004 Interview with Gregg Killpack

Hello and welcome to the Consistent Profits podcast brought to you by Inside out trading and Brian McAvoy, where the focus is on consistency because when you have the consistent part down, profits become easy. Hello, everyone. This is Brian McAvoy with a new episode of the Consistent Profits podcast. Today I'm excited to be introducing Greg Kilpak. Greg teaches traders and investors how to make bigger profits in the markets through short term and long term investing. Greg. He's been studying the stock market since 1988. He's a stock trader with 20 plus years of experience in short term swing trading and long term position trading. By using advanced market timing indicators, he made a 75% profit as a portfolio manager in 2022, which is really cool. We're going to come back to that. His current goal is to start a hedge fund. He obtained the Serious Servant securities license in 2001 and worked as a trader at Fidelity Investments, Broadway Trading and Zone Trading Partners, now Kirchner Trading. He began training and coaching traders in 2005 for Teach Me to Trade and was the director of trader training at Trader to Be. He's been a guest speaker at on the Squawk box at Top Step Trader and he has over a million views on his YouTube channel. He's also the author of the book Advanced Stock market How to safely triple your money or more every decade. And he lives in Largo, Florida.

Florida.

That's near Tampa with his wife and son.

Right.

Thanks so much for being on the Consistent Profit podcast.

My pleasure. Nice to be here, Brian.

Well, if you want, you know, tell us a little bit about yourself, you know, maybe starting with the story of how you got interested in the stock market in the first place.

Oh, okay. Well, that's kind of a funny story because I. This is back in 1988, I was visiting a friend and his family was having a garage sale. And so I was, you know, while I was talking to him, I was thumbing through what he had for sale and saw a book that looked interesting. And that book was how to prosper during the coming bad years by Howard Ruff. And, you know, that was just enough to whet my appetite and get me interested and I wanted to learn more. And what I found as I started to get a hold of books was that there was no one book that had all the answers. And that's really what I was looking for. And so I had to search and search and search and read and read. And what I finally found out was that if you take the stock market from the big picture, it's pretty easy to understand. The hard part is diving into the details of it and. And we can talk about that. But basically, what started out as a hobby turned into basically an obsession about how the market works. And I bet you can appreciate that from your own situation.

Oh, yeah, yeah. What I find with most people, it's either a passionate relationship or almost the. I'm just doing this for the money, and I'm tolerating it like a job that I don't really like, but I got to pay the bills, and there's not a whole lot in between. You're either you're in it or you're not.

Well, I'm definitely in the former camp. I love this stuff. I love learning how it works. I love studying strategies and understanding the concepts behind it. And so it's been a lot of fun. It's a ton of work, but it. But it's very satisfying to me.

Oh, yeah, indeed. Well, I'll tell you what I mean, it really caught my attention as far as you being able to make 75% on a managed account in 2022, because, you know, a lot, a lot of people, well, a lot of traders, they'd be thrilled to make 75% on their own account. But running a managed account, that's a whole different game from managing your own. It's a whole different beast when you got other people looking over your shoulder. And it's regulated differently in the whole nine yards. And so to hit 75% is actually a pretty respectable accomplishment. Tell us a little bit more about that.

So, basically, two things happened that I knew from my reading was going to happen. First, we had inflation, and inflation got bigger and bigger about two years ago, if you recall. And then as soon as the Federal Reserve, around a year and a half ago, started to say that they're going to be raising interest rates, well, I knew that they had to take their foot off the gas pedal, which has been pedal to the metal for over 10 years, basically since the market low in 2009. So I knew that we were going to turn off the afterburner, basically, and that the market was going to take a nosedive. And so I very carefully started to short stocks. And one of my first stocks was Rivian in January of 2022. I sold it short a little bit at a hundred when it was up at a hundred dollars a share, I sold short more when it went down to 65 and it dropped all the way to 20. And then I covered when it started to go up and I. I covered at 30 and I got back in. It went up, I think to 40 and then it came back down. I, I got back in at 30 and I'm still short Rivian right now. And so I've, I've done really well with Rivian last year and I'm still making money off of it.

Well, so what was it about that one in particular that caught your attention and, and had you, had you jumping in on it?

