vantage point and questions

Hello there again to all of you. :) i watched the movie vantage point with my girlfriend and friends and it made me think. :) the truth and your actions really do depend from your vantage point. :) this is true in our everyday lives, politics, work, love and almost everything. I'll touch on that more as we go along. :) i have been busy the last few weeks with business, work and a lot of things but i always try to make it a point to find time to write in my blog for it has become a new passion of mine. :) my dad and i have been to makati a few times in the last month to look for other business interests or alternatives if you want to call it. :) this is a result of very low interest rates in the bank. :) i believe most businessmen right now are doing the same thing, looking for an asset to give you a better rate of return than the bank. :) my dad is really not a big fan of the stock market not really because it is a bad investment but because he cant take the volatility or the uncertainty of the market. He would rather put his money somewhere else more stable even though it has a lower return. :) that is his comfort zone. :) he would rather have a tangible investment or something he could see and he couldnt understand the point of owning “paper” as an asset. But that is beside the point because the point is that you should do whatever you are comfortable with and understand and sooner or later you will succeed. :) we were in batangas last week to look around and i would like to ask what do you think of batangas for an investment because they say that it is the next big thing and after manila and makati the trend is now going there??? that is what they say so what can you say about it? The ayalas are there already and so is wton properties by lucio tan. :) how about laguna??? is it good to invest there??? we also went to the santa lucia mall in cainta, rizal and we were impressed and we might put up a restaurant there. :) is real estate really going to boom? Or will real estate falter because most of the projects being built right now are catered to the ofws but the big problem that that market is facing is a stronger peso meaning that their buying power is somewhat affected. But is it also possible that there will be a real estate oom because of low interest rates??? it is really a tough call but i still believe that in the end the latter is the most likely result but lets wait and see because time will tell. :) gold is now trending up strongly and needs less than 3% to hit the 1,000 level. :) and i will not be surprised if it that happends in the next few weeks. :) there are still a lot of bargains in the market and if i only had a lot of cash id surely buy some more. Tsktsktsk ALI is going to issue P1billion worth of securites to finance their plans of buying more properties and the question that im going to ask is that what will be the effect on the stock price and is this a wise move by the company? :) another question that i'll ask is that what has happened to the stock buyback of AC??? i havent checked lately but i do hope that they are still buying. :) so okay what has happened lately??? my “best friend” who betrayed me got an injury in his knee during a basketball game. My girlfriend has a stalker!!! hehehe i dont know how to react should i be pissed or be happy about it? But anyway the good thing is that her stalker hasnt been any problem lately but if that do happens i'll really report him to the police. And a word on the current political situation, please let us work together and just let the president finish her term. Let us look at the bigger picture lets stop fighting and get some work done. Let us work together. Good luck to everyone and God bless. :)
p.s. for any comments, questions or suggestions please email me at compounder888@gmail.com

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. :)

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. :)

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. :)