Investment Update II

I have just logged into my optionsxpress account and realized that my forecast analysis for AIG to drop by 10%-15% by August has already came true!

-My analysis came true-

And today is only the last day of July. If I were to continue trading AIG..returns would have been at least 70%! But it's ok...I had more impt things to do in July and thus wasn't active.

Notice i DO NOT trade by 'predictin, forecastin or even guessin' simply because that is silly. One of the most impt thing I've learnt is to never predict the market. You're not god.

Look for confirmations and reversal of trends. Ride with the wave. Never predict. Cos when you do..you're gambling.

I may make forecast but only enter when confirmation is present.

If you're a AIG option holder..i'll advice u to be cautious now. Prices are probable going to continue declining BUT..yesterday's close registered a 'Doji'. Meaning a minor rally may occur.

But the saying goes..nv gamble..nv predict. Sell once there is a reversal. Watch that Doji (A candlestick pattern).

This reiterates my point...if you want to make super normal returns on investments..you'll have to learn from the right avenue..

Investment update

I’ve arrived at central plaza more than an hour early for our appt with eNets. N since I’m already prepared for the meeting..i shall blog more abt my progress in my investment skills. I’m glad to announce that the 3K I paid to attend Wealth Academy^TM is finally starting to pay off!

I’m still engaged in virtual trade as Warrant Buffett’s rule of investing – Never Ever Lose Money – has now become principles of my own in my trades. Although I’m currently not in value investing, the trait that made Warrant Buffett a billionaire, that doesn’t mean I should start losing money too. You muz be thinking I’m a very conservative investor making measly returns on my investments (low risk low returns).

You’re right..and wrong.

I’m conservative by my own definition and I go for Low Risk, High Returns.

Impossible you think? That’s what they want you to think. That’s what the main stream educators teach all the time and I’m not surprised if you start doubting the credibility of my statements. I don’t blame the main stream educators (Tertiary, Universities, Certified Financial Analyst & Asset Management Houses) as they were merely teaching you what they were taught. They were never given the chance to be exposed to the evaluation and investing strategies of the likes of George Soros and Warrant Buffett.

Many simply refuse to look at it cos b4 they even got started, they condemned themselves to be unable to achieve extraordinary things and that whatever comes with high returns will come with high risk. This was a state that I was in not too long ago and I am mighty glad that I’m out of it!

How did I achieve low risk? What did I do? They say to lower risk..you need to diversify..Did I start diversifying my portfolio like the way butter is spread on bread?

Nope!

In fact..for the past one month plus, I’ve only traded ONE stock. “That’s super risky!” I can already hear many out there shouting in their minds. And my response is that my risk is much lower than even those who so called ‘lower their risk’ by diversifying as if there is no tmr. Here’s my explanation…taken wholesale from Adam Khoo, Conrad and Warrant Buffett who either taught me investing in person or who’s books have made me see the investing world differently now.

First of all…risk is contextual. Meaning to say..risk is subject to the amount of training you have received to achieve whatever it is you wanna achieve. If I were to ask you to drive a F1 vehicle at 250km/h is it risky? Yes! Both you and I will crash and burn!

If I were to ask you to fly a plane now would it be risky? Yes! We can very well send another twin tower down.

But what if it was Michael Schumacher that was tasked to drive the F1 Vehicle now? Would it still be risky? Of Course not!

What if a seasoned pilot is asked to fly the plane? Would it still be risky? You bet its not!

So what’s the difference? The task at hand is still very much the same. But why does different ppl appear to face different risk? It’s purely becos they were trained to take on the task and they were trained well.

Investing is the same.

The reason why many ppl get burned is becos they either did not train themselves or they got the wrong ppl to train them. All the main stream educators who fail to achieve super normal returns but still went out to teach the others. Someone in SMU once told me..there is no need to pay fees to learn investing..go to the stock market n ‘whack’. The money you lose will be the fees. Insanity at the highest level. Many of us wondered how he got into SMU btw..

He is just another classic example of attempting to drive a high speed vehicle without training. And claim that cost of crashing the car and losing your own life will be the fees of learning. Of cos practical trading experience is important b4 u can declare yourself investment savvy. But going out without proper training is suicidal and stupid to say the least.

I’m not saying I’m a qualified trainer now. How I wish I am. But at least I had the opportunity to be trained by qualified ones who actually do achieve super normal returns after filtering losses if any. Remember..90% of fund managers fail to beat the market every year. And every yr..it is a different 10% that beats the market. 10% chance..is worse than betting on soccer. If you went to bet with Singapore Pools (1x2), your chance of winning is 33.33%. If you wanna count on the mainstream institutional investors (10%), maybe you should start thinking Singapore Pools. Lol.

