Market Optimism Archives - Page 3 of 7

10 Bullets of Crude Oil USO ETF Investing (十重天机)

Posted on March 31, 2020 Written by Dr Tee (Ein55)

If you stayed till 2am Singapore time last night, you would have chance to trigger the first silver bullet, entry to buy WTI crude oil below US$20/barrel (only lasted for less than 1hr, heavy correction of 9% in 1 day) through USO oil ETF. This is last 18 years low for crude oil, mainly due to combination of crude oil price war and low demand of crude oil during Coronavirus pandemic, a rare crisis with 2 black swans.

I have shared this rare opportunity of crude oil crisis with low optimism, the first target US$20/barrel in earlier post a few days ago. At this price, crude oil is much cheaper than mineral water of the same volume (about US$50/barrel or US$0.30 / liter if you are more used to this unit of 1 liter bottled water price). Does it make sense?

If you miss the opportunity last night, not to worry, there could be 10 levels of opportunities (十重天机) ahead. Let’s learn together from Dr Tee on how to trigger 10 silver bullets for crude oil investment.

Over the past 3 decades (with multiple global financial crisis in between), crude oil (WTI) price was ranging from the lowest of about $10/barrel to $140/barrel. For simplicity, we may take $1 – $100 as possible range of crude oil price for next 10 years.

$100 = High Price (Bullish Economy / high optimism stock)

$50 = Fair Price (Average Economy / mid optimism stock)

$25 = Low Price (Bearish Economy / global stock crisis with low optimism)

Below $25/barrel with very low optimism, an investor could position in 10 opportunities for investing with 5 levels of crisis (from severe to disaster, prices may not really follows the crisis, just an illustration of how crisis causes more downside of crude oil).

Initially, prices would move in downtrend (more suitable for long term value investing with contrarian approach or even short term trader for shorting when breaking below the support), 5 possible levels of crisis (Level 1 is confirmed):

$20 = L1a = Price War Crisis (record on 31 Mar 2020)

$15 = L2a = Coronavirus Crisis (low demand 6-12 months)

$10 = L3a = Global Financial Crisis (1-2 years bearish economy)

$5 = L4a = Great Depression (Coronavirus last over 1 year without vaccine, most human in the world stay at home)

$1 (or even lower price, $X) = L5a = Nearly end of the world (no need to have crude oil or a smart scientist found a way to get free or cheaper energy source)

After reaching the bottom (no one knows, only history could tell, $X-$20, may not go through all the 5 levels), then it will recover again in a reversed way (uptrend prices):

$1 = L5b = recovering from “human crisis”

$5 = L4b = recovering from Great Depression

$10 = L3b = recovering from Global Financial Crisis

$15 = L2b = recovering from Coronavirus Crisis

$20 = L1b = recovering from price war

Subsequently, crude oil may move higher to normal range of prices, between $20 – $100+/barrel, averaging around $50/barrel. For those who are patient with strong holding power of over 3 years, there is a good chance of capital gains in future if one believes the 5 levels of crisis above are possible but low chance. Even if price war continues, at $20/barrel, Russia would start to lose money as its production cost is $20/barrel. Saudi could last longer as production cost is only $5/barrel but high national expenses won’t allow oil price to remain at low level for too long and other OPEC / non-OPEC countries may go bankrupt at this price. US, China and big funds in the world may also use the opportunity of low oil price (below $20/barrel) to buy for storage as strategic energy weapon, or simply sell higher price in future.

Some traders may take action to short when $20 support is clearly broken down. Some investors (contrarian type) may take action to gradually buy at historical 18 years low price (perhaps next target will be $15, $10, $5, $1, etc).

Question is will crude oil drops to $0 and will human forever stay at home more than 1 year with Coronavirus?

If not, it means crude oil is a commodity giant, every crisis at low optimism is an opportunity. There are 3 different strategies, counter-trend and/or follow-trend. Assuming, all 5 levels of crisis (although unlike, actual case could be between L1-L5), then one may apply multiple entries, eg (10 times x 10% capital), (5 times x 20%), (2 times x 50%) or simply 1 x 100% (1 bullet, could be due to limited capital).

