229: Lance Breitstein – The Ultimate Day Trader, Pt. 2

Chat with Traders is brought to you by Trade the Pool. Did you know that every decade the market reinvents itself? Online brokers opened the doors, mobile apps made trading seamless, and commission-free trading erased barriers. Now a new era has begun. Meet, trade the pool, limited risk trading. And now you also have unlimited time to reach the profit target. From now on, your trading risk is capped, and your trading opportunities are limitless.

Trade the pool funds home-based stock traders with up to$200,000 in buying power. That means you can trade larger positions and scale your strategies without risking your own savings. It's time to trade with more capital, making it truly worth your time and effort. Ready to trade the pool? Click the link in the description and join the stock trading revolution today.

Welcome back everyone for part two of my chat with Lance Breitstein. It seems part one has been a real hit and I'm fairly certain this episode will be no different. If you missed part one, start there, it was episode two two eight. Otherwise, just to jog your memory, Lance was a senior trader at Trillium and headed up the firm's Chicago office where he trained and mentored dozens of top intraday traders.

Lance put up consecutive eight figure years in twenty twenty and twenty one and holds the firm record for all time PL by a considerable buffer, might I add. Earlier this year, however, being twenty twenty two, Lance resigned from Trillium. And like I mentioned last time, it has meant we're now able to make this interview public, as it's been locked away in the ChatwithTraders Vault since recording in 2019.

So I'll once again point out this podcast solely reflects the views of Lance and is not representative of Trillium's views. Now continuing from where we left off on part one, Lance speaks to the heightened uncertainty in stock markets and methods of developing pattern recognition. Next, trading technology and optimization. I suggest paying attention here. While some of it may seem rather simple, I think there's plenty of value in what Lance has to share during this bit.

then lessons from overseeing others and avoiding mediocrity. And last, I asked Lance about his efforts in philanthropy and establishing the impact competition. This is his organization that challenges university students to solve real-world social issues in their communities. When you get to this bit, you'll note Lance talks of getting a website online. Well, as we're a couple years on now, the website is up and if you are interested, it is impactcompetition.org. All right.

The moment you've been waiting for, there is a brief overlap here from part one just to smooth the transition. If you don't need it, then simply skip ahead a couple minutes. But folks, I present to you once more Lance Breitstein.

Lance, I think a good question to ask you uh around these trades, just uh before we move on to something else, would be What have you intentionally done to get better at these trades? Obviously these trades I'm sure make up a big percentage of your P and L at the end of the year. And it's something that you've really tried to develop and and improve on. What are the things you've intentionally done to get there?

Sure. And I think this kind of goes back to my obsession with with meta-learning, the the just the art of how can I go about efficiently getting better. And I think a lot of What the literature tells us is you really want to have deliberate practice, deliberate reflection. and systematically go about each part of the job building reps. So If there's the example I always give my trainees is there's gonna be the person that

You know, if you take two traders, one trader sits in the seat during market hours, and say that during the course of the week they put in fifty hours, you can have another trader that puts in fifty hours, but it's not just about the hours, right? It's about the quality of those.

Who's the person that's just sitting brainless typing up tickers all day, you know, looking at charts but not really doing any deep reflection? That's gonna be way, way, way different from the trader spending those same hours but is going to the right stock selection and is studying those stocks in depth and writing them up in depth. And those couple great plays a day, you need to really systemize those. And maybe you need to rewatch uh tape or you maybe you need to

Systemize the pros of the trade, systemize the cons of the trade, um, find analogies to what else what other trades it reminds you of. It's gonna be such a different, different learning factor when you're the person doing all those factors and incorporating all those different types of learning versus the person that's just the body in the chair. So I think with anything, the the best example is if you were to take

two people trying to learn basketball and have and they've done this this these studies before and you'd have them take ten free throw shots. The person that takes ten shots and doesn't reflect, he doesn't really get

that much better that quickly. But if you have somebody take 10 shots and after each shot, he writes down how he missed. Oh, I went left or oh I was a little bit short. I went right. Um the person that writes down where their shot missed, And then tries to make corrective action with the next shot, the rate of learning is

Is just exponentially higher. And so those same concepts I try to apply to learning the trades. And even with my trainees, I try to make their their learning as optimal which as possible, which really comes down to studying the best opportunities, the easiest opportunities, making it as realistic for them to practice them again and again and again. If it's a slow week, for example, you might only get maybe three or four good plays to study.

