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The Top 5 Hobbies of Millionaires & Billionaires Around the World

Recently, I came across an interesting report by Wealth-X, which conducts research about the ultra-wealthy. In this report, they revealed the hobbies, interest and passions of the world’s richest people, and some are actually very different from what we think them to be.

The top 5 hobbies are as follows:

1. Philanthropy

It’s surprising that philanthropy features top in the list of hobbies of billionaires. While giving by the rich is often ridiculed by others (“Probably giving because they feel bad”), giving is a financial discipline that keeps the rich rich, and the not-so-rich to be on the right path to success.

Some ways to give your money:

Give regularly to a cause you believe in.

There are some people who frown upon giving to the poor just because they are poor, or perhaps you don’t have a very good perception toward charity. If that’s the case, find a cause that you believe in, and give regularly to it. Some causes that are worth giving to include humanitarian aid, sponsoring budding artists, supporting the elderly in society, giving to children’s education (or even a partial scholarship).

 

Giving is good for the heart.

The act of giving brings a healthy sense of awareness of where your finances come from; the more you serve and give, the more likely it is that people treat you with respect and have a positive attitude towards you, and your business grows.

Give physical gifts instead of financial gifts.

Some charities allow people to give physical goods instead of money. Doing your research, getting the right contacts, and finding a cause you believe in (and a sustainable one too!) requires patience and some hard work on your part, but it’s a worthy exercise. Although I personally give regularly to several charities, I do not like to publicise it.

 

2. Travel

Rich people travel because… simply because they can afford it. If you do have the spare cash, it makes sense to start travelling while you are on your way to financial success. This keeps you motivated, and you can always upgrade your holidays when your financial stability improves.

But the real challenge for most people is not just the money, but also the time. Given the nature of my job (trading), I have become the go-to person whenever any of my friends want to travel, and over the past few years I have travelled to 50+ countries while still making passive income along the way.

 

Christmas tree + Cape Town Flyer + National Geographic photo frame 😄🇿🇦🎄 #Christmas #southafrica #capetown

A post shared by Spencer Li 🇸🇬 Synapse Trading (@iamrecneps) on

 

3. Art

Art is something that really enriches the soul, and adds flavour to life. And there is a wide range of selection to choose from, ranging from a few thousand to rare pieces that go into millions.

 

Personally, I have taken an interest in this after hunting for some pieces for my new house.

4. Fashion

I’m not much into the fashion scene, but the ultra-rich truly enjoy obtaining unique pieces of clothing.

Bespoke, boutique, and customized clothing are the rage for the ultra-rich.

While I don’t really splurge on costly apparel, I do recommend spending good money on key essentials, like a pair of decent dress shoes for men, or any other piece of clothing that you find to be something you want to pull out once in a while.

I also find that it’s a waste of money to spend on cheap clothing; it’s far more cost-effective to buy quality, reasonably priced products that can last you 5-10 years, than to buy-and-throw most of your wardrobe.

That said, I do enjoy the occasional indulgence, from quality brands like Mont Blanc, Paul Smith, AP, etc 😀

 

5. Politics

When people mention the word “rich” and “politics” together, Donald Trump is the first thing that comes to mind. Other people like Henry Ross Perot, Mitt Romney and Ronald Lauder are also rich people who forayed into the political scene, but with limited success.

 

What are your hobbies?

At end of the day, your hobbies and passion are activities that bring additional job and add colour to your life, so pick something that is fun, meaningful, and something within your means. (Not all hobbies have to be ridiculously expensive.)

On a personal note, my hobbies include hitting a gym (with my trainer), tennis (with my coach), yoga (private noob level class), reading (2-3 books a week), and not forgetting trading (15 mins a day). Oh, and travelling as well. I aim for 2-3 new countries each year. 😀

P.S. If you would like to pick up a useful hobby/skill which can provide you passive income of up to 10% returns a month (verified), do drop by for my next workshop.

Click here to register: http://bit.ly/2oXJYIL

3 Crucial Lessons From Jesse Livermore – The Greatest Stock Trader of All Time

Jesse Livermore is known to be the most prolific stock trader. Several books have been written about him and his trading track record is legendary. His profits were so great that he was reported to have owned mansions in various places around the world, each fully staffed, complete with limousines and steel-hulled yacht for his holidays.

