Video on Becoming Warren Buffett – Money is just numbers

Posted on July 27, 2018 Written by

Becoming Warren Buffett
This is a short but powerful 11 min Chinese video (Becoming Warren Buffett) about Warren Buffett strength and weakness. The most touching part is final few minutes on why he decides to donate his fortune accumulated in life.
https://www.youtube.com/watch?v=0YJx2VkQPHc

For English version, you may search for “Becoming Warren Buffett” (see longer version below with 1hr 28min, thanks to suggestion by a member) but I could not find the same short and sweet version as this Chinese video.
https://www.youtube.com/watch?v=PB5krSvFAPY&feature=youtu.be

Warren Buffett initially only focused on buying undervalue stock (Buy Low) but this business partner, Charlie Munger, influenced him to buy good business at fair price (may not low price). The is the key difference of value investing vs growth investing, which Ein55 graduates have learned how to integrated with optimism strategies, including value growth investing to have the best of both worlds.

However, for investing, each of us should establish our own personalized investing styles, there is no need to follow Warren Buffett or Charlier Munger. Berkshire share price dropped by 50% during subprime crisis in 2008-2009, this max drawdown may force many investors out of the stock market, only those with strong faith, applying fundamental analysis, instead of technical analysis, still able to hold through the winter time to be the final winner.

The title of video is an important lesson for everyone: “Money is only numbers”. If we look at frugal lifestyle of Warren Buffett (eg. living in an old house, drive a small car, eating $3 McDonald burger for breakfast, etc), then we can understand money is only an indicator to show his performance in an hobby called investment. This is the same as computer gamers, scoring high from level 1 to 100 is important to their hobbies.

In fact, when we detach making money from investment, just focusing on how to push up the score of investing game with $ amount, our performance could be better.

General public can learn value investing and growth investing from Dr Tee free 4 hour course. Register here: www.ein55.com

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Filed Under: Stock Market, Uncategorized, Value Investing Tagged:

Analysis of 8 Giant Internet Stocks: BAT-FAANG

Posted on July 27, 2018 Written by
Internet Stocks
Ein55 graduates should know how to analyse 8 giant internet stocks when I highlighted during 5-day Ein55 course:
BAT–FAANG:
B = Baidu
A = Alibaba
T = Tencent
F = Facebook
A = Apple
A = Amazon
N = Netflix
G = Google (Alphabet)
 
Alibaba and Facebook are younger giant stocks, more suitable for short term momentum trading, not proven yet for longer term investing.
 
Other 6 internet stocks are proven giant stocks for long term but due to high price growth (faster than earning growth), need to integrate trading into investing when considering for longer term investing. For Facebook, the share price dipped more than 20% in 1 day this week, mainly due to high expectation of global investors on future growth rate. When a company is profitable, it is still in sufficient, it has to exceed the expectation of investors. Stock market is forward looking, when a growth stock or momentum stock is doing well in share prices, supported by past earning, the pressure is higher to score better in business, otherwise the stock prices would be affected. Optimism strategy will be useful to integrate Fundamental Analysis (business world) and Technical Analysis (price world).
 
Among all the 8 internet stocks, Google (Alphabet) is more matured, has the best balance in sustainable price and business growth. An investor may like it but a trader may not.
 
An investor could choose the right type of stock for trading or investing based on own personality:
1) Momentum Trading – Buy High Sell Higher
2) Growth Investing – Buy Low Hold Long Term
3) Cyclic Trading/Investing – Buy Low Sell High
 
Since internet stocks are based on high-end technology which is dynamic in nature, an investor may consider for short term trading or long term investing but may not be suitable for life time investing as there are few technologies could last more than 10 years without strong challenge by newcomers with disruptive technologies.
 
