Thursday, December 27, 2007
ps. for questions, comments or suggestions please email me at firstname.lastname@example.org
before i go as of last wednesday santa claus rally has been confirmed by the market! Hope this is a strong rally! Fly high psei!!!
Tuesday, December 18, 2007
last saturday with my dad in the airport we got to talk to a businessman friend and about china and a lot of other stuff about business. :) he mentioned that the bad debt rate in china is 32% which is even worse than the us subprime crisis. And his question was that why isnt it affecting china the way it does in the us??? i really cant answer that question also. :) and besides i have to verify the numbers that he was saying. :) but i agree with what he said that as of the moment china will just keep on moving up because there is a lot of money going in because of the coming beijing olympics in 2008. i remember my cousin telling us when we were there for vacation last november 2006 that china is really preparing for this event because it will be their coming out party and tell the world that “we have arrived!” my dad's friend cautioned that the stock market in 2008 will go down especially after the china olympics because we dont know if investors will continue to pour the money in or will they take it all out. :) well he has a very good contention and all opinions are correct until they are proven wrong. :) hehehe but i think otherwise, and some say that i am nuts or too optimistic but i believe that it is just common sense. Assets or i should say most assets by nature in the long term really increase in price or it is inflationary. Can you think of assets that decreased in price after 20. 30, 40 or 50 years. :) i bet you can only think of a few things that decreased in price. :) and i also believe that economies of nations or regions move in cycles or periods. :) as the saying goes “when youre down you have nowhere to go but up” and “when youre up you have nowhere to go but down.” :) and that really applies with economies also. :) the last decade the united states had one of the greatest bull markets in history and of course as they say “all good things come to an end.” :) i believe that the signal for the downtrend was the sub-prime crisis which was triggered by granting of too much credit which almost always happens in a very bullish environment. :) and of course the cost of living in progressive countries is almost always high and the opposite usually happens in not-so-progressive countries. :) which asia as a whole is catering to the world. :) its cheap labor and products. :) slowly asia is now catching up with the rest of the world led by china and india. With more jobs to people would also mean higher consumption and sooner or later would also drive commodities, basic goods and asset prices up. This is a perfect example of the law of supply and demand at work. :) when everything gets too expensive in progressive countries it forces the market to look for cheaper alternatives(just like a housewife looking to buy groceries at the cheapest store.). Does this explain the emergence of call centers all over asia??? :) i just cant wait for the day that we can be at par with the us hehehe it might a dream right now but who nows in time. :) i wish everyone a merry christmas and that the spirit if christmas is in giving. I was just talking or maybe complaining is the better word of all my expenses to a friend this december for gifts and treats but i realized that there is so much to be thankful for. :) it is also nice to give back to family and friends all the blessings that you have received. :) thank you lord for everything. :) let this be a christ-filled christmas for all of us. :) God bless and a merry christmas to all. :)
Monday, December 10, 2007
A lot has happened since my last post. :) my best friend asked for a lunch meeting with me and admitted his mistake and asked for an apology which i accepted but i have to admit that i still have a little hatred towards him for that betrayal but in time i know i will forget what happened. Meanwhile my cousin has avoided or maybe you could call it refused to talk with me for fear that i might scold her. Well who i am to do that she is old enough and i assume that she knows what shes doing. :) my dad and i went to manila also last week because his friend wanted to consult him about investing in real estate. His friend has a lot of cash but due to the low interest rates he is forced to put his money elsewhere or a better return on his capital. :) talking to some of the high officials of a few banks they can see that interest rates will be around this level for the next five years which i can say is LOW. :) my dad also shares the same sentiment and i believe the different classes of assets will continue to appreciate in the near future and that includes stocks. :) but what scares people from getting into the market is if the “bubble” bursts just like what happened 10 years ago. In that aspect as far as im concerned the philippine stock market is still fairly valued and even undervalued a bit. And bubbles only happens when everything is overpriced and with this assumption i think our market is still healthy with the occasional ups and downs. :) which is typical of mr market. :)
i just celebrated my birthday a few days ago and i kinda got the “birthday blues” as they call it but thanks to friends, someone special and family i had a great day. :) i thank the lord for all the blessings and for all the people close to me. God bless to everyone and good luck.
p.s. For any comments, suggestions and questions please email me at email@example.com
Sunday, December 02, 2007
p.s. If the market does rally we might as well call it the trillanes rally than the santa claus rally! :)
Sunday, November 25, 2007
Tuesday, November 20, 2007
Broadly speaking, the price of common stocks is governed by the prospective earnings. These prospective earnings are, of course, a matter of estimate or foresight; and the action of the stock market on this point is usually controlled by the indicated trend. The trend is gauged in turn from the past record and current data, although at times the expectation of some quite new development will pay a determining part.
The price of common stocks will depend, therefore, not so much on past or current earnings in themselves upon what the security buying public thinks the future earnings will be. (there are also important influences of a general or technical nature affecting stock prices-such as credit, political, and psychological conditions-which may not be closely related to any estimate of future earnings; but such influences will either eventually reflect themselves in the earnings or else prove to be quite temporary.)
In the ordinary case the price of a common stock is the resultant of many estimates of what the earnings are going to be in the next six months, in the next year, or even further in the future. Some of these estimates may be entirely incorrect and some may be exceedingly accurate; but the buying and selling by the many people who make these various estimates is what mainly determines the present price of a stock.
The accepted idea that a common stock should sell at a certain ratio to its current earnings must be considered more the result of practical necessity than of logic. The market takes the trend or future prospects into account by varying this ratio for different types of companies. Common stocks of enterprises with only slight possibilities of increasing profits ordinarily sell at a rather low price-earning ratio(less than 15 times their current earnings); and the common stocks of companies with good prospects of increasing the earnings usually sell at high price-earnings ratio (over 15 times the current earnings). Thus, two common stocks may show the same current earnings per share, may be paying the same dividend rate, and be in equally good financial condition. Yet stock ABC may be selling at twice the price of stock XYZ simply because security buyers believe that stock ABC is going to earn a good deal more than XYZ next year and the years after.
