How to Invest Like a Boss

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Jason Brown – The Brown Report

Podcast Overview:

00:04:46 Discovering stock patterns, increasing earnings through scholarship.
00:10:18 Manages fear and greed with rules and ratios.
00:11:03 Summary: Trade right and live another day.
00:17:21 Stock charts: like weather app for stocks.
00:19:40 Support and resistance determine buying and selling.
00:26:17 High profits possible with skills and capital.
00:35:35 Options: Controlling stocks, not owning them.
00:39:04 Stock market: profit from stocks’ movement.
00:43:34 From small trades to big dreams.

Podcast Transcription:

James [00:00:01]:

You have found Authentic Business Adventures, a business program that brings you the struggle, stories, and triumph and successes of business owners across the land. Downloadable audio episodes can be found in the podcast link found at draw in customers.com. We are locally underwritten by the Bank of Sun Prairie. Today, we are welcoming slash preparing to learn from Jason Brown of the Brown report, which, Jason, I gotta say, I’m pretty excited. I dabble in the stock market enough to make a profit, but I get the impression that I’m nowhere near the level you are at. So I’m excited to learn from you today. Let’s start with what is the Brown report?

Jason Brown [00:00:36]:

Awesome. Well, I’m excited to be here, so thanks for having me. And Yeah. Hopefully, I can impart some knowledge upon you and the community. As far as what is the Brown report, I know sometimes people think because I’m black, it’s called the Brown report. Was actually not my last name is Brown. It’s Jason Brown. And so the Brown report was really, started because, You know, I don’t know how much of my story, you know, but, like, we grew up pretty poor in in Detroit, Michigan.

Jason Brown [00:01:05]:

And We were sleeping in sleeping bags when we were young.

James [00:01:09]:

Oh, wow. So we

Jason Brown [00:01:10]:

didn’t even we didn’t even have beds. I remember going to my best friend’s house. I was like, wow, you have a bed. And he kinda looked at me like, Of course, have a bed. I was like, well, I thought beds were for grown ups because we stopped in sleeping bags. And so we didn’t get beds till later on.

James [00:01:23]:

Alright.

Jason Brown [00:01:23]:

So just to give you an idea just how broke we were. And so I always wanted to make money and figure out how do we change our situation. And I remember, you know, studying and trying to figure out how do people get Wealthy, and it’s, like, always about the stock market. And so I was like, alright. I wanna get into the stock market. Because you hear those stories where it’s like, If you woulda took $2,000 and put it away when you were 18 and came back later, you’d be a millionaire. So Yeah. Right? That’s a right.

Jason Brown [00:01:50]:

So I’m like, why don’t more people do that? So I took my graduation money at 18. I take $2,000 and I put it in a, I go to a well known bank. I’m like, I wanna open an investment. She’s like, what’s your goal? I’m like, I wanna be rich. Like, why why does anybody wanna do this? And, so she’s like, so you want aggressive funds. Right? And I’m like, Yeah. I want aggressive funds. And so, James, I come back 2 years later after putting my $2,000 from graduation money, all the money I had at that time.

Jason Brown [00:02:19]:

Come back 2 years later, I’m thinking I’m gonna be at least up 4,000, $6,000. And I go to check on my account, and it’s down to $700.

James [00:02:28]:

Oh, wrong direction.

Jason Brown [00:02:29]:

Right. And so I asked the lady, like, what happened? Y’all lost $1300. I’m like, I coulda lost $1300 of my own money. And so I was, like, give me because I in my head, I’m thinking, you go to the professionals because they don’t lose money. And so that was kinda the best and worst day of my life. And once I realized that they lose money, I’m like, I could’ve lost my own money. So I said, I’m a take the $700. I’m gonna do it myself.

Jason Brown [00:02:56]:

So I spent $200 on some gym shoes, something to make me feel better. I’m like, if I lose this other money, at least I got some gym shoes or something to

James [00:03:02]:

show you.

Jason Brown [00:03:04]:

And so at the time, I’m making $8 an hour working for Sprint PCS. I’m selling cell phones inside of Best Buy. And so I’m making $64 on a Saturday, and I thought to myself, So I could just make $50, and I wouldn’t have to work Saturday, and I can have my Saturdays back. So our stock has Sprint was $5 a share. I got $500. I’m like, great. I can buy a 100 shares, and all I needed to do is move 50¢, and I can make my $50. Right? So I bought at 5.

Jason Brown [00:03:34]:

It immediately falls down to 4. I’m, like, this doesn’t work. Stock but but But not that it doesn’t work. I’m like, I got these conflicting message. I’m like, well, people say you gotta be in it for the long term. You gotta be patient. So I’m like, alright. Let’s wait.

Jason Brown [00:03:49]:

Let’s see what happens. It goes back up to 5. Now I’m like, okay. Great. I just need to go to 550. Falls to 4 again. At that point, I’m pissed. I think the stock market’s rigged.

Jason Brown [00:04:02]:

I felt like they know my number. They’re like, when it gets To 5, don’t let it go up. Send it back down. Like, I felt like it’s

James [00:04:09]:

the man who’s gonna do it. We gotta send a dive. Dive. Dive.

Jason Brown [00:04:12]:

Exactly. I felt like it was a dude behind the curtains, like, Send it down. So it fell down to 4. Again, I’m like, it’s rigged. It’s gambling. There’s no way you can make money in this. That’s why they need your Social security normally opened an account, so they can tell the big players when you’re in, and not let it go there. That’s what I thought.

Jason Brown [00:04:31]:

So then it goes back up to 5 again, and I said, I’ve seen this before. So I said, I’m gonna get out at 5 and break even. It failed now on the 4 I got back in and went back up to 5. I got out actually made $100.

James [00:04:44]:

Hey. Nice. Now we’re talking.

