Buy a Stock is a Business Partnership

Posted on February 23, 2016 Written by

Ein55 Newsletter No 020 - image - Biz Partner

 

 

 

 

 

Throughout our lives, we have to make several critical decisions, eg. choosing our own profession and life partner.  We may not understand that buying a stock is actually same as finding a business partner, an important decision in life, especially if we want to grow our wealth.

Why some people become richer over the years?  This is because they get to know good business partners.  When we buy a stock, it actually means we are in partnership with someone doing business together, could be short term or long term partnership.  If our business partners could make money, we would also profit from them because the company earning could be shared with us in the form of capital gain (higher share price) and passive income (dividend).  If we make friends with partners who are losing money quarterly and yearly in business, this is as if burning money, we will lose out in the long run with these junk stocks.

Therefore, it is important to learn how to choose the right business partners who could make us richer over the time.  One could perform fundamental analysis to analyze the company performance through studies of 3 financial reports: income statement, balance sheet and cashflow statements.  However, choosing the right partner (stock) also requires the right timing.  We have to pay different prices to make friends with them, depending on how many friends they have now.  When there are many “likes”, usually the friendship is very costly, one has to pay a high price to buy a desired stock in bullish market.  On the other hand, when a good business is emerging or when the investment market is bearish, they will have less friends, it will be easier for you to make friends with these giants stocks or business partners at low cost because you pay relatively lower share price.

After we choose our career or life partner, it is hard for us to switch.  However,  we could have many choices for business partners because we could choose what stocks to buy.  A wise investor would review the investment portfolio regularly, ensure the business partners are strong, occasionally could be replaced with new blood to strengthen the future performance. When you like any good fund or business in the world, as long as they are listed in stock market, you could make friend with them easily by buying their stocks, just wait for the right timing.

Both traders and investors should learn the unique Optimism Strategies developed by Dr Tee to choose strong global stocks as the right business partners will help you to grow your wealth.

Filed Under: Fundamental Analysis, Stock Market, Value Investing Tagged:

Golden Investing Opportunity is for those Properly Prepared!

Posted on February 15, 2016 Written by

Ein55 Newsletter No 019 - image - Opportunity

“For those properly prepared, the bear market is not only a calamity but an opportunity.” Sir John Templeton (Investing Master)

The safest time to enter stock market is usually after the correction, main difference for a trader and an investor is on how much discount is needed.  A wise shopper would wait patiently for the Great Singapore Sales to buy desired products in bulk at significant discount.  Similarly, an expert trader or seasoned investor would wait for the sales of desired stocks, when majority of the people are still fearful, only then the share price could fall to an attractive level.

The up and down in stock prices reflect both the business performance and the emotions of traders.  The best time to buy stocks is when people worry the sky will fall down but the same business still makes money consistently each day.  Such golden opportunities of investing only occur during global financial crisis, when majority of global investors are fearful, only then they would let go their most valuable stocks at tremendous discount.

3 major banks in Singapore have fallen more than 20% in share prices over the past 6 months.  Is it time to buy these giant stocks cheaply?  The current global market corrections could be a good opportunity for traders but it is still insufficient for value investors who aim for more than 50% discount of such blue chips, proven historically in each economy cycles.

How long should the investors wait for the giants to fall down?  We don’t have to time the market because the future is unpredictable, both the financial news and political economy could affect the stock markets daily.  However, there is a predictability within the unpredictability, if we could wait patiently, preparing for each opportunities to enter the market, aligning the strategies with own personalities as a trader or an investor.

Optimism Analysis is a probability calculation, both for trading and investing.  We would position ourselves to have higher chance of winning with limited downside, risk-to-reward ratio should be at least 1 to 2, every $1 of risk in investment should potentially bring $2 of return.  Gambling could give special edge to the casino, while Optimism Analysis could give unfair advantage to the traders / investors if ones could wait patiently to be the minority who could gain from the majority.  Golden opportunity is for those who are properly prepared, equipped with the investing knowledge!

