On Jan 24, I launched my book ‘Profit from the Panic- How to profit from the Worst Financial Crisis Since the Great Depression’. At the time, the US market (Dow Jones) had plunged from 14,000 points to 8,000 points (a 43% decline) and the Singapore market crashed from 3,800 points to 1700 points (a 56% decline). Great companies like Singapore Exchange (SGX), Capitaland, General Electric, American Express etc… were selling 50%-90% below their intrinsic values.
Sentiment in the market was that of FEAR. Very few people dared to buy stocks after losing so much money in the last 15 months since the crisis started. I on the other hand, was feeling really GREEDY for huge profits.
My main purpose of writing the book then was that I knew that the stock market was very much undervalued and that the market downturn was coming near to the bottom (although I did not know exactly when it would be). I also shared the fact that from studying the history of past recessions, what goes down MUST always come up. In the long term, the stock market will ALWAYS recover higher than ever before.
The book was to share with people how I was selecting the best stocks to buy at the time. In the book, I gave lots of ideas such as buying oil futures ETF (USO), S&P 500 ETF (SPY), Dow Jones ETF (DIA) and China ETF (FXI), all 50%-70% down from its pre-crisis levels. I also shared about how I selected super undervalued companies like American Express (intrinsic value of $60) selling at only $16 & General Electric (intrinsic value $30), selling at only $11.
I also talked about buying singapore stocks like Bestworld International (intrinsic value $0.78) selling at $0.19, SGX (intrinsic value $7.60) selling at $5 and Capitaland (intrinsic value $3.60) selling at just $1.90. I said that anybody who wanted to make lots of money had to grab this once in a lifetime opportunity where it was the great Singapore and Wall Street Sale for Stocks.
At that time people thought I was crazy for suggesting to buy stocks while the economy was in a recession. Sure enough, the market kept going lower for the next one month, and I accumulated more and more stocks. What gave me the confidence then? Well, I knew that history always repeated itself and the wise words of Warren Buffett gave me confidence: ‘Be greedy when others and fearful and be fearful when others are greedy’. Buy stocks when nobody else wants to buy and start selling when everyone realizes that it is time to buy.
Then in March 2009, the stock market made a turn and stocks exploded upwards. For the last 4 months (Mar-July) The US Market has risen 41% to 9,200 points and the Singapore market has risen 73% to 2,600 points.
Most of my stock picks have near doubled and some even tripled from when I bought them. Here are some of the gains I have made since then. American Express made +69.23%, Bestworld made +83.33%,, GE made +32% +14%, FXI made +50% etc…a six figure profit in just 4 months. To celebrate, took my family on a long holiday and brought my kids to Disneyland.
The best part is that I am happy that the many people who attended Wealth Academy, bought my books then, had faith in my teachings and took action have benefited tremendously as well. Also, all the royalty proceeds from the more than 10,000 copies sold have been donated to charity.
Many people who have missed out on this great stock market rally over the last 4 months have asked me if it is too late. My answer is yes and no. For some stocks, they are currently a bit overvalued and in the short term, there should be a downward correction.
However, there are still alot of stocks that are hugely undervalued and there is still alot more upside to go. In my upcoming Wealth Academy intensive courses, I am going to teach people how to select the right stocks to buy and which are the ones to start selling. If you want to find out more about these programmes, call my Singapore office at 65-62740105 or my Indonesia office at 62-215747511