Author: Create Wealth Through Long-Term Investing and Short-Term Trading

Playing The Game of Leverage (4)

Read? Playing The Game of Leverage (3) The mind of an investor can easily change their perception of risk/reward when the investing idea for the SAME financial instrument is presented in different scenarios depending on the mind perceiving it as Greed, Doubt or Fear. Let take DBS 6% NCPS as an example for such financial instrument Scenario 1 I believe Investor easily has SPARE $20K that can be used for investing; but he rather keep it in bank or money market earning low return of 1% for whatever reasons or simply waiting for better investing opportunity to come. If you ask him to...

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Playing The Game of Leverage (3)

Read? Playing The Game of Leverage (2) The story continues …. After pocketing the difference of 4% by leveraging on his borrowed $10K from the Banker, the Investor happily told his Wife that he has finally found a new way of leveraging for passive income. She listened attentively to him and thought deeply for a while and said: “Honey, your Banker has short-changed you by paying you only 1% per annum. Why not you keep your $40K with me? I will double the Bank rate and give you 2% per annum.” Investor: “Wow, That is a Good Deal and I will pass...

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Playing The Game of Leverage (2)

Read? Playing The Game of Leverage “When the mind becomes TOO Greedy; it becomes LESS Savvy.” – Createwealth8888 Investor and Banker. Who is smart? Who is stupid? Let the story begins ….. An investor has saved more then $50K in a bank. When he saved his money in the bank he is actually lending the money to the bank. The bank agreed to pay him 1% interest rate per annum for borrowing his money. One day, the investor discovered from X  this wonderful strategy of Leverage for Passive Income – the idea of “borrowing at a cheap interest rate and...

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Playing The Game of Leverage

Read? Understanding Debt, Risk and Leverage There are few ways to play the Game of Leverage 1. Too Heavy (Too much capital upfront) To invest in property, most retail investors are expected to leverage heavily i.e. they don’t have much of a choice but to play the Game of Leverage in a big way. 2. Too Light (Little capital) For small retail investors with little capital e.g. $2K; they like to own DBS stock but they can’t afford to buy DBS at $14.X. They may have to use CFD to play the Game of Leverage to gain indirect exposure to DBS...

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Olam – Classic example of Long Hammer on 23 Feb 11

KY: “Hopefully when i trade again, I will be profitable rather the being the “Stuck Long Term investor” haha…  I’m studying your blog.” KY attended a  free preview. Createwealth8888  has mentioned many times liao that he has attended most of the free previews and usually could go home with one or two ideas if you are still in the learning stage. What KY has learned from the speaker: “The speaker  stressed to look out for hammer in the downtrend and shooting star in an uptrend for reversal.” KY: “I will keep a lookout for the hammer and shooting star to validate...

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Hyflux Preference Shares

Just For Laugh … Read? Hyflux preference shares Part 3 Wah. Don’t tell me Hyflux 6% Preference shares are hitting Singapore like the last MacDonald’s Hello Kitty Craze. Die die must HAVE. Wah 6% per annum hor and  more than double the rate of CPF OA of 2.5%. Hoot liao! How come Createwealth8888 no hoot? Let me share with you what I think … Hyflux Mgmt is telling you this: Give us your money and don’t worry. We will pay you 6% per annum. Don’t worry if you don’t get paid this year. We will pay you next year...

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Can My Stupid Charting Works? It is 3M’s that really matters

KY asked: “Erm Uncle, how do you use the chart to determine your entry, exit and price target if any? There were quite a number of indicators in your chart, do you actually use them? If so how?” Read? Gohsip’s comment Two Types of Ancient Chinese Sword fighting Master Swordmen These types of ancient Chinese sword fighting movies were popular during Createwealth8888 younger days and he realized that there were two types of ancient sword fighting Master Swordmen. Type One, they have very powerful weapons and superior skills to defeat all other swordmen to become Master Swordmen. Type Two, they use...

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Investing Made Simple by Uncle8888 (12)

Read? Investing Made Simple by Uncle8888 (11) Clearly Know What You Really WANT or  NEED; you may be financially better off! WANT or NEED? Classic example of WANT and NEED is a Car. Most people will WANT car. Right? But how many people really NEED car? A salesperson who travels around the island doing sales will definitely NEED a car to be productive and efficient. Does a desk-bound office worker in CBD area traveling only from his home to office and back really NEED a car? For the same desk-bound office workers without car; they may have more saving and may...

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Mind Flip (3)

Read? Uncle8888 did a Mind Flip Next Mind Flip When 2008 Bear hit on Jan 2008, I lost $76K on that month due to losses on contra trades. From Feb 08 – Apr 08, I didn’t lose but manage to make an average of $2.5K per month. On May 08, I made another $25K and that really made me believe that I was smarter than the Bear and regained my confidence of making an average of $10K per month. But, unfortunately the Bear came back and hit me even harder. I lost on Aug 08 ($68K), Sep 08 ($18K) and Oct...

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The difficulties of investing? Really?

Just For Thinking … Read? The difficulties of investing The difficulties of investing? Really? I think the problem may lie in the mind of retail investors. They like to think that they are buying into companies or businesses when in fact they are NOT. They are just buying stocks. If they can change their mindset to think that they are actually buying stocks; then they don’t need few years to realize that they are wrong and wasted their most precious commodity of all – their time. After you have brought the stocks and their stock prices don’t move forward in your...

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Investing Made Simple by Uncle8888 (11)

Read? Investing Made Simple by Uncle8888 (10) Low tide, calm water and big fish? It was low tide and the sea water is very calm. Uncle8888 has stopped fishing and was staring towards the sea and day-dreaming. Suddenly, someone shouted very loud that he caught a big fish. Really ah? Low tide and calm water and he caught a big fish? When Uncle8888 looked at the big fish and thought that it was probably a sick or dying big fish. He advised the man to exercise caution and decided whether he was taking any risk to consume it. The man disagreed and...

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STI – Why no pullback yet? Amazing!

Look at the blue Block Arrow and its shaded part. Count the number of daily white candles in them. Amazing number of white candles in the past weeks. Right? The bulls are still charging ahead for Election Rally? I was anticipating a strong pullback in Q1 2011 so I fail to profit from this rally. Thus, it explained my poor performance in Q1...

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Have you appreciate the one who has paid for your education?

This is a powerful message in our modern society. We seemed to have lost our bearings and our sense of direction. One, young, academically excellent person went to apply for a managerial position in a big company. He passed the first interview. The director who did the last interview, made the last decision. The director discovered from the CV that the youth’s academic achievements were excellent all the way, from the secondary school until the postgraduate research. He never had a year when he did not score. The director asked, “Did you obtain any scholarships in school?” The youth...

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CPL – More buying into this laggard soon?

National Development Minister Mah Bow Tan said the cash-over-valuation (COV) paid on resale public flats has continued to drop. He said that based on early estimates, COV levels are currently S$20,000 to S$21,000, down from S$23,000 in the last quarter of 2010. Transaction volume has also dropped, but he declined to give figures. His comments came a day after HDB released figures showing that the growth of resale flat prices slowed to just 1.6 per cent in the first quarter of this year. Mr Mah was speaking to reporters after marking the completion of the latest housing project under...

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