Golden Investing Opportunity is for those Properly Prepared!

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!

 

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

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.

 

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

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

 

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

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.

 

Global Stock Market Crash?

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.

 

 

 

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

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.

 

Global Market Rally from Bullish Years of Horse to Sheep

As pointed out in my article 1 year ago, a stumbling Year of Horse 2014 is indeed a blessing in disguise.

https://www.ein55.com/2014/02/stumbling-year-of-horse-a-blessing-in-disguise/

Year of Horse had a rough start but having a nice yearly performance as predicted 1 year ago. All the major global stock indices show positive yearly return, ranging from 10% to 50% gains (see graph below), despite uncertain stock market conditions at that time with gloomy QE3 tapering and China economy slowdown.  As predicted, China Shanghai Stock Index (can be traded with A50 ETF) at 2000 points was a strong support as few country indices with strong fundamentals could have such a low optimism.  Final results show that China Shanghai Index has experienced 70% rally from 2000 points to 3400 points, Ein55 market optimism strategy has successfully predicted this golden opportunity.

In addition, Temasek Portfolio with undervalued low-optimism have recovered successfully, eg, SMRT ($1 to $1.80), NOL (recovering from price valley), Capitaland ($3 to $3.60), there are many more “Temasek Giants” are waiting for recovery:

http://www.temasek.com.sg/portfolio/portfolio_highlights/majorportfoliocompanies

My investing philosophy is to look for investment giants, patiently waiting for the giants to fall down, helping the giants to get up, finally saying goodbye to the giants who will then reward us substantially for the help given. Learn how to position yourself to benefit from the stock market recovery, there are many falling giants from various sectors (oil & gas, retail sales, casino, palm oil, mining, etc) in many countries who are waiting for recovery.

Similarly in the Year of Sheep 2015, the stock market is again uncertain with predictable US interest rate hike, bearish global commodity market (including oil crisis), gloomy European market due to Greece deadlock and massive ECB quantitative easing.  Risks are opportunities in Year of Sheep.  In a bullish market, every risk will result in market correction, which can be a safe entry point.

To better understand the risk and opportunity in Year of Sheep 2015 for stocks and properties, you and your friends may attend my next free investment workshop (both English & Chinese versions are available, solid 3hr knowledge sharing), register through the link below:

https://www.ein55.com/free-public-education-on-investment-programs-by-dr-tee/

Wish all the readers a successful investment in the Year of Sheep 2015!

Ein55 Newsletter No 013 - image - Year of Horse Performance

 

全球投资市场:万马奔腾至三羊开泰

在一年前的马年市场展望报告,我准确地指出,马失前蹄乃塞翁失马、焉知非福。

https://www.ein55.com/2014/02/stumbling-year-of-horse-a-blessing-in-disguise/

马年开市不利,不过后劲十足,就如我所预言一年前。所有主要全球股票指数,全年正数回报,获利介于10%至50%(看以上图表),纵然当时QE3乌云密布,中国经济缓慢。正如所料,中国上证指数(以A50 ETF交易)于2000点是强有力的支撑,因为鲜有强国处于如此低乐观指数。结果,上证指数经历了70%的飞腾,从2000点回弹至3400点,Ein55市场乐观指数策略成功地预测了这个良机。

除此之外,被低估的低乐观指数之淡马锡投资组合已经成功恢复,例如SMRT ($1 至 $1.80), NOL (从谷底翻上), Capitaland ($3 至 $3.60),还有更多的“淡马锡巨人”正在康复中。

http://www.temasek.com.sg/portfolio/portfolio_highlights/majorportfoliocompanies

我的投资理念是寻找投资巨头,耐心等待巨人倒下,然后帮助他东山再起,巨人将感恩图报。

学习如何定位自己,从股市复苏中受益,静待许多国家的各行业(石油/天然气、零售、博彩、棕榈油、矿物等)的重挫巨人再崛起。

同样地,在2015羊年,股市也是不稳定,包括可预测的美国加息,全球商品市场低迷(包括原油危机),阴郁的欧洲市场(希腊僵局、欧洲央行大规模量化宽松政策)。每个风险是羊年的良机。牛市中,每个风险会导致市场调整,恰也是一个安全的入市点。

为了更好地理解2015羊年股票和房地产的风险和良机,您与朋友们可以参加我的下一个免费投资研讨会(可选择英文或华文版,3小时充实的知识分享),通过下面的链接进行注册:

https://www.ein55.com/free-public-education-on-investment-programs-by-dr-tee/

祝贺所有读者一个成功的投资年,羊羊得益!

