Dr Tee (Ein55)

When Technology Stocks Losing Momentum

Posted on April 29, 2018 Written by Dr Tee (Ein55)

Over the last few weeks, some technology stocks in Singapore follow the footsteps of US technology stocks, having significant correction in share prices, triggered by various negative news or market fear. Is it the end of technology stocks bubble or just a temporary price correction?

Strong fundamental technology stocks such as Venture Corp (SGX: V03) and Valuetronics (SGX: BN2) have dropped more than 25% in short term stock prices, disappointing many traders who hope to buy high sell higher with support of strong company fundamental. Other popular technology stocks such as AEM (SGX: AWX), Micro-mechanics (SGX: 5DD), Sunningdale Tech (SGX: BHQ), UMS (SGX: 558) also suffer various degrees of share price corrections, worrying the traders.

Here are the general strategies of momentum stock trading, not limited to only technology stocks:

1) Momentum stocks required strong support from business fundamental at least for the last 3 years for short term trading, proven growing business records of 5-10 years for longer term investing.

2) Due to bullish global economy with strong consumer market over the past few years, some technology stocks have been at long term high optimism with short term uptrend prices, momentum supported by strong business fundamental. This is as if walking on a layer of thin ice, mainly suitable for short term momentum trading to buy high sell higher.

3) When momentum of short term share prices are lost (could be triggered by earning alert, negative market news, etc) is a potential danger signal. A momentum stock trader needs to follow the trend to exit (eg. when a critical price support is broken), not to enter as a trader (aiming for 10% return) but hold as a long term investor when the stock market moves in opposite direction (potential more than 20-50% loss).

A trader at long term high optimism market would not guess the stock prices of next day, following trend to take action with support of strong business fundamental. Global technology giant stocks such as Facebook (Nasdaq: FB), has started to recover after significant price correction, however, the past momentum may be transformed into cyclic or swing trading. For Singapore technology stocks, beware of the sharp falling knives in bearish share prices, not to buy low too early which may result in lower share price.

Understand support and resistance with share price trends in Technical Analysis (TA), monitoring the business performance through Fundamental Analysis (FA), integrating Optimism signals at Level 1 (individual stock), Level 2 (sector), Level 3 (country) and Level 4 (world).

Regardless Buy Low Sell High (cyclic stocks) or Buy Low Hold Long Term (growth stocks or dividend stocks) or Buy High Sell Higher (momentum stocks), a smart trader or investor has to be consistent in own strategies, eg. What stocks to buy, When to buy/sell, aligning with own unique personality.

Learn from Dr Tee through free stock investment courses on 10 strategies of stock trading & investing.

Filed Under: Uncategorized Tagged: technology stocks

Crisis Stock Investing with 4 Qualities of Low Optimism Stocks

Posted on April 26, 2018 Written by Dr Tee (Ein55)

crisis stock investing

Crisis stock investing is investing in cyclic giant stocks, ideal for Buy Low Sell High investing strategy. Usually crisis may happen at business (Level 1, company losing money), sector (Level 2, bearish sector), country (Level 3, recession) or global (Level 4, financial crisis), creating different degrees of fear in the stock market, resulting in fall of share prices. Subsequently, when the market fear turns into greed, these crisis stocks may become uptrend momentum stocks, ideal for selling high.

There are 4 different qualities of crisis stocks with long term low optimism. An investor has to carefully identify the nature of crisis stock investing, understanding how the falling in share prices are induced.

1) Low Quality Low Optimism (L1 Crisis Stock Investing)

Long term optimism of stock is low, driven by decline in L1 business but L2-L4 are fine. Noble Group could be an example. Without consideration of sustainable business, pure strategy of Buy Low may result in Get Lower in share prices, which is a common pitfall for Technical Analysis. Both Fundamental Analysis (FA) and Technical Analysis (TA) should be integrated with Optimism Strategies with consideration of Personal Analysis (PA)

2) Average Quality Low Optimism (L2 Crisis Stock Investing)

Long term optimism of stock is low, driven by decline in L1 business & L2 (sector), while L3-L4 are fine. Examples include oil & gas crisis stocks in the last 1 year, casino crisis stocks 2 years ago, etc. It happens during the sector rotation which the sector market cycle may not align with the country/global economy cycle. If the sector is not a sunset industry, usually it would recover again as there is unique demand vs supply within each sector for investment.

