Hao Jin is one of the fast rising certified contributor at Seeking Alpha.  His articles cover variety of topics with thorough analysis ranging from ETFs to dividend focused opportunities.  He did not, however, always have the knowledge needed to accomplish what he does at Seeking Alpha today.  His career background comes from an IT side with background in management and policy.

He credits much of his initial growth to the CMA and CFA certifications he went after.  With his knowledge, he even started his own financial advise service called PointFinancialAdvisor providing investing advice catered to each individual’s needs.  Because of his interesting development, I wanted to know whether acquiring CFA is worth it or not.

“Hao, how did an IT professional with background in management and policy get into investing?  Why CMA and CFA?”

The first company I worked for after I graduated is a public company listed in NASDAQ.  Part of my job was to analyze stock market, because the company had to raise capital from time to time.  I was invoiced in various financial projects, including acquisition, joint venture, partnership, and private placements analysis.    My interest in investing was developed since.

From years of experience, I realized my knowledge in investing was limited.  CFA is a big help because it gives you broad knowledge in investing world.  I also want to understand accounting data from SEC filings before I invest in any company, hence why I got my CMA.

“As you know, there are various ways an individual can tackle Wall Street and the market.  People succeed with different styles of investing as well as education.  How do CFA and CMA help you in this aspect? And knowing what you know now, would you recommend it to others?”

CFA helps me to the next level.  Now I can see a big picture in markets.   I will definitely recommend it to people who are serious about investing.

“As I can see from your articles, you put a lot of emphasis on analysis.  Based on your recent studies, what would be the opportunities for 2010? Do we still stay long?”

There are still plenty of opportunities in developing markets.  In US, blue chip stocks are still undervalued.  If you have a long investing horizon, there is nothing wrong to stay long.  Otherwise where can you park your cash, given near 0% interest rate?

“What can we expect from your services at Point Financial Advisor?”

PointFinancialAdvisor.com provides basic investing advice based on each individual’s situation.  Each investor’s risk tolerance, investment goal and horizon are different.  Some stocks/ETFs might be suitable for some people, but might not be good for others.

Thanks Hao.  For those of you interested in tapping into the investment world even without an investment background, CFA could be a good starting point.

As a very active writer in the financial world, he delivers his thoughts and views to us through Seeking Alpha contribution and his website, TheBurningPlatform.

“My goal is to provide my readers with a wide eyed view of the world. I will concentrate on social and economic issues that I feel are important to the country. My commentary will be blunt and pointed. The country needs people to see things as they are, not as they wish them to be.”

In our recent interview, he shared his thoughts on Peak Oil, which is a popular topic even now after the fall of oil prices in the past year.

“Jim, can you tell us how your career transformed from the early days to now?”

My background was originally accounting. I graduated from Drexel University with a degree in Accounting and did the two years in an accounting firm while getting my CPA. I worked as a controller and eventually ended up with IKEA in 1989 as Manager of Reporting. I went to Villanova University at night to get my MBA and by 1993 was the Treasurer for IKEA North America. This is where my interest in economic markets and retail markets really took off. I wrote many reports regarding the economy and competitive landscape for IKEA. From 1999 through 2004 I was responsible for strategic planning and placement of new stores in the US and Canada. Today, I’m responsible for strategic planning at an Ivy League University. My writing is a side interest that keeps me busy on weekends and nights.

“What were some of the valuable lessons learned throughout your growth?”

I’ve learned that there is no substitute for hard work, research, and a realistic view of the world. The biggest mistakes I’ve seen made were when people ignored the facts, used pie in the sky assumptions, and wasted millions of their corporation’s dollars on projects that were destined to fail. Huge egos and agendas that don’t match the facts are a devastating combination. I learned finances from the ground up. I understand balance sheets, income statements, and cash flow statements. This knowledge is essential when judging the stability of corporations. A skeptical nature also comes in handy.

“In the recent years, universities saw an increased number of applicants as unemployment rose.  Has this impacted your planning in any way as a senior strategic director of a major university?”

What we’ve found is that in many ways a major university is countercyclical. This past year we received the largest number of applications in our history. Many people are attempting to ride out two years in an MBA program rather than enter the job market. We had the largest MBA class in history. This has helped offset serious reductions in our Executive Education program, as corporations have dramatically cut back on training budgets. Our alumni giving has also seen a large decline. We have proactively reduced costs and scaled back capital projects in order to weather these difficult times.

“You’ve recently published an article summarizing the opportunities in oil.   Now in your mind, when do you see as the right timing to start investing in commodities again? Would other factors like the dollar movements start to play a role here?”

I think there is more danger in the oil story than opportunity. I believe we reached peak oil production in 2005. The current worldwide recession has masked this fact as demand has declined. Recently, demand has begun to pick up. The world will be shocked in the next two years when production begins to lag behind demand. The initial result will be higher prices, topping $100 a barrel again. When shortages begin to materialize, panic and turmoil are likely to be the result. Our society cannot function without cheap oil. The US suburban sprawl way of life will be shattered by oil shortages. Food prices will also soar.

From an investment perspective, the prices of all commodities will be much higher in the next few years. The dollar will continue to fall as US budget deficits run out of control. The next 10 years will be seriously challenging and fraught with danger.

When it comes to oil, Jim is not the only one sharing the same concern.  If you’re looking for the next investment opportunities, do some homework and learn about what the experts are seeing.  Thanks Jim for sharing your story.

Now several years into his blogging journey, he has joined the leagues of StockTwits Premium service.  In addition, he is a Seeking Alpha Certified contributor with over a thousand published articles.  Regardless of the platform, it is certain that his insights have helped hundreds of investors in the financial community throughout the years.

Today, he shares his background on how he got to where he is today as well as some of the other prominent players he respects in the investment community.

“Todd, you are now providing insights to thousands of followers as a StockTwits Premium member.  How did you get here?  Can you give us more on your background?”

I have been investing and running businesses for decades. My first business was a swimming pool installation company in Syracuse NY that paid for my college education. I am not sure someone can be a good investor unless they have actually run a business.  There are things you learn in the process that no school will ever teach you.

I have been managing family money for a while now, and three years ago I was in a position to start writing and investing full time.  So I just started writing since and the blog seemed to finds its way.  I try to be careful not to try to write for an audience, page views or anything like that. Just writing my thoughts about the subject of investing that I enjoy the most has taken me from a small blogger platform to where I am now. No reason to mess with it now I guess.

“What was your field of study in school?”

I studied Economics and Management Science

“What about investing that interests you the most?”

Finding an investment few other are interested in.  It is like solving a big puzzle.

