The first season of Truth or Skepticism has come to a close, but the legacy lives on in the tastytrade archives! I want to take a moment and reflect on a few top takeaways from the 13 episodes that aired. The debates were amazing and the information discussed was priceless, but a few things stood out to me overall. Below you will see the top 5 lessons learned from Truth or Skepticism, along with video links to each micro-segment. Let’s count them down and start with #5!
Lesson #5 - Drive Your Own Car
This segment highlights one of the first times Dylan realizes what Tom is preaching on tastytrade everyday. People have this idea in their head that they cannot manage their own money because they think they’re not smart enough, they don’t have the patience for it, etc. - the list is endless. Tom reiterates that passive index investing is a brain dead act, and although fees are lower than other 401k and mutual funds, one can only make money if the profits of the fund exceed the fees of it. Tom wishes everyone would take control of their accounts, as the knowledge and experience will not only improve their financial lives, but other facets of life too. Dylan agrees that if we can become knowledgeable and exploit the fear factor of the market (volatility) to make money, he is all for it!
Lesson #4 - Understand Federal Reserve Regulations
Dylan wants the Federal Reserve to shake things up a bit, and not to the tune of a 3,000 page document. He proposes a one page document with two main rules: Be transparent in transactions, and have retained risk in transactions. If a transaction does not meet both of these criteria, the transaction cannot be allowed. Doing so would help revert our fed back to the mean, and create a more stable Federal Reserve.
Lesson #3 - Be Aware of How Interest Rates are Currently Derived/Produced
Dylan & Tom agree with each other 100% on this one, where they discuss the notion of creating a free market for interest rates. Instead of having a board decide what they should be, they believe there should be a dynamic rate that fluctuates with demand to avoid sending asset prices to the stratosphere with no real tie to any fundamentals. This discussion was a great one, and is a pivotal aspect of our financial future that both Dylan & Tom believe must change.
Lesson #2 - Increase Number of Occurrences and Understand Market Instruments
The segment is memorable to me because it explains in plain terms how to use different instruments of the market. Tom explains that number of occurrences is very important to maintain a small trade size, and also to allow the probabilities to play out over time. Tom’s main strategy is to use options to exploit implied volatility. We have shown that IV is generally overstated, which is why we sell premium. He uses futures to hedge his positions, and he uses stocks to make smaller adjustments, as you can get notionally smaller with stocks than futures.
Lesson #1 - Be Proactive and Manage Your Own Finances
I rated this segment as the number one takeaway, because it highlights a big problem with financial media today - the lack of genuine interest in the viewers. Financial media could be, and probably is the #1 reason why people don’t manage their own money. Fear is instilled and passive investing products are promoted as opposed to sharing do-it-yourself investing knowledge on these sort of networks. Dylan highlights the fact that the Bloombergs and Wall Street Journals of the world have their head wrapped around the market internals, but they haven’t figured out a good way to channel that into usable content for viewers.
As stated previously, these are just a few takeaways from the amazing series, so be sure to check out all of the full length episodes on the Truth or Skepticism show page! And Dylan will be back on the tastytrade network this Wednesday for a new episode of Truth or Skepticism, so be sure to tune in at www.tastytrade.com!