Jason Brown [00:04:46]:

Right. So what I didn’t realize was that pattern was called a channel in stock. And so now I’m like, what are the patterns out there that exist that I don’t know? So I studied these patterns, and now I’m, like, getting really good with my $500, making $100 here and there. So I’m like, how do I get more money into the machine? So I got a scholarship to Wayne’s Mike Ilitch School of Business, Wayne State University here in Detroit, Michigan. I had a academic scholarship. I knew if I applied for student loan, because all my friends were getting their student loan refund checks, and they were spending it on clothes and shopping. And so I was like, I wonder if I could get a student loan, and they would double pay the account. I knew I would get the refund.

Jason Brown [00:05:25]:

So I applied for a student loan. The A scholarship paid tuition. The student loan kicked in, but I got the refund check of 10,000. I put it in the stock market. I grew it to, like, 100 and $20,000 as a 21 year old college student.

James [00:05:40]:

Wow.

Jason Brown [00:05:42]:

So here’s what happened. I drops out of school now. I’m like a Junior, going to my junior year, I drop out of school. I’m like, I’m making more money without working for anybody else, without a degree. Why would I finish school? I’m 4 times day trading. I make $100,000 a year. Year 3, I’m gonna buy a condo downtown Royal Oak, Michigan for half $1,000,000. I risk a quarter $1,000,000 trying to make half $1,000,000.

Jason Brown [00:06:08]:

I’ll lose it all. I’ll blow up my account. I have to move back home to Detroit to to my mom’s house with bars on the window. I had to sell my car. I had Alexis on 20 inch rooms. I’m living the ultimate bachelor life. And so I had this crazy idea To go full circle, you said, what is the Brown report? I had this crazy idea. I said, I’m gonna record myself Making the money back, and I’m also gonna share the lessons I learned along the way from losing that much money.

Jason Brown [00:06:39]:

And that’s how I started my YouTube channel called the Brown or in my website. It was really just a way for me to be accountable to myself and document making the money back. Because I Say, well, what would Warren Buffett do? I’m like, if Warren Buffett quits, he no longer becomes Warren Buffett. He no longer becomes a billionaire. And I’m sure he lost, $2,004. So or a quarter 1,000,000 in my case at that point. And so I said, let me just document myself making the money back, and that’s Literally how the brown report got started. Just be reporting on making my money back

James [00:07:12]:

from start. So how long ago, let me ask When you’re in school, let’s talk about the 1st 100 grand you bumped up. Over So what was the course of time there? Was that a couple years, or is that months?

Jason Brown [00:07:23]:

So, This is about, you know, I graduated high school in 99. I grow the account maybe 2 years later, so we’re talking, like, 2000 no. I’m sorry. I come back 2 years later. They lost my money. So it’s like 2,001. I take the rest of the money, say I can do it myself. I’m full time So it’s probably 2004, 2005.

James [00:07:48]:

Okay. So 2, 3 years, something like that. That was right after the .com bubble.

Jason Brown [00:07:53]:

Yeah.

James [00:07:54]:

But before the whole housing crisis, whatever.

Jason Brown [00:07:58]:

But before that. Yep. And so then I lost the money, and then I had to go back to work And get a job and get back into the game, and then I document on myself making the money back for the next 5 years. Alright. And, here we are, you know, teaching people the lessons of making it, losing it, and making it back, which is technically how this saying came about. You never go broke taking Profit because when I lost that quarter million, I was up a100000, but I didn’t take it because I was like, I wanna make 500,000 to pay for this condo. A 100,000 wasn’t enough, and now that’s where the saying actually came from that you never go broke taking a profit. So that’s that’s what the brow report is.

Jason Brown [00:08:37]:

So you

James [00:08:37]:

can make some money, skim off the top to put it back in your pocket, and then keep keep rolling with some

Jason Brown [00:08:42]:

of that. I mean, the reality is no one trade will get there. You know, we like to look at our investment in trends. Like, this is the one that’s gonna put our kids through college, but it’s really a Series of making good decisions that is gonna put your kids through college. It’s a series of good decisions that’s gonna get you out of debt, Get you the dream car. Get you the dream house. It’s usually not 1 lottery ticket of a trade or investment. And most people come to the market with that lottery ticket mentality.

Jason Brown [00:09:11]:

Like, I just need this number to hit. I just need this 1 stock to hit. And oftentimes, that’s not something you can build a long term sustainable future off of.

James [00:09:21]:

No. No. If it was that easy, you’d see everyone being a millionaire.

Jason Brown [00:09:26]:

Yes. And the worst thing you can do is get lucky one time because now you’re like

James [00:09:31]:

Oh, I know. I know it. I got all the answers now. Right? Just ask me. I’m the expert. Oh,

Jason Brown [00:09:38]:

that’s funny.

James [00:09:39]:

So 5 years ago ish, whatever, something like that, you start your YouTube channel. There had to be times where you were making trades where they didn’t pan out?

Jason Brown [00:09:49]:

Yeah. Well, the whole like, every trade you make, they don’t pan out. But As I started to make money back again, I just started looking at, you know, what went wrong the first time. Number 1, We risked everything for 1 trade. Number 2, we were up, but we weren’t appreciative. We let greed and I say we myself, I let greed take over. And so I started developing these rules, like, you never go broke taking a profit. So now I take profit when it’s 10 to 20%.

Jason Brown [00:10:18]:

I try to manage fear and greed by putting my rules into place. Like, I need first of all, I’ll look at the trade and say, like, that trade, like, did it even have the ability to make me half $1,000,000? So now I developed, like, a 1 to 3 risk reward ratio. Like, if I’m risking $1, I need to have the ability to make $3. And so as I built my rules back up, and also you have to have a I’m wrong level. So instead of me getting out when I was down 200, and then 175. I just rode it all the way down to, like, I think a 100,000. Then the next trade I lost 50,000, And in the next it was just like, I could’ve stopped maybe at when I was down 200. I mean, when I was down 50,000, I had $200 left.

Jason Brown [00:11:03]:

So Now we have what’s I have what’s called and when I teach my students, like, have your I’m wrong level. And it’s at the level where, like, if if it hits this, I’m wrong about the trade. I’m wrong about the investment. Let me close it out and then look at it with fresh eyes or look for my next opportunity. The other thing I teach and live by now is live the trade another day. So, yes, trades don’t always go right, but make sure you live the trade another day. So if I’m risking $1 to make 3, Technically, I could be wrong 3 times as long as I’m right on the 4th time, I can I’ll be right back to breakeven. So you wanna be right more times than you’re wrong, but this It’s it’s not about being right every single time.

