The Your Way to Wealth Workshop

I was an attendee at Darren Winters' Investment workshop this weekend, where the man himself was presenting some of his key investment methods and philosophy.

The workshop was held in the main ballroom of the Radisson Blu hotel in Portman Square in London. This is a spacious venue, and the ballroom has six eye catching chandeliers that were subtly lit to provide an optimum view of the big screen on the raised platform at the rear. Once the over 200 attendees were comfortably seated, many of them sipping their complementary bottled water and contemplating their training manuals, pens and notepads, Darren took the stage to begin his presentation.

He had to confess that he would have preferrred Barbados as a venue, but thought we wouldn't get anything done. So he consoled us with the thought of a celebration in Barbados instead, once we'd achieved success with the methods he was about to teach us.

He began by talking about the origins of this course. It has been distilled using the most effective methods that he has learned in more than twenty years of studying investment techniques. He's attended numerous seminars and over thirty training courses, and has sought out the best traders in order to learn directly from them. People like Larry Williams and John Bollinger have taught him one to one. He apprenticed himself to a leading investor in order to maximize the learning experience. His apprenticeship was the most effective way to model and copy someone who had already achieved investment success, and that commitment is now reflected in Darren's own multi-million pound bank balance.

We then launch into what we will cover on day 1. This ranges from basic technical and fundamental analysis, understanding the big picture, how to choose quality companies, when to buy and sell, plus psychology, strategy and rules for success. This is pretty comprehensive, and the experience level of those present ranges from complete beginner to veteran investor.

Not wanting to presume anything, Darren begins with basic concepts around markets and techniques of analysis. This is presented simply and clearly, so avoiding the possibility of confusing anyone new to it with information overload. We then cover some basic economics, and where certain industries and sectors fit in to the economic cycle. We talk about the best fundamental criteria to use in choosing a quality company, which is followed by a neat method of identifying these companies that only requires a few minutes to set up.

To break things up and keep us focused we're invited to stand up and do a little stretching and breathing. This actually works, well certainly in my case anyway. It helped to keep me fresh and alert at hourly intervals throughout the weekend.

After which, the basics of charting and charting patterns is introduced. To assist our understanding Darren then offers us a free gift. He gives us all access to three candlestick training videos on his website that he uses in his own apprentice program. These explain how and why the patterns work, with some specific rules to maximize their reliability. As someone who has done some forex trading, I'm looking forward to viewing these videos.

This is an opportune moment for Darren to explain his apprentice program, which he believes is the most effective way to learn and practise his methods. It comes in three flavours - elite, fast track, and mentored, and the price is structured accordingly. The key content of the program consists of personal video analysis of your own trades, along with access to the same analysis of the 16 other apprentices in your intake. This is combined with tutorials, bonus beginners videos, recordings of Darren's own trading sessions, and a live trading day. It all seems pretty comprehensive, and he sweetens the deal by offering a substantial discount to those people willing to act as case studies for a book he's writing. The main aim of this training is to help you achieve consistency in your investing, and the apprentice program is certainly a persuasive argument to invest in the best way of learning from someone who has already done it. The first break sees a few people signing up (by the end of day 2 I recall hearing that 12 of the 17 available places had gone).

So by this point we've covered basics and the big picture. We then move on to what constitutes a good investment strategy, and focus on when to buy and when to sell. This assumes we have identified some good companies through our initial fundamental analysis, and we are now using technical analysis to determine exactly when to get in or out. The six steps he shows us can be applied to shares or any other investment instrument, and involves behaviour, trends and patterns among other things. There are specific instruction on what not to do as well. This topic take us through to lunch at around 1.45pm.

We return at 3pm. There have been lots of questions over the lunch break, so Darren takes some time to answer these, which leads to some interesting diversions about his personal experiences in the investment world. We concentrate a bit more on chart patterns, and he explains that he is showing us the best of these, selected after years of testing the multitude of patterns out there.

We come to the close of day 1 after a discussion of the psychological aspects of investment. These include the principles of good goal setting and the basis of beliefs about wealth, and how to effectively integrate these. Creativity is mentioned as a desirable attribute, and to this end throughout the day Darren has been giving us a few questions to ponder, just to shift our thinking. I'm still wondering how far a dog can run into the woods, I missed the answer to that one.

