BigFatPurse Value Investing Mastery Course (VIMC)

Recently there were quite a number of friends who asked me what I do and what course does BigFatPurse conducts. Basically for now, we run a 1-day Value Investing Mastery Course (VIMC).

We teach retail investors how to invest in stocks systematically, objectively and quickly.

And no… we are NOT another how-to-invest-like-warren-buffett kind of seminar.

If you are keen to attend or to find out more, visit here: http://www.bigfatpurse.com/vimc/

Why Hu Li Yang Thinks The Market Will Be Bullish Within The Next 3 Years

Attended Hu Li Yang (HLY) seminar last weekend. He think the market will be bullish within the next 3 years. Here are the reasons:

1) The world is full of liquidity, all the govt is pumping money to the financial system. Interest rate is at a record low worldwide. Every country is lowering her interest rate, including Australia. This is the first time in his whole life that he sees such event happening.

2) Crude, gold and commodities are officially in bear market. Reason: As long as the asset class dropped more than 20% from its peak and cannot recover within 3 months, it will be stepping into bear territory.

It is not that gold is not good. It is in fact too good already. Everybody who wants to buy gold has bought. The only way now is to go down. (exact words from HLY based on my translation) Demand will decrease. Even there is a QE3, Gold will have a spike lasting for a short while and will start to turn down again.

There are plenty of crude oil available, he believe can last 100-200 years. Just the salesman (OPEC) trying to convince the customer that supply is low/limited – to induce scarcity to raise price

Property markets will pull back slightly (10-20%) at later stage due to increase in interest rate. That result in return may not be that attractive. Owner may sell and return to stock markets. The pullback will last between 5 to 8 years. Again, he feels that those who want to invest in properties has already all invested.

3) Europe will recover in a very slow pace in 2nd half of 2012 which will be reflected in stock markets. Despite all these issues, Europe most stock markets are recovering pretty well not as bad as Lehman crisis period. He stressed that the EURO issue is not an issue at all. We are just  scaring ourselves. At most in time to come, those weaker countries (Greece etc) will just leave the euro zone.

It will not collapse. All those “economists in the media” are just trying to scare people to portray a doom day. His analogy: This euro issue is just like a mosquito buzzing around you. It can keep stinging you but you cannot die from the stings. Just very annoying only.

4) Europe and some Asia markets are at relatively bottom levels. Not high to begin with.

My personal views:

I am also bullish personally.

A) This year is an US election year. Market has traditionally gone up in election years. Obama is going to make the stock market and economy looks “good” if he wants to get re-elected.

B) From what I gather from most people I talked to and from guru’s articles I read, majority them are bearish for year 2013-2014. If most people are bearish, somehow I feel the market will not crash, cos’ most people will be prepared for it. The opposite might occur instead which is a bull market.

C) The US and the Euro problems are known issues. They are not unexpected. When the problems are known, it will not cause a crash.

Be it you are bullish or bearish… just invest within your own limits. There are no right or wrong. Stick to your own views.

This is what makes the market cos’ we are the market. If everybody has the same view, there will be NO MEAT left and you will not be able to profit from the market.

Waiting for the Market to Crash, So That You Can Buy?

Be it in blogs, forums, conversations etc, I have always heard people saying that they are waiting for the next market crash  (the sooner the better) – so that they can really go in and buy those stocks real dirt cheap, and increased their wealth when the market recovers.

Sounds very simple isn’t it? But it won’t be easy to do that.

I am currently reading a book, “Deemer on Technical Analysis” by Walter Deemer.

He said this, “When the time comes to buy, you won’t want to”.

It’s very easy now for you to say that you will scoop all the stocks when prices hit rock bottom, because you are now in “normal” state.

But when the time really comes for you to take action and click “buy”, most probably the market will be at extreme pessimistic state. The news will be so negative that you will feel like it’s end of the world and the market will never ever recover.

The FEAR, The PANIC will take control of you.

Don’t cheat yourself. Go back to Oct 2011. When STI plunged to 2520, how do you feel?

Do you dare to buy? Everything is so damn negative. Mind you, this is just a “correction” and not a real market crash yet.

When the time really comes, I doubt most people (maybe including me) would have the courage to buy.

Wealth Directions’ 5th Mentoring Session

I was given the chance to share my investing and trading experience with fellow graduates on 12th March 2012. My investing buddy, James Tai shared the stage with me and we talked for 1 hour each.

I am not any investing/trading  expert or guru. Basically just sharing what I know and what I have gone through during the past 1 year.

Fantastic full-house crowd of  about 110 people. The responses were very positive after our sharing ended and many of the fellow graduates thank us for the sharing and said that they learned a lot during the session. I am glad the whole session went smoothly and able to provide good information for them.

Here are some of the photos taken during the session:

UOB Kay Hian Review – I Like Their Charting Platform Better

UOB Kay Hian (UOBKH) is one of the leading stock broking firm in Singapore. Recently, they have re-brand their online platform as UTRADE.

