Stock Market Archives - Page 22 of 28

Stock Investing Strategy with Top 10 Richest Investors and Businessmen

Posted on March 7, 2018 Written by Dr Tee (Ein55)

Jeff Bezos of Amazon is No 1 of Top 10 Richest Investors and Businessmen in the world as of Mar 2018. It is not just a competition of individual wealth. It is relative performance of their stocks in the current stock market, implying Amazon (Jeff Bezos) outperforms Microsoft (Bill Gates) in stocks.

See the list of Top 10 Richest Investors in the world, in Asia or even in Singapore, most of these richest persons have a successful business empire, supported by profitable business (Level 1) in a growing sector (Level 2) of a major economy (Level 3) with global influence (Level 4).

Since the contribution of stock performance is key to wealth of individual, this relative ranking of Top 10 Richest Investors could change again every year, depending on their stock prices and business performance. Only those businesses have sustainable growth could dominate the stock market and Top 10 Richest Investors ranking for a long term.

We don’t have to envy of the wealth of Top 10 Richest Investors but we could consider share their wealth by joining as a minority business partner, simply buy the stocks of these giant businesses (Amazon, Microsoft, Berkshire, Facebook, Google, etc) at the right time. Although we may not be able to be the same in terms of absolute wealth as it requires accumulation of money over a long term, it is possible to have similar relative growth in wealth as Top 10 Richest Investors in the world if we could own their stocks.

A short term trader could buy high sell higher, these giant stocks of Top 10 Richest Investors (Amazon, Microsoft, Berkshire, Facebook, Google, etc) likely have strong momentum to grow in share prices further but a smart trader would know when to take profits as the optimism of stock could be on high side. On the other hand, a long term investor may wait patiently for global financial crisis to buy these profitable businesses with share prices falling more than 50%, but the business is still making money each day even during the market fear driven crisis, having tremendous upside for potential capital gains by holding to the stocks.

Learn further from Dr Tee free investment courses to share the profits of these Top 10 Richest Investors in the World, Asia and Singapore (various case studies with strategies will be discussed) through trading or investing in their stocks at the right time, aligning to own unique personalities.

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

Filed Under: Personal Analysis, Stock Market, Value Investing Tagged: Top 10 Richest Investors

Technology Stock Bubble V2.0

Posted on March 5, 2018 Written by Dr Tee (Ein55)

Creative Technology (SGX: C76) at one time, was the most expensive stock in Singapore before year 2000 dot com bubble with over $60 per share. After the Sound Blaster technology faded way over the last 2 decades, share price dropped to $1 due to declining earning.

Recently there is an exciting new Super X-Fi technology introduced, potentially could be a reborn for Creative. As a result, share price soars to over $8 currently from low of $1 in just 1 week. Although this is a speculation of new technology which may potentially save the company (similar to the case of Hi-P, nearly bankrupt at one time, now share prices go up with good earning in the last few years), it may not be wise to short at Creative or any technology stock with strong uptrend, despite it is not yet supported by real earning yet.

Stock market is forward looking, besides looking at past results, the outlook for future products or services can be an important consideration. Creative has a good chance of getting positive cash flow and earning from year 2018 if this new product of Super X-Fi could be as attractive as the Sound Blaster 20 years ago. Creative has been losing less money each year over the last decade, therefore the recent exciting news brings back the old memory of Creative over $60 per share.

Another technology stock, AEM (SGX: AWX) share price goes up 30 times from $0.20 to over $6 since year 2015 after the turn around of business from losing to earning since 2015, riding the bullish economy wave. There are more technology stocks which are driven and supported by good earning in the last few years, eg. Venture, Micro-mechanics, Hi-P, etc.

Technology stocks are benefiting from the current global technology stock bubble V2.0 (version 1.0 was in year 2000), any significant positive news in business would become a driver for stock traders to buy high sell higher until the next global financial crisis. Technology stocks may be considered for short term trading but may not be suitable for long term investing as the business may not be sustainable after the economy becomes bearish one day. Align the strategies of technology stock bubble to one’s unique personality.

Learn from Dr Tee on riding the technology stock bubble.

