How Michael Taylor, A Professional Stock Trader, Nearly Lost It All

This transcript is auto-generated and lightly edited for readability, it may contain errors.

[0:00] Sammie Ellard-King: Hello and welcome back to another episode of the Money Gains Podcast. We’ve taken a small little break for the last couple of weeks, but we’re back today with a brand new episode. And my guest is Michael from Shifting Shares. Now, Michael is a full-time professional trader, and we unpack what it’s like to actually become a professional trader, what you need to know, some of the things that he looks out for, how he does it, and the do’s and don’ts of trading, the really important ones. So this one’s for all of you guys interested in learning a little bit more about this side of investing. Um, but if you’re listening on Spotify, please do whack that follow button. And if you’re listening on Apple or YouTube or any other podcasting platform, give us a follow. Tell a friend about the show. We’re growing this baby this year. But for now, let’s get started on the Money Gains Podcast.

[1:10] Sammie Ellard-King: So Michael, welcome to the Money Gains Podcast, man. How are you doing? You well? Pretty good, thanks, Sammie. How are you? Not too bad, fan, thank you. Yeah, it’s getting lighter. Uh I was out yesterday with a dog. It was six o’clock, still outside. Um so things are looking up, man. I’m looking forward to summer. Yeah, summer’s coming. Can’t wait. Yeah, I really dislike the winter in the UK. It just like winds me up. It’s just dark all the time. Um, you know, you get up, get up to go to work, it’s dark. Then it gets lighter for a little bit, and then yeah, it’s just dark, isn’t it? All all the time. Horrific. Mate, I couldn’t agree more. I usually am totally fine, but this winter I’ve like really struggled. I don’t know why. It’s just maybe it’s because I’m working on you know solopreneur these days and not like around other people as much. But yeah, I found it really tough, man. I need to get away next year for sure.

[2:04] Michael Taylor: Yeah, that’s the best thing to do if you go away in like November, December, January. It’s it just breaks it up so much easier. I get so jealous of people like jet setting off in January, and I’m like, ‘Cause we we used to do it quite a bit, but obviously when I started the business, things changed a little bit. You need to be a little bit more careful with a pennies on your first year or two of your business. Yeah, but pays off at the end. It does, things are good now. So yeah, we just uh we had a record month last month, so it’s one of those things that’s well done all of a sudden kicks into gear, man. But um, we’re not here to talk about me, we’re here to talk about you today, and obviously you’re slightly different to other guests that we have on, and it’s a really interesting part of investing that we’re going to be talking about today, which is more in the trading side of things, so understanding that a little bit more. But um would you mind telling the audience a little bit about yourselves?

[3:02] Michael Taylor: Yeah, so I am a professional stock trader with my own money, and what that means is I basically buy and sell shares on the stock market uh with the hope of making a profit. Obviously, not all of them are profitable, there are losses, uh, sadly. Um, and I try and make a living through doing that, and I’ve been doing that since 2016. It’s been some rough times along the way, uh, but at the moment, yeah, going pretty well. I saw a TED talk with you in Newcastle University of you speaking there, and you were saying how you nearly lost it all once, and you had to go home and tell your other half. Is that that’s am I on the right track there?

[3:47] Michael Taylor: Yeah, so I was on the uh the Tube and I logged into my broker account and I saw one stock had been suspended due to accounting difficulties, which basically meant fraud. Uh and and I was just thinking the entire thing’s gone to zero. Um, so that was that was like a real stomach punch to uh to see that because it was just so um so surprising. You know, the company was on a low price to earnings ratio, which is the the valuation that the market puts on the stock’s earnings, so whether you would classify it as like cheap or expensive, so it wasn’t an expensive stock, it was growing its earnings, had a decent business, was a turnaround. Um, so I I was pretty confident in that, and then that piece of news came out, and yeah, that that wasn’t a nice day.

[4:41] Sammie Ellard-King: What happened in the end? So, in the end, the company did refinance at uh I think it was like 70% lower. I did take part in that refinancing, and I managed to trade my way out of the stock for a profit, which was which was quite nice. Oh, nice. Um but yeah, basically I just wrote it off mentally and treated the refinancing as a completely new position. Um, you know, because there’s a danger of averaging down and chasing sunk costs, so you know, with like things like HS2, you know, they’ve spent so much money on it they think they can’t stop. When actually sometimes the the better option is to you know stop throwing good money after bad. Um so I looked at everything objectively and I thought, you know, is this going to be a nice trade? And I thought, yes, even though I’ve you know written the rest of it to zero. Uh so I took the trade on that basis, but you know, if it hadn’t been, then I just would have written it off and and not taken part.