I have opened an account with them some time ago through my friend who is working as a dealer. Before I opened an account with UOB KH, I already have accounts with DBS Vickers and POEMS.

As of now, out of these 3 brokerage firms, I prefer UOB Kay Hian’s. Why?

The main reason is their charting platform, which is called Techanalyzer, a tie up with ChartNexus. Techanalyzer allows user to perform technical analysis on the singapore counters and also screen for stocks using their stock screeners. I can view the intraday prices with ease and the layout is exactly the same as ChartNexus which I am already very used to it.

Just my personal view, I find that POEMS’s platform looks pretty outdated and “messy” – difficult to navigate.

DBS Vickers’ charting platform can only be used on IE. Hello? This is 2012 already. A lot of users are using Firefox, Chrome or Safari as their main browers and Vickers is still stuck in Internet Explorer ONLY? You can only view 30min or 1 hour for their intraday. Not very good and their charting platform is not very user-friendly.

Also UOBKH provides free SMS/email alerts for orders that are done. Not only that, I am able to set the target price to notify me using SMS if the stocks goes up or down. That’s when i can then decide to log-in and key in my orders to buy/sell. This takes out a lot of hassle from constantly checking on the price movement throughout the day.

Although the published brokerage rate is the standard rate as other major stockbroking firm, I get to enjoy preferential rates from them (due to my dealer friend).

UOBKH also provides frequent education seminars on fundamental analysis and technical analysis. The technical analysis seminar is taught to complement the use of the Techanalyzer. They teach you on moving averages, fibonacci retracement, elliott waves and also candlestick patterns which I find are pretty useful for beginners. Other seminars include how to build your own trading strategies using technical indicators. These are definitely useful for people who are new to technical analysis.

The easy of use of the online platform coupled with the Techanalyzer makes UOBKH’s platform a very good tool for investing as compared to other broking firms’ platform. Mobile platform is also available on iphone and the browser-based platform is available for non-iphone users.

If you are interested to open an account with UOB Kay Hian, you can fill up contact form below. I will ask my dealer friend to get in touch with you and give you a better rate. 🙂

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The Shortists Can’t Bring the Market Down

Dow Jones DJI 12 Jan 2012

Although it seems that the bulls and bears are still fighting to determine the market’s direction, it’s telling me that the bulls may have the upper hand now.

Why do I say that?

The above chart is the DJI (click for bigger view). Price is now clearly above the 200-day moving average, so it’s towards the bullish bias. Not only that, price also did not ever close below the T-line (8 EMA) for the past 15 days. The trend up is slow and steady, which is good because if it’s a parabolic rally, it will not be able to sustain.

Yesterday DJI started negative. But towards the closing time, the market recovered, as shown with the doji candle with lower shadow. There were buying pressure.

The shortists (the perma bears who are already well-conditioned to short from the downtrend last year) who shorted these few days just cannot bring the market down – – The market just keeps going up, which means they are LOSING money now. Somehow they will be forced to cover their positions sooner or later, which adds more fuel to the buying.

Yes, I agree that based on fundamental reasons, the market should be down all the way because of the EURO and US debt issues. The govt. are just kicking the can down the road. The next financial crisis is inevitable and will be more severe than in 2008 (my view). But it’s just not happening now. The market is not always rational. The chart is telling me that the bulls are stronger now.

MF Global (Singapore) Bankruptcy Saga – Can Investors Get Back Their Money?

The New Paper wrote about the MF Global bankruptcy on 5th Nov. It interviewed David Gerald, president of the Securities Investors Association (Singapore). Here’s the Q&A and I have underlined some of the more important points:

What is the worst-case scenario for investors affected by the shut down of Wall Street brokerage MF Global and its Singapore arm?

Many customers opened accounts with MF Global in order to trade multiple products in multiple countries.

In order for such trades to be executed smoothly, monies would have been placed in various jurisdictions (countries) and exchanges (stock exchanges).

As a result, time is necessary to determine where all the relevant monies are located, then repatriate all monies back to Singapore as soon as possible.

Only then, can an orderly distribution of monies back to all clients begin.

As a MF Global is a holder of a Capital Markets Services (CMS) license, it is obliged to segregate the monies and assets of its customers from its own monies and assets under the Securities and Futures Acts.

Nevertheless, given the global nature of its business, it will take some time to locate and repatriate the monies back to Singapore, and distribute to customers.

What lessons can investors learn from MF Global, especially when an Internet connection is all you need to invest and manage your own money?

With the ease of opening trading accounts and trading globally today, investors must be aware of jurisdictional issues.

While MF Global Singapore is a CMS license holder and has to abide by the Securities and Futures Act, I am aware that some investors are trading on platform which are not CMS license holders and thus, do not have the protection of the laws in Singapore.

Needless to say, investors would have a harder time recovering their monies, in what we understand, is an already complicated task. 

— end of interview —

From what I understand and interpret from the interview, clients who have money with MF Global Singapore should be able to get back their money BUT it will take some time.

