All righty then ladies and gentlemen this is Eugene from Rock the Block Live
As promised 2019 we will have lots of different video series for you and
the first one up is for eToro series. This is from our friends at eToro and we
want to find out a bit more about... well, making money! That's something that we
are already interested in. So the question I have for most of you guys
watching this video is: we know that there is something more to life than
just a nine-to-five job; corporate grind and climbing up the ladder; putting your
money in a red tin can like what I read my guest, Aaron, here has done before.
And the question is how can we actually growth hack our finances. We talked about
a lot about cryptocurrency 2017-2018. But again, we have the bear
market in 2018 most of you kind of got weak hands, and now the questions that
you're asking me is: "Eugene do you have any other ideas and anything to propose
to us that could help us improve our financial standing." And so the answer is yes!
Right now I have with me Aaron who
is a eToro trader he does this full-time right now. But of course it didn't start
off that way. We're gonna find out a bit of background story from him and to see
if such a platform really can tell your life around. I just want to find out from
you how did all this started for you know. [Aaron]: it started when I first saw a
newspaper article in 2016 I was 26 at a point of time. I was 26
felt like I was six. Didn't really have my finances in secured, you know. All I had
was that little red tincan you said. So I was reading the newspapers through and
I saw this lady. She was 27. I've actually still been looking for the article, you know.
She was telling people that she's 27 and she grew up in this really rough... she a really
rough childhood. She had to work a few jobs to support herself and her family.
So at 27 she had insure... she had insurance. She had bonds that had a 10 year
maturity. She had a stock portfolio. She had saving. She had properties. And I was just
looking there, and I was thinking, "She's 27. I'm 26. What am I doing with my life?"
You know, like what exactly am I doing?
So, I was thinking...
Thinking and I realized that you know what? There's really nothing
stopping me from being what she has. Doing what she's she's doing so that
actually started the search for any way I could participate in, you know, getting
my finance secured at least. You know. So I was working in British Council at that point
of time, when I told my friend... I told my colleague that I was looking for
a stockbroker you know to participate... allow me participation in the stock
markets. After a while he told me about eToro.
So I looked through it. I realized very importantly that eToro graphic user
interface... The GUI was very very simple. I mean I've looked at other brokers, and
the other brokers they had a lot of data, a lot of chart, and things that a lot of
statistics. Which to me as a new participant in the market I felt was
really, really confusing. Because I didn't know what any of these charts meant.
I didn't know what these numbers meant. It didn't really help that numbers were really
small. I mean, I'm 4-eyed, so that really didn't make things any better, you know, so I
like eToro because it was simple. And most importantly it was sociable, you know.
You could see what certain people were talking about certain things
that markets. You can see how certain people interact. It's not always pleasant.
But you could see. I mean, it's there. So with that in mind what I actually did
was I took the last... if I recall correctly, the last 400 dollars
from my last paycheck in British Council and put it all into the stock market.
And I was like, you know what? I'll just try this out and we'll see where it goes from here.
[Eugene] Ok, but this is counter-intuitive from what you advised me at the start of this
conversation, before we got the recording where you said
"Don't put your all your eggs in one basket!" But here you go putting a last
paycheck, everything into a new platform you just discovered.
[Aaron]: Well, I mean, I had savings. My little red tin can. So the salary thing was was a whole different...
[Eugene]: It's gonna be burn off anyway, right? 400 dollars very quickly. [Aaron]: That's true. That's true. So...
Because back then I had a few spending habits you see. So again that's
also one of the things that a lot of talk about when it comes to building
wealth: is to not have all this silly wants. Sure, you have your needs. You
know. You have you need to eat. You need to pay your rent. You have your bills. But do
you really need that 1,200 dollar hand bag? Do you really need that new upgrade for
your car? Do you really need that new gamr? You know. And putting off this
instant gratification is, what I believe, is one of the core fundamentals of
getting your finances in order and actually making money. Because you can't
make money if you're hemorrhaging money at the backend, you know. So yup.