“I often see praises from others about your solid stock picks.  I don’t doubt that these picks derive from good research and effort.  Now, what are some of the resources you find invaluable to your analysis and ideas?”

Valueline, SEC, Corporate websites, and reading just about anything.

Some of my best ideas have come from just looking around me.  For example, I am an E-trade customer and noticed the improvements they were making in their services.  This caused me to look into the stock. Similarly, Natick Mall in MA is a GGP property, and I watched that mall grow. So I have been watching the stock for a while, and I bought the stocks this March.

“You are very involved in the StockTwits community.  Now, who are some of the fellow StockTwits community members you follow and respect?”

@aiki14, @wsmco, @upsidetrader, @zippertheory, @dasan, @fundmyfund, @gregormacdonald @howardlindzon just to name a few. They are a combination of fundamental, traders, and macro investors. I like to know what the varied groups are thinking. For those who are interested in more names, just check out those people I follow on Twitter.

“Can you tell us more about ValuePlays.net?  Why did you start it?  What can we expect as a premium subscriber?”

I stared the blog three years ago as a simple way to write down my daily investing thoughts. From there it took on a life of its own. In September, we switched to the paid .net model. At ValuePlays.net, subscribers get access to buys/sells as they are made, the analysis of current trades, and other potential picks we may be following. Eventually, we release the picks to the general public, but in almost all cases after significant gains have already been made.

“Lastly, what are the key aspects of investing that make you a better investor?”

I eliminate as much “noise” and “expert opinion” as possible. However, if I do happen to watch financial TV, it is Bloomberg. In value investing, I have found a style of investing that fits my temperament perfectly. I have tried others in the past and my results were modest. I suggest other investors only use a style that fits who they are. People who are chartists or day traders simply cannot be value investors; it is a totally different mindset. The converse of course is also true.

Thanks for sharing your insights and your history Todd.  From swimming pool installation to full-time investing, absorb his know-how on how he got there and gain his edge by leveraging ValuePlays.net.

He earned his high IQ through great returns, discipline to his strategy, and solid research (you can reach his recent one here). In our interview, he shares with us some of his personal interests, background, and the family advantages he leverages on Wall Street.

“Mike, can you tell us more about BlueCut Capital and how it got started?”

BlueCut Capital began when my brothers and I started www.bluecutmarkets.com and its predecessor. We each function in different capacities within the financial industry (asset management, trading, and private equity), and the website has been a forum to exchange ideas and share relevant research and commentary. Originally, the site was for just the three of us, but now has developed a strong following. BlueCut Capital formed as a vehicle to invest according to the ideas and research that were developed thru this collaboration.

“What is your personal background? We’d love to hear more about your educational background, your past experiences, and anything else that will help us get to know you better.”

I am currently an institutional investment consultant, focusing on private equity. Our firm works with Endowments, Foundations, Not-for-Profit Organizations, and Public Funds. Previously, I worked in investment banking. My oldest brother works in the long only asset management space. My younger trades currency and commodities. They are a great informal resource for me in the idea generation and research side of running the portfolio. However, as the portfolio manager, I make the ultimate investment and trading decisions for the kaChing.com portfolio. Having inputs from different viewpoints allows BlueCut’s investment style to be unique.

“BlueCut Capital is currently in a unique position at kaChing. You currently possess a high kaChing IQ, qualifying you as a Genius investor. However, your 1 yr performance has been lagging behind some of the other Genius investors. Can you tell us more about some of the drivers behind this? What this tells me personally is that you are sticking to your core strategies with confidence despite the short-term performance. Furthermore, you possess a higher kaChing IQ because of your high quality research and a good historical performance. I’d love to hear your thoughts on this.”

First of all, my primary concern is generating positive returns moving forward. I run the portfolio according to what I see developing in the future, not what has happened in the past. The strategy does not aim to mirror one particular index; the returns could look outstanding or terrible when compared to a specific benchmark at a particular period in time.

For example, as of today the portfolio is up over 40% year to date, 70% off the March low and 185% since inception. However, over the last 12 months we’re lagging the S&P 500. I’m well aware of the performance derby that goes on in the institutional asset management space and the flow of capital into those with the best trailing performance. I’m not interested in participating in that game by taking positions in order to keep pace with index performance. There are plenty of mutual funds that charge a lot of money to do that while providing mediocre relative returns.

Research is an important part of the portfolio management process, so I’m glad that it has been received favorably.

kaChing gives investors the ability to vote whether or not they like the philosophy with their checkbooks. So far, we have not been embraced on the site with respect to customer assets following the portfolio. Hopefully, this will change as investors become more comfortable with our strategy. Again, the goal is not to replicate an index, but to develop investment and trading ideas that contribute to significant outperformance over a market cycle. The performance since inception speaks to BlueCut’s ability to do this so far, but is no indication of future results.

“As you know, kaChing is transforming the way investments are made, providing additional channels to consumers and money managers. How will kaChing change the dynamics going forward? “

I think kaChing will prove to be a revolutionary platform for money managers to demonstrate their skill. It gives anyone the ability to see exactly what I am investing in, and why I’m making those decisions. kaChing allows the average person to monitor the holdings of a select group of investing “geniuses” with strong track records prior to investing with them, and decide whether or not they like the manager’s style. Since the idea is still new, I think it will take some time for people to adopt the concept of investing with “geniuses”. However, over the long term, I believe investors will move a portion of their investment assets away from traditional actively managed mutual funds to qualified kaChing managers.

“Lastly, what do you enjoy doing outside of Wall Street?”

My brothers and I are all very avid tennis players. Each of us played in college and we continue to play now. It helps relieve some of the stress of being on Wall Street.

It’s always great to meet a fellow tennis player. Thanks Mike for your story.

Now a Genius kaChing investor with nearly 50% annual return and a founder of Kawai Capital, Andy shares his personal story that led him to where he stands today.  Learn about what drives him and hear his advice to the investors on how to keep things in proper perspective and understand what truly matters in life.

“So Andy, can you tell us about how you ran into kaChing?”

kaChing has been around since 2007. A friend of mine simply invited me to this stock app on Facebook. I was a graduate student at Northwestern University at the time, working on a Ph.D. I was in a lab working on electro-optic thin films, but my mind was definitely on stocks and the business of technology. My passions have always been with science and business, but it took some time for me to realize that I could not tolerate 4-6 years of engineering for engineering sake. Business, science, and technology always fit together in my mind.

As for the story of how I came to be a genius mirrored investor on kaChing, long story short, I continued to post solid gains on its simulation with real-time prices and simulated commission and slippage costs. As a result, I came to be ranked high quite consistently on its site. Outside of a few months leading up to the financial crisis, I have always been on kaChing since the outset, and have always ranked high regardless of the ranking criteria adjustments made over the years.

