Investment Analyst Reacts to Finance TikToks - Naughty & Nice Edition

What is discussed, and when

1. 0:00 – 5:00: Amazon, Netscape, The Globe.com
2. 5:00 – 10:00: Wealth Secrets
3. 10:00 – 15:00: Behavioral Economics, Dowbar studies
4. 15:00 – 20:00: Altea Energy

Notable quotes from "Investment Analyst Reacts to Finance TikToks - Naughty & Nice Edition"

• Into Starbucks in the '90s, I'd be a millionaire. If I invested $1,000 into Amazon, in, the '90s,, I'd, be, a millionaire. This is our opportunity for that. What is happening…

  about Amazon · at 1:53

• Guarantee that these companies will do well. back during the crisis, you had companies like Netscape, the Globe.com, companies that were perceived as leaders in their category…

  about Netscape · at 3:44

• For themselves and their family. And if you're wondering where I learned all of that, it's in the book called Wealth Secrets, which you can find in my bio.

  about Wealth Secrets · at 9:16

• With investment returns. There's a very popular series of studies called the Dowbar studies that found that most equity investors underperform the market. Not because of fees…

  about Dowbar studies · at 13:14

• I found another one that shows all the signs I look for. It's a Canadian oil company called Altea Energy.

  about Altea Energy · at 18:10

Who and what is mentioned in this episode?

Books & papers

• Wealth Secrets — Book · 1 mention · first at 9:20

Companies & orgs

• Amazon — Company · 4 mentions · first at 1:57
• Netscape — Company · 1 mention · first at 3:48
• The Globe.com — Company · 1 mention · first at 3:48
  Guarantee that these companies will do well. back during the crisis, you had companies like Netscape, the Globe.com, companies that were perceived as leaders in their category…
• Altea Energy — Company · 1 mention · first at 18:16

Concepts & topics

• Dowbar studies — Concept · 1 mention · first at 13:17
• Behavioral Economics — Concept · 1 mention · first at 13:40
  Really hampers their performance rather than just focusing on the long term. So it does matter and behavioral economics is a really fascinating field when it comes to trading.…

Full transcript with timestamps

0:02 Sorry, beard's getting in my eyeball. Ho ho ho. Merry Christmas everyone and welcome to the holiday special Tik Tok review video. I know it hasn't been that long since we last did it, but this feels like a tradition now to do a Christmas time Tik Tok review video. And I got a lot of requests to pull out the old Santa costume. So, here you go. I hope you're happy because because this thing's hot. Beard's definitely gonna come off soon. You can't you can't even tell if I'm talking. You know the drill. Your boy Santa is a registered portfolio manager. Fun little fact about your uh friend Christmas. Uh and is going to give some some feedback on some online financial advice that you come across on Tik Tok. And uh this year we have the proper naughty nice list to add the Tik Toks to.

0:47 You can see there's a bit more space on the naughty side. And so we'll be keeping track of who goes on what list here., And, I, made, sure, there's, at least, a couple of of nice videos here because I know you guys want me to just go through the the bottom of the barrel stuff. But but let me have this. Uh Santa needs to restore some of his faith in and finance content. But without further ado, let's crisp these cringles. Guys, I'm literally shaking right now and I got to share this with somebody because I don't think that people know that the average person right now can make a lot of money. We're talking about millions.

1:17 Okay. No, I don't have a course to sell. No, this is not a sponsored video. Do you remember how back in the day people made their wealth because they bought a lot of properties when properties were like $5, right? Those days are unattainable now. But our equivalent to that is literally investing in the stock market with what's going on with AI and tech. Okay? Because if you're an adult right now, you have a front seat to what's going on and seeing how our world is literally changing right before our very, eyes., You, know how, before, people would say, "Damn, if I invested $1,000 into Starbucks in the '90s, I'd be a millionaire. If I invested $1,000 into Amazon, in, the '90s,, I'd, be, a millionaire." This is our opportunity for that. What is happening right now is literally something that's like for a lot, of, people,, it's, going to, be, once, in a lifetime. Look at just read is all I'm

2:08 saying. Okay, ladies, I know that stocks are boring. I totally get it, right? But like if you read something for 15 minutes and you invest $5,000 and you see that $5,000 become $220,000

2:24 all, of, a, sudden, that, 15, minutes, of boring ass reading, it's not boring anymore. Right now at a time where people feel hopeless and they feel so much despair and it's like the world is against them there is a huge opportunity for the average person to come out of this with million. So yes investing is great. It might be a few companies that do really really well with the AI situation we're in. Uh very much misrepresenting the the opportunity of investing. You're not going to find a 40x company with 50 minutes of reading.

