Adam Khoo làm giầu như thế nào

Adam Khoo

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


Adam Khoo is an entrepreneur, author and peak
performance specialist. He is the Executive
Chairman of the Adam Khoo Learning
Technologies Group, one of Asia’s largest private
training companies that operate in seven
countries. He has interests in various other
businesses that generate a combined revenue of
$30 million annually. He is also a professional
stocks and Forex trader and investment advisor.
Adam holds an Honors Degree in Business Administration (Finance) from the
National University of Singapore (NUS), where he was ranked among the top 1% of
his cohort. He was awarded both the NUS Business School Eminent Business Alumni
Award (2008) and the NUS Outstanding Young Alumni Award (2011) for being one of
Singapore’s most successful and prominent business leaders. In 2007, he was ranked
among the ‘Top 25 Richest Singaporeans under Age 40’ by The Executive magazine.
He is the best-selling author of 13 books including Secrets of Self-Made Millionaires,
Secrets of Millionaire Investors, Profit from the Panic. Profit from the Asian Recovery
and Winning the Game of Stocks!. His business and personal achievements have been
featured on Channel News Asia’s Millionaire Makers, Channel News Asia’s morning
show (Profit From the Panic), The Straits Times (“He Made His Million at 26”), The
Sunday Times (“Big Investor, Frugal Spender”) and The Business Times.
In 2004, Adam Khoo created the Wealth Academy program to teach people the
investing, business and money management principles he has used to become a
millionaire many times over. Since then, the program has been attended by over
8,000 professionals, executives and business owners around the Asian region.

Though busy running his businesses in corporate training, advertising, children’s
enrichment and fund management, Adam finds the time to pursue his passion in
teaching and mentoring people to achieve their fullest potential in their personal,
financial and professional lives.

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


Chapter 1 Introduction…………………………………………………………………………………………

3

Chapter 2 How to Really Make Money from Stocks……………………………………………..

6

Chapter 3 Winning Method…………………………………………………………………………………. 12
Chapter 4 Winning Money Management…………………………………………………………….. 33
Chapter 5 Winning Mindset…………………………………………………………………………………. 39
Conclusion…………………………………………………………………………………………………………….. 46

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


There Has Never Been a Better Time to Create Wealth
Congratulations for downloading this e-book! I believe that you are committed to
reading this book because no matter what your financial situation is right now, you
have a strong desire to achieve a greater level of financial success and wealth.

The great news is that we live in a time when the number of millionaires is growing
at a pace faster than anytime in human history. And the greatest growth in wealth is
coming from the Asian continent.
In 2012, the number of millionaire households in Singapore rose 14 per cent to
188,000, while that in China climbed 16 per cent to 1.43 million, and that in India saw
a 21 per cent increase to 162,000, according to a 2012 report from The Boston
Consulting Group.
Taking a look at the chart below, you can see that in countries like Singapore (the
country where I reside), a stunning 17.1% of the population is made up of
millionaires — the highest percentage in the world for any country.
Proportion of Millionaire* Households by Market1
1
2
3
4
5
6
7

Singapore
Qatar
Kuwait
Switzerland
Hong Kong
United Arab Emirates
United States

17.1%
14.3%
11.8%

9.5%
8.8%
5%
4.3%

*’Millionaire’ is defined as having more than US$1 million in investable assets, excluding owner-occupied
property.

So, it has never been easier to become a millionaire than today. If so many people
can do it, there is no reason to say you cannot do the same.

1

Jorge Becerra et al., “Global Wealth 2012: The Battle to Regain Strength”, BCG Report, May 2012

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


Investing in the Stock Market Is the Fastest Way to Create Wealth
How did the majority of millionaires build their fortune? While a few lucky ones
inherited their wealth from parents or through marriage, the majority of millionaires
are self-made. From the Forbes magazine article below, a wealth report on
millionaires in Asia revealed that 72% of their fortunes came from personal
investments in the stock and bond markets, while 58% came from property
investments and 55% came from savings through salaries and bonuses2.

If you want to become financially secure and free, it is absolutely essential for you to
learn how to invest successfully in the stock market.
2 Neerja Jetley, “Singaporeans Are the Fastest in the World to Become Millionaires,” Forbes, July 08, 2013, accessed January 17,

2014 />
© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


Unfortunately, after spending over 18 years of our life going through the education
system, many people never learn the essential money skills of investing. They are
merely educated to sell their time in a job and to depend on a salary that cannot
keep pace with ever-escalating expenses.
With this book, I hope to impart to you the essential investing and money
management skills that have helped me to achieve the financial abundance and
freedom that I now enjoy. If you are ready to learn how to really make money from
stocks, read on…

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


“Do I ‘buy and hold’ or do I cut my losses when stock markets plunge?”
“Can I really time the market or is it just wishful thinking?”
“Is it worth listening to recommendations by investment experts?”
“How do I know if a stock has the potential to rise over time?”
“Why does a stock fall in price even when the company does well?”
Nobody can blame investors for being thoroughly confused nowadays at what to do
with their investments. It seems that every time you read the news, you get
contradictory advice and opinions from even the experts.
Many ‘how to invest’ books and seminars confuse people even further as they preach
very different investment strategies. Some educators teach you to buy cheap stocks
and hold them for the long term. They advocate buying more stocks and averaging
down should the price start to fall even more.