“What do you currently do full-time? Also, with the recent launch of trade mirroring at kaChing, do you find it even more challenging to balance between work and passion?”

I currently work out in San Jose as an electronics component technical salesperson. It was one of a handful of positions I could choose from in the midst of a bad recession. Another choice was to work at a well-known TV station in Indianapolis, but I chose the position that put me in the heart of Silicon Valley. It is not glamorous, but I am grateful to have had the opportunity to ‘feel out’ perhaps a hundred different technology companies in the bay area and throughout the US.

You can pick up a lot from visiting a company—the energy level, the sense of urgency, the sense of participating in something worthwhile, the integrity and ethics of people that make up a company.  These are all important factors that are at the core of business. Moreover, since the business I am at is a small operation, I have had the chance to see how managerial decision making, finance, supply management, sales, marketing, collections, legal, etc. all fit together.

“We know you studied science in school, and now you’re one of the most successful investors on kaChing.  What led you to the discovery of passion in investing initially? “

It was a number of things, but family influences have played a big role. Good investing runs in my family. Since a young age, my brother and I both had a passion for sports trading cards. We knew what things to look for in a player, in a set, or in a card. While I gave up that interest, it was more or less the pee-wee leagues of investing.

At age 14, I began analyzing stocks. This came from reading numerous stock books. In the earlier days, I read more daytrading and swing-trading technical analysis books.  What I picked up from that period was a need for meticulousness and discipline, and an understanding that ideas need to be linked to results systematically and across a large number of samples and cases.

Also during my teen years, I discovered that my grandfather had made a small fortune investing in real-estate in Japan. He had bought property in Japan, only to see the value rise several thousand percent. I also learned around the same time that my mother’s aunt had begun investing under the tutelage of my great-grandmother with a modern day equivalent of around $50K. Over the past 60 years or so, she has done very well for herself investing in domestic (Japanese) stocks.  Being modest, she attributes her successes to a booming market during the 50s and later in the late 80s; however, I know better that even though the markets have fallen off dramatically from the 90s to now, she has fared well and counted very few losing years amongst countless years of high double digit gains due to her skill.

“So your family initially had a big impact on your inspiration to be a successful investor.  Can you tell us about your developments since?”

Getting back to how I became interested in investing when my academic background is Chemistry and Material Science at UCLA, I have to go back again to my early teenage years. Thanks to my father who indulged me in all books and magazines, I read hundreds of technological business books and magazines.  One magazine which I still own (in a box tucked away in my parents’ house) is a late 90s copy of Red Herring with Vinod Khosla on the front cover.  Back in those days, Red Herring had the latest juice on a fast-changing Silicon Valley. The biography of Vinod Khosla and how he came to the States with little to his name but a spot at Carnegie Mellon, and later making a fortune in Daisy Systems and Sun Microsystems deeply impressed me.

Additionally, I’ve read the stories of high-tech entrepreneurs Robert Noyce, Gorden Moore, and Andy Grove of Intel, the story of William Hewlett and David Packard and their humble beginnings in a garage, and more recently the story of Liu Chuanzhi and Lenovo.  These and many more biographies and articles of great leaders and large-scale entrepreneurship have all inspired me.  Now the inspiration did not come from their amassed fortunes, but rather the innovation and intellectual versatility these leaders needed and demonstrated. Learning about their undying passion, hard work ethics, ability to inspire teamwork, and most importantly, their struggles as human beings on this planet trying to carve out a better future and making it happen all motivate me every day.

Thus in my mind, business, science, technology and philanthropy have always been interlinked. When I went to UCLA or Northwestern to study material science, my goal was to become an inventor/entrepreneur. I was never interested in a teaching career, or even a laboratory career at an established firm.  As I grew older and shed my naiveté, I came to realize that I may have better opportunities impacting the business of technology in a major way outside the path of lumbering through a Ph.D. and applying for grants to fund my inventions.  Finally, a recurring problem with a medical condition called IBS, and a lack of chemistry with my research advisor, a man I respected, but whose work I could not find any passion in, sealed the deal.

Shortly thereafter, I decided to leave Northwestern’s prestigious Material Science program.  Even to this day, I find myself scared sometimes that I might have made a poor choice. However, my belief that God has a plan for all of us, and this recent ‘run-in’ with kaChing keeps me very optimistic.

Lastly, Mr. Andy Rachleff, CEO and co-founder of kaChing is one of the most successful venture capitalists. I find it very fortuitous that I came across and was receiving investing guidance from him through kaChing.  Up until perhaps July or August, I had no clue as to who Mr. Rachleff was! I respected him for his intellectual consistency and incisive comments; however, it was only through a Google search following discussions of kaChing going ‘live’ to real money, did it become clear to me that this person I was talking to was the main VC behind Blue Coat Systems, AOL, and Shasta Networks amongst other startups.

“So you have had many consecutive years of a positive return.  However, as investors, we all make mistakes.  Can you share some of the “bad” trades you’ve had in the past? What did you learn from it?”

My worst period was late 2000 and early 2001. I lost a lot of money not at the initial dot com bust, but trying to catch old leaders on a bounce thinking I was getting a bargain. As a neophyte to market crashes, I gravitated towards names like Cisco and Oracle after their stock’s first major drop, expecting a rebound. Boy! Was I wrong? At that time, I had money invested in a joint account with my girlfriend at the time. We both posted double-digit losses, and eventually decided to step away from the markets for a while.

Another mistake I made back then was putting too much trust in a well-known stock and mutual fund rating service, which is still very much in business and popular. ARMHY was a stock this service consistently rated highly, which has treated me unkindly. The stock still trades under the symbol ARMH, so the rating service may yet have the last word if its recommendations were meant for the long-term.

In any case, from the dot-com crash onwards, I came to understand the real meaning of ideas that I had only read about originally, such as systemic risk, stock trends through feedback loops, and George Soros’ theory of reflexivity. This experience has helped me to post gains in the most recent stock market crash of 2008.

“Do you have any advice to other kaChing investors who are trying to become the next ‘Genius’?”

Yes. It is general advice on investing, which should translate to a better ranking on kaChing. I have 4 pieces of investing advice:

1)   Dealing with systemic risk is an issue of timing. It is easy to buy into the idea that weathering the storm through sitting still is the best course of action. While overtrading is a costly mistake, when that rare level 5 hurricane hits, an astute investor must react via shortening the investment horizon and exploiting the opportunities that arise.  I would advise investors to be nimble and quick, but not to hurry when getting back in. Specifically, finding the bottom is only possible after the bottom has passed. Getting in, and missing the first few weeks or months of the bounce  is the small price paid to avoid the costly mistake of getting back in too early only to find that the bottom is half a year off. When GE fell Oct-2008, a friend of mine made the mistake of thinking he had a bargain at ~$20 only later to see a low of under $7 in a few short months. Similarly, a very intelligent friend with an MBA bought AIG around the same period, only to see it dip to lower lows in March and in mid-July. Often times, these further dips are not purely technical but are driven by fundamentals that are slow to be uncovered.

