Latest / Financial Survival Network / The Journey from Construction Worker to Derivatives Trader- Mark Anderson #6146

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The Journey from Construction Worker to Derivatives Trader- Mark Anderson #6146 · Financial Survival Network

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  Speaker 1: Uh, yeah, I mean I started with it and as
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  Speaker 1: I was working extraction, I was on good pay when
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  Speaker 1: I realized very quickly that the return on capital is
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  Speaker 1: much more attractic and the return on labor.
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  Speaker 2: You are listening to Carrie Lutz's Financial Survival Network, where
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  Speaker 3: Ever, and welcome. You are listening to the Financial Survival Network.
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  Speaker 3: I'm your host, Carrie Lutz and got a great story
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  Speaker 3: for you. Pretty amazing. You're not going to believe it.
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  Speaker 3: Next guest, Mark Anderson, you went from construction worker to
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  Speaker 3: derivatives trader in three easy lessons. I guess you probably
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  Speaker 3: probably took one of those courses that everybody's advertising how
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  Speaker 3: to make money and options, and the here you are
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  Speaker 3: now running a Tedge fund. I take it that your
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  Speaker 3: construction work is probably a means to an end. Tough. Yeah.
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  Speaker 1: I mean I started with it, and as I was
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  Speaker 1: working construction, I was obviously good pay, but I realized
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  Speaker 1: very quickly that the return on capital is much more
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  Speaker 1: attractic than the return on labor from tax perspectives, from
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  Speaker 1: i'm professional, from scalability. So I just started taking more
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  Speaker 1: of an interest in investing in financial stuff.
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  Speaker 3: I did a lot of real estate, didn't like that.
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  Speaker 1: And then I realized that most everything out there was
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  Speaker 1: basically just kind of high up in salesman that just
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  Speaker 1: jumped from the things I wanted to create something that
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  Speaker 1: was real and actual.
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  Speaker 3: Uhha, Okay, So you know, it's kind of a fascinating
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  Speaker 3: transformation here. You went from I'm a blue collar, it's
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  Speaker 3: a white collar. You must have had some interest in
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  Speaker 3: this in the How did you get into it? I
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  Speaker 3: guess is really the question.
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  Speaker 1: Yeah.
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  Speaker 3: I mean I was young. I had a lot of
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  Speaker 3: energy and a lot of time.
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  Speaker 1: Uh. And then I'd always been familiar with what options
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  Speaker 1: are my dad, I'd like traded options. I was kind
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  Speaker 1: of supposed to a young age. And then I stomped
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  Speaker 1: upon these things called zero das expiration options, which are
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  Speaker 1: options that are put on when the market op it's
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  Speaker 1: at nine to thirty, and an expire when the market
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  Speaker 1: it's at four pm. And I really thought there was
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  Speaker 1: stuffing there with not carrying risk overnight and being able
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  Speaker 1: to always quantify your loss with liquidity and order throughout
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  Speaker 1: the day.
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  Speaker 3: So I got really obsessed with it, and then I
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  Speaker 3: took off.
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  Speaker 1: And the main thing is just because someone good to
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  Speaker 1: Harvard or does whatever, it doesn't mean they're more well.
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  Speaker 3: Suited to do what you do. It's basically just a mind.
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  Speaker 3: But well, let me I think it's a chable, all right, Okay,
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  Speaker 3: so we've got to get into this here, because doesn't
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  Speaker 3: don't like ninety percent and ninety five percent of all
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  Speaker 3: people who trade in options lose money. Yeah, I believe
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  Speaker 3: it's ninety nine percent.
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  Speaker 1: I seply like this question because the outage American is
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  Speaker 1: thirty five pounds of a weigh ten thousand dollars in
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  Speaker 1: debt and as a less close friend, but we don't
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  Speaker 1: go around and go up to someone with the six
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  Speaker 1: pack and say, don't you know ninety nine percent of
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  Speaker 1: people are every way it's possible you have a six pack.
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  Speaker 1: How can you do this? Don't you know that market
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  Speaker 1: sufficient and you can't have a six pack? But we
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  Speaker 1: seem to like to do that to people in the
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  Speaker 1: financial space or the other thing is ninety percent of
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  Speaker 1: businesses fail within the first five years. But we also
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  Speaker 1: don't tell people how's it possible you're running probable business.
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  Speaker 1: It's just it's a fiffent, you know.
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  Speaker 3: Yeah, Okay, I'll buy that. Yeah, But let's face it,
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  Speaker 3: it's one thing like ninety nine percent. That's even better
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  Speaker 3: than the government's conviction rate for how is this done?
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  Speaker 1: Here?
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  Speaker 3: Like you're defying the odds completely.