Are you any good in mathematics? Most people think that as a trader you should be
good in math. Or should understand the charts and the candlesticks. [Aaron]: Well, okay...
Firstly I'm an investor, so I don't really understand charts and
candlesticks except they look pretty. That's about it. I see people
discussing the charts, and if that's how you want to go about doing it, you know,
all the more respect to you. But personally I don't use them. And as for
the maths question: it's ironic because when I was in primary school...
In fact, when I was in primary school all the way till Poly(technic), so
we're talking about a large chunk of my life, I failed math. I don't... I
couldn't for the life of me... Because numbers felt so boring, so cut and dry.
You know. And I've heardsome people say numbers are like the closest we can
get to a handwriting of God. I'm like, "Yeah sure." If that's how you want to go about doing it, sure.
It's dry for me. I'm not gonna take part in it, and yet here we are.
I like to think that my math has improved. I mean I can count, you know. One... Two...
Four...I mean, Three... [Eugene]: So there's hope for people out there who are failing
mathematics and thinking that you know making money on the markets... stock
markets isn't a thing for you. Hey, you know what? Here's a living proof that you
can actually do it. Now the thing is, you mentioned investor. So for most of
us, who are not aware, we called you guys traders. Like when I look at eToro
platform, I always identify the people who are
eToro as traders. What is the main difference?
[Aaron]: Well, I think the main difference here would be timeframe that the individual actually
holds on to any asset that they buy. So for instance traders perhaps they hold on
certain assets for a few hours... few days.... few minutes... perhaps even a few seconds.
You know, I've seen people slinging stocks on the market. When the market start
flashing, people buy the stock. Five seconds later they sell it. You know and
and I mean if that's a way you want to make money, again, it's up to you. But
an investor studies the fundamentals, remember the basics of the stock, and
understands that the stock is not just a ticker symbol. It's for
instance, if you buy Disney. You're not just buying, you know, an e-share. You
know, you are actually buying a share in that business. You know, you're actually
buying a share in Disney. This whole corporation that is Disney. So
what you want to be doing is to study the fundamentals of the business, study
Disney's business model, make sure you understand who's running this company,
and how well you understand it, and of course the most important thing here: the
most important step is to make sure that you're not wrong. Because like there was
this quote, often attributed to Mark Twain, that says that
you know, "It's not the things that we we don't know that gets us
into trouble. It's the things that we know for sure that just ain't so." You know
and Charlie Munger substantiates this by saying that, "The first question is ask
yourself is am I an idiot?" And really... that's when it comes to investing and
studying the markets the first thing.... so understand the company, and then ask
yourself how can I go wrong? Am I being an idiot in thinking this?
[Eugene]: This is extremely relevant to most of our viewers out there, who I believe
on Rock the Block Live, you guys are in the crypto scene. So this should be a
main question that both of us should ask ourselves... myself included, I have
gotten burnt for a few times. It's like, am I an idiot for doing this? Because most times we do our
research and we think that we are correct! But you never know. So is that something
you do a full time? Like just researching? [Aaron]: Yes correct. The first thing I
actually do to research, contrary to what... what most people, they want research that
backs up their perspectives. But what I'm looking for is evidence that refutes my
perspective. Because you want to know where you could possibly go wrong.
There's no sense in understanding where you're right. You know. Because then
it pushes you into this cocoon of this of a certain
rose-colored... rose-tinted lens. [Eugene]: It's like a self-delusion... [Aaron]: Correct. Correct.
You start think that you're right. You're right. If everybody tells you
you're right, the tendency is to believe that, yup! You're right!
without actually considering that... Wait, wait wait! There's evidence out there that tells me
I'm wrong. This is bullshit. I'm being idiot. But... [Eugene]: Emperor's new clothes!
[Aaron]: Yes, correct. Correct. Correct. Correct. So you need
someone who tells you with you're naked. Right? But unfortunately...
[Eugene]: And often times it's not easy to hear that. [Aaron]: Correct. It's the
most... but it's the best thing to hear you
know. It's like I remember there was this quote on... was it called? The Big Shot.
