Market wizard Chris Camillo grew his trading account by $9.7 million in 2020. Here's the simple strategy he's using to mint millions.

<p><img src="https://static6.businessinsider.com/image/5fc92d8a037cbd0018613a75-1213/Screen Shot 2020-12-03 at 11.24.04 AM.png" border="0" alt="Chris Camillo" data-mce-source="Chris Camillo"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>It's safe to say that Chris Camillo, the co-founder of the retail trading YouTube channel <a href="https://dumbmoney.tv/">Dumb Money</a>, is not your typical trader.</p><p>Camillo, who is profiled in Jack Schwager's "<a href="https://www.amazon.com/Market-Wizards-traders-youve-never/dp/0857198696">Unknown Market Wizards</a>," isn't poring over balance sheets. He's not analyzing the latest Fibonacci retracement levels. And, interestingly enough, he's not even concerned with price.&nbsp;</p><p>But in order to better understand Camillo's distinguished approach to markets, it's important to start at the very beginning.</p><p>"Well, I've been tradingI've been investing since I was a kid," he told Business Insider in an exclusive interview. "I frequented garage sales and estate sales as a young preteen and teenager, and I would arbitrage estate-sale merchandise."</p><p>As an adolescent, Camillo trained his eye to pinpoint unique itemsantiques, collectibles, watches, fans, and baseball cardsselling under market value. He'd then turnaround and unload his haul for a handsome profit.</p><p>Soon, Camillo would carry out that same philosophy in financial markets.&nbsp;</p><p>Every morning, before Camillo hit a sale, he'd start his day with a Snapple iced tea purchased from his local 7-11. Frustratingly, one day he'd noticed that his favorite drink was missing, and that the refrigerator section had shrunk within the store. The clerk behind the counter informed Camillo that competition was eroding Snapple's business, and that the downsize was a necessary maneuver.&nbsp;</p><p>A normal patron might've shrugged and walked away at the misfortune, never to revisit the thought again.</p><p>But that's where Camillo differs. He knew that information was valuable.</p><p>After a quick consultation with his older brothera stock brokerCamillo shorted Snapple's stock using put options to execute his bearish views.&nbsp;</p><p>"I think [I made] three times my money in just a few weeks on those put options and I was hooked," he said.&nbsp;</p><p>That single trade opened the floodgates.&nbsp;</p><h2><strong>The strategy</strong></h2><p>Camillo refers to his style of investing as <strong>social arbitrage</strong>. Distilled to its core, the methodology relies on identifying changewhether it be in consumer behavior, culture, technology, or governmentanything that could positively or negatively impact a specific company or market. He then arbitrages that change before the market comes to fully realize what he's already identified.</p><p>"Maybe people are speaking about a certain type of product more than they had in the past, or maybe they were falling out of love with a certain type of brand or product," he said. "It's just being hyper-observant and trying to identify that change quickly."</p><p>He continued: "I think it's really important. So I spend my focus looking at areas that Wall Street is not."</p><p>While most traders and portfolio managers are scouring a company's latest 10-Q, Camillo is hard at work scouring Reddit, Twitter, Facebook, TikTok, Instagram, and Google Trends data to unearth opportunities.&nbsp;</p><p>"So the data set that I trade on is noisy. It's interpretable and Wall Street doesn't like that because it's not predictable," he said. "There's an underlying narrative; there's context to the data."</p><p>Camillo initiates a tradesomething he refers to as the "point of investing"when he thinks he's spotted an informational imbalance that hasn't come to the market's attention. He then ranks that information and vets his analysis to make sure what he's trading on is the most important, meaning it will drive price movement.&nbsp;</p><p>"The optimal wayand I'm not strong enough to do this &nbsp; I wish I could say I was, but the optimal way to pursue this strategy is to not even be aware of the stock price when you initiate the trade and not even to be aware of the stock pricewhether you're up or downwhen you exit the trade."</p><p>Position sizing is based on the conviction he holds surrounding the imbalance, and can generally range anywhere from 2% to 30% of his portfolio. Selling occurs when "your information reaches parity with the market." When Camillo starts to see the market take note of the information he's tradedvia earnings reports, transactional data, or sell side researchhe makes his exit.</p><p>"I solely trade information," he said. " So it's not always black and white."</p><p>That strategy helped Camillo greatly in the midst of the pandemic.&nbsp;</p><p>"When you can't go anywhere, you can't travel, what are you going to do'" he said. "You're going to buy things through e-commerce; you're going to go out and ride a bicycle; you're going to camp. And so these things are so obvious now, but at one point in time, they weren't obvious to everyone, but the data was still there."</p><p>He continued: "And it gave me the ammunition I needed to ultimately identify opportunities in the noise that should never have gone down like Peloton, and Amazon, and Shopify, and outdoor stocks that would only benefit from a pandemic," he said.</p><p>Since February of 2020when the coronavirus started to send markets into a tailspinCamillo's portfolio has swelled by over $9.7 million, a trading account statement seen by Business Insider and vetted by Schwager shows. If we zoom out even further, since 2006, Camillo has generated over $16.5 million in profits.&nbsp;</p><h2><strong>The strategy in action</strong></h2><p>In <a href="https://www.youtube.com/watch'v=SBX3V2XO93M">March of 2019</a>, Camillo watched <a href="https://www.businessinsider.com/category/jeffree-star">Jeffree Star</a>a makeup mogul and one of YouTube's biggest influencers&nbsp;deliver a ravishing review e.l.f Beauty's (ELF) Poreless Putty Primer.&nbsp;</p><p>"So, Jeffree Star is a major beauty influencer on YouTube and on Instagram, and he is just a complete icon in that world and has grown to become one over the past few years," he said. "So if you're a teenage girl, and you're trying to figure out 'What makeup do I want to wear'' you're watching Jeffree Star videos on YouTube."</p><p>At the time, Camillo says that the productwhich retails for less than $10was little known and was mostly sold in Walgreens, CVS, and Target.</p><p>"And it was a really big deal, he said. "It was a YouTube video that went viral and millions and millions of people watched this video."</p><p>With his ear to the ground, Camillo started to notice the conversation around the product start to gain steam on Twitter and Instagram.&nbsp;</p><p>"And it became evident that he had made this brand overnight," he said.</p><p>He continued: "I ultimately ended up doing interviews with a number of employees at Target and at various pharmacies and saw that the product was not just selling outwhich was evident to me from the social buzz that I was picking upbut that there were numerous people coming in every day looking for the product that was sold out. And they were really passionate about it, and they weren't just buying the putty primer, they were applying all kinds of other products from this elf cosmetics brand."</p><p>In the six weeks following Camillo's initial purchase, the stock soared over 50%.&nbsp;</p><p>"And really the moral of that story is, analysts that are following the beauty sector are not spending their days looking at every beauty review out there," he said. "And certainly not what a hedge fund manager is doing over the course of their everyday. But that's exactly what I do. It's everything that I do."</p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/trading-strategy-how-tom-baldwin-surpassed-1-million-first-year-2020-10" >Market wizard Tom Baldwin started trading with $25,000 and grew it to an estimated $30 million. He shares 6 timeless trading rules that helped him reach millionaire status before his first year was through.</a></strong></p><p><a href="https://www.businessinsider.com/trading-strategy-market-wizard-chris-camillo-shares-secrets-to-millions-2020-12#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/what-if-jump-off-international-space-station-2018-6">What would happen if you jumped off the International Space Station</a></p>
Click here to read full news..