Investment in Stocks

Archive for the ‘Options’ Category

Last weekend, I had a wonderful time with friends on the yatch.

And I was asked to give some investment tips.

The first investment tip i gave was to never accept any investment tips from anyone… blindly.

And then, i shared a G.S.T framework for analyzing investment opportunities.

Below is the video, if you want to join us to learn how to do it live, you can join us at our next free workshop.

Click HERE to book a Free Investing Workshop.

I do hope you learnt something from the video. The key is to really first learn how to invest properly before putting your money to work. To learn to invest properly, join us at our next free workshop.

Click HERE to book a Free Investing Workshop.

To your dreams,

Sean Seah

Master Trainer (Value Investing Options Strategy)
Investment in Stocks Blog
Value Investing Academy – the Warren Buffett Way
http://www.investment-in-stocks.com, http://www.nlpinsingapore.com

When choosing businesses to buy, one of the ratios we look at will be the Return on Equity.

Return on Equity measures the rate of return on business owner’s interest or equity.

Return on Equity =        Net Income

Share Holder’s Equity

Each time a business makes profits, it can use it in a few ways.

1. Issue profits out as dividends
2. Retain the profits which adds to the Shareholder’s Equity
3. Reinvest in itself by either expanding or buying back its own shares.
   
   

In other words, the profits which the business has made can either be issued to us, or kept by the business for continued operations or investments. If the business is keeping the profits, it is kept mainly as part of the owner’s equity and we want to know that this amount of money is put to efficient use. Return on Equity tells us how well this amount of money has been used.

For example, ABC company makes $100,000 this year and the amount of share holder’s equity it is holding is $5,000,000.

Return on Equity =        $100,000 = 2%

$5,000,000

What?! We put or keep $5million with ABC company and it only made 2% or $100,000 out of it. That is simply not efficient and thus ABC company does not seem like a good place to put our money in. As a gauge, we should look for companies that have a consistent average ROE of 15%.

ROE is only one of the ratios we look at when we are checking a business’ track records. It is important to look at a few figures as a cross check to make sure that these numbers are not manipulated to fool investors.

Do come and join us for our free workshop as we run through some items to check to avoid the pitfalls of investors who simply do not know where to look. Be an intelligent investor and join us at our workshop.

Click HERE to book a Free Investing Workshop.

To your dreams,

Sean Seah

Master Trainer (Value Investing Options Strategy)
Investment in Stocks Blog
Value Investing Academy – the Warren Buffet Way
http://www.investment-in-stocks.com

Hi,

Today I would like to share my experience regarding “Hyped Up” advertisements! Fortunately or not, i do not yet have the ability to display my feelings through my writing, otherwise, you will be able to feel my anger, frustration, compassion and disappointment.

For those who have read my book, “Winning the Money Game”, you would have read on the part where I started venturing into the stock market after one of my friend, Suffian, showed 6 of us that it is possible to make money from stocks. After our talk with Suffian, I began searching.

To my excitement, I found many courses that promised me that I can get rich quick, quit my job, be a full time trader etc etc…

I paid about $5,000 (i think), joined the course and became confident. I traded some money and won. My confidence grew, so the next step i did was to be a nice kind person and asked 2 of my good friends if they want to make money as well. They said yes, so i took their money and graciously lost about 50% for them. I never forget the feeling.

But i didn’t give up. I attended more courses and lost more money. The funny thing during the time i was trading was this – I identified myself as a Trader. I began to feel good about trading. I read books, attended courses, traded every night. I honestly want to find the “magic” system, strategy… whatever.

Years later, I have arrived at a stage where i began to understand the stock market much better so much so that i can make consistent profits… interestingly, not using any of the techniques taught by me from the courses i attended, but through some guidance from some personal mentors, some books and some practice.

Looking back, i do not think it is fair to say that those course I have attended are fraud, scam etc etc. These course do teach the participants certain amount of skills and i think for beginners, if you need guidance in Trading, it is probably a good idea to get someone to help you get started.

BUT! What ANGERS me is the HYPE in all the marketing!

“I made 700% in my first trade”; “After attending the course, I made my first 3 trades and  make $75,000!”

HYPEsss! I hate to wake you up from your dreams…. In fact those of you who attended such courses probably already woke up!

I recently brought my 2 boys to a drum class. And without a single bit of biasness, they are excellent, had so much potential and talent… just like their dad. But even then, i am clear headed enough to know that they need more than a few drum sessions to make them professional. Being a Professional Trader is the same, it takes years…

I met a nice gentlemen at Philips Capital who used to be a Professional Institutional Trader. He traded millions, made and lost billions and he say that when he saw those claims from trading courses, he is wondering “why MAS is not doing anything to clamp these guys down.” (His exact words). He knew that it is not possible for anyone to make money consistently as claimed by these advertisements.

But even with this post, with all the newspapers journalist warning people, there will still be many people who “see and hear what they want to see and hear” – that is, How to Get rich Quick over night and how to be able to sack their boss 3 months from now….

If you want a real solid plan on your financial destiny, if you want to really learn how to invest- not get rich quick… then I am here to help you. Because i have been through the pain, I understand the feeling and frustration. I see many of my initial trading coursemates had a worse life because of the course we attended.