Some of you might have read that Livermore was worth $100 million after shorting the 1929 great market crash.

Above: Some of the books about Jesse Livermore, available in major bookstores.

What Guidelines Did Jesse Livermore Follow As A Trader?

Among the many quips he had about trading and investing, I’ve picked out some of the key ones that could make or break your trading account.

While many complain about the difficulties in trading forex, stocks, or commodities, there is a good minority that makes consistent profits in the markets.

What sets Jesse Livermore apart from his peers?

 

  1. Buy rising stocks and sell falling stocks.

The above seems obvious, but many people fail to adhere to this rule. Many people like to ‘pick tops’ and ‘pick bottoms’. Now, professional traders do occasionally try to pick tops and bottoms, but they do so with very strict risk management, and always have a contingency plan for when the trade doesn’t work out.

Beginners often makes the mistake of trying to trade against the trend. While this can be profitable for some, talk to anyone in the trading industry and they will tell you that trend-following is the major money-making strategy that every trader uses. It’s simple, easy to add positions on, and it’s stress free. The problems come when beginners make a buck from trading with the trend, and start to explore ‘new ways’ to trade and invest.

 

2. Keep trades that show a profit, end trades that show a loss.

Jesse Livermore is famous for his humongous profits, but behind every profitable trader is the admirable ability to deal with a string of losses. It’s one thing to know that you need to cut losses, but it’s another to actually cut your losses when you are wrong. George Soros famously quips that it is not how many times you win or lose, it’s how much you make when you win, and how much you lose when you are wrong.

Cutting losses is a psychologically hard thing to do in modern society. We’re ingrained to be always correct, and never admit that you messed up, because it reflects badly on you as a person. However, with investing, no one is marking you for the number of losses; the profit that you make is the final report card that matters, and that’s where we want to be focusing on.

 

3. Never average losses by buying more when your stock has fallen.

Too many people refuse to be wrong on their investments or trades.

I have heard of people say this statement: “Even if the stock drops a lot, I’ll just keep it because I’m buying for ownership and dividend cashflow, not just for capital gains.” Sure, but what happens if the stock you hold drops by 70%? 80%? You’ll buy more?

Buying more when the stock has fallen is a sure-way to get your trading account to zero. It’s taking more risk when the odds are against you.

 

Think About This: Which of These 3 Guidelines Have Brought You Losses in the Past?

Many traders soon realize early in their career, that their trading accounts could have been profitable if not for silly mistakes. Avoiding these silly mistakes requires experience, maturity, the correct knowledge, and of course, proper mentoring.

I was lucky to be mentored by veteran traders early on in my trading career. Their advice, based upon thousands of hours of market experience, contributed greatly to who I am today, and I never fail to mention, during trading seminars or public events, that by tapping on their experience, I was able to quickly attain a level of success that kept me profitable.

If you’re currently struggling as a trader, ask yourself this question: “Which mistakes have I been making?”

Acknowledging trading mistakes is a continuous process of learning and growing.

 

Ever Wondered What Trading Methodology Jesse Livermore Used?

The next step for every aspiring trader is to actually take action. Making more trades is the key to success, and consistency can only be bred by constant and directed effort towards your goals.

If you would like to learn the trading method which Jesse Livermore (as well as many other legendary traders used), do drop by for our next workshop where we will share the strategies which professionals have been using for over 200+ years to gain consistent returns.

Click here to register: http://bit.ly/2oXJYIL

Wishing you all the best in your trading journey! 😀

The World’s 7 Greatest Currency Trades Ever Made – Key Lessons & Insights

Have you ever wondered, what are some of the most epic forex trades that went down in history? And more importantly, what crucial insights and lessons can we learn from these legendary traders?

1) ANDY KRIEGER – $300 MILLION PROFIT

Andy Krieger is a somewhat unknown trader who made his name at Bankers Trust. He was watching currencies in 1987 after the Black Monday crash, and he saw an opportunity for arbitrage in some overvalued currencies. He became famous because he shorted a few hundred million dollars worth of Kiwi (New Zealand’s currency), and he shorted so much that his position was said to exceed the money supply of New Zealand as a nation.

Andy shorted so much currency that there was not enough currency in circulation to support the short.