Well, when I started to investigate it, I knew right away that it was going to be a great stock to short because they had not even sold a car yet when I sold it short. Yet they have a valuation just like GM or Ford that does $200 billion every year. And so there's no way that that valuation was correct. It's one of those situations where Wall street pumped it up, people got excited just because it's an electric vehicle maker. And I've studied that, I've researched it, and if you know anything about electric vehicles, you know, it's, there's a lot of technical difficulties that come along with that, specifically with the batteries. And Tesla is one of the few companies that has really done well handling that. So in a way, Tesla has a mini monopoly. But I knew that, that there's no way that rivian was worth $100 a share. In fact, the, the company I was working for at the time, I announced on, on his show that, that I, I predicted that Rivian would be at 12 bucks a share within a year and a half. And my boss freaked out because he didn't, he didn't think that that was a good estimate. But I think he believes it now, now that I think it's currently trading at 14 or something. So.

Wow.

So I knew that was going to work out. I just had to be careful with how volatile it was.

Well, so you got some perspectives that you can share that are, that a lot of listeners might find valuable as far as, what do you see as some of the primary differences between trading an account where you're managing somebody else's money versus trading your own.

So a good professional trader is always going to be managing risk very carefully, always looking at risk, always watching the account in specifically with someone else's money. You know, you can do what you want. If you want to be crazy with your own money, that's one thing. But when you're with handling somebody else's money, you have to take good risks and that's premier. And so, you know, I talked to my client and I told him what I was doing with his Account. He said, okay, go for it. And it worked out really well. I started to sell short, actually at the end of 2021. And then I. The more the market went down, the more I kept selling short more and more stocks. And so Now I'm over 100% short in stocks still.

Wow.

I only have one tiny long position right now, so I'm predicting the market is going to go down a lot more.

So what's the one you think is going to be going up?

Care to share that?

Sure. This is a cannabis stock called true leave. Cannabis. The symbol is tango. Charlie. Nancy. Nancy, Frank. Okay. And this Stock went from 10 to 50 from 2020 to 2021. And then since it's come back down, it's now trading at 6. So I bought it at 10 and sold it at 45. And about a month ago, I bought 100 shares of it just to keep an eye on it. And that's the only position that I have this long. Everything else is short.

Huh.

Kind of grim outlook on things, huh?

Yeah, yeah. Because here's the simple principle. The principle is the stock market follows corporate profits. Corporate profits go up or down based on the economy. What's the economy doing right now? It's dropping like a rock, even though we don't feel it because employment is what we tend to focus on. But the economy is going down hard right now. And you know, the financial. What's his title? The. The senior investment analysis at Goldman Sachs. He said that the market could drop easily another 20% from here. And I wholeheartedly agree with that. And Michael Burry is saying the same thing, that we have more downside. I like to give people this one statistic. Every bear market that's been a true bear market according to my standards, every bear market in u. S. History has lasted between a year and a half and three years. How long have we been in this bear market? A year and a quarter. Okay, so easily the market could go down for two more years before it starts going back up again. And I think it will. Okay, so that's just a simple statistic based on the timing of the markets. Okay, okay, so there's that, but there's also the fact that in 2008, when the big crash came in 2008 during the mortgage crisis, that happened about a year after the high point came in 2007. So the market was slowly trickling down. And then the crash came.

Right.

Okay, so it's been a little bit over a year since the high. We could still have a crash is what I'm saying, oh, yeah, oh, yeah. So it's possible. So I'm still banking on the short side. This does not feel like a bottom to me at all.

Okay, fair enough. Now, not too long ago, I think it was a week or two ago, watch this one video that I thought was kind of cool, pointing out the fact that there have only been like a few presidents that did not get reelected. And the primary consistent factor between them was that the election year for them to go for their second term, the economy was struggling and that was like the big thing. And so the whole point in his bringing this up is how with next year being an election year, the government's going to do everything it can to turn the economy around and get things going. So how do you figure that might play into all this?

That is the one ace in the hole that could mess up my predictions because really, the government and the Fed could jump in anytime it wanted to. If it wants to dump a trillion dollars into the market, it could certainly do that. And if they do that, they will certainly drive stock prices through the roof. Right. To me, it feels like we've been in a controlled retreat because if you notice over the past year, in the last 15 minutes of trading on major down days, especially on a Friday, the market, you know, zips up and recovers most of the losses for the day, just in the last 15 minutes. That's probably the Fed jumping in or the government jumping in and, and propping up the markets. I really believe that because we know that the US Government is manipulating the market and the economy. We know that they were buying corporate bonds for the first time in the last two years. They've never ever done that before. So they're getting more and more manipulative in the markets and the US Economy as time goes on. And so with that said, if they jump in, who knows what's going to happen?

Well, I mean, do you defector that kind of stuff into your thinking when you're looking at the markets?

