Wednesday, 30 September 2015

30-Sep-2015 CSE Trade Summary

Quote for the day

“I love trading macro. If trading is like chess, then macro is like three-dimensional chess. It is just hard to find a great macro trader.” - Paul Tudor Jones

Tuesday, 29 September 2015

29-Sep-2015 CSE Trade Summary

Click here to download 29-Sep-2015 
Trade Summary csv File

52 week high and low prices reached in today's trading session

Crossings - 29/09/2015 & Top 10 Contributors to Change ASPI

Top 10 Gainer / Loser / Turnover / Volume for the day
Top 10 Foreign Activity for the Day   

Quote for the day

“Many traders I've met over the years approach the market as if they're smarter than other people until somebody or something proves them wrong. I have found this approach eventually leads to disaster when the market proves them wrong.” - Jim Leitner

Monday, 28 September 2015

28-Sep-2015 CSE Trade Summary

Quote for the day

“I'm not sure one can really define why some traders make it, while others do not. For myself, I can think of two important elements. First, I have the ability to imagine configurations of the world different from today and really believe it can happen... Second, I stay rational and disciplined under pressure.” -  Bruce Kovner

Sunday, 27 September 2015

Look At The Operating Cash Flow Instead Of Earnings

By Shares Investment 

When a company releases their annual reports, or financial earnings, a specific part that's most looked at, is none other than earnings, or net income.

I mean, yes. It's important, because earnings affect Earnings Per Share, which affects the Price Earnings of the stock and other profitability ratios such as Return on Equity and Return on Assets.

But I'm telling you, as much as it is important for us to look at net income, it can be easily manipulated.

Too easy if you ask me.

That's because elements that make up net income can include “one off gains”, “other income” and other accounting engineering to boost this figure to beautify the income statement.

Operating cash flows however takes a stricter approach to measuring the quality of the operational profits, and it is much harder to manipulate compared to Net income.

Accrued Earnings, Not Counted In Cash Flow
Accrued earnings generally come from accrued sales, where sales are booked and accounted for in the income statement, but not yet received.

This will in turn translate to accrued earnings, which will help boost the different profitability metrics mentioned above.

The operating cash flow will flag such elements and purely take into consideration of cash actually received, so naturally, the accrued earnings will not be included, and thus more conservative as a figure.

Therefore if you see net operating cash flow lesser than net income, you need to start realising that there could be something wrong with the cash cycle, and there might be a need to look at the revenue recognition policy of the company.

Consistency In Operating Cash Flow
Apart from helping you flag the possible manipulation done to the income statement, consistency in operating cash flow, especially when it’s consistently positive and higher than the net income, will tell you that the operational earnings are of “quality”.

Also, a consistency of positive operating cash flow figures will probably help you sleep better at night.

Price To Cash Flow
For comparison purposes, you can also use price/operating cash flow (P/CF) ratio as a metric when you compare a company to its peers.

The important factor to see if the P/CF is a positive one. This will give you a quick insight to see which companies are the cash burners, and which are the better ones in your comparison.

Operating cash flow, though stricter and more conservative then net income, can still be manipulated, although a lot harder.

This is still a better number to look at compared to net income alone and can also serve as a quick metric for you to screen stocks. 

Quote for the day

“Wisdom requires an experience-based knowledge of the world (including, especially, the world of human nature). It requires mental focus, reflecting the ability to analyze and discern the most important aspects of acquired knowledge, knowing what to use and what to discard, almost on a case by case basis (put another way, it requires knowing when to follow rules, but also when the usual rules no longer apply). It requires mediating, refereeing, between the frequently conflicting inputs of emotion and reason, of narrow self-interest and broader social interest, of instant rewards or future gains.” - Stephen Hall

Saturday, 26 September 2015

King of Sugar shares pearls of wisdom

By Emiko Terazono

Malaysian entrepreneur Robert Kuok on his trading philosophy

Robert Kuok, the billionaire Malaysian entrepreneur, maybe better known as the man behind the Shangri-La Asia hotel group, but in the commodities world, he is nicknamed the “King of Sugar”.

The 91-year old tycoon and uncle of Wilmar co-founder and chief executive Kuok Khoon Hong, still watches the sugar market daily, and trades the commodity so he can pay for his bottles of Petrus 1989, one of the world’s rarest and most expensive wines.

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article.

Mr Kuok rarely gives interviews, but he shared his trading philosophy with Jonathan Kingsman, founder of Kingsman sugar consultancy and occasional Financial Times commentator, for his recently published book The Sugar Casino .

Here are some of his pearls of wisdom:

Always take profits promptly

“Not knowing when to take a profit is the Achilles heel for a trader. Take profits! Don't wait. If you have a profit you have to take it. If you wait it will be your downfall.”