It is my appeal to you: To be a wise, Intelligent Investor, not a greedy blind mouse. Take a moment to pause and observe your feelings and be honest to yourself… Are you willing to take effort to learn and take time to… W.A.I.T. (Btw, W.A.I.T does not stand for anything, it just means wait, but i want to create the pause effect after each alphabet, just to make you wait…).

Ok, after all this, I do have good news. If you are able to just take time to learn, you can in fact “get rich quick”… in 2 to 5 years! And let me tell you a secret, 2 to 5 years is QUICK!

But that also depends on your starting capital, your needs and your effort. So you can either B – Buy Assets, and if you are starting out with huge cash, with the proper knowledge, you can buy so much cashflow into your life. I know a couple of people who started out with huge savings. After learning how to Invest properly (not trade… mind you), they become much richer, much faster.

I really do wish to share with you, but only if you are willing to be rationale, to learn and to use what you learn. Do join us at our free workshop where i share how to really avoid the hypes and how to have a real plan for a real future.

Click HERE to book a Free Investing Workshop.

To your dreams,

In the meantime, Don’t Let the HYPE Bite You!

Sean Seah
Master Trainer (Value Investing Options Strategy)
Investment in Stocks Blog
Value Investing Academy – the Warren Buffet Way
http://www.investment-in-stocks.com

Once, i watched this simple yet powerful video, “what the Wealthy Buys on Payday”.

It is created by Tim Sales and it illustrates this wonderful concept of how to be Wealthy. It is not really the amount of income that a person makes which decides if this person becomes Wealthy, but rather, what he/she does with the income that comes in.

In summary,

1) The poor buys “stuff”, things people buy and do not really know why they buy it for.

2) The middle class buys “liabilities”, which are things that you will have to continue to finance out of your pocket once you buy it. E.g. are like cars, boats, houses, timeshare program, a the latest electronic gadget etc etc… which once you buy, you will have an increase in your monthly/ yearly expenses. That is why the middle class are the most ’stressed-up’ people, having tonnes of expenses and bills to pay every month. These people have the highest monthly expenses. Please do note that these can potentially become “assets” as well… if you know how to turn them into assets.

3) The wealthy buys Assets. Assets are things that put money in your pocket, as simple as that.

Some very common assets known to most people will be fixed deposits, annuities and bonds.

Once you buy these assets, money will be generated for you on a yearly/ monthly basis.

More savvy investors can make their money work harder. Compared to fixed deposits, annuities and bonds which typically gives a rate that does not even match inflation, stocks, real estates, land, commodities have a better track record at beating inflation and making your money work harder.

That being said, if you DO NOT have the Proper “Education” regarding these classes of Assests, i rather you delay your ACTION to buy them.

People who “anyhow” buy these assets may end up buying themselves sleepless nights and a dip in their investment/savings jar. So if you are ready to take Action – Invest in yourself first, by becoming more Financially Intelligent.

In this blog, i want to share what has created results for me. I understand that there are many different types of investments such as precious metals, wine, land, paintings etc etc, and i want to share with you those that I have created results in. Many years back when i was in the university business school, i was taught by Professors who never had businesses and do not invest. That is why i did not learn how to build businesses and how to invest from them. Subsequently, i had the good fortune of meeting real businessmen and real investors who had results and they mentored me.

Personally, the assets i buy (currently) are:

1. Stocks

2. Real Estate

3. Land banking

These assets have been working well for me and i enjoy the cashflow coming from each of these assets.

In our free workshop, we share a proven method to invest into stocks, Vaklue Investing!

Click HERE to book a Free Investing Workshop.

To your dreams,

Sean Seah
Master Trainer (Value Investing Options Strategy)
Investment in Stocks Blog
Value Investing Academy – the Warren Buffet Way
http://www.investment-in-stocks.com

To your dreams,

Sean Seah

Options in Stock Investments?

I first learnt about options in my university in Business School. Options are used for hedging risk for investments traditionally, i.e. people use options to reduce their risk, so they pay others to take on their risks.

Options are very like insurance. Stock owners wants people to insure them in event anything happens to their stock, e.g. stock price plunge, and they are willing to pay “insurance” premium to be protected. This was probably the origins of options.

But today, most of the people use options to speculate and trade. Options can give a trader very high leverage. This means, options can potentially make you returns of 100%, 200% even 1000% in a month or even weeks. The issue is consistency. Buying lottery can give you amazingly returns. You pay a relatively small sum of perhaps, $10 and can potentially get $1million in return. The issue is that you may never ever win the lottery.

Of course, the chance of winning using options is much higher in the stock market. But understand that, typically speaking, in order to win in options, you got to choose the right stock, at the right price, within the right time frame. Again, this is a general view. But unlike stock investment, where we need to choose the right stock and buy at the right price, using options, the need to be correct within a certain time frame is important. The reason is because options has a limited lifespan. After a certain date, the option expires and become worthless.

In this post, I would just like to give a quick insight on options, but having said that, I see that I have to go into more basics of an option and I will do that in the next post.

Click HERE to book a Free Investing Workshop.

Sean Seah
Master Trainer (Value Investing Options Strategy)
Investment in Stocks Blog
Value Investing Academy – the Warren Buffet Way
http://www.investment-in-stocks.com