I do, but I tend to think that the government isn't going to be willing to actually spend as much money as they need to to prop up the markets, because it's kind of like trying to hold back an avalanche is what I think. I think even they don't want to spend that much money to try to prop up the markets is what I'm thinking. But, but, you know, who knows? Who knows this? We're in a lot of uncharted waters when it comes to what the US Government is doing.

Well, it's True, that's true.

Well, so, so you're, you've got a pretty bearish outlook for the next year to year and a half, two years.

Correct, correct. Okay.

Can you expand on that or maybe have some different angles as far as, you know. So you know, you put, you talk about where you're at now. Where do, where do you think, where do you see the markets are likely to go? Are they actually going to bottom out or just kind of, kind of keep degrading or what are your views on what we got ahead of us?

Well, the market tends to go from extremes to extreme high to extreme low. Okay. And so actually I don't believe we've hit the extreme low yet. I think that the low that was placed in the markets back around October last year, we, you know, we basically bounced up for the last few months. I think we're going to take out that low this year in March to lower lows. And I just, I just think that we have further that we could go to. The downside. I would say that we've already gone down at least half of the way that we're going to go. But my initial prediction for the whole market was that the, the market was going to go down at least 60% from the highs because the 2000 sell off dropped about 50%. The 2008 mortgage crisis dropped about 55% on the S&P 500. So 60% is not that an extreme a prediction. It sounds like it, but it really isn't if you study the cycles.

Right?

Well, yeah, and as far as your numbers, I mean my next question for you is going to be, okay, so when you say, you know how low it's going to go, what are you looking at and what are you, what are you, what are you using for your gauge? So do you mostly look at like the Dow or the S P or what do you like to use?

Well, the Dow is holding up a lot better than the S P500 and I'm not 100% sure why that is. I, I tend to think it's only because the government is messing with the Dow. And you know, there's only 30 stocks in the Dow. So you just buy, you know, a few million shares of Apple and you might be able to prop up the whole market is kind of what I'm thinking. But let me look at the s and P500 really quick so I can give you some numbers.

Okay.

Okay. So the market for the s and P500 topped out looks like on January 3rd, right around 4800. We're at 3950 on the S&P500. So half a 50% drop from, from 4800 would be about 2400. That might be too extreme. I would say that The S&P 500 is at least going to go to 3250, if not lower within a year and a half.

And so how does, how does that number come about?

That's just because that's not even half of what the overall market was at.

Right.

4,800. Half of that is 2,400. So 3,250 is, you know, pretty reasonable number to come by on the next leg down.

Okay.

Just simple, you know, eyeballing it.

Gotcha.

Okay, well, so as far as your trading now, and you generally said you got 20 plus years experience with short term swing trading and long term position trading. Have you ever bothered with day trading?

Yeah, yeah, actually I have day traded. I've never been successful as a day trader. I have never made money as a day trader. I, I tried it 20 years ago. My first year of day trading was with bright trading in 2001 and I didn't know what I was doing. I was like a deer in the headlights kind of situation and I just lost money and I couldn't figure it out. I think I understand now how it works. So as a day trader, if I went and tried, maybe I could be successful. But what I do now is long term swing trading, which is, you know, two to four weeks or position trading like the Rivian trade was about six months and then I got in. I've been in it over a month since I got back in again. I shorted Snapchat at 50 and it's currently trading around 10. So that's another 80% move. That's how you make 75% in one year. You, you sell short when the market drops like a, like a rock.

So do you prefer short trades versus long trades? Just in general?

I actually prefer longer term position trades because it's re. The shorter time frame I think that you go, the harder it is to figure out where the market's going to go.

No, I'm talking short versus long.

Oh, you mean selling short. Oh, right. Now I definitely like short more than long, but generally I like long because the market usually goes up most of the time.

Okay.

Okay. So generally I like to be long and I like to do growth stocks. Growth stocks get creamed when the market's going down just like it is now. Just like with this stock I told you about trulieve cannabis. But trulieve continues to grow fast. They're here in Florida where I am and they're continuing to open up new places where they sell new spots, new locations and they're, they're still growing financially at a pretty good clip. And so when the economy recovers, this is going to be a great growth stock in the future. And so my prediction on trulieve is it's going to be at over 100 within five to 10 years.

Okay.

So this, when the economy bottoms out in the next year or two, I am going to load up on true leave big time as a major portion of the money that I manage.

Okay.

Well, generally I like to ask and see what, see what a person's just philosophical approach that philosophical is not quite the right word. But I mean there, excuse me, there's some, you know, some people, they, they like, you know, rising markets and they like trading long. There are others who very strongly believe in shorting markets just because their, their attitude is, you know, fear is going to be more, more reliable than confidence.

