Herewith, I am happy to publish another interview – my third in total and this time with Darrell Thomas who invited me several times to his growing YouTube channel “The Money Levels Show”. As a stock investor and blogger myself, I am always interested in what my colleagues are thinking, saying, writing or in this case broadcasting about different topics regarding stock investments.
Summary and key takeaways from today’s Weekly
– Darrell Thomas and I discussed on Darrell’s growing YouTube channel “The Money Levels Show” in English different investment topics
– Darrell frequently manages to bring well-known high-profile guests to his program
– you can find Darrell’s channel by clicking here
A bit more than half a year ago, Darrell and I recorded our first interview for his channel with me as a guest. Until today, Darrell featured me three times on his program.
This time, I thought, would be a great opportunity to let him speak and answer my questions. Not only is it fun to co-op with Darrell, but due to having slightly different investment profiles, I am happy to bring new, fresh perspectives to my readers with this written interview.
Let’s get into it.
Note: You can find our discussions in Englisch on Darrell’s YouTube channel here.
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Interview with Darrell Thomas from “The Money Levels Show” (YouTube)
Alan: Hey Darrell. I am glad to welcome you as a special guest on my blog for my interview series. Some of my readers will already know you from our videos we recorded for your YouTube channel “The Money Levels Show”.
But now, I want to give YOU the stage on my blog to present your investment perspective and strategy.
But, let’s first start with an introduction. Tell us a bit about you and your work.
Darrell: My name is Darrell, I am from the US. I host a financial education show on YouTube called “The Money Levels Show”.
I’ve interviewed some of the top investors, traders, and macro economists in the independent finance industry. My motivation has always been how to simplify complex finance topics for the average person. Helping them navigate the world of central banks, governments, markets, and geopolitics because of their impact on our financial future.
Alan: How did you start with investing in stocks? What was your motivation, was it coincidence or on purpose and has anybody in your family invested in stocks before you so that you had someone to look up to or are you self-taught?
Darrell: I started investing in stocks (outside of an employer retirement plan) in 2017. I did not know what I was doing at that time. I was even buying AMD (ISIN: US0079031078, Ticker: AMD) stock at $10 a share but didn’t know the value of the company or study the microchip industry and where it was headed.
I consider this time in my investing journey as speculative.
I stopped investing and took all of my money out of the market from 2017–2020. When the pandemic hit, I was watching the market fall at significant rates. I started buying stocks again but this time I was educating myself in the process. I still made many mistakes, but I had a better grasp what I wanted to do, how to get there, and the why behind it.
Alan: Please, name one or two investors you look up to.
Darrell: My top investors that I look up to are people I tend to watch and read a lot of their work such as Lyn Alden. I like how she does deep dives into stocks across many sectors. She also focuses heavily on macroeconomics which is a topic I love to research. Her work helps keep my interest because I tend to get bored with natural resource companies though my conviction for that sector is very high.
Alan: As I am personally a firm believer in learning by doing and especially by doing mistakes: What were your biggest mistakes that were true eye-openers for you? What did you learn and how did it improve your investing? Do you also believe in learning from mistakes?
Darrell: My biggest mistakes involved being uninformed, impatient, and emotional.
I’ve bought great companies such as Meta (ISIN: US30303M1027, Ticker: META), Netflix (ISIN: US64110L1061, Ticker: NFLX), and NVIDIA (ISIN: US67066G1040, Ticker: NVDA) at very steep discounts back in late 2022. I knew they were significantly cheap, but I didn’t hold them long enough to benefit from their success today.
I was too bearish on the economy and thought the market would fall further though they were already trading at very steep discounts. I allowed the echo chamber I was in keep me from considering the other side of the things.
Alan: What’s your greatest weakness still that you’d like to improve during your further investment journey?
Darrell: Greatest weakness is emotional trading. I’ve missed out on thousands of dollars by allowing my emotions get in the way of my plan of execution.
Alan: How would you describe your investment style without using the words “value investor“ (if appropriate)?
Darrell: I invest based on cycles, value, and fundamentals. But I also speculate and trade using technical analysis. One is short term the other is long term.
Alan: What are your investment goals? (Income, growing portfolio, mix, retirement account, etc.)
Darrell: My ultimate investment goals are to change the trajectory of my family’s financial status. I desire to build generational wealth and teach my children how to do the same.
