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Hello everyone, today we are speaking with Dan Mirkin of www.trade-ideas.com. Welcome, Dan.
Hi, how are you? Thank you for having me.
Doing great, good to have you with us. Where did you grow up? What's your philosophy and all of that kind of thing?
Love it. I grew up in the former Soviet Union, was born in 1970 in what was then, Leningrad, Russia, but is now St. Petersburg, Russia. My family then immigrated. We moved to the United States in 1978 when I was eight years old. And so, I'm fluent in Russian because my family and my grandmother were with us, and my sister and my parents and they all spoke Russian at home so I'm bilingual, Russian native.
We moved to Texas because my parents were both in the science part of geology and refinery, and we used to move to various places for skilled engineering people to find a job and provide for themselves. So, we moved out there and I kind of grew up as my dad would later joke and say you're a bilingual American. Because I can speak English, I could speak English so well by the time that our six months was over I was so young I picked it up instantly, and the Texas drawl sort of does stuff to remove the European accent. So, my sister who's ten years older still has a little of a European accent but I have none and I am fluent in both languages.
Then I went to University of Texas in Austin, graduated at a time where it was kind of really interesting, 1993-94. The whole Internet age hadn't really been born yet but it was kind of on the periphery, at the time. You had the modems and stock trading was just kind of getting born from the previous crash in 1987, you had these groups of people called SOES bandits who would come in and they were the little guys, like you and me, and they would actually compete with big market makers for the slice of the momentum pie. And the street hated them, but they were there, and I was a part of that whole situation.
So, if there was a better way to say it, that whole thing, being a SOES bandit... sort of a red pill view matrix-style because you realized things that you'd been taught, like five percent a year is good or eight percent a year is good, those things are just not accurate. There's so much momentum in the stock market and I think more and more people now with what has just happened with the slots down, the stock market being the only game in town that's open, you have so many more eyes and they're seeing the same things. They're like man, there's like these gigantic moves. Like look at this $TTPH today, it's up sixty-eight percent. Sixty-eight percent in a day, fifty million shares traded, so it's not like it's one of these things that nobody could have gotten, you know, there's a lot of action in here.
So, my philosophy is you really got to go for the truth. I'm a big believer that we've been lied to about everything and so that's why I love people discovering everything on their own, and especially in the stock market. And we make the tech in a way that we ourselves interface with it because we don't have the privileged information, so we're creating a new type of metadata that is better to help you navigate all the data that's coming through.
We have some really cool tech, that's another thing. You know, we've been doing this since 2003 and we've never raised money from any venture capital people, and all of our development is done in the USA by US developers. We're very patriotic from that point of view, we don't outsource any of that. And, the tech has been evolving since 2003. We have to keep making it different, you know, as new technology came out, but everything we do is super custom for the stock market which happens to be the largest animal of real-time data in the world. So, that's the high level, so I'm all about, and then again, you know, and that's on the business side. In my spare time, I battle for truth, justice, the American way, and all other good things but primarily to find the truth because I do believe we have been lied to about everything. I'm one of probably the only very few flat earth CEO's you'll ever interview.
Well, this is all very interesting. I have another question for you. Can you talk about your dotcom days? I've watched some of your videos. I'd like you to kind of expand on that and how that experience helped bring you to where you are today with your current company.
Sure. Well, you know, during the dotcom bubble I was still an active trader myself. Primarily, you know, trading my own account and teaching other people to trade. And then me and group of businesspeople got together and we raised money and we were going to bring the innovation that had taken place in the self-directed trading world, and take that innovation and bring it to institution-style. That was kind of what happened, that was the goal and the idea. And it happened all around 9/11 unfortunately, so as you can imagine the whole climate for venture-backed businesses literally changed overnight after 9/11.
So, we went from running around the world in jets setting up meetings and future investments and all that stuff, to very quickly going to, okay, we're going to run out of money, what's going to, you know. It was a very, very quick turn of events. But it taught us an immense amount because as we pivoted and in 2003 started Trade Ideas, what we realized was that we could run a profitable business, never give away control, let ourselves really manage the growth the right way. Not always shoot for hyper-growth but rather good technology, good product, and the growth that, that in and of itself provides, versus this chased growth, growth, growth, growth, which is what you see in Silicon Valley. But that was our fifty-million-dollar education. We learned what not to do, if you got experience, have applied it, and have succeeded from henceforth.