Learn from Dr Tee to position in global and local stocks for trading and investing, aligning with own personalities. Sign up for free 4 hours stock investment course for public in Singapore (meet-up Dr Tee): www.ein55.com
 
For overseas (outside Singapore) readers, you may consider video course by Dr Tee with 75% discount now ($25, original price is $100). Content of video course and 4 hours meet-up course is different. Register video course here.
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Filed Under: Stock Market Tagged:

Short Term Investing Strategy – Lion Ambush for Opportunity

Posted on July 26, 2018 Written by
Short Term Investing
There are at least 20 types of short term trading and long term investing strategies to make money in stocks (mostly covered in 5 days Ein55 class, including the Optimism + FA + TA + PA strategy):
– Swing/Cyclic Trading, Position Trading, Momentum Trading, Price Action / Breakout Trading, Shorting, Market Cycle / Long Term Cyclic Investing, Short Term Investing, Crisis Investing, Index/ETF Investing, Discounted Asset (Undervalue/net-net) Investing , Growth Investing, Value Growth Investing, Dividend Investing (non REIT), REIT investing, life-time value investing, forex-stock investing, property-stock investing, commodity-stock investing, bond-stock investing, hedging/spread trading, excluding other speculative and intra-day trading methods, etc.
 
Each stock trading and investing method has its own unique application, usually Ein55 graduates would form a dream team portfolio of 10 giant stocks aligned with own personality, integrating a few of these strategies as defenders, mid-fielders, strikers, in additional to cash as goal-keeper.
 
In the current high optimism global stock market (Level 4), for an investor who understands probability, one may adopt wait strategy for global financial crisis to buy low. However, each investor has different level of patience, some could wait only for a few months and lose the patience and confidence. Some could wait for a few years. Therefore patience is one of the unique personality to consider as it affects the timeframe of investing and holding power. This is similar to lion waiting patiently, fighting against hunger to ambush a potential prey. Remember what Charlie Munger (business partner of Warren Buffett) said: “The big money is not in the buying and selling, but in the waiting.”
 
Short term investing is a nice integration of investing (buy strong fundamental stocks) and trading (entry/exit in short term), suitable for current high optimism stock market, for investor who does not want to miss the possible last rally of bullish stock market. A lion could ambush for a long time but when see the golden opportunity, it will take action to strike for gain. When the prey is running too fast than expected, a lion would give up as well, reserving the energy (capital) for the next prey (stock opportunity).
 
3 local major banks will announce next quarterly results next week. Since the results are likely to be positive (supported by increasing interest rate), market fear on trade war is reduced, recovery of global stock prices over the past 1 week support the confidence in short term for bank stock prices, therefore some have started to go in. Position as a short term investor could leverage the uptrend in bullish bank sector while as flexible as a trader to exit when trend in global and individual stocks become bearish, more than one’s risk tolerance level.
 
Facebook (NASDAQ: FB) is a strong fundamental stock, also a strong momentum stock last year but a few corrections this year has affected the momentum because the global investors have higher expectation each quarter, share price dropped more than 20% yesterday when emotion turns bearish suddenly. Venture (SGX: V03) is another example, medium term business performance over the past few years have been excellent but share price has dropped from peak of $29 to $16, nearly 50% correction so far. A short term investor may also integrate optimism (short term to long term) to understand the relative risk and opportunity, not to apply pure value investing nor only on price action.
 
Start to learn 10 stock trading and investing strategies (including short term investing) from free 4hr course by Dr Tee. Register Here.
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Filed Under: Stock Market Tagged:

Actions on High Dividend Blue Chip Stocks (Example on Singtel)

Posted on July 21, 2018 Written by
High Dividend Blue Chip
The decision to buy high dividend blue chip stocks (eg. 5-6% dividend yield for Singapore Telco and REITs, etc) depends on 3 main strategies which have to be aligned to 3 personalities.
 
Here is an example of Singtel (SGX: Z74), a strong blue chip in Singapore, current share price at $3.31, falling nearly 25% from $4.30 / share since a few years ago, dividend yield is about 5.3%, Optimism is 28%. Let’s learn to take action (Buy / Hold / Sell / Wait / Shorting) based on different unique personality.
 