If you build a database of great plays that have occurred in the past, you you don't need to be limited limited to those three or four plays per week. You can re-study and even visualize and re-mentally and mentally rehearse trading 40 or 50 plays, and you're effectively getting 10 times the reps per week as somebody else. So I'm one of those people where with my trainees,

It's not about just your time at the seat. Time in the seat counts, but we want to be as productive as possible, making getting the most reps on the most important plays. And that's something that I think is applicable to really any. area of of proficiency that you're trying to d to develop.

Maybe we can go into this a little more because uh the basketball analogy was interesting, but I think in markets Something might happen one time, is not gonna happen is not necessarily gonna happen again in the same order, you know, and play out the same way. what you're getting at is with trading, there's still always heightened uncertainty with everything. Where it's always it's unlike poker where it's a s known set of outcomes in hands.

With trading there's always different nuances and how can you kind of Strategize around that, is that what you're getting at? Yeah, pretty much. For example, you can have a company, uh just a very simple example. A company can release a massive increase in revenue and uh uh profit upgrade or whatever, but still might have a major sell off that day. And you think, well, that seemed like good news. Market didn't react well to it though.

You can also have examples where stock has really poor earnings but runs up higher all day long. So, you know, what are the sort of things which you actually really want to drill down into and, you know, reflect upon to try and get better at, you know, whatever your play might be? Gotcha. Well, so I think I think in what you just said, there's there's a lot of beauty in that, in that With the stock market, so frequently the most obvious things end up being dead wrong or whatever you expect.

Like the classic sell the rumor, but buy the news, sell the rumor, or whatever however that saying goes. And the opportunity there lies in constantly reverse engineering everything. Okay, some some stock had had bad earnings. Missed everything and it and it went up. Why? How can I systemize the factors that led to that?

Clearly like they were, you know, quote unquote bad, but they must have not been so bad. Um, so maybe maybe the stock already you know, maybe like, yeah, the numbers were bad, but people were expecting even worse for some reason. Or maybe maybe people bought because this is the signs of it's gonna be the bottom and is at least as far as the earnings cycle. And I think then the quality

questions to ask might be like, okay, like if if my view is wrong or if the way I'm structuring a trade is wrong, how can I then identify what criteria prove me wrong? For for example, one One and this will sound so so silly. But I think it's just having mental flexibility to process things. There there absolutely are times when news comes out and I short thinking, Oh my God, this this news is awful and and the stock goes up. And I think

That's also where you need to make sure you have the trade structure around to protect yourself. And then you can also go back and reverse engineer. And even with with certain news, the beauty of news as well is you can also see in the end, especially if you have Bloomberg and stuff, what do the analysts say? What does Bloomberg first word say? What does your various news sources or the people on CNBC say? And so often you can say like, oh wow, like

You know what? This company was supposed to get Everybody thought it was gonna get a five billion dollar fine and it got a six billion dollar fine, which seems bad, but nevertheless the stock went up because this was a clearing event. People didn't want to own the stock into the

into that news because they were afraid of of s of catastrophe. Whether it might be like the J and J with with the talc or the opioid stuff or like You know, you have all those drug distributors, or maybe, you know, there's been all sorts of like take even PCG right now with the wildfire liability.

Maybe and I I I'm no expert on PCG, the the electric utility by any means, but maybe one day there is gonna be some court ruling where you're like, oh my God, that that number's so much worse than expected. But that court ruling now cleared the way for the stock to actually be ownable without bankruptcy risk. So I th I think anytime something does something that you don't expect and that you don't understand, there's such an opportunity there

To reverse engineer it and figure out why. And I think that's also then replicable in the future, because by the same reason that you were caught offsides using very, very sound logic. There's there's so many times when other people are gonna use similarly sound logic and you're gonna be like, wait a second, I've I've seen this before. Like, yeah, that does make total sense, but uh

making total sense is unfortunately wrong sometimes in the stock market. And then you can be the person where like when that stock starts to go up, you can be like, oh my God, this might be that clearing event. I might try, you know, if this starts to trend, I might really, really want to go with it. And So much of the stock market, it's just human, it's it's just a true human test of of pattern recognition. Um and trying to build a system that best captures

The pat the ever-changing patterns in the stock market. And that's the issue where you have all these trend followers that try to use or not even trend followers, but just programs or systems and algos that try to use one type of of logic and not adapt. But in reality is markets are dynamic and you need to constantly be

reverse engineering any system and constantly optimizing it for how these things change. You know, there just isn't some black and white when you're dealing with the aggregate of how people value things emotionally and and and intellectually, I think. That's a that's a brilliant answer there, Lance. I'm I'm glad I did ask that question.

