the brand

A brand name according to mr webster is the name which a given brand of goods is known. A brand is an identifying mark;trademark. Or something that distinguishes it from other goods. :) from an accounting point of view this is an intangible asset because it is something that cannot be quatified but i do believe that it is a very powerful weapon that can be used by any company. :) a perfect example of this is my friend's dad, we were discussing about stocks one time and he mentioned that he only buys ayala stocks. The main reason is that you believe in the product or in the company. :) he believes that the company is ethical and always puts shareholder interests first. :) it is the ayala brand for my friend's dad that set it apart from other companies knowing that the company stands for excellence. :) another example here is jollibee and mcdonald's. Why do people prefer the bee over ronald macdonald? :) maybe because people here see that jollibee is more suited for the filipino tongue or is it something that they can identify with? There are so many questions to be asked but one thing i do know is that a strong brand will definitely have an advantage over its competitors. :) a firm believer of this is nobody else but mr warren buffett himself. :) but we do have to admit he was more a student of benjamin graham when it comes to value investing but his path what somewhat influenced by his partner mr charlie munger. :) if it wasnt for charlie munger buffett wouldnt have bought see's candies which was five times its book value, coca cola, american express, just to name a few. :) but munger showed him that even though the company was five times its book value there was still value to be found because the see's candies brand cannot be quantified. :) it doesnt show in the financial statements of the company. :) just doing a little survey among my friends i asked what softdrink would they rather have?? pepsi or coca cola. :) the answers that i got were interesting. :) around 2/3 of the respondents wanted to have a coca cola. :) i got a lot of answers saying that they were already used to drinking coke and that it tastes better. :) i also believe that the advertisements have an influence on the preference of the respondents also(this is just a theory of mine) because the ads condition the viewer subliminally that coke is better. :) and we do have to admit that coke is the stronger brand because just the bottle itself is recognized by millions of people around the world. Another theory of mine is that there is really brand loyalty by consumers. :) the coke distribution network here in the philippines, i believe, is superior compared to its counterparts which makes us come to the conclusion that by the time its competitors are able to penetrate the different parts here in the country most of the time coke was already there first. And when consumers are comfortable or get used to a certain product most of the time they will stick it out with the product. :) that example also applies for smart here in the philippines. :) being the first to really have the widest cellular coverage in the country so it also follows that a lot of people had smart as their first cellular network and a lot of those people have continued to patronize the said network which makes it really hard for other networks to equal their subscriber base. :) and another question i was sharing with my best friend the other day... what if a diffrerent container was used and you put coke inside it and the name on the bottle will be “coco-cola”. Will it sell as good when it was in the distinct coke bottle with the red coca cola logo on it?? :) now you tell me will you yourself buy the product? :) thank you so much for your time. :) for any comments, questions and suggestions please email me at compounder888@gmail.com. God bless to all of you. :) good luck.
ps. today its been two years that i have been sharing my thoughts with all of you. Thank you for joining me in my journey. :) happy birthday mr warren buffett. :)

anino

mayroon akong kasama

saan man ay dala-dala

nang dumilim ay nawala

wala na akong kasama

                         

this was a poem a wrote when i was in high school and i decided to write it here right now to reflect my mood. i just want to vent out my loneliness, frustrations, disappointments and anger. i just want to get it out of my system so that i could function properly again. 

we all need lubricants!!!!!!!!!!!!!!!

oil's is in its last parabolic leg. time analysis suggest it should end july til sep (max early oct) as base 3 (or the period covered by X) is only 10 months. in the sample chart of broadvision, the perfect parabolic curve of its X is also 10months and its last leg was due on the 8th time bar. on it's 9th time bar, broadvision broked the key reversal red trendline. im just fascinated by the resemblance of oil's parabolic with broadvision. unfortunately, prices cant be determine but if we use mathematical proportion we can guess. 

broadvision x = 90, high = 138 (did not doubled in percentage but the leg is shortest in percentage increase); gain = 53%

last leg parabolic started 138 to 192 within 8 time bars.
% change = 192/138 = 39%

ratio of % gain: last leg parabolic of boradvision is 73.5% of it's X percentage gain. to show = 39/53 = 0.735
----
oil's x = 50, high = 98 ; gain 96%
oil's last leg started at 88 (base of red trendline)

solving for "guessed" max/high price of oil's last leg:

formula: projected max/high price of last leg = (start of oil's last leg parabolic) times (1+(percentage gain of oil's X) times (ratio of % gain of X and parabolic of broadvision))

given:
ratio of % gain of broadvision's X and last leg = 73.5% or 0.735
start of oil's last leg parabolic = 88
% gain of oil's x = 96% or 0.96

compute:
projected max/high price of last leg = 88 x (1+(0.96 x 0.735))= $150/bbl


caveat. there's no relation between broadvision and oil except similarity of their charts. there are other parabolic chart sample other than broadvision which could lead to different ratios and proportion. so happen both charts have similar wave counts (base 2 to base 3) and time correction pattern (base 4) as well as valid trendlines (4 of them with the red trendline as the key).