Because you can never know if a stock will fall further during panics, I like to know the survivability of a company before getting back in. Of course, I would look at the fundamental prospects and relative valuation of a company. But I am particularly interested in cash, cash flow, and low debt levels. What I am looking for is the company’s ability to weather a multi-year recession or Depression.

My mother’s aunt, who has 60 years of investing success, taught me that during these catastrophic periods, defensive sector companies (low-end consumer staples, defense, medicine, etc.) with little debt and high cash are attractive plays considering the reduced level of risk, and the company’s relatively secure revenue base.

2)    Outside of market crashes, the way to reduce risk is in avoiding excessive trading costs via having a long-term perspective, and in diversifying adequately. Avoiding excessive trading is more important than ever outside of calamitous market situations since well-equipped and well-funded traders are finding new ways to eek out more from ill-equipped traders. Day trading on technicals and split second information is a business for the well funded and for those with the cutting edge technologies.

Most think direct access, low commissions, and a knowledge of technical analysis is enough. However, besides the fact that many technical tools lack both a logical nexus and enough examples to statistically prove a technique’s worth, those well-funded professional traders will always have a “vig” over the small-time day trader due to their access to better technology, greater speed to information, exploitation, and execution. Therefore, an individual investor can mitigate this disadvantage by having fewer trades over the long haul.

3) On diversification, my ideas and advice is simple: examine both historical asset correlation and common macro-economic drivers.  Free correlation calculators are available and can be found via a Google search. Ideally, one shouldn’t just stick to stocks either. Stocks, quality bonds, and real estate around the globe could potentially form a well-diversified portfolio.

Furthermore, historical correlation is a mathematical concept that can be picked up and incorporated into a diversification strategy by the average investor, if that investor has the patience and willingness to learn. The other part of diversifying is in identifying macro-economic commonalities amongst the companies involved. For example, do they all receive their revenue in dollars? Are rising oil prices detrimental to the bottom line for all the investments owned? Obviously, the idea is to mix investments such that when, say the dollar rallies hard, that development does not negatively impact all investments simultaneously.

4)    My final piece of advice is for investors to keep things in proper perspective. My mother’s aunt told me in 2009 that some of her stocks recently dipped 20%, but she is still grateful to the company because of the great performances she benefited from over the last 60 years. Perspectives change when having a longer term view.

Furthermore, when it comes to investing, I would say that it’s only money at end of the day. When considering many issues I’ve had in the past with family during my rebellious teenage years, a debilitating health problem, periods of isolation and an utter lack of self-discipline and God, and the pain of neglecting certain aspects of my life that were truly important, I have come to understand the true priorities in life. Though I risk coming off as being philosophical or pretentious, I would say that the greater returns in life come from investing in family and friends, in God and spirituality, in health, in self-discipline and in lifelong learning.

He is also one of the select investors from Covestor who has been selected as a model for Covestor Investment Management (CVIM).

John was kind enough to spend some time with me discussing more about his background, his experience, and the market.  Now, a degree in history may seem far fetched from Wall Street initially.  However,  in our interview, John walks us through some of the interrelationships between the two, and how he leverages his knowledge in history for investing.

“John, you have a very interesting background.  You’re the first person I’ve interviewed with Bachelor’s and Master’s Degree in History. How did a History Professor get into the world of investing?”

I was investing on my own time before I had a job teaching history, and I’ve been fortunate enough to find the time to keep doing it.  It’s been a matter of inertia as much as anything.

“How have you been able to leverage your expertise in History for investing?”

History is a much more useful tool for the investor than most people understand.  For one, familiarity with the past greatly expands your conception of what is possible in the world, and by extension, in the markets.  The general investing public’s conception of what can or cannot happen in the markets draws for the most part from a pool of personal experience that they have accumulated since they left college.  If the market has gone up in that time, they will tend to “anchor” (as the behavioral finance people would put it) to that experience, expecting still higher prices, and vice versa.

The range of relevant data available to a person familiar with history is much larger.  History offers you thousands of years of examples of unintended consequences, decisions gone wrong, and people being surprised by things that seemed impossible at the time.  If you read history carefully and with a deep understanding that you are no fundamentally smarter from the people you are reading about, you can actually gain something that is very, very close to experience.  I don’t know of any other discipline that can do that.

As a specific example, knowing something about the characteristic historical features of booms and busts, and the consequences of credit overextension, helped me and many others keep from being blindsided by the financial crisis of 2008.  These sorts of disasters, which Wall Street tends to dismiss as “hundred-year floods,” have in fact happened regularly over the decades, as something that people who are familiar with financial history know.

Historians are also experienced at reducing complex sets of information into simple, clear arguments, and determining whether those arguments are or are not well-supported.  If you take every investment thesis you come across and treat it like an argument, you will find it easy to discard some of them right away. Furthermore, you realize that others are maybe more compelling than you had realized at first.

Additionally, there is a barrier to entry to gaining the informational advantage that comes with historical knowledge that is just high enough that most people don’t take the time to learn it.  History’s connection to finance is not readily apparent, so familiarity with history is not a strategy whose effectiveness is diminished much by competition.  This contrasts with strategies reliant on complex math or economics, where floods of new entrants have tended to erode any initial advantage.

“It’s great to hear that you started out your investment career with successful trades.  Now, we know that most of us go through a losing experience as well.  Was this the case for you?  What did you learn from the experience?”

Losing is part of the game, of course.  What I try to do is not fixate on wins or losses, but to make sure that the net expectation of my portfolio is as positive as I can make it.  So if I lose, I look back to see if the loss was a bad break, or if my analysis was flawed.  For example, if you have a stock that you believe has a 50% chance of going to zero and a 50% chance of going up 10 times, you have a wildly positive expected value, and, as long as you are sizing the position appropriately, you buy as much as you can get your hands on.  If it does go to zero, and you are convinced that your analysis at the time was sound, you just shrug and move on.

“Can you tell us a bit more about your strategy in value investing? What resources and strategies do you use to determine your next plays?”