This is why many ppl ‘think’ that the stock market is legalized gambling. Yet another insane remark. Of cos Singapore Pools will never be a viable option..since failing to beat market doesn’t mean you lose all your money. But you can sense what I’m driving at and just why it is so hard to make money by buying into Unit Trust and investment funds. (Especially those that are super diversified)

As I was taught..there are several levels of investing.

Level 1: Buying the Market (Idiot Proof)

Level 2: Value Investing (Investor Strategy)

Level 3: Smart Investor (Modified Investor Strategy)

Level 4: Momentum Trader (Short Term Trader)

Level 5: Options Trader (Leveraged Short Term Trader)

Level 6: Day Trader (Trades Intraday)

Level 7: Scalper (Opens & Closes in a matter of minutes)

The returns rises with the levels. Scalpers in level 7 are able to scalp and make thousands of dollars in a few minutes (typically first half hour of market opening). And of cos..the difficulty rises with the levels as well. Note: The strategies for each level can be very different.

Bulk of what I now know and practice in trading was taught to me in person by Conrad Alvin Lim who has recently broken his own record again and made US$15,563.50 from 18th to 30th July (8 days of trading) after filtering in losses, commissions and cancellations.

Conrad

alan . conrad . clarence

Many trainers out there publish only winning trades and also refuses to trade ‘live’ in front of public. Weak credibility. There’s no point posting a $10,000 winning trade if you’re going to lose $20,000 in the next.

Conrad is the trader I respect and learn from the most simply because he is the most consistent and that he is really humble and sincere. I realized that only truly humble people become truly successful.

Arrogant people obtain some success..think they’re too good to listen to people..and nv improve beyond their present point.

Like Robert T. Kiyosaki says: “Intelligence + Arrogance = Ignorance”.

If you think you can use Value Investing Strategies to do momentum trade..forget abt it. Like Conrad calls it.. “Its as different as day and night.”

I was advised to become masters of a few counters and I have dedicated time to study the AIG counter (Tickle symbol: AIG). I only trade in the U.S market because it is much more liquid than the SGX and also because I’m able to trade options which is not available in Singapore. Only through options are you able to make money in the stock market regardless of whether it is an uptrend or a downtrend.

I am currently at level 5 trying to improve and stabilize my trade decisions. Here are my results for the month of June (I was too busy to trade in July).

I was able to make a 30% return from AIG as I realized in May that their stock price would drop by at least 10%-15% by Aug. Thus I went to purchase a Put option at $73 (29^th May) and sold the option when the stock price was $70 (3^rd July). $73 drop to $70 is only a 5% decrease. What happened to my forcast of 10%-15%? Were there error in my 30% return calculations?

-Candlestick chart-
~Prices was above resistance line and Fibonacci retracement gave confirmation~

Nope!

10%-15% is to be attain in August. I had to sell the options in July as the options I was holding expires in August. A safe options trader will sell options at least 30 days before it expires. I’m super conservative. I sold it 60 days before.

As to how I could make 30%..that’s the beauty of options. Its way too long to explain here. In short, I bought 20 option contracts (100 options) at the cost basis of US$0.85 per option and sold it at US$1.11 per option making a profit of 30%. In absolute terms, investing US$1700 and making a profit of US$520 in one month. Not a fascinating figure in absolute terms simply because I invested only $1700 and more importantly..I wasn’t actively trading anyway.

But from another angle..a living and savings policy gets you 5.25% p.a but I have gotten 30% in a month. Meaning to say I have made in a month..what it would take your typical policy 61.44 months (compounded interest) or 5.12 years to make! This is why my extra funds do not flow to living policies anymore and that financial advisors fail to convince me to purchase any more products from them except term insurance.

Bear in mind: I am still learning the trade. I am a rookie. I hope I will get better. But even if I don’t, it would be better than plain buying policies or investment funds that returns 10-15% p.a at best.

This is the fruit of identifying the right people to learn the trade from. All the truly successful people, regardless what industry, I have spoken to told me the same thing about life.

“Do what the herd do…and you’ll get what the herd gets.”

90% (the herd) of investors learn investment through mainstream institutions (Varsities etc.) and get mainstream certifications (Chartered Financial Analyst etc.) and get mainstream results.

What are you doing with your life today?

