September 4, 2020

What’s the most unpopular trait when it comes to successful investing? What’s the one element that most people overlook when it comes to investing? If you have this trait, investing will be much easier because you know you are following your rules. If you don’t have this trait, you can’t tell whether your investing strategy is working or not. If you have this trait, you will have more confidence when it comes to investing and you will have a higher long term return as well If you don’t have this trait, you will have trouble sleeping at night and you will probably lose money. If you have this trait, you can stand tall and be proud of what you are doing. If you don’t have this trait, you will be scared of getting caught and being suspicious of other people. So, what is this unpopular trait to successful investing? Watch this video to find out

90% correct transcript

So welcome back to my channel. And according to some unknown research, most people are uncomfortable talking about money and sex. And today we're going to dive into one of the most unpopular trait about successful investing, and that is integrity. So my name is Eric Seto and I have been investing for over 12 years now. And for the last four and a half years, I have gotten 450% return using a single strategy. So before we start, I just want to congratulate another success story within investing a celebrator, Mike, he sold AIG and city group. And for AIG, he made 211% in nine weeks. And for city group, he made 86% in 2.5 weeks. So congratulations Mike to making such a successful trade. So what is integrity? And if we are looking at the textbook definition of integrity, it means the quality of being honest and having strong moral principles and more uprightness.

Now, why is it important when it comes to investing? And what does that really mean? If you don't have integrity and how you have more integrity per se. And that's what this video is about. And the truth is integrity is important because a certain population within our society does not have it as a CPA. Integrity is actually one of the core foundational values for our profession. Imagine you're working with an accountant that you can't trust, and he handles all your money. That would be a big problem. What in it, what a lot of people don't realize is that integrity is important when it comes to investing too. And when it comes to investing, we have a lot of stories about scams, scandals, you know, illegal insider trading and whatnot. So for example, if you Google or YouTube Enron, then you're going to find one of the biggest scam into industry.

So they have fake revenue and they enter into contracts and they recognize revenue ahead of time. So then, a lot of people lost money because of Enron. Another one that is more recent is Luckin coffee. And that is really a very popular China coffee chain. And again, they have fake revenue and they recently went IPO. And now they are delisted in terms of a third type of fraud or insider trading in this case was during the coronavirus. Some Republicans actually sold the markets before they released the news because they have access to the latest reports or whatnot. So they sold before the market sell off of COVID-19. So you can imagine how people can use information that they have access to, to basically take profits or even deceive. These are the cases where people don't have integrity. And that's why integrity is so important because it creates a more trusting world.

So from the media, we always hear stories of people getting away with breaking the rules and money from it. But if you're not careful, it will make you feel you like, you should break the rule and try to get away with it too. And this is really how you lose money over the long term. When we look at our society, breaking the rule is often seen as a good thing. You know, here is a bird breaking the rule of having a bird standing on a stop sign. Here's a guy that for the college, he's not supposed to be on a phone, no drinking, he can't eat and you can't smoke. And he's doing all four at the same time. And people usually think it's funny. People take photos of it and it goes viral. So we have a good laugh, but when it comes to money, when it comes to investing, you really don't want to be breaking your own rules.

Rules are usually broken for fund for laughs and for greed. But what happens if you break your own rule? This is really one of the key principles and philosophy of my investing approach. Here, you'll see a bar chart. And on the left side, there's an opportunity where you're 95% confident you'll win. And on the right hand side, it's an opportunity where you're only 50 percent confident you will win. So basically like a flip of a coin. Now for my investing strategy and what I teach in investing a celebrator, we focus only on opportunities that we're 95% confident in, and that is super important. So in order for you to invest in companies that you're 95% confident and it takes work, you need to spend time to research the company. You need to understand what the company is doing. Now, it's much easier to invest in a company that you're 50% confident.

Basically you find any company that is in NASDAQ and SMP 500 and you invest in them basically that's a 50, 50 chance of you winning. And when you're looking at day trading, and if you try to place a lot of trade without rules, then your win rate is approximately 50, 50 as well. So when you think about the market is quite follow tile, if you don't have a strategy, then you're basically a 50, 50% chance in terms of winning and losing. And that's why we only focus on opportunities where we are 95% sure we'll win. And that requires hard work approximately one hour a week. What's the difference between a person that has integrity versus a person that does not have integrity. A person that has integrity will follow his own rules. You know, if I said that I only invest in medium to big cap.

I only invested in medium to big cap and a person who does not have integrity. It doesn't mean he breaks all the rules that he set out for himself, but he only followed the rules sometimes. And it is that sometimes that make you lose money. If you have a lower standard than you will think, well, I can follow my rules sometimes. Maybe not this time, because this is a special case. So I'm going to do something different and that's how you taint your investment portfolio. So let me explain what I mean. Here, you're going to see 10 circles and each circle represents an investment opportunity. And for most of the circles, you will find that, Hey, I invest in companies that I'm 95% confident in, okay. And you will see two green circles that I invested in companies that I'm only 50% confident in. Now chances are I'm going to lose money with the 50% confidence investments.

That kind of makes sense, but what happens if I make money? What happens if I make money from the 50% probability investments, then suddenly that will give me confidence because I got away with it. I invested in a company dime, not so confident in, and I got away with it. And that is the crux. And the key problem of this type of thinking over time, if you invest in companies that you're only 50% confident and what will happen here is the second diagram. No integrity over time. You're going to find out you have more and more investments that are only 50% confident in, it's not that great. It's not bad as well, but you're not exiting them. You still have them in your portfolio. And over time, your portfolio is tainted. And here you can see that half of my portfolio now consists of investments, that I'm only 50% confident in.