3:00 Trust me, Santa has been trying his best. Now, in terms of Starbucks and Amazon, you see this a lot where people highlight a specific example, even, you know, Bitcoin or something like if you invested super early, uh the amount of money that the crazy returns you would see over the long term. Uh but firstly uh when it comes specifically to technological revolutions like AI uh there's a lot of research that seems to suggest they don't actually tend to be that great of a return source for investors. Uh tends to be a lot of attrition in terms of failed companies and investors lose a lot of money basically fund the revolution with their losses to an extent. Um and you know when it comes to leaders like Amazon yes we know their leaders today but looking back and assuming you could have picked them out of the crowd is hindsight bias right? Even if you pick out current leaders in the space, that's no

3:44 guarantee that these companies will do well. Uh back during the crisis, you had companies like Netscape, uh the Globe.com, companies that were perceived as leaders in their category, and yet they still failed and lost investors a bunch of money. So, compare that to the current AI situation. We right now have about 500 AI unicorns in the US, which are companies with valuations over $1 billion. You just have to ask yourself if there's going to be enough demand to sustain all of these companies and what sort of probability that gives you for picking the winners in that crowd. So yes, you could have gotten rich if you had bought Amazon back in the '90s. But ask yourself, how many people do you know who did get rich by just buying Amazon? And if the answer is not that many, well, that kind of demonstrates how likely it is to be making those sort of bets and holding it through the ups and downs of things like the dot crisis

4:31 because it's certainly not as common as this video seems to suggest. So, look this person's young, but I am going to have to put them on the naughty list for suggesting that 15 minutes of research can earn you 4,000% return. Also, I'm sorry. This was about the exact same time I took it off last time, but I'm just getting beard hairs in my mouth every word I say. Hey, Dad. I'm going to start investing in the stock market. You can't invest, Jimmy. You're 12. Go back to playing Minecraft. Not true. Since I follow Nick, I know that kids of any age can invest as long as they open a custodial brokerage account. I'll need you to cosign, though. Does that mean I have control over this money? You can put money in, but once it's in there it's legally mine. And how much do you think you'll earn from this thing? If I invest my $200 monthly allowance into index funds, I could have around 20K by the TIME I'M 18. STOP FOLLOWING NICK.

5:19 HE'S, GOING TO, MAKE, YOU, RICHER, than, me. Well, dad, maybe stop giving your son 200 bucks a month. How many how many Robux does he need? I had an allowance of like five bucks a week. And I know you know, obviously inflation and the like, but I feel like 200 bucks is a lot for for a 12-year-old. So, I'm usually pretty cautious around content that that's geared towards younger investors because yes, you know, compounding interest is great. The earlier you start, the better. Um, if you have 200 bucks a month, awesome. Uh, but most kids don't have that. And to me, I'd much rather see them focus their time and energy towards schooling, you know improving their skills and and just developing, you know, having time to be a kid. It's obviously great to learn money skills early, like budgeting and things like that. Uh, but, you know especially if you have a small allowance,, that's, going to, be, outweighed

6:03 the moment you get your first real paycheck, but overall, good information good TikTok. Uh, just quickly to add there are tax implications sometimes with these types of custodial accounts. So, you need to know the rules of where you live. um the tax authority doesn't want you investing money through your child to avoid income taxes, right? So you got to be aware of when tax will be recognized in their name versus your own name. But, nonetheless, uh good Tik Tok. Our first nice list edition. I I'll add that there. Congratulations.

6:29 We did it. Next Tik Tok. You don't need a job anymore. 50 grand a month is about to be your new normal. And the reason I know this is because I'm about to let you in on one of the biggest secrets that wealthy people have been gatekeeping from you for the longest time. You know what a trust fund is don't you? When you think of a trust fund, you think of wealthy people. Uh just quickly uh for those who don't know what a trust fund is, trust is just a legal entity, a structure that you set up that holds money and assets in its name for the benefit of a beneficiary oftentimes like a child or or someone who maybe can't control the money themselves, but is is managed by a trustee uh for the benefit of that beneficiary. So, uh you can see it for example if with inheritances that go towards uh children who aren't old enough to to manage the money themselves or other sort of tax or state planning

7:28 purposes. And a trust fund is just a trust that holds and invest money. But, did, you, know, that, it's, not, only wealthy people that open trust funds? People who are broke open trust funds and they use them to become wealthy. And now you're probably wondering how do they do it?

