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YOUR FIRST MILLION $ making it in STOCK

"Your First Million $ making it in stocks" book by Dr. Michael Leong. This book is one of my favorite reads for this year. I do agreed with some of his thoughts and strategies shared in this book which I'm currently practicing for my investments. I extracted some of his key investment strategy and I would strongly recommend you to get a copy of this book to have in depth understanding of the author's investment secret. 



Background:

Dr. Michael Leong is a medical doctor by profession, started his IT career with IBM in 1991. He founded ShareInvestor in 1999. ShareInvestor is a regional financial internet portal that provide online investor relations to listed companies in Singapore. He sold ShareInvestor to Singapore Press Holdings in 2008. This book provided a glimpse how he view the market and how he decide when to buy or sell a stock.  

Summary of key investment strategy: 
  1. Preserve capital. Similar to Warren Buffett rule no.1 "Never lose your capital". 
  2. Focus on only a few stocks. Do not over diversified. 
  3. Identify a tipping point for each stock. 
  4. Buy slowly into any stock. Time the market bottom is difficult to do. 
  5. Invest for long term. Use the money that you can afford to leave under the pillows for years.
 Selection criteria for stocks:
  1. NTA (net tangible assets) are at significant discount to current market price. 
  2. Potential to be a multi-bagger. (stock that appreciates in value many folds)
  3. Strong cashflow with conservative accounting. 
  4. Belong to growth industry and has good competitive advantage.
  5. Its products with strong brand name and not commodity. 
  6. Strong recurring income.
  7. Has credible management team. 

Managing emotion when investing, quote from this book:

"Over the years, I have learnt not to be emotional over any stock, or for that matter, over the market. Some days, you may feel an urge to exit all your positions as the market is toppish, hoping to re-enter later at lower price. If you are right and there truly is a correction, you stand to make quite a bit of money."

"If you are wrong, you stand to be left out of the market. As the days go by and the market bull charges ahead, you will feel a greater urge to re-enter the market at a much higher level than you exited." 

 "For me, I have learnt that the Mr Market always seems to be smarter than I. Whenever, I try to outsmart Mr Market, it easily outsmarts me instead. This is why I do not try to second-guess the market. After all, any correction is usually just a blip and will be overcome if the megatrend is intact." 



Stay safe and trade smartly....... Ciao

-WILLIAM CHENG

Please click the links below for more interesting reads:


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ALIBABA.....My best investment 2020 Update

Previously, I was recommending Alibaba as good stock to invest. It has potential to move up at least 50% in short term in my view. I have accumulated a huge positions before the HK IPO in anticipation of demand surge after the US-China trade war ended.



Below was the recap for what I had posted in Dec 2019. 

The IPO (Investment Profit Overdrive)
Alibaba Group announced to raise US$12.9 billion from its landmark Hong Kong listing and is set to price its shares at HK$176 (S$30.62) each, start trading on 26 Nov 2019. Shares of Chinese e-commerce giant Alibaba saw a strong debut in Hong Kong surged more than 6% at debut, intraday high of HKD189.50.

Since the HK IPO listing, BABA share surge almost daily hitting it 52 week high within 2 weeks. The cooker's lit had finally popped open, letting the steam out. The truce reached in the China-US trade war back in Dec-14 had bring back much needed boost for this Chinese stock. Turning a "flight to safety" trade, avoid all "Chinese stock" event into "risk on" overdrive. 


Alibaba currently trading at USD215 after 1 month since IPO. Up > 20% since my last bought.  Hey, I'm not popping my champagne yet and not selling my stake. I think the surge is not over yet, there are few more events may add more "boost" to the share price. I'm looking at next 2 major events that will be significantly impact the valuation of the stock price. 


  1. Inclusion into Shanghai Stock Connect - this inclusion will open a floodgate of 100 millions investors in China eligible to invest in this HK biggest IPO stock. This will help boost the share price valuation. 
  2. Inclusion into the major world Index -  Due to its capitalization size, it will be include into major index such as Hang Seng Index and MSCI China etc. This will drive up the buy side demands from index fund managers' portfolio that require mirroring the index performance. 

Click Link below for the full article on this: 


My Trade update Feb 2020



The stock price peaked at $230 on Jan-13. I started to take some profit and sold out by Feb-2020 due to the COVID-19 situation in Wuhan, China. My initial plan was to hold this investment for long term. However, I felt that the world economy was overheated and this COVID-19 pandemic could triggered a market correction and even world recession. So I decided to cut my stock holding along with others counters.



In all, my investment return for Alibaba was about 25% gains over 3 months holding period which provide me a handsome profit of $33,148 with average selling price of $220 per share.



This would be among the best investment decisions I ever make and best ROI in the record for 2020. Since 2018, this counter had been my favorite and I never regret looting this "Treasure Cave" over again and again.  

-WILLIAM CHENG

Please click the links below for more interesting reads:



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