Month of June – Mid July

Some of the rest of my activities in June & July

Endless House Moving

Somehow this yr..June has become House moving month..helped out in endless house moving..includin my sis n even peeg who moved out of his hse..to TPY..

I should start printing decals saying ‘Professional House Mover’ and stick it on the car soon..

Peeg’s home was especially hard to find. And even though it was at one end of the island..n dat cookiemon n me decided to leave home late..Peeg was still not ready when we arrived..tsk tsk tsk! Always waking up late. As they say~.. ‘A Jason never changes it’s sleeping habits’. Lol.

Before

After
-Jason the Yun Nan Endorsor-

-The Punk Wannabe-
~Ade Lavigne~

His Room is so so so messy!?!!!

Unbelievable!

Packed the whole car!

And still Packing..

There's always time to pose..

Weather..

Just keeps getting worse..
Even had to avoid the 1st Lane cos there were trees falling from center divider.

The poor Lexus bear..

We had live performance in the car!!
-The Cornetto Man-

Every room is numbered!





Sigh..how many signs does SBS have to make to accommodate ppl like them..sigh..

Reduced Suppers

Owing to the fact that all my classes were in the morn..Supper days had almost vanished. But I still did manage to meet for supper like..once a week?..haha..Returned to thrice a week gym regime which effectively means I am gyming more than I am suppering!

Another trend I realized was dat a lot of ppl were troubled in month of June..tsk tsk..no idea why..but found myself on the listening end to many ppl..which i’m not complaining of cos. I love listenin to ppl..and while some tink that I can read ppl well..i would say it depends if I tink that person is worth reading. Some ppl jus create probs for themselves n den complain why god is so unfair towards them..which makes me wanna switch off totally some times..

Matriculation Booth - Impressmu

Along with matriculation every year..a freshman bash follows and this yr..sigh..is no diff including the venue. I was hoping for a change of venue..but well..M.O.S was the most keen to work with us..so..this yr’s freshman bash is scheduled to be held in M.O.S on 30 Aug 07.

Apart from being involved in my biz plans..summer 3B..Freshman Matriculation..I am also in the marketing team for the Freshman Bash. One of the touch points we chose was to make a presence at the Matriculation booths. There were tons of booths from diff clubs and organizations, both internal and external tryin to grab a piece of the freshies’ attention.

And I hav to say..i have the best job on the scene (I don’t expect any dispute on this). I was appointed Talent Scout on one of the matriculation day and my job as the title suggest..is to look for talents. Lol. Duh~. We were on a look out for potential participants in the Freshman Bash Pageant and my job is to scout and sneak up on babes n hunks and to persuade them to join. Perfect excuse to talk to the babes..Lol. Everyone wanted my job..but too bad =P. It was non-negotiable.

I had to snap photos of them as well..which I know a lot of guys would want to be in my shoes..and luckily I’m the one appointed talent scout cos..u can rest assure..i dun abuse ppl’s photos..simply becos..i’m how innocent can..lol.

I will not post their photos here as it would be unethical but all I can say is..there are some interesting prospects lurking around..lol..and if u wanna find out jus how interesting and how juicy..Just come to the Bash @ MOS on 30^th Aug.

Hee..i’m from Marketing Team..have to promote a bit..

End of Summer 3B!!

Finally it was time to bid farewell to the prof..as he looks set to return to the states. B4 he left..we had a lengthy chat and he recommended me to go to the Indian School of Business (ISB) in India to do my masters becos of a variety of reasons. He cited that ISB is the SMU of India..as they are a very vibrant sch as well and that their grads are head hunted before they graduated..much like traits of SMU. More imptly..they offer 1 yr Masters and there is possibility that I will be able to attempt my Masters there str after I grad from SMU since I’m already running my own biz now. Typically you’ll need at least 3 yrs working experience and of a certain job designation to attempt Masters in a good University. So..i’ll be keepin a look out for ISB as well as other reputable universities who may offer 1 to 1.5 yrs Master courses.

But nonetheless..after the lengthy chat..

The ‘Sunsilk Team’ headed down to Minds Café finally..after endless times of talkin abt it. We could finally find some time to go have some fun and jus chill..

Michael-soft..e Geek???

Team Sunsilk!

It will be our last meeting for a week or 2..since Ze Yan is leaving town..n Jenny is heading back to Korea. Plus I’ll be busy with my biz plans as well..sigh..meeting with eNets tmr at 10 n I’m still typin away now.

Finally managed to meet up cookiemon for supper dat day too..

Yummy!

Driving in little India is such hazard!..ppl there hav no regard for their own lives n dash out of dark corners at free will..sigh..