Support the street children movement.

this is spyfrat's post. :) spyfrat is a fllod victim and yet he still had the time to write something for us here!!! a true testament for his love of investing and trading. :) i decided to add little flavor to the blog by having a guest writer from a different school of thought. :) but of course i still believe the your investing style really depends on what your goals are and your tolerance for risk and patience. after all short term investors and long term investors are after the same thing PROFIT! we just have a different process of doing it. as they say in school in math class "the process doesnt matter as long as you get the right answer."

ps for any comments, questions or suggestion please email me at compounder888@gmail.com

i will also try to have a fundamental analysis of oil next time if i have the time. :)

The Law of One Price

prices and economic incentives:
comparing apples and assets
We expect the same thingto sell for the same price. This is the Law of One Price. Why should this be true? Common sense dictates that if you could buy an apple for $0.25 and sell it for $0.50 across the street, then everyone would want to buy apples where they are cheap and sell them where they are priced higher. Yet this price disparity will not last: as people take advantage, prices will adjust until apples of the same quality sell for the same price on both sides of the street. Furthermore, a basket of apples must be priced in light of the total cost of buying the fruit individually. Otherwise, people will make up their own baskets and sell them to take advantage of any mispricing. the arbitrage relationship between individual asset prices and overall portfolio values is explored later in this chapter.
The structure imposed on prices by economic incentives is the same in financial markets as in the apple market. Yet a different approach must be taken to determine what what constitutes the “same thing” in financial markets. For example, securities are the “same” if they produce the sane outcomes, which considers both their expected returns and risk. They should consequently sell for the same prices. Similarly, equivalent combinations of assets providing the same outcomes should sell for the same price. Thus, the criteria for equivalence among financial securities involve the comparability of expected returns and risk. If the same thing sells for different prices, the Law of One Price is violated, and the price disparity will be exploited through arbitrage. Thus, the Law of One Price imposes structure on asset prices through the discipline of the profit motive. Similarly, if stocks with the same risk have different expected returns, the Law of One Expected Return is violated.

Economic Foundations of the Law of One Price
The Law of One Price holds under reasonable assumptions concerning what investors like and dislike and how they behave in light of their preferences and constraints. Specifically, our analysis assumes the following:
More wealth is preferred to less. Wealth enhancement is a more comprehensive criterion than return or profit maximization. Wealth considers not only potential returns and profits but also constraints, such as risk.
Investor choices should reflect the dominance of one investment over another. Given two alternative investments, investors prefer the one that performs at least as well as the other in all envisioned future outcomes and better in at least one potential future outcome.
An investment that generates the same return(outcome) in all envisioned potential future situations is riskless and therefore should earn the risk-free rate. Lack of variability in outcomes implies no risk. Thus, strategies that produce risk-less returns but exceed the risk-free return on a common benchmark, such as the U.S. Treasury bills, must involvemispriced invesments.
Economic incentives ensure that two investments offering equivalent future outcomes should, and ultimately will, have equivalent prices(returns).
The process of a short sale are available to the investor. This assumption is easiest to accept for large, institutional investors or traders who may be considered price-setters on the margin. Even is this assumption seems a bit fragile, market prices generally behave as if it holds wel enough. The nature and significance of short sales are discussed more later in this chapter.

Systematic, persistent deviations from the Law of One Price should not occur in efficient financial markets. Deviations should be relatively rare or so small as not to be worth the transaction costs involved in exploiting them. Indeed, when arbitrage opportunities do appear, those traders with the lowest transaction costs are the ones likely to be the only one who can profitably exploit them. The Law of One Price is largely-but not completely-synonymous with equilibrium, which balances the forces of supply and demand.

This article was in response to an email sent to me asking if there was a law(like supply and demand) that could support value investing. Then here it is for everyone to read. This was taken from the book “understanding arbitrage: an intuitive approach to financial analysis” pages 5 to 7 by randall billingsley. Wishing you all good luck on your life and in your trades and investments. :) for any comments, questions or suggestions please email me at compounder888@gmail.com

the new philippine heroes

Hello again everybody im back after a three week hiatus for a little vacation. :) it was a good break after a year of hardwork. :) and of all my vacations i have to say that this one gave me a lot of realizations. :) first realization of was of being how rich the greek culture is and how much it has influenced the world and especially the roman culture. As they say “the glory that was greece, the grandeur that was rome.” and how true it is. :) and the next i will explain further in this article. :) the first part of the vacation was a land tour around athens, kalambaka, meteora, delphi and olympia. :) and the second part was a cruise around the greek islands mykonos, patmos, heraklion, rhodes and santorini. :) the cruise ship had around 2,000 more or less passengers and it had 432 staff members of which more than a hundred were filipinos. :) and the filipino crew members recognizing us being their “kabayans” they were friendly and were asking about how things are back home and told us about their lives in the ship which really touched me. Compared to working in the philippines there is no doubt that they are paid better working abroad but the sad part was that they were in europe and all their expenses were in euro but they were paid in us dollar(greeks are smart eh?). :) they usually have contracts of 8 months and mind you there is no day off and they work 12-13 hours a day. Tsktsk i remember a waiter telling us that sometimes he or most of his fellowmen in the ship get home sick and are too tired to keep on working but just receiving one text message from loved ones back home and it is enough to keep them going. I was really touched when i heard that. Then the first filipino staff member that i met in the ship was mike the head bartender and his story was that he sends back 80%-90% of his salary back home because he has three kids who are going to school. Can you imagine such sacrifice. He was also a champion in a singapore bartending event and he is even given a 30minute bartending and juggling exhibition in the ship for its passengers and i curiously asked him if he is given extra because of that skill. Then he told me that he didnt ask any extra pay from the company for that but in exchange he just asked that his brothers also be taken in the company for work and he has three brothers also working in different departments for the same company. Such a touching story. :) he even gave me a hundred dollars to bring back home and left me the choice of jewelry that will fit his budget for his wife because it was her birthday. :) then another was a waitress from iloilo also and she told us of her plans that she was going to save enough money to buy a van for her mother back home to start a rent a car business and help the whole family. :) and she also sent a $100 through us for her mother. It was really touching to hear stories of our heroes abroad. They are truly our heores for if it wasnt for the ofws our country wouldve been in much worse shape. They have basically helped sustain our economy. Helping kids go to school, helping build homes and helping millions of other filipinos live better lives. :) the government should do something so that our fellowmen wont be forced to go abroad to find work. More jobs should be generated here in the country! :) the ofws are our modern day heores! Long live the ofws! Long live the filipino and the filipino spirit! :) God bless and take care. :)