Day 1 ends at about 5.30pm. It's been stimulating to say the least.


We start day 2 where we left off, with a further talk on psychology and the importance of creating useful wealth beliefs. Believing it's possible to achieve your goals is a crucial step in manifesting them.

We then concentrate a little more on significant chart patterns and how they actually work. Then it's time to discuss indicators, which for those of you who don't know are tools to assist in decision making when you're entering a trade. As for chart patterns, there are many indicators in use, but only a few that are actually useful when applying a trading strategy. They are used to confirm certain patterns and price movements. We talk about these at some length, and once we're done we now have a full explanation of the six crucial steps of trading selection covered.

To back all of this up, Darren shows us some analysis of trades done by his apprentices, and where everything we've been taught fits in. This is followed by a number of specific strategies that can also be incorporated into the decision making process.

The day has flown by at this point, and we wind up with an Action Plan to get us started on the actual business of trading. Darren doesn't mislead us by saying applying all of his training will be easy, but assures us that if we're willing to put in some work our prospects of success are very good indeed. We now know more than 90% of the professionals doing this already.

It's been an interesting weekend. For me, the trade selection steps and the proper use of indicators alone has made it worth attending. All backed up with clear documentation for future reference. I leave with the intention of putting it all into practice as soon as possible. As a training course, highly recommended.

The Ultimate Entrepreneur

 

In 2002 it was reported that George W. Bush told the then prime minister Tony Blair that "The problem with the French is that they don't have a word for entrepreneur". Putting it kindly, this was a mistake. Translated from French, an entrepreneur is "someone who undertakes" something. Of course it carries a much wider meaning than that in the modern English definition. An entrepreneur is someone who takes an idea and builds it into something great and successful. Someone with vision, drive and creativity, and the will to make it happen, often against difficult odds. Or certainly that's the general perception. Does this person have to be a genius? Above average intelligence? What defines an entrepreneur really? 

Dictionary.com will tell you that an entrepreneur is "a person who organizes and manages any enterprise, especially a business, usually with considerable initiative and risk." We're talking about people who don't have a steady 9-5 job, but who are believers in an idea that they will plough all of their energy, money and time into. With no guarantee of success and not much more than self belief to drive them, they assume a high degree of risk for potentially high reward. Although entrepreneurs come in all shapes and sizes, there are some qualities that they all share.

 

For sake of argument, think of yourself as an entrepreneur. You've got a great business idea that you know will change things in ways that nobody else is even aware of yet. It may not necessarily be the prospect of making billions that's driving you either. You're more likely to be driven by a vision and a passion, because you know what you're doing has the potential to change the game. Other people will tell you you're crazy, but you could do worse than quote back to them those famous words of the 1997 Apple advertisement: "... the  people who are crazy enough to think they can change the world are the ones who do."

You'll need that passion to sustain you through the hard times, when you hit walls and things aren't going to plan. You'll need persistence in the face of adversity, or perhaps it could be expressed as the tenacity to hold on to your trust in yourself and what you're doing, regardless of what the world out there is saying.

As an entrepreneur you're in the uncertainty business, so you need a high tolerance for risk. You need to be willing to fail several times if necessary in order to get it right in the end, and you need to be flexible in your thinking. Your idea may need to change as your journey unfolds, and you need to be open enough to accept and work with that change. Uncertainty is a scary place, so you will need to deal with the fear associated with that. Fear of not knowing where next month's pay cheque is coming from, fear of failure. You must become accustomed to insecurity as a life choice. And you'll need the ability to think creatively so you can change perspective to solve all those inevitable problems that come up.

So far then we have vision, passion, persistence, high risk tolerance, flexible and creative thinking.  Throw in resilience for good measure. Not many people have these qualities up front, or maybe more importantly, are willing to adopt them. It is argued that our education system does nothing to promote entrepreneurship either. With its emphasis on conformity and "thinking inside the box", it arguably stifles creativity. It is interesting to note that people like Richard Branson, Alan Sugar and Steve Jobs didn't finish higher education, and Bill Gates dropped out of Harvard. I'm not saying you need to be a dropout to be a successful entrepreneur, but you don't need to be highly educated either.