When neither boom nor deep depression is affecting the market, the judgment of the public on individual issues, as indicated by market prices, is usually quite good. If the market price of some issue appears out of line with the facts and figures available, it will often be found later that the price is discounting future developments not then apparent on the surface. There is, however, a frequent tendency on the part market to exaggerate the significance of changes in earnings both in a favorable and unfavorable direction. This is manifest in the market as a whole in periods of both boom and depression, and it is also evidenced in the case of individual companies at other times.
At bottom the ability to buy securities-particularly common stocks-successfully is the ability to look ahead accurately. Looking backward, however carefully, will not suffice, and may do more harm than good. Common stock selection is a difficult art-naturally, since it offers large rewards for success. It requires a skillful mental balance between the facts of the past and the possibilities of the future.
Monday, November 12, 2007
Thursday, November 01, 2007
Saturday, October 20, 2007
Thursday, October 11, 2007
Saturday, October 06, 2007
when i was in hong kong there were a few simple things that i noticed that when i point this out to you you woud be surprised how you couldve taken it for granted. My trip to the said country was really for business but going around the country you cant help but notice some of the things there. Hong kong has very strong consumer spending like i was surprised when there was a line to go inside louis vuitton??? was really surprised to see that and i dont blame them for doing that because a lot of people go in the store not just to look but also to buy!!! there are a lot of buyers from hong kong residents but i believe that a big part of their costumers are people from the mainland. Which again im stressing that point that i have been making with you guys here. There will be an asian boom coming in the next few years and it is now believe almost inevitable now with the rise of metals, weakening of the us dollar and the looming recession of the us caused by the subprime crisis. Sooner or later fund managers and businessman will put their money somewhere where they can see promise or potential and that would be in asia. There will be shift in funds to asia!!! money is never lost it is only transformed or if you want transported in another place. :)
another thing that i also noticed in hong kong was the emergence of macau! Imagine this the venetian and wynn put up casinos there and soon mgm will have theirs operational also! What does this mean??? whenever there is a casino it means that there are people who are gamblers??? nahhhh just kidding it means that there are people with cash or excess money or in short people with money to burn. :) american companies put casinos there in macau to be able to get a piece of the pie and they see the potential in asia. :) just imagine folks three casinos in macau! Thats how confident they are in the asian market. :) if other people are so bullish with us here in asia shouldnt we also be bullish on ourselves???? :) another thing that i think also will help push up asia will the beijing olympics in august next year. :) it will be like a showcase of china and asia to the rest of the world. :) i wonder what is the effect of the olympics on the host country before and after the said event??? i think that would be an interesting study. :) i think an asian boom in the next few years is eminent but of course dont expect it to go up like a rocket i know there will still be some volatility but the general trend would be up. :)
there are only three things that could happen to an economy it could: go up, go down or move sideways. On the part of the us it is really going to go down even with the fed rate cuts because it is only a short term solution to the problem. It will solve the problem and calm the us markets in the short term but it is inflationary in the long term. It will drive the prices of different classes of assets up. And one asset that im really keeping an eye on is gold. :) when gold broke $695 my opinion was that the minimum upside of gold was $740 and it has already reached that mark and what it will do after that we have to see and gold will be supported by traders in the $690-$700 level. But i really do like the potential of gold with the weakening of the us dollar. :) i like gold so much that i even “speculated” on philex mining. :) i bought the stock of the company because i was confident with the rise in the price of gold and not because of the company itself. :) the market is now up almost 20% year to date and it is nice to see it back where it was before the panic but im still thankful for that for i was able to get shares in ayala corporation and national reinsurance at a good price. :) i attended the tatler 6th anniversary ball last saturday and it was a thrill for me to see all the bigwigs and taipans that shape our economy. :) look, observe and notice all the things that are happening around you to help you make your investment decisions. :) its nice to be back home. :) good luck and take care to everybody. :)
p.s. After a week of trying i have finally gotten through blogger!!! phew!!!
Wednesday, September 12, 2007
okay now lets get down to business, last week was a really bad week for me it was so bad that i decided to go to the barber and had almost all of my hair shaved!!! hehehe problems with business, work and i must admit in the arena of love. But anyway ive recovered and got back on my feet and this week is better for me. :) if its not better then i should make up reasons on why this week will be better for me. :) im just happy because ayala corporation just announced that they are doing a 2.5B stock buyback program!!! this just shows how confident the management is on the value of their company. :) im so happy i was able to get shares of a great company at a fair price. :) patience really does pay off sometimes. :) the week started out with me reading the articles of jack galt and ron nathan aka mr bearbull :) and im glad that somehow we share the same sentiments in some aspects. Mr bearbull and i agree that the us is really due for a recession and he also stated that maybe it might be safer to invest in emerging markets than the us. Ive said many times that i believe that there will be a shift of funds to asia from the us due to the recession. :) i think there will be more panic to follow because of the subprime problem that still lingers the only solution to that is to wait for bargains and just buy with what your comfortable with. :) im also glad that another analyst also likes jollibee which is a stock that i follow and i agree with him the jollibee is one company that will really reflect the boom that we are experiencing. :) just give jollibee some time and im sure the stock price will follow its increase in earnings. :) another topic that is of importance is the fed announcement on sept. 18. most likely the fed will lower interest rates so that they could calm investors and stabilize the economy. :) interest rates usually have a great effect on any economy lower it and assets will usually go up and increase interest rates and you might possibly see a slump in asset prices but the market is irrational and you never know what will happen. :) just expect the unexpected. :) remember....... money is never lost it is only transformed. :) hehehe happy trading to everyone and good luck. Sad to see erap go down but justice must be served. Tsktsk a group of friends and i are planning to put up a restaurant in binan, laguna can anybody here tell me the prospects there???? thanks :) god bless to everybody :)
Wednesday, August 29, 2007
Monday, August 27, 2007
Wednesday, August 15, 2007
Tuesday, July 31, 2007
Friday, July 27, 2007
Monday, July 16, 2007
here is a peek on what is inside eric go's portfolio who also has an inclination to value investing and at the same time also trades stocks for the short term. :)
i have a set of stocks which are considered permanent and another set of stocks which are for trading and capital gains. (basically value for holding and speculatives for quick trading margin)rules for investing are as follows:speculatives are always up for sale. Whether to take profits or in some times to cut loss. Value stocks are permanent and will not be sold unless fundamentals start to erode. Cash dividends are reinvested and majority of capital gains(if any) are reinvested as well into the value portfolio. There will only be 7 stocks in the value portfolio which i have set as the maximum. In the event another stock would be a candidate for the value portfolio, one of the current positions must be sold before another will be added. % is based on the closing prices as of july 6, 2007. for the value stocks there are 7 and for the speculatives there are 4.