3) High Quality Low Optimism (L3/L4 Crisis Stock Investing)

Long term optimism of stock is low, driven by decline in L1-L4 (business/sector/country/global financial crisis). More than 50% global cyclic giant stocks during global financial crisis would be affected in both business (drop in earning or even losing money) and share prices (L1-L4 from individual stock to global stock indices). Since the market fear at L3/L4 may not last long (global political leaders would take actions by then to save the whole world), the downside of global stock market is limited but an investor needs to have sufficient holding power through the cold winter time of global financial crisis. For example, many cyclic giant bank stocks may behave this way.

4) Excellent Quality Low Optimism (L4 Crisis Stock Investing with strong L1 Business)

Long term optimism of stock is low, driven by decline in L2-L4 (sector/country/global financial crisis) but L1 business is fine. Less than 10% global growth giant stocks during global financial crisis could still be profitable or even growing in business while the share prices falling relatively less (defensive in nature) than the average in global stock market. In fact, defensive growth giant stocks are suitable for Buy Low & Hold for long term investing, sell is an optional strategy.

The safest time to buy a giant stock is when everyone is afraid the sky will fall down while the business is still operating normally with consistent performance. This could be a rare opportunity to buy during a crisis but many people are too normal, do not know how to take this advantage to truly buy low sell high.

A smart investor may not need to consider only crisis stock investing. There are other strategies such as growth stocks, dividend stocks, undervalue stocks and momentum stocks, etc, may be integrated to form a balance stock investment portfolio.

Learn from Dr Tee through high-quality free stock investment courses.

Filed Under: Market Cycle Investing, Stock Market Tagged: crisis stock, crisis stock investing, global financial crisis

$110,000 Charity Courses for Tzu Chi (慈济) with Summary of Capital Growth Stocks

Posted on April 23, 2018 Written by Dr Tee (Ein55)

Dr Tee Charity Course for Tzu Chi (慈济)

Dr Tee, Ein55 Mentor & Graduates have together organised 6 charity investment courses (REITs/Business Trusts in Nov 2015 and May 2017, High Dividend Stocks in Mar 2016 and Oct 2017, Discounted NAV Stocks in Sep 2016, and Capital Growth Stocks in Apr 2018) in the past 3 years, donating net income of around $110,000 to Tzu Chi 慈济 (Singapore). We hope to inspire more Ein55 Graduates to reach out the society, helping others who are in need. More importantly, they have also learned the secrets of making money through investment. When more Ein55 Graduates are successful financially, they could also contribute back to the society to help more people in future.

Here are key learning points from the recent Charity Course on Capital Growth Stocks:

1) Two approaches in investing for Capital Growth

– Asset Base approach – buy base on margin of safety via calculate it’s “Discounted” NAV of all present assets

– Earning-Cash flow approach – buy base on margin of safety via calculate it’s Intrinsic value using “Discounted Cash Flow” of future cash flow.

2) Discounted Cash Flow (DCF) model is the most common method to calculate Intrinsic value of a growing company, using future cash flow projections and discounts them using an expected annual rate to arrive to present value.

3) An economic moat is a structural business characteristic that allows a company to generate excess economic returns for an extended period. It protects a company’s profit from being attacked by business forces. Traditional management theory terms as “Sustainable or Durable Competitive Advantages” or simplify terms as “Entry Barriers”.

4) A company with economic moats able to generate higher level of Economic Profit compare to its peers and can sustain competitive advantage for a long period of time. Economic moats drive value creation that leads to revenue growth, high profitability and high return on invested capital. The free cash flow accumulated create economic profit, this is the real value creation company.

5) Here are 3 Steps in Stock Investing:-

– Identify businesses that can generate above-average profits for many years

– Wait until the shares price trade below their intrinsic value, and then buy

– Hold those shares until either the business deteriorates, or the shares become overvalued, or a better investment is found.

We should drive the money (helping others when you are successful), not driven by the money (making money only for own gain). Investors should learn the unique Optimism Strategies with FA (Fundamental Analysis) + TA (Technical Analysis) + PA (Personal Analysis) developed by Dr Tee to choose strong global stocks, buying them at low price, then holding for consistent dividend payout or selling for high capital gains. High-quality free stock investment courses are provided by Dr Tee to the public.