1) Counter-trend (eg. 5 x 20% in downtrend L1a-L5a)

1.1) Fixed quantity method (eg. 100 units for each price)

Average price

= ($20 + $15 + $10 + $5 + $1) / 5

= $10.20

It means there is no need to guess the levels of crisis, simple average down could get about $10/barrel easily. This is 50% discount compared with someone with 1 entry at $20 with 100% capital.

1.2) Fixed capital method (eg. $100 per entry)

Total units = ($100/$20) + ($100/$15) + ($100/$10) + ($100 / $5) + ($100 / $1) = 142

Average price = ($100 x 5) / 142 = $3.50

This average method allows more units purchased at lower prices, therefore achieving a even lower average entry price.

2) Follow-trend (eg. 5 x 20% in uptrend L1b-L5b)

Average price will be same as counter-trend, depending on which levels are experienced.

3) Counter-trend + Follow trend (eg. 10 x 10% in downtrend L1a-L5a + uptrend L5b-L1b).

Results will be same as above but with more entries (more diversification), depending on which levels are experienced.

Assume, only L1a-L3a ($20 – $10) with 3 levels of crisis, one could still get $13 as average price with fixed capital method over 3 entries. This method is different from dollar cost averaging which buys all the time (low and high prices). This method requires low optimism to trigger multiple entries, high optimism to trigger multiple exits (future topic when market is bullish again to sell one day).

Learn further from Dr Tee for both trading (eg. shorting crude oil in bearish market to make money) and investing (eg. buying crude oil in bearish market with value investing). Contrarian investing has risk of buy low get lower, therefore needs to be supported by giant investment (eg. crude oil, gold, property and over 1500 global giant stocks with strong business fundamental). An investor may also integrate trading into investing, only enter during uptrend phase but there is a risk of missing out (eg. price may touch $20 and rebound forever). So, align the strategy with own personality, either trading or shorting, there are many ways to profit from current crude oil crisis and global stock crisis.

Ideally, buying giant dividend stocks (about 100+ in the world) at low optimism prices with high dividend yield is even better than crude oil investing because one could collect over 5% dividend return in next few years (better than fixed deposit in bank with 1+% interest rate) while waiting for winter time is over, applying similar methods of entries but first silver bullet to trigger (first entry) will depend on unique optimism level of each stock, this is 1 of 55 investing styles developed by Dr Tee.

What is the chances of winning in crude oil for entries below $20/barrel if one has holding power of over 3 years (typical global financial crisis is 1-2 years)?

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3 Strategies for Crude Oil ETF (USO) 大小通吃

Posted on March 29, 2020 Written by Dr Tee (Ein55)

When WTI crude oil falls below US$20/barrel during current Crude oil price war (between OPEC and non-OPEC), price is cheaper than mineral water (same volume) for some countries, it is attractive to buy USO (WTI oil etf) for long term, I am not surprised if Jim Rogers (long term commodity lover) may be accumulating when crude oil prices are at low optimism.

OPEC (Saudi, etc) and Non-OPEC (Russia, etc) could not sustain for long term (over a few years) with WTI < U$20, despite low production cost (about US$5/barrel for Saudi, about US$20/barrel for Russia) as national expenses of oil produces countries are also high, money from crude oil is main source of national revenue.

One may leverage on crude oil crisis, either investor or trader could benefit if aligned with own personality. WTI and Brent crude oil prices correlate well, differences are about a few dollars per barrel of oil prices. When Brent is below US$25/barrel, WTI would be near to US$20/barrel, so either price may be used for analysis, then easy to take action through USO (WTI oil ETF).

Here are 3 main strategies to invest in USO crude oil ETF:

1) Long term investors

1.1) Contrarian investors

This is suitable only if one could hold more than 3 years, use low optimism and strong holding power on a commodity giant (oil won’t drop to $0, similar to property or land, also a giant by default). Risk management includes diversification (not just invest in crude oil) with position sizing and progressive entries (eg. 10 times x 10%).

Assuming $20/barrel is the first target (use either WTI or Brent for analysis, be consistent), trigger the first buy, then when drop to $15, $10, $5, $1 (similar to car COE drops to $1, assuming something nearly impossible happens), trigger possible more entries until extreme low optimism (no one would know the lowest point but likely not $0).

Saudi and Russia are pressing the oil price down but US & China and global giant funds, may standby to buy low as national reserves. Crude oil in the world is limited in supply, therefore it has its intrinsic value, especially world needs crude oil for energy (more demand when Coronavirus crisis is over).

