Game Changing Breakthrough

I just received an advertisement through email and I feel it makes sense so I’m sharing it with you here. However, I have just reproduced the strong message below without any call-to-action as per original email:

“I just had a weird chat with John Assaraf.

My first reaction to it was ‘What the?’

But when I got what he was saying I felt charged with excitement.

That’s because John revealed a game changing breakthrough for anyone who feels frustrated….because financial results aren’t coming fast enough.

Here’s what John shared with me…

Imagine a rocket about to launch in Houston Texas.

Escape Velocity is the speed this rocket needs to go to break free of the earth’s gravitational pull.

It’s a staggering 40,000km an hour and requires up to 1.9 Million litres of fuel.

However, after the rocket has broken free of the earth’s gravitation field…it requires only about 20% of this amount of fuel to reach its destination.

That’s because taking off is the hardest bit.

After that the rocket has ‘momentum’. It soars.

And it’s the same with you achieving your goals in life.

Once you go past a certain point of struggle and effort…you get a new momentum… you take flight….you achieve your goals lightning fast.

Earl Nightingale – founder of the world’s biggest personal development publishing company – puts it like this:

“A time can come for each of us when more will happen for us in six months than has happened in the previous six years. Compound events in our lives can be compressed into remarkably short periods.”

John’s experienced this state of rapid results achievement.

He went from being a teenage street-kid to ‘escape velocity’….and earning a $510k plus yearly income…surprisingly quickly.

Talk soon,

Greg”

Emotions taking over during a crisis?

Many of us have heard that the best time to buy stocks is during a stock market crash or during a correction. However, how many can actually put this into practice? The sure way to make money is to buy low and sell high. However, how many of have done the exact opposite? They buy high and plan to sell higher but the stock price tumbles, they end up selling low due to fear. Buying high and selling low is the surest way to erode wealth. How, then, is one to have emotional stability to buy stocks during a crisis when stocks are on a mega sale?

Firstly, you have to research into the company you are buying into. Behind every stock price is a company. How does the company generate profits? Where is it operating in? Is it a simple business? Is it a prominent business? Is it a strong brand? Next, you have to look into the management and access if they are honest and competent. Then, the most important thing is that you have to know the right price to buy at. This is essential as it makes sure you don’t sell prematurely when there’s still room for growth in the company. This takes the emotions out during a crisis. For example, a company is selling at $2 and has been dropping for the past few months due to market sentiments. You have valued the share at $4. This is a 100% discount. Would you buy it? Of course you would load up on this company as the stock price is screaming “Buy!”. On the other hand, someone who does not know the value of the company is going to sell at $3 when the price has been dropping due to fear. He will be cashing out at $3 even though the company’s value is at $4. Remember, that behind every stock price is a business with value.

You also have to be convinced and believe in yourself and in the company you have researched into. Conviction is paramount as this allows you to buy more of the company during a crash when it’s selling at a huge discount. Buying more at a lower price allows you to average your buying price downwards. This is how you buy low, sell high and create wealth. You cannot buy at the absolute lowest but at least you can buy at a low price region.

Recessions create new millionaires. During the last financial crisis in 2008-2009, Straits Times reported that the number of millionaires in Singapore increased by 32.7%. Do you want to be like them? If you do, you have to take opportunity and buy when stocks are low and not when they are high. To do that, you need to have emotional stability and that comes when you know the right price to buy at and be convinced with your purchases. Take control of your emotions and take charge of your financial destiny!

Being Fixated on Stock Price Before Purchase

I have been guilty of this many times. I need to consciously tell myself to stop doing it. What it is, is that I usually become fixated on the stock price of a company I’m researching on and this makes me “afraid” that the price will rise quickly before I finish my research on the company. The problem with this mindset is that it causes my research to be hastened and not thorough.

Company analysis can be very time-consuming and it can span a number of market days. During this time, the stock price can rise very fast. (On the contrary, it can fall very fast too but my mind disregards this fact at times.) When I bought Dapai back in 2010, I was guilty of slip-shot research. I didn’t research into the company as thoroughly as I would want to. The reason being I didn’t want to miss the chance of buying the stock at a low price. This caused me to overlook some facts that I found during my research. I felt it will not affect the business overall and thus didn’t investigate into it further. My inadequate research suddenly became gleaming once I bought the business and had ownership in it. Luckily, I realised my mistake early and sold it off for a slight profit. I have blogged about my divestment of Dapai here.

To combat this problem of mine, I have come up with a few things. Whenever I research into a company, I imagine it’s a private business I’m researching into with no shares being traded. This allows me not to think of the price movement of the stock since it’s a “private business”. I have tried this with my latest research on a company and it works. By following this practice of “faking” my mind, it doesn’t allow me to let greed cloud my logic and judgement during research. Also when researching, I give myself one month to do a thorough research to prevent any undue pressure on myself.