My candidate for entrepreneur of the 21st century has to be Steve Jobs. Steve, who died of complications associated with liver cancer in 2011, really was a game changer. He changed (or even originated) personal computing, the music business, the mobile phone business, and the movie business. Steve was an adopted child who grew up around San Francisco and witnessed the birth of Silicon Valley. His adoptive father was a mechanic, and Jobs himself developed a keen interest in electronics. He left college after six months and in the 70's spent time travelling in India, looking for spiritual enlightenment. He also experimented with psychedelic drugs, citing his LSD experience as one of the most important things he ever did. He became interested in Zen Buddhism and maintained that interest throughout his life.

He combined this hippy counterculture outlook with a sharp business brain. In 1976 his friend Steve Wozniak developed the first Apple computer, and the Apple company was born in the garage of Jobs's house. In 1984 the MacIntosh was introduced to the world. It used the graphical user interface (GUI) that Steve had first discovered on a visit to the Xerox Corporation. This icon driven computing experience formed the model for personal computing going forward, and gave Microsoft the template for Windows. Apple appeared to be going from strength to strength, but in 1985 Jobs was ousted from the company after John Sculley, the CEO he'd lured to Apple from Pepsi, had convinced the board that disappointing sales figures and Steve's reluctance to put sales ahead of innovation meant he should no longer be in charge.

Steve was devastated, but formed a new company - NeXt. It made high spec computers with a sophisticated operating system and a magnesium case. Steve's emphasis on aesthetic beauty and high functionality made the NeXt machine too expensive for its intended market, and after disappointing sales the company moved more towards software development. He also invested money in Pixar, an animation company that produced the movie Toy Story in 1995. The success of the company culminated in a takeover by Disney in 2006 in a deal worth around $7 billion.

In the meantime, in 1996, Apple acquired NeXt and Steve was back at the company he'd founded. He went on to produce the ipod, the itunes store, the iphone and the ipad. Not all of this was achieved seamlessly. He was a notoriously temperamental manager with a strong perfectionist streak, and he had a so called "reality distortion field". This essentially meant he bent reality to conform to his own vision, which he communicated relentlessly to those around him. He probably wasn't the easiest person in the world to work with.

Steve Jobs was an innovator, he took existing technologies and transformed them, taking them to a whole new level. Did he change the world? He certainly changed the way we interact in it. We maybe can't all be Steve Jobs, but we can learn from his story and apply his vision and his drive to our own projects. As a template for a successful entrepreneur, you could do a whole lot worse.

 Darren Winters

Train to Trade is it Necessary ?

Most people would be attracted to the idea of earning extra money in their spare time or of making their living from home or even on the move. One approach to achieving this dream is to trade financial markets successfully.

The people that try this will either have had some market experience and think they can transfer what they know to trading or will be people who have no market experience but attend a taster course and, perhaps, think that they now know enough.  Both could be dangerous to their wealth and they need to be dissuaded from moving ahead without more information and, in particular, training.

Trading the markets is a completely different approach to making money than investing for the medium to longer term and participants will require knowledge of the best approach to avoid the potential pitfalls.

Financial markets are ideal for trading as they are very dynamic and volatile and are very liquid.  Thus giving opportunity to pick up on trends without, usually, being caught out by a single market participant.  The most suitable in this regard is the foreign exchange (or forex or fx) market.  This market is global, is open 24 hours per day except weekends and is very liquid with approximately $5 trillion dollars traded every day.  It is, however, a market in which money can be made very easily but, for the untrained, can be lost even more easily.

Trading the forex market can be done by buying the physical currency with either your own funds or with money borrowed.  This requires more sophistication than most people would have.  It also requires the access to large sums of money and exposes the smaller investor to high transaction costs.  Most people who trade the forex market will do so by trading using a margin account through spread betting.  This is cheap, tax free and requires much smaller amounts of money than might otherwise be needed.  It does, however, open the untrained trader up to large losses as trading on margin gives the trader the opportunity to enjoy unlimited gains but to also suffer unlimited losses with their account being wiped out in very short order.