Let's move this along a little bit into uh technology because when you came out here to Sydney um and we were talking, one of the things which I remembered from that conversation was you

You said something along the lines, and I'm not quoting you exactly here, but y it it went something like, I can go all day long, pretty much, without touching my mouse. And I just thought that was really interesting. So I'd like to hear a little bit about I don't even know necessarily what the right question to ask about this is, but how are you set up, I guess, to to trade during the day? Like what's the technology which you you lean heavily upon?

Sure. And so this will this will be super commonplace in the States is I don't know if you if you played many video games as a kid or like computer games or anything, but essentially the same way modern computer games have like a zillion hotkeys where a lot of them It's it's just all based on keyboard hotkeys. And so for us day trading, it was equally shocking for me to hear that you guys don't do that as as a standard just because

so so much, especially in in the fast moving American markets, you're really fighting for every every second or every tenth of a second. And any time you you move

and reach to touch that mouse, uh it's it's just too slow a medium. Uh you know, to g to move your hand, move the mouse, pinpoint something, click it, uh it's it's just a very slow way of doing things. And so When you're trying to search for that ever optimal solution and kind of like everything you do, a very common practice in day trading world is for just everything to be hockeyed.

from from different order types to uh going a certain tickers or to doing any sort of thing. We're just trying to reduce the friction as much as possible. And along those lines I think that's just kind of the path of Of just human improvement in in in general. Like even reading like some of that Elon Musk stuff, how he eventually wants like

the Neuralink, like how cool would it be if one day our trading software, you know, you wore some little visor thing on your head and you're able to make just just literally millisecond decisions where it can read your mind. And I think The hotkey stuff in the States is simply just trying to minimize all those frictions. So you can essentially find the fastest, most optimal way, because if you're not the fastest, and if you're not optimized, uh this is a world where you're too late.

Uh if if if anybody's trying to point and click with the mouse, you you're just just hugely incompet uh uncompetitive out here.

How about beyond hotkeys? Like is there any other technology which you use either in the way to assist you with executing and getting positions on and off and e even managing positions maybe? Yeah, I mean I won't speak necessarily so much about about our firm, but even even in general in the trading world, I think While most people think of of algorithmic trading and and programmatic trading as as kind of this this

crazy computerized thing. Like there's there's a lot of ways where even even day traders now can can be VWApping orders or can have even just using certain stop orders or doing um just just more sophisticated order routing, I think really it's it's one of those jobs where you really reflect on any way that technology can make anything easier.

It's it's gonna set this will sound crazy, but like I I try you want to try and use any technological edge you have where even even something I've I've been really obsessed on is is is optimizing my sleep. And so even for something as Сліп госбати Меріо, яно фром фром ору.

basic human times. But now with like some of the sleep wearables and that technology, you can start to track sleep better and you can optimize sleep better. So I wouldn't even say it's just just trading and an order entry, but like You know, are are there

Are there ways that I can use any form of technology to make anything more seamless? And that goes to traders that that back test their trading. That goes to traders that run algorithms to get them in and out of positions. That runs to traders th that that

you know, to to n news aggregation services to everything. Um I think I think to stay competitive in this world or to be optimized in any sense, uh technology is a huge aid and you need to find if there's any friction where you say to yourself, man, like that's annoying or man, that's pretty slow.

especially with coding and programming, there's there's gotta be some solution. You know, even even something as as simple as like if I'm trying to think without getting like too proprietary, what a good example might be. I mean something something as dumb as and we'll go so non proprietary as as possible, but If if every single morning you turn on your computer and you individually open nine different programs and you do all these things on the computer

You know, if if it's the same routine, if you're doing the same thing every day, there's some way where you can program something where it's like, hey, I'm I'm gonna turn on my computer, click this one button, and nine programs will open. You know, and so uh taking it away from trading, I think there's just ways to use technology to get the right the right data, the right answers and to just remove any any friction so you really can

approach like that, that theoretical just peak performance where they're there where you're just operating as as you should be. Uh a program like that would be very helpful actually. Have you ever watched a stock explode and thought, if only I had the capital, or sat on the sidelines because your account balance felt too small to matter? Good news.