%for the whole are the following: chib – 6.45%; bdo – 2.53%; mvc – 4.15%; smdc – 5.75%; ans – 16.83%; reg – 10.76%; ephi – 4.22%; apc – 5.35%; geo – 27.23%; mac – 12.44%; pcp – 4.22%
for value:chib – 12.72%; bdo – 4.99%; mvc – 8.19%; smdc – 11.35%; ans – 33.18%; reg – 21.22%; ephi – 8.32%
specualtives are:apc – 10.86%; geo – 55.29%; mac – 25.26%; pcp - 8.57%
Saturday, July 07, 2007
A good business is a business with a “franchise” when i say that i mean a strong following and a solid product. One business with a very strong franchise is a school. :) just take this example from real life when you meet other people what are the few things that you would ask about him. “where did you graduate?” then he'll say ateneo and then you'll say me too! Whats your course? Who are your friends there? It just goes on.and on. :) we all have a certain attachment to our school because we spent a lot of time in our school, we meet our friends there, boyfriends, girlfriends,best friends and it is there that we discover new interests and fields or in other words whether we like it or not we will always be connected to our school for the rest of our lives. can you think of another business that has that kind of following? A school, i believe in its normal operations is a money making machine. :) you really dont need a lot of teachers to run a school. But you do need good teachers to be a reputable school. A school makes a profit from tuition and maybe from other services like research grants which is most of the time sponsored by individuals or companies due to its tax benefits. :) another advantage for a school. :) and when a school plans to put up a building or a new facility what does it do? Fund raising! And where do they usually get the bulk of the funds? From its alumni! :) i hope you get my point that im trying to drive at here. :) well its as if paying tuition is not enough you will still contribute and help your school even after you graduate because as ive said you will always have this attachment to your school. Or sometimes schools get funding from big companies or individuals. They do this to get tax incentives. :) a school is a very good business and with that buy shares thru the psei. :) i think there are three which is feu, ceu and ipo. :) i like ceu and feu. I would be willing to buy ceu at around the 5 range i think its expensive at its present price. Feu is beautiful from my recollection this is one of the few stocks that i bought that spyfrat didnt object. :) i got shares in the first few weeks of 2006 and as of the moment it has more than doubled in price. It was really undervalued when i got shares.:)it is now trading around the 780-850 range and it gives out dividends. :) study the schools in the psei :) you wont regret it. Feu i believe right now is undervalued now but i will not be surprised if its share price will just keep on going up. :) “when holding a great stock time is your best friend, but when holding a bad stock time is your worst enemy.”
as ive said the minimum upside of the market is 3,800 and it was reached last thursday and what do i get out of it? :) at least the market didnt make me look like a fool. Hehehehe :) but i believe that the market will continue its uptrend in the next few weeks. Up to what level it will go up? i couldnt answer that, lets just wait and see. :) as my friend said “dont mind the weather, know the climate.” :)
p.s. My friend rafael stayed home the other day because he had a flu and he did some research on the stock market while he was at home and by some stroke of luck he stumbled upon chiefstocks and he read my critique of him. :) he was a good sport and he took it well. :) but it really doesnt matter because out of 10 things about the stock market that we talk about i think we would only agree on two things! Hehehe so it wouldnt really make a difference anyway. :) im sure rafael would also see the valid points that i raised about him and as smart as he is im sure he would also recognize some of his mistakes and try to correct it. :) hes a smart guy and i know he took it well and then he is also very generous for he gave a considerable amount to my friend paul(he is recovering from a kidney transplant as of the moment and im doing a fund raising for him) and to think that they are both strangers to each other. :) thank you lord that there are still people like that. :) the main goal here is to learn from our mistakes and improve ourselves. I also continuously try to learn everyday from other people and hopefully my blog helps others also. :) value investing makes sure you take advantage of the market whenever it is irrational and not participate in it. :) fly high psei! Good luck and god bless to everyone. :)
Monday, July 02, 2007
Its been almost four year since my friend rafael told me about the stock market and introduced me to spyfrat and i can still remember it all clearly. :) and last june 24 was the third year that i made a commitment to value investing. :) when i started buying stocks i just bought the stocks that i fancied and whatever i was familiar with. Just buying with no research whatsoever!?! hehehe i did well with my first buy sm prime holdings (smph) and made a 12% profit and my next buy was metrobank (mbt) and i registered a 9% loss. The latter was the one that made me think. Maybe there is an approach to investing where you can time your purchases and make short term profits which got me interested with technical investing and charts which i also made a profit but the problem with it for me is that i dont have the time to monitor the market because i work on trading days. Then i discovered value investing and it was a perfect match! :) long term investing was a perfect fit for me but one thing that i had to learn was to be more patient. But with some luck and determination i was able to discipline myself with my trades and to withstand all the temptations of selling my positions every time there was bad news. :) as they say it takes a lot of stomach to be a long term investor. :) how would you feel if you see that the share price of your stock goes down 20% or 30%? i would say that 90% of people would panic. :) but this could be avoided by good research, patience and discipline. If you make the commitment to buy stocks only at lows then half the battle is already won. :) my target with my value portfolio is a minimum 15% compounded return in a 10year span and im really surprised that i was able to do better after three years. :) my portfolio doubled in value after 2years and 11months and im really happy with it but of course i do know that there is still a lot of room for improvement and there is still so much to learn about the market. :) as they say you stop living when you stop learning! :) im happy i found value investing because it is the perfect system for me and you should also strive to look what style suits you. :) research also will play a big role in your success in investing also. Discipline and patience is important because it really takes time to see your portfolio grow. Time does a lot of wonderful things to a value portfolio. I do hope i could see more value investors in our market. :) heres a saying that i like but i cant seem to recall where i heard it. :) “the harder you work the luckier you get” :) market closed at a new high again today and i believe that the market will still do well in the next few weeks and hopefully hit 3,800 very soon! good luck on all your trades and God bless :)
Sunday, July 01, 2007
Sunday, June 24, 2007