There was this quote, and they said it was overheard in a bar in 2008. They
said that "Truth is like poetry. The thing is most people hate poetry."
[Eugene]: So if you're just looking at long-term investment hold, you obviously do the
research on behalf of people who follow you, and I understand that eToro, you
mentioned it's a social platform, can you just briefly tell me what's the
difference between a traditional trading platform and a social trading platform?
[Aaron]:Well, I couldn't really say that I know the difference because eToro was the
first and only platform that I've been on. I mean I've looked at the rest, but I
guess I saw comms student myself, the social aspect would be that people get
to interact with you directly. You know they get to learn opinions. They get to
give you feedback. Sometimes not always positive. But that's part of what, you
know, social media is right? So to me it's amazing because what eToro has done.
It has actually married the fundamentals and tenants of capitalism into investing
and trading... Into this activity of investing and trading, you know. On eToro
if you perform well, people come to you. If they don't like what you do, they just
go somewhere else. And that's essentially what it's like in a capitalistic economy
as well, right? If you have a good product, people want. You know. If you
don't then people just go and find it somewhere else, right? [Eugene]: So yeah. So what are
your top three stocks that you would recommend are eternal well I'm generally
speaking, I don't make any stock recommendations. Because I feel that
people should invest in a company that they actually understand. So
there is really no point in listening to what someone might recommend. Because, you
know, for even if I like to be right. I might be wrong. And again, you might
not exactly agree be that person's perspective. So I always believe in
independent thought, and to actually do your own research to make sure that your
your research is right, and then make the investment.
[Eugene]:Okay. That's a very fair
point. Maybe let's take that question in another direction then. What would be
your personal advise? The things that you would look out for? So you
mentioned about do your own research. And every investment you make is
very subjective and it's very true. But for those of us who are new in this
scene, can you give us a heads up? What are the three things we should look out
for as we are doing our research? [Aaron]: What you should look out for is a business
with a competitive... sustainable, competitive advantage. So these can come
in a few forms. For instance, economies of scale. Economies of scale means how much
company can produce in a large scale. You know, so for instance, Procter & Gamble
and the amount of products they have under their brand. Say maybe Apple... that's the
branding power there. Apple to a certain extent owns a piece of the consumers mind so
when you thing our phones, some people... most people... I think some.... for a
majority of them working on Apple. Right? When you think of childhood entertainment,
Disney. Right? And how would you know that a brand has a occupies, or rather, owns a
piece of the consumers mind, is if that brand comes to mind
when you talk about something. Right? So for instance if I told you Coca-Cola.
There there is a certain image that flashes in your mind straight away, but
when I tell you Dr. Pepper? [Eugene]: May be not for the Asian market.
[Aaron]: Exactly!
So you can see that Coca-Cola owns a piece of the customer's mind, right? If I told you Disney, there is that magical
feeling. But if I've told you Nickelodeon? You're like not sure. Because I've come on... Disney.
So I'm looking for that sustainable competitive advantage.
Secondly, I'm looking for people... I'm looking for the people who run the
company, right? Whether they're experienced; the kind of people they are;
and their personalities. How long, they of course... and how long do you pian actually
running and what... how they actually got there, you know. I'm also looking for
companies that have lasted to the test of time. So for instance one of the
ways I look at a company's strengths and tenacity,
is to take a look at how they perform in the... in crisis... times of crisis. So for
instance, companies that... And this is one of the things that I look for. This one
of the things... Is I look for companies that perform well despite the Asian
financial... it did... despite the housing market crisis in all
2007-09. Because if these companies perform well in a crisis, chances are
there is something about them that requires more investigating as to how
they actually did it.
[Eugene]: The more resilient to market movement. [Aaron]: Correct.
[Eugene]: And 2018 is a bear... was a bear market.
Still kind of bearish. Right?
Stock market threw down. Crypto was blooded. Even price of gold and
silver were tanking. How... what's your take on that? Like how did your portfolio
perform? Because you are looking for stable resilient companies.