My core strategy is the same as any other value investor will tell you: to buy assets on the market at less than they are worth.  This is linked with an idea of trying to take advantage of the capital cycle, by investing in under-capitalized industries.  I get most of my ideas from Value Line, although the very best I tend to come across before they get into Value Line.  If it’s a company, once I have the idea, I do some thinking about the company’s position in its industry and make sure the accounting appears to correspond with reality.

“You’ve gone through the market stages in which the fundamentals themselves simply could not explain the stock price. How does that challenge you as a value investor? Also, how do you cope with such a phenomenon?”

The dyed-in-the-wool value investor doesn’t see that as a problem, because the price is just noise.  At some point or another, the share price is going to gravitate to an approximation of the discounted future cash flow of whatever asset you are holding, and investing simply becomes a matter of waiting for the market to acknowledge it.  Having clients, or having politicians decide they need to get involved, does make it a little more complicated than that, but those are considerations a good investor would have been aware of in the first place.

“So in your mind, what does it take to be a successful investor?”

I’ve done a lot of research over the years on who is and who isn’t successful at investing.  My conclusion was that the single common feature among successful money managers is that, to a person, they are not afraid to do something different from what everyone else is doing.

Whether these people understand it or not, they are following a strategy that exploits the market’s status as a broken discounting mechanism.  The market consistently overvalues events perceived as certain and consistently under-prices events seen as unknown or unlikely.  However, the reality is that there is always a greater chance that people are wrong than they believe.  There’s plenty of money to be made in betting on events that everyone agrees are impossible or far-fetched, and plenty of money to be made by fading the obvious.  I don’t know if there is a fundamental axiom of investing, but this is as close as I’ve been able to get.

“Thanks very much for your time John.  Best of luck with your current and future initiatives.”

You too, Hiro.  Thanks for the opportunity.

Dennes, one of the kaChing Genius investors, is not only outshining the S&P 500 at 130% annual return, he is one of the youngest Genius investors.  As a senior student at Chapman University, he is just getting ready to start what could be a long, successful journey of his investing career.

Lucky for us, we get to learn more about him and the factors behind his success through our interview.

“So Dennis, can you tell us more about your background? Where do you come from? What is your educational background? Help us get to know you better.”

I’m currently a senior attending Chapman University. My major is Political Science and I also have minors in Business Administration and Economics. The reason I’ve decided to go down this path is because politics, business and economics are all interrelated.  Therefore, I feel this will give me an edge over other market participants who may not fully appreciate what government actions will have on the economy over the long run.

On a typical day, I would spend six hours reading global news, researching, analyzing 10-Q forms and listening to conference calls. Of course, this is aside from my school work. This may sound like a lot of time, but I simply just love what I do and it doesn’t feel like work at all.

“Any plans in mind after graduation?”

My goal after graduation is to land a job at a hedge fund. If that doesn’t work out then I’ll keep managing my own money and let the power of compounding interest work in my favor. I plan on to start acquiring farmland in Canada to get myself ready for the end of oil imports that I predict will occur in the next decade. There will be food shortages since transporting food will be too costly and in some places there will be no food available at any price. Being one step ahead of the crowd is the key to becoming successful in life.

“How did you get into investing? Furthermore, what led you to the energy and agriculture sector in particular?”

I became fascinated with investing after watching the movie “Wall Street” by Oliver Stone. The allure of quick money and outsmarting the market was too much for me to ignore. Fortunately for me, I quickly learned that gunning for the quick buck was a losing strategy, and I only lost a small portion of my capital learning this very valuable lesson. I started reading up on legendary investors such as Warren Buffet and George Soros. What I found out about these individuals is that they took long term views on the economy to make their wealth grow for them. Also, I read a behavior economic case study showing that humans disproportionately valued the present and grossly discounted the future and this was the key to outperforming the market.

What led me to the energy and agriculture sector was realizing that they were in a global long term growth trend. World energy consumption has been increasing every year, and the world population, in particular the middle class in India and China, has been increasing which allows them to consume more protein rich diets. Learning from my economics courses, when you have a finite resource that is depleting and you have growing demand for this resource, prices will be going up!

“What do you love and hate about investing? Do you think investing is for everyone?”

What I love about investing is watching how investor’s expectations about the future change on the dime. One day, everyone will be worried about deflation and the economy.  Then the next day, they are worried about inflation. Human emotions leak into the markets and opportunities are created each day.

What I dislike about investing is how time consuming it becomes. In order to stay current with global market news and have a slight edge over other investors, countless hours must be spent each day researching and analyzing companies.

I don’t believe investing is for everyone. Most individuals may have possibly two hours a week to devote to stock research, but no way can they keep up with individuals who commit ten hours per day keeping up with all the headlines. Investing is also very stressful since real money is on the line, and most people become way too emotional to commit to an investment, especially when the markets turn against them.

“So speaking of markets turning against people, how do you go about managing risks?  From your experience, what works best in order to maximize the return while minimizing the risk? “

The best way to manage risk is having the ideal price entry for any investment. For example, buying Apple at $200 will seem like a great investment when you look back 5 years from now, but if you had patience you could have picked up shares for $80 not too long ago. Overpaying for any investment is the quickest way to lose money. Knowing what you are buying in terms of your investment is critical! I see too many people buy XYZ stock and sell out panicking once the price falls 5%.  Diversification is often advocated to manage risk, but all asset classes are correlated which was painfully clear a year ago. The only reason I diversify is to protect myself from specific firm risks such as management cooking the books, natural disaster or some event that is out of my hands. Just knowing what you are buying and knowing what you are paying for is the best way to manage risk.

“You have a long-term strategy when it comes to investing.  What is your typical holding period?  Do you also trade stocks short-term?”

I employ a long term investing thesis, and the amount of time I hold onto an investment will vary greatly. Mainly I pick a company with a great story behind it, and I give it enough time for the story to unfold and play out. If the fundamentals change for any reasons, I’ll quickly drop the investment and move on to something else.  Before I make any investment, I typically have a price target for the company with the assumption that it’ll take 5 to 7 years to reach.

I don’t usually trade stocks short-term unless the opportunity presents itself. For example, last fall, the CEO of Chesapeake Energy received a margin call on his entire stake in the company. As a result the stock was hammered to an unbelievable price and was basically a dead give away. A few weeks later, the stock was trading over 50% higher from the lows. Events like these are usually rare, but present exceptional opportunities when they are spotted.

“Lastly, what advice would you give to young aspiring investors who want to become the next Dennes?”

My advice for any young aspiring investor is to start reading and get informed! The internet has transformed humanity in the past 15 years and the information that’s available for free is simply incredible. Never get your news from TV since most of the events they talk about are insignificant or it has been censored by the producers. Always seek information from blogs and internet news outlets since they are often uncensored, but it is your sole responsibility to be objective when reading anything you see. Remember we all have 24 hours in our days; it’s what you do with the time that sets you apart from others.