The sugar market is prone to over supply

“In the sugar market, there is always over production. There is no point hoarding sugar. There is always a bumper crop coming up.”

Don't be arrogant when trading

“You have to be humble because you are never always right. You don't need to convince anyone. You can trade as a very humble man.”

You’re either a trader or you're not

“Traders are born, not taught.”

Cut your losses and walk away if someone abuses your trust

“If you want, you can keep that person as a friend but do so at arm's length; no more business dealings. But it is better to just cut the cord and part company. If you bear a grudge you are just hurting yourself; you are not hurting the other person. It is like throwing good money after bad. Keep your wits, keep your humour and if you are a good man, luck will come your way again. You will see another opportunity and you will grasp it.”

Always adhere to moral practices

“If someone asks you for a bribe you should say that neither you nor your company could do that. But stay polite. Don’t stand on your high horse and preach morality at that moment.”

There is nothing that can't be traded

“I have a simple motto in life: every single material thing that I have in life can be traded. It is for sale. It is a question of, when, where, to whom and price. The first three are more important. If you like a person the price becomes unimportant.”

The Commodities Note is an online commentary on the industry from the Financial Times

The Sugar Casino is available on Amazon ebooks.

The Importance Of Cash Flow Analysis

As we embrace the full influx of financial reports for the earnings season of 1st quarter, it is pertinent to note that besides paying close attention to profit margins and management’s view of the company that you’re looking at, an important piece of the financial report called the “cash flow statement” should be given a closer look as well.

The importance of cash flow statement lies in the fact that it explains the changes in cash and gives insight to the company’s operating, investing and financial activities. Also, cash flow statement will unveil the company’s ability to generate cash to meet its short-term obligations, thereby assessing if company’s liquidity and solvency position is sound.

In this article, I will show you a brief example on assessing the health of the company using Cash Flow Analysis. Before I go forth with my explanation, a stark contrast has to be established whereby “High Profits Do Not Equate To Healthy Cash Flows.” Many quickly assume that having high profits generally mean that the company is doing well. Ironically, profit figures could be easily manipulated via unconventional ways such as “off balance sheet financing” or “window dressing”, thereby making profits look “good”.

In a nutshell, the cash flow statement is made up of 3 categories, namely operating activities, investing activities and financing activities.

Operating activities – These are revenue generating activities of the company, which normally includes cash receipts from sale of goods and services, cash payments to suppliers for goods and services and disposal gains and losses of fixed assets.

Investing activities – These are activities that involve the acquisition and selling of fixed assets (long termed assets like land, building or plant), cash receipts from the disposal of fixed assets and cash payments to acquire fixed assets.

Financing activities – These are activities, which change or impact the size and the composition of owners’ capital. They include cash proceeds from issuing shares, or debt and payment of dividends.

The cash flow statement presented below will entail explanations on the analysis on the health of company A.

From the above cash flow statement, even if Company A’s income statement reflects a profitable figure, Company A is not earning real profits but instead “creating” profits. This can be seen by its significant disposal of fixed assets and lowering of provision, thereby reflecting “poor quality” of profits.

Breaking it down further, red flags should strike you upon noticing the fact that net cash from operating activities is negative, indicating unsuccessful business operations in terms of cash earned. Despite improvement in cash flow where closing cash and cash equivalent albeit being negative narrowed, closer attention will enable you to see that said improvement was actually attributable to the huge sell off of its fixed assets (plant and freehold land and building).

Because purchasing and owning fixed assets such as plant and machinery will subject Company A to depreciation charges, thereby weighing down profits, Company A has replaced the disposed fixed assets with long term leases. Long-term leases are akin to “renting”, in which things like depreciation or maintenance of the asset are absorbed by the owner and not the lessee. However, long-term leases will subject Company A to future cash flow commitments, which could create further liquidity problems.

Insufficient cash flow also led to the company raising funds through the share issue, which was done to cover the deficit but Company A’s business still reflected an overdraft figure of $60 million due to its poor operations. This is in addition to the fact that it chose to pay out dividends of $125 million despite such performance.

Summing this piece up, it is pertinent to remember that high profits do not equate to healthy cash flows. It is often easy to manipulate profit or balance sheet figures by adopting policies which capitalize on the grey areas of accounting standards, but it is not as easy to do that on a cash flow statement. To further enhance the analysis, financial ratios could also be used hand in hand with the cash flow statement to better understand the story told by the numbers.


Quote for the day

“I'm not saying that controlling your mental state is the magic solution to trading success. It's just part of the answer. But when you admit that the answer is within yourself, you've come a long way.” - Van Tharp

Friday, 25 September 2015

25-Sep-2015 CSE Trade Summary

Quote for the day

“A wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the over-abundance of information sources that might consume it.” - Herbert Simon

Thursday, 24 September 2015

7 Secrets Behind Warren Buffett’s Billions

By Robert Allen

Warren Buffett is incredibly successful, and he's built a mountain of wealth.