[Aaron]: Well, my portfolio took a hit. I mean as long as you are invested in the market, any
market participant will definitely take a hit when the markets go down. You know.
Unless of course you are doing something on your end or maybe pulling at an Enron.
Creative accounting. So um yeah... I took like hit. But what I did when the markets went down
was I kept buying stock. Because I like buying stocks. You know. I like buying
them when they're cheaper. You know. Like what Buffet said, you know, in the Buffett
household, let's say assuming you can eat hamburgers for the rest of your life,
you sing the Hallelujah song and when the price of hamburgers go down. And
if you know that that hamburger is a damn good one, you know, why not buy it
at a cheaper... at a cheaper price [Eugene]: I had the
same mentality as well. I buy it when... they said, buy on the dip. [Aaron]: Correct.
[Eugene]: But unfortunately when it comes to crypto the dipping never ends. So I keep buying...
I average down. What the hell?
[Aaron]: That... that's something I think a lot of people so do. And if you
do believe in that asset, you know, by all means... I mean but again it hinges on what
you believe in the asset. You know when it comes to the crypto space for me... um...
I've told some people that I don't invest in crypto because of the
volatility, right? But don't get me wrong I do believe in blockchain technology.
It's an amazing technology. I mean a public ledger that is maintained by
everyone. You know. Promotes transparency and trans... I'm very big on
transparency when it comes to my portfolio as well. So yeah.
[Eugene]: I know and you
know as well that we cannot predict the future okay but this doesn't stop people
from asking the same question, and everybody loves this: Is what do you
think 2019 is going to be? Coming from an expert? With 33,000 followers. We want to know
what you think is gonna be? And personal opinion?
I'm sure that... I'm not really an expert but
I'm sure there are people out there who are better than me.
My personal opinion is that, very practically speaking, is that the only
prediction I have is that the market will always remain inconsistent.
That's... that's.... every time someone's someone asks me for a prediction, they don't think
it's helpful, but the way I see it is: I'm not trying to be helpful...
I mean, I'm trying to help you. Yes! But I'm also trying to be very practical.
Look. I don't have a crystal ball. If I had a crystal ball I wouldn't have thirty
three thousand followers. I mean I would have 33 million. This is a guy who can bring
the market a hundred percent success rate! I want to be part of it, man!
But... But I don't. And I don't believe anyone does that either, right? Sure some
some people who get it right. Some people get it wrong. The way I see it, like what
Benjamin Graham said. "You have your option on flipping a coin, and taking the
consensus of marketing experts. And chances are you're gonna be... you're gonna
get the same amount of, you know... of chances of all being right. Or 50/50. So
the way I see it is the only consistent thing about the market is its inconsistency.
And my advice is to just go with the flow.
Adapt. And I think most importantly is to develop the stomach for investing
because the investing business is more about temperament than intellect. You
know. I've observed this three years that I've been investing... I've observed that a
lot of people with very high intellect, IQ, participating in the market. But more
often than not this high IQ is actually what gets them in trouble.
You know. Because, again, the investing business is not about intellect. It's
about your temperament. It's about your stomach. How much can you take? How much of a loss
are you willing to take? You know. In order for the promise of future gains?
How much faith, I guess, to a certain extent, you have in your own decisions? You know.
How much independence of thought do you have in your thought processes? Yeah. Okay.
So these are five of my role models. Actually all five of them are my role
models. Each of them actually represents a certain trait which I admire that I
want for myself. So for instance Warren Buffett is his humility. Man, this is a
guy that is worth currently, as of now, 80 billion. And look at the way he lives.