rice rice baby

I have always stated that the us is going to suffer a recession and i am that happy that somehow it really happened and i didnt make myself look like a fool. ;) but after that i also stated that prosperity will transfer here in asia and after a few months this year it hasnt looked promising..... tsktsktsk :-( and my dad has consistently repeated that we are in a crisis right now and after doing a little research and careful study on the subject my father was right on a lot of points and maybe without being conscious about it.... the drop in the american economy drove investors and speculators alike to buy gold, oil and other commodities as a hedge against the weakening us dollar. As a result, it drove the prices of commodities up which resulted a meteoric rise of gold and oil, even reaching new highs, with almost every machine in this world being driven by oil it resulted in rising costs in everything from transportation, food and almost everything. I still believe that there will still be a shift in capital from the us to asia because in simple plain logic any businessman or investor will always put his money where he can get better returns and asia in my opinion is the next best thing after the us right now because asset prices here are not that high compared to europe and other parts of the world. :) so it might be true that capital will probably go here after the us recession but it also came at a price. Tsktsk and then there is another, the weakening us dollar and the strengthening peso, though looking at the bigger picture it is better for our government that our currency strengthened because it will lower our foreign debt which would lower our deficit and same is true with companies with dollar loans. But in return we are also lowering the purchasing power of our dollar dependent families or families receiving remittances from abroad. From P55 to P41 is a 25% decrease so if your receiving $1,000 a month a few years ago it would translated into P55,000 in expenses be it groceries, shopping or investing but now it is only worth P41,000. Ofw family budgets are definitely affected. Then you have to factor in the fact that basic commodity prices have been rising lately. Tsktsktsk gasoline has been steadily increasing the last few years. When i first started driving diesel was at P9.80 per liter imagine that???? below P10 a liter and maybe that was 10 years ago then when i had my own car in college it was at P15.00 already and now its at the P40 range already. Tsktsktsk i will put it in numbers so that you will understand the impact it has on our daily lives.:) 
diesel is increasing at a rate of 15% per annum. tsktsk and i think it will keep on going up and with that expect fares to also go up. And i think the most serious crisis of them all right now is the rice shortage which is a staple to the filipino diet. :) they say that there is a rice shortage and i really dont know the truth behind it. Some say that this is a ploy of the government so that the people will forget about the zte deal scandal. I really dont know but what i do know right now is that a solution should be made for the rice prices to stop rising and to stabilize. Tsktsk im calling all the rice hoarders to please release whatever rice they may have for the betterment of our country. If you keep hoarding rice at this time i believe it is tantamount to economic sabotage and the government should do something about it. :) i have even heard stories that the warehouses of these rice hoaders when they were being checked up by the officials were empty but the truth of the matter is that their stock were in barges in the middle of nowhere. Calling officials please do something about this. I really dont know the truth about this. But that is the story thats been going around. Maybe its just a rumor or maybe its the truth i really dont know but every avenue to fix the rice shortage should be checked by the top men of the nfa. :) please do something about this!! :) according to my friend from the media holp-ups, burglaries and related crimes have been increasing lately which is probably because of desperate attempts for money. These are desperate attempts for money and to be able to provide for their family. Tsktsktsk another sign that a lot of the population are having money problems or hardships. Tsktsktsk im sure the government realizes this and businessmen should expect an increase in wages soon. Tsktsktsk can you see the pattern???? its a vicious cycle!!! everybody is affected in this. :) talked to a college classmate who is now an executive in the sm department store and she told me that the sales have dropped in almost all of their branches and they attribute this because of the rice shortage and it being a staple of every family. Families have to adjust their budgets for the increase of price in rice. Tsktsktsk im sure there will be bad debts here and there because of the crisis but it wont reach that level of the us subprime crisis so we dont have to worry about that. :) let us hold on tight, it will be a bumpy ride in the next few months but i know there is light at the end of the tunnel. :) every economy will undergo its ups and downs and this is something that we have to surpass. :) to put it in simple words i dont know what the market is suffering from right now. Is it just a slight fever of flu i really cant diagnose it. Hehehe :) just continue to do research and continue to find for diamonds in the rough. :) bargains are to be found at this time. :) patience is a virtue. :) i still expect oil and gold to keep on going up so better buy your loved ones some jewelry while its still cheap. :) God bless. :)
p.s. For any comments, questions or suggestions please email me at compounder888@gmail.com. And for questions sent to me by email last week i'll answer them soon. :)

