I. Current Topic#
This episode revolves around ChatGPT’s analysis of CLEC Investment Education, deeply comparing CLEC investment with common investment education on the market, influencers, and common investment books. It emphasizes the uniqueness, practicality, executability, and systematic nature of CLEC investment. At the same time, James shares the growth path of investors, the necessity of asset allocation, the importance of cash flow management, and how to deal with market fluctuations, and answers questions raised by students regarding the A-share NASDAQ premium, the American political economy, and AI regulation.
II. Briefing Content#
Investment Philosophy and Strategy#
Differences between CLEC Investment and Market Books, Influencers:
- Core Strategy: CLEC uses the NASDAQ 100 Index Fund (QQQ) as its core, combined with leveraged funds (QLD) and bank pledges for asset allocation, targeting an annualized return of 12%~20%.
- Traditional Investment Education: Usually only emphasizes large-cap index investing (such as VOO, SPY) or value investing, rarely mentions leveraged funds, and even less involves specific capital operation strategies (such as stock pledges).
- Influencer Finance: Often oversimplifies investing or recommends various immature investment targets (such as newly issued ETFs), lacking systematicity and risk control.
- Financial Freedom Strategy: CLEC provides a clear path to financial freedom, including when to start stock pledges, the amount that can be safely withdrawn each year, and how to achieve financial freedom through capital operations, rather than just “saving money + investing.”
- Practicality and Executability: CLEC provides concrete and actionable plans, such as how much assets you need to reach to start pledging, how to adjust asset allocation according to market conditions, while many books and courses only have theory and lack practical guidance.
- Capital Operation: CLEC emphasizes capital operation through bank credit, wealth management mortgages, stock pledges, etc., to achieve the goal of “borrowing money to invest, borrowing money to spend, and asset appreciation,” which is rarely involved in traditional investment education and influencer finance.
- Risk Management: Emphasizes risk control and has specific coping methods in the event of a downturn.
Comparison with Common Investment Books:
- “The Psychology of Money”: Emphasizes long-term investing and saving, but CLEC goes a step further by accelerating wealth accumulation through leverage and capital operations.
- “A Random Walk Down Wall Street”: Advocates investing in the broad market index (SPY), but CLEC believes that QQQ has more growth potential and combines leveraged funds and cash for asset allocation.
- Buffett: Buffett is the representative of value investing, requiring in-depth research on companies and industries, while CLEC believes that ordinary people do not need to have professional knowledge and only need to invest in index funds.
- “Rich Dad, Poor Dad”: Focuses on real estate investment, while CLEC believes that stock investment and capital operations are more efficient and does not recommend investing in real estate.
Investor Growth Process:
- Beginner Stage: Learn and practice long-term investing principles, and don’t panic and sell (already in the top 20% of the market).
- Advanced Stage: Learn and use leveraged funds and stock pledges (top 20% of the market).
- Advanced Stage: Proficient in stock pledges, cash flow management, and asset allocation, and fearless of market fluctuations (top 1% of the market).
Core Investment Philosophy:
- Mission: To awaken the capital awareness of ordinary people and help them achieve financial freedom, rather than for traffic and making money.
- Investment Target: Focus on investing in QQQ, believing in the long-term development of American technology.
- Leverage Use: Reasonably use leveraged funds (QLD) to magnify returns, but strictly control risk and avoid short-term operations.
- Smart Rebalancing: According to market ups and downs, dynamically adjust between QQQ and cash (or short-term bonds) to achieve “buy low and sell high.”
- Stock Pledge: Obtain cash flow through stock pledge to achieve “consuming without selling stocks” and ensure continuous asset appreciation.
- Simple and Effective: The investment strategy is simple and easy to understand, can be executed in the long term, does not require monitoring the market, and does not require stock picking.
Asset Allocation and Risk Management#
Importance of Asset Allocation:
- Survival Guarantee: When the market fluctuates violently, reasonable asset allocation is the key to survival.
- Cash is King: Always maintain at least 20% of cash (or cash equivalents) to cope with emergencies and market declines.
- Dynamic Balance: Adjust between different asset classes according to market conditions to reduce risk and increase returns.
Importance of Long-Term Investing:
- Market Trends: Firmly believe that the market will move upwards in the long run and do not predict short-term fluctuations.