The kiwi fell tremendously while he was shorting it and made $300 million for Bankers Trust. Legend has it that a worried New Zealand government official called up Krieger’s bosses and made threats to him. Krieger later left the firm to work for George Soros in his quantum fund.

 

2) STANLEY DRUCKENMILLER – $2 BILLION TRADE

Stanley Druckenmiller made this historic trade as a trader working for George Soros’ Quantum Fund. He went long on the German mark because of the fall of the Berlin Wall, and the undervaluation that was going on during the reunification between East and West Germany. Legend has it that Stanley initially bet a few hundred million dollars, until Soros told him to raise the bet to $2 billion. That year, the Quantum fund brought in 60% returns.

Stanley is a rather unknown person, but the fact that George Soros hired him is worth noting.

Another trade that Stanley made was in the 1990s. He was buying German bonds, because he expected investors to move from British bonds to German bonds. It was also during the period where Soros broke the Bank of England.

3) GEORGE SOROS – $1 BILLION PROFIT IN THE POUND

George Soros became famous because he shorted the pound aggressively, in fact, so aggressively that he borrowed heavily and make $1 billion in the process.

At that time, Britain wanted to keep the value of the pound above 2.7 German marks, a key feature of the fixed exchange rate mechanism. Many speculators began to take up short positions in the expectation that this fixed exchange rate would not hold.

This was the famous ‘broke the British bank’ trade that shot George Soros to stardom.

Britain even raised its interest rates to double digits to try to attract investors and prop up the buying in its currency, however, the British government soon realized that it would lose lots and lots of money trying to keep the value of the pound. Soros made $1 billion for his fund on this trade.

 

4) PAUL TUDOR JONES – $100 MILLION PROFIT SHORTING BLACK MONDAY

The U.S stock market experienced its largest 1-day percentage decline ever on Black Monday of 1987. This was the most shocking fall the world had seen at that point, and even up to today, no 1-day decline has ever matched Black Monday.

Betting on a black swan event netted Paul Tudor Jones $100 million in profits.

1The 22.6% drop in the Dow in 1987 has not been rivaled even up to 2017.
Source: stock-market-crash.net

Paul Tudor Jones shorted the stock market, tripling his money, and making US$100 million on that trade while the Dow Jones plummeted 22%.

 

 

5) ANDREW HALL – $100 MILLION PROFIT BETTING ON OIL

While working for Citigroup, Andrew Hall predicted a 5-year bull-run in oil from 2003-2008, and made the appropriate trades. Oil went from $30 to $100, and Hall brought with him $100 million as part of his compensation plan.

Andrew Hall made it big on oil in his career at Citigroup.

jAndrew Hall at a conference in September 2016.
Source: Forbes

Aside from this brilliance, he reportedly bought 1 million barrels of physical oil in 2009, and stored it, hoping that oil would rise greatly. It did, and from 2009-2011, oil went from $50 to $100. However, his oil fund hasn’t been doing well in the past 5-6 years, and he has had to repeatedly explain the lack of profits to investors.

 

6) DAVID TEPPER – $4 BILLION PROFITS BUYING BANK STOCKS

David Tepper’s strategy was simple; buy low, sell high. In early 2009, he scooped up big banks like Citigroup and Bank of America, and saw them quadruple and triple in value from their bottoms in 2009.

Nothing spectacular; buy low, sell high.

These trades earned $7 billion for Tepper’s hedge fund. His personal compensation was $4 billion.

 

7) LOUIS BACON – 86% RETURNS BETTING SADDAM HUSSEIN WOULD INVADE KUWAIT

Louis Bacon went long on oil, short on stocks in the 1990s because of this geopolitical situation. Later, he also correctly bet that the U.S. would quickly defeat Iraq and the oil market would recover.

Bacon’s event-based bets rewarded him handsomely.

1Louis Bacon explaining what he knows best; geopolitical event trading.
Source: Quotesgram

His hedge fund returned 86% that year because of these trades. Although his strategy is somewhat unconventional, he has excelled in it and carved a niche for himself.

 

AFTER READING THIS, WHAT’S NEXT?

Many of these traders had decades of trading experience under their belts. Although they all seem like they had a great stroke of luck or a brief moment of brilliance, the preparation and practice that they went through was thorough and gruelling.