1) Trader for short term capital gains
– Singtel share price is still a falling knife (although not as sharp as M1 and Starhub which dropped more than 50% in share prices) in short to medium term stock prices, therefore may not yet a good buy for traders who need support of strong uptrend. Singtel share price is affected in short to medium terms by Level 4 (global stock market weakness), Level 3 (weaker Singapore STI index) and Level 2 (bearish Singapore Telco sector, including Starhub and M1), despite the Level 1 business is still strong for Singtel. Although current short term bearish stock market supports shorting (profit from falling price), usually a stable dividend stock with strong fundamental may not be a good choice for shorting.
 
Possible Action: Wait.
 
2) Investor for long term capital gains
– Possible to be a contrarian investor to buy low for Singtel (it was less than 25% Optimism when price is nearly $3, even it may get lower in share price, long term holding would have high chance of winning. The concern is more on short to medium term share prices correction, especially global / US stock market is still at high optimism, there is a potential threat of global financial crisis, it may not be wise to hold a stock unless it is defensive with high growth in nature. Singtel is considered a defensive stock but a slow growth stock.
 
Possible Action: Wait.
 
3) Investor for long term passive income
– Since the objective is to collect dividend, falling in share prices have exchanged for higher yield for Singtel (5.3% currently). Singtel fulfills the criteria of a dividend stock with stable business (despite slow growth) with stable free cashflow and consistent dividend payment. The critical consideration for passive income investor is on the overall return. If one has $100k capital, is it satisfied to get $5.3k annual return (regardless of up and down in share prices)? What if Singtel share price drops further, yield goes up to 8%, will an investor regret of not able to get $8k dividend? So, the decision depends on reward expectation or greediness of an investor. If compares with bank interest rate (1-2%), property rental (2-3%), even current moderate yield of 5-6% dividend stocks are considered better. In general, the spread between yield of blue chip dividend stocks (5-6%) and risk-free investment (eg. 4% for CPF, 2% for Singapore Saving Bond) is narrow. The trick is on capital allocation, maximize the yield by entry in phases. It means if one could not hold the capital with little return in bank deposit, it is fine for investor to consider 5-6% return (ignoring the share price could drop by the same amount in certain week) with partial capital. Bulk of capital may be reserved for higher yield return aligning to the next global financial crisis
 
Possible Action: Buy (partial capital only) or Wait
 
It is clear by now there could be different possible actions for the same stock because the right decision has to be aligned with own personality, eg. holding for short term trading or long long term investing, aiming for capital gains or dividends or both, reward expectation and risk tolerance level, etc.
 
Learn from Dr Tee to learn 10 different stock trading and investing strategies (including high dividend blue chip stocks as a strategy), aligning with 10 unique personalities. 
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Filed Under: Stock Market Tagged: , , , , ,

Food Chain of Stock Market (弱肉强食)

Posted on July 18, 2018 Written by
Food chain of stock market
In the nature, there is always a food chain, only those fittest ones could survive in each position. Sharks could swallow small fishes which eat little shrimps.
 
Similarly, in the food chain of stock market, institutional investors (big sharks) could determine the mega direction of stock prices, while retail traders (small fishes) follow the trend of stock prices, left behind speculators (little shrimps) who react to the uncertain daily market. Size is power, usually little shrimps are sacrificed, lose out in speculative stock market, especially when a stock is being manipulated.
 
Blumont in the penny stock crisis a few years ago was a good example. The big sharks (big boys) started to pushed up the stock prices, then small fishes (retail traders) who follow the uptrend could buy high sell higher to make money. Eventually when the share prices were manipulated, pushed up 100 times, it attracted some little shrimps (speculators) who just want to get rich quick but ending up a great loss when the big sharks start to sell all the shares, following by clever small fishes (traders) who follow the trend to get out with some gains or little loss, while the ignorant speculators continue to hold as long term investor when making a loss, ending up losing 99% of stock value, holding until today without clear understanding what went wrong.
 