- Patient Holding: Investing requires time and patience, and wealth accumulation takes time.
- Emotional Control: Not affected by market sentiment and short-term information, and maintain an optimistic attitude.
Risk Management:
- Risk Awareness: Recognize the high risk of investment and be mentally prepared for a possible drop of 50% or even 70%.
- Survival First: The primary goal of investing is to “stay alive” rather than pursuing short-term high returns.
- Cash Reserve: Adequate cash reserve is the most effective means to cope with risks.
- Smart Rebalancing: When the market falls, use cash to buy more QQQ or QLD to lower the average cost.
Stock Pledge:
- Core Strategy: Obtain cash flow through stock pledge for living expenses or other investments to achieve “spending money without selling stocks.”
- Advantages: Avoid selling high-quality assets and enjoy the benefits of continuous asset appreciation; achieve the ideal state of “borrowing money forever, never repaying, and no interest.”
Other#
- About Group Discussions:
- Focus on the Topic: Group discussions should revolve around CLEC investment philosophy and strategies, and not discuss content beyond the scope.
- Avoid Misleading: Do not discuss newly issued ETFs or other investment targets that do not conform to CLEC investment principles.
- Answer Questions: The group owner and senior students should help new students answer questions.
III. Q&A Session#
Eason#
Sharing:
- A-share NASDAQ ETF Premium Issue: Elaborated in detail the fundamental reasons for the premium of domestic A-share NASDAQ ETFs (such as 513100, 159941, etc.):
- Foreign Exchange Control: China implements foreign exchange control, and each fund company has a state-approved quota. The quotas of old fund companies are usually tight, resulting in limited off-site subscriptions (suspension or limits), and investors can only turn to buying ETFs on the market, which pushes up on-site prices and forms a premium.
- Market Sentiment: The A-share market is easily affected by policies, hot spots, and other factors, and rapid capital flows can lead to violent fluctuations in the premium of the NASDAQ ETF. For example, when the market pursues other hot sectors, funds may withdraw from the NASDAQ ETF, leading to a decrease in the premium or even a discount.
- Long-Term Trends: In the long run, due to the existence of foreign exchange controls and investors’ continued optimism about the NASDAQ, the premium will exist for a long time. However, in the short term, the premium will be affected by market sentiment and capital flows.
- On-site and Off-site Differences: The same fund has different codes and trading methods on-site (exchange-traded funds, ETFs) and off-site (subscribed and redeemed through the fund company). Off-site subscriptions are usually based on the fund’s net value, while on-site transaction prices are affected by supply and demand, which may result in premiums or discounts.
- Impact on Investors: The premium of the A-share NASDAQ ETF is unfavorable to ordinary investors, especially buying at a higher premium, which increases the investment cost.
- Investment Recommendations:
- Long-Term Investing: If it is a long-term investment, there is no need to worry too much about short-term premium fluctuations.
- Be Cautious When the Premium is Too High: When the premium is too high (such as exceeding 10%), you can wait appropriately or consider other investment channels.
- Pay Attention to Discount Opportunities: When a discount occurs, it is a good time to buy.
- Open an Account in Hong Kong: If conditions permit, you can consider opening an account in Hong Kong to directly purchase US stock QQQ, avoiding premium problems, and you can also allocate leveraged funds (QLD).
- James’ Comments:
- Fully agrees with the doctor’s analysis that the premium problem of A-share NASDAQ ETF is indeed caused by factors such as foreign exchange controls and market sentiment.
- Suggests that investors who are more sensitive to premiums or want greater investment flexibility can consider opening an account in Hong Kong.
- A-share NASDAQ ETF Premium Issue: Elaborated in detail the fundamental reasons for the premium of domestic A-share NASDAQ ETFs (such as 513100, 159941, etc.):
Question 1: After Trump takes office again, will his domestic and foreign policies be very different from the past (including his first term), and will these changes shake the American system?
- James’ Response:
- American Strength: Clearly stated that the United States is very strong and Trump will make the United States stronger.
- Quality of Political Officials: American political officials are very good, they are loyal to the country, and can give up personal interests for national interests (for example, many political officials come from Goldman Sachs and other Wall Street investment banks, giving up high-paying positions).
- International Situation: Touched on international issues without commenting too much to avoid controversy.