1.2) Trend-following (short term traders / long term Investors)

After reaching lowest point one day (only history could tell), crude oil would start to recover. The same group of investors may use the remaining capital to add more positions (still low optimism). Traders who long would also join at this phase for short term trading

Since the market trend now is bearish, trend-following investors or investors who long the market would choose “Wait” action.

2) Short term traders (shorting)
This is suitable for short term trading, aligning with current bearish trend, aiming for every major support, eg $20, $15, $10, $5, etc (these levels are just for examples)… whenever breaking below, shorting would be initiated. Traders protected by position size and cutloss (risk could be high for leveraged trade in a volatile market). S&P 500 trend over the past 1 month of falling 30% following by over 10% of weekly gain is a good example of intense fight between bull and bear.

So, one could “Buy” (contrarian investors), one could “Wait” (trend-following investor or traders who long), one could “Short” (short term traders), all 3 actions are correct if aligned with own personality. If one follows others to take action, then all 3 actions could be wrong.

Since crude oil is a giant, crisis in price is an excellent opportunity to invest with at least 3 strategies. Learn from Dr Tee 4hr Free investment course on how to take actions in crude oil and global giant stocks.
Register Here: www.ein55.com

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Filed Under: Commodity Market, Market Cycle Investing, Market Optimism, Market Outlook Tagged: crude oil, etf, investment strategies, uso

Action in Global Stock Crisis 心动不如行动

Posted on March 24, 2020 Written by Dr Tee (Ein55)

Market analysts usually like to predict the future. Before 1 month ago in bull market, some still predicted how high US stock and economy may surge. Now, of course predict how low it may drop to the bottom.

Some readers may be confused of so many future market directions, unsure which one to follow, ending up as an observer without taking any action, missing the boat eventually.

It is human nature hoping to buy at the lowest or sell at the highest point of stock market. However, it is not practical to follow these predictions before actions. Each of us need to have a strategy aligned with personality, may not need to be a long term investor, could be short term or mid term trader.

In general, long term investor only need to buy at price below the value with significant discount, no need to buy at the lowest (if got it, treat it as a bonus but not a must to have). An investor just need to define % discount acceptable to oneself, similar to a shopper going for shopping with sales, will trigger a buy when % discount is more than expectation.

For traders, one may add trend-following indicators on prices, waiting for reversal before entry (now is mostly for shorting), no problem if new prices are higher, a confirmation of new trend (eg bull to bear) but always follow SET plan: Stop Loss / Entry / Target Prices.

Action is more important after reasonable analysis (no need to be very precise, especially for longer term investing but overall direction must be correct). Press the button when signals aligned with own personality, not aligned with market analysts or mass market.

Learn further from Dr Tee free 4hr investment course on how to take actions in global stock crisis: Buy / Hold / Sell / Wait / Shorting with 10 different strategies in stocks: www.ein55.com

You are invited to join Dr Tee private investment forum (educational platform, no commercial is allowed) to learn more investment knowledge, interacting with over 8000 members:
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Filed Under: Macroeconomy, Market Optimism, Personal Analysis, Stock Market Tagged: global financial crisis, stock market crisis, take action

Time for Bottom of Stock Market (海底捞月)

Posted on March 23, 2020 Written by Dr Tee (Ein55)

No one would know the true bottom (the lowest point) of stock market unless having the ability to “Back to the Future”. Time for the bottom of stock market is ideal but may not be practical as it could be reaching the moon with underwater reflection (海底捞月), greedy for the lowest (cheapest price with most discount) with little considerations of other risk factors, may fall into water with market trap. For those without any action, there is also a fear of missing out, eventually may miss the boat of opportunity totally. So, it is a dilemma for some investors to Buy or to Wait when stock market is bearish.

Similarly, in a Bull market (last 10 years), it is also a headache for investors to “Hold” or to “Sell”. Over the past few years, I have reminded repeatedly readers and students to take note of the high optimism risk at Level 3 (country, especially US) and Level 4 (world) stock markets, safer to apply short term trading, walking on a layer of thin ice which finally breaks over the past 1 month (those who fell but did not sell as short term trader is now trapped with over 30-50% losses). So, even one may not know the highest point, as long as know “High Enough” (>75% optimism), one could escape from the 30% loss in global stock market, which may have another 20-30% potential to fall, if it becomes global financial crisis with declining economy.