nba trades and panics

Panic is contagious and it can happen anywhere. :) being a basketball lover myself, the events that happened the last few weeks just before the nba trading deadline expired made me realize that panic can strike anywhere. :) in the nba's west division this panic started when the los angeles lakers were able to get pau gasol for memphis which all of a sudden made them a championship contender. This trade gave their team a legimate center and a filled a very important piece in a phil jackson team, a big man who could pass the ball. But pau gasol is not just a good passing big man but is also a low post threat and a great defender and when andrew bynum gets back from injury they will surely be a great frontcourt(thank goodness they were able to get kwame brown out of the team). Then with this development the phoenix suns were also forced to make a move which resulted to getting shaquille o'neal in exchange for shawn marion. :) i do agree with this move because you need a big man to survive in the nba playoffs which the suns have sorely needed the last few years. But the problem with this trade was that they had to give up a very importat piece in their team. I mean dont get me wrong the phoenix suns are still a great team and will still be one of the best teams in the nba but they wont be a great without shawn marion their team. I consider him a very important piece that made their team click. He is one of the few players in the nba who could defend all positions from point guard to center. He gives you everything points, rebounds, some shooting and defense and also not to mention he is also a great finisher of the fastbreak. :) but still all is not lost for the suns got shaq who we can say is at the twlight of his career but still his presence will surely help any team. They would now be a slower team than before but now more battle ready for the playoffs assuming that shaq stays healthy. :) then the next team that i believe made good moves also would be the san antonio spurs signing kurt thomas a great low post defender and a very solid player and also damon stoudamire a very reliable point guard to relieve tony parker. :) the spurs have just made their once very solid team into a very very solid team with their core still intact i could say that they are still the team to beat. :) with the top teams beefing up in the west guess who made the worst moves you guessed it right MARK CUBAN. Hehehe the dallas mavericks made a very disastrous move. :) sure getting jason kidd is great but overall i think they took a step backward. :) they gave up devin harris who is a very promising player and they got a player to play a position that i believed was adequate enough in the first place. Jason kidd is great but we must admit he is now on a downtrend. :) at 35 years old that is just too old for a point guard. There's maybe just a year or two left in him while devin harris is an all-star in the making. And if you really come to think of it teams in the west made moves to strengthen their interior then so why make a move to strengthen the teams backcourt when it was okay in the first place??? as they say if its not broken then why fix it. :) they should have gotten an interior player ala kurt thomas coulve done more good to their team than getting jason kidd. This move didnt have any margin of safety there is so little room for error. This would mean that its all or nothing for the dallas mavericks this season. Tsktsk what the mavericks did also happens in our market. I believe that it is called institutinal panic when a competitor does something whether it is right or wrong most of the time the other competitors would usually copy that move. :) what happened the last few weeks in the nba is a clear example of that. :) this institutional panic that happens in our market could sometimes open the door for us value investors to get some bargains. So let us always be ready. :) remember what buffett said “i would rather pay for a great company for a fair price than to pay for a good company at a great price.” good luck and God bless. :)

happy valentine's day

Happy valentine's day to everyone!!! :) as of this very moment there is a very intense debate in financemanila and the topic being which is better technical investing or value investing. :) well its been a lively discussion the last few days and all i can say is that(just like in this popular ad a few years ago “kung saan ka masaya te supportahan ta ka!”(wherever you are happy i will support you). :) you dont have to follow a successful investor's style but just get bits and pieces of it. I say this because when you practice a particular style you have to be really comfortable with it because there is no perfect style or system. All systems have its advantages and disadvantages also so you should be able to take its downside to be able to appreciate its upside. :) doesnt this sound so familiar??? its as if im talking about a girlfriend or a wife but i believe that it is really true. :) being a value investor can you withstand a 20% or 30% drop in your portfolio??? sometimes you have to stomach it for you to be able to enjoy long term gains. :) so whats new?? nothing much but i have been extra busy the last two weeks... i was in manila with my father for work and we also consulted our financial advisor and thank goodness we agree on most points. :) the philippines is doing well and will continue to do so in the next few years even with the us downturn. :) but we agreed that the selling of government assets is not sustainable so the next president will really have a problem with this. Tsktsktsk we also talked about asset allocation of one portfolio but this is one whole topic altogether. :) we also talked about real estate prospects here in the philippines in the next decade. :) we expect the real estate sector to do well because of the low interest rates businessman will be forced to get their money out of banks because they would rather put it somewhere else that could give them a better return on their capital and real estate and financial markets would be a good choice and maybe you could also include currencies. :) we also talked about a university being a great business because it incorporates a good business and then real estate. :) even the taipans agree with him. :) henry sy being the second biggest stockholder in far eastern university and he is also offering to buy this school which i cannot mention as of the moment and also lucio tan also now owning university if the east. :) last february 1 the headlines of the philippine star was the philippines record growth. :) i believe a big factor of this was played by our present environment of low inerest rates. :) we will survive and do well in the next few years i believe because asia now is more mature and will be able to take all the bumps and bruises. :) but dont take my word for it. Continue to do your research and then buy great companies at great prices. :) good luck :) God bless :)

words of sir john templeton

to buy when others are despondently selling and to sell when others are avidly buying requires the greatest fortitude and pays the greatest potential reward.