Other experts expound the ‘buy high and sell even higher’ approach of momentum
trend trading. They advocate cutting losses once the price falls to a certain level and
to sell for quick profits if the stock price continues to run up.
Many people I talk to find that no matter what approach they adopt, they never
seem to be able to make consistent profits from their investments. They may score a
nice profit once in a while, only to find themselves losing it all back to the market
eventually. Even when they invest their money with professionally-managed funds,
they find their investments going nowhere or worse, struggling to break even. In
their frustration, many of these people resign themselves to earning a measly 1% 3% interest from bank deposits.
Is There a Way to Really Win the Stock Market Game?
The fact is that there are people who make huge amounts of money from the
markets, year after year. These are the professional and semi-professional
investors/traders who are able to grow their investments anywhere from 15% to
150% annually.
While these successful investors do have losing investments (everybody does), the
fact is that over time, they consistently make much more than what they lose from
the inevitable mistakes they make. So, how do they do what they do? What really
works in the market and what doesn’t? How much of it is luck? Can these skills be
learnt by anyone?
© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


This topic is something I have passionately studied and practiced for over 21 years,
ever since I started investing with my mother’s stock brokerage account at the age of
18 years old. I am not only proud to say that I have made a nice fortune as a semiprofessional investor (and now, a professional one) but I am even more proud to say
that I have made every conceivable mistake that can be made in world of investing. It
is the mistakes I have made in the past as well as my ability to continually fine-tune
my strategy that has allowed me to discover the profitable investing techniques that I
employ today.

These Successful Investing Techniques Can Be Learnt by Anyone!
The great thing is that these winning investment methods can be learnt and applied
successfully by anyone, regardless of your past experience and background. Through
my Wealth Academy investing courses, I have had the privilege of training
investment analysts, financial advisors, bankers as well as individuals like engineers,
teachers, homemakers and students who started with zero financial knowledge.
Here are some of the experiences my students have had after learning these
strategies.
“I Grew My Investments from $10,000 to $18,000 in 1.5 Years”

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


“Recouped All My Losses in 2011 and an Additional 35% Return”

“I Achieved 35% - 100% Returns from the Stock Market”

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


“Recovered Losses of More than $50,000 and Holding on to Good Gains”

Undergraduate Creates Another Source of Income and Featured on The Straits
Times Singapore Newspaper

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com

When I first met many of my students, they had absolutely zero knowledge of how to
invest. Some of them even tried their “luck” by speculating (treating the stock market
like a casino) and lost money as a result.
Thankfully, after learning the right strategies, they have made back previous losses
and are now creating a sustainable new source of income through their investments.
If these ordinary people, with little or no experience can became successful investors,
so can you!
Introducing the 3Ms of Successful Investing
In this book, you are going to learn the three key principles of successful investing:
‘Method’, ‘Money’ and ‘Mindset’.

Profitable investing begins with having a winning ‘Method’ that will give you an edge
over the market. While no method can guarantee a profit 100% of the time, I will
show you winning methods that ensure that your investments succeed majority of
the time.
You are going to learn a set of rules that will tell you exactly WHAT stocks to buy,
WHEN to buy and WHEN to sell. You will learn that knowing WHEN to buy and sell a
stock is even more important that knowing just WHAT to buy. Many people end up
buying the right stock, but at the wrong time. As a result, they see the stock decline
further downwards in disbelief. You are going to learn how to read the emotions of
the market and enter only at the time when the stock is ready to make explosive
gains upwards.
WINNING METHOD
1. WHAT to buy
2. WHEN to buy
3. WHEN to sell

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com

You are also going to learn the second ‘M’ of successful investing — ‘Money
Management’. Many investors with a good investing strategy may still end up losing
money because of poor risk and money management principles. They may make
money on nine great investments only to lose all their profits in one bad one. You
are going to learn how to minimize your risks and maximize your returns through
portfolio management and position sizing techniques. You will learn how many
shares you can afford to buy of each stock and when to cut your losses when an
investment goes bad.
Finally, you are going to learn how to master your ‘Mindset’. You are going to learn
how to adopt the winning psychology of successful investors and know how to
manage negative emotions like fear and greed that get in the way of your success.
I am sure you will find this book to be extremely useful in helping you become a
successful investor. I look forward to sharing with you my ideas in the pages to
follow.