There are many other similar examples of food chain in stock market (dotcom bubble in year 2000), property market (subprime crisis in year 2008) or even Bitcoin (from rally in year 2017 to crisis in 2018). There are many valuable past lessons which could be learned from food chain of stock market:
 
1) Big funds with smart investors could take the lead in investment markets but could also suffer when there is a global financial crisis which is a disaster in the world of nature. However, smart investors are usually longer term in holding or having strong fundamental business with sufficient past profits to last through the cold winter. The chances of survival is high.
 
2) Retail traders are smaller in size but if one could learn to follow the direction of money flow, sensing the potential market risks, chances of survival is also high but one has to be very flexible, including cutting loss when market direction is reversed.
 
3) Speculators could make a lot of money sometimes but high risk high gain strategy could get burnt eventually. Even if one could make many small profits, one big risk could wipe out all the past earnings when falling into a crisis without proper diversification. The worst is the stock invested (speculated) may have weak fundamental, one could lose all the fortunes with speculative investment which is worst than gambling.
 
A small shrimp may not necessarily be the loser in food chain of stock market. An investor with small capital could outsmart big funds if one could buy much stronger fundamental stocks in a portfolio, able to wait patiently to buy low and sell high (for cyclic stocks) or hold long term (for growth stocks) with market optimism, following traders to ride the trends in stock prices.
 
Learn from Dr Tee to invest & trade giant stocks with small capitals. Register 4hr free stock investment course here.
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Filed Under: Stock Market Tagged:

5 Strategies in Property Stock Investing

Posted on July 11, 2018 Written by
Property Stock Investing
Property stocks are usually highly cyclic as it is subjected to political economy (eg. government cooling measures), project duration (TOP) and economy cycles (demand vs supply). At the same time, property market has gradual growth of about 2-4% over the decades, supporting the growth of property stocks. More importantly, passive incomes through dividend from property rental is a bonus.
 
There are 5 main strategies in Property Stock Investing or Trading:
1) Cyclic Investing (Buy Low Sell High)
– Suitable for cyclic property stocks, especially for penny stocks or small cap stocks which are more volatile. The capital gains could be tremendous.
 
2) Dividend Investing (Buy Low & Hold Long Term)
– Suitable for passive income through regular dividend payment, similar to landlord of a property, collecting monthly rental consistently despite the up and down in property price. The key is to buy low to maximize the dividend yield (for property stocks) or rental yield (for property).
 
3) Growth Investing (Buy Low & Hold Long Term)
– Suitable for growth property stocks, usually are blue chips with strong fundamentals to support the long term growth.
 
4) Momentum Trading (Buy High Sell Higher)
– Suitable for short term trading of property stocks during bullish economy but full compliance of exit strategy is required when uptrend has ended.
 
5) Undervalue Investing (Buy Cheap Sell expensive)
– Suitable for value investor who view property stocks as asset, buying at price much below the net asset value, selling when price is above valuation in future. Patience is required for this conservative strategy.
 
For all the 5 strategies in property stock investing to perform well, the common requirement is to buy only giant property stock which has strong fundamental.
 
If you are in Singapore, learn from Dr Tee through 4hr high quality stock and property investment course (free), register in www.ein55.com. First come first served till tickets are sold out).
 