[5:46] Sammie Ellard-King: That’s so interesting, man. It just goes to show that like there is risk in investing because you’re like living proof of that, but also there’s 100% too. Yeah, yeah, there’s been so many along the way. Um if uh Patisserie Valerie, uh high street chain, people are probably aware of. Um, you know, that looked like it was a nice business, and then one day it was gone. Um, so you you just you just never know. Any any time you buy a stock, you’ve got to be prepared for that to go to zero. Uh, because one day a stock that you hold will go to zero. It’s just bad luck, but it’s an occupational hazard, it it’s gonna happen. Um, you’ve got to prepare for these things.

[6:37] Sammie Ellard-King: I suppose that’s where we’ll get into this, but I suppose that’s where you wouldn’t hold just one because then there’s the chance of that happening. Whereas if you you spread out your investments as uh as we would talk about, no, no doubt. But let’s go right back to the beginning because I feel like it’s important the people that are listening to this go, okay. Well, what is trading and what is investing in your eyes? So trading and investing, they are completely separate. With investing, you were buying the business, so you would look at the business’s assets and decide whether this business can deliver you a return on your investment. So you would look at how the business is valued, look at its price to earnings ratio, various other valuation metrics, you know, look at the prospects of the business. Does it have a moat? Is it growing? Does it have a you know good cash flow? Do those cash cash flows translate into profits? Whereas trading, um, you might well, sometimes I just look at a chart, and sometimes I might take an intraday trade that can last seconds or minutes, or you know, sometimes days, weeks, or even months, but basically it’s focused on the chart and the risk to reward on that trade, and not actually the business itself. Um, because the the goal in trading is just to make money, and it doesn’t really matter how you do it. Um, there’s a good example when Charles was going to be um coronated. People guessed that a company called De La Rue would make a lot of the coinage, and so people bought De La Rue on that. Um I didn’t take that trade myself, but you know, you could have bought in, assuming there would be flow from people taking that trade. And if you’re ear, uh you can make a profit in cash out. So sometimes the you know the trades can come from anywhere, um you know, even based on what other people are thinking sometimes.

[9:27] Sammie Ellard-King: So news is a big part of it, and keeping your kind of finger on the pulse of what’s happening, spotting opportunities within the market, and then saying, yeah, I’m gonna take a bet on that going up or down, essentially. Pr pretty much, yeah. So an example today, Currys, um, which I I don’t really know why that still exists, because you you can get everything uh cheaper on the internet. Um, although having said that, I think I did buy the washing machine from Currys, so just guess I just asked my own question. Yeah. Um but but today that put out uh an RNS announcement, a regulatory news announcement, which is the official feed for the London Stock Exchange for price sensitive information that Elliott Advisors had uh spoken to the company about acquiring it, like outright, uh, for 62 pence a share. And the previous closing price was 47 pence. Um, so straight away you can think if the price opens up below 62 and the board have said we’re rejecting the offer at 62 because it undervalues the company, you know, there might be a trade up to around that 62 pence mark. But then also what other companies are in that sector? So for example, AO World is a correlated stock because it’s in the same business as Currys. Um, so I was looking at that to see if that might get an uplift this morning because if there’s you know, if the sector’s hot and people are taking out cheap companies in the sector, other companies in the sector can move as well. Um so essentially, yes, news is a big part of it, but then sometimes I’ll just look at a chart, uh, look at the risk to reward on the trade. I don’t really need to to bother myself with what the company actually does, because all it is is just you know candlesticks on a chart, like moving lines on a chart, and that’s all I care about.