With Trade the Pool's limited risk platform, you don't need millions or even thousands to start trading the U.S. stock market. Bypass the PDT and tap into over 12,000 U.S. listed equities. From penny stocks to big caps, ETFs, even the newest IPOs, and short anything you like, with zero locate or hard to borrow fees.

Start your evaluation, get funded with up to$200,000 in buying power so you can go big without risking your own savings. And now you can also have unlimited time to reach the profit target. It's a game changer. Not ready to trade yet? Trade the pool offers a free demo and educational resources. practice on live data, master the platform, and build confidence risk-free before you even pay a cent. Click the link in the show notes to start trading with Trade the Pools Capital.

Just moving on subjects a little bit, given the position you're in, it's quite interesting as you head up the the Chicago office for the firm there, you're kind of in a position where you oversee the traders, you see Some who are excelling, some who aren't doing so well, and also the fact that you're one of the top traders at the firm. I I think I have to ask you like how do you avoid becoming mediocre? Like how do you really excel and become one of the the the better traders?

Yeah, absolutely. So I think totally and I think what has been what is just the common theme to to life a and trading as has come up in a in a few areas is You need to always be constantly improving and adapting with the markets. And it's almost a cliche, I think, for for many traders, but I think it's a cliche that's true because in in

General, every year markets progress towards higher levels of efficiency. So if you're going to be extracting your same earnings level or higher, you're competing at a higher level. So you need to be getting better at a faster rate. And that's why I think the people that take their foot off the gas thinking, Oh, I can just coast.

The reality is you don't end up coasting and staying level. You end up seeing year over year declines in your in your PL. And so I think the truly great people, um, and not that I would necessarily group myself there, but I think The great people that really see the year over year improvement every year. And what's led me to have such success and see similar growth is just that mindset of just constant improvement.

To this day, every single day, I don't I don't view the day as a win or a loss based on the P and L. And one of the best things I did this year, and this was my my number one goal for 2019, was rather than set a PL goal, my overarching goal was to be productive and improve 1%. on two hundred days or more.

And I it's yeah, it's a little qualitative. You c don't actually know when you improve one percent, but I have this tally mark. So on January 1st, I put a little notepad with 200 with a 200 countdown to zero. And every single day my only goal, especially especially when when you took a

big loss, you had a bad day or you were negative. It's so important that I don't let the PL affect me. And instead I ask myself, what can I do better? What can I learn from today? What is gonna, what can I extract? that's gonna make me that one percent better. And So many people don't have that emotional fortitude where they'll take a loss or they'll take a little licking.

And they let that negativity compound. Where, okay, fuck, I had a bad day. I'm gonna I'm just gonna leave early or I'm gonna go home. Like, uh, this day sucked, like that was bullshit. But not only are they taking the loss, but they're they're essentially taking an even bigger loss and that

That negative PL prevented them from getting better that day. They didn't learn from their mistake. They didn't propose solutions to avoid that loss again. They might come in the next day and take that same loss. And that in my world and what I try to foster culturally is making that unacceptable. Mistakes happen, bad trades happen. I'm the king of big losses. But

that will always happen and is always unavoidable. And all we can do in life is when we get knocked down or when we mess up, all we can do is learn from it and not just identify the failure. But most importantly, take that one step further and figure out a real solution to to prevent that from happening again. And so actually when when I was in Vegas at that at that conference. A lot of what I spoke about was when you identify these things, it's not enough to simply

do that, but you want to make the strongest system possible. And so the example I used there was say you missed a trade because you're on your s your your cell phone, like texting or something. You know, just identifying that isn't enough. If you just say, Oh crap, I missed that trade because I was on my phone, guess what? You're gonna miss it again tomorrow or the next week or next year.

But if you say to yourself, What what can I extract and how can I prevent this? Okay, tomorrow I'm gonna put my phone in my desk. And maybe you get bored and you take your phone right back out and you're texting again and you miss another trade. So you say to yourself, crap, that was that was a solution. It was worth a try, but it wasn't good enough.

So how can I go one step further? And so then maybe you give your cell phone to a coworker to hold during market hours. So you can't then get distracted and text at all, and that might work. And so what I've really tried to embody through leading by example and then just impr impressing upon others as a culture

is is every day I want to identify what was the easiest to best money or like what what change. This is probably the million dollar question for for every single person listening to this, whether it's in trading or life. What change could you have made today? What easiest change could you have made that would have had the largest positive impact on your trading or your day? And that doesn't mean just a gainer. It might mean how how could I have easily avoided some loss?