7:45 I, am, about, to, tell, you., So,, make, sure you save this video. So,, you, open, up, a, trust, fund,, which anyone can do, and then you buy an asset to put inside that trust fund. And if you're thinking, well, I don't have an asset to put inside the trust fund. What people will do is they'll just go and buy a life insurance policy to put inside the trust fund. Life insurance policies are very inexpensive and they're accessible to almost anyone. You can get in a million dollar policy for anywhere between $100 to $200 a month.

8:20 So, if you were to buy that million-doll policy and put it inside your trust fund, that would bring your trust's value to $1 million. And then you do what the ultra rich do all the time, which is borrow against their assets. Because you put your life insurance policy inside of your trust you can now borrow against the value of that life insurance policy. Now, if you borrow the money, you can do what you want with it. But the smart people, they use it to go invest and buy businesses. They'll go out and buy small franchises. They'll team up with other investors and go buy things like apartment buildings and other commercial real estate. And once they start collecting profits from those businesses, they'll go back and they'll pay off the loan that they used to acquire those businesses in the first place. And once they've paid off their debts, they're now financially free and can start building generational wealth

9:16 for themselves and their family. And if you're wondering where I learned all of that, it's in the book called Wealth Secrets, which you can find in my bio. If I were you, I would grab that book and try and learn as much as possible from it. Because when I started reading it, it made me realize that becoming wealthy really is just about what you know.

9:37 So,, I'm, not, a, tax, professional., But, that video was very misinformed in terms of of trust structures and and how they work. Broke people do not just open trust funds uh to get rich. Trusts are very expensive. They're they're are administrative tax and legal fees involved with them. Uh so already the moment you open a trust, you're kind of in the hole. Uh, and then buying a policy to put in that trust doesn't just give you a million dollars of benefit that you can suddenly tap into. What you can typically borrow against with a whole life policy is what's called its cash value, which is a portion of the premium that you're paying into your policy. But that cash value doesn't just hit a million dollars the moment you buy the policy. It starts off small and then and then grows over time based on your payments, right? So again, you're not generating money out of nothing. And even if you do borrow against any cash

10:31 value you have, you're still paying interest on that. So even though you're borrowing from yourself, you technically aren't. You're actually still borrowing the money from the insurance company because there's no million dollars in your trust to access, right? If you put a policy in your trust, that trust doesn't have any cash on hand to give you. You have to reach out to the insurance company. They lend you money using that policy that they have in house as collateral, but you're effectively just taking a loan from the insurance company. What you do see is some wealthy people will buy whole life policies and borrow against those policies as a tax planning tool because they're in the highest tax bracket and even with the expenses of the premium and the like it can still be worth it when you're in the highest tax bracket for you know reducing your your payable taxes but for most people it's not worth

11:15 it. So very much misguided. Wealthy people don't use whole life policies to get rich. They are rich and then look to use whole life policies for state or or tax planning but that's it. It's not some secret tool for going from zero to $50,000 a month. I have no concept of where that dollar amount's coming from. So, look, I don't know if if maybe the book maybe misled this guy. I haven't heard of this book before. Or maybe he's just misremembering the details of it. But I do have to sadly put you on the naughty list. But hey, if I'm wrong, if you are making $50,000 a month with this trust idea, uh just let me know and and I'll be happy to correct and and put you on the nice list. But uh otherwise let's move on. Next, Tik Tok. There's literally no way that trading is not going to work for you.

11:55 I, swear, I, I, feel, like, Tik, Toks, are getting more bold with with how they present their ideas or concepts. You can't fail at trading. You sure can.

12:08 The, only, reason, that, people,, you, know, say that it didn't work or they failed is because they gave up. I'll say it again. If I wanted to, I could teach like a seven-year-old to trade. Trading is not the hard part. It's not trading that you don't understand. The psychology is the hard part. The discipline is the hard part. The motivation, the consistency, those are the things that make people fail. Not the actual skill of trading. The actual skill of trading is honestly just not that difficult to understand. And like I said before, that's like 5% of being an actual trader. The rest is all the psychology. All that to say, keep doing it. It's going to end up working out.

12:42 You just need to make sure you get discipline and consistency and all that you know, under control. and the rest is a piece of cake. Literally

12:49 that's, what, I've, been, saying., That's consistency is the key. You don't want to let your psychology psych you out. That's why whenever I use the plain bagel trading pattern, patented by the way, we're always betting on red. Every time it's red only or is it black? Wait a minute. So, psychology matters with investing. Definitely plays a role with investment returns. There's a very popular series of studies called the Dowbar studies that found that most equity investors underperform the market. Not because of fees or even strategy, but one of the top factors is actually their well in addition to lack of capital um is their psychology right? Chasing returns, selling out of positions early and and buying into and chasing returns in other funds um that really hampers their performance rather than just focusing on the long term. So it does matter and behavioral economics is a really fascinating field when it