Jason Brown [00:11:46]:

Nobody has, is the Moses of trading or is the God of trading. And it’s like, You’re only good if you don’t lose. That’s the wrong mentality. The key is to when you lose, lose small. And when you’re right, you’re right big. And then you need to Right more often than you’re wrong. If you can get that combination of probability and statistic, it’s like 3 steps forward, 1 step back. 2 steps forward, 1 back.

Jason Brown [00:12:10]:

Three step support again, maybe 2 back. That’s the game of investing. You don’t just go, I started. I’m so good. Every train I hit is a home run. Even though that’s what we wish it would be like, that’s not the reality of it.

James [00:12:23]:

Oh my gosh. I’m still learning that. I remember throwing, Oh, man. I wanna say 3, 4 years ago, something like that. I threw a bunch of money at GE because I thought it’s GE. Right? He usually make rocket It ships, they make airplane engines, they make light bulbs, like they’re everywhere, not a house exists in the US or probably even the world that does not have a product that GE makes Yeah. And GE, they’re still having a bad day. Just, right, I just read, some Well,

Jason Brown [00:12:51]:

lately, they’ve been they’ve been doing really well, but I’m looking at the chart. If you invested back in, like, you know, 2021 Yeah. All it did was just get cut in half pretty much.

James [00:13:04]:

Yeah. I was getting beat up. Anyways, I end up reading a book or some quotes or something like that from Warren Buffett. And he had the saying in there that said, you do not have to make the money back the same way you lost it.

Jason Brown [00:13:15]:

Oh, right.

James [00:13:16]:

And I was like, man, you think about it. And you’re like, I’ve held that GE stock for a couple years. It’s been going way down. Maybe it’s time to pull the chute. It’s not as, dreamy as something like a Tesla or something like that. Kids are bored of GE, even though it’s everywhere they don’t know. So Yeah. I figured it We

Jason Brown [00:13:37]:

call that we call that revenge trading. Right? Like, some people revenge Right. And it’s like, no. I gotta make it back, and I gotta make it back with this stock. Just go give me my money back, unless that revenge trading. Like, I want revenge. I want my money back.

James [00:13:51]:

Alright.

Jason Brown [00:13:51]:

Which is similar to Warren Buffett saying, you don’t have to make it back the same way you lost it. We say no revenge trading. Like, move on to the next chart. Yeah. Because our ego gets involved. Right? And

James [00:14:03]:

Well, ego and, I guess, from my point of view with GE specifically, and now I’m running into the same issue with Intel stock. I think this should be higher than what it is. Like, this is this is a company that’s everywhere, stable. And on paper, to me, it looks good. But clearly, there’s something either I don’t know or the emotional train that’s running in people’s head isn’t impressed with it. And in the end, That’s what the value is, so to speak, I guess, is what the market says. Right? Not necessarily what the paper says.

Jason Brown [00:14:35]:

That’s one big thing to understand. That’s what I learned from school. They was teaching us to do all these valuations and what it should be going for, but the market will pay Sixty times that multiple if it’s Tesla. And then you’ll find a company, like you said, maybe Intel, GE, and it’s like, It should be higher than this, and the market’s not willing to pay Mhmm. Percent of the multiple. Like and you’re just like, I don’t get it. But but I think those textbook calculations don’t take into people are willing to pay for growth, people are willing to pay for Future valuations. A lot of stuff is already baked in, so they’re looking for what’s the next big thing that the company’s gonna do.

Jason Brown [00:15:16]:

Like, These are all things a lot of pricing models or book value don’t take in. So when we think it should be higher, it’s like, yeah, but the market is Forward thinking, and it’s saying, nope. It should be lower.

James [00:15:30]:

Yeah. It’s interesting. I was just looking at the value of Ford, And I was looking at it thinking, I think Elon Musk could just walk in the door and be like, I’m gonna buy you and just whip out his wallet and start counting money like the valuation. I wanna say 50,000,000,000 or something like that. If off the top of my head, something like that. I’m like, there’s people that have more net worth than what Ford, a company has been around for a 100 plus years that you see you can’t go down the street without seeing a Ford. It blows my mind, and then I’m wrapping my head around this like, okay. I gotta look at this that a lot of people are buying and selling are buying more on emotion or hope rather than looking at the numbers.

Jason Brown [00:16:15]:

Yeah. And there’s so many different ways to look at it. Right? Are you a fundamental investor? Are you a technical trader? Are you a long term investor? Are you a dividend? I mean, so there’s There’s so many different styles. What’s important is that you find one that fits you. But I think no matter what your style is, I think everybody needs to learn how to read Stock chart. Because the stock chart can tell you with technical analysis that things are changing. You might not know why they’re changing for the good or for for worse, but But what’s important is that you can identify that something’s changing, and maybe I need to get out, or something’s changing, I need to get in. And that’s what I like about understanding the charts and technical analysis.

Jason Brown [00:16:56]:

Where it’s fundamental, you could be right, but the market right now isn’t ready to accept that, and And it shows parts. Whereas technicals, it’s like, I don’t necessarily know why, but something’s changed. They like it at this price. I want a piece of it.

James [00:17:12]:

Alright. So tell me about the stock chart that you’re talking about. You’re talking about the basic up, down, dividend ratio, stuff like that, or Can you elaborate on that a little bit?

Jason Brown [00:17:21]:

Yeah. So pretty much the way I like to explain stock charts, because I don’t know how how much your your audience Read stock charts enough, but I like to put it like this. Stock charts are kinda like the weather app on your phone. And you don’t necessarily have to go to school or become a weatherman or weatherwoman, and figure out chemistry or science, and what a Cirrus or Stratus or Cumulus Cloud is. But if the weather app says it’s a 70% chance it’s gonna rain today, You’re gonna grab an umbrella. And if it says it’s a 80% chance it’s gonna be sunshine today, you’re gonna wear shorts. Right? So that’s how charts are for the stock market. They’re not a 100% accurate, but they can tell you 70 to 80% chance that it’s gonna rain, or that the sun is gonna come out.