Excellent, excellent. Well, that answered the next question, how did Trade Ideas get started, but now I've got another question for you. On your website, right next to the AI figure, there's a statement. ‘You're about to make the best decision of your financial future.’ Convince me.
Okay. So, imagine when you were playing poker, you always had access to a computer that could tell you what to do based on your cards, to the best ability of statistics. Which, a computer for poker has. Okay, how would you ever turn that down? Because you know that no matter how, I mean number one, be honest with yourself and tell yourself, you know, you think you can outplay a poker computer. I mean, some people can, you know, but it's hard because it doesn't make statistical mistakes playing by the book, you know. You have to go all-in on it a couple of times and get lucky to do so, you know, but for the most part it's very difficult to beat.
We have the poker bot, but for the stock market. We don't just give you data, we're also processing that data in real-time in our server farms in California, where we're constantly having the software check for patterns and play these Monte Carlo simulations where the software is trying to back into what would look like a good strategy to make money, if you're playing it systematically. And so, we're proving that feedback to people and we're also displaying data.
See there's, let me tell you, from a just little bit of history, I love this question because the question should answer a lot of things here. So, at the dotcom time, E*TRADE was going public, well it went public in the 90s, but you had E*TRADE, TD Ameritrade, you had these commercial people like, "Hey, I trade stocks and I own island", you remember that. You know, it was a very hot trading climate. But after the dotcom bubble burst that vanished. Poof. And then everybody gave their trading away to experts in 401K's and nobody really did anything. All of a sudden, we have a revival of that. Well, with that revival you now get the benefit of the fact that we are, ourselves, the Trade Ideas team, that we've never stopped innovating since the time of the 2000s. We're still on that same curve, you know what I mean. We never left, because we transferred from that one firm where we had access to an immense amount of capital to then doing it the right business way where we never have to rely on anyone but ourselves. And pivoting out of that, and now just growing, and growing, and being in a perfect position to show people there's so much more to it than you could ever, ever imagine. It's the most, it really is, like when you come into our world, you break out of the matrix that they have played on your mind in terms of the stock market, and you see it for what it really is, which has an immense amount of potential.
Consider this for your listeners. At the high-level game of allocating resources, let's say you have money and you're like, "You know what, I'm going to buy a house." Well, how long is that going to take you? Well better yet, let's say you want to buy a five-million-dollar house, cool. And by the time all that gets executed it's going to be like thirty to sixty days from the time you first saw it. And then, if you want to sell it, you ain't going to make that money back right away. It's going to take some time, okay. Now, welcome to the stock market, okay. I'll give you a stock like Facebook, or Twitter, or Bank of America, or whatever. I can with one button press spend that five million and I can actually make a return on it, from what, maybe even like a percentage point in like thirty minutes. Like boom, sell, boom. You can't do that anywhere else. There's no casino, there's no anything... you cannot do that anywhere else, but the US stock market is the most liquid pie and money allocation speculation but yet capital risk management, high stakes game in the world.
Very interesting. Well, that's a good analogy with playing poker but based on the best statistics available at any given moment. So, the next question is, your website says, you have the only AI (Artificial Intelligence) virtual analyst that generates alpha, would you explain that for our listeners?
Absolutely. So, if you looked at the Dow Jones Industrial average right now, today, it's plus 258.88 points as we speak, which means that it is up one percent. 1.09 percentage points. Whatever it is that you're doing today with your money, if you did nothing you could have been in the Dow, you would have made one percent. So, the alpha is whatever it is over what the averages are making. You have to take away the average return because average is the no brain return. The no… you're getting in the, on the bus, to tuna town, getting in there, and that's it, you sit, and you do nothing, you don't think. We are very against that. We are for critical thinking. Turn your brain on. Start seeing what's right in front of you and that's really the big, the big difference.
