want to bet that GameStop goes from 2-20 or Nike goes from 106 down to 80 or whatever it is. It's people whose Wall Street has gotten their attention. The accessibility to trade the market has opened up. They've been given the availability to find a free, no-charge trading app where they could buy and sell.

The internet has exploded in information. People who are false advisors and fake advisors telling everybody what to buy and sell. Those guys are bad actors, so be careful if you're following a lot of them. Jordan- Who? Well, no names. I'm not going to mention any names. But look, let's think. Everyone's seen the movie Wall Street, the Wolf of Wall Street. Who is that based on? Jordan Belford. That was based on… He's a bad guy, and I don't like to diss anybody. But what Jordan Belford did back in those days was he did what's called the classic pump and dump. He would buy a bunch of stock. Then he would have his little minions. He'd have his little minions go out and call everybody and say, We recommend X, Y, Z, when they've already taken a big position in X, Y, Z. The thousand people following them would go buy it. When they were buying it, he'd be selling it. There are a lot of people on the internet right now who, for $7.99 or $25 a month, will sell you price, stock targets, stock picks, and financial advice. What they do is they create a huge community by creating all this false enthusiasm around a company that tell you this is a great one and look at that stock and la la la.

They'll have a community of 5,000 people. They'll go out and buy a bunch of shares for themselves. Then they'll put it out on Instagram or on Discord or on Reddit and say, I like XYZ, I like whatever. Then everyone rushes in to buy it. When you're buying it, they're selling it. The stock will go up on big volume and then you'll see it go down. Those are the bad actors in the space.

Trading has often been synonymous with getting rich quick versus long-term investing, which is like this slow, steady burn. Do you recommend people are long-term investors as well before they start trading?

I cannot really answer that. I'm not allowed to talk about individual stocks or be your financial advisor. But having analyzed the markets on a day-to-day, hour-to-hour, week-to-week, month-to-month basis for as long as I've been here, over time, stock markets have gone up. The S&P has outperformed most everything over the last as many years as it's been here. Every crisis and crash, and I don't use that word lightly because we've really only had a few, even though people feel if the market's down a thousand, that is a crash, and that's really not. The crash of '29, the rough times of the '70s, the crash of '87, the bubble of 2,000, and COVID, those were legitimate crashes. Over time, those have been better buying opportunities than selling opportunities. I think everyone, young people, there is a saying that if a young person at the age of 20 were to put, I'm saying this hypothetically, if they were to put $250 into the S&P 500, and I'm not recommending this, over every month, then by the age of 40, they would have $600,000. At the age of 60, they would have $1.6 million cost averaging. That would be investing in your future in a financial instrument that over time, has proven to be successful.

I think everyone should do that hypothetically. People should invest in stocks and not stuff. This is one of my messages, which I learned from a guy down here on the floor, which is we don't... Look, we are the greatest consumer generation in history. We always have to have the next sneaker, the next iPhone, the next this, the next that. Even though if you look in your closet, we have so much stuff that we don't really use or need. If I could say anything that would inspire a young person, that if your iPhone 13 is not broken, you may not need the iPhone 14. Maybe take that money and buy a couple of shares of Apple. I'm not recommending you.

Do that. Couldn't agree more. In my last book, I talk about how I always wanted this Tiffany bracelet growing up. I couldn't afford it. When I finally could afford it, I ran out to the Tiffany store in New York, and I went to go see that exact bracelet. I was like, This is the time I'm going to make it. This is going to feel like the status that I finally got this bracelet. I was so jealous of all these other girls wearing. Then I left and I called my broker at the time and I bought Tiffany Stock instead.

There you go. So we're totally on the same wavelength. And that's the greatest thing that people.

Can do. I agree. But if they're investing for the very first time, do you think it's wise to buy individual stocks versus you can buy in, like a stock, to the S&P 500 that you mentioned. You can buy into an index instead. People would ask me in the middle of the pandemic, A, should I sell when everything's in the pooper? No, I think we can agree on that. Correct. Buy low, sell high. Correct. I think we can agree on that. And second, should I buy Zoom? I'm a first-time investor, but Zoom, I hear, is crushing it. So should that be my first foray? Okay.

So Zoom that nobody really heard of before the pandemic went from 20 to 400, and it went right back down to 20, basically. So the bottom line is, and I can't really tell you what to do, but look, an individual stock will go up and down on the profitability of the company and whether they're doing good things or not doing good things. They are basically at the risk of something bad happen, the market changing, a global pandemic, a war, whatever they're connected to. A defense company does better when we're in war. An airline company does poorer during a pandemic. An e-commerce company goes up during a pandemic. You need to get an oversight of what the world's doing at a time. But investing in companies that make money, no matter what's going on, is probably a good thing to do. Exposure to one company, you are at risk if something goes wrong with that company. That can happen in this crazy world from one minute to the next. In this market, we go up and down 1,000 points in an hour. You can be in a bear market in the morning and a bull market in the afternoon.