 

Filed Under: Market Cycle Investing, Market Optimism, Stock Market Tagged: , ,

Strategies for 3 Personalities of Traders and Investors to Profit in Bearish Stock Market

Posted on January 22, 2016 Written by

Ein55 Newsletter No 018 - image - success

Many traders and investors lose money in the past few months during global stock market correction.  With STI < 2600 points, there is a strong fear in the market. I have clearly pointed out in the past that greed and fear will continue to influence people to make wrong decisions.  We need to position our investment, choosing stocks with different characters, aligning with our personalities.

Here are suggestions of trading/investing strategies for 3 unique personalities (Short / Mid / Long Terms) to profit from the current bearish stock market with 4 decisions of Buy, Hold, Sell/Short, Wait.

1) Short-Term Trader (buy/sell every few weeks)

Strategy: Short / Wait.

Choose stocks with weak fundamental and bearish trend for the past few months (aligning with major stock indices), short with CFD for stocks at high optimism to profit from the falling market.  Most people only know how to long the market, therefore either lose money or doing nothing in the past few months of bearish market.  Trading could be 2 ways (long / short), as long as the trend is clear, either bullish or bearish markets could be opportunity to make money.

If shorting (requires training) is not a preferred style, those who want to buy low sell high, has to wait for a few more weeks for the global stock market to recover for short term, then long on stocks with positive trend. 

As a short term trader, not every day is a trading day, we need to wait patiently for the best opportunity of the weeks to long or short.  Short term trading is more speculative, reacting quickly to market news, therefore one has to apply Short-term Optimism + Technical Analysis (both price and volume) to have a high probability trading.

 

2) Mid-Term Trader (buy/sell every few months)

Strategy: Wait / Long.

The current market correction (20-30% for some stocks) is attractive for mid term traders who have higher risk tolerance level and looking for higher potential return than short term trading.  Since the short term trend is still bearish, one could wait patiently for the global stock recovery for the next few months, then buy those stock with strong fundamental stocks.

If your stocks are trapped in the stock market, likely now is at low optimism, too late to sell now.  Wait till the next rebound or rally above the support again, target to sell at intermediate high, either to minimize the losses (if bought too high last time) or making some profit.  Apply Mid-term Optimism analysis with integration of Technical and Fundamental Analyses as main strategies.

 

3) Long-Term Investor (buy/sell every few years)

Strategy:  Wait / Long.

Usually long term investors need to wait 5-10 years (typical economy cycle) for global financial crisis to buy strong fundamental stocks safely at amazing low price, future potential could be 50-200% higher.  Current global market correction is still not severe enough, there is room for further correction. Therefore, long term investors should wait patiently, could be next 6-12 months, partly depending on the political economy, ones could enjoy the best performance as the golden investing opportunity could be coming soon.

Apply long-term optimism with fundamental analysis to start prepare yourself for this gift from heaven in near future.  Blue chips will have more than 50% discount in stock prices, most people will get panic but you could profit from fears of others.  However, investor has to accumulate bullets (cash) to have chance to buy low and sell high.

 

Filed Under: Market Cycle Investing, Market Optimism, Market Outlook, Personal Analysis, Stock Market, Trading Tagged: ,

Ein55 Charity Course for Both Graduates and Needy People

Posted on December 2, 2015 Written by

Dr Tee is not profit driven for his investment education programs, aiming to setup a low-cost, high-quality and sustainable platform for the general public to learn the right way of trading and investing, from free public workshops, low-cost 5-day course to long term coaching program for the graduates.  Dr Tee is supported by a team of graduate mentors (Chye Tin, Andrew, William, James, Victor and Kee Min), who are senior traders or experienced investors. These graduate mentors integrate their own trading and investing systems with Optimism Strategies learned from Dr Tee several years ago. After they become successful, they also have decided to contribute back as volunteers, helping Dr Tee to provide close guidance to Ein55 graduates through various graduate mentor courses.