Today, he's the second richest person in the world, worth an estimated 73 billion dollars. That's greater than the combined GDP of many countries.

Want to grab lunch with the man? That'll run you $2.2 million, based on a 2014 bid by a man in Singapore.

Even more mind boggling, if you had invested just $100 in Warren Buffet's Berkshire Hathaway fund in 1965, you'd now have more than $1.2 million stored away, off that tiny investment.

With a track record in wealth creation like this, Buffett's life undoubtedly has lessons that we can all apply to amplify our own riches.

Below, we'll uncover 7 secrets behind Buffett's multi-billion-dollar wealth engine.

These are the exact strategies and techniques Buffett uses.

So pay attention.

No matter where you are on the investing spectrum, you can implement these wealth-building techniques and begin reaping the rewards in your business and life today.

The 7 Secrets Behind Buffett's Billions:

1. He reads a lot

Buffett believes reading works a lot like compound interest. You build your knowledge base, day-by-day, by adding more information. And over time, that compounds upon itself. Until one day, you're surrounded in a wealth of ideas, strategies and concepts.

Buffett consumes an average of 500-600 pages per day (that's a really dense book!), and he credits reading for his ability to make smart investment decisions.

But for Buffett, it's not about the number of pages he ingests. Rather, Buffett knows you must apply critical thinking and deep analysis to the materials you study.

That's how you take your knowledge and money game to a whole new level, and you reap the dividends from this intellectual investment for years to come.

2. He’s methodical in his approach

Impulse decisions often fail, especially with investments. But Buffett spends hours every day researching, writing, and exploring new economic theses. So when it's time to make a rapid-fire conclusion, he’s already prepared.

In business and investing, it's important to hustle and capitalize on opportunities. But Buffett's method teaches us that we should strategically hustle.

That way we're not scrambling and taking un-calculated risks out of desperation.

3. He's not an overnight success

Buffett’s billions are the product of years of hard work and mountains of effort. In fact, many people don’t know this, but Buffett started investing when he was just 11 years-old. Talk about taking advantage of investing early!

Also, Buffett's first business was earning fees off pinball machines that he placed in local businesses as a teenager.

Many like to imagine Buffett's business acumen and stock-picking talent to be magical in some way.

The reality is he's worked incredibly hard, over many years, to earn every penny he’s worth. All 73 billion of them.

4. He relies on the numbers

Everybody has an opinion and a reason for telling stories a certain way. But rather than sifting through other people's ideas, Buffett turns to the hard data and facts.

When he does this, he's able to make smarter decisions, more consistently. Looking at the numbers also gives Buffett an advantage. He's able to test new investments ideas, before anyone else comes to the same conclusions.

His actions are not clouded by the biases of others, and relying raw numbers continues to provide him with ridiculous returns.

5. He’s a master of influence

Warren Buffett said that the single most valuable skill in his life is the ability to influence and persuade people. When he first started out as an investor, he was such an awful speaker and persuader that he took a Dale Carnegie course to learn how to communicate with people. It changed his life.

Without influence, Buffett wouldn't be able takeover companies, to buy investors out, to convince people to work for free, or to negotiate multi-billion-dollar deals. Learning this skill of communication was so impactful that, today, the only diploma he has on his office wall at Berkshire Hathaway is the one from the Dale Carnegie course. It's one of his proudest achievements.

6. He’s persistent

In the face of fear and uncertainty, Buffett has taken enormous financial risks to buy stocks, invest in foreign countries and bailout companies on the brink of bankruptcy.

Many investors lose belief and get nervous when times are tough.

But Buffett won't give up; he won't take no for an answer. He keeps pushing himself and his investments to grow faster, to be more, and to outpace everyone else.

Buffett knows that the best investments come from taking calculated risks over long time horizons. He’s not in investing to make a quick buck, here and there, by trading in and out of stocks.

He's in it for the long-haul, and his patience continues to pay off for him. Among investing legends, he has the longest track record of beating the market average. No one else is even close.

7. He lives below his means and invests

This one almost goes without say, but it’s a really important point. Without cutting expenses and saving his money, Buffett wouldn't have the opportunity to beat the market through the years and earn billions of dollars.

After decades of living this way, Buffett never has to worry about money again. In fact, he’d have to spend nearly 200 million dollars per day to lose his net worth in a year. That’s like buying a mansion in the Hamptons and a private jet for 365 days straight, before losing it all!

Needless to say, he’s set for the rest of his life. This is the foundation for Buffett's long-term success, and for anyone aspiring to establish wealth, this should be an essential part of their financial plan.