And that's a big problem because when you think about it, now, my profitability is a lot lower because my win rate is lower. And probably these are not as good investments. That is 50% of my portfolio. And chances are depending on how you manage your risk. And depending on how you manage your losses, you might hold on to them because you think one day it's going to go back up, but it's not going back up yet. So you're in continuously a loss position. A lot of people think about integrity and they think that well, people with higher education actually have more integrity. Now I actually don't have the statistics on that, but I have met a lot of people and I would say it mainly defines into a table, a 2x2 table like this one. So you have people with higher education with high integrity, but you also have people with higher education with low integrity.

And that's where you get the scam. Like Enron, you get the scam like Luckin coffee or whatnot. And you also have people with low education, but have high integrity. And I has met those people before. And you have people with low education and low integrity as well. So whether your education is higher or lower medium, it doesn't really matter because at the end of the day, you want to be a person with high integrity. And if you set out an investing rule for yourself, if you set a standard for yourself to achieve, then you need to uphold yourself to that standard. Just like for myself, I only invest in companies that I'm 95% confident, confident in if I'm not confident in the investment, I don't invest in it. Period. So do you know what else a person with high integrity will do? They will subscribe to this YouTube channel for more investing videos.

So if you haven't subscribed yet, be sure to click the button and subscribe. Now, now I have two stories I want to share with you for people with high education and integrity. So I have actually met a PhD this year and he doesn't have a very strong sense of integrity because I taught him the investment strategy and he kind of followed it to a certain extent. And now afterwards, the moment he saw a small profit, he just took it. So he invested in a company. Yeah, he made a 15% gain or whatnot, and he didn't really follow the exit rules I taught him. Because he didn't respect the investing rule. He just took a small profit and he's gone. Now, if he has followed the investing rule that I have laid out for him. Then he would be making around 60% return right now in less than 12 months.

And when you decide to follow a set of rules, make sure you follow them till the end. It's called follow through. Don't quit halfway because at the end of the day, you leave a lot of money on the table. Now, I have also met and another, our doctor and he has high integrity and he upholds himself to a very high standard. So after joining investing a celebrator within six months, he made over 10 successful trades. And for his portfolio, he made 50% in return. And that is fantastic for this year and the amount of time he's able to achieve this kind of results. So how can you have integrity and improve your investment return? And there are three tips that I can give you. So first you need to be honest with yourself and with others. And if you're not honest with yourself, then chances are, you're going to lie to yourself.

You're going to give yourself excuse, basically, leeway to not follow the rule. You set up for your investing strategy or life in general. Second, don't try to cheat the system. And if you cheat on one system, it is likely that you cheat on another system and another system, another system, and this actually applies to all areas of life as well. That's so important because when you are deciding your own investing strategy, you're designing a system and you don't want to be the person that cheats on your own system because you decided yourself. And unless you follow the rules that you set out for yourself, you can't really tell whether your system works or not. For example, let's say you design an investment plan and there are 10 steps, okay? For some odd reason, you only follow five 11 steps. You lost money. Now, can you really conclude that you lost money for this investing plan?

Well, you can't because you only follow five out of the 10 rules. What if you implement all 10 rules, if you are losing money and you're not following a investing plan, you don't have discipline or whatnot, and it's not proven. Then chances are, you need higher amounts of integrity. You need to follow through in terms of investing strategy. So then you become profitable. And finally, you should always remind yourself to do the right thing. You know, it is easy to kind of take a shortcut here and kind of skip a couple of steps and kind of invest in some risky opportunities a couple of times, but you gotta remind yourself, you need to do the right thing because that's the long term average return that you're looking for. It is very easy to do the wrong thing. Just to get ahead. When in fact you should focus on doing the right thing, and this is actually one of the mottos of Google, where you focus on doing the right thing and look where they are now.

So the truth about integrity is that it takes commitment and work. And you might not experience the short term gains today, but you will definitely experience the longterm game for the last four and a half years. I've been using the same strategy over and over again, even though there's an oil price crash, even though there is airplane crash, even though there are it issues with the companies I invest in, even though there's a hurricane Trump trade war, COVID-19 I follow the same rules. I don't deviate from them because I know it works. And I only invest in companies that I'm 95% confident in. That's why it's so important for you to follow your own investing plan as well. That is proven and well-defined. And that is really the core of investing accelerator. Ever since I start following one strategy that works I made 450% in the last four and a half years, and I have taught almost a hundred people now on how to invest in the market.

Let me just recap this video. You need to give yourself a high standard, follow your own rules. You need to do great research when it comes to investing and you want to only invest in the best opportunities. Only. There are a lot of stocks in the markets. There are a lot of stocks in Toronto, NASDAQ, New York stock exchange, and you only want to invest in the best opportunities only. And once again, I want to congratulate Mike for making 211% in nine weeks from AIG and also 86% in 2.5 weeks from city group. So that's a fantastic return within the period of time this year. So congratulations, Mike and I look forward to your next successful investments. So my mission is really to help people without a financial background to master investing and target 30% return using an hour a week. So if you're interested in learning more about my investing strategy, you can always visit my website five minute case study. The link is below as well. And then you can watch a three hour webinar on how I invest in a market. Once you sign up, put in your name and email and click register, then you can click on play to watch the webinar. So I'll see you inside. So thank you for watching

And I hope you enjoy the video. Please help support me by like subscribe and you can watch the next recommended video here as well. So I'll see you in the next line.


About the author 

Eric Seto

Eric Seto is an investor with over 10 years of experience. He travelled around the world to help with auditing, accounting, purchase and sale of companies.

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