Ever wondered how to earn as big as Wall Street traders without loosing your sanity and life working 15 hours a day, reading financial reports, building reports, glued to the news and only earning $90k for the first 3 years with 30%+ going towards taxes living in 24 hour cities of NYC, London and San Francisco?
Youâre in luck. Thanks to the handy dandy internet and the world youâre living in today, you can easily turn $10k into $60 million using a new way of stock investing called social information arbitrage.
I know. This sounds foreign. Might as well learn how to build a DCF instead huh?
No way!
For a background on arbitrage, read here. Essentially youâre trying to maximize your cost of living by moving to a more economically financially savvy place where you can support the gig economy and live up your dreams through the FIRE (Financially Independent Retire Early) movement.
Social Who?
The guy who modernized the social information arbitrage investing movement is Chris Camillo. Heâs been laughing at Wall Street for decades and beat the pros in investing through âdumb moneyâ. This is an approach where you can skip the technical and fundamental analysis and dig straight into society.
Let Wall Street do what it does best at and have their advantage in research and analysis. Yet the new advantage that no one pays attention to because it seems too good to be true is snooping on social media and the world around us. Yes, the dopamine addiction machine that you canât stop drooling over and spend an average of 10 hours a day on! Finally thereâs an excuse to use Insta and Facebook to make money NOT as an influencer!
Branch Out
What if I told you in your townâs deli or when you turn on a random channel on TV tonight, you will find the next Amazon and beat out Wall Street?
Too good to be true huh?
Now letâs back track a bit. I donât advice investing to get rich quick because thatâs active investing and we all know what happens overtime with day traders. They not only loose 80%+ of their money but they buy on margin, take on too much leverage, waste their time, money, sanity and get nowhere.
Sure, they learn great lessons because the best lessons are made when you loose money but this type of ârich quickâ investing Chris has established is legit and 10x safer than what the Robinhood Reditt Rottweilers follow.
Now disclaimer, investing is never 100% safe because thereâs no guaranteed return but that should NEVER steer your away because everything in life is a risk in one way or another! Thatâs no way of living especially if you want your money to work for you.
Risk whatever youâre willing to loose.
If you want more stable income, follow the passive investing approach where you track a major index, commodity, security or any type of asset overtime through a basket of stocks. You wonât beat the market per say but you will follow/monitor it and earn overtime through compound interest if you have patience and diligence.
Chrisâ ârich quickâ investing is out of the ordinary and safer than any option or bid you place because no matter how much you analyze a stock, if the CEO gets in trouble through a nasty affair or news breaks that the company never paid taxes for over a decade, the stock will plummet.
Early Bird Gets the Worm
This successful trading strategy revolutionized by Camillo is all about picking up on new social trends or cultural shifts that are meaningful catalysts to a stock price before Wall Street advertises them! By the time Wall Street finds a pick, the news already caught on and itâs out. Thereâs no advantage there.
This helped Chris go from broke to a trading legend with real proof in a few short years by looking outside of the box.
Letâs see how he did it with a few clever examples:
Win #1:Â Snapped
Camillo noticed in the early 2000s that his favorite drink: Snapple was missing. He would go every morning before school to his downtown 711 and notice for a few consecutive weeks Snapple was the only drink gone from the fridge. Assuming it was just a back-up delivery issue with his nearest 711, he decided to drive a few miles north to a couple other 711 in his state of Texas to just confirm yet noticed the same dilemma! All drinks were stacked except for his beloved Snapple.
Apparently he was the first one to notice that Snapple had serious supply chain and inventory shortages and was running out of money as a company. While Chris was digging deeper into a possible opportunity, the analysts at the banks were too busy valuing the company or most likely focusing on bigger better ones. Not paying attention to some classic Snapple brand.
The analysts wouldâve never known what was going on since no highways exist in Manhattan nor gas station chain like 711. Chris was confused yet confident that something was wrong with Snapple so he decided to short the stock (put) through a short squeeze which means you borrow the stock, sell it and buy it back at a lower price and won big.
Win #2: iSee You
When the iPhone came out and was produced, advertised and shipped from Silicon Valley before China took over, Wall Street wasnât convinced especially since no one barely used Apple products especially on the East Cost at the time. Wall Street didnât trust the internet age especially after the dot-com bust. The last thing they wanted their hands on after blowing millions on unprofitable loft valuation companies was on tech or high growth stocks.