Quote for the day

“Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great.” - Mark Twain

Wednesday, 23 September 2015

23-Sep-2015 CSE Trade Summary

Quote for the day

“Everything relates to failure. We grow up experiencing failure as children and then we go through it as adults. The key is understanding that failure is how we improve. You do this not by ignoring the failure, but by recognizing it, examining it thoroughly and not making any changes until you truly understand it.” - Henry Petroski

Tuesday, 22 September 2015

22-Sep-2015 CSE Trade Summary

Quote for the day

“In bull markets, people have faith; in bear markets, doubt. The other way around might be more profitable.” - James Grant

Monday, 21 September 2015

21-Sep-2015 CSE Trade Summary

Quote for the day

"Success is neither magical nor mysterious. Success is the natural consequence of consistently applying the basic fundamentals." - Jim Rohn

Sunday, 20 September 2015

How to break into and Succeed in Finance

1. Be multi-talented; Be genuinely interested in many things, including those that may not be related to your career;
2. Work harder than everybody else (Coaches know that hard work beats talent most of the time).
3. Find something you are good at, then hone that skill until its razor sharp;
4. Read voraciously. Build a library, learn from the masters.
5. Your academic background matters less and less the longer you are out of school.
6. Create something of value that others want — and are even willing to pay for;
7. Meet as many people in your field as you can. Learn from them, and when possible, be genuinely helpful.
8. Develop a speciality.
9. “Once in a lifetime” opportunities come along more frequently than you imagine; Be prepared for when those opportunities presents themselves;
10. Be lucky.

Read more:

96 Years Ago, This $310-Billion Man Revealed the Secrets To His Success

By Alex Banayan 

He’s richer than Bill Gates and Warren Buffett combined. And he started off as a broke Scottish immigrant. I’ve been dreaming of interviewing him for my book. The only problem? He died 96 years ago.

How did Andrew Carnegie, the man with the world’s largest steel empire, rise from no money, no opportunity, and no connections — to the richest man alive?

I’ve spent hundreds of hours researching Carnegie’s success, and here are the 5 best lessons from the man himself.

1. Get Out Of The Shade

One afternoon, a young man walked into Carnegie’s office to interview him about his success. Carnegie could have told the young man about his journey from poverty to riches or about his wild dealings with John Rockefeller. But instead, Carnegie talked about something else.

His optimism.

Carnegie said the most important thing in his life was his “ability to shed trouble and to laugh through life.” He said that seeing life through a lens of positivity was worth more to him than millions of dollars.

“Young people should know that it can be cultivated,” Carnegie said. “The mind, like the body, can be moved from the shade into sunshine.”

And it makes good business sense, too. By not getting weighed down by the negative, Carnegie could keep his focus on the positive, bounce back from failures faster, and see opportunities where other people didn’t know they existed.

Ask yourself: do you sometimes slip into pessimistic thoughts and negative self-talk? Are you missing opportunities because you let your mind fall under “the shade”? How much would your business grow if you taped a note above your desk that reads: “move your mind into the sunshine”?

2. Tell Him to Keep the Ten Thousand

Carnegie and J.P. Morgan were once partners in a business. One day Morgan wanted to buy out Carnegie’s stake, so Morgan asked how much he wanted for it.

Carnegie said his shares were worth $50,000, plus he wanted an extra $10,000 on top — so a total of $60,000. Morgan agreed to the terms. But the next morning, Carnegie got a call.

“Mr. Carnegie, you were mistaken,” Morgan said. “You sold out for $10,000 less than the statement showed to your credit.” Morgan had calculated that Carnegie’s stake was actually worth $60,000, and with the additional $10,000, that made $70,000. So Morgan sent Carnegie a check for the full $70,000.

Carnegie responded by telling Morgan to keep the extra $10,000 — which, adjusted for inflation, is over $130,000 today. Morgan replied, “No thank you. I cannot do that.”

When reflecting on this story, Carnegie wrote, “A great business is built on lines of the strictest integrity.” He learned from Morgan that it is better to lose money in the short-term if that means maintaining your reputation for the long-term.

Think hard about this: Is your business doing everything it can to ensure that reputation comes before profits?

3. Follow the Rule of Nine-Tenths

There was a story that changed Carnegie’s life. It’s about an old man who lived a life of many tragic events. People in the town pitied him, but the old man said, "Yes, my friends, all that you say is true. I have had a long life full of troubles. But there is one curious fact about them – nine-tenths of them never happened."

Carnegie learned from that story that most of the problems and “what if’s” we imagine almost never occur. Our brains have a tendency to dream up the worst-case scenarios and act accordingly — yet most of those almost never happen. And even if they do occur, they’re almost never as bad as we imagine.

By reminding himself of the “rule of nine-tenths,” Carnegie freed himself from the fear of the unknown and was able to take the risks he needed to achieve his radical success.