I hope that these stories of real traders would motivate you to continue at your game, brush up your skills, engage the financial markets, and stay up-to-date with what’s going on.

P.S. If you are keen to learn the strategies that professional traders are using and experience some practical live trading, I would like to invite you to join us for this:

In our previous workshop, during the live trading segment, one new trader made US$200+ from following our USD/SGD short trade, while Spencer made US$454 on the same trade and over US$1,200 of profits in total during the workshop.

Come join us for our next hand-on workshop, where you will learn 4 easy strategies to tackle any market (stocks, forex, CFDs, etc), and how you can apply them with as little as 15 minutes a day to make 20-40% annual returns consistently.

In addition, this workshop also includes training notes and slides, case studies, a customised trading plan, and an additional 120 mins of exclusive training videos you can keep.

Check availability and register here: http://bit.ly/2oXJYIL
(Each workshop is limited to 30 pax)

 

RESEARCH SOURCES & REFERENCES

investopedia.com/articles/forex/08/greatest-currency-trades.asp
commodityhq.com/education/5-legendary-commodity-investors/
businessinsider.com/greatest-trades-in-wall-street-history-2013-2
ibtimes.com/top-10-greatest-trades-all-time-253039
cabotwealth.com/daily/options-trading/the-greatest-options-trade-i-ever-saw/

The Top Hedge Funds of 2016 Share Their Best Bets for This Year (With New Charts & Examples)

Bloomberg recently did a good cover on what hedge fund managers are looking out for in 2017. The general consensus is clear; the market is uncertain, and world events are causing markets to react in unexpected ways.

“You’re going to have to take way more risk today in order to try to make outsize gains versus a year ago,” -Hanif Mamdani, PH&N Absolute Return Fund

I found the article to be pretty insightful, with a handful of key take-aways. To make it easier for my readers, I’ve broken up the article into easy-to-digest sections, and added some charts and examples to make it clearer. Here we go:

1. Distressed Energy Companies

Hedge funds specializing in purchasing companies that are on the verge of collapse, actually profited from the rise in oil prices last year. Companies that were in the red started to turn profitable, and after purchasing companies at ultra-cheap prices, these assets were starting to bring in significant capital gains for hedge funds. Even though oil has risen significantly, hedge fund managers still see the potential for more gains.

It’s interesting to look at the related ETFs for oil and gas companies. I’ve pulled out 2 charts of U.S Oil & Gas company ETFs (XES and IEO). The gains over the year are impressive.

The charts above summarize the oil and gas sector for the year of 2016.

On the technical side, the Oil & Gas sector is still on an uptrend. It is prudent to remain bullish when the market is still trending up. It’s interesting that XES has broken out of a wedge, and looks to be gathering bullish momentum.

In the longer term, oil & gas companies seem to be picking up momentum.

 


A few weeks ago, I was invited to give a talk at the Singapore Stock Exchange (SGX) on the Offshore & Marine sector, and Keppel Corp was one of our top picks. 

2. “Global Macro Deceleration”

Some hedge fund managers are positioning themselves for the worst. For example, a border tax in the U.S could “cause a global depression and a major equity market decline,” says Carlson Capital’s Black Diamond Thematic Fund. They’re waiting for commodities to “correct meaningfully” (meaning a decline in commodity prices), and looking to scoop up good stocks at the bottom of the market decline.

Traditionally, sector rotation strategists have sworn by investing in stocks like semiconductors, industrials and miners during full-blown bear markets. These stocks are famous for having high volatility and are not for the faint-hearted. A famous example, Caterpillar Inc, is shown below:


Heavy industrials like Caterpillar Inc tend to move cyclically with the economy. Notice the 6 big swing it has had since 2012!

3. Long High-Yield Corporate Bonds Amidst Rising Interest Rates

Some hedge funds are betting on higher-yield corporate bonds rising during this period. High-yield bonds typically have both a short maturity and high coupon rate. With interest rates expected to rise in the coming decade, bond prices are likely to fall and bond holders will actually be worse off (Economics 101!). However, with the shorter maturity, higher-yield corporate bonds become more attractive as they are less exposed to the beating by rising interest rates. Bearing in mind these ideas, it is understandable why these have been attractive to institutional investors in the past year.