You know, and so there might be a trade you could have done, but it might that trade might have been extremely exceptionally hard, and maybe it wasn't reasonable that you would capture it. Mm. What was the easiest change? And just really focusing on that easy change you could make with the largest impact, if you just do that every single day, ruthlessly and relentlessly analyze that and attack that.

you're going to accomplish really anything. The sky's the limit because it is it is that powerful of a simple simple f use of your time. For so many people You could you can have I mean, so take a friend of mine in the firm, you know, very good trader, like very experienced. But he's he's been he's just been bleeding money out of his ass trading earnings after hours. It's something he doesn't do well in, he doesn't have edge in. So for him to make the money he has lost.

in a new strategy, for him to learn something new might be extremely difficult. It might be a matter of investing one hundred plus hours of study to make six figures in a new strategy. But for literally zero time investment, he could if he just simply says, Hey, my new rule is to stop trading after hours earnings. That simple rule that involves zero time and zero investment and minimal reflection, that one rule is gonna add six figures or more to his bottom line.

And I'm all about trying to identify what those things are each day that are gonna have that that outsized impact. the people that I think excel the most from from beginner to r to intermediate to elite and the people that get elite are those people that do the best job of not just identifying but making those changes. And most people struggle to make the changes. Um but that's that's where the the rubber meets the road in a way.

One of the ideas you shared just there, which I thought was was quite interesting, was how you said that your goal for twenty nineteen was to improve by one percent on two hundred days. How did you determine whether you had improved by one percent or not? I know you said as well it was uh not exactly the easiest thing to kinda quantify, but You know, can you give maybe a couple of examples of of recent days where you you were able to put a check there and say, today I did improve by one percent?

Yeah, absolutely. And so I think the biggest thing is by having that there, it makes me consciously assess and honest with myself and Obviously the 1% is is is totally made up. But to give you an an example of how I measure this, you know, I recently started with there's some other guys in the top ten with me, like other other strong traders. And so at the end of each month,

We'll review our trading month together and discuss the opportunities, the winners, the losers, what we could have done better, like share kind of best practices and So if I if I do that, you know, we pr it probably takes an hour and a half or so for us to go in detail. And if I do that on on a day, that is a win. you can't quantify the value and the edge and benefit I get from it. It's impossible to to quantify. But I know that like, hey, I spent that hour and a half and I invested that.

That was good. If I trade a day and I take some big loss and I say, uh This job sucks. I hate this shit. Like I'm I'm outta here. I'm just gonna go to the bar and and, you know, drink myself into a stupor. That's not a winning day. So that doesn't get a check mark. If if I'm if I'm rushed or if I have

um outside obligations, you know, I I I have some other interests that that I kinda pursue. So if I if I need to leave right after the close and I can't if I can't do my daily reflection and if I don't take the half hour or hour to really find what was that best place I can improve. I don't view that as a check mark. And It's so I found I found that simple 200 tally goal just so, so powerful, much like and I I I speak about this a lot and read about this a lot, but It's almost it's almost

Like the Jerry Seinfeld, don't break the chain. I know I feel guilt leaving the work day if I haven't crossed off that tally. So even if I take if I take a big loss or have a bad day or if it's super slow. And especially lately it's been slow. So most most traders will say like, look, there is nothing I there is nothing to learn today. I barely traded, the market was slow.

Look, it's just this slow week. I'm getting the hell out of here. Like, oh, it's almost Thanksgiving. I'm getting the hell out of here. But no, I don't, I don't care how slow it was, on the slowest day of the year, the slowest day you've ever seen, if the market isn't even open, there is something out there for you to learn and to improve.

You know, like I don't I don't even care if it's if it's if it's a Sunday. I can add a tally mark on a Sunday. If I go into the office on Sundays, which I tend to do And if I if I look over tape and if I assess my trading and if I if I help the rookies out and if I write up you know some best practices, that's a tally mark. And so really it just comes down to building that best practice of not not truly defining a 1%, but did I put in true honest effort?

make myself better. And yeah, you never know whether it adds value or not, but it's just like I think it's so powerful because we're we're in a game where every day your PL is measured by green or red.