If you are in overseas, learn through video course (75% discount is given, only $25 now) by Dr Tee.
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Filed Under: Property Market, Stock Market Tagged:

4 Positions of Economy vs Stock Market

Posted on July 4, 2018 Written by
Economy (master) and stock market (dog) is similar to master walks the dog, now dog is behind the master who is walking faster. When both master and dog are slow, then it will be a concern, regardless who is ahead
 
There are 2 relative positions (behind/ahead) with 2 overall paces (fast/slow) with 4 scenarios of economy vs stock market:
(1) Bullish market – master (economy) could be ahead/behind stock (dog), while both are walking at faster rate
 
(2) Bearish market – master (economy) could be ahead/behind stock (dog), while both are walking at slower rateeconomt
 
Now could be scenario (1) bull market with economy ahead of stock market but if the dog is too slow until the master is also slowed down, it could become scenario (2), turning from bullish to bearish.
 
Learn how to position in these 4 scenarios of economy vs stock market, register for free course by Dr Tee.
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Filed Under: Macroeconomy, Stock Market Tagged:

High Probability Investing with Optimism Strategies

Posted on July 3, 2018 Written by
High Probability Investing with Optimism Strategies
When most people feel that it is the best time of economy and stock market, then the chances of stock market crash or global financial crisis would be high. Let’s look back the past market peaks in years 2000 (before dot com bubble) and 2007 (before subprime crisis), the market crashes always happened after an euphoric stock market with support of bullish global economy.
 
Feeling is qualitative (correct in principle or direction but not measurable), may not be suitable for stock investing. A better way is to apply a quantitative method of High Probability Investing with Optimism Strategies. Currently over 75% Optimism for US and world stock market, probability of downside (75%) is more than upside (25%). When we play a poker card game with possible numbers between 1-10, when your opponent has card No 7, your chance of winning (from possible No 1-10) is not high as the chance of getting No 8-10 is only 30% (3/10).
 
Even a player may not know what is exactly the No of next card, one could apply probability over several chances (not having only one chance to win all or lose all), the winning rate would improve accordingly with larger number of trials. This is how most insurance stocks and casino stocks could have rising share prices over longer term, supported by a profitable business with a game of probability, even future is uncertain.
 
This is the same for investing, even one may not know exactly when a market could reach a peak or crash eventually, if one could master these successful factors of success, high probability investing could be achieved:
1) Diversify over 10 giant stocks with strong business fundamental
2) Buy low optimism stocks aligned to level 1 (stock), level 2 (sector), level 3 (country) and level 4 (world). Sell when optimism is high.
3) Follow market trend in actions of entry and exit
4) Mind control: be fearful when others are greedy, be greedy when others are fearful
5) Money management: allocate fund with unique investing clocks for cash, stock, property, commodity, forex, bond, etc.
 
Even we may not know exactly when the global stock market may crash (no one could do so unless the person predicts everyday that “today market would crash”), we could understand that the remaining days of bull market are limited, exit strategies are crucial now unless the stocks on hold are defensive growth stocks for long term investing.
 
Don’t apply “Hope Strategy”, buying a stock and hoping for the best outcome. Use Probability Strategy instead, making the right decisions aligned with high probability factors mentioned above.
 
Learn from Dr Tee FREE 4hr stock investment course in Singapore on High Probability Investing with Optimism Strategies + FA (Fundamental Analysis) + TA (Technical Analysis) + PA (Personal Analysis). Take Action to Register: www.ein55.com
 
If you are busy or living outside Singapore, sign up for video course (75% discount, only $25): https://www.investingnote.com/store/products/discover-giant-stocks-value-investing-strategies
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Filed Under: Market Optimism, Stock Market Tagged:

Key Learning Points from Ein55 Graduate Gathering 2018 July

Posted on July 1, 2018 Written by
Ein55 Graduate Gathering
We have had a successful Ein55 graduate gathering today with about 500 attendees. It is also 5 years birthday for Ein55 investing school, student size has grown 100 times from the first class 5 years ago with 30 students to about 3000 students currently.
 