[11:28] Sammie Ellard-King: I’ve got you there, right? So let’s talk about this. So when a beginner looks at a stock chart, it can be slightly overwhelming, and there’s different viewpoints. You just mentioned one there, which is a candlestick, which is where you see the green and the red, kind of they look like mini candles, candlesticks. But what are the key things to understand it from a beginner’s perspective? Day one, never looked at a stock chart. What are you looking at, and what should people be aware of when they’re looking at it? Um, so I would always say zoom out, look at a two-year chart, and then you know, you should be able to see if there are any uh trends. So if you if you can see from the left of the chart the price is just slowly going down towards the right, I would call that a stage four stock because it’s going down. Um, so I would just avoid that because why would I try and gamble on that stock being the bottom? It’s probably unlikely I’m gonna print the low, so I don’t need to gamble on that. Um, so zoom out, look for a trend. You know, if the trend’s down, I personally would avoid it. An investor might say um I can buy a cheap stock, but you never actually know if it’s cheap, you just know if the price is falling. It might be cheap for a reason because the business model sucks and it’s going to go bust in a few years, and that might be why it’s going down. So just because a stock price is low doesn’t actually mean it’s cheap. Um, but I I always look at the overall trend and the volume in a stock and key support and resistance levels. So, for example, if a stock has hit a price level of 60 pence several times, I would call that resistance, and lots of other people would call that resistance. I I didn’t make the term up. Um, and then if it breaks out of that resistance, you can trade that because the price is moving through a significant level, therefore, it might be a significant move. But then what you would want to do is limit your risk, so you would look to place a stop loss where the trade would be wrong. Um, it’s sort of hard to explain without a live examples.

[13:37] Sammie Ellard-King: So, what’s a stop loss then screen? Uh a stop loss is a level where you kill the trade, so the amount that you’re willing to risk. So if I’m entering at 60, let’s say I’m putting my stop loss at 55, I’m basically limiting myself to five pence risk on the share, if that makes sense. Gotcha. Yeah. So you so you’re making sure the losses is protected are protected, and the goal is ideally to make more than your stop loss at least. Interesting. So we had um we had um Ben Knight on the podcast, and he was talking about how he he doesn’t do this, but interestingly, well, he does, but with a different way is that he raises his stop loss. So when he goes into profit on the trade, he’ll raise his stop loss above the original price that he bought it for. So basically forever locking in that profit. Um, is that something you do as well?

[14:40] Michael Taylor: Um no. And the answer is it’s quite technical. Um, it makes sense to increase your stop loss um as as it moves into profit, but not just above profit. So there’s a thing in trading called the break-even trade, which is where you know people will see a position move into profit and they’ll immediately then move their stop loss to break-even and think, well, now I can’t lose on the trade. Um, that’s actually bad because if you’re entering at a level you’ve entered because you think that is a good risk to reward, and if you then move your stop to break-even, you’re not actually giving the price room to breathe, which means you’re just going to get stopped out repeatedly, and yes, you’re not losing, but you actually need to take on a bit of risk to make any money, if that makes sense. Whereas if you’re 20% up, then you know, moving your stop less loss up to lock in a 20% profit, you know, absolutely, that makes sense. Um, so I don’t know what Ben was suggesting exactly. Um, but you know, trailing stops, yes, good idea, as long as you were not doing the break-even trade. Um, because that is you were just going to churn your account in commissions and fees doing that.

[16:00] Sammie Ellard-King: I think I probably hashed that up completely. It was 30 odd episodes ago, but go I will put a link to that in the show notes so people can go back and listen to that because it was very interesting to hear the way that he did it too. So that’s why I asked you because it’s always interesting because every trader or person with that trades the stock market has a different system, which is always really interesting to hear. So let’s talk about the average person listening to this and going, Oh, this sounds interesting. I sound like something that I can do. What does it take to get into trading stocks like you do? Yeah, um, I just want to add on that other one there. You know, it’s if you’ve got a position that’s 50% in profit, you do not want to take a small loss on that profit. So you absolutely want to move your stop up. Um, because that one, if if that happens, if you see a big paper loss go to a small loss, that is psychologically demoralizing, and it’s gonna make you more trigger shy on the next trade, and it’s gonna affect you psychologically, it’s gonna affect all parts of your trading. So a lot of trading actually is is emotional management, and yes, you can manage that through physical allocation of capital and managing risk. Um, so hopefully that sort of probably answers that question. Um and then it does.