Be honest with yourself: Do you get caught up on the “what if’s”? Would your life be better if you followed the rule of “nine-tenths” and reminded yourself that most of those problems won’t actually happen? Are you willing to make a commitment right now to live by that rule?

4. Jump On 'Flashes of Lightning'

When Carnegie was hired for his first job, the interviewer asked him how soon he could start. Most people would have asked for a couple of weeks to transition. But Carnegie’s answer? “I can start right now.”

“It would have been a great mistake not to seize the opportunity,” Carnegie wrote. “The position was offered to me; something might occur, some other boy might be sent for. Having got myself in I proposed to stay there if I could.”

Carnegie didn’t overthink it. He preferred to act quickly and risk something going wrong than to act slowly and risk losing the opportunity entirely.

And this rule worked in reverse, too. When Carnegie realized he owned shares in a company he didn’t like anymore, he told his partner to sell all the shares right away. When his partner said there’s no rush, Carnegie shot back, “Do it instantly!” And good thing he did… that company soon went bankrupt.

Of course, it’s important to study the facts, but if you’re presented with a real opportunity, don’t risk losing it by taking your time. As Carnegie would say, jump on the “flash of lightning.”

How many opportunities do you think have passed you by because you didn’t jump on them right away? Are you ready to act like Carnegie and make your answer “I can start right now”?

5. Find Your "$2.50" Motivation

Early in his career, Carnegie was given a bonus of $2.50. When he gave the bonus to his parents to help support the family, he said “no subsequent success, or recognition of any kind, ever thrilled me as this did… Here was heaven upon earth.”

And from that point on, Carnegie knew he wanted to be rich. But not for himself. He dreamt of making the money for his parents, so they could live a good life.

As soon as Carnegie identified that external motivation, his drive turned into high gear. The key is that he wasn’t motivated to help himself. He was motivated to help someone else.

So whether you’re doing it for your parents, your children, or to help people who don’t even know your name — you need to have that motivation clearly in your mind to fuel you through the inevitable hardships on your journey to success.

Are you clear on who your “$2.50” motivation is? Who are you doing it all for, other than yourself? If you don’t know, figure it out. And if you do know, how can you remind yourself of that “$2.50” motivation everyday?

Andrew Carnegie is proof that if you work hard, keep your mind “out of the shade,” take risks, act quickly, and build a reputation of the strictest integrity — anything is possible.

And the craziest part? Carnegie is just one example of how it’s possible to work your way from poverty to radical success.

Quote for the day

“Very early in my career, a veteran investor told me about the three stages of a bull market. Now I'll share them with you. The first, when a few forward-looking people begin to believe things will get better. The second, when most investors realize improvement is actually taking place. The third, when everyone concludes things will get better forever.” - Howard Marks

Saturday, 19 September 2015

Top 10 Rules for Forecasting


Quote for the day

"Know what you own, and know why you own it." - Peter Lynch

Friday, 18 September 2015

18-Sep-2015 CSE Trade Summary

Quote for the day

“The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance.” - William Eckhardt

Thursday, 17 September 2015

17-Sep-2015 CSE Trade Summary

Quote for the day

"Do you know that one of the great problems of our age is that we are governed by people who care more about feelings than they do about thoughts and ideas." - Margaret Thatcher

Wednesday, 16 September 2015

16-Sep-2015 CSE Trade Summary

Quote for the day

“Judgments based on intuition seem mysterious because intuition doesn't involve explicit knowledge. It doesn't involve declarative knowledge about facts. Therefore, we can't explicitly trace the origins of our intuitive judgments. They come from other parts of our knowing. They come from our tacit knowledge and so they feel magical. Intuitions sometimes feel like we have ESP, but it isn't magical, it's really a consequence of the experience we've built up.” - Gary Klein

Tuesday, 15 September 2015

15-Sep-2015 CSE Trade Summary

Quote for the day

“Whenever your mind is totally absorbed in whatever activities you are performing, your mind will remain calm and content.” - Chin-Ning Chu

Monday, 14 September 2015

14-Sep-2015 CSE Trade Summary

Quote for the day

"This idea that in order to make a decision you need to focus on the consequences (which you can know) rather than the probability (which you can’t know) is the central idea of uncertainty." - Nassim Nicholas Taleb

Sunday, 13 September 2015

11 choices rich people make that the rest of us don't

By Kathleen Elkins

Rich people think and act differently than the rest of us. They aren't born with this "rich mentality" — they learn how and then choose to think and act this way.

It's a concept that has been in print for nearly a century — thanks to a journalist's research of more than 500 self-made millionaires in the early 20th century — and continues to gain relevance today.

In T. Harv Eker's bestselling book, "Secrets of the Millionaire Mind," the self-made millionaire identifies specific choices the wealthiest people make on a daily basis that most of us fail to emulate.