I’ve inserted a little-known ETF, “HYG”, a high-yield corporate bond ETF that tracks the prices of high-yield corporate bonds. You can see that the bear trend sharply reversed at the turn of 2016 and has been rising steadily since. The uptrend is still in force, and some hedge fund managers are looking to speculate on a variety of interest-rate products.

What They’re Saying:

In summary, what we notice to be the consensus about the market in 2017 is this:

  • Heightened interest rate, inflation rate, and economic volatility
  • Renewed interest in unconventional investment strategies

That being said, it’s important to keep yourself updated and continually learning about financial markets. In such a unique market climate, it would serve you well to continue reading up and knowing what market participants are paying attention to.

Want to Learn How to Tackle the Markets?

Join us for a 3-hour intensive “Trading Foundation Workshop” where you will learn all the necessary skills, and witness firsthand live trading, where many of our new attendees managed to make some profits from their very first trade! 😀

Register now: http://synapsetrading.com/trading-foundation-workshop/

 

Research Sources:

bloomberg.com/news/articles/2017-02-28/the-top-hedge-funds-of-2016-share-their-best-bets-for-this-year

Why Goldman Sachs Thinks a Stock Market Crash Might Be Coming Soon

Source: CNBC

“Financial market reconciliation lies ahead…”We are approaching the point of maximum optimism and the S&P 500 will give back recent gains…” – Mr. David Kostin, Goldman’s chief U.S. Equity Strategist

While the S&P 500 continues to break new highs, prominent economics and C-level staff in multinational banks are coming out to say it’s time it has to stop.

 

U.S Equities are at Extreme Highs

As the old adage goes, “what comes up, must come down”. However, this adage has a valid explanation in the world of stock trading. Prices that go up must come down eventually because at some point there will not be any more buyers in the market, buyers would look to take profits and sell, new sellers would short the market.

 

Markets move in swings; they often don’t go straight up.

As you can see above, classical technical analysis theory teaches that every uptrend swing must be accompanied with a correction downwards. Even though the price can go in one direction for “far too long”, there will always be a correction.

Riding the bull market 😄

A post shared by Spencer Li 🇸🇬 Synapse Trading (@iamrecneps) on

 

A Correction is Due, BUT…

Before I go on, let me state 2 very basic facts about market euphoria:

Fact 1: Euphoria in the Market Happens Often

In the forex markets, this happens very often. In fact, these are known as gentle trending markets and the easiest way to trade these markets is to buy, add on at every opportunity, and watch your profits grow.

If you zoom in to the 5-minute charts, 1-hour charts, or move to different financial products like Forex, Commodities or Bonds, you would notice that market euphoria is quite a frequent occurrence.

Euphoria in that sense, can happen in both directions, as seen in the diagram below (Hourly chart for EURUSD)

Euphoria can happen in both directions, and for very long. In this case,
there were many opportunities to short, and the trend lasted far longer than one would expect.

Here is another recent example of riding trends:

Trends can last far longer than one expects. That’s why it’s important to know this fact:

Fact 2: Markets Don’t Reverse Immediately!

It’s easy to jump on the hype when almost every news outlet is talking about it. But the truth is this; what’s important is on the chart. Price already gives you the decision-making tools you need!

Even though Goldman Sachs says that a correction is due, that does not mean you immediately go ahead and go all-in to short the market. Even if you are fully convinced that the market is going to crash, it is best to wait for actual price confirmation before taking any action.

Daily chart of the S&P 500, with a small pre-emptive short position which I have initiated.

In trading, it’s all about probabilities. The above technical levels show how far the market might go, but what actually happens will depend on price action. And since the reward to risk is pretty decent based on this price channel, I am winning to take a small short position, and add on more later if it goes in my favour. This will ensure that I have a decent profit from shorting near the top when the market does crash. Till then, fingers crossed!

Here’s some food for thought before we conclude this article:

“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” -Sir John Templeton

Cheers and have a great week ahead! 😀

P.S. For those who want to start learning about how to make money from the financial markets, don’t miss our last 2 workshops for this quarter at the special price of $25.
Check workshop availability: http://wp.me/P1riws-6gw

Research Sources:

cnbc.com/2017/02/21/goldman-sachs-market-investors-have-a-letdown-coming.html
thefelderreport.com/2016/05/23/this-might-be-the-most-extreme-stock-market-euphoria-we-have-ever-seen/