Its been an interesting and stressful week. An investment scheme of my friend finally went bust. Ive always warned my friends of the danger of these kinds of investment. The investment will almost double your money in one month. I really dont know if it was a ponzi scheme, hyip or a scam because for a long time it was really paying well. The good thing for me was that i really believed that “it was too good to be true” so every time that interest was being paid on the principal i kept on reducing the principal before the investment went bust. At least i can live with my decision for i have almost recovered my investment. :) this investment is a lesson for me and taught me a lot about the psychology in investing the excitement and the ensuing panic when everything falls apart. Every time interest is due i kept on getting it while some of my friends kept on adding to their investment and i have the impression that some of them have put more than half of their savings in it for they believe that it is a “once in a lifetime opportunity.” so what will they do now because i believe that there is just a very slim chance that they can recover the whole of their investment. It also showed me that the generation nowadays dont value hard work. They would rather have it easy. But lets not deny it who wouldnt want to earn easy money but not to the point of putting almost all of your money in it. This is something that i would also like to do more research on the saying “easy come easy go”. Or what are the percentages that one can save from hard earned money and easy money. I noticed that the generation of my parents and grandparents give much more value to hard work maybe this is because they experienced hardships during the war? I really dont have the correct explanation for that phenomenon. Im lucky for my family has instilled in me the value of hard work and i am not afraid to get my hands dirty. :) and everybody shouldnt be afraid to do hard work for i remember there was one taipan that said “there is no shortcut to success and hard work is the key to success.” and i remember i think it was lucio tan who said this during an interview “i became successful because when i knew that my competitors were working 8hours a day i put in 10hours a day and when i found out that they were working 10hours a day i put in 12hours a day.” now you know why he is one of the richest people in the country. :) i remember my dad also in a meeting before when he got upset with a manager and up to now i can still clearly remember his words “i dont care how smart you are, but i come from the old school and the only thing that i know is hard work.” :) here is another story of another taipan told to me by a friend when henry sy saw the movie “ghost” starring patrick swayze and demi moore he made it a point to let everybody in his family watch the movie to watch a particular scene. It was the scene where another ghost was teaching patrick swayze how to move objects, the latter was being told by the other ghost to concetrate and focus until he finally moved the object. The moral of the story is focus. For hardwork without focus is nothing. Good luck on all your trades and God bless. :)
Sunday, June 17, 2007
Wow! What a way to end the week! With this i believe that we can expect an exciting and bullish next few weeks. :) and who knows maybe the 3,800 mark can be reached before the end of the 1st of half of the year. :) but anything can happen in the market so lets just wait and see. :) ive read some of my past posts and i think i should apologize for some of the typographical errors and maybe some of the topics that i wrote might have bored you. But i should also thank some of the faithful followers of my blog and to some who have posted comments, sent private messages and e-mails. :) thank you very much it is very encouraging and believe me i will always strive to learn more about the market and share it here with everybody. :) before i start discussing my topic for this week i would also like to mention the solid group inc.(SGI) has finally broken out and im really happy about it. I remember when i wrote about it some time late october last year a lot of people really reacted to it. But the reactions were really more on the negative than on the positive but anyway everybody is entitled to their opinion. I have stated my opinion and it might be right or wrong but the best judge would be time. :) “when holding a good stock time is your best friend, when holding a bad stock time is your worst enemy.” You could read about sgi in my blog, i wrote about it october 25, 2006.
i would like to explain the shanghai mini selldown and try to explain to you guys on why it happened and the reasons behind it. I talked to a private banker and she told me that the shanghai stock market is mostly held by retail investors or weak hands as they say. Why do they say that retail investors are weak hands? Because the majority of the people here are the ones who dont understand the stock market fully well. Most of the people here trade on tips and trade based on recommendations by other people without even researching or understanding the company that their buying into. So if the market drops a bit you can expect a panic because they dont fully understand the stocks that they own. :) another factor in the cause of the drop in the shanghai stock market is that the rise is meteoric and too fast and sooner or later the market will find its equilibrium. Another thing that could explain the fall of the market is that there are not that many funds invested in their market. That being the case, it is a house built of sticks and the big bad wolf could blow it away anytime it wants too but a house that is built of bricks would take so much more to bring it down. :) the fundies are the backbone to any stock market and when present in a market is a sure sign of good things to come for it. :) the mutuals funds are the ones that are considered the strong hand. their market will also be affected if their government will approve that the locals can invest money overseas. With all of these things mentioned, i believe that the shanghai stock market is due for a big correction but i really couldnt tell when exactly this will happen but i know for a fact that it is due for one. What does this mean for us? Well it could really mean a lot of things but there are really a lot of factors that you have to consider but for me the real issue at hand is the philippine stock market itself. How is it doing? It is doing great now up 23% year to date and with its close last week it will mostly likely go higher and who knows maybe 3,800 very soon. :) the philippine market is fairly valued as of the moment and if ever there is a correction i believe that it wouldnt go down as much. But for the meantime let us all enjoy this bull market of ours. :) words of warren buffett about buy and hold. “i made a lot of money doing nothing.” good luck on all your trades and God bless. :)
Sunday, June 03, 2007
The topic that im going to talk about this week was inspired by two friends elizabeth and raffy boy when i had a talk with them on two separate occasions and “the art of war” by sun tzu. i could say that it was very timely with how our market has been like lately. :) anyway i will try to discuss this in the simplest way possible. Here is the line that really struck me in the book: “know your enemy, know yourself, and your victory will not be threatened. Know the terrain, know the weather and your victory will be complete.”