However, it is possible to apply probability investing to start progressive entries (for contrarian investor) when it is “Low Enough”. 25% Optimism will be a point of “Low Enough”, 0% Optimism is considered a rare opportunity. However, “Buy Low” is insufficient, one has to align other Ein55 styles to form personalized strategy aligned with own personality, otherwise When “Buy Low” may “Sell Lower” or “Sell Lowest” one day for those with weak holding power, especially if global financial crisis is confirmed and become worse over the next 6-12 months after the starting of global stock crisis in Mar 2020.

Trump and G20 political leaders may join forces in the next 1-3 months to launch the most generous QE ever (eg. massive printing of money of a few Trillions of dollars through asset purchase by government and other feasible economic stimulus tools). However, this is borrowing money from the future generation (20 years from now), simply planting another time bomb for future investment market (similar to QE 1-4 over the past decade, finally triggered by fear of Coronavirus and crude oil crisis).

For smart investor, one could save 10-20 years of investing time by leveraging on current opportunity. However, the lost generation who does not know investment may suffer in future. See Japan ‘s example of lost 3 decades, some elderly people could not retire as retirement was evaporated and young people need to struggle with lower pay job without bright future despite inflation is low.

I am reluctant to reveal here exactly what are the prices of “low enough” (25% optimism) or “rare opportunity” (0% optimism) for each investment here (stocks, properties, commodities, forex, bond, bitcoin, car COE, etc). Main reason is readers may not be trained, sharing may be wrongly used as “tips”, when not supported by other Ein55 styles (eg. strong fundamental stocks and technical of prices, macroeconomic analysis, personality, etc), it could be a disaster.

Current global stock market crisis could be a gift from heaven but only if one knows exactly how to position with integration of minimum 5 Ein55 Styles of LOFTP strategies (Level 1-4, Optimism 0-100%, Fundamental – Strong/Weak, Technical – Up/Down, Personal – Trade / Invest).

Register Here for free 4hr stock investment course by Dr Tee (23 Apr session is full, next one is 21 May session, only 1 class monthly, will be updated in same website): www.ein55.com

Filed Under: Macroeconomy, Market Optimism, Market Outlook, Stock Market, Technical Analysis Tagged: global financial crisis, stock market bottom, stock market crisis

Uphill Task to Invest in Stock Market Crisis

Posted on March 18, 2020 Written by Dr Tee (Ein55)

When Dow Jones Index drops below 20000 points during intra-day today (quickly recover above it, although may fall below again in near future), this is about last 3 years low. This implies an investor is saving 3 years of investing time if investing in current level. So, when one could invest in last 10 years low for a major stock index (eg. US S&P 500 or Dow Jones Index), it means the crisis helps one to “jump queue”, saving 10 years of waiting time.

So, when looking backward, history does help one to decide the entry and exit, especially the stock market cycle which could be 5 to 10+ years long. Current bull for global/US stock market (Mar 2009 – Mar 2020) is 11 years, the longest in the history of stock market so far, after US stock market lost more than 1/3 of market cap so far, Dow Jones Index falls from nearly 30000 to 20000 points in 1 month. Despite a bear market is confirmed, this is not yet low optimism < 25% based on Ein55 styles, only a mid-size bear so far.

However, the waiting time has to include the fall + recovery again, therefore some investors prefer to wait till the uptrend phase before entry which is easy to miss the boat (1 chance left) when an entry price is not defined. If an investor enters as contrarian approach first, there are at least 2 chances: fall below the desired entry price and again above the entry price after a period of waiting.

Ein55 members, please plan your entries, how many bullets to use: 1 shot or multiple shots. Don’t end up no shot at all when the game is over.

Learn from Dr Tee free 4hr investment course to plan for your “bullets” to shoot, investing in stock market with LOFTP (Levels 1-4, Optimism 0-100%, Fundamental – Strong/Weak, Technical – Up/Down, Personal – Trade/Invest) Strategies to leverage on current global stock market crisis. Register Here: www.ein55.com

Filed Under: Market Cycle Investing, Market Optimism, Personal Analysis, Stock Market, Technical Analysis Tagged: Dow Jones Index, S&P 500, stock market crisis

Dr Tee (Ein55) Style of Stock Market Outlook

Posted on March 13, 2020 Written by Dr Tee (Ein55)

It is hard to wait for Level 3 (country) and Level 4 (world) stock markets to fall, sometimes need to wait for 10+ years. The current crisis may not be a global financial crisis yet (require confirmation with weaker economy with falling of related market such as property) but it is definitely a stock crisis. Grab on this opportunity may help one to save 5-10 years of time (comparing to buy & hold), especially for cyclic stocks.

