An investing educator with Ein55 Investing Styles, Dr Tee Tong Yan shares his wealth of knowledge and experience in investing and the importance of discovering your own investing style.
What prompted you to start investing and how did you begin?
The Asian financial crisis in 1997 caused severe social & financial hardship to the average people. The stark reality of ignorant amateur investors who lost their life savings motivated me to study the market behavior and utilize this knowledge to fatten my investing wealth.
You train people on stocks analysis, are you able to share some of the methods you use?
[Free Ebook] How should you invest your first $20,000?
We asked 14 Singapore finance bloggers to share what they would do if they could go back in time and invest their first $20,000. They can no longer rewind time, but you can learn from their experience and hopefully start with a better footing.
Having experienced different investing approaches of trading, market-cycle investing and value investing over the past 17 years has enabled me to recognise the strengths and flaws in different investing methods.
This propelled me to establish a unique Ein55 Styles, which is a mega-market-cycle investing that bridges stock trading and value investing while integrating Fundamental Analysis (FA), Technical Analysis (TA) and Personal Analysis (PA).
I would stay invested during a mega bull market (usually between a period of about 2 to 5 years) and sell before the arrival of the mega bear market, where the latter can result in a 25% to 50% downfall. Of course, this method involves estimating the upside potential or the peak of the market. Market-cycle investing can achieve higher profit with shorter investing period, which also implies higher annual returns.
I would minimize investment risk by using value investing for entry, i.e. buying at low price with substantial margin of safety. This enables investors to have strong holding power to avoid selling low during the mid-term corrections.
Even if we have missed selling before the bear market and are forced to hold off till the next market cycle, the mega-market-cycle investing would become value investing, and the only compromise is a lower annual rate of return. But we can continue to have a stress-free investing life by ignoring the rise and fall of the market.
Will you be able to illustrate some examples of successful stock investments using the methods you just mentioned?
The Ein55 methods which emphasizes on buy-very-low and sell-very-high, are applicable for both short-term trading and long-term investing, generating higher profit with longer trading or investing period. Some of the recent examples which my students have profited with over 50% gains are SMRT, Noble, Monster Beverage and other stocks with low optimism level. My personal example is Chip Eng Seng (1/3 capital) with over 125% capital gains and 40% dividend collected so far.
How much of your income do you save annually? What do you spend on normally?
I am strongly influenced by my parents who are excellent investors and thrifty in nature. I save 70% of my income and am free from housing mortgage and car loan. On top of the regular expenses for the family, I also spend on my childrens’ education which is the best investment for them. The savings will be deposited in the bank or reinvested based on the optimism level of the different investment markets.
What’s the worst investment you have ever made?
It was a technology stock which I invested in 2001 after the dot-com stock market bubble burst in 2000. Although there is a high margin of safety with a low entry price, the share price plunged due to the deteriorating underlying fundamentals of the company and the persistent gloomy outlook of the economy then.
Making mistakes and incurring losses in the early years of your investing journey especially when one has limited capital will prove to be an invaluable lesson towards evolving into a smart investor. On the other hand, an early taste of success may result in an over-confident mindset which could lead to irrecoverable losses, especially if incurred near retirement age.
Do you consider yourself financially free?
Yes, I am financially free but it does not mean I should start retiring. After working for 17 years in the corporate world, I have decided to pursue my own interest in investment education. Being rich spiritually is more important than financially. Successful investment gives me happiness through greater satisfaction in validation of methods shared.
What’s the most extravagant item/service you have ever bought?
I can’t think of any. Similar to my investment style, I purchase products or services which are value for money and never lead an extravagant life style. I share this same mindset with my students who are looking for high quality courses at a great discount.
How would you advise a person who has never invested before to begin investing?
First-time investors should possess an open-mind and expose themselves to various investing techniques and commit less capital for their initial investment. Before pumping substantial capital into an investment, one has to formulate a personalized investing strategy based on own investing styles and preferences. Although there is no universal law in investing, investors should exercise independent thinking and not blindly follow experts as their method may not work for all the investors. Herd investing may even lead to catastrophic loss, especially when one follows an over-generalized method in an inconsistent way, without adaptation to individual style.
The core of Buffett-style investing is drawn from a combination of the two most successful investors: Benjamin Graham (value investing) and Philip Fisher (growth investing), modifying to suit his investing styles.
Similarly for Ein55 Styles, it is an adaptation of my unique investing techniques and beliefs, with integration of other trading and investing experts whom I believe. Recognizing that every individual investor has their own distinct investment style, Ein55 Styles serves as a reference for amateur investors, with the flexibility to modify and develop their unique investment styles over time.
About Dr Tee Tong Yan
An investing educator with Ein55 Investing Styles. He holds a PhD specialized in computational simulation. He possesses 17 years of trading/investing experience with in-depth knowledge in stocks and related investment markets. He was a corporate vice president, now an owner of a consulting firm and also a trading/investing educator.