What you just said was, there are these things called financial instruments like the S&P 500, which are 500 stocks put together in a basket, which gives you this global footprint of basically the American economy and global economy. And so if you want exposure to all that and you're a buyer of the world and life, then probably an investment in the S&P 500 is a good one. Okay, so what.

You're suggesting is like the shaded part of that Venn diagram, almost, like trading and long-term investing or cautious, responsible investing. Sometimes when you think about trading, you're thinking of these gut-rich-quick schemes. But what you're advocating is trading responsibly. Okay. It's the middle.

Shade of part. Yes, absolutely. Look, not everybody's going to be... Look, as I said, suddenly the barriers to entry for a trader and investor are down and anybody can do it.

Because you can day trade so-called responsible index.

Funds, essentially. Absolutely. You can day-trade stocks, you can day-trade funds, you can day trade ETFs. It doesn't matter as long as you don't trade on hope is not a trading strategy. Fomo, fear of missing out is not a trading strategy. Uncle Herbie on the internet telling you to buy something is not a trading strategy. Fundamental analysis is risky in this crazy world we live in because the markets are so volatile. Markets that go up and down as volatile as these do, one must know the rules about having a stop order risk management, money management, the psychology of trading is a really important thing. You have one little person on your shoulder going, I'm a genius. I got diamond hands. I'm going to make a million dollars. Then there's the other one who's more conservative saying, I'm up 50 bucks. Let me take a profit. I'll get into another trade later. That's the paradox. I beg people to err on the side of caution and less risky in a market that goes up thousands of points at any given time.

Try to acquire that devil. You mentioned these downturns and you listed them. Do you think we could go into one? And if so, when we were all watching during COVID and the market stopped, or these breakers, can you explain? You were here. Sure, I was here. Can you explain what happened? Sure, I was here.

Sure.

And can that happen again? And how do you prepare?

Okay. Markets go up, markets go down. We've learned that. A lot of the anxiety and unknowns about what's going on globally are still very much alive. Markets don't like unknowns. They don't like anxiety. The market, if you ask me, is the market going to go up or down? The answer is yes. Most people won't tell you that. I told that to Neil Kavuto once, and it was the hit of the day because no one's saying that. Everyone's saying it's going here, it's going to go there. I don't predict anything. I have no opinion. It's going anywhere. Circuit breakers, let's talk about for a minute. We have here on the Stock Exchange, if the market goes down 7%, we slow down. If it goes down 10% on the DAO or the S&P 500, I don't know the particular numbers, we actually stop for 15 minutes. We give everybody a chance to see where are the bodies buried, what's really going on, digest the news, and then we reopen. If we go down again- It's like a time-out. It's a time-out, exactly. And if you have a kid, you know that a time-out can do only not everything, but good.

Or in a game. Yeah, exactly. And then if we go down again, once again, then we stop for a little bit longer. And then basically what you don't want to do is to disadvantage the actual companies and the investors to have an overreaction that may be out of the guardrails.

We end the episodes with one financial tip you can take to the bank. You have, I think, a whole bank of tips you can take to the bank, but if you could pick just one.

I think it's important to invest in stocks and not stuff. We love to buy things. I'm a firm believer and it's not something I've been that great at. But if you see something you really love, walk around the block for 20 minutes before you go in and buy it like you did with that Tiffany bracelet. We always think we need something just because we want it, and that may not be the case. If you're a young person and you want to get invest in your future, then that's a great place to start. That if something is not broken, you don't need the next one. And so if I could just say anything to anybody, invest in stocks and not stuff, but.

Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin'. Our executive producer is Morgan LaVoy. Do you need some money rehab? And let's be honest, we all do. So email us your money questions at moneyrehab@moneynewsnetwork. Com to have your question answered on the show or even have a one-on-one intervention with me. Follow us on Instagram @moneynews and TikTok @moneynewsnetwork for exclusive video content. Lastly, thank you. Seriously, thank you for listening and investing in yourself, which is the most important investment you can make. Hey there. It's financial expert, Nicole Lepin, and I'm Magnify, your AI Investing Assistant. We're working together on this new podcast, Money Assistant, where we talk to people about their money problems and then help them create.

An actionable plan to solve them. If we take a look at how.

That will impact.

Future Paola, she will be dead free in under six years and have a million dollars in retirement.

How does that sound? Wait, what?

Meet.

Money Assistant, premiering September fourth, wherever you got your.

Favorite podcast.