Sharing below is for education purpose, please make your own decision, aligning with own personality based on strategies learned.

I have just shared more details with Ein55 graduates (since they are fully trained) to position in current stock market. Please login to Ein55 graduate forum for 3000+ Ein55 graduates. Pay attention to Article on Ein55 Style No 53: Entry / Exit with Optimism.

For 200 students waiting to attend 6-day Ein55 course (www.ein55.com/course) in Jun, Aug & Oct 2020, hope you could wait patiently to learn the complete 55 Ein55 investing styles before taking action. If it is a global financial crisis, it may take 6-12 months to fall in prices, so you will have enough time to take action for new stock investment.

Sharing here is not a “stock tip” as it could hurt those who are not trained, eg may buy a junk stock with weak fundamental at low optimism, buy low get lower. Please put in effort to learn in next 12 months in stock investment to grab the opportunity of current stock crisis. Here are my views of these 5 major stock markets:

1) World

After double top crossing down from 75% optimism, finally optimism is below < 50%, dropping to moderate low 38% optimism, a danger signal as it is hard to recover in short term with such a low optimism, unless US could reverse with strong stimulus plan by Trump.

2) US

After triple top crossing down from 75% optimism, there is a sharp falling knife in optimism from over 90% to only 52% which is still a fair value, not low optimism yet.

Since US economy is still strong, so far the stock crisis is fear driven (Coronavirus pandemic + oil crisis + global travelling crisis), there is still possibility it may end up as global financial crisis, if Coronavirus could end in summer (possible, based on 3-4 months virus spreading cycle pattern in China). Regardless this is a fake or real crisis, it is a major correction to stock, so opportunity could be mid term trading to long term investing, depending on severity.

For trading (long), US stock market has to recover by 20% first, not a mission impossible but requires political economy by Trump to come out with a massive stimulus plan. In fact, last US interest rate 0.5% cut in falling of stock market from high optimism is proven to be a negative help as investors may feel economy is really affected (actually not yet). Ein55 graduates have learned in earlier 6 day Ein55 course on impact of interest rate (Ein55 Styles # 21 & 22), can understand better here.

3) Singapore

Optimism at 29% yesterday, hit 25% Optimism at intra-day today but so far recovering above it. Again, Singapore could only follow the world, especially US, therefore apply US / world optimism for longer term investor to make decision, not just on Singapore. However, this is a rare opportunity for Singapore to near to low optimism of 25%, some blue chips (eg. 3 major banks) could fall more than they should if not supported by company share buyback.

4) Hong Kong

Optimism at 27% yesterday, hit 25% Optimism at intra-day today but so far recovering above it. Position for Hong Kong market is similar as Singapore, need to follow US but also China (Coronavirus condition has improved, first to start, first to end). However, China contribution to world stock value is much less than US (over 50%), therefore the direction of US stock is more important.

5) China

Optimism at 26% yesterday hit 25% optimism at intra-day today but currently recovering above it. However, short term China stock is still bullish, could be the strongest short term stock market in the world now. However, China could not be totally insulated from the fear of global investors (especially with Shanghai and Shenzhen markets connect with Hong Kong exchange), hard to be bullish alone while the rest of the world is bearish.

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So, there is alignment in optimism for most Level 1 (individual) and Level 2 (sector) stocks with Level 3 (country) and Level 4 (world) stock markets. Some may need to wait for TA (Technical Analysis) for reversal, some could enter in batches (Ein55 graduates may see example of different personalities as you have learned in earlier 6-day Ein55 class on Style No 53: Entry/Exit with Optimism).

For current Ein55 coaching students, please work harder in your coming coaching homework, showing potential actions, either spring cleaning (especially for weaker stocks) or dream team stocks to buy. Some experienced traders may also apply shorting in current bearish market but need to follow SET trading plan: Stop Loss / Entry / Target Prices.