You could have done everything right, done all the trades according to your system, and you might have lost twenty grand, thirty grand that day. But look, that's that's not a failure. If I let that day Be viewed as a failure, then, and and I don't get any work done, or if I'm pissed off, or if I'm upset, or if I'm sad moping around because I took a loss.

And had a negative day, then I'm not productive and I'm not getting better. So it shifts the mindset so powerfully away from judging the success of a day from being green or red, which is market-dependent and often out of your control. And it then shifts

the mindset to viewing the day based on did you get better? And so even on the biggest of losses, those are almost most opportune for you to learn the most and better protect yourself in the future. And that Man, it it's it sounds so dumb and so simple, but I think th it's there's just a lot of just power behind that concept of of judging. your your day and measuring yourself just based on am I better than the prior day, regardless of what that dumb colored number on my screen says.

Yeah, I really love this idea. I think it's it's really neat and I'm sure there's gonna be people who listen to this podcast and and probably take that and apply it themselves. It also allows you to d take days for recovery. There's gonna be realistically days where you're truly not in the mood or you're truly you you have other obligations. But all it says is during the majority of the year

uh to the best of my ability, I will uh, you know, call it two hundred fifty training days or something like that. You know, so four out of five days I will try to be a better version of myself. and just trust in the process that that will result in the P and L number I want in the long run. It will result in me being the person I want in the long run. And ultimately I won't burn myself out getting so emotionally invested on on these losing days. We're where I see so many traders around me just

They take everything so personally and get so upset when it's like, look man, like my my job, I'm not concerned with my daily performance. I'm concerned with the actions I'm taking now. that will make me better in the future. You know, today's the second that market belt closes, the days in the past, you can't change that number, but I can take the actions to make sure that I traded better the next day. And

It's it's just a huge psychological edge, I think, to do that. In any and you could apply that to anything. Yeah. It's certainly not easy to do either.

But uh it's it's definitely something to strive for and it's obviously something that you've been willing to do after what, like nine years in the game now? Yeah, I think that with many things it's it's always a question of like, what price are you willing to pay? And I I don't mean that in in dollar terms, but everything in life is a trade off and

we see so many people that don't make it in this job and and in this industry. And like I said, y when we hire everyone, everybody's gung ho, bright eyed and, you know, bushy tailed or whatever the saying is and So many people weren't when I w when I s when I went out to Princeton to to learn from the best, there were so many people that weren't willing to pay the price. They weren't willing to pay the price in in social

cost and and and not having fun times and and reputation and not being able to say, Oh, I'm a Wall Street trader, oh, I'm living in New York trading. You know, people weren't willing to give that up. To have a better chance at success. And and so many people that that fail, it's so hard. for people to go all in and pay the the price of of admission to succeed at this job which is

The price is high. It's it's not any, you know, if if you look at some other jobs, like say you're just running Excel spreadsheets at at some accounting firm, yeah, there's it's a lot of people can do that and it's a great job. But it doesn't have the same price of sacrifice that you need to pay to succeed at this one. And a lot of people don't realize that they're signing up to really sacrifice

uh blood, sweat, and tears for a couple of years and then followed up by constant improvement to stay relevant. And so many people might have the passion but they don't have the hunger and so many people might might be hungry to succeed but aren't passionate about stocks and and right now, even when we talk about recruiting In in my view, you really do need so many factors combined to find the person that's willing to

to pay the price of admission and be passionate and be coachable and focus on self improvement and be detached to money so that he feels okay risking and can deal with the constructive feedback and and the criticism and you know, can bounce back. Yeah, it's it's just hard to find those those qualities. It's it's tough and demanding.

Last subject I'm gonna throw out there and I'm not sure if this is maybe even something that you'd like to talk about on the recording. Uh if not we can take it out. Otherwise I believe, um, again, through a mutual friend, I had a little tip. You'd like to give back. a lot with some of the money you've made from trading. I don't know exactly in what way. I just thought I'd ask you about that. Yeah, I think that's that's a fun one. I'll be I'll be happy to approach.

Okay. So I'm actually very philosophically I guess Buddhist in a way, not like religious Buddhist, but as far as Freedom from attachment and and how can we be happy with what we have? And I've been very fortunate in many ways. Um every day I'm I I'm loving life. Life is great. And Ultimately I try to wake up and tell myself And I think this is true for most people, even though they'll deny it and come up with some excuse. 99.9% Of the people listening to this podcast.

have everything in their life that they need to be happy. Yeah, they m you know, everybody wants the Ferrari, everybody wants the five million dollar beach house. But as far as not not wants, but what you what you need to be happy, you you have it. You have the roof over your head. You can feed yourself. You you most likely have your health even if if Uh, you know, everybody has their issues here and there. So ninety nine point nine nine percent of us.