Jason Brown [00:18:14]:

And if you can Control yourself to only make decisions during those 70 to 80% chances of rain or sunshine, You have a higher probability of making a successful directional trade that in which direction you think that the stock or the market is going. Oh, interesting. That stuff shows up in the stock chart.

James [00:18:37]:

Okay. So I have to apologize because this looks like it’s prediction or somebody’s predicting. Is that right?

Jason Brown [00:18:45]:

Yeah. You’re you’re you’re you’re predicting to a certain level of accuracy. Right? That’s why I always say 70, 80%. You’re not Yeah. Not a100. Not a100. But you’re saying, hey. This setup normally means the sun is gonna shine.

James [00:19:01]:

So is that with the stock charts, are you going through, I wanna say guru, but that’s not gonna be right. Someone like a specific website that offers these stock charts that you’re paying a monthly not to.

Jason Brown [00:19:14]:

Here’s the So

James [00:19:15]:

The guy in the corner with the cardboard sign that says

Jason Brown [00:19:18]:

Oh, no. So stock charts are free. They’re free. Okay. You could get them through any broker. If you have, you know, a Charles Schwab account, a WeBull, a Robinhood, Any account they offer charts. Getting access to the charts is is not most people’s problem. Understanding what they’re looking at It’s most people’s problem, because there’s levels called support and resistance.

Jason Brown [00:19:40]:

Support is just a price where people love it, And then resistance is a price where it’s like, at that point, nobody wants to buy it. In fact, people start selling. Think of it like a house. There are certain neighborhoods where it’s like, if it get that low, you’re like, I don’t even need a house, but I’ll buy it because I can’t believe it’s that price. Sure. Then there’s certain prices where, like, it gets so high, like, nobody wants to move into that neighborhood. In fact, people start selling their houses, they’re like, look. At these prices, it’s time to move.

Jason Brown [00:20:07]:

Same thing happens with the stock market. There are certain prices were so low that it’s like, You look at Amazon. Right? You start getting down to literally almost about where it’s at now, in the 120 area. And you’re like, Okay. They got the biggest e commerce shopping platform. They got maybe millions of people that pay a 149 a month just for Amazon Prime. You also got the people who, the the retailers who pay to ship their stuff to Amazon. They also run ads.

Jason Brown [00:20:40]:

Right. And so you look at that and you say, there’s no way they’re going to 0 because they have an embedded customer base. They have ecommerce unlocked. They got alright. So That gets to a certain point or price point where you’re like, there’s no way it should be below that. And so understanding where that shows up on the chart Can help you make a better decision when it’s time to buy.

James [00:21:01]:

Fair. Totally fair. You know, it’s funny because that reminds me of when I was at GE. GE was so low that I thought as they went out of business and had to sell everything, I’m like, that would pay for more than all the stock.

Jason Brown [00:21:14]:

Absolutely. But, it

James [00:21:16]:

didn’t happen. Whatever. So but I get what you’re saying. That’s, very interesting. So when they’re when these people are predicting or maybe it’s algorithms are predicting. I imagine there’s some just like with weather. 1 weather person says it’s gonna rain. Another person says it’s gonna be sunny.

James [00:21:32]:

They’re looking at the same sky. So do they just have different patterns that they’re looking for, or what are they looking for where they differentiate?

Jason Brown [00:21:41]:

Yes. Great questions. That’s a really good question. First, I think people gotta understand that’s what creates a market. Alright. Is that we’re looking at the same thing through 2 different lenses. 1 person says, I think it’s gonna go up. 1 person says, I think it’s gonna go down.

Jason Brown [00:21:57]:

And maybe if a 3rd person says, I don’t know, so I’m not doing anything. I’m sitting on the sidelines. Right? But to make a market, you have to have someone who thinks going up, so those things are going down. Or you have to have someone who thinks is undervalued and someone who thinks is overvalued. Now we may be looking at the same chart, But where the differences are gonna happen is life. And what I mean by life is, you got some people that are day traders. They just wanna jump in and send the stock up for a day, and send it down. So that’s gonna be a group of people that can move it.

Jason Brown [00:22:28]:

Then you got people like Warren Buffet who may come in about 1,000,000,000 of shares He’s investing over the next 3 to 5 years. And so you might have that type of money that comes in. It doesn’t worry about what it does every day with the fluctuation. You have a different crowd that’s like, this money has to last me in retirement, so I don’t wanna take risk on certain tech stocks. I don’t care what the chart says. So there’s all these different reasons why we all look at the same chart and make a different decision. And, Also, remember, I teach people to make decisions only in the 70 to 80%. Then you got the people who take the 50.50 chance.

Jason Brown [00:23:09]:

Like, It looks good enough or close enough. 50% chance it can go up, 50% chance it can go down. You got the the rock the the the gamblers of the world, the Reddit people, the people who are just place and bets. So all of those things play in a different temperament of why 1 person would buy, 1 person would sail, and 1 person would just sit out altogether. Alright. And and not only that, though, there’s 3 things that move the market. There’s the technicals, the Practicals and the fundamentals. So if we’re both looking at the same technical chart, then next we’re gonna layer fundamentals on top of it.

Jason Brown [00:23:45]:

And say, all the reasons I named about Amazon is why I like it. But then you go into the practicals, which is like, okay, we got a government shutdown. You got the UAW Strike. That means less people go be shopping for Christmas if they are you know, they employ a lot of people at the big three. Less people are gonna be shopping for Christmas. Less people shopping As less people shopping on Amazon, less people shopping on Amazon, less revenue for them to collect from the retail. Like so now you just have also what’s going on in the world that, You know, the the Fed’s gonna raise interest rates again unless people are gonna use their credit cards. So it’s not just you could look at the chart and stop there, But the chart starts to say something is wrong, then you can go to fundamental and say, is it bad leadership? Is it a bad product? Then you can go to the practicals and say, what’s going on in the world? Is it just because it’s interest rates? Is it because Russia just launched a Mishawat Ukraine? Those other things also play into what would move the stock up and down.