In general, readers may look for 2 main types of giant stocks (following Ein55 investing styles with over 1500 global giant stocks, at least 10 different stock investing or trading strategies could be applied)

1) Growth Stocks (Buy Low & Hold)

– Add dividend and defensive stocks as extra protection if needed.

– Certain growth stocks may not drop to low optimism < 25% due to strong business fundamental, then one may apply Levels 3-4 low optimism as criteria to buy these very strong growth stocks.

2) Cyclic Stocks (Buy Low & Sell High)

– Trend-following is crucial for cyclic stocks (eg. many global banks and property stocks are more than 20-50% discount), so that it won’t Buy Low get Lower. Holding power is crucial when investing in bearish stock market.

– Align L1 (even individual stock is already low optimism) with L2 (sector), L3 (country) and L4 (world) low optimism for better quality of opportunity.

Of course, Ein55 graduate may also look for pure dividend stocks or specific sectors (diversification is needed) or even for indices / ETF (USO – oil ETF, S&P 500 ETF – SPY, World stock ETF, etc) for those limited in capital but need diversification. Ideally, diversify over a portfolio of 10 – 20 giant stocks (max 5% risk if 20 stocks), entry / exit in batches (eg. 2-3 times) if capital is sufficient.

For general public (non-Ein55 graduate), you may start your investment journey at the right time now with stock market crisis, learning from Dr Tee 4hr free stock investment course on LOFTP strategies (Level / Optimism / Fundamental / Technical / Personal Analysis). Register Here: www.ein55.com

Filed Under: Macroeconomy, Market Optimism, Market Outlook, Stock Market Tagged: dr tee, ein55, global financial crisis, market outlook, stock market crisis

3 Levels of Stock Market Crisis (Wolf, Mini / BIG Bears)

Posted on March 10, 2020 Written by Dr Tee (Ein55)

Every 10 wolves (eg. 10% minor stock correction, could be yearly) may lead to 3 mini bears (eg. 20% major stock correction, could be every 1-3 years), eventually only 1 becomes the BIG bear (eg. over 50% stock market crash, could be every 10+ years) or commonly known as Global Financial Crisis.

For stock investing or trading, one has to know own personality which includes preferred timeframe of investing and holding power, aiming for 3 levels of stock market crisis which could be represented by these 3 animals:

1) Wolf (Short Term Trading)

Short term investor (usually is also a trader) may need to take action every few weeks or few months, responding to daily positive/negative news which may cause the stock price to up/down by about 10%. A common tool is Technical Analysis, analyzing price trend and also support/resistance of stocks (eg. exit when S&P 500 is below 3000 points).

Trend-following strategy is flexible (similar to a wolf who is very alert to surrounding), suitable for traders, although many times, could end up as false alarms to longer investors who hear “wolf is coming” (eg. market recovers again after price correction).

2) Mini Bear (Mid Term Trading)

Mid term investor or trader could have higher tolerance level, able to hold longer (eg. more than 1 year) for up and down of about 20% in stocks. A Mini bear may come when there is a regional crisis (eg. Euro Debt crisis, US losing AAA credit rating, etc) or unexpected events (eg. Coronavirus, Oil Crisis, etc). It is a mid-scale crisis which could cause significant harm, but could be intermediate opportunity to buy low when crisis is over a few months later.

A mini bear is welcomed by both investors and traders as it won’t end the bull run but creating more opportunities along the long journey of bull market (eg. current bull run is already 11 years long from 2009 to 2020).

3) BIG Bear (Long Term Investing)

The scary BIG bear is a threat for global investors and traders who know how to buy stocks but do not know how to exit because the drawdown could be more than 50%. For junk stocks with weaker business fundamentals, some may be swallowed by the BIG bear, ending in bankruptcy, an investor could lose 100% investment permanently in this coldest winter which could last more than 1-2 years (Great Depression in 1929 could take more than 5 years).

At the same time, the BIG bear or global financial crisis provides an excellent opportunity to redistribute the wealth globally, from those who are ignorant to those who are prepared, smart investors who have found a portfolio of global giant stocks with strong business fundamental, using the BIG bear to scare away other competitors to get a huge discounted price to own them for another 10+ years of new market cycle (which the investor later could decide whether to hold for long term or sell at next market high).