13:44 comes to trading. This kind of stuff is just highlighted as an out right for for people who promise high returns but then don't see people able to achieve that especially because half these people are selling trading courses that are supposedly so easy you can just automate the process or you know anyone can do it. uh then psychology shouldn't really matter if it's like mathematical, right? If I see a stock drop below a resistance line, if the pattern is as simple as they highlight, then there's not much emotion to be had, right? Because I'm just following the steps you told me to follow. But yeah, to be clear, trading does not work for the vast majority of people. There are plenty of papers to highlight that. And the people who say otherwise, vast majority of the time they have some interest in getting you to trade, right? Whether it be they're selling a course or a Discord signals group or whatever. Um, in fact, you

14:31 know, if we just go on Tik Tok and search trading, you can see how many of the top videos are courses, right? Here subscription and affiliate links trading course or mentorship of some sort. Again, subscription and promotion selling a trading program. So far, five out of five. So, if you just look at top results for trading it's all this content, right, of people talking about their their gains, their wins, glorifying this day trading life and process to try and get you to to buy into that lifestyle they're selling despite there not being much merit oftent times to to the course or the pattern they're using. So, you really got to be cautious with influencers and people you follow online, including myself. You know, be aware of people's conflicts of interest. Even I, you know I work in the industry. I have a conflict of interest as well. And you need to be aware of that so that you can frame the information, the details you

15:22 get from them, right? It's not to say that anyone who sells a course or whatever suddenly you can't trust anything they say, but that information is important to what they do say, right? If they start telling you, oh, you can make millions of dollars trading, you're going to look at that information differently if you also know they sell a trading course, right? So, so very important to to be aware of that kind of stuff.

15:41 Here's, the, one, financial, rule, I, will always always follow every single time I get paid, and that is I will always pay myself first. Every time a paycheck hits my account, it automatically takes 50% puts it into my investments. That is me paying my future self. After that $1,000 goes straight into my credit card fund, which is going to be used to pay off my monthly credit card statement. That's it. As someone who was a mega spender before, this was the only way that helped me save money for the future me while still not feeling guilty about spending money that I need to spend.

16:11 Because before I would just let my paycheck hit my account, spend it all and then see collect some coins of what I can save, which was two bucks, five bucks here and there. Not a lot. Not great for wealth building. So, pay myself first is the only rule that I will ever follow.

16:25 All, right,, good, Tik, Tok., Another, another nice little addition. We're We're doing it, guys. We're healing. You know, I see some comments about it being unrealistic to put aside half your salary, but the underlying practice is a solid one right? I I understand not everyone can afford to pay themselves first when you're living paycheck to paycheck. So you know, very clear distinction, but this person is just sharing their own experience. A lot of people find this very helpful, this idea of paying yourself first where you put this fixed expense for your investments aside first thing when you get your paycheck so that as you get towards the end of your paycheck period, you're adjusting your discretionary spending rather than your investments to whatever you have left over. When it comes to anything finance or budgeting related, automation is your best friend. Uh people only have certain

17:06 amount of mental bandwidth for dealing with all of life's stresses and as that mental bandwidth gets taken up from other stuff, it can be hard to dedicate mental efforts towards your your finances and your budgeting, right? It's why you can see people who are very well educated and very fiscally responsible sort of fall to bad financial habits when they're stressed out at work or or have a late night or things like that because they just don't have the mental bandwidth in that moment. It's why people can make really severe mistakes even with sort of a good foundation. So good tactic obviously you need to know how much you can afford to put aside.

17:39 You don't want to put yourself in a bad situation by doing so when you say first start. But when stuff like this becomes more habitual, it's more likely again that you'll stay with it consistently and and see that progression over time. I told you to buy this stock 5 weeks ago when it was just 5 and now it's sitting at $1.80. That's a 36 times return. And some of my followers actually made that move. And once again, I'm not selling a course or charging for anything. Everything I share is completely free. I just post undervalued penny stocks with massive upside potential. And right now I found another one that shows all the signs I look for. It's a Canadian oil company called Altea Energy.

18:18 Uhoh., Canadian, uh, over-the-counter, micro crap stock. Probably a paid promotion. I had a video a while ago where I I talked about this trend of junior mining or exploration energy and and mining companies in Canada paying creators online to promote their stock with these types of videos. Yeah, it's it's sadly become a a bit of a trend. Normally, you can find a press release about their marketing, but let me see. Wait. So, the stock has a ceased trade order and is in default as of the end of last year, as of December 2024. So, this guy's just actively promoting a company on the verge of being shut down. Yeah, that's uh I wouldn't recommend it.