Filed Under: Personal Analysis Tagged: Charity Course for Tzu Chi (慈济), Tzu Chi, 慈济

Song of Stock Market

Posted on April 6, 2018 Written by Dr Tee (Ein55)

We may hear different song of stock market each day, sometimes could be a nice melody, sometimes could be noisy heavy metal sounds. Each of us is a composer of this song of stock, which is made up of both market emotions and fundamentals. Let’s learn to appreciate different type of song of stock market, position oneself with the right investing strategy:

1) Pop Song

– This popular song of stock market is welcomed by mass market, following trends together to buy up in a bull market. Mastery of this song requires understanding the mass market trends (eg. technical of share prices and fundamental business and economy), leaders of mass market (usually smart investors) would has more capital gains, last batch followers (usually retail investors who listen to news) may needs to pay for lunch when the music or song has stopped.

2) Rock Song

– This rock & roll type of song is similar to cyclic stock market, traders who enjoy the up and down in price rhythm, using volatility to create potential capital gains. Emotional control is key to through the cyclic song of stock market. There are different degrees of rock music, from little noisy market (short term trading) to highly volatile stock market (longer term market cycle trading).

3) Blue Song

– This sad song of stock market is welcomed by those who know how to apply the reversed strategy in stocks with shorting, making profits with falling down in share prices. While the mass market is in great pain during depression with different degrees of market crisis, this group of blue song lovers would enjoy the sadness of market, position correctly in an opposite direction of mass market.

4) Love Song

– Most people like love song but we should not fall in love with every stock. We could love a person for life, there are also stocks which long term investor could love for life time, with condition that it remains a giant stock with growing cash flow.

5) Country Song

– This group of country song lover also likes to invest in regional stock market through stock indices of country. The pace of investing is stable, little volatility, helping to calm oneself, making money with less stresses.

There are many other types of song of stock market, sometimes could be a blend of different songs, the style could change from time to time, from pop to rock, etc. Which is your favorite song of stock market? We don’t have to force oneself to listen to song composed by others, when the melody is not right, we could walk away, staying out of the stock market. When the right song is back, we could join the stock market, applying the preferred stock trading or investing strategies, aligning to our interest or personality.

Learn from Dr Tee free investment courses to appreciate different types of song of stock market, discovering your interests in stock trading and investing.

Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)

Filed Under: Personal Analysis, Stock Market Tagged: Song of Stock Market

Don’t Put All Eggs in 1 Basket – Golden Egg Stocks

Posted on March 31, 2018 Written by Dr Tee (Ein55)

My family and I went to nearby farms in Lim Chu Kang yesterday during Good Friday holiday, children were excited in finding the Easter eggs hidden in Bollywood Veggies farm. We left Hay Dairies farm around 3pm+ just before the thunderstorm came, never expect the impact of mother nature is so much on farms including Chew’s chicken egg farm (widespread damage), resulting in significant losses. It is important to diversify to at least 10 stocks to minimize the unsystematic risks (business or operation related risks, including thunderstorm yesterday) by 70%, even if a stock may perform well in stock market with support of bullish global market. Don’t put all eggs in 1 basket of golden egg stocks.

Chew’s (listed in SGX: 5SY) is not just a producer of eggs, it is a promotion of healthy life style (eg. eggs with Omega X, etc). For small business such as Chew’s (a young strong-fundamental stock) which may not have a lot of resources, this Level 1 (business level) crisis would take some time for it to recover. If the business just depends on the farm in Singapore, then there is a concentration risk in operation.

There is another regional egg producer which is a super giant stock in Malaysia, which is truly a golden egg stock. The share price has gone up about 5 times in the last 1 decade (a strong growth stock), about 40% rally in share prices in the last 1 year (also a strong short term momentum stock). Ein55 graduates should remember when I shared the best global super giant stocks in the 5-day Ein55 course. If forgotten, you may visit Ein55 Graduate forum under thread of “Investment Opportunities” – “F&B Stocks”. Details will not be shared here as it may be used wrongly if the reader is not trained, may not understand why it is a super giant.

However, for systematic risks such as global financial crisis, it won’t help even if an investor buys 1000 stocks or large indices ETF because Level 4 (global stock market) risks could only be minimized with understanding of Optimism. In general, a smart investor would investing when price is less than value, reflecting by lower optimism. Current global stock market has been at high optimism, stock prices are well above the value, important decision is to sell high for the stocks, converting to cash, so that in near future, there is enough cash which is an important opportunity fund to buy low.