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No one would know exactly when the BIG bear may come. We don’t have to scare ourselves every year whenever there is a wolf calling (action for short term trader) or even hearing the steps of mini bear (alert for mid term trader).

For longer term investor, one could apply probability investing with optimism to know when to stay alert, the time when global stock market at Level 4 (especially US stock market, Level 3) exceeds 75% optimism (eg. over the past 2 years). The investors who prefer not to exit first (to ride the price momentum in last rally of bull run), then need to protect oneself with shorter term trend-following strategy during the uncertain stock market at high optimism.

In summary, despite we may know not precisely when the global financial crisis may come, we could evaluate the probability based on signals received along the way, eg. stock market optimism (Levels 1-4 Analysis), business fundamental and country economy (Fundamental Analysis), Price trends (Technical Analysis), Market High or Low (Optimism Analysis) and more importantly, knowing if one’s personality (Personal Analysis).

Learn the unique LOFTP Strategies from Dr Tee free 4hr course to prepare for 3 levels of crisis (Wolf, Mini Bear or BIG Bear). Register Here: www.ein5.com

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

Warren Buffett Apple is the “Best Business in the World”?

Posted on February 25, 2020 Written by Dr Tee (Ein55)

Warren Buffett invests in Apple Inc (NASDAQ: AAPL) and thinks that it is “probably the best business in the world”.

Of course, this statement should be issued AFTER Warren Buffett has invested heavily in Apple Inc. Followers of Buffett would then follow to buy the same stock but at much higher price. Apple is still the same Apple with strong fundamental but FA (Fundamental Analysis) is not the only consideration. There are other key variables in investment, eg:

1) Prices of Apple is a few times higher. This will affect price to valuation. Warren Buffett bought Apple at much lower price, therefore the risk of longer term investing is lower and return is much higher.

2) S&P 500 is at high optimism. US stock market could affect Apple but Apple may not able to affect US stock market. This is Level Analysis, aligning individual stock with the stock market.

3) US economy is at the best of past decade, how to be better? When spending is high, how to be higher for Apple to grow? This is a relative consideration of business for individual stock (Level 1) vs economy of a country (Level 3).

4) Other black swans such as Coronavirus threat (affect retail shopping), China economy slowdown (Apple having lots of business in China), US presidential election (results could affect US-China trades in future), etc.

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In short, investing in Apple has to align with own personality, not simply following Warren Buffett blindly as his personality (depth of business analysis, self-confidence, holding power, diversification, capital, etc) could be different.

Even at current high price (nearly US$300, doubled from US$150 in about 1 year), the optimism level is around 41%, considered a fair price based on Ein55 valuation. However, Apple is more suitable for short term momentum trading as world stock market (Level 4) and US stock market (Level 3) are at higher optimism, it is safer to do short term investing, applying trend-following with closer monitoring. Of course, if Apple is fine each month, then short term investor may gradually become medium term or even long term investor. This is different from starting to aim for long term investing at high optimism stock market unless one could accept moderate return by holding a long term and able to withstand the possible correction due to global financial crisis.

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Back to the title, is “Apple the Best Business in the World”? Fundamental of Apple is indeed very good, it may be Warren Buffett’s best business (since he invested in this business) but may not be the best business in the world. There are other better stocks in the world with stronger business than Apple but investor has to learn how to identify these giant stocks and wait patiently to invest in them at discounted prices.

A giant stock could be just a small cap company (too small for Warren Buffett’s capital which could only consider large cap) but suitable for retail investor with condition to diversify with 10 giant stocks.

Learn from Dr Tee free 4hr stock investment course to consider global giant stocks from various sectors with strong business comparable with Apple, then forming a dream team stock portfolio. Register Here: www.ein55.com

Filed Under: Fundamental Analysis, Market Optimism, Stock Market Tagged: apple, stock, warren buffett

Impact of SARS 2003 and Coronavirus 2020 on Global Stock Market

Posted on February 7, 2020 Written by Dr Tee (Ein55)

SARS and Coronavirus could be from similar family of virus but occurred at different timing of market cycle optimism, having different risks to global economy and stock market.

SARS started in late 2002, near to low optimism of global stock market after burst of Year 2000 Dotcom bubble, ending around mid 2003, so impact to stock market is limited. After ending of SARS, regional and global stock market start to recover.