Jason Brown [00:24:45]:

But technicals is like your first. If you could at least read the chart, You can have an idea if it’s a good or bad stock, then you go to fundamentals and say, why is it good or bad? Then you go to practical and say, what’s going on right now in the economy That either will keep it going or that could derail what’s going on right now.

James [00:25:04]:

Alright. I see what you’re saying there.

Jason Brown [00:25:06]:

Was You really start to build a process on top of your technical analysis. You don’t just look at technicals, but you start there. And then if you build a fundamental and a practical thesis, you really have a bonafide game plan of why you’re buying or selling the stock.

James [00:25:22]:

So let me ask you. I’m gonna dig into your secrets a little bit here, if you don’t mind. When you are day trading, are you keeping track of just a few dozen, or maybe a 100 or something like that stocks? Are you looking at the whole thousands of stocks out there and trying to keep track of all that?

Jason Brown [00:25:40]:

So I don’t day trade as much anymore. I do what’s called more swing trading. Meaning, I’m looking for patterns that are gonna play out over the next 30, 60, or 90 days. So usually my longest investment or trade is about 90 days. I don’t I’d I’d I know how to day trade, and I have a program that teaches it. But, again, I’m at a point in life where I don’t wanna sit in front of the computer all day. And so with day trading, number 1, you’re looking at a intraday chart, meaning a 3 to 5 minute chart. And you’re looking at every 3 to 5 minutes, and you’re trying to jump in and jump out or trying to catch a direction term for the day.

Jason Brown [00:26:17]:

It’s very profitable if you have the skills and you have the money. Because Day trading is all about volume. Mhmm. If I can jump in and get a dollar movement, but I can buy 10,000 shares, I can make $10,000 In a matter of a hour and be done for the day, because I was able to buy 10,000 shares. But 10,000 shares of, You know, what, a $100 company is like $1,000,000 or something like that. Let me make sure I’m doing my math right, but you’re buying 10,000 shares Of a Yeah. It’s $1,000,000. Right? So how many people have $1,000,000 to try to make $10,000 a day? But If you could jump in and get $10,000 on one day, maybe your goal is just to make $100,000 a year.

Jason Brown [00:27:06]:

You could just trade one day out of a month and take the rest month off. So when you’re day trading like that, you’re looking for small movement. You’re able to control big volume. And then you ask, am I looking at all the stocks? Typically, when you’re day trading, if you are a good day trader, or any good tray day trader, I would say, would tell you, You usually have about 5 stocks. And the reason you don’t wanna have more than that is you really wanna get to know those Five stocks really well and how they behave every day. You can’t do that if you’re jumping from company to company to company trying to day trade. Okay. Wanna focus on, like, 5.

Jason Brown [00:27:43]:

You know them really well. You also wanna know when their earnings are coming out, if their CEO is about to speak, if there are any lawsuits pending. Because You don’t wanna get caught off guard that the answer to the lawsuit comes out in 30 minutes, and you was like, oh, I didn’t know that. So you really wanna know the Companies know how they behave every day when you’re day trading.

James [00:28:02]:

Gotcha. Okay. I just it’s so interesting. When I got into the stock market originally, I just had this picture in my mind that people were keeping track of all the stocks on the New York Stock Exchange or something like that. And I had no idea how many that number how high that number was. That is a high number.

Jason Brown [00:28:21]:

Oh, it’s 1,000. Yes. 1,000.

James [00:28:23]:

To keep track of all that. So then Yeah. Yeah. So then I started whittling it down what I keep track of. And I figured, okay, I’m certainly not the smartest guy in the room. So the people that are making lots of money at this must be doing something similar because I don’t know how else you would keep track of all that’s going on. So Yeah. That’s good.

James [00:28:43]:

I I appreciate reinforcing that there. You also bring up an interesting point about the, like the the government shutdown or whatever. The current problem

Jason Brown [00:28:54]:

lay offs and stuff.

James [00:28:55]:

Yeah. Problem of the day, problem of the week. I’ll read the headlines that’ll say something like stocks down because of, you know, a pending government shutdown. And I always think, like, well, I made some trades today, but that wasn’t really the compelling reason why I made the trades. So I always wonder, how does this journalist know that? Or what are they using to predict that?

Jason Brown [00:29:20]:

So this is a really interesting topic. The way I like to think of it is journalists don’t know anything. And what and if any journalists are listening to this, Respectfully, they don’t know anything. What I’m saying is you have to the regular people, like, because I’m in the industry, I understand, but most people don’t what a journalist’s job is. A journalist’s job, whether it’s mostly TV let’s just talk TV for a second. We could talk print, but TV. The journalist’s job is to keep you watching the show. Because if they keep the ratings high, what do they make money off of? They make money off selling commercials.

James [00:30:01]:

Mhmm.

Jason Brown [00:30:02]:

So the journalist’s job isn’t necessarily to predict the stock market or give you good stock advice. Their job is to keep talking about it all day and keep you tuned in. Now you go to step 2, which is like, well, how do they keep you tuned in? Well, what what’s the number one reason that people tune in to any type of news? They don’t tune in because everything’s fine today. No. It’s

James [00:30:24]:

like Right?

Jason Brown [00:30:24]:

The night at 7, this guy got robbed at the gas station and almost lost his life. What did the police do next? This is the same thing. Tonight at 3 o’clock, will they shut down the government or not, and how that gonna affect stocks? The big sell off today and the number one reason it happened, it hit. How did the UAW tank the market today? Right? So they’re just taking what’s going on, and they’re just Putting lipstick on the pig and saying, oh, that must be the reason why things sold off today. They don’t necessarily know, And that may not necessarily be the reason, but their job is to take whatever’s going on in the market and make sure you’re tuned into it. Yeah. If you really think about it, why would we sell off on a government shutdown or UAW strike win? If you really think about it, Almost every time we go into a government center, which seems to be every year now, they locked themselves in the room, and they magically reassess reassess the budget at midnight, and they figured it out, and the government shutdown averted. Mhmm.