Filed Under: Stock Market, Trading Tagged: dot com bubble, technology stock, technology stock bubble

Riding the Dark Horse Stock with Economy Wagon

Posted on March 4, 2018 Written by Dr Tee (Ein55)

Stock with Economy

US job market has improved further, jobless claim as of Feb 2018 is the lowest over the past 50 years, implying more Americans have jobs, having salaries monthly, therefore stronger spending power which would help the bullish US economy to grow further. Currently it is employee market, the company may need to pay higher salary to keep the staff. The bullish No 1 economy (US) would help the rest of the world stock with economy to grow together.

The corporate tax reduction by Trump from 35% to 21% has helped the companies to achieve higher earning by saving of 40% tax. Warren Buffet’s Berkshire Hathaway book value has gone up tremendously by $65 Billions in year 2017, about $36 Billions is from company business, remaining $29 Billions from the recent tax reform. It means for every $2 value gained by Warren Buffett in year 2017, $1 is from the business, another $1 is contributed by Trump through the tax reduction. This is not limited to Warren Buffett company. This is applied to entire US companies, therefore the hidden stimulus plan is massive.

The impact would be tremendous over the next few years, may result in overheated economy and bullish stock market with over-spending, higher inflation, therefore higher interest rate. The recent global stock market correction is healthy, bringing the stock market (price) closer to economy (value). If the wild horse of stock is not tamed, sooner or later it would fall off the cliff (black swan) or tripped over a rock (crisis), hurting the master (economy) and global investors and traders.

It is fine to ride the horse with economy wagon, up the hill of stock market. The rider (stock trader) has to monitor the emotions of horses (especially for unpredictable dark horses, stock which perform inconsistently) as upside will become when running too fast for too long. If the horse could rest from time to time, having enough food (supplied by master through stable economy), the journey of bullish stock market could be longer. Learn how to manage the stock with economy.

Filed Under: Macroeconomy, Stock Market Tagged: economy, job market, stock with economy, US Market

Leveraging on Stock Market Greed and Fear

Posted on March 1, 2018 Written by Dr Tee (Ein55)

Good news continues to be bad news, affected by stock market greed and fear. Stock market is forward looking, usually moving ahead of economy. When economy is strong, stock investors forecast on next moves such as further interest hikes, therefore cautious in each move from now.

If there are 4 times of 0.25% interest rate hike = 1% increment in the next 1 year, the US interest rate would be 1.5 + 1 = 2.5%, US treasury bond yield would exceed 3%. This implies that the next 1 year would be very exciting for both stock traders and investors if they know how to position based on their personalities against the stock market greed and fear.

1) Stock Traders – Leveraging on Stock Market Greed

In the last phase of bull run, mixed of worriness and excitement, stock market may achieve an euphoric stage before ending the episode of a decade long market cycle. This is a high chance for stock traders to make some quick profits but only those who knows how to exit could keep the profits, otherwise may lose more than the earlier earning.

2) Stock Investors – Leveraging on Stock Market Fear

After the investment party (rally) is over, while waiting for global government to clean up the mess, stock market would fall significantly, resulting in the global financial crisis. The black swan would help smart investors to buy the desired global giant stocks with more than 50% discount, which would translate to tremendous capital gains in future.

A smart trader or investor would leverage the right emotion against the stock market greed and fear, creating opportunity of winning. Learn how to align your personality to profit from the stocks market greed and fear, register for free investment course by Dr Tee.

Filed Under: Macroeconomy, Market Outlook, Stock Market Tagged: stock market greed and fear

Global Bank Stocks Investing Strategies

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

3 major local bank stocks in Singapore: DBS Bank (SGX: D05), OCBC Bank (SGX: O39), UOB Bank (SGX: U11) have already achieved historical high peak prices, supported by the bullish global economy. With the rising bank interest rate, Net Interest Margin (NIM) would be larger, banks would have higher profits from this traditional business, not to mention other divisions such as credit card, insurance, wealth management would also make more profits.

3 major banks in Singapore contribute to about 30% of STI stock index. Trend of STI does not reflect all the sectors in Singapore, it is important for trader and investor to study the respective sector index, instead of using STI alone to compare with individual Level 1 stock.