[17:24] Sammie Ellard-King: Thank you. That’s a really good point. Good, yeah, good. That’s uh glad to hear it’s useful. And then the the sorry, the next question was if someone wants to get started, what should they look for? Or so how does the average person listening to this thinking, Michael, that sounds awesome. How do I get into trading stocks like you? Uh a lot of research. So when I started, I looked at YouTube videos, I read a lot of books. Um, you know, at one point I was even reading value investing books, and you know, you you sort of learn what makes sense, and there’s a lot of people out there on the internet, a lot of people offering good free knowledge, a lot of people who aren’t. Um, generally, if you’re seeing a guy standing in front of a Lamborghini telling you that you can make 10 grand in 15 minutes every day and then go sit by the pool, um, you know, I I would think that it’s obvious that is a scam, but sadly, a lot of people, probably desperate and vulnerable people, do fall for these. Um, so certainly avoid those. Um, but you would want to work out what you want to trade and how you want to trade. So if you’ve got a full-time job, if you want to become an intraday trader, it’s like getting into a boxing ring with a hand tied between behind your back. You know, it’s just not gonna happen. With the best intentions in the world, it’s not gonna happen. Um, unless you can free up significant time in the morning to trade the opening session, um, it’s not gonna happen. Um, but generally, swing trading has a higher strike rate, at least for me, and you know, it’s generally accepted to be um easier because if you’re long stocks in a bull market, you’re and you’re picking up trending stocks, then you were putting the odds in your favour. Whereas if you’re intraday trading, you know, you might as well flip a coin, and it’s so difficult to get an edge. Um, so certainly look at end-of-day trading systems, um, decide what asset class you want to trade. I trade UK stocks because I think it’s it’s the easiest place to make money. Um, if I thought there was somewhere easier, I would go there. Um I’m not married to UK stocks, but essentially if a business is under 100 million, you were not going to get a lot of institutions looking at those stocks, which means a lot of the liquidity is going to be people like you and me, and you know, maybe people down the pub or people who’ve made a bit of money and want to invest in stocks. You know, it’s not people with huge computers. Whereas if you pick Barclays, you know, there’s like a team of 20 analysts whose sole job is to look at all the cash flows of Barclays and work out what a fair value is. And you know, those stocks are liquid, and they’re liquid for a reason because they’re huge and you can quantify a lot of things. Um so I’m not saying you should get involved in UK small caps, but generally if you’re looking at forex and commodities, it it very hard, it’s it’s definitely harder to make money, at least in my opinion. Um, but you would want to focus on one strategy, you would look at how it works, and then you would look at previous historical action to work out how you would trade that. Um, I don’t believe in demo trading for very long because it just teaches you bad habits. Um, you know, it’s like small stakes poker, everyone goes in all in on every hand. Um, so it’s not really a great place to learn. Certainly learn how the buttons work, you know, don’t lose money because you didn’t know how the buttons work. That’s no good. Um, but in terms you want to get to real money as fast as possible, um, but not so fast that you don’t know what you’re doing. But you need to put some money on to test your thesis. To it’s got to be enough so that you’re actually invested, you know, putting on like two quid risk is you know, if you’re risking less than a coffee, you’re probably not gonna care about the outcome that much. So you do need to care about the outcome, but you also don’t want to care too much about the outcome because that’s going to affect you emotionally, and it could, you know, physically harm your account.

[21:41] Sammie Ellard-King: Um so let’s let’s let’s talk about then like because for me, what I’m gathering from this is that it’s a proper skill, like you it’s a proper, proper skill, you need to take the time to learn the skill properly. So, how long does that process normally take for someone? Some people never achieve profitability, you know. That it’s just the harsh truth. Um sometimes that’s due to variance, you know. If you flip a coin a hundred times on one of those outcome spectrums, um, you know, a hundred of those are going to be heads. It’s unlucky, definitely, but it it’s possible. Um, and so for some people they never achieve it just because their money runs out before they’re actually profitable through no fault of their own. It’s unlikely, but it can happen. Um, but it it depends how quick you learn. So, you know, some people can pick it up reasonably quickly. Um, a lot of people made a lot of money in 2020, 2021 without much skill, and then they got found. Out in 2022, 2023. But you know, if you learn from your mistakes and you put the time in, I can’t really give a time limit because you know it depends how fast you learn and how much time you put into it. Someone who’s investing 10, 20 hours a week into learning a skill is you know more likely going to learn fast than someone putting two hours a week in. Um, but in in general, if if you are going to learn how to trade, you you should at least have five, six hours a week to commit to it. Otherwise, you might as well just buy an ETF tracker.