crazy mister market

Its been two weeks since i wrote an article here and a lot has happened. :) i attended my friend's wedding and i was beside my businessman friend and we talked about our idols in philippine business, his being john gokongwei and mine being henry sy. Both have a different approach to business but they both get results and as they say “you cant argue with success.” :) i will talk about them more in the future. The us markets have gone crazy and maybe i can say that they are in now a semi-panic. And i would agree that it is contagious and our local market here has also gone wild and maybe we could make a documentary or movie about this and the title would be “markets gone wild.” :) hehehe just when the markets showed technical signs that it was going to make a rally then it goes down hard and then it had sucessive days of increase then it goes down again. Its like a crazy rollercoaster ride. :) i think it is starting to become clear now that the us is going into a recession and the question is... is greenspan a genius or the source of all the problems the us are experiencing now? :) a genius because he was able to keep the us economy afloat for how many years or should he blamed for delaying the envitable recession which is now hitting the us hard because it came a couple of years late? :) you be the judge! :) and the next us election will really be critical and who knows what just might happen. :) personally id like to see barrack obama get into the white house. :) it would be nice to see an african-american in the oval office but the question is that if the us is ready for a black president. :) ill just write here whatever pops into my head and of course it chould also be relevant to finance and investments. :) commodities have been hot lately with the recent us downturn. :) this might just be the golden years of gold!!! hehehe but dont expect it to be a smooth ride just last week gold was as high as $920 then went to as low as $850 and then increased around 7.5% in just 60 hours and reached $920. :) phew! Im just thankful my stomach has been able to take the market turbulence lately. :) we have been infected with this market panic. And what is the result of that???? bargains, bargains and bargains in the market. :) to name even a few theres meg, chi, mbt, chib, sm, jfc, ac, ali and kpm has been strongly trending up even with the market volatility as of late. :) last january 23 the philippine daily inquirer had for its headlines “global stock plunge” and then on the same day most markets around the world took back those losses and also the day after, this just shows how fickle minded the market is. :) thats how mr market is. :) i have seen the fs of urc and what can i say? Im happy its condition has been the same since the first time i took notice of it 4years ago. It still has s solid balance sheet and even though its income statement has a nig investment gain in it i could still say that it is a bargain in its current price. :) its international line still hasnt taken off i might add. :) well i would agree that it is in a boring industry but does that follow that profits are also boring??? :) its profits are in the billions and i would expect it to continue in the next couple of years. :) id like to invest in the market with the current prices but im still strapped for cash because i paid for my restaurant investment with friends that we put up in laguna. :) so ill gather up ammo first then wait for bargains but as for the moment ill just stay put and just watch from the sidelines. Tsktsktsk last january 20, i attended my friend's(high school classmate) wedding and intimate reception at his wife's home. It was a fun event being able to be with close friends it always a refreshing and enjoyable experience. :) the next day i shared the photos that i took during the wedding with another classmate of ours who is in new york and i realized how easy it is now in this age of computers and digital technology. :) if its that easy to now send information to any part of the world i could assume that it is also that easy to send money to anywhere in the world. :) so what am i driving at??? that dont be surprised if foreign money will go in to asia soon. :) there is nothing special with my reasoning it is all about common sense and simple logic. :) remember that if only 2 people have the same idea out of 10 it means that what you have is something special. :) in other words contrarian is the way to go. :) dinagyang was a lot of fun this weekend here in iloilo. :) you should be here next year to join all the fun!!! :) good luck and God bless to everybody and hold it in. :)

the year that was and the year ahead

Happy new year again to everybody and good luck to a year of trading and investing. :) its been a busy year so far! Phew! I helped organize and attended my friends wedding, after that i got sick because of the stress and also maybe because of fatigue and then i was in binan, laguna last friday to attend the opening of our restaurant business with friends. :) i hope this business venture of ours will turn out great and give us great returns. :) i also got life insurance from my best friend and the truth of the matter is that i didnt want to get any insurance policies because the money that im going to pay for them is my investing money. Tsktsktsk i would rather invest them myself and im sure i would be able to get better returns. It would give me a 5.5% compounded return in 20 years. Tsktsk its not that good but i would like to look at it like a time deposit in the bank. :) so all is well after all. :) then just before new year i bought a ream of cigarettes and i did some computing, in 15 years a ream of cigarettes would be worth P1,000 already. So smoke all you can while its still cheap!!! hehehe im just joking. :) i will do a study on that next time on why you shouldnt be smoking. :) i will give you the reasons both health-wise and money-wise. :)
now its time to talk about investing!!! what do i predict this year??? i dont have any but i do know that i will continue to buy great companies at fair prices. :) from a technical point of view had a chat with spyfrat and according to him it will be the year of commodities, the psei will be really volatile in the short term and might stabilize maybe around march, gold can reach $1,000 before the first half of the year ends(as of last trading day gold closed at $895) and the US will really be falling prey to a recession. :) what is the difference with our situation now and the asian crisis 10 years ago. :) one of the reasons why the bubble burst 10 years ago was that because everything was overvalued, we started to run even before we learned to walk. Now that the us is in a financial crisis you can expect that there will be a shift of capital from the us to asia. :) 10 years ago there was still no china and india factor and in the next few years they will both lead the charge in asia's rise. :) asia is now more mature now economically and can now face the world. :) asia i believe is still undervalued and will soon catch with europe and the us. :) its all part of the economic cycle:what comes up must come down and once your down you have nowhere to go but up. :) hehehe the us is a credit economy and the average american has $20 in their wallet. :) i think that the filipinos are better off and have more than P1,000 in their wallet. :) i remember this story of some friends in hong kong, its a story when they were handed back to china. :) chinese from the mainland started coming to hong kong signature shops and shopped like crazy. :) and believe it or not they paid with cash. :) they still didnt have credit cards. :) and they say that china is overheating??? i think that its still growing because it still has a lot of catching up with the western world. :) china is still in a growing stage! :) the philippines will ride the wave that china has created. :) lets wait and see what happens. :) as for the philippine stock market??? i think it will continue to improve but dont take my word for it because you never know what mood mr market is in. :)im hoping for a 15-20% return by the market this year. :) im really now sure what the market will do this year but i do hope mr market will be generous enough to give me some bargains this year. :)
for any comments, suggestions, questions or whatever please email me at compounder888@gmail.com