- Ukraine Issue: Believes that the Ukraine issue was caused by Zelensky, who should be responsible for the current situation in Ukraine. Implies that Ukraine is being used by the United States.
- Summary: Overall optimistic about the United States and Trump’s policies, believing that the United States will continue to remain strong.
- James’ Response:
Belle#
- Sharing:
- Learning Experience: Shared in detail her learning journey following James to learn CLEC investment for 4-5 years, from a “newbie” who knew nothing about investment to gradually understanding and practicing long-term investment, leveraged funds, stock pledges, asset allocation, and other concepts, and finally realizing a change in mentality and improvement in investment skills.
- ChatGPT Application: Introduced how she input the learning content and personal experience of CLEC investment into ChatGPT (version 4.0) and obtained ChatGPT’s in-depth analysis and summary of CLEC investment. She found that ChatGPT can not only understand the core strategy of CLEC investment, but also analyze her psychological changes and decision-making logic in the investment process.
- Comparison with Other Investment Methods: In the learning process, Belle also read other investment books and influencer viewpoints, but she found that many investment methods are either too complex or too one-sided, lacking systematicity and operability. She believes that CLEC investment provides a complete, clear, and executable investment system, which makes her full of confidence in future financial freedom.
- James’ Comments:
- Highly praised Belle’s learning achievements and summarizing ability, believing that her understanding of CLEC investment is very accurate.
- Expressed surprise and appreciation for ChatGPT’s analysis results, believing that ChatGPT’s understanding of CLEC investment even exceeded his own, which gave him a deeper understanding of the potential of AI.
- Affirmed Belle’s questioning skills.
IM#
Sharing:
- Learning Experience: Shared his feelings about learning CLEC investment, believing that CLEC investment not only makes him feel at ease and confident about his future financial situation, but also makes him think more deeply about life.
- Case Observation: Shared his observation of a 70-year-old retiree. This old man had devoted his whole life to his family and work, but felt confused and empty after retirement, and did not know where his life value was.
- James’ Comments:
- Dilemma of the Working Class: Pointed out that this is a common dilemma for many working-class people, who spend their whole lives working for others but neglect their own life goals and values.
- Awakening of Life: Emphasized the importance of awakening in life, realizing that you are not living for others but for yourself. Plan your life early and don’t feel confused until retirement.
- Significance of Financial Freedom: Financial freedom is not only the accumulation of wealth, but also to obtain more time and freedom to pursue your life goals, to accompany your family, and to experience life.
- Living in the Present: Introduced the concept of “mindfulness,” that is, focusing on the present, reducing thoughts, and living in every moment, so as to obtain inner peace and happiness.
- Definition of Capitalist: Redefined the concept of “capitalist,” pointing out that true capitalists are those who do not need to work themselves and can obtain wealth through capital operation.
- Three Levels of Investment: Divided investors into three levels:
- Rich People: Obtain a certain amount of wealth through investment (such as index funds).
- Wealthy People: In addition to investment, they also know how to use leverage (such as credit, wealth management mortgages) to accelerate wealth accumulation.
- Tycoons: Master advanced capital operation techniques such as stock pledge to achieve “consuming without selling stocks” and continuous asset appreciation.
- Social Contribution: Emphasized that although CLEC investors “do not work hard,” they make huge contributions to society through capital allocation.
Question: How to get along with people (especially family and friends) who do not understand the CLEC investment philosophy? They may think we are “not doing our job” or “fond of ease and averse to labor.”
- James’ Response:
- Understand the Differences: Acknowledged that there are differences between the CLEC investment philosophy and traditional concepts, and it is normal not to be understood.
- Do Your Own Thing: Do not need to force others to understand, do your own investment well, and prove it with practical results.
- Patient Communication: If the other party is willing to understand, you can patiently explain the principles and advantages of CLEC investment.
- Share Resources: You can share James’ videos, articles, handouts, and other resources to give the other party a more comprehensive understanding of CLEC investment.
- Respect Choices: Respect everyone’s choices, do not force, and do not argue.
- Example is Better Than Precept: Put it into practice yourself and live a life of financial freedom and spiritual freedom, which is the best demonstration.
- James’ Response:
Dave#
- Sharing:
- Responding to “National QQQ” Concerns: Some students worry that if everyone buys QQQ, will it lead to market imbalances or a decline in QQQ’s returns. Dave pointed out that this concern is unnecessary.