Know your enemy and what does this mean to the market? Your enemy in investing would be the more than 200 companies in the philippine stock market. And why do i consider them as enemies? Like in war you try to conquer your enemy to gain more power but in investing you need to “conquer” companies being traded in our market. Just like in war you study your opponent and look at its weak points and strong points and from there you make your approach on how to defeat your opponent. In investing you study the different companies and see what is the best price to buy the stock. Study the different companies and find out what are its good points and bad points. When you know your stocks well you would know that it will do even better in the long run. As ive said before you should buy the stock when everything is in your favor. Quoting warren buffett, “when holding a bad stock time is your enemy and when holding a great stock time is your friend.” For a great company will almost always increase shareholder value in the long run. :)
knowing yourself will help you a lot in investing. What are you good at and what are your weaknesses? When you know your strengths you can use it to your advantage and then find ways to cover up the weaknesses. :) this is what i figured with my friend raffy boy who has been asking me since last week if ive sold my holdings in the market and i told him that im still in the market and i havent sold anything yet. He just told me the other day that he has sold all his holdings in the market except for two because he got scared because the market dropped more than 1% and the market might have reached its peaked already. And then the next day the market goes up 2% and the next day another 2% and just this afternoon he texted me that he made a bad call in selling his stock holdings. What i see that is wrong here is his refusal to recognize that he needs help on how to read charts, on how to study companies and on judging the trend of the market. He would rather make decisions to buy or sell stocks based on his “feel” on the market. If he recognized his weakness he couldve avoided the mistake of selling. :) and listening to him he gives me the impression that he wants to be a long term investor but buys and sells stocks like a trader. In other words he also doesnt know what he wants from the market. knowing yourself it would make investing easier, for you would know which style of investing would suit you be it short, medium or long term and when you know this it would make investing more “comfortable” for you. :) do you think a sprinter would do well if he joined a marathon? :)
know the terrain means understanding where you are doing battle and that is philippine stock market itself. Understand the stocks being traded and the nature of securities. By nature, equities fluctuate in the short term but in the long run it usually follows a certain trend. :) if you recognize this it would make you a better investor and not make hasty decisions. Again i'll mention what i said awhile ago with what happened to my friend raffy boy if only he recognized the nature of stocks he wouldnt have panicked when the market went down 2%. :) are you risk averse or risk tolerant? To be a good long term investor, one has to have the stomach to see the market drop 10% in a day and be okay with it. If youre not comfortable with that then you should use a different style in trading. as the great investor warren bufett said “the ticker is just there to see if there is something foolish being offered in the market.” :)
know the weather means being able to analyze how the market will respond to everything thats happening around us. Be it increase in interest rates, a higher or lower inflation, a higher gdp and so on. But there are so many things that are happening so how do you know which one to watch? Personally i believe that it is better to analyze the company than the economy. Why? Because i cant think of anybody who can control the economy and there are so many factors to consider that one way or another you would make a mistake but one could correctly analyze a company. And from there you could make a conclusion at what price to buy the stock. :) when you know the company that you own, you wouldnt panic if it drops in price because you know its real value. :) you might even want to get yourself more shares. :) you dont have to buy the stock when it is trading at 30 times its price-earnings ratio but you could buy it when it is trading at 10 times its pe ratio. Its all about being patient. :) and i remembered when i had a talk with my friend elizabeth about being passionate in everything that you do. Well i believe that in everything that you do, your heart and soul should be in it. If that is not the case then why do it? :) a long term investor or any trader for that matter should be passionate but detached. You might want the stock of a certain company but when the time comes that it is trading at such a high premium you have to be able to unload it. Such is the nature of investing. :) invest to get something in return. :) but dont be too passionate because you might also run out of steam and for long term investors i discourage tracking the market for it is the nature of stocks to fluctuate and as such it might make you uneasy or panic then cause you to commit mistakes. Again the attitude one should take is passionate but detached. :)
the market ended this week gaining over 2% on thursday and friday. :) and again the market has made a new high. I think that the market will make a strong move again the next few weeks but of course anything can happen because the market is irrational. :) as ive mentioned last week the market has now set 3,800 as its minimum upside :) lets wait and see what happens. :) in a bull market it is in the sitting that you make money. :) but for now enjoy the ride! :) good luck on your trades and god bless. :)
Saturday, May 26, 2007
the next day, My siblings and i for a change took klm for our flight to europe. :) and i can say that i was impressed! :) the service was very good and there was a lot of food served. :) hehehe and believe you me the food was good too! That is coming from someone who doesnt like airplane food. :) our flight was from manila to amsterdam for a quick stopover and then from there to vienna.
Vienna is beautiful old city and very scenic. :) you can just see how rich their culture is and i hope that the philippines have something like this to offer to tourists. You can see how rich their culture is in their palaces, castles and museums. They have preserved their culture very well. Old buildings are not demolished but they maintain the facade and then just remodel the interior of the building. The philippines should also do something like this. We should do something to preserve our culture. An example that o would like to point out were the jewels of mrs imelda marcos. I believe we shouldnt have sold them. We shouldve kept all of them and then we couldve displayed all of those in a museum and literally and figuratively it could have been a jewel of our nation.
We took a 4hour bus ride to go to budapest(pronounced budapesht) in hungary. And my oh my were we surprised the place is just beautiful. The city is very laid back , picturesque and the architecture is just marvelous. More than 70% of the structures after world war II were destroyed but after the war they decided to rebuild the city the same way it was before the war. I really didnt expect that budapest was this wonderful considering that before it was a communist country. Im somewhat reminded of the philippines when our guide explained to us the history of hungary with many foreign invaders and then staying in the country and stuff like that but one big difference that i see here that we filipinos should also have is the love of country and culture. A nation with a rich culture just shows that the country is really rich and educated and i do hope some day the philippines will also have that love for the arts, music and culture. :) their parliament here is just beautiful and i cant find the right words to describe it. But when it comes to churches the philippines can be at par with them here. :) we should do something to uplift our culture and everybody has to do their part. :) just some trivia to you investors: anonymus was really a writer/poet during the 12th century who never signed his pieces ir works. :) and of course that explains where the word anonymous comes from. I had my picture taken in his statue holding his pen because they say its for good luck. :) another bit of information for everyone: one of the greatest people to come from hungary is the man who bet $10billion against the british pound and then got $1billion in profit! Phew! The guy is george soros. :)
to stockmaster thank you so much for the comment it is things like those that inspire me and make me strive to do even better in investing. Investing is all about the numbers and people. :) if the company is run by very good people and you buy the company at a fair price only good things can happen. :)
bratislava in slovakia is also a nice small and beautiful city. :) how can such a small place be so rich in history. :) they have a lovely old town square and can you imagine in a 200 square meter radius a lot of the great composers have in one time or the other have played or taught there. The question is that what did that little city have that brought a lot of the great composers there??? what did they have?? why dont we have that in the philippines? That is the question in my mind right now. Were on the bus driving to prague, czech republic now and ill more to this when we leave prague.