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Interesting. Now, let me ask another question here. I've got this, this is pretty lengthy. The individual AI trade strategies you offer, they have names. Forty-five in all if I counted right. We've got Quarterback, Alpha Predator, Nickelback, Count de Monet. Explain a few ways these might be different from one another, and do any of them, for instance, involve derivatives?
For me to dive into the technology of that would be really silly. I'm going to give a metaphor for this. Okay. The best metaphor is, imagine you have a football team. An American football team, the Giants, whoever you want to call it, but the football team has a standard amount of players that have competed very aggressively to be on the roster of the team. Do you understand what I'm saying there?
Yes.
Okay, so we start with a certain amount of algorithms and these algorithms are based on Monte Carlo testing and statistical analysis are always competing with one another. They want to beat one another so they can be in the rotation to play and participate in the AI the next day. So, in other words we always have what’s called a quantitative combine happening where every algorithm is constantly competing with another algorithm to make sure that their statistical analysis is the best.
So, once again, in football, okay, you have the starters and then you have the backup. If a starter gets injured, sometimes the back up comes in. And I really want you to think about this because it's kind of accurate in terms of what you're seeing here. Every football team has different positions. You've got the center, you've got the quarterback, you've got the running back... that's why you see Nickelback and Count de Monet. We're creating different ideas quantitatively and we're just giving them some names, to kind of entertain people, you know.
I appreciate that explanation. Now how do you advertise your site? In other words, how do your clients find out about you?
We work with a lot of affiliate partners on the internet who market for us by helping people navigate to us and we appreciate their business. And our affiliate business is one of the best in the industry. You should check that out yourself. So, that's really the way that we advertise. Of course, we are also very well-designed from a website point of view. We understand how web crawlers work and in turn we understand search engine optimization. We don't outsource anything, because we have technical wizardry on our side. So, we deploy that. We have proper, again, positioning in all things related and people find us and then of course because we're a one of kind type of firm and technology there's word of mouth. And, to that end, to expand the word of mouth we've launched this program where we do open houses. And we actually have one coming up May 11th. So, there's an open house and for $8.99 anybody can try every aspect of the software. The full high-end stuff and the low-end stuff together.
Would you like to give the location of that event?
Yeah, if you go to our website you will instantly be notified of how to participate. So, go to trade-ideas.com and it will pretty much, if you have never been there, it will instantly let you know that hey, we've got this open house and prompt you to sign up for it.
Excellent.
It's two weeks by the way. So, it's going to open for two weeks, May 11th through the 22nd.
Let's say a person there's interested and so they go to the website, or they talk to somebody, how do they navigate through all of those choices, and how does their money move between, for instance, one of the algorithms that takes advantage of what would be a bull market or one that has what I would call bull pushes but it's really kind of idling or slightly bearish and something that you're expecting to turn down completely. How do they navigate that and allot their money between those?
Okay. So, we design different algorithms to specifically search for different things. It's almost like a wolf pack. Some of the wolves, you know, hunt one thing better. We have short algorithms, we have long algorithms. Self-selection then makes it, for example, if the market starts declining, which it has been, all of a sudden more short strategies started to do better. Just easy peasy, you know, and again, it's self-evaluating and it also readjusts. So, then once again, if the market starts to pick up, longer strategies will start to win and it will do better. And by itself, the system always goes in the direction of the market because the math doesn't lie. You know, whatever is winning we will gravitate towards. Does that make sense?
Yes, it does. So, the question that's on my mind at this moment then is, last year the market seemed to be doing just fine and then I believe about September, October it took this decline that just kept kind of going down, and going down, and going down, and going down, and surprised almost everybody. How did your clients do in that atmosphere?
Well, let's talk a little bit about just the nature of our client is somebody who wants to manage their risk better. So, since our software gives you the most heads up in terms of what you're doing with your money by visualizing financial P&L, seeing your dollar wins per position, your ratio. It's almost like this, remember I told you the poker computers going with you. It's not only just making these actions for you or maybe potentially giving you suggested actions, but it's explaining to you why it's happening. Like, well here's your percentage, you know, this is what you're doing good, this is what you're doing bad. There's a lot of feedback that you have that teaches you and one of the most critical things that I have to say in terms of information for your listeners, is really that our software has a simulated trading mode.