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


To consistently profit from the stock market, you need to have a winning Method or
strategy that will give you an edge over the market.
If you were to randomly buy stocks just because you got a “hot tip” or a “gut feel”,
your chances of being profitable will be 50% at best. Since a stock either goes up or
down, you only have a 50/50 chance of being right.
Of course, with some luck, you could still make money. However, money that is made
from a lucky streak never ever lasts. Eventually, luck will run out and you will end up
losing everything and much more. This is why people who gamble at casinos or try
their luck at the stock market will end up losing everything.

When you have a strategy that gives you an edge over the market, you can
confidently be right 70% - 80% of the time. Remember that no matter how great
your strategy is, you can never be right 100% of the time. This is because there are
many factors in the world of investing that are out of our control. (For example, a
sudden economic crisis can cause stock prices to fall temporarily.)
The Three Keys to a Winning Method
A winning method of investing should consist of three key components: Knowing a)
what to buy, b) when to buy and c) when to sell. Let us go through all three in detail.
a) What to Buy? Buy Only Stocks of Fundamentally Good Companies
As a winning investor, you need to have a set of rules to guide you on exactly what
stocks to buy.
When you buy a share of stock, you are actually buying a share of a public listed
company. You become a part owner (albeit a very small one) of a business.
We only want to invest in shares of very good businesses. Using fundamental
analysis, we need to learn how to study the financial reports of companies to
determine which are the most profitable and valuable ones.

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


What Makes a Great Company Stock?
There are many factors that make a company's stock a good investment. Let me
highlight two important ones:
1) Consistently increasing sales revenue and net income
2) Positive long-term growth rate
I only invest in companies that have a track record of consistently increasing sales
revenue and net income, together with positive future growth potential. When a
company has these fundamental qualities, its share price will have a greater potential
to rise over time.

Take a look at the stock of Nu Skin Enterprises (NUS). NUS clearly generates
consistently increasing sales revenue and net income year after year. At the same
time, it is projected to grow its earnings over the next two years.
Nu Skin Enterprises (NUS) Revenue and Net Income

Source: investing.businessweek.com

Nu Skin’s consistent sales and net income growth results in its share price rising
steadily over the last five years.

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


Nu Skin Stock Price Chart 2008 - 2014

Source: www.thinkorswim.com, ProphetCharts®

At the same time, I avoid buying stocks of companies with inconsistent or declining
sales revenue and net income. Take a look at the stock of Barclays (BCS). Its revenue
and net income has been declining for the last four years. Its earnings are also
projected to contract the following year (2013).
Barclays (BCS) Revenue and Net Income

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


Source: investing.businessweek.com

Stocks of companies that have weak revenue and net income growth usually have
flat of declining stock prices like what you can see from Barclays’ share price chart.
Barclay’s (BCS) Price Chart 2008-2014

Source: www.thinkorswim.com, ProphetCharts®

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


So, which company is the better investment? Obviously, it is the company with the
stronger financial performance. Of course, there are many more financial data and
ratios we can look at to determine that it is a great company. I also look at stuff like…








Insider activity (are company directors buying or selling their own shares?)
Return on Equity
Statement of Cash Flows
Debt to Equity Ratio, Current Ratio
Gross and Net Profit Margins
Working Capital versus Sales Revenue Growth
Cash Conversion Cycle

All these are beyond the scope of this book. It takes a couple of days to learn and

master this stuff. This is why I spend no less than 45 hours training people who are
serious in becoming successful investors and traders.
Just to show you how important it is to look at insider buying and selling, take a look
at the stock of CapitaLand. CapitaLand had been falling from $4 to $2.50 over a
period of a year. On 22 May 2012, many of its directors started accumulating shares
at $2.51.

Source: www.shareinvestor.com

Obviously, insiders buying their company’s shares is a great sign of confidence. After
checking that CapitaLand met the rest of my investment criteria, I started buying up
too.
© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


Within a week, CapitaLand’s shares climbed +56% to $3.90!

22 May
Insiders Buy
Aggressively
at $2.50

Source: www.chartnexus.com

Similarly, it is a good idea to avoid buying or even selling shares of companies whose
insiders themselves are selling. In the insider trading report, insiders of China
Minzhong had been selling the shares aggressively from $1.23 to $1.02 from March
to April 2013…

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


Source: www.shareinvestor.com

Sure enough, the share price of China Minzhong eventually declined…

26 April 2013

$1.02
-48%

$0.53
Source: www.chartnexus.com
© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