Prague is beautful and that is an understatement! Its really a small town with a lot of history and a lot of beautiful architecture! :) the city reminds of a universal studios back lot but with well preserved historic buildings in it. We also visited the church of our lady of victories where the miraculous sto. Nino can be found and i got some souvenirs for my friends. :) i also met a good friend from college, glenn, who is currently there studying. He accompanied us around the city then crossing the charles bridge, explaining the culture and customs and the people. Its been a long while since we got to talk. We went out for a beer, which czech beer is really good, and then talked. And we came to the topic of life and i told him and quoting my father “what is the difference with interest and dedication? Interest is something you do when you have the time but dedication is something that you even if you dont feel like doing it.” or i'll put in other words what are you willing to give up to get what you want? In economics that is what you call opportunity cost. :) Just shows that were really starting to age we talked about our love life and i tried to convince him to get into the stock market. :) they say that prague is the 4th most visited city in europe after london, rome and paris. :)
were now back in vienna and tomorrow will be the last day of our trip and its back to work. :) its always nice to get a break from work sometimes it makes you think and appreciate all the hardwork and sacrifices that youve made. :) im just here in the hotel room having a glass of jack daniels-coke relaxing and thinking of all the things that has to be done when i get back home and of course to catch up on work. I really didnt regret getting a digicam before leaving for our vacation i really enjoyed using it. :) im really happy with it. :)
the market is really doing well now. I hope its going to reach the 3,800 before the end of the year. :) but if it doesnt its really okay i will still hold on to my stocks. :) im still looking for bargains as for the moment. :) after ive found some maybe ill write about it here. :) til here ill see you again next week. :) good luck and take care. :)
Tuesday, May 15, 2007
The elections are just over and guess what happens??? the market hits a new ten year high. I can see all the tsupiteros shouting and dancing for joy. Technically i can see the market hitting 3,800 in the near future but of course dont take my word for it for the market is irrational and anything can happen. :) so what has happened in the last two weeks? My dad is finally interested in stocks(but he is too proud to admit it for he was really against my going into stocks hehehe) because i think he has finally realized that you could invest conservatively in the market and that risk can be managed. Its all about the price that you buy the stock. :) thats what ive been telling him all along and now i think he's beginning to understand it. Look at the upside and the downside. Buy it high and as they say “the higher you are the harder the fall.” but buy it cheap then the chances of a loss is very minimal but of course as i mentioned to you investors before that wouldnt be possible if your not patient enough. And i believe that is the hardest part in investing because no book or person can teach you to be patient, it has to come from yourself. It is all about bargains or as warren buffett said the three most important words in investing is MARGIN OF SAFETY. :) one has to be able to find the real value of the company or its intrinsic value or implied value. And there is no holy grail in finding value and it is really an art that is why im still learning because value can be found in a lot of things the companys brand, undervalued assets, growth, manpower and a lot more. That is why research is so important in investing.
I was invited to join another forum and it was okay but i believe that a lot could still be done and that there should be originality in it but thank you to the founders for inviting me. :) wish you all the best guys. :) i really thought that the psei will go down because of the elections but look at what it did!!! a new ten year high. There has been an upsurge in price lately in some of my favorite stocks smdc, kpm and ephi with its coming merger with kpp and of course im also thankful for the dividends from smdc and urc. Keep up the good work guys and keep it coming. :) with the new developments in san miguel corporation it has brought the psei to a new level and for the index to keep on moving up smc should keep on going up too. I like san miguel but i still have to understand the company better. Does it really have room to still grow? Did it invest in the right industries??? :) we will see in a few weeks time. :)
and another company i like is V with an eps of P1.05 but its basic eps is 0.12. but i dont think that it really matters if its earnings were flat this year because it has now a bigger cash hoard and we all know what cold cash an do!!! hehehehe :) i watched spiderman3 on opening day and i really like it and i hope you guys did too. :) thank you for those who sent private messages and emails about my recommendation on kpm. As ive said there were people who helped me out in my research and they deserve the credit also. :) i will be leaving for eastern europe on friday and will be back after a few weeks. :) i will still keep track of the market every once in awhile and hope our market will continue to do good. :) god bless :) “sometimes a winner is just a dreamer who never gives up” :)
Thursday, May 03, 2007
here is what's inside of the portfolio of one of the great long term investors who is a frequent visitor of financemanila. i would like to post his name but he has asked that he remain anonymous. :)
Total Portfolio (as of 25 April 07) 100 %
Peso Savings 5.30 %
UITF/Money Market 17.94 %
Dollars 1.47 %
Equities 75.3 %
CHIB 12.71 % (of total portfolio)
PERC 5.01 %
IPVG 4.49 %
JFC 3.02 %
ALI 3.78 %
FPH 3.62 %
EDC 3.43 %
ASIA 3.08 %
Others 22.12 %
Cash for Stock Purchase 7.03 %
1. latest sale entire PX position (about 10% of total portfolio)
a percentage of ANS ( about 7% of total portfolio)
2. as much as possible, no equity position should be more than 5 percent of total portfolio; historically, the largest single positions were FPH, PERC and ANS (more than 20% of total portfolio)
3. everything is for sale
4. conditions for purchase:
b. growth potential
c. possible plays
5. oldest positions presently held (more than 5 years)
Friday, April 27, 2007
I had a really wonderful weekend and one of the most memorable at that. :) prepared a surprise treat for my friend alan last friday night and the the boys had one hell of a party and then the next day my dad and i had dinner with mr colayco (author of “wealth within your reach”) and discussed things related mostly to business. :) we got mr colayco as our financial consultant for our business so the whole sunday my family and me were with him. To straighten out some things and to find solutions to some problems and on how to strengthen and protect the business and talk about things that are related to business. :) i really admire mr colayco because i always believe that the best solutions to solve problems are always the simple ones. :) he advised us on what course to take to solve some problems and the beauty is that he gave us simple answers to our problems. :) a very smart guy but he doesnt flaunt his intelligence or make you feel dumb when you talk to him. He is a very humble and helpful person. :) And what i like best about our talk was that somehow he made my dad believe that the stock market is not gambling after all! :) hehehe ive been trying to convince my dad and the rest of my family to invest in the stock market for almost four years already and i cant get through him but just one afternoon with mr colayco and now he is kinda open to the idea of investing in the stock market. :) and our talk with mr colayco further strengthened my resolve about value investing. And i will quote his words “dont mind the weather, know the climate” in other words think long-term. Dont mind the daily fluctuations in price and look at the prospects of the company of what it can achieve in five years or more. :) its just what i posted here around december i think. And im so happy that we both share the same sentiments. If you dont have any knowledge in stocks the next best thing to do is to invest in mutual funds. I believe he mentioned philequity (you guys should love me this is a free advertisement!). And we discussed the most lively part of our talk. How to invest your excess cash. :) and he suggested to put it in equities or in equity mutual funds and let the power of compounding work for you and leave it for as long as 30 or even up to 50 years. :) and i also did the math and our figures are not really far from each other. :) if you invest P240,000 in a mutual fund or stocks and add P12,000 every year for five consecutive years and just leave it and let the money compound here is what you will get.