On 29 Nov 2015, Dr Tee and graduate mentor Chye Tin, together organized the first Charity Course on REITS and Business Trusts for the graduates.  It is a huge success, the course was sold out within 12hr, because the graduates understand they are contributing to charity while learning useful investment knowledge.  The net income of the course with top up of personal donation, total amount of S$10,000 is donated by Ein55 Graduates to Tzu Chi (慈济) Foundation, accepted by the Deputy CEO of Tzu Chi Singapore, Mr Khoo on the same day.  The charity course has inspired more graduates, including Mr TG Ng, a successful business man, who matched the same amount of final donation of $10,000 by Ein55 graduates, total of $20,000 now is available to help more needy people through Tzu Chi Foundation (Singapore).

Below is a group photo of Dr Tee (red shirt), together with 6 graduate mentors and Mr TG Ng.

Chye Tin who is Ein55 Graduate Mentor, has committed to develop more charity courses for Ein55 graduates (about 1200 as of now, after graduating from 5-day course by Dr Tee) in future, ranging from investing for income (REITS/Business Trust and High Yield Portfolio) to investing for capital growth (Discounted Asset Strategy and Earning/Cashflow Strategy).  These are valuable strategies from his decades of personal experience, sharing without financial return to Ein55 graduates, net income will be donated to Tzu Chi.  These high quality courses are bonus for Ein55 graduates, integrating well with Optimism Strategies learned from earlier 5-day course by Dr Tee.

Here are valuable feedback from some Ein55 graduates who have benefited from the last Charity Course on REITS/BT taught by Chye Tin:

1) Mach Goh: “Chye Tin is a meticulous mentor and give 100% effort in sharing his knowledge.on REIT & BT. His detailed analysis of the REIT & BT far exceeded my expectation. Thumb up 10/10!!!”

2) JS Tan: “Personally i can feel that Chye Tin is a good mentor with kind heart and deep knowledge. My aim is to be successful of myself, and i will help more peoples by donating my knowledge or my wealth back to the society.”

3) PT Kok: “It’s very well integrated with Ein55 styles – benefited many including myself.  I would recommend the instructor or his team members to conduct more sessions for the benefit of majority who missed it as soon as possible – dun miss the next market cycle to enter.”

4) KS Lai: “This course has helped me to have deeper understanding of factors affecting the performance/total return of Reits when combine with Optimism method.”

5) GL Lee: “Chye Tin is very meticulous and generous in sharing very detailed case studies as well as useful templates with all students attending the course. It covers both theory and practical in a very logical and progressive manner. I am sure it will benefit all students who have the diligence and patience to put them into practice. At the same time, I highly commend Chai Tin and Dr Tee for making this course a charity event.”

6) SB Tay: “The instructor presented very well. The course notes were well prepared. The instructor must have done thorough research on the subject before the presentation and was very confident during the presentation. The Optimism Level was applied throughout the presentation.”

7) Vincent Seow: “Chye Tin is a very knowledgeable and experienced investor; he holds no barred in sharing his investing experience with the class.”

8) Albert Tay: “这個輔導課兼提醒学生通过義務服务或樂捐幫助社会的弱势群体。我深信每位学生或多或少，当他们投资有良好的成绩時更不会忘記需要幫助的弱势群体。今天這課，能够幫助我更明白REIT 及BUSINESE TRUST 的概念，如何分析REIT 及 如何用乐观指数分析投资海外股票市场中的REIT以降低風險。所講的概念与所分析三個公司的案例都能系统化的輔導有心学習的人。”

“Ein 55 股票高利润秘诀将是我在投资道路上的指南針。這個課程教学生具有宏覌与微观的相関分析相关概念来分析投资，加上技术分析上的活用与投资心理調整的配合，特别是乐观指数(Optimism)的概念，是外面学不到的。”

 

Filed Under: Stock Market, Value Investing Tagged: ,

Fresh from Oven – Download eBook by Dr Tee: Global Market Outlook 2016

Posted on November 24, 2015 Written by

Ebook Cover 2016

I have just finished writing the eBook on Global Market Outlook 2016.  You may download from this link:
https://www.ein55.com/free-public-education-on-investment-programs-by-dr-tee/

Please feel free to forward the latest eBook 2016 to friends. You and your friends are also invited to attend the workshop on Market Outlook 2016, next 2 dates will be on Nov 26 and Dec 20. See below for details of registration.