Bank stocks can be multi-role players in an investment dream team, can be a defender (passive income generation) or can be a striker (short term trading for quick capital gains). Currently Ein55 coaching students (Jan-May 2018 batch) are working on a special project on global bank stocks, shortlisting 28 excellent bank stocks from over 500 good bank stocks globally. Under the guidance of Mentors Isabel & Chye Tin, The students will use the next few months to study the financial reports in details with bank stocks unique performance indicators, choosing the best bank stocks for various categories of investing from these 28 excellent bank stocks:

– Growth stock (mainly capital gains),

– Defensive stock (low risk, life time investing),

– Defender stock (investing for income with dividend)

– Midfielder stock (capital gains + dividend)

– Striker stock (cyclic / momentum trading for short term capital gains)

In Ein55 coaching this week, we have reviewed several short term global & local momentum stocks with potential, just nice riding this recovery wave. The Level 1 individual stocks are aligned with Level 3 global stock market performance: corrected by about 10%, hitting low optimism for short term, then recovering well above intermediate support. A nice entry signal for short term trader after breaking the intermediate price resistance.

The last few weeks of 10% correction of global stock market is an alarm, after the recovery, when it is forming twin peaks (double top) or head & shoulder next time at high optimism, the risk is even higher. Remember we are walking on layer of thin ice now, safer to position as a short term trader but having investor mindset (eg. considering only giant stocks). In short, be a short term investor = Buy stock as an investor + buy/sell as a short term trader.

For general public, you may start learning how to invest in global bank stocks and other blue chip stocks through free 4 hours investment courses by Dr Tee, sign up today.

Filed Under: Fundamental Analysis, Stock Market, Trading Tagged: bank stock, dbs, ocbc, uob

Investing Strategies for Singapore Telco Stocks

Posted on February 21, 2018 Written by Dr Tee (Ein55)

After joining of No 4 Telco Player, TPG, the Singapore Telco stocks have been bearish in the last few years, with share price correction ranging from about 20% to 50%. Here is a quick summary based on current share prices:

Telco Stocks Optimism Dividend Yield

——————————————————————-

Singtel (SGX: Z74) 29% 4.9%

Starhub (SGX: CC3) 20% 7.1%

M1 (SGX: B2F) 2% 6.4%

TPG (AX: TPM) 17% 1.6%

TPG is a growing Telco stock in Australia, sharing the limited market share of saturated sector of telco stocks in Singapore. Both Starhub and M1 are affected more as the business depends on local Telco, while Singtel is relatively more stable as its business depends on both local and regional Asia Pacific market. M1 is severely affected with share price dropped by more than 50% but the company is still profitable, earning drops by only 25% over the last few years. It shows that Telco stocks in Singapore are over-corrected, initially was driven by news, later by weaker fundamental for Starhub & M1, then driven by the market fear of huge fall in share prices.

As a result, Optimism for Singapore Telco stocks are low, especially for Starhub and M1 which are <25% Optimism. Telco is usually a defensive business, after getting the limited Telco licence issued by government (oligopoly business with limited competitors), investing in infrastructure for Telco, offering services with reasonable prices, the return will be relatively stable with positive monthly cash flow. The disturbance of TPG is just a one-time correction, when the market share is redistributed among the 4 local Telco stocks, all the 4 companies will find their own anchor point in share prices and business earning.

As an investor, there are 2 Investing Strategies for Singapore Telco Stocks

1) Investing for Passive Income (Buy & Hold)

– Stable dividend payment for long term investing

2) Investing for Capital Gains (Buy Low Sell High)

– Buy at discounted price (eg <25% Optimism), selling at bonus price (eg >75% Optimism)

For Passive Income Strategy, Singtel barely fulfills the criteria with 4.9% dividend yield with support of a stable local and regional business, strong sponsor of major shareholder Temasek. The 4.9% dividend yield is comparable with some strong REITs, better than local bank stocks, much higher than 2% return of Singapore Saving Bonds or 1% bank interest rate. A better way of investing for income is to consider Singtel or other dividend stocks at low optimism to maximize the dividend yield, having the potential for capital gains at the same time. An investor also has the choice to consider regional and global Telco stocks which are growing, instead of depending on saturated Singapore Telco business.

However, in the short term, since the Telco stocks are still bearish, it is possible for Telco stocks to have capital loss more than 5% when share prices drops further. Therefore, it is crucial to understand the objective: investing for long term (dividend / capital gains) or trading for medium / short terms. A stock for long term investing may not be suitable for short term trading.

For Capital Gains strategy, both Starhub and M1 fulfill the criteria with Optimism < 25%. In the short term, M1 has better price support than Starhub. Choices of Starhub and M1 should not base on dividend yield of 6-7% because the high yield is due to price drops, not due to earning or dividend growth. Since global stock market is over 80% Optimism, despite Starhub and M1 are at low optimism, the positioning is mainly based on trading to buy low sell high for short to medium terms. The signal for entry depends on the recovery of short term stock prices and business performance. If not, there is a risk of capture the falling knife.