 

 

 

 

 

Legend of Ein55: Bridging Scientific World and Investment World

For so many years, I still cannot get rid of my old habit in the first phase of my life in scientific world: whenever I have new ideas (even when sleeping), I would wake up anytime at night (eg sleeping 2:30am just now, waking up 5:30am), writing down all the new ideas in dreams, then formulating the theories into applications.

Later research shows that this is actually how the right brain (creativity, breaking through ideas) could help the left brain (logic, systematic).  This characteristic has helped me to achieve the peak of my scientific career, an engineering PhD with over 150 technical publications / patents in the past (just Google my full name)

http://smarts.com.sg/Publications.htm

In the second phase of my life in financial world, extending the past 18 years of hobby in investment & trading, being a full time investment educator (while taking care of my engineering business on part time), I still like to relate different ideas in scientific world with financial world, forming the foundation of Ein55 Styles of investment.  I have successfully bridged the scientific world and financial world over the past decade, analyzing the investment market in a scientific way.

This has inspired me in the creation of “Market Optimism Strategy” with FA (Fundamental Analysis), TA (Technical Analysis) and PA (Personal Analysis), combining with the philosophy of my childhood idol (Einstein, “make thing as simple as possible but not simpler”) and the thousand years of Chinese wisdom in TaiJi (太极)/YinYang(阴阳), which is the source of my Ein55 logo:

Start Journey of Financial Freedom with FREE Stock Investment Course!

In the investment world, the Equation is

TA = FA + PA

(eg. share prices is a reflection of both business performance and trader psychology with daily uncertain news)

Most people with biased view, only use one eye (either pure FA believers or TA believers), could only see the partial view of investment.  For me, not only I am using 2 eyes (FA + TA), I am using the 3rd eye of “Ein55 Optimism” to see it more clearly.

In the world of investment with Ein55 Optimism, the Equation is

TA – FA = PA = Optimism

(Investment opportunity is a relative gap between its price and value, going through an emotional market cycle)

This 3rd eye could see the investment world from a totally different perspective, even human emotions and winning probability (PA) can now be measured, not just a concept, enable a trader or investor to truly “buy low sell high”, which is the “secret” of making money (as shared by Jim Rogers).  Similar to “Theory of Relativity” by Einstein, this is my “Ein55 Theory of Relativity” for FA vs TA.

I am very glad when I hear a feedback from a recent graduate from Jan 2015 investment class.  He told me that now he can really see the investment market with the “3rd Eye” as I promised in the earlier public workshops.  Those who are interested to learn more about the “3rd Eye”, just drop by to attend a free public workshop (solid technical content, not a sales talk, it is my contribution back to the society, helping others to achieve financial freedom):

https://www.ein55.com/free-public-education-on-investment-programs-by-dr-tee/

Ok, it is time back to sleep again, more future dreams will continue to inspire me…

Risks are Opportunities in the Year of Sheep 2015: China Market Rally and Crude Oil Crisis

Happy New Year to all readers.  Here are some new updates on current market outlook (supplements to eBook on Global Market Outlook 2015) when we welcome the Year of Sheep 2015.

1) China Market Rally

As shared in several workshops and publications since 1 year ago, 2000 points was a golden entry point for China SSEC Index (through A50 ETF) as it was at 25% Optimism, a rare opportunity for a major country index to be corrected.  Indeed, in the past few months, after the Shanghai and Hong Kong stock markets are connected, it provides a reason for the traders and investors to push up the undervalued SSEC Index to 3330, appreciation by 65%!

Although SSEC or A50 still has more than 50% growing potential (before reaching 75% Optimism), a safer  strategy now could be looking for individual undervalued stocks with low optimism (<25%) which are still lagging but having more potential to rise.

2) Oil & Gas Correction

Brent crude oil price has been dropping in the past few months, from US$115/barrel to the lowest of US$47/barrel recently.  Global commodity price index has been below 25% Optimism when crude oil was still above US$100, the unstable high oil price at over 75% Optimism was triggered by a complex interactions of:

2.1) Recovery of US:

The US dollar is strengthened after QE3 is fully tapered since Oct 2014, following by anticipation of US interest rate hike in 2015. USD and commodity (eg. gold, oil, etc) usually move in opposite direction.  With US unemployment rate drops to 5.6% in Dec 2014, the US recovery will continue in the next few years, oil will be under pressure.