He's so humble. He has somewhat of a minimalistic lifestyle I guess. No matter
what you do you don't increase our standard of living. Just keep within your
means. Keep within the level of comfort that you want and that's it. As for
Charlie Munger. Now this is very important. Charlie Munger greatly influenced my
decision making process. He's the one that actually set me on the path of
learning from different schools of thought. Learning from different fields of
expertise, specialties. So for instance psychology, mathematics, science, physics,
economics and things like that. And his idea is that you should mesh them
together because all of the world's knowledge isn't found in one field. You
need to look for the inter-connective tissue between these fields of study, and
employ all these mental models at the same time. And it takes a lot of effort
to think that way, you know. Because most people they like to commit to a certain
decision. People don't like to think. Science has shown that around 2/3 of men
and 1/3 of women would rather... would never... would rather get an electric shock than to
actually be alone in a room with their thoughts. You know. So but the investing
game is a lot thinking. And thinking in a multi... in a
latticework of mental models is what Charlie Munger has taught me. Bill Gates
has taught me a kindness. I mean it's a it's amazing what both Bill Gates and Elon
Musk have actually done, you know. And they've actually used their personal
fortunes to forward humanity a few steps forward. I mean look at what Bill Gates has done.
He has given so much of his net worth to various charities and that is
something that I hope that this company that I've set up
Alderique will actually strive towards as well. It's something that I'm currently
building up a charity. Elon Musk as well. But what I really admire about Elon Musk
is his drive. I mean if you were to look... read through his biography, you know, Elon
Musk the biography by Ashlee Vance, if I'm not wrong, it describes how Elon Musk
actually founded SpaceX, and how he invested in Tesla, and then became the
CEO of Tesla, and the amount of struggles he actually had to go through back during the
PayPal days. You know. And if you look at this guy, you realize that this guy has an
exceeding amount of drive that regardless of any circumstances...
regardless of how much pressure, this guy just goes through. You know. And it's not
just his genius. It's not just this smarts. He also has that great... you need to keep
going at it even if you fail. If it's something... like what I said, if something is
important enough, you know, you should never give up. Just keep going at it.
Pick yourself up. Keep going. Which by
the way is what Munger has said. So you can see there is a linkage
between all five of them. Now Kevin O'Leary is a very interesting one.
Because Kevin O'Leary is the star of Dragon's Den and Shark Tank, right?
Correct. It's not someone that a lot of people would know, but I admire him because
the first book which I read on... throughout my whole long list, was this book called the
"Cold Hard Truth On Men, Women, and Money." You know he... Okay a lot
people say, "So mercenary!" But it's practical advice. It's what you need to
actually start on your financial security, you see. So I really respect Kevin
O'Leary for being the mercenary. But that's what business is. Yeah so... Yeah so these are all my...
[Eugene]: And you have your New York Times, Wall Street Journal...
[Aaron]: Yes. This is what we call, or what Warren Buffett likes to
call, instructive art. You know. These are times where by the market
has taken a very big hit. You get to
observe human nature at it's best. You get to observe the panic in the markets.
So like... so like... Buffett I basically stick it up to remind myself just how bad
things can actually get in the markets and to always be prepared. You know. So yah.
[Eugene]: I think the biggest takeaway I have with regards to answering the question of
what's gonna happen in 2019 and what to invest in? Is really when Aaron said:
"I don't do anything that keeps me awake at night."
So if you have done something that keeps you awake at night,
now that answers that "Am I an idiot?" question. So hopefully you guys will
trade wisely this year. And may you all make a lot of money. And you know if you
if you do, do leave us a comment, share your thoughts. If you have any advice for
other people watching this video, well, leave it in a comment below as well. Before
we say goodbye, Aaron, perhaps you could look at our audience and if you could
have a 30 seconds time frame to tell us whatever advice you want to give us that
time is yours. [Aaron]: Well, like I said, if you choose to participate in the markets
remember to keep our emotions under control. And regardless of whatever
happens in the markets, be sure to never lose your rationality.
Because rationality is one of the things... one of the core... or rather one of the
foundations of being... of what being a successful investor is about. And also
what are the other ingredients, the key ingredient especially, and I cannot
stress this enough, is patience. It's in dwindling supply but it's important
to have extreme patience in the market and really in whatever
do this well. [Eugene]: Thank you very much Aaron.
[Aaron]: Hi I'm Aaron Wee, a popular investor from eToro. And you're watching me on Rock The Block Live!
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