====================================
Table of Contents
1.  Mass Market Sentiment Survey
2.  Review of 2015 Global Markets
3.  US Market Outlook
3.1  US Government Debt Limit
3.2  Tapering of QE3
3.3  Fed Interest Rate Hike
3.4  US Job Market
3.5  US Property Market
3.6  US Bond Market
3.7  US Dollar vs Commodity (Gold / Silver / Crude Oil)
4.  Regional Market Outlook
4.1  Europe Market
4.2  China Market
4.3  Hong Kong Market
5.  Singapore Market Outlook
5.1  Singapore Stock Market
5.2  Singapore Property Market
6.  Conclusions and Recommendations

 

Filed Under: Macroeconomy, Market Cycle Investing, Market Optimism, Market Outlook, Property Market Tagged: ,

Profit in Stocks from Commodity Market Cycle (Oil & Gas, Palm Oil, Mining, etc)

Posted on October 5, 2015 Written by

Commodity

Every major investment market (eg. stock, property, commodity, forex, bond) has its own unique market cycle. A wise investor could combine 2 market cycles of 2 different markets to maximize the potential gains.

Currently, regional stock markets have diversified performance.  Major economy such as US, China and Germany are still at moderate to high optimism levels.  At the same time, countries with GDP depend heavily on commodity, eg. Malaysia, Indonesia, Australia, are suffering in slower economy due to declining commodity prices.  Their stock markets are at low optimism level now, risk seems to get higher with political uncertainty and weaker currency.

The recent free-fall in share price for Glencore, major global commodity stock is an alert to the whole world, both commodity and stock markets. At the same time, local commodity related stocks such as Oil & Gas (Keppel Corp, Sembcorp Marine, Ezion, etc), Palm Oil (Golden Agri, First Resources, Wilmar), as well as overseas commodity related sectors (eg. mining in Australia), are recording huge correction is prices over the years.  This could be a rare opportunity to buy during a crisis but many people do not know how to take this advantage.

The secret of making money in investment is simply Buy-Low Sell-High. However, most traders and investors are too normal, therefore their emotions will swing with the market news, ending Buy-High Sell-Low.  Commodity related stocks locally and globally are very attractive in prices but whoever dare to buy, could end up buy low and get lower, eventually may sell lower due to fearful outlook. The dilemma is how to measure low and high, how low is considered low? It has to be 20%, 50% or more discount in price?

In the past few years, STI component commodity stock, Noble Group, share price has been declining from over $2 to about 40 cents now, more than 80% correction in prices.  At which level, share price may be supported?  When is the right time to enter?  The decision requires good understanding of fundamentals of commodity and stock market cycles.  Commodity market cycle now is in winter season while stock is near to summer time.  A wise trader or investor would align these 2 unique market cycles in one’s trading plan or investing strategy.  There is a limit in falling in price, as long as the reason is not due to fundamental of company is getting worse, eg. declining business with little asset or cash to pay for excessive high debt.  Not everyone is master of fundamental, therefore a stock price could be over-corrected based on declining in business (eg. due to commodity market downturn).  For the case of Noble Group, the accusations by Iceberg Research and Muddy Waters, resulting in share price falling below $1, all the way to 40 cents, is mainly a reflection of traders’ fear.

The safest time to buy a stock is when everyone is afraid the sky will fall down while the business is still operating normally with consistent performance. Such opportunity requires patience.  Opportunity of fortune is for someone who is prepared.