I'm all about reading the market conditions. Markets don't move in a vacuum. They move based on what's happening in the economy. And because I've studied cycles, I definitely take a top down approach to investing, which means first you got to know where you are in the cycle and then you've got to take your positions from there. And so I knew the whole market was going to roll over. You could have picked just about anything to sell short a year ago and you would have made money. Right. That's knowing the top down approach, that's understanding how the cycles work. And that's why I teach that to my clients and to my students.

Well, maybe you can, maybe you can add the next line to, you know, the first one is, you know, rising tide floats all boats. You know, lowering tides.

Exactly. Lowering tide kills all boats and. Yeah, exactly. It's true, it's true. But you need to know what's going on with the cycle of the markets.

Well, yeah, I mean especially if you're, if you are doing the swing trading or position trading, of course, day trading. Interesting, interestingly, with day trading, one of the biggest suggestions that I have to make with people when we're, when we're taking a look at what they're doing and I'm not trying to take over the conversation, but I think it's pertinent is a lot of day traders will, when they start their day, they'll look at the daily chart or weekly chart so they have a feel for the bigger picture. And I'll tell them stop doing that because if they're day trading and they're trading like a five minute chart, the time frames and references are not relevant and more than likely it's going to hurt them rather than help them. Because if overall it's a bullish on the daily chart things are bullish. But right now it's bearish. Having that. Oh, but it's bullish in floating around in my head is not going to help you make good decisions now.

Right. If you have too much of a bias when you're day trading, you have too much of a bias one way or the other, it can mess up your trades because anything can happen in the short term. In the long term, stocks always follow the money that the underlying company is making in the long term. But in the short term all, all hell breaks loose and crazy things happen. So I agree with that advice.

Yeah, well, and actually I think it's cool that you're bringing up how you know, the markets are manipulated because it's absolutely true. It's been true for a long time. I mean those who have, those who have the resources to, to manipulate the markets do of course, because they can.

And it works to their advantage and absolutely illegal. It seems pretty blatant right now that what the government is doing, I mean they've changed the economic data reporting numbers like you know how they changed unemployment, they've, they've lied about the, the inflation numbers. We know that inflation is bigger than they're saying trust the government at all anymore. And so you got to pay attention to what's really happening out there in the world.

Oh yeah.

And so that's, that's my way of looking at things. You know, I'm kind of a self taught person when it comes to the stock market. Right.

Okay.

I, I didn't have an MBA from Harvard or a finance degree. I taught myself from reading lots of books and then going out there and getting experience. And one of the things that financial advisors will tell you is just, just buy. You know, the market's going to go up eventually, just buy. And it's horrible advice, but it's all they can say because they don't understand how the cycles work. Well, I've been studying the cycles for 30 years and I can tell you it's, it's very much more likely to go down than up from here. And I'd much rather buy a stock at 10 than 50, then hold on to it and hope at 50. And hope it comes back, you know. So this is not rocket science, it's just simple reading. What's, what's going out there in the world.

World.

Well, speak. Speaking of books, you got, you got any favorite books that you would recommend to aspiring traders?

Yes. Well let's see. For aspiring, yeah, this would be good. For longer term traders, it's Ahead of the Curve by Joseph Ellis. That is a book that talks about the cycles. That's how I'm. Because I read that book is how I knew that the market was going to take last year. Because it talks all about it in that book. It's a great book but it's more for money managers than for short term traders. It's for investors. It'd be great for the average investor if they understood that. But. But not for day traders. That's not going to be that relevant for day traders. One of the best books that I have read, it comes from Larry Williams. Larry Williams is the all time record holder for the Robin's Futures Trading competition. Do you know actress Michelle Williams?

Sounds familiar.

She was in Brokeback Mountain. She was in some wizard of Oz movie. I can't remember the title. Oz the great and Powerful. I think it was the blonde actress. She was in that movie about Nixon, Dawson's Creek. Anyway, she's Larry Williams daughter.

Okay.

When she was 16 in the futures market in this competition she turned 10,000 into 110,000 in one year. And she won that year at 16 years old because he taught her how to do it. And so I learned what I've learned from Larry Williams and one of his best books for traders is Long Term Secrets to Short term trading. Probably not for day traders, probably better for swing traders.

Right.

Really good book. How to get an edge in your trading. That's a great book for that. Also the Stock Traders Almanac.

Yeah.

Has all sorts of good stuff in there.

Cool.

Well you had any, any particular heroes along the way or you know, people who've had an impact on you either you know, in your trading career or personally?