as sure as the sun will rise

Its been a very busy christmas :) the season has now a different meaning when you age, i now understand what the older people have been saying all the while hehehe :) but anyway its been a joyous christmas for me and even though my wallet has been massacred with all the gifts and “tips” to people im still happy to see the smile in their faces. :) this article will be my little christmas gift to all of you readers of my blog. :) the last two weeks we have seen the steady rise in the share price of digitel communications. :) and why is that??? because of speculation of a takeover by a singaporean company and a few other offers from others. :) the talk thats going around is that they are offering $900m but mr gokongwei wants to sell at $1b and that is why the negotiations are still in limbo. Time will tell what will happen to this company. I will tell you a little story what lead me to research about this company. :) i like this company and even liked it better when i saw the numbers. :) i saw hidden value in the company or maybe you could say that i saw promise or potential in its product. :) it was undervalued because the company was still losing money. :) this is still value investing but with a twist. :) i only so two things happening to this company: it making money or an investor buys it at its fair value or even at a premium. :) my family got more than 50 lines at sun cellular for our employees because we wanted to save on out telephone calls. :) they are the only network offering unlimited text and calls to the same network. :) after a few months of using my sun i realized the cost savings our company got. :) then i realized how lucky we are to have discovered the wonders and advantages of using sun cellular and it would just be a matter of time also before millions of people discover it also. :) good thing i still found the draft i made last september for sun cellular but i decided to hold it and wait for the write time to put it here. I believe there is no better time to write about it. :) my draft is dated september 12, 2007 and i have already been studying the company for two months prior to writing the draft and then i accumulated shares after a month. :) i gathered information and data and i had to be resourceful to get it from reliable sources. :) good thing i had friends who were associated with the company. :) what ill be writing down is the important points that i made in my draft. :) the big advantage that sun cellular has over other networks is their unlimited calls and texts to the same network. :) the other networks will have a hard time offering this service because it will really hurt their income but sun cellular was built to cater this unlimited service to their subscribers. :) i remember my brother-in-law saying that in cebu it is “in” if you have a sun phone. :) here is also another point in my draft, in the short term i dont expect sun to grab market share because the other networks still have superior service but i can see that sun will become a “secondary” number but they are now improving their signal, adding more cell sites and now has better coverage. If they keep up the good work they might grab a big slice of the pie. :) i can see sun cellular making money in two to three years but if you really want to be conservative maybe five years. :) sun is full blast in metro manila and in metro cebu which are the two major cities and they also have good coverage here in iloilo and to my surprise even in the towns outside the city. :) they are adding more cell sites in the visayas and mindanao area. Sun is doing well in davao and cebu because there are a lot of companies there and companies here in iloilo are also catching up the the sun cellular craze because sun gives you cost savings. I dont expect smart and globe will see a decrease in their subscriber base but i do believe that they will see a decrease in usage by their subscribers. A company should have a good manager and the gokongweis fit the bill. I admire them and believe of their capabilities of taking the company to the next level. The father started it all but the son knows how to unlock shareholder value. :) here are some of the numbers that i ran into during my research :) as per research the subscriber base as of september now reached 3million(this is an estimate) and at the end of 2006 the number was 2.2million. :) the company is expected to profit at 4 million subscribers and the long term target is 6 million subscribers. :) they have 30,000 dsl customers and the target is 50,000. :) the company's capex for 2007 is $200 and $150m will be on the cellphone business and $50m will be spent on the dsl business. :) the $150million budget for the cellular business means that their target of 40-50 cell sites per month is very much attainable. :) with these numbers i can only see good things happening to this company. Merry christmas and a happy new year to all!!! God bless!
ps. for questions, comments or suggestions please email me at compounder888@gmail.com
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!!!