I also tell myself not to be greedy and greed is not good unlike what Gordon Gekko says in the “Wall Street” movie. Another way that works for me is to ask myself, “How would I research if I were Warren Buffett?”

Lastly, I have also come up with a plan to research one company I like every one or two months (depending on the company) when the business is still overvalued. Doing this does not allow the price of the business to cloud my judgement as it is not attractive to buy at the current moment anyway.

Gratitude!

A very powerful message captured in this 6 mins video, that all of us should follow every single day, to lead a more meaningful and fulfilling life:

How to Stay Motivated No Matter What

There are times when we feel unmotivated to move towards our goals and feel like giving up. However, there are other times when we feel so motivated that we believe we can move the majestic Mount Everest. Why is this so? How do we stay motivated all the time to achieve our goals in life?

We lack the motivation to achieve our goals when we lose sight of our goals. For example, your aim might be to have $1,000,000 by a certain age. When you came up with the goal, you had a strong conviction that you could achieve this amount, no matter what. However, as days and weeks went past, you might have begun to feel that it’s alright if you didn’t achieve the $1,000,000 after all. The thinking of “It’s alright if I’m not a millionaire” came about due to a lack of purpose and reason why you wanted to get that $1 million in the first place. The “Why” (Purpose) is more important than the “What”. The “Why” must be strong enough to make you want to achieve the goal. Your “Why” might be to provide the best for your family, not to worry about money anymore, to have the money to travel around the world and invest in properties to make more money, etc. You have to find this “Why” within yourself and it must be strong enough to propel you towards your goal.

After finding your purpose of achieving your goal, imagine and visualise yourself having already achieved the goal. Napolean Hill once said, “Whatever the mind can conceive and believe, the mind can achieve”. It’s a dogma I live by everyday and it really works! Imagine your new lifestyle in full colour and splendour after achieving the goal. Imagine that you have already achieved the goal and you are enjoying the fruits of your labour. Imagine the unlimited possibilities in your life now. Do all that with conviction and believe! There should not be a slightest doubt in what you are visualising.

I, too, sometimes fall into the unmotivated camp and can stay there for days. The trick is to catch hold of the negative thoughts and feelings, acknowledge them and gently change them to positive ones. Remember, the mind cannot differentiate between negative and positive thoughts. So, by constantly feeding negative thoughts, guess what? You will materialise negativity. Remember, whatever the mind can conceive and believe, the mind can certainly achieve!

Psychology of Great Value Investors

1. Be disciplined

• Successful investors are very disciplined and they do not let emotions (eg. fear and greed) get in the way. They buy and sell on strict rules. Using a checklist on when to buy and when to sell will help to curb out the emotions and make us detached from our stock holdings.

2. Never follow the crowd. Have an independent mind.

• Warren Buffett’s famous quote, “Be fearful when others are greedy and be greedy when others are fearful” rings true. When the whole world is shouting “Buy!” and stock market is going up on a frenzy, you should be fearful and even look to sell some of your overvalued stocks. A market crash or recession, when the majority are fearful, is a good time to consider buying assets at selling at unbelievable discounts.

3. Never rely on experts. Be an expert yourself.

• Never rely on experts or gurus as they are humans themselves, they do make mistakes and they can be wrong at times too. Have an independent thinking and research into companies yourself instead of relying on analysts or brokers. You won’t know what hidden agenda the guru or analyst might have in releasing a buy call on a certain stock. You can always read an analyst report, digest their materials and conduct your own intimate research into the stock you are interested in.

4. Invest only when there’s minimal risk.

• Before investing, always think “What’s my downside?” or “How much am I willing to lose?”. Remember Warren Buffett’s rules “Rule No.1: Never lose money; Rule No.2: Don’t forget Rule No.1″. Always think in terms of preserving capital before thinking about making money.

5. When there’s nothing to invest in, don’t invest!

• When the world stock market is in a bubble and market P/Es are hitting the roof like during the dot-com bubble, sit tight in cash and just enjoy the world go past.

6. Take responsibility of your own mistakes and never blame others.

• When you make a wrong investment, think through what went wrong and do a post-mortem. This will help you to make an informed choice in the future and ensure that you will not repeat the same mistakes again. When you blame others for your mistakes, you will be bound to make the same mistakes again and you won’t be a better investor. There are no failures, only feedbacks.

7. Don’t time the market. Take action with what is presented before you.

• Timing the market is futile. Take action as and when the market presents itself before you. There are many researches conducted on timing the market and all point to the same conclusion: Time in the market is more important than timing the market. It doesn’t matter if you are right or wrong. What matters is how much you make when you are right and how much little you lose when you are wrong.