Coronavirus started in late 2019, near to low optimism of China stock market but at high optimism of global stock market (US, World). Currently global/US stock market are mainly supported by US presidential election year with strong US economy, especially with cease fire of US-China trade war and end of impeachment on Trump.

Relatively, potential risk of Coronavirus to global stock market is greater than SARS mainly because:
1) Higher optimism level of global stock market, more potential to fall down when there is a black swan
2) Contribution of China to global economy in Year 2020 (15% world GDP) is 3 times more than in Year 2003 (5% world GDP)
3) Spreading of Coronavirus is faster than SARS, despite fatality rate is lower, total number of death (and therefore fear) could be more if dragged much longer without an effective medical solution

Therefore, the 2 main X-factors are mainly US election results (affecting US market, especially if Trump not elected or behind in winning rate) and severity and duration of Coronavirus (affecting China / Asia market).

Shorter term trading on more bullish US stock market (achieving new historical high again recently) is relatively safer. For China/Asia market, short term recovery could be cyclic in nature, could be suppressed when there is new unknown negative news of Coronavirus.

Learn from Dr Tee free 4hr course on how to invest stocks during global financial crisis. Register Here: www.ein55.com

Filed Under: Market Cycle Investing, Market Optimism, Stocks A-Z Tagged: coronavirus, global stock market, sars

US Stocks (Intel vs Micron, AT&T vs Verizon) & Sectors Comparison (Telco & Semiconductor)

Posted on January 8, 2020 Written by Dr Tee (Ein55)

There is a good question asked by Ein55 investment forum member (click here to join forum for free) on comparison of these 4 US stocks from 2 sectors:
– Semiconductor / Technology: Intel (Nasdaq: INTC) vs Micron (Nasdaq: MU)
– Telco: Verizon (NYSE: VZ) vs AT&T (NYSE: T)

Here are my replies after application of “Giant Detector” tool just now, only personal views for educational purpose:

1) These 4 stocks generally are giant stocks, choice of stock or sector depends on investor personality which determines the strategy to apply, eg. short term trading or long term investing, whether buy low sell high (for cyclic stocks), or buy low & hold long term (growth stocks) or shorting (when trend is reversed in a bearish market). Micron may not for long term investing due to very cyclic nature.

2) These 4 stocks belong to the same country (Level 3), USA, therefore trends are mostly following US S&P500 / Nasdaq, generally bullish.

3) These 2 pairs of stocks also from the same sector (Level 2). Telco: Verizon (NYSE: VZ) vs AT&T (NYSE: T). Semicon / Tech: Intel (Nasdaq: INTC) vs Micron (Nasdaq: MU). Both sectors are also following Level 3 in US with uptrend prices.

However, these 2 sectors are different:
– Telco is a “growing” industry in US, suitable to buy low sell high, or buy low & hold.

– Semicon / Technology is a “cyclic” industry in US, more suitable to buy low sell high (especially for Micron)

4) The key differences are with individual stocks (Level 1):
– Micron is more cyclic than Intel (choice depends on personality on risk tolerances), both have strong fundamental but tech / semicon is susceptible to economic cycle. We may have version 2.0 of Dot Com bubble (Ver 1.0 was in Year 2000), which technology stocks usually would go to high optimism during bullish economy, eg now, both stocks are over 70% Optimism.

– Verizon has stronger growth than AT&T (difference is not very large), both have strong fundamental.

In the last Ein55 Charity Course, we have reviewed a strong Hong Kong Telco dividend giant stock, could be better than both Verizon and AT&T for long term investing. US stocks are more suitable for shorter term investing or trading due to high optimism level in the current US stock market. Please do your own analysis and make decision aligned with own personality.

For students waiting to attend 6-day Ein55 classes in Feb and June 2020, you will have chance to do similar homework to study the best giant stocks in each sector or country after learning Giant Detector on Day3 of the 6-day course.

For public readers (non-graduate) who are new to stock investing or Ein55 investing styles, you may sign up free 4 hours stock investment course by Dr Tee to learn LO-FTP strategies: Levels 1-4, Optimism, Fundamental, Technical, Personal Analysis. Register at: www.ein55.com

Filed Under: Market Optimism, Stock Market, Stocks A-Z Tagged: AT&T, Intel, Micron, Verizon

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