Gonna head to bed very soon..Update again tmr.. =P

MKTG 101

Alrite alrite..i’ve finally been bugged by enough ppl to update my blog. Hee..i apologise (as always) for the lack of activity here. Have been really really really busy. A lot of progress has happened in terms of my biz..am now in talks with eNets to use their payment gateways for my biz as well as many other parties. We’re also in the search for Patent Agent as we intend to file for patent protection in terms of our biz operation. Millionaire Prof Loh, who sits in SMU BIG (Business Innovation Generator) advisory board has also hinted us of his interest in our biz n thus jumped onboard. Thus..i hav been awfully busy. And this..is only 1 of my 3 biz plans that I’m pushing for. That explains the things I have on my plate…not forgetting the fact that I hav jus finished Summer Term 3B..where I took Marketing 101. So..all the more..packed..

I changed my bid for Marketing 101 the moment I heard that we had a prestigious visiting prof from Goizueta Business School..A business school in the United States that is renowned for their PhD programs. Prof Bharadwaj (pronounced as bar-ra-watch) is a marketing guru that has won numerous awards and has done well to add companies like Coca Cola, IBM, Microsoft, KPMG, Nokia, NOL, Siemens and many others to the list of high profile clients he has served over the years.

Since he’s from the states..i have expected him to be at least interesting in his teaching..and that was exactly wat he brought to the class room with him. Somehow I was the only one with coloured hair in the class..and from day 1..he seemed to notice a lot abt me. I guess speaking up in class really helps..we all know how detrimental it can be to be quiet in class in SMU…felt the full effects of it last sem when I somehow ‘Saved my group’s presentation’ according to the prof and can still get lower marks for presentation than someone else in my grp whom she felt was too lacking in presentation. But guess that’s how the world works..r’ship comes above everything else. Not Talent.

Although it was a 3 mth course packed into 1 mth..n hav seen us have quiz and project due every few days..Marketing 101 was nonetheless a joy to sit thru..probably due to the prof and the fact that I had my LTB mates to take MKTG101 with me. We could all draw a lot from his experience and enthusiasm which is one of the things I thrive to do in SMU. To learn from elites. Everyone knows how much I hate sitting thru modules that in my mind do not serve a practical purpose (finally freshman year is over!). I dun even bother to debate in projects when the mods hav near zero actual implementation potential. I am mighty glad to be taking proper biz mods again..

Prof Bharadwaj was fast to build rapport with us when he started asking for the reasons why we chose SMU..n started saying things like “who wants to go to..NTU??..wherever it is..” and that it is even nearer to travel to JB from town than to Boon Lay..which was a really mean statement. Lol.

For our Final Proj..we selected to change the marketing plan of Sunsilk simply becos they were not achieving max potential on their product. I bet you didn’t know that females in their 20’s were their target grp and that they actually priced their pdt low cos they felt females at that age were price conscious. I have no idea where they get that idea from. Isn’t it blatantly obvious that the ones who really spend most on beauty products are females in the 20’s??? And that there is a direct relation between ‘Perceived Quality’ and ‘Price’ when it comes to beauty products and hair care. I mean..which lady in her prime would wanna use the ‘cheapest’ shampoo in the market simply cos its cheap. When we presented the case..the prof couldn’t agree more n thot that it was suicidal. He even defended some of the doubts that were thrown at our marketing plan by other grps. We proposed to repackage the whole brand all together to deliver the one message (which I even got the class to repeat after me) that “Sunsilk is Trendy”. And the proposal was to have the brand come with a series of augmented products including education, colour themes and trendy association.

Overall I felt we did pretty alrite..n has chosen the rite brand to redevelop. I have thot this way b4 (since poly days)..n I still tink this way…that it is suicidal regardless at any level (corporate or school) to start changing the marketing plan of something that is already working. Before you start thinking ‘duh?’..look around and tink abt brands like ‘Nokia’ and ‘Sony’ who were clear market leaders 5 yrs ago and jus had to have the itch to change things for the worse. This is a realistic issue. There were a grp in the class who presented on a brand that was already working as well and started proposing some weird stuff which got all our jaws including the prof’s dropped. Like the prof always said during the course.. “Common Sense…is NOT common.”

Marketers treat it as a jinx to change things that are already working. While I was never known as a conformist..this time I hav to agree with the saying. I know quite a no. of my frens r gonna take MTKG101 the coming sem..n when MTKG 101 is taken during normal term time..you can rest assure that projs will be even heavier..but at the same time..more fun. Have Fun!