Plus Wall Street and Silicon Valley (East vs. West) are still are competitors to this day but thankfully FinTech made the two coasts more compatible through Robinhood, CoinBase, M1 Finance, Public.com and all the trading retail crypto currency apps that are booming now due to boredom and high savings rates.
Anyway, when the iPhone came out, Chris saw a massive shift in the technology but its only provider was AT&T at the time which wasnât available in NYC because it had poor speed times and wasnât operating properly on the East Coast yet. Only in the South and West was AT&T revolutionizing the digital age. Yet as a Texan, Chris knew Apple would catch on, spoiler alert, it did, big, and bought Apple when no one saw it coming. Apple has only gone up with a whooping $2 trillion valuation since he took the position.
Win #3:Â YelloWOW
During Barackâs inauguration, Michelle Obama wore an eye popping yellow dress from J.Crew. Not something you would typically pay attention to, let alone traders, specifically men just focused on multiples, future earnings and building DCFs and LBOs all day not caring in the world about what the First Lady is wearing but Chris happened to, in a non-creepy way of course. He noticed on social media her dress got a lot of buzz and decided to sporadically buy a few shares of J.Crew. A few hours later it was up 20% in 1 day!
Win #4:Â Sticky
Throughout quarantine, we all needed something to do besides baking more banana bread and playing board games. Especially kids. After all, they survived the hardest year of their lives. Camillo noticed crazy experiments kids on TikTok were doing to pass the time and knew whatever the experiments involved, the supplies would be falling off the shelves.
Through a little searching online and sniping at hashtags, he found out that slim was all the craze. He investigated the most popular ingredient in slime is Elmerâs Glue. He cast a call option and it skyrocketed in price the next few days.
Scenario #5: Look Out
Chris acquired shares and call options of the cosmetics company E.L.F. Beauty Inc in 2019 from a single review from beauty Youtuber jeffreestar, who has 17 million subscribers at the time of writing this article who recommended led millions of millennial and Gen Z consumers to purchase the companyâs products.
The review was posted on March 5th, 2019 and subsequently the stock price of the company more than doubled over the following six months. In order to maximise the profits he makes on trades, Chris Camillo uses options. In this case, he bought call options, banking profits that are 10x bigger than the 120% appreciation of the shares.
Wizardry Without the Wizard or Smarts
The beauty about this type of investing is that you donât have to go to business school, know what goes into pricing a stock, find undervalued, defensive or growth stocks and compile models for decades to come.
All you have to know is whatâs trending, what you forecast in the future to be popular or see exponential growth in, how you see the next few months coming about in the economy and where customers are transitioning to and from.
What type of devices/software/applications/products/services that may or may not be well known that are becoming the next hot thing?
Chris dug through social media not his Bloomberg Terminal. He also watches snippets of E! News, Extra TV and celebrity gossip to see the hype because if celebrities use it, people will too. He spent time with teens, the next generation of know it alls and investigated what will be cool to gain the scoop on his next trade.
Spark
Investing is all about creativity. The more creative and willing you are to look outside the box the better thatâs why being a generalist is your best bet. Donât be a close-minded specialist stuck to technical and fundamental analysis both methods of methodically trying to interpret companyâs financial statements, earnings potential and using intrinsic values and data to gauge the behavior of a stock price history and base it off of future.
Give yourself a break, especially if you did go to business school and waste that degree. Just have a purpose when you log on to social media with the intention of making your next money moves and youâll be all set. Use behavior analysis and dollar cost averaging to your advantage. Thatâs it.
How To Get Involved
All you have to do is be open to looking outside of the traditional investment approach and strategy. Thereâs no risk involved with searching and talking to people . You have to put yourself out there to detect social trends and cultural shifts.
Put your Steve Kornacki data analysis hat away and look at what the media is ignoring and calling childish.
With 5 billion people online and 1 billion users using social media a day, youâre sure to find out what people are up to because thereâs no secreacy anymore.
As Chris puts it: âyou donât have to predict the future to make money in the stock market but you have to be good at reading the present and identifying the meaningful changes that are occuringâ.
Be you by understanding your world. Itâll help you beyond your portfolio.