Peridot Capital now boasts the 2^nd highest kaChing IQ at 162 (as of Nov ’09), and he has already amassed $350,000 in customer asset in less than a month.  Today I share with you our interview in which he dives into the details of his investment strategy.  Read the interview and learn from this kaChing Genius investor what it takes to succeed in the art of investing.

“So Chad we know that you’re the founder of Peridot Capital, and you’re clearly performing very well based on kaChing performance. Well, what can we know about you? Can you tell us more about yourself? How did you get to where you are today?”

Well, I got hooked on the stock market very early on in my life (around age 12).  From that point on, I really knew that I wanted to pursue it as a career. That might sound hard to believe, but one day I was checking baseball box scores and stumbled upon the stock tables in our local newspaper (The Baltimore Sun used to combine the sports and business sections into one section). I asked my dad to explain what they were (stock tables look pretty foreign to a 12 year old) and after learning that one could make money from companies without actually working for them, I was intrigued. I have always been interested in business, good with numbers, and very competitive, so the markets really were a good fit for my interests and skill set.

I started investing my own money (what little amounts I had) throughout high school, and I went on to college knowing I wanted to study finance and ultimately become a research analyst or portfolio manager. I graduated college in 2002 when the dot com bubble burst and pretty much no investment firms were hiring.  So I worked in Corporate America for a couple years but was not happy doing anything outside of the markets. As a single twenty-something, I figured it would be an ideal time in my life to take a risk, quit my job, and start my own investment advisory firm. After all, there were a lot of people who got burned in the market in the early 2000’s and were looking for a change in direction. Most brokers and mutual funds had steered their clients into very risky, overvalued stocks and paid the price dearly. There was an opening for me to come in and suggest a different approach.

“What’s it like being a RIA managing your own clients versus your prior experiences? The good and the bad?”

I think I have really thrived as my own boss. I am very opinionated on the things that I am passionate about (investing strategies included).  So being able to craft my own business model and execute it without having to worry about how my bosses or my employer felt about those ideas has really been advantageous. Things like refusing to accept sales commissions for selling specific products, for example, is not always something one can do if they work for a big firm. However, I think clients should be invested in the best option for them, not just the ones salespeople can make a good living on.

I can’t say there is really anything bad about running my own firm. You are always faced with a situation where you have to be motivated every day because you are the face of the company and your efforts determine how successful the firm is.  However, as long as one is passionate and excited about what they do, I don’t think the need to take charge and put in the time and work is really a drawback, at least for me.

“How has it been for you managing other peoples money during this financial crisis? We’ve certainly seen historical levels of volatility in the last year, both up and down. Also, do you invest differently now because of this past year?”

Whenever the stock market fares poorly, trying to control clients’ emotions are always the trickiest job and of utmost importance. The biggest mistake people can make is to let their emotional overcome the realities and to make decisions based on how they feel versus what is the right move financially. I really try to educate along the way and always be in constant communication with my clients, helping them try to understand what is going on, what they should be doing, and what they should not be doing.

I write a quarterly letter that gets sent to clients every three months which serves as my main communication/education tool. Most of my clients were not really in danger of making irrational decisions based solely on negative emotions, but there are always a few people who get really anxious and want to sell everything at the exact low point when fear is highest. It’s completely understandable (human nature takes over), but it my job to try my best to educate, communicate, and facilitated good decision making, even in times of crisis and maximum emotion.

In terms of investing differently after the crisis, many people insist that every crisis should result in making changes to one’s strategy.  However, I respectively disagree provided that you had an appropriate game plan before the crisis. Each of my clients has a personalized investment strategy based on their own financial goals and risk tolerances. As long as those goals/risk profiles are unchanged, I have not changed anything with respect to their strategy. After all, if their investment portfolio was appropriate for them before the crisis, their financial plan should not have been severely impacted by the market drop. Conversely, if things have changed for the client personally, we will make necessary changes to their plan together.  For the most part, that has not been the case however. Change simply for change’s sake makes little sense to me.

“So you’re a value investor, looking for stocks in which the longer term fundamentals appear to be more optimistic than the near term market sentiment. Can you elaborate on your strategy a bit? How do you evaluate the companies? What are some of the factors you primarily focus on?”

Simply put, I believe Wall Street is too short term oriented. A focus on quarterly results, analyst upgrades/downgrades, and other short term events move stock prices dramatically, but the changes to the longer term outlooks for most firms, in my view, is never quite as dramatic as the market’s initial reaction appears to indicate.

My primary focus is on valuation. We know that stock prices have priced in the consensus view on the future prospects for a particular company, so I simply try and find situations where current expectations for a company appear to be more negative than I think they actually will prove to be over the long term. Essentially I try and take advantage of irrational short term moves in stocks and hold them for the long term, which allows the short term concerns to be proven either wrong or less significant than feared.

Let me give you a recent example. Last week CVS Caremark announced that it lost a few big contracts in its pharmacy services business. The stock dropped 25% (from 36 to 27) on November 5th alone. I like the long term fundamentals for the company, as both the drug store industry (CVS) and the PBM industry (Caremark) should benefit from an aging baby boomer population and expanded healthcare for all Americans. In my view Wall Street clearly overreacted by selling the stock down 25%. If you look at the overall financial impact of the contract losses, it’s about 5% of the company’s profits, so the stock dropped 5 times as much as it should have based on the numbers. That’s potentially a terrific opportunity.

“Lastly, I imagine there are many investors following you today with the inspiration to follow your footsteps. What advice would you give them? How can they start?”

The number one thing I would suggest is to study the markets, read a lot of books and academic studies that discuss the long term trends that allow investors to outperform the major indexes, and to use that information to formulate their own investment strategy. It is very important to form a strategy that has a high probability of performing well over a long period of time (based on historical data) and committing to it. Not only will doing so stack the odds in your favor, but it will allow you to articulate exactly what you do to potential investors. If people understand what you are doing, why you are doing it, and it actually works, there is a great chance you will be a successful investor.

Hope you enjoyed  his insight and can apply to your investment career development.  Thanks Chad!

Although he has not qualified to be the next Genius kaChing investor yet, he is certainly nearing qualification with a kaChing IQ of 124.  Most importantly, it’s his passion to learn and the unrivaled drive to get involved that will get him there.  As a seasoned kaChing player, he shares with us today his background and tips on how to become the next Genius investor.

“Can you give us more on your background Chris?  What do you do full-time?  How did you get into investing?”