- Small Market Value of QQQ: He provided data, pointing out that the market value of QQQ (about $300 billion) is very small (about 0.5%) relative to the total market value of the entire US stock market (about $62 trillion), and even if more people buy QQQ, it will not have a big impact on the market.
- The Choice of a Few: Emphasized that CLEC investors are a minority, not a majority, and the vast majority of investors will still choose other investment methods.
- James’ Comments:
- Fully agrees with Dave’s point of view, and reiterated that the market value of QQQ is very small and CLEC investors are a minority.
- Added that even if everyone comes to buy QQQ, there will be no problem because the market will automatically adjust.
Haoqing#
- Sharing:
- Economic Comparison between Taiwan and South Korea: Compared the economic development of Taiwan and South Korea, pointing out that Taiwan’s economic growth mainly relies on a few technology companies such as TSMC, while South Korea’s economy is more diversified, mainly dominated by large chaebols such as Samsung and Hyundai.
- “Individual Stocks” and “ETFs”: He believes that Taiwan’s economic model is more like “heavy positions in individual stocks” (TSMC), while South Korea’s chaebol model is more like “investing in ETFs” (containing multiple industries and companies).
- Taiwan’s Worries: Worried that Taiwan is overly dependent on a single industry, and once TSMC has problems, it will have a great impact on Taiwan’s economy.
- Impressions of South Korea: South Korea is unfriendly
- James’ Comments:
- Agree with Observations: Agreed with Haoqing’s observations on the economic models of Taiwan and South Korea.
- Taiwan’s Advantages: Pointed out that Taiwan’s soft power (such as talent, innovation ability, financial environment, etc.) is very strong, but compared with the United States, there is still a big gap.
- Focus on Yourself: Emphasized that Taiwan should focus on developing its own advantageous industries and improve its overall competitiveness, rather than comparing with other countries and regions.
- Importance of Capitalists: Reiterated that both individuals and countries should learn the thinking of capital operation and become capitalists, rather than relying solely on labor and production.
- Taiwan’s Financial Environment: Believes that Taiwan’s financial environment is very good, even better than the United States (such as low interest rates, no capital gains tax, etc.), providing good conditions for investors.
- No Need to Compare: Taiwan doesn’t need to compare with other Asian little dragons.
Lina#
- Question: Regarding the issues of AI regulation and AI fraud, how should ordinary people prevent it?
- James’ Response:
- People Vulnerable to Fraud: Pointed out that elderly people, people who lack investment knowledge, and people who covet petty gains are more vulnerable to AI fraud.
- Preventive Measures:
- Do Not Click on Links Randomly: Do not click on links from unknown sources, especially those that claim to provide free benefits.
- Do Not Join Unknown Groups: Do not join investment groups, financial management groups, etc. from unknown sources.
- Do Not Covet Petty Gains: Do not believe in “pie in the sky” good things, and do not be tempted by promises of high returns and low risks.
- Verify from Multiple Parties: If you encounter suspicious investment opportunities, verify from multiple parties and consult professional opinions.
- Protect Personal Information: Do not easily disclose personal information, especially sensitive information such as bank accounts and passwords.
- AI Regulation Issues:
- OpenAI is Not Open: Pointed out that OpenAI’s “non-openness” is a problem. The decision-making process of AI should be transparent to humans and accept human supervision.
- Honesty of AI: Believes that AI should be honest with humans and should not deceive humans.
- Necessity of Regulation: Emphasized the necessity of AI regulation, but how to regulate it specifically still needs further discussion.
- James’ Response:
Jason#
- Sharing:
- Organizing Manuscript: Shared the progress of organizing James’ videos and articles into a manuscript, which has been organized to the fifth chapter.
- Personal Gains:
- Deepen Understanding: Deepened his understanding of the CLEC investment philosophy by organizing the manuscript.
- Leave Information: Reduced his attention to financial news and market information and focused more on long-term investment.
- Focus on Life: Has more time and energy to invest in his hobbies and public welfare activities.
- James’ Comments:
- Highly affirmed and appreciated Jason’s organizing work and personal growth.
- Question: For investors in mainland China who cannot purchase leveraged funds (QLD), is it possible to keep investing in QQQ at regular intervals? Is this method feasible?