That is scary stuff but the trained trader will know not only the best time to enter and exit a trade but will also learn how to limit their potential losses on each trade.

Knowing the techniques for spotting a potential trade involves reading charts, being aware of any relevant news that could have the potential to move prices for or against the trader at that time.  Reading the charts is more than just buying low and selling high although that is one objective.  The trader can also sell high and buy low thus taking advantage of rising and falling markets so that they make money in either.  When is a currency low enough to buy and when is it high enough to sell? The techniques learned will help pin point the optimal time to buy and to sell. Nobody wants to buy at the top and sell at the bottom.

 

Another problem is that the techniques learned for buying or selling only gives the trader an indication that this is the right time. Not every trade will automatically succeed, indeed most traders will experience more losing trades than profitable trades.  So, you might ask, how can they make money?  The answer is to recognise quickly when a trade is going wrong and to limit the losses experienced to small amounts whilst running profitable trades for as long as is possible to maximise the profits.  Traders will enter a position knowing the potential loss and the potential profit before they click the buy or sell button.  The techniques needed for this can be taught by existing successful traders.

Another consideration has to be how to maintain the original funds intact while suffering early losses and waiting for that big and encouraging successful trade. The obvious starting point is to have sufficient funds as working capital to tide one over the early trades while a rhythm and profitable trend can be found and worked on. The untrained trader may well be carried away with the prospects of making their fortune quickly and retiring early to a Caribbean island.  That ‘certain’ trade will do it for them or maybe the next one if the first fails or maybe the next one.  This may well lead to no funds left before the first successful trade can be found, desolation and a very disillusioned trader.  The ‘trained’ trader will know, however, how to avoid this simple and all too often found mistake.  Trading involves hard work and dedication and the application of the correctly taught techniques.

Trading can be a very emotional pastime.  It is your money and the trader needs to ensure that it is money he is prepared to lose and which he can manage without should that happen.  Even though this may be the case, the trader will find it a very emotional activity the euphoria of making profits can all too easily be countered by the depression of losing.  Traders need to be prepared to lose and should plan their trades so that they know what they might lose and what they can expect to make.  The psychology of trading is very important for all traders to understand, This will include planning the trade and limiting the risk but it also includes knowing themselves and being aware of the pitfalls such as doubling up on a losing trade that one ‘knows’ will come good.

As with all worthwhile ventures being prepared before you starts is paramount.  That includes knowing you have the time and the funds and the desire but, perhaps most important is the need to be properly and professionally trained by a well tried and trusted professional training company.  The prospective trader should be reassured as to these attributes by attending taster courses and by meeting the traders that the company have and which have already found success.  These traders should be prepared to give of their time and their advice on an ongoing basis to help others on to this lucrative and satisfying route to making a very good living.

Darren Winters

Modi Mania

The inauguration of India’s 15th Prime Minister, Narendra Modi, since British independence, early this week was a momentous occasion.  Guests and high level dignitaries from across South East Asia attended the ceremony to show their respect for Modi as he took the oath of office, swearing to uphold the nation’s constitution with dedication and diligence. Security throughout the entire affair, which was held at the Colonial-era presidential mansion in New Delhi, was unprecedented.

Modi, enters office with a landslide victory and also high expectations from the Indian electorate. Indeed, Modi’s newly elected government will need to hit the ground running.

On social issues despite India’s rapid growth over the past two decades, that elusive trickledown effect has not yet materialized; India remains near the bottom of the nutrition and literacy league. Moreover, the lack of jobs for young people entering the work force is another pressing problem for the government to tackle.

On the economic front there are also a number of challenges that lie ahead. Inflation remains stubbornly high 8.59 per cent in April 2014 with food and beverage price accelerating to an annual 9.66 per cent in April. Monetary tightening by India’s Central Bank, in other words raising interest rates,  is likely to be a delicate balancing between dampen price rises, but simultaneously not choking off business investment, consumption and economic growth.  Getting it right can be tricky. Speaking to journalist in Deli, India’s new Finance Minister Arun Jaitley, a supreme court lawyer and strategist for the governing BJP party said, “The balancing act will have to be done,” said Jaitley  in response to a question about how he intends to tackle inflation. “I will wait a few days before announcing the government’s program.”    

