A multi-genre book by investment celebrity Victor Chiu combines sound business analysis provided by his mother, along with some down-to-Earth delicious recipes in a slightly whimsical yet fundamentally educating and informing new release titled Wall Street Kitchen - The Recipe Behind a Housewife's 1000% Stock Return.
Mrs. Chiu, an autodidact, gained experience with stock market investing and enjoyed sharing her revelations with her son, along with the latest delicacies from her kitchen. The combination of good advice coupled with savory meals made for a persona of a person which shaped Victor Chiu’s life in extraordinary ways.
His book celebrates the wisdom gain from his mother in which he shares with his readers, and fortunately at the end of the book are included recipes for the food so temptingly described.
A book that will satisfy your curiosity for sound financial modeling of investment strategies, while simultaneously making you hungry, Wall Street Kitchen has something for everyone. It teaches you to not follow the crowd and to trust your instincts – and stay with the plan for the long term. Advice on investing along with the double entendre theme analogy of food makes for a humorous read while humbly imprinting common sense principles for achieving success in the stock market.
“Time is your friend; impulse is your enemy.” – John Bogle
Welcome back to our humble home. The kitchen table awaits, and I am pleased to let you know that a very special guest will be joining us shortly, a gentleman by the name of Jim Rogers.
Right this way. You know where the famous kitchen table is, with Mom's trusty laptop and...ooh, what's this? Mom, you've made us some chicken!
Vindaloo chicken, Victor. Remember last time you explained how complicated the recipe looked, but how easy it is to make. Well, I made it in under an hour, just like I take under an hour to manage my investments each day. Dig in; it's fresh from the wok.
This is a treat! Mmmm. Mom, this is as delicious as ever.
So let's take a look at where we've come so far. On your first visit, I introduced you to Mom's recipe. Not her recipe for chicken, but for wealth - for investing. Then we took a look at the stock market and how impressive the long term returns are, even through hard times. And last time we looked at how stupid it is to buy stocks through a broker and how it's just common sense to buy them directly.
And last time we left off with...let me see...oh yes, I sent you off to buy a lottery ticket. Yes, and I am a little sore on that count. You did not even send me any of your winnings.
No winnings? Oh, well I guess that's to be expected. Lotteries are gambling, after all. They are not the best investment are they? That is the point of the exercise - to understand the difference between investing and gambling. The lottery feeds the gambler's never-ending dream - to defy the odds and beat reality. Mom's investment recipe is about investing in reality, not gambling.
We do not gamble.
We do not speculate.
We do not wish and hope and dream.
We don't trade; we invest.
Oh sure, there is nothing that is 100 percent. There is nothing that cannot fall. Rome fell. The British Empire disintegrated. The Great depression lasted a decade. But life goes on and business goes on and a sound investment goes on and keeps going up.
Luck is always a factor. It's just by pure chance that we live on a planet where water is liquid. On every other planet, any water would be ice or vapor. So luck is always a factor. But leaving everything to chance is just not a very smart way to build wealth.
Moms' investment recipe is 99 percent certain. It follows the market. It minimizes costs. The long term is always up. If another Great Depression hits, you will take some short-term losses, even with everything we tell you. But you will lose less than everybody else in the short term. And in the long term, while gamblers, speculators, and traders are still weeping in their Vindaloo Chicken, you'll already be counting your profits.
Today, I am going to share with you our little secret about trading. OK, so it's not technically a secret, but most financial groupies haven't figured this out yet.
I want you to close your eyes.
Go ahead and close them...
Oh, for goodness sake, just close your eyes. I won't steal your Vindaloo Chicken while your eyes are closed.
Now picture this. You are looking out over the stock market floor and already it's getting crowded as they wait, bodies tensed for the opening bell. It rings! They are off, grown men in thousand-dollar suits jumping around and waving their arms frantically, yelling and flashing messages in their special sign language, papers flying everywhere with seemingly wild abandon.
No, they aren't geeks that never grew up. They are traders!
You've seen this scene before in movies like in Trading Places, Wall Street and The Wolf of Wall Street. They are worth watching just to see the craziness. The panicking. The pandemonium.