- James’ Response:
- Completely Feasible: For investors in mainland China, since they cannot purchase leveraged funds, the following strategies can be adopted:
- Office Workers:
- Retain six months of emergency reserve funds (cash).
- Invest all remaining funds in A-share NASDAQ ETFs (such as 513100, 159941, etc.).
- Hold for the long term and invest regularly.
- Retirees:
- Adopt an 80/20 asset allocation (80% invested in A-share NASDAQ ETFs, 20% invested in cash or short-term bonds).
- Rebalance regularly.
- Office Workers:
- Advanced Strategies:
- Open an Account in Hong Kong: Suggests that after investing for a period of time (such as 3-5 years), if conditions permit, investors can consider opening an account in Hong Kong to directly purchase US stock QQQ and QLD and enjoy lower transaction fees and more flexible investment options.
- Gradual Transition: Gradually transfer A-share assets to a Hong Kong account to achieve a more optimized asset allocation.
- Additional Notes:
- Keep it simple when you first start investing * If the child’s account is not managed by him, you can invest in QLD
- Completely Feasible: For investors in mainland China, since they cannot purchase leveraged funds, the following strategies can be adopted:
- James’ Response:
Julie#
- Question: Worries about inflation and the Fed’s policies. Recently, US CPI data has risen, and the market is worried that the Fed will postpone interest rate cuts or even raise interest rates, which will negatively affect the stock market?
- James’ Response:
- Relationship between Interest Rates and the Stock Market:
- No Obvious Correlation: Clearly pointed out that there is no obvious correlation between the 10-year US Treasury yield (TNX) and the trend of QQQ. Suggested that students can make their own graphs for comparison to verify this conclusion.
- Do Not Pay Too Much Attention: Do not pay too much attention to interest rates and the Fed’s policies, as these factors have little impact on the long-term trend of the stock market.
- US Economic Prospects:
- Very Optimistic: Very optimistic about the US economic prospects, believing that the next four years (Trump’s second term) will be better than any of the past four years.
- Reasons:
- Strong System: The United States has a strong political and economic system that can self-repair and adjust.
- Excellent Political Officials: Trump’s government officials are very good and have the ability to cope with various challenges.
- Economic Policies: Trump’s economic policies (such as tax cuts, trade protection, etc.) are conducive to the long-term development of the US economy.
- Investment Recommendations:
- Hold for the Long Term: Continue to hold QQQ for the long term and do not be affected by short-term market fluctuations.
- Seize Opportunities: Do not miss the opportunity for the rapid development of the US economy, now is a good time to invest in the United States.
- Relationship between Interest Rates and the Stock Market:
- James’ Response:
Mike#
- Sharing:
- TSMC Premium: Discussed the issue that TSMC’s ADR (TSM) in the United States has a premium relative to the Taiwan parent stock (2330.TW).
- US Policies: Shared his views on US policies, believing that the United States is taking a series of measures to enhance its competitiveness.
- James’ Comments:
- Reasons for the Premium:
- Market Differences: Premiums and discounts are normal phenomena between different markets, just like the price of the same commodity may be different in different stores.
- Capital Flows: The US market has more funds and institutional investors, and the demand for high-quality assets is higher, leading to price increases.
- Convenience: US investors are more inclined to buy familiar stocks in the local market, even if there is a premium.
- Taiwan’s Financial Opening: Believes that whether Taiwan’s financial market is fully open has no direct relationship with TSMC’s premium in the United States.
- TSMC’s Strategy: Suggests that TSMC adopt a “cold treatment” strategy for the investment requirements of the United States and not easily give in.
- Affirm Mike: Affirmed Mike’s insights and analytical skills.
- Reasons for the Premium:
Becky#
- Sharing:
- California Problems: Expressed dissatisfaction with the current situation in California, including severe homelessness, inefficient government, insufficient public services, high home insurance costs, and difficulty in reconstruction.
- Medicare Issues: Shared the difficulties encountered in helping family members apply for Medicare (federal health insurance), believing that the Medicare system is very complex and difficult for ordinary people to understand.
- James and Mike’s Response:
- Acknowledge the Problems:
- Acknowledged that there are many problems in California, and these problems are real.
- Pointed out that these problems are mainly caused by the mismanagement of the California governor and government.