  

Additionally, reenergizing capital investments into infrastructure projects will also be a critical issue for Modi’s government to resolve.  The chronic underfunding of large infrastructure projects due to a lack of capital investment, which accounts for 35 percent of economic activity in India barely grew since the previous fiscal year that ended in March. The issue of capital investments is likely to touch on the thorny issue of alleged irregularities (corruption) of the previous administration in awarding public infrastructure projects.

Bolstering capital inflow into India is most likely going to be also on Modi’s list of things to do. India’s sovereign debt rating has been downgraded to a "BBB-minus", by the credit rating agency Standard & Poor, which has a negative outlook on the nation’s sovereign debt. What this implies is that India currently has an adequate capacity to meet its financial commitments, however, adverse economic conditions or changing circumstances could have an adverse impact leading to a weakened capacity on India to meets its financial obligations..   

So investors are eagerly waiting to see what Modi’s new government proposes to do in order to continuing meeting its financial commitments.  Reducing the budget deficit would be perceived as a step in the right direction, for investors.  Modi has a target of reducing the deficit below 4.8 percent of Gross Domestic Product (GDP). India’s deficit was 5.3 percent of GDP in 2012-13 (estimated figure).  But reducing the deficit results in fiscal leakages from the economy and the outcome of this reduced public spending is lower employment and possibly a fall in GDP.  Pedaling austerity to voters who are eager to see job creation will not be an easy sell for Modi’s administration.  Young job seekers make up 49 percent of the unemployment statistics, according to a recent study.

With respect to India’s burgeoning energy needs, the country is tipped to overtake China in 2020s as the principle source of growth in global energy demand and by 2025 India will be the world’s largest coal exporter, according to the International Energy Agency's latest World Energy Outlook.  Modi’s goal is for every Indian citizen to have access to a house with water and electricity by 2025.  Thus, Modi’s energy policy or foreign policy is likely to be not to put his eggs in one basket, which means strengthening diplomatic relations with the main energy suppliers, China, Russia and the USA.

It maybe still too early days to gauge what impact Modi’s new government will have on the true economic direction of the country. On the upside it appears that Modi has been true to his electoral motto of, “minimum government and maximum governance,” Modi’s Cabinet of Ministers has been streamlined.  All the sound bites from the newly elected government seem impressive; make the government more efficiency, energize growth, creating millions of jobs and spreading prosperity. However, little is understood about what is their strategic plan is to achieve these objectives, so far on this point the Modi government has been mute.

Admittedly, if all the stars could align, If Modi could get inflation under control, increase capital investment and net inflow of foreign capital, tackle corruption, make the administration more functional and get the youth in work, and then the opportunities could be tremendous. Consequently it is no surprise that the markets have been euphoric about Modi’s election victory.

 

But perhaps the outcome is not entirely in Modi’s hands, it may not even be within India’s sovereign boarders. It maybe thousands of miles away, within the central banking system of the USA, the Federal Reserve. If the Fed withdraws from its bond buying stimulus policy (tapering) the India Rupee falls, which would have an adverse effect on Indian Inflation, investments etc. So Modi may have an uphill struggle on his hands with the Fed winding down its monetary stimulus program, of billions of USD bond buying.

Volatile time may be ahead for the India markets.  Both the rupee and the S&P BSE SENSEX (India’s stock exchange index are down on the week, with the latter down 1.31 percent as I write this piece.  

Darren Winters

UAE the Fiscal Paradise

When Sheikh Mohammed gave the green light to his project managers to construct the Burj Khalifa, a Dubai skyscraper 40 percent taller than the world tallest building, it became fairly apparent that the Sheikh had some big global ambitions for his oil rich bit of turf, the United Arab Emirates (UAE). 

While the Burj may be reaching for the Arabian stars another manmade construction was already well underway in the UAE, a fiscal paradise.  Indeed, the Dubai International Free Zone (DIFC), which has managed to lure 313 authorized lenders, insurance firms, asset management companies and fund firms. Among them are 22 of the 25 biggest banks in the world. In figures what this all means is an inflow of foreign direct investment of 30 billion Dirham or $8.2 billion into the UAE in 2012, which is up from $7.68 billion compared to the year before.