Here are 11 of them, with commentary from Eker's bestseller:

1. Rich people choose to be in control of their success.

"Rich people believe, 'I create my life,'" writes Eker, "while average people think, 'Life happens to me.'"

You have to be in control of your financial life, he emphasizes: "You have to believe that you are the one who creates your success, that you are the one who creates your mediocrity, and that you are the one creating your struggles around money and success. Consciously or unconsciously, it's still you."

2. Rich people choose to think big.

If not you, then who? That's how rich people think, Eker writes: "Big thinking and big actions lead to having both money and meaning."

"Most people choose to play small," he continues. "Why? First, because of fear. They're scared to death of failure and they're even more frightened of success. Second, people play small because they feel small. They feel unworthy. They don't feel they're good enough or important enough to make a real difference in people's lives."

3. Rich people choose to commit to attaining wealth.

Rather than wanting to be rich, wealthy people consciously commit to being rich.

"Getting rich takes focus, courage, knowledge, expertise, 100% of your effort, a never-give-up attitude, and of course a rich mindset," writes Eker. "If you are not fully, totally, and truly committed to creating wealth, chances are you won't."

They are able to fully commit because they have precise goals and a clear vision.

"The number one reason most people don't get what they want is that they don't know what they want," he continues. "Rich people are totally clear that they want wealth. They are unwavering in their desire ... As long as it's legal, moral, and ethical, they will do whatever it takes to have wealth."

4. Rich people choose to focus on opportunities.

Rather than focusing on obstacles like most people tend to do, rich people focus, and capitalize, on opportunities.

"Rich people see potential growth," writes Eker. "Poor people see potential loss. Rich people focus on the rewards. Poor people focus on the risks."

5. Rich people choose to play to win.

While rich people play to win, average people play to not lose, says Eker: "The goal of truly rich people is to have massive wealth and abundance. Not just some money, but lots of money."

If your goal is simply to be comfortable — to have enough money to survive — you probably won't strike it rich.

Eker writes: "When your intention is to have enough to pay the bills, that's exactly how much you'll get — just enough to pay the bills and not a dime more."

6. Rich people choose to hang out with other rich people.

The rich associate with those who are equally or more rich.

"Successful people look at other successful people as a means to motivate themselves," writes Eker. "They see other successful people as models to learn from. They say to themselves, 'If they can do it, I can do it.'"

Rather than being jealous of other successful people, they are grateful for them, as they provide a template for how to attain such success.

"The fastest and easiest way to create wealth is to learn exactly how rich people, who are masters of money, play the game," he explains.

7. Rich people choose not to be derailed by their problems.

"The secret to success is not to try to avoid or get rid of or shrink from your problems; the secret is to grow yourself so that you are bigger than any problem," writes Eker.

"The road to wealth is fraught with traps and pitfalls, and that's precisely why most people don't take it. They don't want the hassles, the headaches, and the responsibilities. In short, they don't want the problems."

Rather than focusing on, or even noticing, the problems, the super successful focus on their goals, says Eker.

8. Rich people choose to focus on their net worth.

"The true measure of wealth is net worth, not working income," writes Eker.

Net worth is the financial value of everything you own.

"[It] is the ultimate measure of wealth because, if necessary, what you own can eventually be liquidated into cash," writes Eker.

9. Rich people choose to get paid based on results.

"There's nothing wrong with getting a steady paycheck, unless it interferes with your ability to earn what you're worth. There's the rub. It usually does," explains Eker.

The wealthiest people never have a ceiling on their income, nor do they choose to get paid for their time, says the self-made millionaire.

"Rich people prefer to get paid based on the results they produce, if not totally, then at least partially," he writes. "Rich people usually own their own business in some form. They make their income from their profits. Rich people work on commission or percentages of revenue. Rich people choose stock options and profit sharing in lieu of higher salaries."

10. Rich people choose to manage their money.

"Wealthy people are not any smarter than poor people; they just have different and more supportive money habits," writes Eker. "The single biggest difference between financial success and financial failure is how well you manage your money. It's simple: to master money, you must manage money."

Average people choose not to manage their money because they believe they don't have enough to manage.

"Until you show you can handle what you've got, you won't get any more!" says Eker. "The habit of managing your money is more important than the amount."

11. Rich people choose to constantly learn and grow.

The wealthiest learn how to be successful from those who are richer and more successful than they are. They then continue to learn even after they've attained incredible success.

"Every master was once a disaster," says Eker. "No one comes out of the womb a financial genius. Every rich person learned how to succeed at the money game, and so can you ... Success is a learnable skill."