[23:19] Sammie Ellard-King: Yeah, no, exactly. There’s a time commitment there for sure. Like that’s what I want to make abundantly clear for someone listening to this and going, oh yeah, that sounds like a lot of fun. Like there’s there’s a lot of nuances involved for you to pick up. But you’ve mentioned it a few times, and I think it’s one of the most paramount things to discuss, really, when it comes to trading, is mentality. So, what type of mentality does a trader have to have? You’ve got to have some risk appetite because you are gonna lose money and unexpected things uh are gonna happen. That’s just the reality of the business. Um you’ve got to be not sort of entrepreneurial in the sense that you were doing your own thing and that you were doing it for yourself. Um, you know, your PL essentially is a reflection of all your habits and uh thoughts. So you know, you are you are doing it for yourself, but you you’ve got to be motivated and self-disciplined, and you know, there will be rough times, and you’ve got to keep going through those rough times. Um so yeah, risk risk appetite, um, motivation, discipline, and you’ve got to enjoy it. You know, if you if you don’t actually enjoy what you’re doing, it it’s it’s not gonna work. Um it that’s that’s pretty much it. And you need to be able to learn quickly and accept that you might not know everything. Um one thing that I typically see is that people from logic-based disciplines, uh, where you were definitively like right or wrong can sometimes have a hard time in the stock market because you know something might be overvalued and they might cling to that idea because they think they’re right because they used to be in right, but actually the market doesn’t care if it’s overvalued or undervalued, it you know, it just because something’s overvalued doesn’t mean it’s going to revert to a normal value. Things can stay, you know, there’s a saying, I’m sure you’ve heard it, you know, uh markets can remain irrational longer than you can remain solvent. Um, I would go one further and say markets can remain irrational uh longer than you can remain alive. Because if you look at Van Gogh, none of his paintings sold while he was alive, and it’s only now people actually care. Um, you know, you probably could have done with that money while he was still alive. Um so um, yeah, you you just got to be prepared to to sort of dig in and keep at it.

[25:48] Sammie Ellard-King: Right. I mean that’s so important to say, and obviously you’ve mentioned as well here that there’s risk element for let’s say something catastrophic to happen to one or the entire market at all at once because of a you know world-related issue, 9-11 pandemics, etc. These these types of things massively have a huge impact on the entire stock market. So having gone through some of these things yourself, how do you manage market drops? So it’s so sometimes. I mean, I personally thought market my the market drop in 2020 was hugely fun, uh, because everything went down very quickly, and I was short a lot of stocks. Um but in j like long drawn-out bear markets like 2022.

[26:40] Sammie Ellard-King: So sh a short, just to be clear, is when you’re betting on it going down. Exactly. Yeah, sorry. So if you ever hear someone say that they are long, uh they’ve essentially bought and they will profit if if the stock goes up. And if someone’s short, it means they’ve sold something they don’t actually own with the hope of buying it back cheaper. Um and if you’re a retail client, you know, you you can’t lose more than what you put in. But if you are a professional trader, um you’re on the hook for everything. Um, but you know, you have to apply to be a professional trader, so you know, you don’t necessarily need to worry if if you were short. It’s still a tricky trade and not one I would recommend for beginners. Uh, but you know, that the idea that you can lose everything, it it’s just not true because you were protected by uh negative uh account equity. Um but yeah, in terms of the very fast falls, I found that very fun uh because I was short a lot of things. Whereas it that differs to 2022 where and 2023 where things have got so low that you can’t really short them because they are so cheap and there’s a risk that they get taken over, which which we are seeing a lot of takeovers in the UK market now. Um but you also can’t really go long because people just don’t have risk appetite at the moment, and we’re getting a lot of cash outflows from the market. So stock might put out good news, and you know, last year it would just get sold into, even though it was good news, everyone would just sell and take advantage of the liquidity. Um, so though those drawn-out bear markets are actually tough to make money in. Um, there are obviously opportunities, it’s just a lot harder. Um, whereas if you’re in an early stage bull market or even a euphoric bull market, there’s there’s plenty of opportunity to be long.