economies and christmas

Its been a very busy past few days... phew! Im really tired because i had to attend a christmas party last friday night and went home late then had to wake up at five in the morning the next day for a trip to manila witm my father and then get back home late in the afternoon and then attended a friend's party at his bar. Wow! Then the next morning went to mass and had lunch with relatives for my maternal grandmother's 90th birthday. :) thank you lord for my very wonderful grandma. :) then in the afternoon i had coffee with a friend and then attended a christmas party with our employees and i really had a good time watching their presentations and enjoyed watching them participate in the games. :) then im here now in my room in bed trying to write something for this blog. :)
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. :)

irrational mr market

mr. market is now showing signs of life and then just today it drops almost 2%? hehehe well thats the market for you. IRRATIONAL. :) and this is something that we all have to deal with. sometimes the market can be overly generous and sometimes it could also be very stingy. And it is in our better judgment at what price we buy the stock that we like. :) its been almost five years that ive been trading seriously and i even started out as a technical trader but i fell in love with value investing because of its simplicity and the two most important things that you need are:common sense and patience. :) which i dont know how but i realized that i have both of these traits. Hehehe :) i still believe that the market will still make a rally for the yearend but let us just wait and see. :) there is really nothing much i can comment about the market right now except that if you see a bargain just buy it if you can see that it could give you excellent long term returns.
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 compounder888@gmail.com

trillanes rally

Mr trillanes made headlines again last thursday by holding that “coup” if you would like to call it. :) i admire our government on how they handled the situation. :) they had to use some kind of “force” to stop that stunt and to show others who would also like to destabilize the government that they mean business. I admit that president gma also has her faults but we have to look at it in a bigger picture by weighing things. There is no question that there is corruption in our government but my point on president gma remaining as president is for the fact that she knows what shes doing and she knows how to run the country and all the destabilizing plots will just be in vain. All these plots to unseat the president doesnt do us any good :) why not do something positive and help our country progress and improve!!!???!!! :) president gma is not a perfect president but she is the best person for the job right now and it is time for us to work together and help bring glory back to our country. :) and now lets talk about our favorite topic the stock market. :) my sister is interested in buying stocks for the long term and as she puts for her baby's college education. :) i can see two stocks right now that really fit the mold. :) and i told her to get some of it tomorrow! :) i do hope she has the stomach to withstand the ups and downs of the market. :) i have a friend who commented that i should have sold my shares in this certain company awhile back when it was trading at its high. Well he has the point but why cant he get my point that i buy the company and not the stock. :) i study a company and if i like it, i just wait for it to get to a price where it could give me a superior long term returns. :) its that simple really but why cant he get it??? I buy the company and it really doesnt matter to me if the market doesnt like or if the price is depressed(if its depressed doesnt it follow that its a bargain???) because all im after is buying a great company at a fair price just like what warren buffett said. :) that is one of the mysteries of the stock market because in real everyday situations people dont act like that. As they say the market is irrational. :) as ive told you before if you like a pair of shoes you usually dont wait for the price to go up and buy it, what people usually do is wait for a sale and then buy it. :) but in the market people do that opposite and i really cant explain why that is so. :) as the famous technical trader william o'neal said “the two most dominant emotions that dominate the market is fear and hope.” said but for me the best approach is to buy low and sell high because its the one that makes the most sense. :) if you are a technical investor i believe that this is the best time to buy shares because as of last friday the market has indicated that there was follow-through buying and it has triggered a rally and it is just in time for the santa claus rally that usually happens every december and january. How far the market will go up we'll never know and only time will tell. :) good luck on all your trades this december. :) God bless and take care. :)
p.s. If the market does rally we might as well call it the trillanes rally than the santa claus rally! :)

bargains and hurting

Its a lazy sunday afternoon after playing a ballgame where our opponent won the game against us by 20points tsktsktsk and here i am relaxing my aching muscles and beaten up ego because i had a bad game and we will have our knock game against the same team this coming tuesday but the catch here is that we also have a semifinal game in another basketball club this coming tuesday also at the same time. Phew..... how am i to go about this??? im reading this book right now “the winning investment habits of warren buffett and george soros” by mark tier and its really good. :) i am enjoying reading it. :) im a bit disappointed with the performance of the stock market lately and it would seem to me that mr. Market is upset about something lately. Which i believe is the subprime crisis in the us. But its okay i still believe that the market is undervalued by my count and ive been trying to accumulate some shares of a few companies. I will tell you more about it next time and this is a good time to accumulate shares of companies because mr. Market is being generous right now better take advantage of it. :) there are good finds in the market and do your research well and you will surely find them. :) ive been very busy lately... phew! Been busy with work and especially that a group of friends and i decided to franchise a fastfood restaurant somewhere in luzon and another group of friends and i just opened a printing business. :) phew! Ive been very busy lately indeed. :) and also i have discovered lately that besides work and the stock market or investing as my passion you can also add to it photography and its one hobby that i want to develop and learn more. :) and i have been bothered about something that happened to me a few weeks ago and i hope you guys wont mind me talking about it here. The first weekend of the month i was out with my friends and the group included my best friend and a close relative. And the story goes like this we had fun drinks, laughs and all but i went ahead because i really dont like to stay out that late when i go out and according to sources they disappeared at around 4 in the morning when a friend had too much to drink and was throwing up and all of a sudden my guy best friend(who has a wife with two kids and a mistress and a number of girls that i couldnt even keep count and by the way he was also making out with some girl he just met before he was with my cousin) and that relative of mine was nowhere to be found and when friends were calling her she wasnt answering the phone which made me very worried and at the same time suspicious. The only viable place where they could go was a hotel nearby and the sad part was that they forgot that some of the personnel there used to work for our hotel also before and some of those personnel were able to identify my cousin and i couldve let go of the situation but what really pissed my off was that they both denied it and continued to lie to me(which is a clear sign of guilt and it also shows that what they did was wrong) and with that i decided to call some of my contacts and get professional help and they were able to get hold of some very important information like the credit card receipt and the hotel registration card which sad to say the guy has just no respect for me even used my name(his best friend) in the form and also i got a copy of the video where it shows my relative returning the key to the said room in the registration form which to me if you bring it to court is really hard evidence and you could even say that you could convict them “guilty beyond reasonable doubt.” and the very upsetting thing was that he doesnt know i was able to get a transcript of his calls and text messages and he is even “coaching” my relative to lie but the sad part is that i know the whole story and all the lies that he will throw to me wont just do any good and makes me hate him even more. That really hurts me because i have been a good friend for such a long time and i know i might not be perfect and we may have had our arguments from time to time but i always helped him out during his time of need be it with his wife, mistress and even up to the point of covering up for him(sad to say the wife is my “kumare”) but he is still my best friend and made that choice to help him out and he knows that im really close to my relative and even treat her like a sister. When it comes to playing around my relative was suppose to be out of the question already(which i believe he knows and could be proven with him lying to me a sure sign that he knows that he did something wrong). I dont know if i really have reason to be upset or is this something that i should just let go. But i was really hurt with what they did but i believe that the blame falls more on my best friend. Ive made ways for him to know that im upset and that i know what happened and im not just fishing around for information. If you really come to think about it i have the hard evidence to show his wife(who i believe is also unhappy) which surely would end their marriage and to his mistress who i know suspects that he has other women also other than her and his wife. I can also show it to his family that sad to say he was able to manipulate for how many years already. I have been a good friend but why the betrayal?? what have i done wrong to him that he did that to me? For the meantime i will just wait and see and do nothing just like in investing. Wishing you guys a good trading week and i hope to hear from you. Im really trying my best to forgive them and maybe i have already i just dont know. Time will tell i guess. Im just praying to the dear lord that i will forgive them but i was really hurt with the betrayal. Phew! What a month so far? God bless everyone. :) carpe diem!

