Saturday, March 24, 2007

thailand and the stock market

Was in thailand with friends just the other weekend and what can i say? I really enjoyed the vacation with friends, a chance to get to know them better in a different environment and a chance to get away from all the work and stress. Just seeing the development and the progress in the place just makes you think what should we do to improve the image and the economy in the philippines?!?!?! the groundwork for success in our economy has been laid out by the present administration but the question is... will it go on after president gma steps down from office? These are questions that we cant answer for now but what we have to appreciate right now is that the fundamentals of the stock market is very solid and now is a good time to invest for the long term. But what if the market goes down together with the global sell-off? Well i myself will buy more value stocks and hold them for the long term. :) you must be thinking if im crazy to buy in this kind of environment which is erratic. Well this started last february 28, 2007 when there was a sell-off in shanghai which triggered a global sell-off and of course our beautiful country was also affected after the psei almost reached the 3,400 level. Short term traders say that the trend is your friend and i wont argue with that for it is true but sometimes when you look at the bigger picture investing for the long term is also advantageous in a lot of ways. Less work in a way that you dont have to monitor the market everyday. :) and less commissions to pay because you have lesser transactions. :) for the last year of trading why not check how many transactions did you make and how much did you profit and how much did you pay for commission. :) you'll be surprised at how much you pay your broker. :) but anyway ive already posted my reasons a few weeks ago why the stock market will continue to trend up for the long term. Volatility is not bad if you just have to use it to your advantage. As i've said the market is irrational and whenever the market is in a good mood and sells stocks at a bargain take the as a chance to buy and when the market is feeling generous and would be willing to buy your stock at a premium than its value then take that as a chance to sell! :) the best way to protect yourself from volatility and big drops in prices is to buy stocks at a cheap price. I guess thats your best protection from price drops because the buying stocks cheap most of the time is usually buying them near the bottom. :) being a value investor means a few things an arbitrageur, a bargain hunter, a contrarian and a patient man. I believe we are one-third or one-half in the markets bullish cycle. It wont be easy thats why you have to learn to detach yourself from the daily happenings in the market. We'll get there we just need time and patience. :)

Saturday, March 17, 2007

mr sy #1

Henry sy is the richest person in the philippines in the last ranking by forbes magazine. Let us now dissect on why that is so. :) mr sy or tatang as he is fondly called started started in the shoe business and then sm department store. :) he built his first sm mall in 1983 in north edsa and was instantly a hit. He built the mall during a time of uncertainty and unrest with the killing of benigno “ninoy” aquino and the unstable political situation at that time. But as the man said “times of distress bring about opportunity”. Any good value investor will agree with that saying for it is during those times that you will be able to able to buy stuff or companies at a discount. :) for my henry sy sm prime holdings is his anchor or core business. :) it might be true that he is diversified but his main business is still smph. That is where it all started and from there he started putting capital into other businesses. No matter what happens he will never leave smph. In other words his other businesses are his sideline. :) the key is putting good managers in your other businesses so that they could run it for you. Delegation in other words. Smph will always be his favorite and he will always look after it. :) so that is one trait that is usually common among successful value investors which warren buffett would call “focus investing”. Not to be diversified is also wrong because is you put all your money all in one investment that would now be called gambling. For me a portfolio to be diversified should have at least 5 investments and not more than twenty (20). :) i will give you some data that i got from reliable sources on how good mr sy's core business is and how it catapulted him into the top spot. Smph is forced to open new malls because it generates around P20billion yes thats right billion just from rent every month. :) you just keep that much cash just lying in the bank you have to use it to get better returns. :) smph charges a premium for rent and why not? Being the leading mall in the country it has the right to do so. It doesnt even charge rent but also percentage from gross sales in some businesses. But who complains? Nobody because that is the price you have to pay to get a piece of the sm crowd. :) and even before the mall opens it already will get millions just from the advance deposit of its tenants already so basically they already have money to use to run the mall! :) such a great business. Mr sy has! Even if it opens in a place and its department stores wont do that well smph will still collect rent and what is the worry because every time sm opens a new malls it has followers from its consignors, jollibee, kfc, chowking, national bookstore, and many more. :) so basically it has already tenants when it opens a new mall. :) compared to other malls in the country this one appeals to all classes from the a to d market. :) sm has this kind of command in its rent and everything else because there is no close competition and in the absence of that smph will Just continuE to gRow and increase iTs market share! :)

inspirational words in these trying times

“a pessimist sees the difficulty in every problem, an optimist sees the opportunity in every problem” - winston churchill