My academic background is in Economics and Science at the University of Toronto. I also have a background in computer software programming and design. My day job is in IT business consulting and project management, so my work involves being a translator between end-users on the business side and the technology staff who implement the solutions. I also have a license to sell real estate with a particular focus on residential condominiums.

I was first introduced to investing when I was in high school, but spent more time on investing and learning about the market after university. At the time, it was a personal hobby.

The stock market is very frenetic and deceitful. Yet it is a place where one can keep learning new things. Yet, I find that amidst all the chaos in the stock market, an investor may be rewarded through patience and hard work, with of course a bit of luck. The former two are precursors to possessing trading “alpha,” the value that differentiates traders who match stock market performance and those who exceed it.  What I find most fascinating from market participants is that investors are always looking the holy grail of investing. That is, that things are different this time and that it is possible to make money without enduring any risk. But as Mark Twain said, “History doesn’t repeat itself, but it rhymes.”

“You’re one of the most involved investors in the kaChing community.  How did you run into kaChing and what is it about kaChing you like versus other investment communities out there?”

Instead of falling into the allure playing zombie applications, I wanted to pursue my interests in investing on Facebook. I found kaChing (it was known as “FSX Player” or “Hedge Stop” at the time) from Facebook while searching for financial applications. I added both a mouse trap game application that made “real” money by selling “virtual” cheese to users, and kaChing.

I was involved with any other variant investment communities well before “social networking” became mainstream, back in 2000. WSJ and other newspapers interviewed me about kaChing and actually asked me the same question. My response was that I had my experiences with Marketocracy and iExchange (iExchange is long defunct and a victim of the dotcom crash and I don’t use Marketocracy).

I am sure the other investment communities have their strengths and weaknesses, but I prefer to stick with one investment community. The advantage of having done so is it that I forged connections (both collegial and ones that are antithetical) with kaChing’s virtual community. What is most interesting is that investing is a common language regardless of nationality, race, or locale. As a result, I built virtual friendships with members from such countries as Britain, Singapore, China, and of course the United States.

“So what is your trading strategy?  What type of tools and resources do you use to make your investment decisions?”

My investment strategy starts first and foremost with this idea: don’t lose money. This is easier said than done. After that, I read the business news to look for new investing ideas. When I identify a potential investment, I learn about its business, its product and about its executive management. If the company’s business is too complex, I pass on it.

Next, I identify all possible risks for the investment opportunity:

-          Company risk (i.e .competition, health of balance sheet)

-          Market risk (i.e. a high p/e stock price influenced by a frothy market is inherently riskier)

-          Uncertainty (i.e. what are some general extraneous circumstances that cannot be identified but need to be considered?)

Since risk in and of itself cannot be predicted, I quantify this risk using a range of values, and then determine a margin of safety needed to make the investment worthwhile.

I calculate the intrinsic value of a company using a variety of methods, then compare this to the stock market value of the company. If the difference between the two values is significant enough against the margin of safety, I will make an investment in the company.

Investing is as much an art as it is a science. The art involves making decisions on what tools to use to calculate a company’s future earnings power. The science is the math involved in making these calculations. When the two come together, a stock price is determined as well as downside stock price target.

Currently, my virtual portfolio (http://www.kaching.com/kaching#portfolio/5916/holdings) is hedging for downside risk. This is accomplished by holding 2/3 in cash, diversifying, holding short positions, and averaging into positions as sentiment changes. That is why my trading performance since March is essentially a flat line.

Finviz.com, yahoo finance and google finance to be very good resources for quickly checking out potential investments. I also follow a few reputable blogs to get another perspective on the interpretation of markets.

My trades are not made on the basis of blogs. The reason is that I prefer to formulate my own trading ideas. If and when trading mistakes occur, I prefer to own up to them instead of looking for other reasons why the investment did not make money. Finally I assess the balance sheet of the company from the quarterly and annual filings.

In the last year and a half, I’ve been more “academic” to gain a more philosophical approach for investing in the stock market.

I read books from Taleb (“The Black Swan” and “Fooled by Randomness”) and Malcolm Gladwell (“Outliers” and “Blink”). I also read books from Michael Lewis. Most importantly, I spent more time learning Benjamin Graham’s “The Intelligent Investor” and “Security Analysis.”

What I found most frightening was that Graham’s identification and discussion of bubbles in “Security Analysis” was just as applicable when it was first published in 1934 as it was to the dotcom bust of 2000 and the housing bubble.

“You’re not a Genius kaChing investor yet, but you’re also very close.  As a veteran player in the kaChing community, can you share your learning on how to become the next Genius investor effectively? It’s clearly more than just return”

For beginners who have never invested, join my “Beginner’s Guide to KaChing Trading” group. It has over 1000 members now. Join “Intelligent Investing” too.

I noticed that many beginners come in for stock tips or have no idea how to trade. I was there once, so I can relate to this.

I would advise these members to first read the FAQ and the glossary. Unfortunately, the content is somewhat “intermediate” level in nature, so users should also supplement their experience on kaChing with investpedia.com.

For experienced investors, I encourage these members to interact with other good traders and investors on the site. You are bound to find like-minded investors. Focus on risk-adjusted return, not just return. A genius investor is not defined by its connotation, but on an “alpha.” Alpha by definition is a measure of skill as opposed to luck. It is quantified as the risk-adjusted return one makes based on an accurate non-consensus viewpoint of the market that is also correct. I learnt about this very concept from kaChing’s very founders.

“Chris, we know you have other work outside of investing during your day, but you devote a lot of your time researching and trading.  What drives you the most when it comes to investment?  Do you recommend it to everyone?”

I am liberated when I do not depend on the analysis, thoughts, and opinions made by others.  I enjoy pouring deep into financial statements, reading the small print (of footnotes) and looking into things where others are not. It is a great feeling to formulate ideas in the form of research and being right.

I took a lot of heat over on seeking alpha for my short-idea in First Solar. (http://seekingalpha.com/author/chris-lau). Still, some of the critiques were useful and I applied them to other research write-ups.  On a positive note, I received positive feedback on my long idea on Ford.

“If Wall Street disappeared tomorrow, what would you be pursuing?”

If Wall Street disappeared, I spend more time travelling and seeing the world. I would spend more time practicing the violin so I could perform. My aim would be to work my way up, be discovered, and be popular enough to perform in Carnegie Hall, New York.

Thanks Chris for your thoughts, and best of luck on your journey to becoming the next Genius kaChing investor.

As one of the kaChing’s Genius investors, Min stands strong at the top of the hill.  With a kaChing IQ of 172, he is now the top kaChing Genius performer generating nearly 200% annual return (as of October 2009).

Probably by now, there are many spectators following Min wanting to ask more questions.  Well, now you get to learn more about him, thanks to Min and his insights he shared with us.