Learn from Dr Tee on how to setup a balance stock portfolio with dream team of 10 “golden egg stocks” in 1 basket, taking good care of these golden egg stocks which could give fortune to us over time.

Filed Under: Stock Market, Value Investing Tagged: Don't Put All Eggs in 1 Basket, Golden Egg Stocks

Political Economy Drama on Stock Investment

Posted on March 27, 2018 Written by Dr Tee (Ein55)

The fear of trade war between US/China has subsided with potential negotiation between 2 countries, ending the first episode of political economy drama. Logically, win-win is better than lose-lose for these 2 biggest world economy. This is a mind game (testing of patience, strength, flexibility, communication, etc), recent threat of trade war may not be the last move, more similar moves may be expected in near future episodes of political economy drama, stirring up the market volatility, creating opportunity for short term traders.

Despite short term recovery in global stock market, Dow Jones Index is still below 25000 points, S&P500 is still below 2700 points. The stock indices have to be above these 2 critical short term resistance to reestablish the upward trend with additional help of more positive monthly macroeconomic news in near future. In the short term, either “Double Top” or “Double Bottom” patterns may be formed. A short term trader would follow the market trend, considering both support and resistance, not just hoping for a future which is unpredictable.

Volatility is a friend for a trader (buy low sell high), an enemy for a value investor (buy low and hold long term). Use the market volatility to your advantage by aligning with your personalized trading or investing strategies.

Political economy drama is inherent within stock investment. The person in power may need to make decision with a complex process of considerations, aligning personal interest with own supporters at national level. Think in the shoes of these politicians. Do they want to destroy the global stock market and eventually economy? This is as if hitting own feet with big stone. However, sometimes there could be black swan event which may be beyond control of these political superpowers, a stock trader has to be responsive to any major change in market signal.

There are similarities in investing at business level (businessmen) vs country level (politicians). Learn further from Dr Tee on analysis of political economy drama which is reflected in global stock markets.

Filed Under: Macroeconomy, Personal Analysis, Stock Market Tagged: Political Economy Drama

US/China Trade War Impact on Stock Market

Posted on March 25, 2018 Written by Dr Tee (Ein55)

Global stock market has lost the short term growth momentum with new variable of potential US/China trade war impact on stock market, triggered by Trump latest political economy move.

The conditions for uptrend stock momentum is

US S&P500 > 2700 points

– now 2588 points, nearly break below 2581 points critical short term support

US Dow Jones Index > 25000 points

– now 23533 points, breaking below 23860 points critical short term support

US contributes to more than 50% stock value, therefore monitoring of S&P500 or Dow Jones Index help to understand the health condition of global stock market. After the 10% global stock market correction in Feb 2018 due to fear of higher US government bond yield, US stock market was recovering well above the 2 conditions above but breaking down recently due to the fear of political clashing between the Top 2 global economy, US and China.

Since the current high optimism market is more suitable for short term trading, it is important to follow the short term trend (buy when it is uptrend, sell/short when it is downtrend, wait/hold/do nothing when it is sideways) with consideration of support and resistance.

For a short term trader, safer approach is to exit first, enter again only after confirmation of short term uptrend. For an investor with higher risk tolerance level, need to monitor the level of support (aligned with own personalities) for plan for possible exit.

Political economy has added to the complexity of high optimism stock market. Volatility is getting higher, currently above critical level of 24, if sustainable above this level for more than 1 month, it will be a danger signal.

Remember global stock market is walking on a layer of thin ice now. Feel free to drop by Dr Tee next free investment course to understand the market outlook with US/China trader war impact on stock market (World, US, Singapore, China, Hong Kong).

Filed Under: Macroeconomy, Personal Analysis, Stock Market Tagged: trade war, Trade War Impact on Stock

US Interest Rate Hike

Posted on March 22, 2018 Written by Dr Tee (Ein55)

As expected, confirmed US interest rate hike to 1.5-1.75%. It is hard to stop the wheel of uptrend macroeconomy, higher GDP, lower unemployment rate, etc. This will lead the global economy and stock market towards positive direction.

However, due to high optimism stock market, any unexpected negative political action or financial incident could trigger the next global financial crisis which could stop the wheel of growing economy. Market correction (eg. threat of trade war, worry of interest rate hike or surging bond yield, etc) is actually healthy as it helps to prolong the bull run in stock market.