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  Speaker 1: People psychologically can't get out of their own way and
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  Speaker 1: don't put in the time and dedication to achieve what
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  Speaker 1: they're trying to do. So the way like I like
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  Speaker 1: think of it. Actually saw this YouTube video other day
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  Speaker 1: where it's the guy that invented the bulletproof vest got
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  Speaker 1: shot and the chest one hundred times and that's what
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  Speaker 1: he would do. Basically all do stuff, And it's like,
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  Speaker 1: those are the people that succeed, that have enough condition
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  Speaker 1: and their idea that they're willing to go first, put
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  Speaker 1: it in front of it, and they're willing to put
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  Speaker 1: their money where their mouth is. They directly put their
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  Speaker 1: value that they offer in front of their clients. And
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  Speaker 1: then also the reason ninety nine percent of people lose
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  Speaker 1: is because trailing trading is indefinitely scalable, So I could
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  Speaker 1: do one hundred million dollars in seat of ten million dollars.
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  Speaker 1: It would require no more work by good shad peak.
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  Speaker 1: So it's just inherently a winner take all game, which
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  Speaker 1: obviously eats up. Arrested more of a pure form of capitalism, right,
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  Speaker 1: I would say real estate is more of a single
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  Speaker 1: family real estate or Reynolds is a how to not
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  Speaker 1: lose game rather than how to win game. You don't
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  Speaker 1: really see people buying a government financed loan at a
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  Speaker 1: single family home get rich, you know.
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  Speaker 3: Okay, So, but is this something you could do at
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  Speaker 3: home or is this something that you know there should
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  Speaker 3: be a warning don't try this at home. Only professionals
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  Speaker 3: are engaged in this kind of activity, you know. That's
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  Speaker 3: my means anyone could do it.
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  Speaker 1: All you would need is thirty grand to not have
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  Speaker 1: pattern day trading rules, which is just a rule by
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  Speaker 1: the government that says you can't treat options on the
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  Speaker 1: same day one or twice a week if you have
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  Speaker 1: a thirty grand account. So there's really no buried injury
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  Speaker 1: of anyone that could do it. It would just be
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  Speaker 1: already willing to put a buy and to do something
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  Speaker 1: and learn it. Like what I like to say is
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  Speaker 1: I'm giving away the secret selling implemortation. So I release
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  Speaker 1: everything on a YouTube channel and you can go ahead
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  Speaker 1: and look at it and feel my strategy and do
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  Speaker 1: whatever you can. The main underlying thing though, is since
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  Speaker 1: you did read all of it, you didn't put the word.
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  Speaker 1: If that goes up and down a little bit, you're
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  Speaker 1: probably going to struggle with your conviction.
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  Speaker 3: It's all over room and actually do it so right.
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  Speaker 3: That's what's going to catch you for proceeding. So what's
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  Speaker 3: the worst hit you've taken in your training? Here?
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  Speaker 1: The worst hit I've taken is an eight percent drawdown,
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  Speaker 1: So from my all time account high value, I lost
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  Speaker 1: eight percent of my account or of course about two weeks.
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  Speaker 1: But to make it sount the cooler I've lost, it
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  Speaker 1: was about a million dollars. So that's a big number,
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  Speaker 1: but not the big percentage. But the percentage of all
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  Speaker 1: really matters, so about half as much as the average
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  Speaker 1: down here in the index. For example, this year, the
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  Speaker 1: biggest drawdown from a high and the Nasdaq was eighteen percent.
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  Speaker 3: So what's like when it happens here? When you hit
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  Speaker 3: pack these losses, what is generally the cause of it.
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  Speaker 3: It's usually just a big reversal.
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  Speaker 1: So let's say during the day the market goes up
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  Speaker 1: all day, my computers selling puts that's boot on it,
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  Speaker 1: and at that of the day it just drops like
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  Speaker 1: a percent or two percent for no reason. But again,
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  Speaker 1: all these are statistically managed in so roughly two percent
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  Speaker 1: of the time that's going to happen. So that happens
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  Speaker 1: about one supporter. Okay, so.
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  Speaker 3: What if somebody wants to exercise the option, right, these
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  Speaker 3: options get settled in cash, right.
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  Speaker 1: Yeah, s and P five hundred options, which is at
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  Speaker 1: the act are all European options, which means they're cash sittled,
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  Speaker 1: so no one can assign it to you, right, so there's.
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  Speaker 3: No delivery per se other than paying the loss right, correct,
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  Speaker 3: got it? Got it, That's what I thought. That's fascinating. So, well,
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  Speaker 3: you can't lose a lot, you can't really make a
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  Speaker 3: lot either, So essentially, yes, what the act that these
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  Speaker 3: are put on daily.
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  Speaker 1: The compounding is where all of the edge comes from.
