May 02 2008
Clemen Chiang on Make Money in 2008
Dr Clemen Chiang was the first speaker of the day at the Wealth Expo. Clemen is the CEO of Freely and one of the pioneers in the options trading coaching industry in Singapore.
The first part of his presentation focused on analysing the history of US recessions and the impact on the stock market.
According to Clemen, over a 60 year business cycle period, the US recession lasted for an average of 10 months where the expansion phase lasted for an average of 57 months.
There were 2 instances where the stock market undergone a severe correction. One was during the oil shocks in the seventies, another was during the savings and loans crisis in the eighties.
At this current moment, we are faced with a double whammy. We have both the high cost of oil and the subprime crisis.
Clemen provided two strategies for making money in this climate.
Strategy 1
The first plays on the Fed’s decision to cut interest rates. Whenever the rates are cut, the market tends to rally.
From Jul 90 to Mar 91, the rate was cut from 8-3%.
From Jan 02 - Jun 03, the rate was cut from 6-1%.
The lower range is usually between 1-3% before the FOMC reverses the direction.
During the Mar 01 to Dec 01 recession, the recession only kickedin on the 3rd announcement of the 3rd Fed annoucement of rate cuts. If we take that information and apply it to the current situation, the end of recession should be in Sep 2008.
His Predictions
- From Oct 2008, markets to rally ahead of presidential election.
- From Mar 09, markets must rally otherwise we could enter into a stagflation phrase.
Strategy 2
Clemen has studied that whenever there is a casino development, the property prices within a 5k radius will appreciate greatly. That was the reason he bought a home in Sentosa Cove.
The Sentosa opportunity is obviously not there, but Clemen points us to the fact that Taiwan might be opening a Casino resort too. This might happen on Pescadores, or Penghu County. The conditions appear just similar to Sentosa and there could be a potential property play there.
The rest of his presentation was pretty much a sales pitch for his options trading seminar.
This is the second time I have attended Clemen’s presentation. When it comes to investing, Clemen’s a guy that does his homework and uses his own independent thinking. However, one thing that was quite irritating in his presentation was his never-ending examples of his students making triple digit percentage returns on individual trades.
Making a 1000% return on a single trade is always possible, especially when you are using leverage. But we all know that the consistent returns over time will be much, much lower than that. Unfortunately, the sizzle and not the steak is always the thing that sells.
I would just like to counter your claim about Dr. Clemen Chiang doing his homework and independent thinking. I had been a student of his and had requested that he consistently share his trades so that we may learn from the “master”, but he only replied us saying that we must not give up hope. My conclusion? His only income is in tricking newbies to invest their hard earned money into his Sentosa Cover house. As for his “knowledge”, just subscribe to CNBC and you will suddenly become a “prophet” like him.
His triple digit profit? Like you hinted. It is a very very very very rare occurence. I have been trying out his method for a couple of months using fake and real money and to have that kind of gains, you need a HUGEEEEE price move. There are a few lucky ones who have managed to do so but check out this statistics. Out of the thousands of students who are executing hundreds of trades, don’t you think there will be a few “hits”? He emphasizes trading around earnings, but talk to any seasoned investor and they will say that such trading is as good as playing roulette. PLEASE BE WARNED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I still believe in options but I do not believe Freely gives the best education for it. The best education is free education (NOT FREELY!!!!!) and it is available once you just bother to do some reading online and pick up a few books. Optionetics gives a 6 months guarantee that you make back your “investment” or else they will refund it. I have not tried it but for those who have, I would love to hear from you. Otherwise, just check out these online “Think or Swim”, “Briefing”, “Investopedia” & “CNBC” .
[Reply]
Hi Victor,
Thanks for your insights. It is much appreciated.
I have not attended Clemen’s 3-day event before so I can’t really comment on his methods. Neither do I have access to his trading records so it would be unfair for me to pass judgement on that.
But you are absolutely right about triple digit gains. If it was so easily achievable, a person doing it would be richer than Warren Buffett in no time. That is why I get turned off whenever someone tries to use that to entice people to sign up for his courses. I prefer to see his long term trading performance or a summary record of all his students.
Like yourself, I believe the best education is in books. The basics are the same everywhere so you don’t need to fork out $3k to learn it. If you look at it in perspective, I would need a capital of $30k with an investment return of 10% return in the first year just to break even. How many people can do that? I would rather use the money as trading capital.
Attending a trading seminar packed with 100+ people isn’t going to make you a trading expert. It is the same like other sports. Even if Tiger Woods were to teach me golf or Michael Jordon were to teach me basketball, I might not reach even 10% of their standard. Also, a good player need not necessary be a good coach.
There might be a few who truly benefit but these would be the exception rather than the rule. For example, I know of someone who is doing options trading full time after graduating from Clemen’s course. He has lots of discipline and also applies his own enhancement to the methods.
Having said that, I think a personal coach would be useful for a newbie trader. This is a kind of coach that does 1 to 1 coaching, helps to monitor your progress and mentors you. He can help to instil discipline into your trading, a bane of most traders.
[Reply]