Don’t Gamble Your Way to Wealth – Do This Instead
Listen to the audio version of this article (generated by AI).
In This Digest:
- Why so many investors are taking crazy risks with their money right now
- This standout stock is a great way to play the energy boom
- Copper demand is surging, but its seasonality won’t turn bullish until the end of the month
Gamblers are taking over the stock market…
That’s the word from TradeSmith’s 40-year options trading veteran Jeff Clark.
Jeff opened his first money management firm in California in 1987.
Back then, an estimated 47 million Americans owned stocks. Today, that number is 165 million.
The age profile of investors has changed, too. While the Baby Boomer generation first got started investing on average at age 31, Gen Z investors tend to get their start before their 20th birthday.
And as the makeup of the market has changed, Jeff has seen an increase in gambling-like behavior – from sports betting, to prediction contracts, to zero-day options trading.
It’s not hard to see why. A whole group of people – especially young people – think it’s the only way they’ll get ahead. With inflation running hot and the potential for AI to take over jobs, taking high-risk bets starts to seem reasonable.
It’s why, in May, Jeff launched his first-ever trading challenge. Rather than watching folks try to gamble their way to wealth, Jeff is showing how they can make potentially life-changing sums in the options market.
He’s aiming to turn a stake of $5,000 into $1 million in 12 trades or fewer.
That may sound crazy. And Jeff is the first to admit the odds of him making it to $1 million are low. But even if he turns $5,000 into $20,000, $30,000, or $50,000, that will be a win.
But low odds and impossible aren’t the same thing.
One of his team members went back through the nearly 400 trade recommendations Jeff has closed over the last nine years. He found 36 separate streaks of three or more winning trades. He also found 21 streaks that ran five trades or longer.
And on two occasions, the streaks ran long enough that someone rolling $5,000 from one trade into the next would have ended with seven figures.
The first was during the 2023 banking crisis – nine trades that could have turned $5,000 to $1.3 million. The second was during the AI repricing of 2025 – 12 trades that could have turned $5,000 to $2.6 million.
And here’s the really interesting thing. Both streaks took place in roughly the same conditions we’re seeing today: broken assumptions, stocks moving 20% or 30% in a single session, sectors getting repriced overnight as the rules of normal investing temporarily stopped applying.
You can find full details of Jeff’s challenge here.
The energy industry is lighting up on this new Quantum screen – and this is the stock to buy
One of the big themes on our radar here at the Daily is energy generation.
That’s because two massive market forces are happening at once.
On the demand side, you have AI which, according to some projections, will double its total power consumption by the end of the decade to 945 terawatt hours.
For perspective, a single terawatt hour is enough to power 90,000 American homes for a year. Multiply that by close to a thousand, and that’s the energy that AI is forecasted to need.
And on the supply side, energy capacity is under threat. Ukraine’s long-range drones are wreaking havoc on Russian production. Just yesterday, a long-range drone from Ukraine flew to the Arctic and attacked two hydrocarbon plants in Russia’s remote Yamal region, where they produce 80% of Russia’s natural gas fuels.
Meantime, Iran and its Houthi allies in Yemen are stepping up attacks on shipping out of the Persian Gulf.
So it’s no surprise that the energy sector is flashing green on our Quantum Edge platform.
Longtime readers will know that we use the Quantum Edge system to find the strongest stocks in the market (based on their Fundamental Score) that are the subject of unusually large inflows from deep-pocketed Wall Street investors (the Technical Score).
After a recent upgrade, it now also gives scores for entire industries.
And right now, despite a lackluster Fundamental Score of 45.8, the energy industry has the highest Technical Score of any industry – at 67.5.
In other words, it has the best momentum and the most big-money buying. And there are some standout opportunities when we drill down into individual energy stocks.
Cactus (WHD) is one. It’s a Houston-based maker of equipment for oil and gas wells.
Its stock has a Quantum Score of 94.5 – making it an elite-tier stock with unusually large institutional buying behind it.
If you’re looking for a way to play the energy boom, put WHD on your watchlist.
And if you’re a paid-up subscriber, pull up the full industry ranking on TradeSmith Finance and see which other stocks in the industry have high scores.
Copper prices just hit an all-time high – but seasonality says to wait a beat before chasing it…
Copper just hit an all-time high of $6.83 per pound. That’s up 68% over the past two years.
As our CEO, Keith Kaplan, explained it on X this week, that’s thanks to three decades of underinvestment in new copper deposits colliding with the AI, power grid, EV, and renewables buildout.
Copper is an essential ingredient in power distribution, electrical conductivity, and cooling systems. Without it, you can’t move power from A to B. And you can’t cool AI data centers, which throw off huge amounts of heat.
That’s why S&P Global sees global copper demand climbing roughly 50% by 2040.
Mining industry legend Robert Friedland put it bluntly. The world needs to mine as much copper in the next 18 years as it has in the past 10,000.
But now is not the best time to buy in, according to our Seasonality tool.
Our Seasonality tool looks at how stocks tend to trade during calendar windows and flags patterns that tend to repeat year after year – through bull markets, bear markets, and everything in between.
Freeport-McMoRan (FCX) is the world’s largest publicly traded copper miner and a bellwether for the industry. And as you can see from the chart below, during the Sept. 11 to Sept. 29 window – which starts tomorrow – FCX has fallen 80% of the time over the past 15 years. And the average pullback in this window is 3.5%.
Seasonality also called a brief dip in FCX prices earlier this year.
See that red shaded area on the left side of the chart above? From Feb. 19 to March 9, FCX has fallen all but two of the past 15 years for an average loss of 4.8%. This year, it dropped 3.3% during that seasonally bearish window.
Copper’s long-term future is solid. But a better time to buy in kicks off at the end of the month. So keep your powder dry for now.
To building wealth beyond measure,
Michael Salvatore
Editor, TradeSmith Daily