Tuesday, July 31, 2007

roller coaster

The market is now in a consolidation mode after it touched the 3,800 level and then what does the market do??? it goes crazy and mr market goes on a selling frenzy which lead to a big market correction for us. its now a wait and see game for us traders and investors. :) it would seem to me that the psei is undergoing a correction right now and how big the drop is i really dont know. The correction i believe is primarily caused by the unstoppable juggernaut called “recession” which most people now believe is about to hit the us. I remember when i wrote it i think september or october last year a lot of people disagreed that the us is due for a recession and now we are starting to see it unfold before our very eyes. :) but in the mean time other stocks are back to bargain levels so accumulate some. :) patience is the key here. A few days ago my friend raffy boy told me that the 2007 financial statements of feu are already out. So we discussed about it. after some computations and seeing the financial statements for myself the eps was about P86.37/share which is almost a 5% increase from last year. Well i told him to already get hold of some shares if he likes it. A school is just like an electric company dont pay your bill and your out!!! no electricity for you!!! hehehe as i told raffy boy the only people i know who graduated from a school without paying any tuition are scholars. :) and the rest are captive market of the school!!! do you remember when during exams you have to settle your tuition first before being allowed to take the test. A school is a cash cow. :) you know whats even better with a school compared to an electric company??? feu has very little debt which compared to an electric company it is debt heavy because every few years you need new equipment, machinery etc etc. a school doesnt need that :) it doesnt just have little debt it is also very liquid! :) what else can you ask for? My henry sy holds more than 20% of stock in this company. The board of directors are very competent and was impressed when i read more about their curriculum vitae. :) the number of enrollees dropped this school year because they lessened the number of students being accepted especially in their nursing course to improve the standards which i very much agree with the move. A school shouldnt just be happy with accepting students and get their tuition but it is also their responsibility to produce great and competent people when they go out into the real world. :) this is the bright side and shows a lot of promise for the company, the number of enrollees dropped by around 1,800 students but the school is still within its 24,000 target and still the company was able to increase its income. i wrote about feu a few weeks ago and i mentioned that it is slightly undervalued and i still stick to what i said awhile back it is undervalued and this could be a great long term investment. :) well its really up to you how you look at the company. But dont take my advice and always do your own research. I even told raffy boy a few weeks ago when he read the article about feu and i advised him that if he likes what he sees he should gets shares before august 15 or the end of august the latest. :) lets wait and see if this company will give great returns in the next few years. :) watch out for this! :)

Monday, July 16, 2007

go eric go!

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

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

3rd year anniv

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