Here are the 7 key learning points by Dr Tee:
1) Safer to position in high optimism stock market with shorter term trend-following strategies.
2) Align individual stock with global stock markets which are mostly bearish, waiting for reversal.
3) No need to predict the stock market. Instead, prepare a system of trading (what to buy, when to buy / sell), let the business fundamental and share price come to us, follow the signals to make decisions.
4) Form a stock investment portfolio with 6 different strategies:
– Long term growth investing
– Defensive investing
– Long term cyclic investing
– Dividend investing
– Short term momentum trading
– Midfielder investing
5) World and US stock market are still at high optimism above 75%, short term is mild bullish with support of bullish economy such as excellent job market.
6) Singapore, Hong Kong and Germany are at moderate optimism 40-60% after recent correction, short term turning bearish.
7) China stock market just falls into low optimism below 25%, officially level 3 (country level) crisis again, potential opportunity for cyclic investing but beware of short term sharp falling knife in prices.
 
Next Ein55 graduate gathering will be in Jan 2019. Graduates have learned the importance of setup exit strategies while preparing a wish list of giant stocks to buy in future.
 
For general public, you may learn the latest market outlook through free stock investment workshop by Dr Tee, register in www.ein55.com
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Filed Under: Stock Market Tagged:

YangZiJiang Stock Review – Sample Ein55 Analysis

Posted on June 29, 2018 Written by
All Ein55 graduates are trained for a simple trading/investing system of Optimism + FA + TA. Here is a sample application on YangZiJiang stock review based on a request by a forum member, sharing for pure educational purpose, not a personal financial advice.
 
Stock = YangZiJiang (SGX: BS6.SI)
Current Price = S$0.90 (28 Jun 2018)
 
Optimism (long term) = 39% (below Ein55 “intrinsic value” of $1.13 but still above buying zone of 25% Optimism).
 
Optimism (mid term) = 22%.
 
FA (Fundamental Analysis) = 4.5 point (out of max 8 points for a super giant), average performance.
 
TA (Technical Analysis) = Down-Down-Down (sharp falling knife from short term to mid term to long term), potential for short term shorting but must know how to setup with entry/exit signal.
 
Strategy = Do not qualify Ein55 “giant stock” criteria, may not consider for long term investing. A cyclic stock in nature, moderate dividend, possible to buy low sell high, applying mid-term trading strategies but probability of success may be limited. For short term trading, possible to short (strong bearish trend) but need to wait for right entry signal.
 
Possible actions = wait for investor (till 25% Optimism is reached) and trader (till trend is reversed from bearish to bullish). Decision making is personality based, it is possible for investor to ignore, mid-term trader to wait to buy while short-term trader to wait til short, all are valid actions if aligned to individual.
 
This is the most simplified Ein55 investing/trading system, Ein55 graduates are trained to make a decision (Buy / Hold / Sell / Wait / Shorting) with quick glance of Optimism + FA + TA.
 
For more in-depth YangZiJiang stock review, one may need to integrate with L2 (sector – shipping for YangZiJiang, Baltic Dry Index, etc), L3 (country – Singapore / China indices for comparison with YangZiJiang) and L4 (world – economy / stock) indicators, understanding the interactions of all investment market: stock, property, bond, forex, commodity and economy, aligning with own unique personality (from short term trading to long term investing) and investment goals with strategies (investing for income or capital gains or both), consideration of political economy, PA (Personal Analysis), etc, through 55 Ein55 investing styles.
 
For general public, if you are from Singapore, feel free to sign up for free 4 hours investment course by Dr Tee to learn Optimism + FA + TA + PA. Register in www.ein55.com.
 
For those who are from overseas (outside Singapore) or too busy to attend the free course, you may sign up for Ein55 video course by Dr Tee (different content from free 4hr course, focus more on giant stocks with Fundamental Analysis). Register Here: https://www.investingnote.com/store/products/discover-giant-stocks-value-investing-strategies
Dr Tee Investment Course (Stock, Property, Commodity, Forex, Bond)
Filed Under: Fundamental Analysis, Market Optimism, Stock Market, Stocks A-Z, Technical Analysis Tagged: ,
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