Another goal of mine is to retire and be financially free. Looking at the macroeconomics of government indebtedness, deficits, and lack of funding available for social security and medicare (United States); I am convinced these subsidies wont be available for the average American in the future. I am also convinced that taxes will increase significantly.
Alan: What is your understanding of risk when investing?
Darrell: There is risk in every investment. However, managing risk is important to protect and grow capital. I identify investments, secure profits and limit my downside risk if the trade goes against me.
Alan: I find it very interesting that stock markets have risen 7–8% p.a. historically over the cycles – how come 80% of average Joes don’t make any money with stocks?
Darrell: Investor psychology tends to cause people to buy when an asset has already run up then sell when it falls. Falling in love with companies can cause an investor to not consider taking profits or cutting a stock that is causing them pain.
Investors should have a price target of where they like to trim positions. Inactive management of retirement funds can cause issues as well. Some investors can hold onto losing stocks for a long time.
Alan: Let’s talk about the current environment. The indexes are making new highs (recently), but this is somewhat masqueraded by the fact that concentration is very high on just a handful of big tech stocks. Volatility was almost dead until two weeks ago. At the same time, many consumer stocks that were thought to be recession resistant with limited downside are dropping.
How are you positioned and how do you make sure not be directed by emotions (both sides, fear and greed)?
Darrell: I am positioned long term in commodities (gold, oil, uranium, copper, etc.). I still have ultimate conviction in the thesis for higher commodity prices.
In the intermediate term I do not trade against the market. I trade with the chart not with my heart. I do this to benefit from the current market trends.
Alan: What’s your take on reading posts and comments like “the greatest generational buying opportunity“ or “I am buying the dip aggressively“ – I’m talking about mainstream stocks like currently Pepsi, PayPal, Starbucks, McDonald’s, etc.?
Juicy opportunities or reckless ignorance based on past performance?
Darrell: I think that these stocks can fall further. I am buying Nike (ISIN: US6541061031, Ticker: NKE) stock for a quick swing trade, though I love Nike products! 🙂 I think that the titan of a company is way oversold and I can benefit from the share increase by selling for a profit.
This isn’t a long term investment for me, it is a swing trade that will take patience.
If my thesis doesn’t work out, I will trim the stock.*
*Darrell is already out again
Alan: Do you prefer a concentrated portfolio (if so, how many positions circa?) or ETF-like compositions?
Darrell: I like to diversify across different sectors.
Alan: Which three stocks / investments are your favorites currently and why? How much potential do you see?
Darrell: My favorites are treasury bill ETFs BIL, SHY, & STIP hahaha. Less risk in the current environment of uncertainty and I get paid to wait.
Okay I will give one stock I am currently adding.
I am adding BTI (British American Tobacco (ISIN: GB0002875804, Ticker: BATS) ). They were oversold for a long time, they are cheaper compared to Phillip Morris (ISIN: US7181721090, Ticker: PM) and Altria (ISIN: US02209S1033, Ticker: MO), they are buying back shares, and they pay a ~9% dividend.
Alan: To which extend do you think, can social networks like Twitter (X) impact portfolio results and idea generation? Or is it more distraction?
Darrell: Distractions, people need to do their own due diligence while be open minded to different theories.
I have been through an investor roller coaster following people saying the market is bullish or bearish. I’ve lost money doing that.
Find trustworthy people like Alan 🙂 and consider his ideas, but also do more research!
Alan: Please answer to the following phrases with just the first few thoughts that come to your mind:
- FOMO (fear of missing out)
- understanding a business vs. investing based on past performance (assuming the trend continues)
- “legacy and dirty“ energy stocks
Darrell: People get wiped out with FOMO, you don’t need to get in on every trade or stock. Take your time do you homework.
Understanding a business is important for long term investing. Investing based on past performance can be detrimental to a portfolio.
Energy stocks are the contrarian point of view right now.
Alan: Where can people find you else?
Darrell: People can find me on YouTube at youtube.com/themoneylevelsshow (see Darrell’s YouTube channel here) as well as on Twitter / X under my nick @moneylevelsshow (see Darrell’s Twitter / X profile here).
Alan: Darrell, thanks for you being this time the one who answered questions. 🙂 Looking forward to our next talk.
Darrell: Thanks, Alan. All the best.
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