2.2) Political Economy

There could be political considerations for oil producer vs oil consumer countries, OPEC and non-OPEC countries, conventional vs shale oil technology.  The demand vs supply principle of economy is disturbed, resulting in high volatility in oil prices.  The crude oil price is halved, the impact is as if a new form of global QE (Quantitative Easing) to stimulate the economy because the energy cost is lowered, there is more saving for spending or investing in near future, at the expense of oil producers who have accumulated significant reserves of wealth during the super bull run of oil from 1999 to 2014.

2.3) Trader Psychology

Profit taking or cut loss when prices drop from high point, resulting in falling-knife trend, few traders dare to catch to support the price.  With more hedging and shorting sentiments, the oil price will be under correction, following the old foot step of gold prices a few years ago.

A crisis is usually an opportunity, a blessing in disguise. Oil price has resulted corrections in many stocks in Oil & Gas, some are below 25% or even 0% Optimism, which usually only observed during Global Financial Crisis, not in the middle of a bull market. Commodity has a much longer market cycle (eg. 20-30 years), may not be aligned with economy cycle. Each investment market (stocks, properties, forex, bonds, etc) has different investment clock, % Optimism strategy could be applied to buy low sell high.  For long term Brent crude oil, 0% Optimism is at US$44/barrel, over-correction by the market will provide an excellent opportunity to both traders and investors but a proper strategy must be adopted, especially to overcome the market emotional swing due to short term volatility.  The timing of crude oil recovery then will be the timing for oil & gas related stocks.

The sector correction will be rotated from time to time among various industries due to imperfect market, following the Optimism level, higher one will have higher risk, lower one will have higher potential.  The oil correction will help the shipping sector (eg. NOL, SIA, etc) at low optimism to grow, higher outlook for profitability with lower energy cost.  The rally in China market will help the Singapore S-chips to recover gradually, especially after the China economy is improved further. The last example was severe Singapore REITS correction in year 2013 after 50% rally, now in recovery phase but will have limited upside due to increasing mortgage rate (anticipation of US interest hike) and gloomy outlook of Singapore property market.  Earlier example was storm in penny stocks, correcting many stocks, resulting in low trading volume due to negative sentiments.  Based on the survival of the fittest, each correction will make the “giants” or strong-fundamental stocks become stronger after recovery from the valley of lower price.  We want to look for giants who are falling down, helping them to recover at the right time, then the giants will reward us when becoming strong.

For those who are interested in the details of market outlook 2015 or Ein55 styles with Optimism Strategies, you may drop by to attend the next free workshops conducted by Dr Tee.  All the best to all in trading and investing for year 2015!

eBook on Global Market Outlook 2015

It is fresh from the oven:   I have just finalized 35-pages eBook on Global Market Outlook 2015. You could download here:

Existing Newsletter subscribers: Please refer to the download link sent by email on 14 Nov 2014

Non-newsletter subscribers: Please sign up (click on eBook image of ein55.com) before download

Aligning with the introduction of new eBook, I have prepared 3 exciting free workshop and short course (total worth $1000) in Nov & Dec 2014 for the readers:

1) Global Stock Market Outlook 2015

2) Best Timing to Profit from Singapore Property Market and REITS Stocks

3) Market Optimism Strategy with Integrated Fundamental and Technical Analysis

 

Free seats are limited (first come first served), please register through:

https://www.ein55.com/free-public-education-on-investment-programs-by-dr-tee/

 

eBook Table of Contents (Global Market Outlook 2015)

1.  Mass Market Sentiment Survey

2.  Review of 2014 Global Markets

3.  US Economy and 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, Inflation & Gold / Silver / Crude Oil

4.  Regional Economy and Market Outlook

4.1  Europe Market

4.2  China Market

4.3  Hong Kong Market

4.4  Japan Market

4.5  Southeast Asia Market

5.  Singapore Economy and Market Outlook

5.1  Singapore Stock Market

5.2  Singapore Property Market

6.  Stock Market Potential for 2015 and Beyond

7.  Conclusions and Recommendations

Acknowledgements

Appendix