“the ticker is there as a reference to see if someone is offering something foolish” - warren buffett

Monday, March 05, 2007

please stay calm

Its another bloody day and in general its been really a bloody week in the philippine stock market but the way i look at it since december 2006 the rise of the market has been meteoric and i believe what we got is a long overdue correction. Just like a car it needs maintanance every once in awhile. Every 5,000km a change oil and when it reaches 20,000km a tune up and it is no different in the market. We have an economy that is growing and were in the part of the world, asia, where emerging superpowers are in the making and with the us already showing signs of a slowdown and surprisingly an even an admission on their part that they are about to go into a recession! :) actually i even think that the admission of the us about their economy and the china sell off set all of this off. :) if you read my past articles i have stated that asia will boom and the us will go into a recession by 2010 and i still stand by with what i said. This is just one of the things that you got to endure when youre investing. This is what i was telling my friend, nico, last week “dont track the market and dont watch is too closely you have to be detached with whats happening in the market on a day to day basis” here are some of the quotes that i got from my friends about what happened in the market last week and the general condition of the market.
Spyfrat a chartist and short term trader - “down! Its the start of the bear market. The market has disciplined us for it has spoiled us for some time already im out and ill wait in the sidelines.”
bruce a technical trader and short term trader, the boss of financemanila - “cash is king. Ive been getting a lot of “what to do questions apparently from the 95% of those who did not heed my advice to lighten up on the market before the market spiralled downwards. If you joined the market late last year, this rout should only be taking a small cut from your overall equity. But if you joined the market this year my prayers are with you. It may be too late to cut right now for there is a for there is a slight support base (trendline created from june 2006)awaiting near 2,950-2,960. however if we do get a technical bounce from that level, any really from that point should be your cue to sell. How big a rally, how long?i dont know because we are going to paint the chart with this new short term downtrend. it is yet to be created and measured. I gauge this to be a “lower high rally” a rally with a lower peak much lower than the one created at 3,417. after a series of lower highs and lower lows the index may see itself at ultimate uptrendline support(created 2003)near 2,600 or there abouts. we'll talk about it when the time nears, if at all. However in between the trendline supports of 2,950-2,600 there are recent low supports at the following levels 2,830 2,746, 2,520 (opps yes thats below 2,600 already)
nico a speculator who is interested in long term investing - “whether we like it or not the philippine market is hinged in the us as we are heavily dependent o foreign investors. Big picture in global economy and stock confidence can affect us directly.”
joey a friend also investing in stocks - “i believe this is only temporary”
eric a trader and long term investor - “the drop still seems healthy. Prices seem to be at fair value with select issues being a bit undervalued. Long term upside indicate good upside at current levels”
jerty a friend interested in the stock market - “oh my... well it dropped 200points, a lot of people were worried but president arroyo said theres nothing to worry about, its a normal trend in the market and what happened was just cause and effect”
volatility is part of investing in the market. Just like getting punched in a boxing match. It is part of the game. To protect yourself from big drops in the market the solution is to get the stock at rock bottom prices or when it is for sale! :) just like when you go shopping how would you react if you hear this from you wife/girlfriend “oh sweetey im dying to but this bag cause the store is selling it 50% its usual selling price”then i wont blame you if you tell her this “YOUR CRAZY!” but if she tells you that “baby i want to buy that bag and i want to buy it now cause it selling at 30% off its usual tag price.” now thats logical and that makes your partner just “half-crazy” hehehe just this morning my friend joey texted me to ask if i got out of the market already and i replied “nope :)” and he was surprised that i could even smile. Hehehehe and my friend nico also asked if im out of the market already and i Just rEplied “i havent even seen the tickeR yeT for today.” the point im driving at is that invest in the company and not the market. :) if you get a stock of a good company at a fair price then there is no reason to panic. :) even my portfolio took a beating too it drop around 14pts but as i said its all part of the game. But i have stocks of good companies and luckily i got it at a good price so thats the reason why i not yet selling. if you look at price movements in a a shorter span of time the more volatile it is but looking at it in a longer span of time it is less volatile. Everybody has a opinion on the market what it will do and why it will react that way but in the end it is Just all about invEsting in good companies when it is selling at a laRge discounT. My advice just be on the look out for good companies that are selling at a discount and be prepared to hold them for years. :) no reason to panic friends :) god bless.