Quote for the day

“Economics is a social science and there is a fundamental difference between the natural and social sciences. Social phenomena have thinking participants who base their decisions on imperfect knowledge. That is what economic theory has tried to ignore.” - George Soros

Learn from the most successful traders of all times. This is what they do

By Rolf

I have read dozens of trading and trading related books over the years and I have extracted a huge collection of trading quotes with tips and advice I use in my daily trading. Listening to what the most successful people have to say, adopting ideas that helped them overcome their greatest struggles and following their advice can be of great value. At least for me I can say that following the best traders and incorporating their ideas into my own trading made a huge difference. This is why I am going to share with you the greatest tips, help you understand their meanings and how to use it in your own trading.

Losses and risk management

It is obvious that in every trading book, dealing with losses and risk management always comes first. It doesn't matter which trader you listen to, every top trader puts great focus on the importance of losing efficiently and having a good risk management approach in place.

"I tend to cut bad trades as soon as possible, forget them, and then move on to new opportunities. The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you follow these three rules, you may have a chance." – Ed Seykota
"A loss never bothers me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does damage to the pocketbook and to the soul." – Jesse Livermore
"The most important rule of investing is to play great defense, not great offense. Every day I assume every position I have is wrong. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead. Always maintain your sense of confidence, but keep it in check." – Paul Tudor Jones
"Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple:Get out, because you can always get back in." – Paul Tudor Jones
"You should always have a worst case point. The only choice should be toget out quicker." – Richard Dennis
"Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose." – Bruce Kovner
"The first rule of trading – there are probably many first rules – is don’t get caught in a situation in which you can lose a great deal of money for reasons you don’t understand." – Bruce Kovner

The common denominator among all those quotes is that cutting losses fast and moving on the next trade is essential. Don’t dwell over lost trades; a single trade is absolutely meaningless for your overall path as a trader, but most traders let losers get out of hand and they allow a single losing trade to have a significant impact on their account balance. Furthermore, honour your stop and always place it at a level where it indicates that your trade idea was wrong, not just based on money related objectives or to achieve a certain reward:risk ratio.

Emotions and mindset

Emotional stability and discipline is the foundation upon which a trader has to build his trading methodology. Without the ability to control emotions and the impulsive trading decisions emotions cause, the best trading system and the best thought-out risk management approach are useless.

"I truly feel that I could give away all my secrets and it wouldn't make any difference. Most people can’t control their emotions or follow a system."  – Linda Raschke
"Markets are never wrong – opinions often are." – Jesse Livermore
"I don’t get caught up in the moment." – Ray Dalio
"If you argue with the market, you will lose." – Larry Hite
"The psychological factor for investing has 5 areas. These include a well-rounded personal life, a positive attitude, the motivation to make money, lack of conflict [such as psychological hang ups about success], and responsibility for results."  -Dr. Van K. Tharp
"It is hard enough to know what the market is going to do; if you don’t know what you are going to do, the game is lost." – Alexander Elder

These quote highlight the fact that, before you get into the nitty-gritty of your trading system and try to tweak your stop loss or take profit placement, you have to work on your discipline. It is not a stop loss order that should have been placed 5 points higher or lower that makes the difference between a consistently losing and a profitable trader, but the degree to how a trader can avoid emotionally caused trading mistakes.

Development and self-improvement

Trading is a performance game and only the best will make it to the top and stay there. Professional traders work very hard and are often obsessed with trading, whereas the average amateur trader reduces their trading time to flipping through time-frames to hunt trades or read through forums trying to find a better system. Professionals understand that they have put in the work and that the learning never ends.

"Successful traders constantly ask themselves: What am I doing right? What am I doing wrong? How can I do what I am doing better? How can I get more information?" – Bill Lipschutz
"I really value the fact that I've learned to trade as a craft. Like any craft, such as piano playing, perfection may be elusive – I’ll never play a piece perfectly, and I’ll never buy the low and sell the high – but consistency is achievable if you practice day in and day out." – Linda Raschke
"I learned that each mistake was probably a reflection of something that I was doing wrong, so if I could figure out what that was, I could learn how to be more effective. I learned that wrestling with my problems, mistakes, and weaknesses was the training that strengthened me. Also, I learned that it was the pain of this wrestling that made me and those around me appreciate our successes." – Ray Dalio
"When you think that it’s too hard, remember that in the long run, doing the things that will make you successful is a lot easier than being unsuccessful." – Ray Dalio
"If you don't work very hard, it is extremely unlikely that you will be a good trader." – Bruce Kovner
"The realization that you are responsible for your results is the key to successful investing. Winners know they are responsible for their results; losers think they are not." – Dr. Van K. Tharp

Use this moment to look at your own trading. Do you put in the work that you should? Do you constantly work on your trading skills and review your trades to build your edge? Or do you just play around and are one of those system-hopping traders who can’t let go of the illusion that someday they will just stumble over the Holy Grail trading system that just works all the time?