[28:36] Sammie Ellard-King: So interesting. So bull market for people listening is when the stock market’s going up for a prolonged period of time, to put it simply, and and bear market is when it’s retreating down. So that’s so so so interesting to hear that because you actually enjoy it when it kicks off like that because there’s more money perhaps to be made for you there. Yeah, so traders essentially make money off volatility. Um, you know, if there’s no volatility, you can’t actually make money. Um, whereas an investor might just care if the stock’s cheap and they are happy to sort of wait for that valuation, uh, you know, the stock to revalue. As a trader, you want things to move because if nothing’s moving, yeah, as I say, it’s very difficult to make money. And when things are moving quickly, uh, there’s opportunity. So especially when there’s some sort of black swan event, which you know seems to be happening all the time now. Um, but something like that that is not can’t be modelled properly. So, for example, you know, the lockdowns and everything, nobody really had a clue what was going on. You know, if you go on Twitter, lots of people did seem to think they had a clue, but you know, did they make any money off it is uh is a different thing. Um GameStop, HODL, basically, diamond hands, wasn’t it? Uh yeah, the classic one, yeah. But when you get those sort of black swan events, things move very differently because there’s a lot more emotion in the market, and it’s very difficult to predict what’s going to happen. Um, so potentially that there’s a lot of alpha, a lot of opportunity in the market up for grabs.

[30:17] Sammie Ellard-King: So interesting, man. Well, let’s talk about like what are you interested in at the moment? So you obviously mentioned you just trade UK stocks. As if if someone’s listening to this and thinking, oh, that’s that sounds sounds interesting. What what kind of trends are you looking into at the moment that you’re perhaps following along with? So I mentioned before about stage four stocks, the ones that go down. I’m primarily interested in the ones that are going sideways because I’m looking for them to start going up, which I would class as a stage two stock, uh, or stage two stocks that are already trending upwards. Um, because it you know, that’s just the the easiest way to make money, you know, buy something that is going up at an entry point where you can limit your risk and try and get on board that trend. Um, obviously there’s a lot more to it than that, but in a sense, that is what the the strategy is. There’s a whole load of tactics you can do, like position sizing, stop loss placement, risk to reward management, um, you know, look at what trading platform the stock is on. There’s a lot more to it, but in general, I look for uptrending stocks and I try to make a profit off those stocks going up higher.

[32:45] Sammie Ellard-King: That’s so interesting. Okay, cool. So it’s not necessarily a trend you’re looking for overall markets with opportunities with some of the bigger businesses which are perhaps trending sideways that got the potential to trend back up. Um, so sometimes I will look at the news. So, for example, in 2021, uh uranium is you know, my belief was that uranium would become more in demand because after the last bull market, Fukushima pretty much killed it completely, and so there’s been an excess of uranium around, but because of that, there’s been no uranium mines come online since. And I believe that you I still do believe that nuclear energy is the way to move from fossil fuels to renewables because it you know it’s hundred percent very very little carbon, it’s always on, it’s actually very safe. Um so yeah, for for me, I just thought that made sense and that there would be a trend to nuclear energy, and since then the EU has mandated nuclear energy to be green. We’re seeing China ramp up nuclear power plants, a lot of Europe now. Um but you know that that trade didn’t actually start moving properly until half two last year. So I was I was in the trade for for two years and not really, you know, in much profit and until the last six months of of last year. I’m still in the trade now, but you know, that that’s an example of uh a trade where I’ve thought of what the future looks like and what the risk to reward is now, and what catalyst is actually going to drive the market higher. Um so so why am I positioning in this? And what what is my downside and and what is the upside? So that that would be one way to think of a trade. Um I didn’t look at the the trend for that, I just sort of looked at the macroeconomics of the trade. Um and that thankfully it worked out.