19:07 The, fastest, way, to, change, your, financial future in 2025 isn't buying Bitcoin.

19:12 Oh,, no. I'm just realizing now that whole thing was AI. They, ask, you, how, you, are, and, you, just have to say that you're fine when you're not really fine.

19:22 That's, crazy., That, kind, of, leads, me, to wonder if the companies behind this type of content. Honestly, it wouldn't surprise me at this point. Like there's a lot of really nefarious and sketchy marketing happening with with really small companies and just no very little regulatory action going against it. So you have to be so careful. I've never been got by a by an AI video like that. That's Wow, that's embarrassing. It's not even that good. In hindsight, it's it's not even that good. You can see around like the eyes and the mouth.

19:50 Like, it's all very unnatural. But, uh if that's not proof to take everything you hear online with with a grain of salt. Um, yeah. Yikes. Let's move on. Try try to forget that happened. Most people don't know this but Chat GBT is a genius when it comes to trading stocks. Here are 10 quickfire Chat GBT prompts to help you make money from the stock market. Number one market research and trend analysis. Analyze the current trends in the stock market, focusing on your sector or stock. Identify any emerging patterns and suggest potential investment opportunities. Consider recent earnings reports and industry news in your analysis. Number two, portfolio diversification. Given a portfolio with a mix of your current sectors or stocks suggest strategies to diversify further while minimizing risk. Include potential sectors to explore and specific stocks to consider. Number three, an AI powered stock screener. Help me build an AI

20:38 powered All, right,, you, get, the, idea., the, there's 10 kind of AI prompts for improving the investment process. And listen, I actually use AI when searching for different financial details. I don't often rely on on what it tells me, but it sources some of the details. So, um you know, if I'm looking for a very niche or specific detail, um I find it's helpful to use AI to try and track the the source to find that information. Uh but it's important to recognize that chatbt is not a judgment model. when you ask Chachi BT to analyze something, it's not going through and and calculating you know, financial models, um, even really researching different reports especially because most of them are going to be paywalled or, you know whatever. It is simply predicting what someone given the data points it has would likely reply to the question you asked it or or the prompt you gave it.

21:28 That's not to say you can't use AI to improve your research process. uh some of these prompts might work but uh you know it's not really meant for for this type of activity and so you don't want to put undo weight on its on its output if it's not really built for that. I know actually early on when Chach was first launched, there was a a portfolio the GBT portfolio that claimed to be beating the S&P 500. And there are now services that let you invest in portfolios picked by these AI models. And you can see that they post a supposed average return that beats the market again. But really, if you look at each individual uh AI system, the results are just all over the place right? you have uh sometimes it outperforms the S&P 500 over that time period. Sometimes it's severely underperforming the the S&P 500. So looking at these results, a there it's not really a standardized return, so you got to be, you know, cautious of that.

22:18 Uh but B, it just kind of paints to me a randomized picture. Yes, in this period the average seems to be doing better than than the S&P 500, but you're talking about a couple of years of of potentially just random results. Uh any random set could give you that sort of output. So AI can be a handy tool. Uh some of these prompts might work uh to an extent, but just be aware of of what you're getting. Right? This is basically using the internet to give you a summary of what the internet would try to reply to to your answer. Uh that's not always going to be the internet's not always wellinformed on on uh you know where to invest money. Definitely wouldn't suggest investing based on what chatbt highlights. So yeah, that's the video.

22:54 We have our our list now. Put the beard back on for the for the outro. Uh got to get some use out of it. Yeah. Uh couple couple nice on there, but overall just uh still some work to be done. That's okay. We always have 2026, right? We always have next year. Let me know in the comments down below what your favorite uh Tik Tok was, your favorite takeaways, and any other content you'd like me to uh review in the future. Thanks again for watching. I'm taking this off. It's way too hot. See you in the next one. I got to go to the office right after this and pretend like I wasn't just dressed up like Santa Claus.

Questions about this episode

What is discussed in "Investment Analyst Reacts to Finance TikToks - Naughty & Nice Edition"?

In order: 0:00 Amazon, Netscape, The Globe.com; 5:00 Wealth Secrets; 10:00 Behavioral Economics, Dowbar studies; 15:00 Altea Energy.

What is mentioned in this The Plain Bagel episode?

7 people, works and ideas are mentioned, including Amazon, Netscape, The Globe.com, Wealth Secrets, Dowbar studies, Behavioral Economics. Each one on this page links to its own page with every episode that mentions it.

How long is "Investment Analyst Reacts to Finance TikToks - Naughty & Nice Edition"?

The episode runs 24 min; the transcript is about 4,751 words in 39 timestamped sections.

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