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  Speaker 1: So the right book like to give to people is
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  Speaker 1: that if you're one hundred grand in real estate debt
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  Speaker 1: and you have a ten percent rate you know, to
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  Speaker 1: ten at the end of the year. But if you're
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  Speaker 1: one hundred grand in a credit card debt at a
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  Speaker 1: ten percent rate, that is compounded daily, so you end
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  Speaker 1: up paying about twice the principle over a year period
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  Speaker 1: when it's compounded daily versut one. It's compounded yearly. So
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  Speaker 1: eventually this is where the real edge is? Is that
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  Speaker 1: mathematically not even just see if I could do the
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  Speaker 1: same return as the index every day, I would get
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  Speaker 1: double the return at the end of the year because
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  Speaker 1: it's concounted daily.
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  Speaker 3: All right, And do you keep investing more money in?
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  Speaker 3: How does that work? Or do you just how do
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  Speaker 3: you do that? Exactly?
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  Speaker 1: Yeah, So basically it's just all based on math. So
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  Speaker 1: I fill about one percent of my account value and
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  Speaker 1: credit per day. So if I have a million dollar account,
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  Speaker 1: I said about ten thousand in bree me a debt
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  Speaker 1: by one point one million dollar accoun I would sell weapons.
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  Speaker 1: So basically on taking the same percentage risk each and
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  Speaker 1: every day. So mathematically, on a percentage basis, it makes
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  Speaker 1: no difference whether my casts larger or smaller.
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  Speaker 3: It's just purely really interesting, really interesting. So So how
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  Speaker 3: do you get how do you get involved in this,
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  Speaker 3: so can we invest in your fund? Is that the doable?
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  Speaker 3: And what kind of returns have you gotten in the
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  Speaker 3: fund over the path since out?
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  Speaker 1: If you're interested in that, you could look at my
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  Speaker 1: YouTube channel The roaday Mark. I basically break everything out,
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  Speaker 1: get a link to some back testing software if you'd
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  Speaker 1: like to pull up invite it for itself. And it
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  Speaker 1: sounds that I'd interested to you, I'd be more than
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  Speaker 1: happy to seek with you. But yeah, you actually invested
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  Speaker 1: in my fund based find me on LinkedIn website h
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  Speaker 1: Capital Management dot com and then you just got to
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  Speaker 1: be aligned with basically my clients and everyone after one
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  Speaker 1: hundred percent with WIT so you can take your money
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  Speaker 1: out whatever you want. And I'm currently starting a forty
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  Speaker 1: percent yearly return percent quarterly return, so you can basically
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  Speaker 1: get out on bull of shit and you could see
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  Speaker 1: the returns on a day to day basis at target.
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  Speaker 3: That's regardless of what happens in market.
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  Speaker 1: The market's down up sideways, down twenty percent percent quarterly
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  Speaker 1: return to the four year seniorly return, so.
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  Speaker 3: You don't really care what the market does right now.
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  Speaker 1: In statistical terms, we're pointing due to percent correlated to
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  Speaker 1: the market, so basically random.
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  Speaker 3: Got it. Yeah, so it's it's just really irrelevant. Yeah,
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  Speaker 3: got it? All right, fascinating and hey, appreciate you coming on.
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  Speaker 3: Can you tell us where we can find you, give
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  Speaker 3: us links, website, whatever.
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  Speaker 1: Yeah, you can find me at Mbhcapital Management dot com
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  Speaker 1: or look me up on LinkedIn mbH Capital Management see
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  Speaker 1: Mark Anderson under there also about a YouTube channel under
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  Speaker 1: euro Day Mark based the world host kind of my
• 10:51
  Speaker 1: pop profits being one doing in general relation to creating
• 10:55
  Speaker 1: to just kind of educate people and get people a
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  Speaker 1: better perspective on it.
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  Speaker 3: All right, Hey, well I like it. Got any questions
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  Speaker 3: from Mark myself should be an email linked to a
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  Speaker 3: site be in the show notes This interview on Financial
• 11:07
  Speaker 3: Survival Network dot com. While you're there, please sign up
• 11:11
  Speaker 3: for your free newsletter. Hey definitely want to have you
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  Speaker 3: on again and go more in depth into this and
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  Speaker 3: really get some like real life examples and what else
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  Speaker 3: can we say? Well, that's about it. Appreciate you coming on.
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  Speaker 3: We'll talk to you again soon. Appreciate it.
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  Speaker 2: Thanks for listening to carry Lets this Financial Survival Network
• 11:31
  Speaker 2: your solution to today's trying times. For the latest, go
• 11:35
  Speaker 2: to financial Survivalnetwork dot com Financial Survival Network now more
• 11:41
  Speaker 2: than ever,