[34:49] Sammie Ellard-King: Just more into investing, really, in a way, there. Um I guess so, yeah. Um I’ll class that as a sort of thematic themed trade where you were looking at um, but I mean even then I had a a risk, a downside, I wasn’t sort of married to the view, if that makes sense. So I wouldn’t really class it as an investment because I I can change my mind. Uh but I guess you you you could call it an investment. Personally, I don’t because I like to call them trades because I can change my mind at any point, whereas investors tend to be more wedded to it. But yeah, that was a discretionary long-term trade. Yeah, because I’ve done similar things like that in the past, you know. I’ve looked at trends which I believe X, Y, and Z is going to happen, especially in financial tech. I would place, you know, say I might buy three or four companies within that sector because I’m aware of a trend which is coming or an invention which is coming, which is going to revolutionize a sector, for example. And therefore I might place a trade, but that trade might be a year long, or it could even be two, three, four, some of mine are still going, they’re five, six years long. Um, and you know, when I come out of them, I come out of them if I ever come out of them. So um it is so interesting to look at these different ways of investing because we do talk a lot about um investing in you know funds and and and longer-term wealth building approach. And I do think that’s highly important, but we wouldn’t be doing the markets a service if and if we weren’t speaking about the whole picture. People need to understand the entire picture because actually when people think of investing, they think about you, they think about what you’re doing, they think about the guys on the trading floors making trades in and out, in and out, in and out. They think they think about that. Like that’s that’s really what the kind of like overall consensus of what investing looks like in the UK. But that’s why I’m doing a job to show them that there’s yes, there’s a side, but there’s also a different side as well. So let’s talk about that. Do you have any other long building do you have like any other longer-term wealth building strategies that you put into play alongside your day-to-day trading?

[37:07] Michael Taylor: Um, I’ve got a couple of other trades like that, but a lot of it is based on trends and intraday trading. Um, you know, for me, uh, uranium was actually a terrible capital efficiency because it didn’t really do much for 18 months. You know, so even though I was right eventually, it took some time. So I generally want to be making money, you know, quite regularly because I got bills to pay and you know the things to pay for. So, you know, I I don’t really have a luxury of waiting years for a trade to sort of come to fruition. I’ve got uh um I’ve committed some capital to a VC fund and a couple of uh you know growth stories, which are sort of lottery tickets in the US. I’m sort of comfortable losing all of my money. If any of them come off, then you know I’m I will I would expect to make at least 10 times as much as what I put in. Um that’s like a very small allocation of my capital. Um generally I’m looking to be pretty active. Um, but you know that that also comes at a cost. I’m constantly active, constantly looking at the news. Whereas investing is quite boring. You know, you find a company, you make sure that the thesis is intact, you update your view when a new piece of news comes out or a new piece of industry news, and you don’t really look at the price because you don’t need to. Um because you know, there’s that old story about uh you know, every day the stock market comes to you with a with a price, and unless it meets your sort of value, you don’t actually have to do anything. Um so yeah, investors I think can can sort of call themselves investors, but a lot of the time they’re actually traders, they’re jumping in and out of things, and whereas if if you’re an investor, it it’s quite boring. Um, you know, if you just put a bit of money away into the S&P or something every month, you don’t actually need to look at it, you just let it do its thing and let it compound. And now that that’s what I actually tell most people to do. Um, if they’re interested in trading, I say, you know, trading comes at with a a time commitment and an effort commitment. And if what you actually want is to build wealth in the stock market without the effort, just go and buy an S&P tracker or world tracker, yeah, stick it in an ISA, make sure your your gains are tax-free, direct debit it, and that’s it.

[39:30] Sammie Ellard-King: 100%, mate, because that’s like that’s what you know. I’m trying to educate people is totally possible. So you don’t have to be you, you don’t have to sit behind the screens and trading charts. Like you can just have exposure and still invest, but without the like the day-to-day element of it, you just don’t need to do it. Like most of the people I know that have set up uh have now like they check in three, four times a year. If that, you don’t even need to do that. I think my girlfriend checked it the first time in eight months the other day and was like, oh, right, cool. That’s nice. I might output her by 20 quid now. Actually, I’m gonna put 25 quid more in a month. Like, oh cool, you know. So like she sees the value of just like getting on with her life, but also having exposure. But then people really enjoy this side of things. Like I talk about it myself, like I have an 80-20 strategy, so 80%, I tuck it away. That’s just my safe, you know, putting it into the S&P and the Vanguard Total Stock Market Index, for example, just like tuck it away, a couple of UK funds in there, because I feel like there’s an opportunity there at the moment, and then but that’s my personal opinion, right? And then the other 20%, that’s me. That’s this is like where I get I’m gonna have some fun, and yeah, I’m a few trends, a few individual stocks, I will even have a little swing trade every now and then just because I’m spotting opportunities, and that’s something that I’ve taught myself. But equally, if I make a really bad decision, I’m not necessarily gonna lose all my wealth. It’s like I made a bad decision. Okay, cool, you know, lost a little bit on that, but then I’m okay with that, and that’s the big thing here. Like, we haven’t gone and taken out our £1,000 that we’ve got sitting in our savings account, smashed it on a stock, and then it’s gone to zero, and then we’re like, what the hell’s going on? You know, like we’ve we’ve proportioned our money very carefully to make sure that we’re managing risk in the right way, but also reward too. Um, so I think it’s really important that people see both sides of this coin because it’s so interesting, and it’s always fascinated me as well. Like, I you know, I couldn’t do what you do, I really couldn’t. Um sometimes I do that myself learning about it. Yeah, so you can learn, you teach people too. So tell us all about that because um, you know, if you listen to this and thinking, yeah, it sounds like a bit of me, how how can people get in touch with you?