- America Needs Reform:
- Emphasized that the United States needs to be reformed, especially in government efficiency, public services, and health insurance.
- Believes that the Trump administration is working hard to solve these problems. - Side Effects of Capitalism:
- Pointed out that problems such as homelessness and wealth inequality are inherent defects of the capitalist system and cannot be completely avoided.
- The goal of CLEC investment is to help people achieve financial freedom under the capitalist system and reduce the impact of these problems on individuals. - Importance of Personal Decisions:
- Emphasized that personal decisions in investment and life are very important.
- Pointed out that the house being burned down was a mistake in personal investment decision-making (over-reliance on real estate).
- Suggested that everyone learn CLEC investment and reduce risks through reasonable asset allocation. - Taiwan’s Experience:
- Shared Taiwan’s experience in taxation, medical care, public services, etc., believing that Taiwan’s system is simpler and more efficient than the United States.
- Believes that the United States can learn from Taiwan’s experience.
J#
- Question: How to introduce the CLEC investment philosophy to my children aged 30-40? Are there any specific videos or materials that can be recommended to them so that they can quickly understand the core ideas of CLEC investment?
- James’ Response:
- Understand the Needs: Recognized that introducing CLEC investment to young people requires a more concise and direct approach.
- Consider Special Lectures: Considered making a special lecture on “From Rich to Wealthy to Tycoon,” focusing on explaining the key differences and transformation methods between these three stages.
- Emphasize “No Income”: Emphasized the importance of “how to get yourself no income,” which is a key step in achieving financial freedom.
- Follow-up Plans: Expressed that he would seriously consider this issue and launch related teaching content as soon as possible.
- James’ Response:
IV. Wonderful Quotes#
Investing is very simple, but not easy, not easy. – James
Emphasizes the importance of learning and understanding investment concepts, which requires time and patience, and should not be rushed.
Happiness is a gift, wealth is a human right. Financial freedom is a right that everyone should have. – James
Emphasizes the importance of financial freedom, encouraging everyone to pursue financial freedom, which is a right and an attitude towards life.
Let him be strong, the breeze caresses the mountains. Let him hate, the bright moon creates the great river. Let him be ruthless, let him be evil, I have enough true energy in one breath. – Jin Yong
When discussing the economic comparison between Taiwan and South Korea, James quoted Jin Yong’s poems, emphasizing focusing on one’s own development, not comparing with others, and doing one’s own thing best.
My destiny is determined by me, not by heaven. – Nezha
Emphasizes the autonomy of life, fate is in one’s own hands, and should not be influenced by external factors.
What is the final decision of the success of life? How many people love you? – Munger Emphasizes the importance of interpersonal relationships, money is not everything in life, love and being loved are the most important.
Borrow money forever, never repay, no interest. – James
The core concept of stock pledge, achieving financial freedom through borrowing, while assets continue to appreciate, which is an advanced strategy of CLEC investment.
American warships have cannons, and the bullets don’t cost money. –James
Taiwan’s financial investment environment is better than that of the United States. The cost of borrowing is low, and the investment environment is more favorable.
How to get yourself no income? It is a kind of wisdom and a kind of ability. – James
Emphasizes the importance of reducing taxable income through legal means, which is a key step in achieving financial freedom and a kind of wisdom.
Homelessness is a side effect of capitalism. – James
While capitalism brings economic development, it also leads to problems such as wealth inequality and homelessness, which cannot be completely avoided.
V. Summary#
This episode contains a lot of information. Through ChatGPT’s analysis, James systematically elaborated on the concepts, strategies, and advantages of CLEC investment, and compared it with traditional investment education and influencer financial management. At the same time, it also deeply discussed important topics such as investor growth paths, asset allocation, risk management, and cash flow management, and answered various questions raised by students regarding the A-share NASDAQ premium, the American political economy, AI regulation, and personal financial planning.
James emphasized that long-term investing, focusing on indices, reasonably using leverage, doing a good job of asset allocation, maintaining cash flow, living in the present, and pursuing financial freedom and spiritual freedom are the core ideas of CLEC investment. He encouraged everyone to learn and practice CLEC investment and achieve financial freedom and control their lives through their own efforts.
Disclaimer: This article is only a personal study note and does not constitute any investment advice.