More trading tips

Here, I gathered trading quotes of different areas and also with a few practical tips.

"I review my checklist. It’s a handwritten sheet laminated in plastic and taped to the right-hand corner of my desk where I can’t overlook it." – Marty Schwartz
Marty Schwartz who has made millions of Dollars still uses a physical trade checklist to control his trading and to avoid making mistakes. If one of the best traders in the history does not trade without a checklist, why should you?
"Systems don’t need to be changed. The trick is for a trader to develop a system with which he is compatible." – Ed Seykota
A system is not something that you purchase from a website and then just follow the instructions. A trading system is a complex structure and it has to be tailored around your personal strength, weaknesses and your mindset.
"Having a quote machine is like having a slot machine at your desk – you end up feeding it all day long. I get my price data after the close each day." – Ed Seykota
Although Ed Seykota refers to quoting machines, it can be easily translated to today’s world. Traders constantly watch their floating account balance and P&L. They babysit their trades and watch every tick of the move. This inevitably leads to impulsive decisions and trade mismanagement. Get away from your charts and let the markets do what they want.
"Money is made by sitting, not trading." – Jesse Livermore
Livermore highlights the importance of patience and just waiting; waiting for the right setup and the right time to enter the market, waiting for the right time to do something about your trade and being patient about trade exits.
People always feel that they ‘have to do something’ and so move around stop loss and take profit orders and constantly micro-manage their trades.
"Always understand the risk/reward of the trade as it now stands, not as it existed when you put the position on."– Bill Lipschutz

The dynamic nature of reward:risk ratio is totally misunderstood and often even completely neglected. The reward:risk ratio of your trade constantly changes which brings many questions.

Conclusion: Learn from the best

You will not be able to reach out to Paul Tudor Jones or Marty Schwartz and let them teach you how to trade, but you don’t have to either. There are so many resources and great books out there, in which the most successful traders share their journeys, their struggles and how they overcame it. I urge you to take the chance and start mirroring what the professionals do. If you want to get started, I highly recommend the complete Market Wizards series to kick-start your trading!


Saturday, 12 September 2015

Quote for the day

“Many fail to grasp what they have seen, and cannot judge what they have learned, although they tell themselves they know.” - Heraclitus

11 ways rich people think differently from the average person

Mastering your money has a lot more to do with mindset than we might think.

Self-made millionaire Steve Siebold has interviewed 1,200 of the world's wealthiest people during the past three decades. As backward as it may sound, getting rich often has less to do with the money than the mentality, he writes in his book "How Rich People Think."

Here are 11 mindsets of the wealthy you could adopt today:


Friday, 11 September 2015

11-Sep-2015 CSE Trade Summary

Quote for the day

“You need to have the courage to stand up against the crowd, decide your position, and execute it.” - Mark Ritchie

Thursday, 10 September 2015

10-Sep-2015 CSE Trade Summary

Quote for the day

“Investors must remember that their first job is to preserve their capital. After they've dealt with that, they can approach the second job, seeking a return on that capital.” - Irving Kahn

Wednesday, 9 September 2015

09-Sep-2015 CSE Trade Summary

Quote for the day

“Each stock has its own probability distribution that depends on a host of factors. Who has what position? Where did the major buyers accumulate their positions? Where are their stop-loss points? What price levels are likely to be technically significant?” - John Bender

Tuesday, 8 September 2015

08-Sep-2015 CSE Trade Summary

Quote for the day

"You cannot climb the ladder of success dressed in the costume of failure." - Zig Ziglar

Monday, 7 September 2015

07-Sep-2015 CSE Trade Summary

Quote for the day

“The stock market is an inexact phenomenon. Laypersons' opinions often seem as worthy as professionals', and shoeshine men and brokers compete for genius.” -  Michael Steinhardt

Sunday, 6 September 2015

50 best things Warren Buffett told investors over past 50 years

By Charles Passy

Memorable quotes from past letters to shareholders

It’s been 50 years since Warren Buffett — a.k.a. the Oracle of Omaha — took control of Berkshire Hathaway and turned a sleepy textile company into a powerful conglomerate with multiple businesses and investments. And that means it’s been 50 years since Buffett started writing his annual letter to shareholders.

The 2014 edition — the epistles always refer back to the previous year — gives us the perfect excuse to review all 50 letters and find 50 of the most memorable quotes from them.

Keep in mind that Buffett’s early letters — some of which were not actually signed by him — featured little more than straightforward accounts of Berkshire’s finances. But by the late 1970s, the oracle started, well, oracle-ing, offering pointed, humorous and sage-like commentary on the markets. And along the way, the cost-conscious billionaire wasn’t afraid to make fun of himself (and his one indulgence — namely, a private jet).

Read and enjoy.