At 12% compounded per annum. Your total cash outlay is P300,000
in 10 years you will have P850,042.65
in 20 years you will have P2,640,103.44
in 30 years you will have P8,199,760.54
in 40 years you will have P25,467,211.59
in 50 years you will have P79,097,293.59
at 20% compounded per annum. Your total cash outlay is P300,000
in 10 years you will have P1,708,221.73
in 20 years you will have P10,576,858.68
in 30 years you will have P65,489,121.14
in 40 years you will have P405,491,376.64
in 45 years you will have P1.008,992,302.32 welcome to the billionaires club
in 50 years you will have P2,510,695,725.72
at 21% compounded per annum. Your total cash outlay is P300,000
just to show you the difference what 1% could mean to your portfolio.
In 10 years you will have P1,850,814.71
in 20 years you will have P12,451,355.84
in 30 years you will have P83,766,495.80
in 40 years you will have P563,539,096.23
in 50 years you will have P3,791,209,241.23
can you see what a difference of 1% can do to your portfolio over time??? who would think that a difference of 1% in your portfolio would mean having over P1billion more in your portfolio after 50years. :) value investing works and compounding is a very good ally.
i wouldnt be surprised if mr colayco himself has a value investing portfolio with very good returns but he said that hes only into investing thru mutual funds. :) the key is patience and being able to detach yourself from the everyday happening of the market. I believe i wrote about an article about compounding around december of 2006 you could also read that if you like. :) and as mr colayco also said to profit from the stock market you should be able to take advantage of other people's mistakes. Buy when someone is selling cheap and sell if someone is buying expensive. :) in other words being a value investor also means being a contrarian. :)
a warrant of arrest was just issued to the two main suspects of the tan massacre in january last year here in iloilo. The two main suspects were the children of the father from his first marriage. This is really tragic and i hope that everything will be resolved soon and that truth will prevail. Let us be thankful for all the blessings we received. God bless everyone. good luck. :)
Sunday, April 22, 2007
What a roller coaster week! :) looking at technical data i still believe that the rally is still in place. Up to what level it will reach i really couldnt tell but from what i see i think its still ongoing. :) well what can i say about my week. It has been kind of a roller coaster too! Work and all then with a little bit of pleasure playing basketball. And then gave a surprise to a friend who really enjoyed it. :) hehehe so whats the latest in the investing world??? universal robina corporation (urc) will be included in the new psei index on may 16, 2007! yahoo! This might Just bE the news that this “laggaRd” has been waiTing for?!!?! it needs to break around the P20-P20.50 range to break its downtrend. :) it looks like that our economy is really in full swing right now. With the very big and significant investments in real estate we could somehow see that maybe this is for real. All the big players are in like the ayalas, lucio tan, megaworld, henry sy to name a few. :) and theres this property here in iloilo thats up for bidding which was our old airport. I wonder who really wants it but i believe that mr sy is the one who wants it the most for it is very near an sm mall and the is the new thrust of smdc building residential spaces near sm malls. :) gold and other precious metals are now really going up in price and i suggest to you to start buying jewelry for your wife or loved ones before the price of gold reaches $1,000 per ounce! :) and with the increase of the prices of metals this might also spark our mining sector here. Phew! And of course the stock that i recommended keppel philippines marine (kpm) which was suppose to be a valentines gift for readers of chiefstocks has made a meteoric rise the last few days. :) and if you bought it at 0.94 you have already more than a 50% return but as ive said there is still value in this company. Time will be the one that will unlock its true value we just have to be patient. :) things are really looking good for our economy but dont be overconfident for the market fears no one and if you are careless you will surely get burned! With diligence there is still value to be found in the market. Remember the three p's in investing: patience, patience and patience. Good luck to everyone. :) happy birthday charlene! :) god bless
Thursday, April 19, 2007
Is the market irrational? Is the market bipolar? :) what do you think? We can see it all happening in front of our very eyes! :) the first two trading days of the week the market went up more than 1% each day and then what happens? It drops more than 1% tsktsktsk is that suppose to be rational??? i bumped into my broker the other day and he told me that the market has forgotten the china sell-off and that includes him too hehehe i remember him telling me a few weeks ago to liquidate my shares but i refused to do so. Now do you think im crazy??? hehehe but my broker is a short term trader or a chartist and from his point of view that was the right thing to do and if i look at it from that point of view he gave me the right advice but i look at my shares of stock in a long term perspective thats why i didnt sell them. :) i really admire my broker spyfrat because he is one of the best at what he does. people really have a short memory span after a month they are all at it again!?!?! can anyone please explain to me if thats rational!!!!! anyway it really doesnt matter just always remember to buy low and sell high! :) volatility is your friend! :) i really believe that. As mr. Buffett said investing is like a baseball game but there are no strikes being called. :) meaning you dont have to buy anything that you dont like. :) just buy something when you really like it. :) nobody is forcing you to buy a stock at a certain price so if thats the case then just wait for it to drop to the price that you want. :) when you do that you lessen the chances of making a mistake. As the master investor said investing is about making as little mistakes as possible! :) anyway there are still cheap stocks in the market and one that im going to discuss right now is fil-estate(LND). Trading at the range of 0.80 to 1.00 :) this is a really cheap stock selling at a very big discount right now!!! around 70%-80% imagine that?but still im having doubts of buying the stock. Because i believe that one very important requirement of a good stock and giving you back superior returns is good management. And no offense meant i really dont have a very high regard for its management. So as of the moment even though holy week is over i think im going to abstain from LND. hehehehehe I will quote again my idol warren buffett “i would rather buy a great company for a fair price than buy a good company for a great price.” good luck guys. :) the nba playoffs are now fast approaching!!! :)
Sunday, April 08, 2007
As i promised im going to write an article about what a ponzi scheme is. This is taken from marc faber's book tomorrow's gold pages 176-178.