 

Filed Under: Commodity Market, Market Cycle Investing, Market Optimism, Market Outlook Tagged: ,

Global Stock Market Crash?

Posted on August 25, 2015 Written by

Ein55 Newsletter No 017 - image - Market Crash

Global stock markets of 4 major economy: US, China, Japan and Germany have achieved 75% optimism. Therefore, it is not a surprise to see major correction in the past 1 month. We should follow Optimism from Level 1 (individual stock) to Level 2 (sector) to Level 3 (country/region) to Level 4 (world).

Although Singapore STI and Hong Kong HSI have been only 50+% optimism in the past few years, they are smaller market, we need to follow a bigger market to evaluate our probability of success with Optimism. High optimism = high risk, 75% World Optimism means the chances of falling down is 75% while there are only 25% chance to go up. Don’t over-trade or over-invest, keep at least 75% cash as world Optimism has reached 75% optimism. If we follow the rule of money management, taking profit with higher optimism, the risk could be minimized.

For those who want to grab on the opportunity of falling giants of global stock markets, adding Technical Analysis (TA) will be helpful because the falling knife could be severe, your personality may not be suitable to buy low with downtrend. Regardless it is a major correction (mid-term) or Level-4 (world) crisis at longer term, we should consistent to buy low (either long term, mid term or short term) and sell high later. If we could diversify over 10 different giants (through Fundamental Analysis, FA), even if the giants fall down, the chances of recovery is very high especially if the price correction is mainly due to the human greeds and fears (Personal Analysis, PA), not the FA (economy or company business performance).

TA = FA + PA

 (Share price is a reflection of business performance and traders emotions)

We shall continue to apply this FTP (FA + TA + PA) analysis around the Optimism Strategy to profit from the global stock market in a safe way. There is no need to guess the direction of the market, low enough, we could enter; high enough, we will exit. The low and high shall follow our personality for short term trading, mid term trading or long term investing. New Level-3 giants are falling down (eg. Malaysia, both stock and currency markets), grab on the opportunity to time yourself with consideration of Level 1-4 Optimism.

 

 

 

Filed Under: Macroeconomy, Market Optimism, Market Outlook, Stock Market Tagged: ,

Q3/2015 Global Stock Market Correction: Mid-Term Opportunities to Buy Low Sell High

Posted on July 16, 2015 Written by

Chart of Global Stock - 2015-07-07

On 8 Jul 2015, I shared a newsletter when many readers were troubled by the global stock market correction (which turned out to be a mid-term low point if you compare with later second chart).  Figure above shows that in the past 1 month with charts till 7 Jul 2015, global stock market encounter series of negative news, from Greece crisis, bullish turned bearish China market, to speculation of possible US interest hike, etc.  As a result, most traders get worried, following herd mentality to exit or dare not enter the stock market again, especially observing more than 30% correction in China SSEC index.

After 1 week later, now (as of 15 Jul 2015) the global market has regained the confidence after Greece crisis has a new political solution, China stock market is strongly supported by the government. The figure below shows a strong rebound in global stock market. The last fearful point on 8 Jul 2015 happened to be a low valley.

Chart of Global Stock - 2015-07-14

 

“Normal” retail traders would wait for friends around them to make money first, after share price is up more than 10%, only then having the confidence to enter the stock market at relatively high price.  This is happening in China stock market now, those who got burnt with earlier 30% fall, some start to try their luck again with rising price.

Similarly, when market turned bearish, most people are losing money, despite significant discount given, majority of the traders would prefer to wait.  They have to pay for premium in price to exchange for confirmation in trends to overcome their fearful emotion.  The mentality of buy high sell higher depends on the support of market speculation which may not be sustainable. Any major global news could potentially erase the speculated gains overnight.  Since we cannot accurately predict the future, we need to always buy low sell high to put ourselves at low risk, regardless you are a short term trader or a long term investor, only difference is just the timeframe of interest: buy low sell high for 1 month or buy low sell high for 5 years.