Well, besides Larry Williams, who I'm very impressed with the knowledge I've gained from his books. I have tremendous respect for Michael Burry from the movie the Big Short. I mean he really knows his stuff and he made a whole bunch of money shorting the markets in 2008. Millions and hundreds of millions of dollars because he understands how it really works. And so he's been making predictions but his timing has been a little bit off. He sees it before it comes to pass and so he's a little bit early in his predictions and he kind of gets criticized for that.

Right.

But he's absolutely right. And so I pay a lot of attention to what Michael Burry has to say.

Well, his, his predictions are generally based on pretty sound reasoning on what he's doing.

Absolutely. That's why it works.

It's like, I mean, just like in the movie the Big Short and the whole thing that was going on with real estate, you know, crashing all that, he was just looking at the realities of what was there and seeing what other people weren't seeing. And he's like, this just, it ain't gonna continue. It's gonna fail. And we're right on that edge. And it's, it's like, I'm not making this up. It's not some interpretation. It's right there.

So, yeah, absolutely. People who really understand this stuff, know how it works, and can predict the market to a certain degree. They just can't tell when it's gonna happen. Exactly.

Oh, yeah, True, true, true, true. Yeah, Very cool, Very cool.

Well, I'll tell you what, Greg, you know, thanks for sharing all this today. This has been a fun conversation and definitely enlightening. It's kind of cool. You got some neat perspectives now as far as, you know, what you have going on and you know, how you help traders. Give us a little bit of insights as far as, you know, what you do as far as helping traders.

Okay, so I've been a coach for 10 years, okay. And I don't have a website. I just am on YouTube and Twitter. And what I do is I teach people over individual and group zoom calls anywhere in the world. And I teach investors how to invest in the markets and how to react in this current situation. And I teach traders. It's two separate skill sets. It's two separate things that you're looking at as a long term investor versus a short term swing trader only. And So I have two different courses. I only charge $2,500 to teach people how to do that. And it's funny because somebody who took my course last year, I saved him $200,000 when they took my advice. And so I'm one of his favorite people in the whole world because I saved him that much money and I only charged them, I think I charged him $3,000. But if you're any of your people in your audience want to sign up within the next few days, I'll, I'll do 500 off for either course or both. Okay, I'll do it for 2000 from 2500.

Now, you said you, you only work through YouTube and email. You don't. You said you don't have a website, correct?

Yeah, I used to have a website and I, I didn't. I don't bother with it anymore. It got hacked, actually.

Okay.

So much trouble.

So best way to catch up with you or, you know, make contact with you to, you know, explore working. Working with you would be to visit your YouTube channel or email you, correct?

Yes, you can find me on YouTube or let me just give you my email address. Okay. If that's okay. It's Trader Greg. Kmail.com. that's Trader T R A D E R G R E G G K. Gotcha at Gmail. And just tell me if you want to learn more. I'd be happy to do a free introductory zoom call with you and we can go from there. If it's a good fit for you.

Yeah.

Excellent, excellent. What's. What's the name of your YouTube channel?

It's just my name.

Oh, okay.

I do this under the name Market Timing University, My company. But if you just type in my name in YouTube, you'll find me Gotcha or Twitter.

Okay, very good, Very good.

Any other last words of wisdom for our audience today?

Don't catch a falling knife. Be patient. Wait. There's no rush to get in the market. There's still time to get out of the market and save money. I would much rather be like the mouse looking out of the hole really carefully and being safe rather than jump out and getting eaten by the cat. So. So just. It's safer. It better be safe than sorry at this point, the way things are looking.

Yeah, good metaphor.

True, true, true. All right, well, great. Yeah.

Again, thank you so much, man. I'll make sure to have the link to your YouTube channel in the show notes and also your email on the page here so that people can reach out to you. For everyone listening, if any of this resonated with you as far as what he's talking about, his perspectives on the markets, definitely take action. Go ahead and reach out to Greg so that you can talk to him and if it makes sense to work with him, cool. Don't just do nothing, though. Don't just wrestle with it on your own and continue to struggle for months or years. Like I see so many people do.

I consider myself to be like a second opinion to your financial advisor who's always going to tell you to buy or hold, and you can do better than that. Okay.

Okay, very good.

Well, anyway, again, Greg, thanks for being on here.

Brian, it's been a pleasure. Thank you for having me.

Excellent.

Excellent.

Well, that's it for this episode, everybody. Greg, thank you again. And we'll see everyone on the next episode of the Consistent Profits podcast.

Bye now.

Thank you for joining us today on the Consistent Profits podcast, brought to you by Inside Out Trading. If you enjoyed the show, make sure to subscribe on your favorite channel and we'll see you on the next episode. Cheers.