There are many ways to make money in Singapore Telco stocks and global blue chip stocks, learn further from Dr Tee.

Filed Under: Stock Market Tagged: m1, singtel, starhub, telco stocks

Stock Market Time Bomb

Posted on February 15, 2018 Written by Dr Tee (Ein55)

An investor has to be careful of stock market time bomb. S&P500 has to prove its recovery this week, breaking 2700 points will be a test of strength for US stock market. If this 2700 intermediate resistance could be broken, Asia stock market can only catch up next week after the Lunar New Year holidays.

A smart short-term investor who plans to buy low after recent 10% stock market correction, may integrate with trading strategies, waiting for uptrend market momentum and greed to come back. The recovery process may not be smooth after the recent market shock as some traders will be more cautious, not as “crazy” as before.

If the sell down last week is proven to be just a correction (stirring to cool down a pot of hot soup), then the next peak will be even more thrilling as it may potentially form double top or even Head & Shoulder pattern or Shooting Star, which can be risky in a high optimism global stock market.

In short, positioning in high optimism stock market has to be short term (following the trends closely) unless it is a truly defensive stock to resist the stock market time bomb.

When US 10 years bond yield is approaching or exceeding 3%, the Stock Market Time Bomb could be triggered by any potential black swan, the last straw which may break the camel’s back. Until then, enjoy the bumpy ride of crazy bull.

Filed Under: Stock Market Tagged: Stock Market Time Bomb, US Market

Stock Market Gravity: Heaven – Earth – Hell

Posted on February 10, 2018 Written by Dr Tee (Ein55)

Stock market gravity force controls the global stock markets. The high volatility of global stock market last week is comparable with the time in year 2011 when US losing AAA credit rating. If we were not amazed by upward strength of US stock market over the last 1 year, we should not be surprised as well how it drops with similar strength but in reversed way.

US and global stock market is still at high optimism. High optimism means share price is a bonus, a market could not sustain at high optimism for too long, it has to correct down near to its fair value which is like a stock market gravity. Sometimes it may over-correct, going to low optimism region which is a discounted price.

Remember Ein55 Style #7: Heaven & Earth. It is similar to life, usually we experience a cycle of 3 stages: Heaven – Earth – Hell. A person could not be at Heaven stage (smooth life, successes, winning, etc) all the time, sometimes we may feel like Hell (down, depressed, failure, etc), although most of the time we are on Earth with daily lives (regular routines). Similar to Earth Gravity, value of stock market gravity will pull down high optimism prices, bringing up the low optimism prices.

When one is at Heaven of stock market, don’t assume we are a winner all the time, learning to sell high, so that the burden is less when it is due to fall down again to Earth one day. Similarly when one is at Hell of stock market, as long as can endure through the tough time, there will be chance to go up again if there is enough cash and able to take actions to buy low when most people is suffering.

Sir Isaac Newton discovered the Law of Gravity (famous story of apple falling on his head) but he could not apply in the world of stock market, losing lots of money in South Sea Bubble. Stock market is not designed for smart people. Stock market is for one which can find strong business as value stock, wait patiently to buy low, overcome greed to sell high. A big winner in stock usually is lonely because few people would do the same way.

Learn from Dr Tee on the law of stock market gravity with optimism.

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

Time for Actions in Stocks (Personality Based)

Posted on February 9, 2018 Written by Dr Tee (Ein55)

Position in the current high optimism stock market with 10% dip in S&P 500, following your unique personality: Trader or Investor, having stocks or no stock. Here are possible time for actions in stocks for 4 types of personalities:

1) Traders – With Stocks:
Time for Actions in Stocks: Short term traders should have sold the stocks (taking profit or even cut loss) a few days ago when short term trend turned bearish. For medium term traders with higher risk tolerance level, plan to exit if the correction has met the exit strategy.

2) Traders – No Stocks

Time for Actions in Stocks: Waiting for signal to come back again (either short term or medium term), don’t capture the falling knife buying low in downtrend. Current short term support is broken for Level 3 (stock indices), about 10% price correction for S&P 500 is significant, it may take time (weeks or even months, need strong economic data and even support from political economy, price will show if there is any recovery signal) for the market to recover. Even if individual stock (Level 1) is strong, it is against the market trend, chances of sustainable bull may not be high. Since the long term and medium terms are still bullish, possible shorting for trading may be only considered for short term.