Jason Brown [00:31:27]:

So why would that tank the market? It seems like they avert the shutdown every single time, or we’re gonna have to raise the debt ceiling limit. And I don’t know if we default, people won’t get their food Steps and veterans won’t get their GI. It’s just like they every time they do this, they get to midnight, and they avoid a government shutdown. So

James [00:31:47]:

If ever they don’t, there’s gonna be some anarchy where the people that are making the decisions are gonna have a bad day. So it’s in everyone’s best interest to make it happen.

Jason Brown [00:31:56]:

It is. So I’m saying that to say that news is not really what moves the market. There’s other things behind it. There’s Portfolio rebalancing. There could be, now some people could be taking chips off the table in case it does happen. But also sometimes the market has just run so high that it’s like, it’s time to take profits. It’s power to raise interest rates again. Like, there’s other things at play, But the news usually doesn’t know.

Jason Brown [00:32:24]:

They’re just reporting after the fact of what they think, number 1. And number 2, whatever’s gonna get you to tune in for ratings.

James [00:32:32]:

Right. Got it. Tell me, let’s shift gears to the Brown report specifically. People the people that come to you, do they have, broadly speaking, experienced in the stock market, and they just haven’t been doing so well, or they’re just like, I heard there’s money to be made. I have no idea how to make it. Jason, teach me. Tell me how green are they, I guess, when they come to you?

Jason Brown [00:32:54]:

A little bit of both. So we teach people from beginners All the way up to advanced traders. So we have beginner basic programs all the way up to our high level $20,000 a year mastermind. We have stuff as low as $100, all the way up to $20,000 a year. So you could imagine that’s a wide variety of Of people. But the reason we teach everybody I know sometimes they say, you shouldn’t say you teach everybody. We really do teach all levels. We don’t teach everybody.

Jason Brown [00:33:25]:

They have to be somebody that has disposable income, that wanna learn, that are willing to put in a hour or 2 a week, to be a good candidate. But The reality is that’s where I started. I just told you, I went to a bank and just was like, I just wanna invest. And so I created what I wish I had. I was like, how does it work? I didn’t know that these patterns were out there. How come no one’s teaching these patterns? You know you know, how do I read a stock chart? What is a stock chart? I had no idea what I was looking at. It looked like Hocus Pocus. And back then, I was just buying books and stuff.

Jason Brown [00:33:58]:

And I would buy a book, and I have to get a 2nd book to understand the 1st book, and I get stuck in the 2nd book and get a 3rd book to understand the 2nd one. And I was like, I wish somebody would just show me. And so we teach beginners. We show them through video format, which I believe is the most effective way of learning. We teach them through videos. We also teach them through live trading. And so I’m trading my real money in the market. So I’m showing you What I’m buying, what I’m selling, I’m giving you my analysis, technical, fundamental, and practical analysis of why I think a stock is gonna go up or down because I’m looking for these stocks, for myself.

Jason Brown [00:34:35]:

And I primarily trade options, which is a whole another story. But, you know, so I’m taking you along that journey, And my superpower is showing you what I’m buying, what I’m selling, and my thoughts on the market. But most people, if they just came in at that point, they wouldn’t Fans. So we have to teach them from beginners to get them up to speed so that they can understand. And I’m like, the ball like you said, what’s that book? I’m like, hey. It’s a Bollinger Band breakout. I think it’s gonna pop above the upper band. I can’t stop every time and explain what that means.

Jason Brown [00:35:08]:

That’s why we teach them in the course, The basics and the fundamentals. And then when it comes to the live trading, they can understand and execute with us in a practice account Or in your real account if they choose to.

James [00:35:20]:

Oh, that’s cool. Tell me about the options thing because that’s I guess I saw that a little bit on your website, but that’s a whole another realm, I guess, when it comes. I mean, stocks, you can get in there pretty easily. Options a whole is a whole new game.

Jason Brown [00:35:35]:

You know, it it’s a whole new game, but it’s not a whole new game. And, you know, what I mean by that is people don’t understand that they’ve been playing with options their Entire life. And so options is what really helped me grow my account from 10,000 to a 120,000. I was a 21 year old college student. And so options is basically a game of controlling stocks versus owning stocks. So let me give you an example that Most people can relate to is a house. If you go see a house that’s $200,000, you’re like, I like this house. I wanna put an offer in on it.

Jason Brown [00:36:07]:

You put an offer in, it gets accepted. Okay? They usually ask for some type of good faith for earnest money deposit. So you got like, alright. Here’s $2,000, And then they say you got 30 days to get an inspection, get an appraisal, make sure you want the house. So the house is $200, but you just put down $2,000. So we just Stop right there. Pause. $2,000 is allowing you to control a $200,000 asset for the next 30 days.

Jason Brown [00:36:34]:

You have it under On track. Now you get your inspection appraisal, they come back and they say, this house is valued at $250,000 in this neighborhood. And with that, composite deck they built and the materials they used is about 250,000. So now you have 2 choices. You can exercise your option and buy that house for 200,000 or somebody Elastat came to the open house like, oh, I really want this house, but it’s under contract with someone else. And you’re like, hey. The house appraised for 250,000. I will sell you my $2,000 option contract for $50,000, and then you can go buy the house for $200,000.

Jason Brown [00:37:19]:

So now that person Pays you 50,000 for the contract to go buy the house with 200,000. So total, they paid 2.50. They’re happy. That’s what the house is worth. But you just took $2,000 and turned it into $50,000 by controlling the asset without having to come up with the full 200 $1,000.

James [00:37:39]:

Oh, nice. Okay.

Jason Brown [00:37:41]:

That is what options are like in the market. You can control Tesla, Amazon, Apple, these higher priced stocks for a fraction of the cost. And if the price goes up, you can turn around and sell that contract To somebody else and make the equivalent of if you have had $200,000.