It's like a carnival without the music and the laughter and the fun. But just as crazy and chaotic.
The traders need to act fast. They need to react even faster. Every second could cost them a fortune. They need to buy before everybody else. They need to sell before everybody else. A few seconds late to either buy or sell could spell disaster. And they will keep doing this all day long.
Could the makers of Tylenol and Advil have concocted a more perfect incubation chamber for a captive market if they had tried?
This is high stress. Fighting fires and chasing bad guys seems like downtime compared to trading stocks. A million actions transpire every minute, moving billions of dollars from one set of hands to another. Traders have to be fast, fast, fast.
And they have to be right. Every time.
But they are not right every time and people lose a lot of money that they could have made by just holding on to their stocks for the long term. Making dozens of split -second decisions every minute, moving through a pressure-cooker at the speed of light - that is no way to make long-term investing decisions. That is no way to risk your future.
As Timothy W. Holt puts it, "Search around and you can find someone who was successful, at least on one or two trades. But don't drink the kool-aid they're selling. If you think you understand the odds and that you are smarter than everyone else just look in the mirror. You'll see 'sucker' printed on your forehead."
This kitchen table is not like the stock market floor at all. Here, we are calm and relaxed and, most of all, we are sane. Sane means that we are clear-headed and we can think and we can act in a way that makes sense. Sane means we don't have "sucker" tattoos on our foreheads.
Trading sucks. It is not a sane way to manage our money. Think about this for a minute. If the professionals make split second decisions to time the markets to the second, and still get much of it wrong, how would you compete with that? How would you make a trade in time to beat them out?
Remember that every transaction has a winner and a loser. Somebody buys the stock just as it's about to go up, which means some sucker sold it just before it goes up. Somebody sells their stock just before it dips, which means that some sucker buys the stock just before it loses value. When you go toe-to-toe with these pros, which of you do you think will be the sucker?
When you tip a waiter or a bartender, do you tip at the end of the night? Most people do. And it's a great strategy if your goal is to make sure people get what they deserve, no more and no less.
But if your goal is to get great service, try tipping early. I always tip generously on my first drink. Guess what my second, third and fourth drinks are like? They are stiffer. They are filled to the brim. The bartender knows my name and I know his. I get speedier service and I look good in front of my friends. Tipping later on doesn't have the same effect.
Go ahead and try it out the next time you want service. It works in bars. It works in hotels, too. Tip well on your first chance, and for the rest of your stay, the staff will treat you royally. You have to tip early. But this is the opposite of what most people do, and that is why it is so effective.
So what should you do if the market takes a dip and the media are rubbing the word "bear" in your face? How do the reports of how grim the situation is make you feel? How do the reports of how everybody should sell their stocks make you feel? How do the reports of how this time it could be The Big One make you feel? It doesn't feel too good, does it?
I can tell you - it feels horrible. There's a knot in your stomach; I've felt it myself. You watch your stock fall five percent. Then ten percent. Then fifteen percent. When will it stop? It keeps falling! That kind of thing can bring even the toughest guys on Wall Street to their knees. What can li'l ol' you do?
First, you can turn off the TV or the Bloomberg app. Already the pain diminishes.
Second, you can get up off your knees and shout out, "Bull! The panic is a lot of bull. The negativity is a lot of bull. It's all a load of bull!"
You get online and turn that bear into a bull.
When markets dip, that's the time to buy, not to sell. Buy some new stock or buy more of some stock you already own. Anything that dips is a great candidate for buying, as long as the fundamentals are sound. Really the toughest part is turning off your emotions.
We humans have emotions, and they are a beautiful thing. You want emotions like love and happiness, and even fear and anger are important. But never, ever let emotions drive goal-oriented activities like stock investments.
You know where the term bullsh*t comes from? The term comes from people who have a lot of things to say in a bull market:
Hey, check it out, I just made $4000 in a week from this stock…
I’m telling you, Fred, now’s the time to get in! The stock ain’t coming down! It’s gonna double!
When you hear this kind of stuff, it’s time to turn around and walk away. It’s called bullsh*t for a reason.
People who have discipline don’t listen to bullsh*t or bearsh*t for that matter.