There are already 38 free zones in the UAE and already there are plans to construct another nine free zones.  There are several fiscal advantages for doing business in these free zones. For example, registered businesses are exempt from taxes when they repatriate their capital, registered companies don’t have to pay import or export duties. Free zone companies are even exempt from paying municipal taxes. Moreover, each zone is treated as an “offshore jurisdiction” under UAE law and they are virtually autonomous with their own administration, legal system and favorable tax incentives with the intended aim of luring top financial institutions and other companies from around the world to set up shop there.   

The federal government of the UAE has also made, Abu Dhabi, the capital of the Emirates, a free zone last year.  The name of the new free zone, “Global Marketplace Abu Dhabi” (“GMAD”), underscores Abu Dhabi’s ambition for this new free zone to act as a hub for financial services. GMAD will be based on Al Maryah Island in Abu Dhabi and will be treated as an offshore jurisdiction.

The recent appoint of a senior executive, Jan Bladen, with extensive experience legal and regulatory experience, to run GMAD further highlights the UAE’s ambition to be a major player in global financial services.   Ahmed Ali Al Sayegh, chairman of Abu Dhabi Global Market, said: “Jan Bladen is ideally positioned to address our key priorities which are to develop the legal, regulatory and operational platforms that will provide the foundation for the growth of The Global Market.”  Indeed GMAD is a huge strategic initiative for Abu Dhabi, which is intended to become a significant contributor to the UAE economy, according to Bladen.
Chief Economist at National Bank of Abu Dhabi is optimistic that the Abu Dhabi World Financial Market can help Abu Dhabi to recycle its petrodollars. In other words, reinvest the funds earned from the export of its oil within the UAE and the Middle East.  Certainly there are a lot of petrodollars to recycle, Abu Dhabi contains approximately 7 percent of the world’s oil and has huge Sovereign reserves.

Cash and gas rich Qatar, a sovereign Arab emirate, has also set up a financial district the Qatar Financial Centre. Furthermore, what was meant to be a sober Saudi Arabian alternative to the UAE’s financial free zones the Saudi’s have also recently completed their new financial district, King Abdullah Financial District. The district will contain 42 buildings and 900,000 square meters of office space—similar in scale to London’s Canary Wharf.

A question worth pondering over is with all this spare capacity in financial services, as a result of these financial free zones mushrooming in the emirates and beyond what impact will this have on the traditional global financial centers, like London, New York and Frankfurt. Perhaps we are going to see an increase in competition amongst the world’s financial centers as they compete with each other to attract a finite demand for global financial services.

Geographically and to some extent culturally, these financial free zones maybe well placed to service the requirements of their customers in the Middle East and North Africa. Undeniably, both regions have relatively young and well educated populations. Normally, these attributes are a catalyst for economic growth.  If this region takes off it would certainly pick up demand for financial services. The Spring Arab uprisings, a series of anti-government protests and armed rebellion that spread across the Middle East in early 2011 appears to have blown over.  A few months ago the Tunisia President issued a decree to lift a State of Emergency beginning on March 5, 2014, three years after it was imposed.  Critics argue that the move was merely a symbolic gesture to try and kick start Tunisia tourism industry, which is a sizable contributor to the country’s GDP. Before the uprising 7 million tourists came to Tunisia and recent estimates now but the figure to under 6 million tourists.

Then there is Egypt with already three elections in as many years. Observers are now waiting to see what impact these new elections will have on the country’s economy and security situation. But some voters are showing signs of election fatigue and downright cynicism over the electoral process.  A BBC reporter notice a young man loitering in a crowd, “Don’t you want to vote,” the journalist asked the young man.  "I didn't take part in the revolution and watch my friends die to then vote in an election that is nothing but a show," replied the young man. The country’s former army chief has been tipped to win.

So the extent to which these emirate financial free zones triumph may also depend on how the delicate situation in North Africa and parts of the Middle East unfold. Time will tell.

Darren Winters