into uncharted territory

Its nice to see the market get to these levels after the market panic caused by the us subprime problems. :) the market hit its highest point this year last july 6 at 3,822.41 and at the height of the panic was as low as 2,874.99 on august 17. i cant wait for the time the market will hit 3,830 for it will signal another strong rally upward and we just be not far from it because as of the close of the market last thursday it showed signs of a strong rally and maybe break the 3,830 mark in the process and who knows where the market will take us. :) im happy that investor interest is back with metrobank because i added shares in the company also in the recent market downturn. :) i would say it is one of the very stable and solid stocks in our market. Ayala corporation was a bargain when it sold below P450/share. It was just unbelievable. Good thing i was also able to grab some shares. It was like a ferarri with a flat tire, sure you couldnt drive it for the moment but with a little fixing it is still a ferarri after you have the tires replaced. :) from its low of P405 it has gained around 50% after a month and a half. :) who wouldve have thought the market would be back to these levels after such a short time. I knew the market was still healthy but i didnt expect it to be back near the 3,800 this soon. :) hopefully we could go beyond the 4,000 level before the year ends. :) i wrote the first part of my next article of this blog after the pacquiao vs barrera match and i just wrote the introduction because i didnt think the market was going to go up this fast. Sure the bullish trading last october 2 and 3 showed signs that the market is going to have a strong rally but this is really BULLISH. Imagine 2% gains every trading day last october 2, 3 and 8. and the stocks that are really leading the charge are pldt, ayala corporation, ayala land, sm investments, metrobank and bank of the philippine islands. :) i thought the market needed a week of two to break the 3,830 mark but boy was i wrong. :) with the 3.830 mark broken, technically the minimum upside of the market is at 4,770. :) how long will it take the market to get there well time will tell. :) im just glad i stuck it out with the market during the downturn last august. ;) with this rally there are still some stocks that havent caught up with the increasing market prices like universal robina, ivantage, jollibee, gma7, national reinsurance corporation, solid group inc, sm development corporation, banco de oro, anscor, asia and keppel marine philippines. :) what can i say the market is like a yo-yo right now (just shows irrational the market is) but its okay as they say look at the long term and dont mind the short term volatility. In short dont be near sighted!!!! :) hehehe the market is about to have a strong rally after breaking 3,830 and with the peso strengthening thats a good indicator that the market is going to continue to go up. :) there are even some talks of the peso reaching the low 40's by the end of this year but lets not talk about that for now for that is still a subject that i still have to study. :) there is also this company that im studying right now. I really like it for it shows a lot of potential. It might just be the next turnaround company. :) i will share it with everybody reading this blog after i study it but so far i have been impressed. :) good luck to everybody and God bless. :)

asian boom

Its been almost three weeks since ive put anything here... just been busy lately. Phew! Anyway lets get back to business and our business is stocks or finance or anything with value in it!!! :) theres a lot going thru my mind right for its three weeks worth of ideas and observations around me that i sometimes use also in my valuations. Simple as it may seem to the naked eye but if you really look and understand things deeply you will realize a lot of things. I was in hong kong for a week for business and luckily last thursday afternoon i had a bit of free time and i was able to go to hong kong disneyland with two friends. I know this might sound funny at my age but i still think that disney still has its magic!!! i really dont know what is it but theres just some kind of magic when youre there. I guess that is a good indicator of a good product and if only disney was a publicly traded company in the philippines i would surely love to own its stock. :)
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!!!