“Min, you currently hold the highest kaching IQ and the highest return amongst the Geniuses.  You also stick to your strength in healthcare consistently, and it certainly pays off for you.  How did you get to where you are today?”

It is definitely flattering and exciting to hold the top spot at the moment, especially knowing I am up there with a group of other very talented Geniuses, many of whom have decades of experience and manage millions of dollars in assets professionally. I am grateful for the opportunity to help others looking for a better and cheaper alternative to invest their money away from the typical mutual funds and brokers, while hoping to significantly beat market indices.

For the past several years I’ve worked in healthcare IT for a major medical institution. Being surrounded by medical practitioners and academicians, witnessing life-saving therapies being applied, and directly being involved in advancing IT infrastructure technologies and Clinical applications due to my job role, I developed a keen interest in the healthcare sector.

The real turning point was a few years ago when a small biotechnology company I owned got acquired by Pfizer. I originally purchased the stock deeming it was severely undervalued and the company was ripe as a takeover candidate. Seeing the actual fruits of my labor and realizing a lot of money can be made further sparked my interest, and it was at that moment when I started focusing solely on biotech and pharma companies, and here I am today.

“You look for undervalued stocks in biotechnology and pharmaceutical sector.  You then trade on momentum while investing on fundamentals.  We clearly see the end result of your strategy, but what are some of the resources you utilize to make that happen?”

An important aspect of any investor’s success is having an open mind and willingness to engage with other investors, either bullish or bearish on your stocks, to gather rational opinions. In the healthcare sector for a non-MD and PHD especially, there are complexities in understanding  a company’s drug mechanism and translating published clinical trial results. I am fortunate however to have a network of investors I talk to, many of whom are MDs, PHDs, statisticians, and investment professionals. They are not always right, but their insights and knowledge are priceless.

Outside of my close-knit group of contacts, the Internet obviously contains a wealth of information as long as you can pick the good ones from the bad. Let me give you a few of my regulars:

Investorvillage.com – This is a moderated stock message board with a mature audience base coming from all backgrounds. Now, the tricky part about message boards is that people are usually free to say anything, albeit following the website’s posting rules.  Therefore, you really have to judge their true agenda.  When you interact with a group of investors bullish on a particular stock for example, the individuals will suffer from “groupthink” oftentimes.  Furthermore, they will ignore differing or challenging analysis, and oftentimes even call you a “basher”.  A good investor should always evaluate both sides of the story and should never “fall in love” with a stock.

TheMarkets.com – Here you will find sell-side and macroeconomic research reports from thousands of institutional brokers, such as Goldman Sachs, Morgan Stanley, and Deutsche Bank. I am mentioning this website because I utilize it, but most non-industry individuals will not have access to this unless they have deep pockets. Subscription to this website is $2,000+/month, but fortunately for me a nice contact of mine granted me access.

Sumzero.com – Jeff Borack also mentioned this site. This private website caters to industry professionals like portfolio/hedge fund managers and analysts, but they do accept a small amount of private investors, me being one of them. You will need to send them a compelling research report and tell them why you deserve to be a member. What I like about this site is access to interact with investment professionals owning the same stocks you do, and the opportunity to compare each other’s financial models.

“What exactly do you look for in these companies?”

Biotech companies are very tricky to evaluate because most are cash-flow negative, and my analysis is based on perceived future value. I dissect the company and analyze every aspects of it, such as financials, management background and vested stock interest, institutional buys and sells, drug’s clinical efficacy and safety data, market potential , and competitive landscape. I compute a discounted cash flow model on my own to try to estimate what a stock would be worth if it were to reach the marketplace.

In an article piece interviewing Joseph Edelman, a prominent healthcare hedge fund manager, he stated “biotech stock prices are governed by the disparate forces of perception and reality.”  The binary events, or what he calls the “reality points”,  for these stocks are news of the clinical trial results, FDA advisory panel meeting review or approval, and quarterly financial results once the product has been approved and launched for example.  In between those “reality points” I try to exploit the stock’s momentum, up or down, and after much due diligence I may also let the stock sit through an anticipated clinical data release or FDA approval date only if I think it will be successful.

The key is always to find the best risk/reward profile of a stock. I do not invest in a stock I think will have a 20% upside potential when the downside risk is an identical 20%. I’ll give you an example. Let’s talk about DNDN since everyone always asks me about this stock, even though I’ve had many other big winners like VNDA, which I bought at $1 and sold at $13. I bought DNDN stocks around $4/share on kaChing and traded options on my personal portfolio. After much research, I evaluated that the upside potential for DNDN was $20/share, with downside risk a conservative maximum of $1 ($3+ cash/share with no debt, not even including any other assets) and heavy short interest (short sellers will naturally becomes buyers when covering) , so 500% upside and 25% downside. Yes, a 25% downside is significant for a large cap stock especially, but not for a small-cap speculative biotech stock with a MUCH larger upside potential, and in this case 500%! Remember, this is all about finding the best risk/reward.

“How has your experience been since the trade mirroring launch?”

So far it’s been phenomenal, even though trade mirroring only started a week ago. It’s exciting to see my portfolio shown on CNBC and talked about on Internet news articles.  I also receive a lot of questions on my wall post but I am willing to answer them to the best of my abilities, as long as people are not asking for personalized advice (due to legal restrictions).

“What do you enjoy doing with your personal time?”

Outside of my regular job and doing daily stock homework to maintain my portfolio on kaChing, it does not leave much room for playtime.  At the same time, I try to squeeze in as much activities as I can.  I’m down to earth and like simple things like just laying on my couch or bed and watching TV shows, oftentimes needing to play them back from my Comcast DVR.  Some of my favorites are 24, Entourage, Californication, Dexter, Top Chef, Man vs. Wild, and The Office (the fourth episode this season was hilarious and should’ve been the ending instead!). I don’t watch much sports but love watching the UFC, with favorite fighter being Quintin “Rampage” Jackson due not only to his fighting acumen but also likable personality.

Outside of the house I like to dine out with friends and try out different restaurants and visit local attractions. I live in the San Francisco Bay Area so I never run out of places to go. I also like to visit the race tracks and track my car, a modified Nissan 350z, around a circuit. This Winter I plan to visit Lake Tahoe a few times to go snowboarding.

“Lastly do you have any advice to those who want to follow your footsteps? I know it’s not as simple as investing in bio/pharma stocks hoping for the big surge.”

I actually don’t recommend beginners to start investing in biotech or pharma stocks with real money on their own. My field is a niche focus, and really only for those with experience and the right contacts, or who are willing to spend hours a day researching and understanding the stocks in the sector.