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 AcademyTM 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 (29th May) and sold the option when the stock price was $70 (3rd 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?
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