So, it is essential to do enough research on the right company’s stock to buy. They
have to meet all the critical fundamental criteria!
b) When to Buy?
It is not good enough to know which companies’ stocks to buy. You need to also
know exactly WHEN to make your investment. I know many people who invest in
great stocks. Unfortunately, they buy it at the wrong time and see their investments
go down in value for a long time before it starts recovering. Knowing WHEN to buy is
even more important than knowing just WHAT to buy.
Buy When the Price Is below the Intrinsic Value
So, WHEN is it a good time to invest? Well, you should only buy a stock when its
price is below its intrinsic value. This means that the stock is selling at a price below

what it is actually worth.
I use an intrinsic value calculator to determine the true value of a stock, based on the
company's cash flow from operations, growth rate, total debt and cash holdings. The
intrinsic value of a stock will also give you an indication of where the share price can
potentially reach in the short term.
For example, I made an investment in Google (GOOG) on Jan 2012, a stock that has
delivered consistent growth in revenue and net income. Although it seemed pricey at
$575, it was actually way below its intrinsic value of $1,065. The intrinsic value of
GOOG gave me the confidence that I could potentially double my investment when
GOOG reaches its true value.

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


Sure enough, a year later (2013), Google (GOOG) reached $1,100 per share, giving
me a nice 91.3% gain!
Google (GOOG) Chart 2012 - 2013

Source: www.thinkorswim.com, ProphetCharts®

Buy When the Price Is on an Uptrend
Besides analyzing a stock’s intrinsic value, it is also very important to only buy a stock
when its price is on an uptrend. Never buy a stock when the price is on a downtrend,
no matter how good the stock is or how cheap the price may seem.
When a stock’s price is on a downtrend, you never know how low it can go before it
starts to recover. A cheap stock may become even cheaper in the short term.
What Is a Price Trend?
Stock prices move in trends. A trend is like a river current. Once a stock’s price is on a
trend, it has a high probability of continuing to move in the direction of the trend

until there is a reversal of trend.

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


There are three main types of price trends: Uptrend, Downtrend and Sideways Trend.
1) Price Uptrend
An uptrend is characterized by a series of stock prices making higher high points
and higher low points. On an uptrend, stock prices still go up and down. However,
every time prices go down, they move up even higher subsequently.
Stock Price on an Uptrend

Source: www.thinkorswim.com, ProphetCharts®

When a stock is on an uptrend, it means that investors are getting more optimistic
about it. This causes upward price momentum that drives the stock higher and
higher. This will keep happening until a major news development changes the trend.
It definitely makes sense to only buy a stock when it is on an uptrend because the
probability is that it will keep going higher. This is why there is an old Wall Street
saying, “the trend is your friend”.

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


2) Price Downtrend
A downtrend is characterized by a series of stock prices making lower high points
and lower low points. On a downtrend, stock prices still go up and down. However,
every time prices go up, they move down even lower subsequently.

Stock Price on a Downtrend

Source: www.chartnexus.com

When a stock is on a downtrend, it means that investors are getting more and more
pessimistic. This causes downward price momentum that drives the stock lower and
lower. This will keep happening until a major news development changes the
direction of the trend.

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


As a rule, I never, ever buy a stock when it is on a downtrend. On a downtrend, you
never know how low a stock can go. In the short term, markets are emotionally
driven and prices can get driven down to illogical levels. Even if the stock of a good
company seems cheap, it can get much cheaper in the short term. I prefer to let the
stock bottom and buy it when it has reversed to a new uptrend.
Remember, “The stock has gone so low already, it cannot possibly go any lower” is a
phrase that has gotten many ignorant investors into trouble!
3) Sideways Trend (Consolidation)
Besides uptrends and downtrends, stock prices also go through periods of
consolidation. This means that the stock price moves sideways between an upper
(resistance) and a lower range (support). In the chart below, Las Vegas Sands’s stock
price is consolidating between $37 and $49.
Consolidation patterns can take place for days, weeks or even months. However, the
stock will ultimately break out of this consolidation patterns in either an upward
(uptrend) or a downward (downtrend) direction.
Price In Consolidation

Source: www.thinkorswim.com, ProphetCharts®

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com


As long as a stock is stuck within a consolidation pattern, there is no point in making
an investment just yet. Even if the price rises, it will likely hit the upper price range
(known as the resistance line) and reverse back down to the lower price range
(known as the support line).
You have a better chance of making a very profitable investment only when the stock
price breaks out of this range. One of the best times to buy is when the stock price
breaks out of a sideways trend and into a new uptrend. Here are a few examples
below…
Walt Disney (DIS) Breakout

Source: www.thinkorswim.com, ProphetCharts®

In the chart above, you can see that there was a strong resistance level at $34. The
moment the stock was able to break above this level, the buying pressure drove the
stock into a new uptrend. A great buy entry would have been at $35.

© 2014 Adam Khoo Learning Technologies Group Pte Ltd. All rights reserved.
www.wealthacademyasia.com