This incident serves as a reminder on counterparty risk. If you deposit your money with a broker, that broker is the risk you have to undertake. Under such uncertain economy nowadays, the broker could fail and go bankrupt and your money will be gone as well.

Although MF Global is MAS-regulated, it doesn’t mean it’s fool-proof. You never know what they will do with the money behind the tables. In other words, know the risk and don’t deposit large sum amount of money with a broker. Of course, “large sum” is relative.

There was a lady who deposited her life savings of more than $100,000 into MF Global (as reported in Straits Times). Her open positions could not be closed and it seems that she had incurred $40,000 in losses. A broker is NOT a bank. A bank can also fail, let alone a broker!?!? You don’t deposit ALL your money with them. Know what you can afford to lose and use some common sense too.

However, it also doesn’t mean you should stay clear from trading CFD completely from now on.

Just like there are always accidents on roads. It doesn’t mean you stop walking on pavements and stop driving completely. There will always be people who fell in bathrooms, that doesn’t mean you don’t step into your bathroom ever, right?

Due diligence please…

Silver Price Might Fall Again

silver bearish pennant 17 Oct 2011

From the daily chart above, silver has formed a bearish pennant. Volume is getting lower and lower as well. For more information on bearish pennant, click here.

This is not looking good for me. It has the possibility that the price will go down lower.

silver possible retracement

Above is the weekly chart of silver, which also showed a bearish pennant in play. However, I added in the Fibonacci which showed the silver price stuck exactly at the 0.382 retracement level. It can’t break past that level for 3 weeks already.

Recently I happened to read up on “Harmonic patterns”, which talks about Fibonacci ratios and how some of these related ratios consistently formed some patterns. A bit “cheem” for me also, I am still learning. However, I can see that it has the possibility to form such “bullish” pattern. The price has to go down first once more before silver will shift to an uptrend again.

As such, silver has the possibility to go down for a 1.13 retracement, which is about USD$25 level.

bullish harmonic trading

If you don’t know what I am talking about, it’s alright. I am just trying to say that silver has the possibility to go down lower and it can go as low as ~$25.

Please note that I am not analyzing on hindsight. I am analyzing at this moment in time which the price is on the extreme right of the chart. This means that I don’t know what will happen in the next few days or 1-2 weeks. I might be wrong (I am always wrong) and who knows silver will just rally and go higher and higher.

But personally, I will go to UOB today (Mon 17/10) and sell my silver away. I feel that there is not much upside at the moment while the downside is a lot more (might drop to US$25). If the price really drop till that level, I will buy back again.

From TA, my own judgement is that it will drop… just don’t know when. It’s the timing that’s difficult to catch. So, I rather sell first (I don’t mean shorting, I mean holding cash) and not buy.

This is just my personal opinion. I am just sharing what I will be doing.

Market Has Changed From Oversold to Overbought

s&p 500 12 oct 2011

I hope my chart above can explain clearly (click on the chart for a bigger view). Seems like the rally is losing steam and price will drop soon. DJI roughly has the same kind of chart pattern as well.

Just last week, the market was seriously very oversold. Now it’s the reverse, becoming very overbought. I did some check, a lot of US counters are showing signs of weakness (based on my own analysis).

STI had became overbought too. Most likely will have a retrace soon.

In addition, the companies’ quarterly reports will be out soon. People will react based on fundamentals (profits/losses). Market most likely will be volatile again.

I Went In And Got It Wrong

kimco 5 oct 2011

I was talking about Kimco Realty (KIM) a few posts ago. I mentioned that I entered a short position. You can read the post over here.

It was a trade that really went my way – the drop in price was big and I made decent profits. The swing trade lasted 5 days for me. The market was actually very very OVERSOLD already. I am expecting a rebound anytime.

Then 2 days ago (4 Oct), the market rebounded very fiercely in the last 20 minutes. I thought that was no hope for S&P already initially, it looked like it was going to break the crucial support and officially in bear market. The bulls fought back, all done in the last 20 minutes! I bet a lot of people’s stop loss will be hit by the sudden surge.

As you can see from the chart above, Kimco actually went from a huge bearish engulfing to a white candle stick in the last 20 minutes as well. Sensing the market will rebound, I entered a long position. It was still a small hammer when I went in.

However yesterday Kimco actually dived (see the last candle in the chart above) while a lot of counters was actually up yesterday! It hit my stop loss and I was out of the trade. At the end of the day, it formed a hammer again! Well, I got the timing wrong. I should wait for the confirmation before I enter a position. 2 hammers in a row… this counter should go up today. But the upside is not that good. The 20d MA is near to act as brick wall. Not worth to risk it.

spx 5 oct 2011

Anyway, I long S&P 500 index (SPX). The chart above is self explanatory. As I mentioned earlier, the market is very oversold and there will be a rebound. The market rebounded on the 4 Oct during the last 20 min and I went in. It was a small hammer when I entered. Became a big white candle when the day closed.

Those who long should be careful too. We are still against the trend. Set a tight stop loss, be quick to exit and take the profits.