[41:54] Michael Taylor: Yeah, uh, so I got a website, shiftingshares.com. I’ve got a free book, a trading handbook. Um, I think a hundred plus articles now based on the stock market and um you know various aspects of of trading and investing. Um so start there. I do offer a paid course as well. Um, but you know, people should only really sign up to that if they’re absolutely sure that they want to learn to trade and they’ve they’ve gone through all the free material first. Um and look, there are other providers out there. Um, what I would suggest is you look at you know the sort of stuff they put out. Is it you know, because there’s a lot of people are promoting lifestyles and it just doesn’t work. Um there’s a lot of people who basically rip off things from others completely. Um and then when you ask them a question based on the content, they don’t actually know because they stole it from someone else, um, which is obviously illegal, but people do it. Um I mean people impersonate me on Twitter all the time. Um, ever since I paid for Twitter Blue, actually, it’s sort of calmed down a lot because scammers don’t want to pay 10 quid a month. Um but yeah, just just be careful. Um, question everything, don’t take you know, and one thing that I learned early on is that you know, a lot of people will talk their own book and they’ll talk about stocks that they own, but you don’t know what their strategy is. You know, they might be talking up this stock and it sounds amazing, you but but their their time horizon’s five years, um and they’re probably not gonna tell you when to sell either. Um so don’t don’t follow people. Certainly like get ideas from people, but if you don’t do the work yourself to put the trade on, it’s just gonna be a losing trade in the end because you’re not gonna know, you’re not gonna have any conviction in it, and you’re not gonna have a strategy. Um but yeah, re read a list.

[43:50] Sammie Ellard-King: You are you are placing a full punt, aren’t you? Yeah, exactly. And no nobody wins apart from the broker when you go punting, um, or B-Book brokers um who basically take the other side of your trade and don’t hedge it, um, which is why all of these affiliate scammers are around, um, because you know, brokers know that most people lose, so they don’t hedge. Um, but yeah, read around, watch, watch plenty of YouTube, and and just just be careful because financial markets are risky, they are dangerous. Uh, yes, they’re hugely fun, and you can make a lot of money, but you can also lose a lot of money. Um uh which which sucks. It’s really uh I love that you take both sides of that coin because boy, have I spoken to my handful of traders in my time that are like, this is ever, this is everything, this is so good, da da. And they never ever tell you how much they lost last week. Um, but they will 100% tell you that stock that they bought and it went up by 220% in three days, they’ll definitely tell you that bit.

[44:56] Michael Taylor: Uh yeah. Um, but anyway. Like the um well the WhatsApp groups, isn’t it, where people post the one a few hundred quid on the gambling, but then forget to tell you that they spend 20 quid a week there. Mate, 100%. I can relate to that. My um one of one of my friendship groups is literally like two of my two of the lads in there, they like a little bit of the flutter, and it’s basically 90% of the conversation until we’re all meeting up, and then it’s actually about real life stuff. But um, I just have it on archive now. I’m like, oh sod that. Um, but mate, um, so shifting shares, also your YouTube channel, which I’ve been watching you, you’ve been putting out some new videos as well. Definitely check that out if you’re interested in a few bits and bobs. Uh Michael’s got some really great videos there. Um, but mate, it’s been a real pleasure. Thanks so much for coming on.

[45:42] Michael Taylor: Yeah, thanks for having me, Sammie. Yeah, really enjoyed it and uh great to see you doing what you’re doing full time now. And uh yeah, definitely looking forward to following you and seeing where it all goes.