3) Investors – With Stocks:
Time for Actions in Stocks: Long term investor have already gained if holding from low optimism to high optimism market. Current high optimism market is only a bonus, not to use fundamental or strong economy to justify the holding because any black swan (may not be a known crisis, could be a butterfly flapping wings, potentially could cause a thunderstorm eventually) or the last straw which may break the camel’s back due to sudden transition from greed to fear. Investors may have used trailing support so far, risk tolerance level is higher (possible to hold as long term optimism is still high) but when the condition is met, has to exit as well, just needs more signals for confirmation. There is no need to guess the direction of high optimism stock market which is full with randomness. For investors, the difference is only big win or smaller win.

4) Investors – No Stocks
Time for Actions in Stocks: Current market correction is still not yet the condition to buy low as optimism is still high. It requires patience to wait for tremendous fear in the market to truly buy low, eg. a blue chip with more than 50% discount. Investors are likely to continue to wait but studying harder to shortlist at least 10 global giant stocks, so that action taking can be faster if global financial crisis really comes one day. Cash is king when used at the right time.

—————————

Currently it is too early to conclude whether it is only a short term stock market correction or beginning of global financial crisis. A wise trader and smart investor would not take it lightly, starting to take the right actions (Buy / Hold / Sell / Wait / Shorting) following own personality. Doing nothing (pure ignorance) without a strategy can be very risky.

Learn further from Dr Tee on how to Time for Actions in Stocks.

Filed Under: Stock Market Tagged: Time for Actions in Stocks

Walking on Thin Ice of Stock Market

Posted on February 8, 2018 Written by Dr Tee (Ein55)

After the surprise dip of 666 points on 2 Feb 2018, Dow Jones Index dropped another 1175 points on 5 Feb 1018, there is total of about 7% correction over the last 2 trading days, strong enough to drive short term traders (who long) out of the game temporarily. The thin ice of stock market is getting fragile.

Those algorithmic trading tools which follows the TA rules, when critical short-term support is broken, would rush to find the nearest exit to sell down with high volume recorded, adding to the power of market correction in a short time. There are over 70% stock trading in US is done by robot or algorithmic trading, mostly are trend follower, therefore when there is a flash crash, the robots will follow one another to exit from the stock market or even start the shorting process.

The 7% stock market correction is overdue, especially for US and Hong Kong stock markets which have been over-heated in the past few months. Macroeconomy and stock market are connected loosely, when the fear emotion is over (intra-day VIX was 50 but subsiding quickly), fundamental will have influence over the technical again, before the greed emotion takes over again.

There is nothing wrong for short to medium term traders to take profits of last few months as this was the exit strategy. After all, US was at very high Optimism (over 90%), any potential risk could be the next black swan, resulting in the global financial crisis. In year 2000, the dot com bubble was simply too large, price over value, therefore a high optimism stock index, itself can be a potential crisis because when most people are profiting from the bullish market, any shake would change the greed into fear, breaking the thin ice of stock market.

Trading in a high optimism stock market is as if walking on a layer of thin ice of stock market. Sometimes it could be a false alarm (wolf is coming), sometimes it could be a real crash of ice and stock market. Therefore a systematic and disciplined trading plan is needed.

Investors would want to wait for the global financial crisis to come ASAP to buy low for strong fundamental stocks. However, political economy could add more complexity and traders could buy low again in short term if it is only a regular correction. Therefore, patience is crucial for investors.

Allocation of funds (cash vs stock) is critical to manage the emotions for a trader and an investor. When one invests too much at high optimism, the self control is weak. It is fine to cut loss in a trading market when the future price trend is against the earlier assumption. The worst is a mismatch of personality with strategy, eg. entering as a short term trader for a quick return, ending up holding as a long term investor when stock market is confirmed a crash.

This Chinese saying is a good summary of strategy at high optimism stock market:
《詩》云：「战战兢兢，如临深渊，如履薄冰。」

Learn from Dr Tee to match the stock trading or investing strategy with own personality, mastering Walking on Thin Ice of Stock Market.

Filed Under: Stock Market Tagged: black swan, market signal, Thin Ice of Stock, US Market

2 Free eBooks by Dr Tee (Click to Download)