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Don't Make These Short Selling Mistakes - YouTube
Channel: Timothy Sykes
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- So, in this episode,
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I'm gonna be going over a very,
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very, very sarcastic tweet that I had.
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But, you'll learn a good lesson.
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(gentle music)
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What's up,
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Tim Sykes, millionaire mentor and trader,
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here reviewing my tweets.
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This is Tweets with Tim,
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leave a comment underneath
this video if you follow me
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on Twitter, yes or no,
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and if you answer no, change that, okay?
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Type in no, and then go
follow me on Twitter.
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Be honest, trading is
all about honesty, okay?
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Don't just tell me what I
want to hear, be honest,
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because that is the key to your success.
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That's been the key to my
success, both as a trader,
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now in as a teacher.
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So, in this tweet, this
is a very sarcastic tweet.
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Some people got it, a
lot of people didn't,
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so I want to explain it.
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I use Twitter for all kinds of things,
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whether I'm ranting,
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or, you know, posting links
to my latest blog post,
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or video lesson.
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Cashtags are amazing on Twitter,
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you put the little dollar sign
in front of a stock ticker,
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and then you can see what
everyone is saying about it.
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But, in this tweet, I said WOW,
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congrats to all $AQB longs,
roughly $2/share from my alert,
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Friday squeeeeeeeze...gotta
love the short sellers
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who usually enter too
soon like on this one
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and $TROV and $SEEL and $BPTH
love you guys, many thanks!
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LOL..
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So, this is directed at a
lot of the short sellers
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who have entered the market
in the last year or two years.
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A lot of people just like to
short anything that goes up,
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because they rationalize
that all these penny stocks
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are gonna crash,
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the companies will fail,
so, if the stock is up
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30 or 50 percent in the day, most likely,
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it'll go down the next day.
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And, guess what?
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Most times, they're right, so,
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a lot of short sellers get very confident,
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and they think they've
revolutionized the world.
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Trust me, I've been a short
seller, I've been there,
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but what has gotten me to the long side
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more than the shorting side
lately, is just the risk.
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And, newbies don't understand
the risks that they take
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when they short.
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For those of you who don't know,
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shorting is when you're
betting on lower prices,
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you're taking a negative position.
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Don't worry about how technical it is,
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but you want the stock to go down.
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And, most penny stocks do go down
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after, you know, spiking for a little bit.
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But, the problem is,
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is that newbies don't understand
how high a stock can go.
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And, if you're a short seller
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who wants the stock price to go lower,
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if it goes higher, you're losing.
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And, sometimes you can lose a lot.
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I mean, theoretically, you
can lose infinite amounts,
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because the stock can just
keep going up and up and up.
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Versus, if you buy a stock,
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the worse that could happen
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is you lose your initial investment,
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it goes to zero.
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But, what if you're
betting against the stock
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at $2 a share,
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and the thing goes up to $10?
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Now you're down $8 a share
four times your little $2.
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So, you can lose four times
your initial investment
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if a stock goes from 2 to 10.
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And, what's been happening lately
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in the last one, two, three years,
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stocks just haven't
been going from 2 to 10.
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Some stocks have gone
from 2 to 20, or 5 to 50,
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or even 5 to over 100, if
you want to talk about DRYS.
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But, lately, BPTH was the big runner,
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from 5 all the way up to
the 70's in just one day.
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So, if you're betting against it,
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like I know many short
sellers are, and have been,
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you can lose a lot of
money if you think, oh,
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the stock has gone from 5 to 30.
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It's up 6 times, that's ridiculous,
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and then it goes up to 70.
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So, short sellers try to predict the top,
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they try to bet on lower prices,
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but often times, they get squeezed.
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That's what a short squeeze is,
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and the reason why I talk about
this in a sarcastic manner,
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is that if you're a short seller,
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and you're getting squeezed,
to exit your short,
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you have to buy to cover,
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meaning that you have to buy the stock.
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So, you don't know if
someone is buying the stock
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because they think the stock is going up,
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or if they're just buying to cover
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to get out of their short.
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Either way, it creates more buyers,
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so when a lot of shorts are
losing all at the same time,
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when these stocks are spiking,
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they have to buy all at the same time,
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thus pushing the stock
up to ridiculous levels,
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which is why BPTH went
from 5 to 70 plus in a day.
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Now, it's back down, but a
lot of shorts lost money.
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Not in my chat room, not in my chat room,
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because I have very few short sellers,
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and even those who do,
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respect rule number one,
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cut losses quickly.
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But, other chat rooms, headed by newbies,
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headed by fakes, headed by frauds,
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headed by non-transparent traders,
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guess what?
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They lost big..
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I heard horror stories,
people losing $20,000,
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$50,000..
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One guy apparently even
lost $400,000 plus, so,
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I'm sad about it, but I've
been warning about this
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for a while.
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If you learn from the wrong person,
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you don't even realize
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that you're learning flawed information
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until you have a gigantic loss.
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Rule number one for me,
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is cut losses quickly,
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so I know that if you're
following my rules,
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you can't have a big loss.
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Obviously, crazy stuff happens,
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so you can't be 100% perfect.
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You know, sometimes stocks get halted,
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so it's not like foolproof,
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but with that mentality
of trading like a coward,
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trading scared, that allows
you to minimize your risks.
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Newbies, non-transparent
traders, fakes, frauds,
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non-self-made millionaires,
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they don't know.
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It's not that they're bad
people, at least not all of them,
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they just don't know what they don't know.
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And, it's my job to teach
you what they don't know.
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This is the beauty of being real,
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this is the beauty of having
two decades of experience.
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I've seen so much stuff, I
understand the risks, okay?
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I've seen two decades of trades,
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and now I've been teaching
for over a decade too.
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So, I see what students need,
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and trust me, if you are shorting,
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you are gonna get obliterated,
especially as a newbie,
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because you just don't know the risks.
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You can't act that fast, and
I try to tell people this,
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but a lot of people don't pay attention,
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and then they learn the hard way.
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So, for me, this tweet is
kind of like an I told you so,
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but, also, for me as a trader,
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I'm very, you know, I guess
grateful, you could say
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for these people who
are losing their asses,
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because those of us who are
long-based, long-biased,
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we profit off these short squeezes, okay?
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And, AQB just shot up..
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All of these stocks mentioned
in this tweet, and more,
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have been shooting up 100,
200, 300, 500, 1000 percent
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in a few hours, or in a few days.
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Not because they deserve to,
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but because of these short squeezes.
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So, while it sucks that
short sellers are losing,
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you can actually turn
it to your advantage,
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if you buy these patterns,
these supernovas,
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which is what I've been
doing for 20 plus years now.
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So, leave a comment,
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let me know if you follow me on Twitter.
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Or, if you're gonna follow me on Twitter,
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I have some sarcastic tweets like this,
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but, this is the market, okay?
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You either learn from the wrong
person and you get screwed,
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or you learn from
somebody who's experienced
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and will teach you how to do the screwing.
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Hey, Tim Sykes, millionaire,
mentor and trader.
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Thank you, for watching my videos.
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I hope that they help you,
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I want to share everything that
I've learned over the years.
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You can check out more
videos right over there,
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and also, click subscribe,
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so that you can watch all of these videos,
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get that knowledge and become
my next millionaire student.
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