And this is probably the biggest mistake that individual investors make is they get excited about the stock market, and right now they should be excited because it's a very good stock market. Best time to be in it I've ever seen, but because it's so volatile most people have never seen this type of behaviour. And as a result, they will quickly start to lose money because the market brings out your emotional wounds the quickest, which is just a fact. Whatever it is that's bothering you, you will feel it in the market. That's just the way it works, you know, it can play on your demons of risk management. Your fear of missing out, whatever it is, you'll have it. But our software from just the way it's designed, imagine you're playing football but with pads on, versus running around, you know, flag football with your buddies who have no idea what they're doing, next thing you know you got a broken ankle.
We designed this from feedback and our experience, to visually take your risk management skills and your money management skills to a completely different level. And it's so cool that everything I'm saying right now is just scratching a little bit on the surface of what's it's doing. If the retail brokers really loved their customers, we would have been bought out a long time ago. But don't worry, they don't, so there's no worries.
Well, Trade Ideas has been featured in many magazine articles and is listed for the third time in the Inc. 5000, and that's a great history.
Thank you.
What is your next move? Or what is your future plan?
Oh, get ready for some of the biggest stuff ever. So, we're going to create tournaments for money with the simulated trading so you will be a real-time data consumer, but the trading is simulated. We'll create rules where we are, again, trying to bring the results to as close as real market as possible but at the same time taking as much luck out of it as possible. So, that it becomes a skill-level game. Not just like you, you accidentally bought some stock, it got bought out, and you won the contest. No. But you can do that in real life, but you don't get rewarded for that in competition.
So, again, we're so excited about this because number one, as you know game applications are very popular. But number two, here we're taking a game and I mean, I don't know how Fortnite skills translate into real life, but this actually translates into real life because everything that you're doing you can take that same interface and use it with real money now that you've learned with the simulated money. So, we love just being able to add something positive to the whole mental aspect of the game. Which brings me to the other beautiful part about the stock market, is that it’s like sweet science or surfing, you know, you never get it perfect.
That's why people continue the journey with us all through their lives because it's not something you can master. There's no such thing. You know, you're going to be presented with scenarios, it's a way of, not a thing to master. So, always learning. Even the pros are always learning, like myself and again, and it lends itself to teach you something.
Well, I agree everybody should be learning, it's a wonderful thing. And I love to learn, and I'm loving this interview just for that reason. Is there any question that you wished I had asked, that I didn't?
I mean, we covered so much...
Yes, you've been very informative.
The one thing I want to just give a couple of basics, I was mentioning this in a different podcast with someone else, where I said, right now at this time, today, in 2020 you are finding me with the most powerful suite of tools we've ever brought to market. We are gappling guns a blazing right now with innovation. From what we've done with the simulator trading and this other stuff, I mean, there's so much cool stuff. We have a channel bar that makes our software kind of like Netflix. You don't have to be a layout designer to get instant benefits. You've got these beautiful staged areas that are designed to work right away for you. You know, just like the Tesla auto-driver.
So, we are just innovating at a completely different level and one of the beautiful things is because we're not funded by anybody and we don't do board meetings, you know? We just don't. You know, we just work, we make the product better and it's all innovation-driven. So, the speed of which we develop I think outranks everybody. And our customers already say it, they did, you guys put out a new version every week. And there's no finish line, you know, the software keeps evolving. That's the kind of people we are. Again, made in the USA and just amazing stuff.
Very interesting. Any parting comments you'd like to make?
No, I just want to remind everybody great time to take advantage of the test drive that's going to be on May 11th, in just a few days. It's only $8.99. We've been doing this for seventeen years, we're the best at what we do. Go to www.trade-ideas.com. Check it out, you won't be disappointed.
Dan, thank you for being with us today. Until next time, happy trading everybody.
Thank you, take care.
