Key Learning Points of Ein55 Traders Psychology Course with Charity for Lighthouse School

 

Ein55 Newsletter No 064 - 2017-03-19 - Donation to Lighthouse School

Congratulations to Ein55 Mentor James Hon who has successfully completed the full-day PA #1 Course on Traders Psychology. Who could believe he is over 70 years old, able to talk loudly nearly non-stop without a microphone to over 100 students for the whole day!

The students have learned the power of PA (Personal Analysis), understanding the importance of personality based trading plans and investing strategies.  Here are some of the key learning points:

1) Develop Wisdom by combining Knowledge and Life Experience:

Knowledge + Experience = Wisdom

2) ECP = Experience leads to Confidence, which enables your willingness to apply your system with Persistence.

3) The 3S of Trading Success:

Survive -> Sustain -> Succeed

4) Knowing where you want to be (Goal), you will be able to follow through (Persistent); persistence keeps you calm, calmness enables you to let go of emotional stress (Detach), then you will be able to attain result through careful deliberation.

知止而后有定,定而后能静,静而后能安,安而后能虑,虑而后能得。《大学》

知道应该达到的境界才能够使自己志向坚定;志向坚定才能够镇静不躁;镇静不躁才能够心安理得;心安理得才能够思虑周祥;思虑周祥才能够有所收获。

5) Gain the Awareness to define your own roadmap to develop the right Habits.

Ein55 Newsletter No 064 - 2017-03-19 - PA Course

 

Life is not just making money. To encourage successful Ein55 Graduates to help other needy groups, Ein55 Mentor James Hon and Dr Tee take the lead to donate to a charity organization, Lighthouse School. The school has been helping children with vision and hearing impairs to gain confidence in life through special education.

Ein55 graduate, Grace Poon, who is a volunteer and donor to Lighthouse School, has shared her experience in helping these special needs children through a choir. One of the motivation factors for Grace in learning investment is to help other needy group with the gains from investment. We hope her sharing could inspire more Ein55 Graduates to help other needy groups one day!

Let’s hear the beautiful sounds of these children in Purple Symphony, we could feel how the music has given a new meaning in life to them:

 

How to Gamble Safely with Casino Stocks?

Ein55 Newsletter No 030 - image - Casino Banner

As we know, casino has unfair advantage of over 51% chances for all the games, therefore even a gambler has a 49% winning rate, over a long time with many times of gambling, the survival rate could be very low.  However, in the world of stock market, we could reverse the situation, playing the role as casino with unfair advantage on us, if we know how to position the right strategy, aligning with our personalities.

Genting Singapore (SGX: G13) has suffered huge correction in share price to about 1/3 of the peak price.  In the past few years, earning of Genting Singapore and global casino stocks have declined due to slowdown in global economy.  Weaker Malaysian Ringgit and anti-corruption in China have further reduced the gamblers from these 2 main markets.  The net asset value (NAV) of Genting Singapore is still growing gradually, helping to stabilize the business.

Long-term Optimism of Genting Singapore is 9% at current share price, low downside and high upside.  This is a rare opportunity for investor (second best opportunity after the last global financial crisis in 2008-2009).  Optimism is a probability calculator, we could estimate the reward to risk ratio, we could safely consider a good stock if we could wait for the giant to fall down.  However, the medium term trend is negative due to weak fundamental of business, therefore only investors with long term holding power could enter with counter trend (price could become lower in short to medium term). If not, trading strategy could be considered, waiting for higher share price with breakout of next resistance, buying after short-term uptrend is established.

At the same time, trader could also profit from shorting the casino stocks at short to medium-term high optimism.  There is no single answer to trading or investing decision which has to be aligned with one’s personality (short term trader, medium term trader or long term investor).

Ein55 Newsletter No 030 - image - Genting SG

Currently global casino stocks are under Level 2 crisis, suitable for medium term trading but technical analysis should be applied before entry.  For long term investing, this stock may be considered during Level 3 (regional crisis) or Level 4 crisis (global financial crisis) one day when optimism of world stock indices are low. Global casino business is at winter time now but this is a cyclic business, a gambler may not stop gambling forever.  When global economy has improved, the gamblers will come back again to support the casino business.  For trader and investor, the only question is what price to buy for casino stocks?

 

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.