in fact, every mania involves some sort of Ponzi scheme. Carlo ponzi was a swindler who, in 1920, devised something akin to a chain letter, whereby early investors were paid out of money invested by late buyers. Ponzi promised to pay 50% interest for the use of 45 days' deposits, based on a strategy to arbitrage international postal union coupons bought with depreciated exchange rates abroad and to exchange them at higher fixed exchange rates for US stamps (for which coupons could be redeemed) in the us. The scheme was purely fictitious. Ponzi took in close to us$8million, but had only us$61 worth of stamps in his office when arrested. His “pyramid” scheme, the success of which depended on attracting new depositors at an ever-accelerating rate, collapsed when a number of depositors began to suspect that they wouldn't get their money back and attempted to withdraw their funds.
Ponzi schemes resurface from time to time in emerging economies where a sufficiently large number of naive people can be found who believe that 50% returns on short-term deposits can be achieved. However, it is a fact that for most investments, sooner or later, early buyers will be paid out by late buyers. This would seem to be particularly true in the case of investment booms and manias, which require a large number of participants to fuel and maintain the upward price momentum. The boom ends when the amount of money flowing into the popular investment theme starts to decelerate, as buyers become suspicious about the sustainability of positive returns, or when the supply eventually exceeds the demand. Thus, the early buyers of us stocks in the 1920's, 1960's and 1990's did well, while the latecomers were badly burnt by the subsequent market declines. The same was true of the gold and silver booms, and of the japanese stock market bubble in the 1980's.
In fact, i would argue that one of the principal features of an investment bubble is the existence of a giant ponzi scheme. Entrepreneurs no longer start businesses with the objective of achieving recurring profits from their investments, but rather seek to set up ventures in order to flog them off to speculators through IPOs and secondary offerings. At the same time, investors almost totally abandon the concept of investing according to strict value criteria and real economic merit. Instead they purchase stocks solely because they figure that, as more and more people join the investment party, someone - “the greater fool” - will be willing to pay an even higher price than they did for their stocks.
Ponzi schemes raise some fascinating questions.why are so many people repeatedly fooled by them? And why did carlo ponzi's scheme fail in less than a year, while other similar schemes have lasted so much longer? Investors get caught again and again in ponzi-type chains because of the very high returns they promise. Had carlo ponzi promised to pay a return of only 2% in 45 days' deposit (102% annually), no one would have bothered to invest with him. But with the promise to pay 50% for such a deposit (162,450% annually), he was able to attract quite a sum, considering that he was operating only from boston. His main problem was the regional scope of his scheme. Had he been able to operate globally with the support of cnbc, cnn, internet chatrooms and a variety of questionable stock advisory services, his operation could have flourished for much longer. The money flows that financed his operation would have continued for as long as the incoming funds were sufficient to pay out the redeeming investors. And the longer this had continued, the more confident the investing crowd would have become in the merits of his financing skills, possibly to the extent of attracting even central banks to invest their reserves with him. Morever, ponzi's promised returns were such that even if interest rates had risen 10% per annum, they wouldn't have jeopardised his scheme. It was his inability to raise money fast enough and the loss of investors' confidence that brought him down.
Now suppose that ponzi had reinvested himself. Instead of a questionable character operating regionally in boston and promising to pay 50% for 45 days' deposits, we have the credible and proven capitalistic system and alan greenspan as well as the us treasury guaranteeing that every time there is a crisis there will be a bail-out – as was the case in mexico, asia, ltcm and most recently brazil. Thus, the system and alan greenspan, and not carlo ponzi, were vested by the global investing public with the power to underwrite a 20% per annum return for the us stock market, as was the case from 1982 to 2000. even better, the system and greenspan, supported and cheered on by the media, were believed to guarantee an almost 100% annual gain from investing in a basket of technology stocks, which was the return of the nasdaq 100 a few years leading up to the march 2000 (up nine times in five years and almost four times from 1998 to 2000).
a ponzi scheme may not fly with a 20% guaranteed annual return, but a sure 100% return is a tempting proposition for any investor. So, for as long as the nasdaq could sustain these returns, ebullient investors reallocated more and more money from conservative investments such as short-dated bonds, money market funds, cds, abd even value stocks, into the high-tech sector. Even rising interest rates cannot derail this process, because the returns promised by a ponzi scheme are so much higher than interest rates.
The breaking point, however, is reached when insufficient new money flows into the market, or the supply of equities begins to exceed the demand, and investors start to experience significant capital losses. Only when this happens do investors lose confidence and scramble for the exit, bringing about a meltdown. This was apparent in the us when, in 1999, a total of 555 companies went public (an all-time record) and raised us$73.6 billion. But that us$73.6 billion represented only 27% of tge issuing companies' market caps. In 2000, however, the lock-up period for most of these issues expired and, in addition to the then prevailing heavy new-issue calendar (in early 2000, there were weeks when new issues raised over us$8 billion), insiders were able to sell more than us$200 billion of previously locked-up shares.