Ар as fortunate as can be and and chasing after those. other wants won't likely give you the happiness that you can already have. It's just a decision. And so my realization was being a finance person and thinking about compounding of progress, compounding of money. is ultimately in the same way that money compounds, so does philanthropy. And I'm a huge Buffett fan, but my one gripe is Warren Buffett

is one of the smartest people on earth and one of the smartest people in understanding compounding. And yes, he's donated a lot to the Bill Gates Foundation and will be donating pretty much everything, but all the money that he holds on to can for the last all these decades could have compounded philanthropically. Every life you can change or every impact you make reverberates essentially through the future forever. And Bill Gates and his foundation, which is also an awesome

Netflix documentary out right now, Bill Gates is saving millions and millions of lives and making these this huge impact. A lot of it is with Buffett's money. But my main point being that yes, money compounds, but so does philanthropy. And Sometimes thro through my mentorship, а май Alma Mater.

You know, you always get asked for the the classic donation and I've always shied away from it because I always wonder like where does it really go? I don't really want to do something unless it really has the maximum impact. And so I spent a lot of time over the last couple of years trying to brainstorm how can I find the highest philanthropic re return for for my time and and minimal money. You know, we're not talking uh anything that anybody can't do themselves, honestly. And

What I decided to do was essentially start what I call the impact competition. And the impact competition is a case competition at my alma mater. And so each year, what we organized was I fund the prize money and the cost of the competition. And we ask the business students. At the business school, or really anybody, to address one of the biggest social issues addressing their local community.

So this past year was in our inaugural year, and we partnered with Habitat for Humanity, which is uh an organization that helps uh solve homelessness. And we asked the business school students This is the mission of Habitat for Humanity. Their goal is to house all the local homeless in in Bloomington, Indiana. But the number of people applying exceed their funding that they can cover with with their mandate.

H what is a solution that can help us house all these business stud house all these homeless uh people? And so essentially with a very nominal donation, I incentivize college students rather than trying to solve the the next mobile app or try and you know become you know, the next Facebook uh founder or whatever. To focus instead on of money, focus on social need in the community. And in the end, with this case competition, the students

became involved with a habitat build. They learned about habitat's mission. They said, wow, like there actually really is need and suffering and people in way worse off situations than myself right here in my backyard on this college campus. And So not only did they then get involved, but the students Essentially had such great, great solutions. The presentations they gave blew everyone's mind. And essentially, the winning solution.

was a solution based on building tiny homes for a fraction of the cost of the traditional homes that Habitat builds. And this solution, when implemented, which is is ongoing, essentially would allow Habitat for Humanity, the local chapter, to house every single person that applies. Something that seemed like a pipe dream before we challenged the students.

All the traditional solutions were based upon increasing fundraising efforts. But increasing fundraising is a very kind of linear, difficult solution. But this solution essentially changed the whole game. And so now You gotta ask yourself. that nominal donation that the average working professional listener could have made. We got probably a hundred applicants thinking about not-for-profits. We got a hundred applicants.

and competitors helping out with the habitat build, we got solutions that helped solve the mandate for habitat. So they're gonna be housing hopefully dozens of extra people per year. Now how will those dozens of homeless people that now have a home and a community, how will that change their life? And maybe other habitats I'm building a w I'm ideally building a website to highlight the the best practices of each of the

solution, how will other habitats in the country possibly learn from our case study and b and learn s and apply some of these best practices? And Essentially, what I really sought to do after all this was try and figure out like how can we just

You know, Bill Gates is tackling the big issues in the world like malaria. So how can the little man like myself, with with limited funding, try to really find a solution that compounds? And and that was really m what I've what I've found and what it what's it's it was the first year and it was a huge success and I've been trying to

incorporated incorporated at the University of Chicago. And I've got this vision that one day, maybe through the help of of many other people, uh maybe this becomes a a countrywide best practice. where universities can all share their solutions to help their local community. And I think with the power of compounding, the impact this could make really will or at least could change the world. And the biggest message I have is nobody

Nobody wants to take that initiative, right? Everybody thinks, oh, there's some billionaire out there or some millionaire that can do that donation. But everybody we're so fortunate. We are part of that population. No matter who you are, if you're listening to this, you have some portion of money that that can help somebody in need, or you have some time that you can invest and help somebody else less fortunate.