US stock market has been stagnant after the 10% correction in Feb 2018, S&P500 is still supported above 2700 points, bull market is still intact but short term momentum is slowed down.

US 10 years bond yield is near to 3%, US interest rate hike has another 1-2 year to catch up with similar level as bond yield. Global stock market is walking on a layer of thin ice, mainly suitable for short term trading (who may consider to buy), not for long term investor (except planning for exit).

A smart investor or trader would learn to adopt the right action (Buy, Hold, Sell, Wait, Shorting) aligning to own personality and current market condition. Sign up for free stock investment course by Dr Tee to learn 10 strategies of stock trading and investing (including impact of US interest rate hike and other indicators).

Filed Under: Macroeconomy, Market Outlook, Stock Market Tagged: US Interest Rate Hike

Ein55 Law of Stock Market Motion

Posted on March 12, 2018 Written by Dr Tee (Ein55)

Share price is a 3-dimensional movement, governed by Ein55 Law of Stock Market Motion:

Optimism = PA = TA – FA, [gap between price and value]
TA = FA + PA
z = f (FA, PA), function of FA and PA

where PA = Personal Analysis, TA = Technical Analysis, FA = Fundamental Analysis

It means share price (TA) which is the vertical Z-axis, is a function of X-axis which is business Fundamental Analysis (FA: strong or weak) and Y-axis (depth direction of roller coaster) which is market emotions with Personal Analysis (PA: greed or fear). Both the FA and PA could contribute to up and down in share prices (TA), main contributors to the Law of Stock Market Motion.

Ein55 Law of Stock Market Motion simply means that both market emotions and macroeconomy / business strength contribute to movement in stock market. Based on probability, a company which has consistent good performance in business will likely to perform well in stock prices over a longer term. Similarly, when there is an unexpected bad news or unpredictable outcome which results in stock market fear, the share price is likely to fall down. In the real world of stock market, both fundamental (FA) and emotions (PA) will be combined to form an unique condition of stock market on different day, therefore creating different share prices each day, hour or even minute.

When we buy a stock at low optimism, it means we buy when the gap between share price and value is the large, an undervalue stock with price below value. When we sell a stock at high optimism, it means the share price is much more than value, an overpriced stock.

Learn the Law of Stock Market Motion from Dr Tee FREE stock investment course to understand how the share prices could move up and down in the stock market.

Filed Under: Fundamental Analysis, Market Optimism, Personal Analysis, Stock Market, Technical Analysis Tagged: Law of Stock Market

Active Income from Job vs. Passive Income from Investment

Posted on March 11, 2018 Written by Dr Tee (Ein55)

An active income from job would stop after one’s retirement but a passive income from investment could continue with minimal monitoring required, eg. buying a portfolio of giant stocks or even property at low optimism price during the market crisis, holding long term or even a life time beyond retirement.

The beauty of investment (stocks, properties, commodities, forex, bonds, etc) is to provide an alternative source of passive income from investment to us, with little effort put in, in additional to own active income from professional job (engineer, teacher, accountant, admin staff, salesman, etc). Ideally, a combination of both active income from job and passive income from investment would provide a more stable dual engines of growth for our financial needs, supporting the growth of a meaningful life with lower risk.

We don’t have to be excellent in all areas of life. However, it could be risky to depend on only 1 professional job or skill after investing 16-20 years of time investment (primary school, secondary school, tertiary school) in mainstream school. This is called concentration risk for income. What if there is a drastic change in industry needs, the job becomes obsolete in the next 1-2 decades? Then, the time investment would be wasted and family could be at risk as the active income from job may not be sustainable anymore.

Good habits in life leads to higher probability of success in life as well. If one likes to study, chances of doing well in academic is high. If one practices an unique skill with years of hardwork, likely the active income will be higher with salary increment or better business. If one pays attention to business fundamentals, the confidence of buying and holding a good stock for capital gains and passive income from investment will be strong. If one is sensitive to trends and changes in the market, will be more likely to be a good trader in stocks.

Initiative the positive habits in life for active income from job and passive income from investment. Start the second engine of passive income from investment, learning from high quality free investment courses (Optimism Strategies + Fundamental Analysis + Technical Analysis + Personal Analysis) from Dr Tee.

Filed Under: Personal Analysis, Stock Market Tagged: passive income, Passive Income from Investment

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