James [00:38:02]:

Nice. So what? So you have the basic tools that came on, I guess, in the past 5 ish years. You got the Robin Hoods of the world, and there’s Laundry list of other apps were making trading stocks way easier than it was when I first started. Way easier. I got started with E*TRADE back in the day when it was $10 a trade or something like that.

Jason Brown [00:38:26]:

Yeah. I remember those days.

James [00:38:27]:

Now it’s, It’s easy. So with options, though, I didn’t even know where to start to get in that game. So where do you send people?

Jason Brown [00:38:35]:

So options is just Something you apply for with your brokerage account. So it’s not like you go somewhere special. You could do it in Robinhood, Weebook, E Trade, TD Ameritrade, Charles Schwab. It’s just understanding that you can control a stock for a certain amount of time. And and most people don’t understand how to do that, but they do when it comes to House, when I give the house example, we go, oh, yeah. We do that all the time when we buy a house. Right? Mhmm. But you can do that all the time in the stock market as well.

Jason Brown [00:39:04]:

The other thing I like about the stock market, because we’re talking about call options. With put options though, we can make money when stocks fall in, and that’s Where you become you start to become what I call we call it power traders. Right? We’re power traders. And so we have the knowledge and the power to make money if stocks are going up, Sideways or down. And that’s when you become a powerful trader because now you’re not only looking for companies that’s doing good. If companies or the market is doing bad, you can use put options to make money from stocks falling. And so a lot of times people think, like, Why would anybody how how do you make money from put options? I don’t get it. The example I like to use and, again, when I put it like this, People don’t realize they buy put options every single month, and I can guarantee everyone listening, including you, has bought a put option.

Jason Brown [00:39:52]:

You’re like, okay, Jason Brown. Prove to me I bought a put option. I’ll prove it. If you have a car, you pay for something every single month called insurance. Okay. So let’s say you got a $100,000 Cadillac Escalade, and you pay $500 a month for insurance. You are buying a put option on your car. So you for 30 days, you are covered.

Jason Brown [00:40:16]:

If you go smash that Truck into a wall and get into an accident, god forbid, and the truck is now worth 0, you get to call up your insurance company and put A $100,000 truck to them that is now worthless, they still have to cut you a check for $100,000. And all you pay was $500 a month for that right to Put it to them.

James [00:40:38]:

And so

Jason Brown [00:40:39]:

you can buy put options in the market to either, a, protect your account. So if you got a $100,000 stock account, You can buy protection for 30 days just like you buy insurance for 30 days. And if the market tanks or fall, They’ll have to pay you for your stock at that higher price of $100,000. That’s the simplest way to explain it, But it works the same way it does with insurance on your car. You can insure your portfolio. Or if it’s a stock you don’t own, the way you make money from it Is let’s say it’s a stock trading at $100, and you have reason to believe it’s gonna go down. Jerome Powell is speaking. He’s gonna raise interest rates.

Jason Brown [00:41:16]:

Typically, every time he speaks, the market tanks. You’re like, I’m gonna buy some put options on stocks I don’t own. So say you buy a $100 put option for let’s say you pay $2 for that option. That means you can force somebody to buy the stock from you at $100. If the stock falls down to $80 And you can force them to buy it at a100, that’s $20 you made in between. So you just took that $2, and you turned it into $20. So because you could force them to buy it from you at a100. Now people say, well, how do you force them to buy it from you? Which is that’s why we have courses and teach this stuff, but you could technically go buy the stock on the open market for 80, and then exercise your put and force the guy to buy it from you at 100.

Jason Brown [00:42:05]:

So that’s why you can make $20. Because you can go buy it on the open market for 80, force them to buy from you for a100, And you made a $20 spread. Some people say, well, what if I don’t have the $80? Again, that’s why we teach this stuff because you could either borrow it from your broker, or you can just sell contract to somebody else. So that’s that’s how you we’re getting into, like, how do you unravel the trade. Mhmm. I just want people to understand the concept That you can force someone to buy stock at a higher price by buying a put option. So when it falls, you either protect your account or you can make money. Alright.

James [00:42:39]:

That is all that’s super cool. I mean, I love that you have this going on. I love that you’re training people and all that jazz. And I gotta say, one of the best feelings that I’ve had, recently is I was at my in laws, and the kids are watching TV and stuff like this. And I made a trade, and I made $40 or something like that. And my wife is looking at me like, what are you so happy for? And I’m like, I just paid for our lunch. On the way up here is $40 at some fast food place, and I was so put off. It was like, $40 for junk.

James [00:43:12]:

But then I made the money back in the stock market after a couple minutes. And it was just one of those, this is cooler than real work kinda thing.

Jason Brown [00:43:23]:

Absolutely. I mean, when you think about How excited you got over $40.

James [00:43:27]:

Right?

Jason Brown [00:43:28]:

I have videos where I made 400 and over $400,000 on one trade.

James [00:43:34]:

Wow.

Jason Brown [00:43:34]:

So now imagine when I buy watches, when I buy paid off our house in cash and stuff like that, That it like, you can go from, oh, just pay for lunch to, like, just pay for a car that I would never pay for working a regular job. Just pay for a house, our dream house that it would’ve took us 30 years to pay off. So those big trades all start with trades like that where you’re like, I just made $40 to pay for lunch because the only difference between $40 and 400 to pay for a car note or 4,000 to pay for Your your dream house note or 400,000 is how much money you have in the machine, and how often You can find those opportunities and duplicate that. So I don’t know how much you had in there to make 40, but just imagine you had enough money in there to make 40,000. Only difference is how much money you have.

James [00:44:29]:

Yeah. It was 100. It wasn’t it wasn’t crazy. It was just, it was one of those things where for a moment, I thought I got That’s all figured out, and then the next trade, I didn’t. But it was it’s one of those where, I guess, I am to the point right now where I’m One step above dabbling with a little stuff, and now it’s time to get into the big stuff. As far as volume of money to make a move, I proved that I can Prove to myself, I should say, that I feel like I have a ballpark idea of what’s going on.