And I I really just do believe that some of these things can compound in pretty crazy ways if you're just willing to be the person that starts the snowball.

Yeah, that's that's incredible, man. Well done. And uh congrats to you. It's quite amazing because You know, a lot of people probably think about trading on the surface as a very capitalistic kind of job. Yet, uh, just recently I had Larry Height on the podcast who's veteran trend follower. uh who's big into philanthropy uh nowadays. Also have got a podcast with um the author who wrote about uh Jim Simons, uh obviously the the multi billionaire behind Renaissance uh technologies.

Um, who's also very big on philanthropy. Yeah. I think uh I think you're headed in the right direction too. I mean look even look even at uh Ken Griffin of Citadel. And the thing is though, and especially right now with the upcoming presidential election and Eli Elizabeth Warren, like you do have this populist movement, but we do have all these people just doing incredible things and they're doing a lot of heavy lifting, but I g but the truth is is everybody else can help too.

Because everybody, you know, you can you can be the ninety-nine percent in America and say, Oh, the one percent needs to do more. But at the same time, the ninety nine percent of America is still the point one percent of fortunate people in this world. And I think you can always say somebody else should do more, but you need to in the end to kind of be the change you want to be yourself. And I don't I don't know of a single person who doesn't have some ability to help somebody else.

And I think ultimately the best way to snowball change and really change the world. Isn't to solve one problem through my impact competition, but to g the whole end goal is to get more people and these business students thinking how can they change the world as well and getting more people involved because that

if if you can even get ten more people volunteering, then those ten people tell their friends. Or if you get ten more people donating, they all have a friend that can donate as well. So it's really a question in in my view of how can you get Not not just a couple philanthropists trying to make big change, but how can you get everybody doing their small part? You know, because it's those.

Everybody it's power and numbers doing small things to make just enormous change. And that's something I think a lot and will hopefully try to solve better over uh the coming years, I think.

Now you said something like you're you're working on a website for this or w when's that likely to be up? I'm just thinking like as someone who listens to this, you did say there was a website coming, didn't you?

I've not built anything yet because I'm really just kind of flying by the seam of my pants with a lot of this stuff, but I do I do envision a world Where where Indiana University attacks the issue of homelessness with partnered with Habitat for Humanity, then I post those solutions online.

under impact, you know, say the impact competition.org, you know, and other habitats can then learn from that, or other case competitions can then learn from those best practices. Or maybe then we we tackle an environmental issue or maybe a topic on mental wellness and maybe I get enough schools doing their own impact competition so maybe I can have ten schools at a time tackle mental wellness.

in the community. And then every school, I can post their best practice and their best solution all in one spot. So maybe there's gonna be practitioners out there that wanna make change and this is gonna just be ideally a centralized website of kind of just the best solutions from some of the top business schools in in the world. And and that's kind of the end goal where I think how cool would it be if if habitats for humanities

from from all over the country can can see these students and and their solutions and be like, wow, how can I how can I learn from that? How can I learn from this? And I think that's what's really gonna add the snowballing, but it's it's just a matter of me

Just just building the website and, you know, kind of juggling a lot of balls at once, but hopefully in in Certainly I'm hoping by the end of this year, maybe in 2020, there will be the impact competition dot org and it'll be uh just a central place for me to write and and Kind of confer everything.

Nice. Yeah. Well you'll have to keep me posted on that and obviously I'll do what I can to to help spread the words. So uh yeah, good on you, man. That's that's awesome. And we should probably call it a wrap around here before we go on for another hour.

I do wanna say to you, Lance, I really appreciate you doing the podcast. Uh I feel very fortunate and very lucky to have uh had this conversation with you and to get it on the record. I know a lot of people listening are gonna get a ton of value from this. It's it's been massive. So Really appreciate it, man. Thanks a lot.

Yeah, yeah, thank you. I mean from from a chance coincidence and uh a beer in Bondi Beach, it's it's been a real pleasure and uh I I appreciate all the work you do with with your podcast and the impact it's made on people. Absolutely no trouble at all. Thanks a lot, man. We'll call it a wrap. Thanks, Aaron. You've reached the end of this episode of Chat with Traders, but rest assured there are more episodes. And zero high. if you leave a race Chat with traders.