Saturday, March 03, 2007

investing in love. . .

Being in love and the stock market? Are there any similarities? Can you use the same principles of in trading or investing to the game of love? To get a good stock you have to be patient and of course you need time and capital for that. Im not being materialistic here but i am just trying to point out the similarities between the two! for value investing way of thinking Well one you should devote a lot of time to the girl, court her, bring her flowers, give her chocolates, call her(youre gonna burn a lot of prepaid cards for this) and text her. You have to be there when she needs you and even if she doesnt need you! The price you have to pay to be a guy! Tsktsktsk so thats capital and time or if you want to call it commitment. Just like in stocks and especially value investing you have to be committed to owning the stock of the company for years in order to see its true potential! Again id like to quote mr warren buffett “when owning a good stock time is your best friend, but when owning a bad stock time is your worst enemy!” phew! How i wish this was true in real life. But sad to say that its different because as they say it takes a lifetime to get to know a person! After 5years of getting married you just found out that your partner is a cleptomaniac, or an ax murderer, or a nymphomaniac(this could actually be beneficial for you in some ways hehe), or maybe after how many years of being together you just found out that the kid you claimed as your own is not really yours after all! Isnt that tragic if you find that out? In stocks these risks are also present but.... you can minimize it by careful study and research. Or if you want you can be a tsupitero or a short term trader! Hehehe what does that mean? Meaning you jump from one relationship to the next after you take profit. :) in real life what does that make you? Hehehe a swinger? Hehehe in short term trading you look for volume in the stock to be able to push up the price of the stock. In real life you need good looks and smooth talking to be able to get the girl you desire in a short span of time and after achieving your objective you could now get out of the relationship and find your next target! :) but one thing is common for the value investor and tsupitero lover you need to find the right time to find the right girl and approach her. :) in life everything happens for a reason but the problem is that we dont know the reason why! Tsktsktsktsk life its just so complicated! :) but that is what makes life so beautiful! :)

the next problem is how to find the right partner. You can have certain criterias for stocks like it has a low price/earnings ratio, high volume, big caps, blue chip, dirt cheap and whatever qualities you like. You could also have certain qualities that you look for in your partner but the question is that it doesnt mean that you have found the qualities that you look for in your partner it doesnt mean that your relationship with him/her will work out. Thats the sad part in the game of love..... you might have found the perfect partner but it doesnt mean that you have found the perfect pair..... it takes more than Just lovE to make a RelaTionship work, but well we must admit that love makes everything easier for how can one be patient if he/she doesnt love their pair? :) the conclusion is this in the end being in a relationship is about commitment and not about love. For the human brain and feelings are so complex that you cant quantify it. Its not like earnings of companies, the assets of companies or the obligations of companies for these things can be quantified or be given value. We never know whats going on in a person's mind or the feelings that one would like to express for if we do then all relationships wouldnt have any problems then. :) some of the things needed to make a better partnership are trust, love, patience and respect. When all the things mentioned are present a relationship will have a better chance of surviving and will have a positive impact in the lives of the persons involved! :)

spyfrat's corner

Im here in the office again and peter is taking pictures of jewelry again. His yummy friend sofie will pick him up in a little while. The other day my friend oskie told me of an investment scheme in the internet. 1% a day investment kind. So i asked myself is it worth the risk? If a business earns more than 5% a month that may be enough reason to question if that business is legal in the first place! :) it might be a ponzi scheme type of investment. Ill write about that in the next articles. Ill try to do more research or get a story from a book and ill print it here for you guys. :) by the way oskie almost made it to pinoy big brother but its okay for everything happens for a reason! :) it would have been fun if he made to the show we already plans on what to do to help him win! :) hehehe

so now lets talk about business its a bloody week in the stock market which was triggered by the china sell-off. It is a sign of things to come for china. China will be a force to be reckoned with someday! I am still confident that our market will still do good this is Just onE of the obstacles an investoR must go Through. :) “you are looking at the tree unmindful of the forest” that is what we must avoid as a value investor. Always think long term! :) i believe that our market is still ok and of course china will still continue to be a dominant force in asia and the world. I will put an added extra to all of you every once in awhile. Ill let you see whats inside the portfolio of my friend spyfrat who i believe is one the best chartists in the country. As he would always say “ignore the news” that is so because he puts his faith in charts. :) to quote spyfrat “im into pcp, ict, ipvg and avoid blues” good luck to all in these trying times in our market. :)