In a bullish stock market, as long as the optimism level is not too high, every correction due to bad news is an opportunity for safe entry for mid-term trading.  Investing Master, Jim Rogers’ open secret of success is “Buy Low Sell High”, but how low is considered low? The world’s richest investor, Warren Buffett, has a famous saying of “Be greedy when others are fearful”, but how fearful is considered too fearful?  The Ein55 Optimism Investing Strategy developed by Dr Tee will provide the answers.

 

Filed Under: Market Outlook, Stock Market, Uncategorized Tagged: , ,

Investing Strategy to Profit from the 10 most valuable brands in the world

Posted on June 19, 2015 Written by

Even if one does not know which good stock to buy, top 10 brands are definitely Giant stocks. Ein55 graduates could perform Optimism + FA (Fundamental Analysis) + TA (Technical Analysis) + PA (Personal Analysis) of these 10 brands to time the investing clock for entry/exit.

10 most valuable brands

 

Even if it is long-term high optimism (quite likely based on current global stock market), not suitable for investing, you may still consider these giants in the next global financial crisis (when it will be at low optimism again at long-term), usually the share price will be cut by half. Alternatively, you could consider mid-term or short-term trading opportunities after correction to buy low and then sell high at the high of trading cycle.

This is how to profit from 4 steps of Ein55 Investing Styles (details will be given in Dr Tee workshop):

Step 1 = Find the Giant

Step 2 = Wait for the Giant to Fall Down

Step 3 = Help the Giant to Get Up

Step 4 = Say Goodbye to the Giant

If we are patient, we could find the most valuable investment (stock, property, commodity, forex, bond, etc…) at the lousiest price, owing to the greeds and fears of the majority. Ein55 Optimism strategy is a unique investing method, learning how to be the minority who are usually the big winners.

 

Filed Under: Market Optimism, Stock Market Tagged:

Buy or Sell in May 2015 with Bullish China and Hong Kong Stock Markets?

Posted on April 28, 2015 Written by

For a complete understanding of the investment market, we need to perform 4 levels of analysis:

L1 = individual stock, L2 = sector / industry, L3 = country / region, L4 = world.

These 4 levels will interact with one another to generate the complex stock market responses.  From the past 5 years of regional stock indices (see Figure) in Singapore, China, Hong Kong and USA, we could observe the following important trends and correlations, which could help us in making the right positions for the next 1 year:

1)      In the earlier stage, due to different political economy policies, US and China have been diverged in the trends, China has been bearish after the tightening of cash supply since 2009 while US has been consistently bullish after QE 1,2,3 with near-zero interest rate.

2)      In the past 1 year, supported by strong recover of economy, US could still maintain the uptrend in stocks, continue to create new record high in stock market for S&P500, Dow Jones Index and Nasdaq.

3)      With tapering of QE3, risk of domestic inflation is lower, China could loosen the monetary policy to accelerate the growth of economy, resulting in the recent rally of SSEC index from 2000 points to 4500 points, sentiment of market is very positive.

4)      Singapore (STI) and Hong Kong (HSI) are closely correlated like twin markets over the past few market cycles. In the past 5 years, variations between 2 markets are within 10%.  Fund managers and retail traders/investors know both market well, the fund could flow smoothly between 2 markets, although they are not officially “connected”.

5)      Both Singapore and Hong Kong markets are followers, sandwiched between US and China, world No1 and No 2 largest economy.

In conclusions, China is fast in catching up with the lagging performance, pulling Hong Kong up along the way, while Singapore is likely to follow the twin in this rally.

Want to learn how to position yourself to profit from the current rally in regional stock markets?  How far could STI, SSEC, HSI and S&P500 grow eventually?  What are the stocks with tremendous upside? You could find all the answers here through high-quality free public workshops by Dr Tee

Ein55 Newsletter No 015 - image - Correlation of 4 markets

Filed Under: Market Outlook, Stock Market Tagged:
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