Jason Brown [00:45:00]:

So Yeah. And the more money you have, the more strategies you need. Right? The more you need to know how do I protect my account if it goes against me. The more you have those strategies, the less you’re worried when you put in 30, 40, 50,000 at risk because you’re like, well, I bought a put option. I No. I can’t lose more than this. Right? So people think, like, aren’t you afraid you’re gonna lose all your money? But it’s like, Those are people who don’t understand that there are other strategies like put options that can protect your account the same way you protect your car. You don’t go out there every day and drive and be like, I’m scared I’m gonna lose the whole value of my car.

James [00:45:37]:

It’s like,

Jason Brown [00:45:38]:

why not? Because you have insurance. Okay. Then buy insurance on your stock portfolio. Most people just like, I didn’t even know I could do that. And it’s like, that’s why we’re here to teach people.

James [00:45:47]:

Here’s the class. Check out the brown report. Right?

Jason Brown [00:45:51]:

Yeah. Because, again, for me, I was upset that nobody’s teaching this stuff. Right? Your your financial advisers are teaching this stuff. They don’t for you. They’re definitely not teaching it in school. And so the wealthy people are doing it, but they don’t like broadcasting what they’re doing. Mhmm. And so once a regular person like me figures it out, I’m like, We gotta let other regular people know how this works.

Jason Brown [00:46:15]:

Like, I’m tired of the people from the other side of the tracks holding the secrets close to their chest. And the beautiful thing about the stock market is, if I teach you the secrets, it doesn’t affect me. Neither one of us has enough money to buy all the, Excuse me. All of the Amazon or Apple stock?

James [00:46:37]:

Yeah. Moving the needle just on the one trade. Right?

Jason Brown [00:46:41]:

Yeah. We don’t have enough money to move the needle, so it doesn’t hurt me to teach or educate on how it works.

James [00:46:48]:

Right? I love it. So, Jason, how can people I guess you got the Brown report, so I imagine it’s the brown report.com or something like that? Or let’s start with YouTube channel because that’s probably the easiest. Right?

Jason Brown [00:47:01]:

You know, I got smart, and I locked down the Brown report on everything. And so on YouTube, I’m The Brown Report, on Instagram, I’m The Brown Report, Facebook, Twitter Nice. Then, you name it. So it’s actually easy to find me on any platform if you just type in the Brown report. But I always tell people people always ask, like, how do I get started? How can I test the waters? And I would tell them, at the brown report.com, we have what’s called a stock market starter pack and a stock option starter pack. So if you’re brand new to the stock market, The stock market starter pack will break down, like, the 3 most profitable patterns. What do they look like? How do you spot them? How to open an account? And then if you’re interested in options, Calls, puts, how can I protect my account? How can I control those higher priced stocks? We have the stock option starter pack. They’re both, like, Ten page PDFs breaking out how it works and how you can make it work for you.

Jason Brown [00:47:57]:

And, they’re all at the brown report.com, and as well as the YouTube channel. Everything You can get to just by going to the brown report .com.

James [00:48:05]:

I love it. That’s awesome. Well, Jason, so thank you so much for being on the show. This has been impressive, and I always I don’t maybe it’s just because I was raised dirt poor as well. So I’m not sleeping bag poor, but I was considered pretty poor. It’s always fun to learn from other entrepreneurs that pull themselves up from a pretty low spot financially and are now spreading the word to help other people do the same thing. It’s impressive. It’s admirable.

James [00:48:33]:

It’s super awesome, so I appreciate that.

Jason Brown [00:48:35]:

It’s such a fun way to give back and see people’s eyes get open because I know what it did for my life, and it’s been Totally life changing. So Yeah.

James [00:48:44]:

Yeah. Probably unbelievable, I imagine, to a point. You see some buddies that you knew when you were a kid, and maybe they didn’t make the same

Jason Brown [00:48:52]:

choice to do that. I mean, my life is drastically different these days. I mean, we have a house on the lake. We drive a Rolls Royce. I mean, we just got back from Croatia. We went to Africa this year. I mean, if I were to lay out how different my life is from growing up In Detroit with bars on the window, single parent household, drugged, that was in the neighborhood. I mean, it’s like night and day difference.

Jason Brown [00:49:16]:

And I think more people can experience it with especially from my community without thinking they gotta rap, play football, go to the NBA. We we always think the Rolls Royce is reserved for those people. The nice house is reserved for for rappers, actors, Those people. And I’m here to say that regular, everyday people could experience it too. And you don’t have to be a doctor or A lawyer either.

James [00:49:41]:

Yeah. He doesn’t go to school for 12 years or that is impressive. That is super impressive. Jason, I appreciate you being on the show.

Jason Brown [00:49:49]:

James, thanks so much for having me, man. I appreciate it.

James [00:49:52]:

This has been Authentic Business Adventures, the business program that brings you the struggle stories and triumph and successes of business owners across the land. We’re locally underwritten by the Bank of Sun Prairie. If you’re listening or watching this on the web, if you could do us a huge favor, give us a big old thumbs up, subscribe, And, of course, share with all your friends that you think could use a couple bucks and some inspiration to get going with Jason Brown and The Brown Report. My name is James Kademan, and Authentic Business Adventures is brought to you by Calls on Call, offering call answering and receptionist services for service businesses across the country on the web at calls on call.com. And, of course, the bold business book, a book for the entrepreneur in all of us available wherever fine books are sold. We’d like to thank you, our wonderful listeners, as well as our guest, Jason Brown of the Brown Report. Jason, can you tell us the website? I know It’s easy. But just for fun, just tell us what the website is one more time.

Jason Brown [00:50:43]:

Absolutely. It’s, the brown report .com. And even if you forget the, I still own brown report.com, and they’ll take you to the same place. So Smart man.

James [00:50:55]:

Smart man. I love it. Past episodes can be found morning, noon, and night. The podcast link fun at draw in customers.com. Thank you for listening. We will see you next week. Want you to stay awesome. And if you do nothing else, enjoy your business.