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. :)

green is the color of money

For so many years the man at the helm of the federal reserve was alan greenspan and the question that im going to ask everybody reading this blog is.... “is alan greenspan a genius or a fool?” genius because for so many years he was able to keep the american economy afloat or is he a fool because of too gimmickery that when after he left his post the economy had nowhere to go but down. :) as they say the higher you are the harder the fall. :) economies by nature are cyclical meaning there will be periods of prosperity and there will be periods of depression which is normal. :) just like life itself. :) but during his long term in office which if i remember correctly is over 20years there was hardly a very serious depression. And if i remember correctly the life cycle of an economy with a great upswing and a great downswing is about 30-50 years according to marc faber in his book but i have to check on that again. :) so the last great depression was in 1929, 1973 and possibly 1987 could be considered as well but the question is when is the next great depression? Could it be happening now? Time will tell. :) the federal reserve has been drastically cutting interest rates and it hasn't had any effect yet. (another point that my friend has been raising about greenspan is that if he raised interest rates a bit during his term the crisis wouldnt be this bad)  I have a little opinion or theory if you'd like to call it. Interest rates have been lowered so where are people putting there money? For sure its not in stocks and most likely it is also not in real estate because of the subprime mortgage mess. So where are the americans, investors and fundies putting their money? Possibly in assets outside the us and most likely in commodities which would explain the rise in prices. And could it be possible??? according to the charts, gold has a mimun upside of $1,250 and with this credit crunch fundamentally the us economy will stay down for a while and the most likely place that people will place their bets in would be commodities so hold on tight guys. :)






maybe you guys are wondering why i made a poll about jamby madrigal and pia cayetano. It was just an idea that came up when they had a cat fight in the senate. :) i voted for pia cayetano i have to admit(she's also cute by the way) but i didn't vote for jamby madrigal. What have they both done while they were in office. Jamby making the news for protecting a tree and pia cayetano for entering all those athletic races and stuff. I have to admit they both haven't done enough and i could say that more deserving people deserve to be there. Let your vote be counted. :) good luck on all you invesments. :) God bless. :)
p.s. For any comments, questions and suggestions please email me at compounder888@gmail.com
and a joke for all of you! What disease is the market suffering right now??? answer: beary-beary. :)

$1,000 it is!!!

warren edward buffett - the world's richest man
gold jewelry
silver jewelry
gold has finally reached the promised land!!! it has finally breached the 4digit level. :) according to the charts the minimum upside of gold is $1,020 and who knows what will happen after that??? but looking at the long-term charts of gold like way back 70's and 80's the minimum upside that i could see from the charts is $1,250 and i know what's going through your mind that i might be crazy or something but hey im just telling you what i can see from the charts. :) hehehe i remember when i told my dad this the first time it was like almost 2years ago i was driving and he was in the front seat and he violently opposed! hehehe but now he's a believer. ;) because if you now look at it fundamentally it is now very much possible with the recession in the us and also being an election year you can't expect the next president to immediately make an impact in the economy because those things take time. :) so expect the same from the us in the next 2 to 3 years which would mean a stronger peso against the dollar and higher commodity prices. so the question right now is.... do you buy or do you sell??? the answer i believe that whichever way you go you just have to remember that there should always be a margin of safety in whatever course of action that you will take. :)
     i am now inclined to tell you a story about a friend. i decided to tell you their story as a lesson for all of us. let us remember the important principles of value investing margin of safety and preservation of capital.  this friend and all of her siblings did'nt practice these important principles which in the end made them broke. it is really a sad story to tell but it is something we can all learn from.  after the death of their mother the my friend and her siblings got a sizable inheritance and instead of investing the money into something that could give them good returns they threw it down all in the drain. the most important rule in investing is that you should never lose whatever money that it is that you or in short preservation of capital. :) and then margin of safety they also did'nt practice this because of putting up a business or working to earn a decent income to support themselves they instead decided to live the good life and spend their money and spend it until they got broke. when they got the inheritance their relatives advised them not to spend and take good care of their money but all of these fell into deaf ears. if theu listened to the wisdom of their elders this tragedy could've been avoided. the sad part of it all is that the elders that they didnt listen too are now the people they are running to for help. i really dont know how i could help my friend but if i do help her she should at least have the will to help herself.  let us remember that life is not easy and it is those challenges that we have in life that make life more colorful and give us character. lets go and fight the fight. :) good luck to everyone looking for bargains in the market because there are a lot. God bless.
p.s. for any comments, suggestions or questions you can email me at compounder888@gmail.com
a friend texted me and asked if metrobank is having a bank run. i told him of course not because if the biggest bank and one of the most stable banks in the country does have a bank run it would surely mean the end of our country and everybody in it.
i would like to end this article on the lighter side. what is the difference between a penis and life??? answer: life is always hard!!! hahahaha
good luck manny pacquiao! go out there and make us proud. :)

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. :)

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

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! :)

common stock prices and values

This is taken from Benjamin Graham's book the interpretation of financial statements chapter 33
Broadly speaking, the price of common stocks is governed by the prospective earnings. These prospective earnings are, of course, a matter of estimate or foresight; and the action of the stock market on this point is usually controlled by the indicated trend. The trend is gauged in turn from the past record and current data, although at times the expectation of some quite new development will pay a determining part.
The price of common stocks will depend, therefore, not so much on past or current earnings in themselves upon what the security buying public thinks the future earnings will be. (there are also important influences of a general or technical nature affecting stock prices-such as credit, political, and psychological conditions-which may not be closely related to any estimate of future earnings; but such influences will either eventually reflect themselves in the earnings or else prove to be quite temporary.)
In the ordinary case the price of a common stock is the resultant of many estimates of what the earnings are going to be in the next six months, in the next year, or even further in the future. Some of these estimates may be entirely incorrect and some may be exceedingly accurate; but the buying and selling by the many people who make these various estimates is what mainly determines the present price of a stock.
The accepted idea that a common stock should sell at a certain ratio to its current earnings must be considered more the result of practical necessity than of logic. The market takes the trend or future prospects into account by varying this ratio for different types of companies. Common stocks of enterprises with only slight possibilities of increasing profits ordinarily sell at a rather low price-earning ratio(less than 15 times their current earnings); and the common stocks of companies with good prospects of increasing the earnings usually sell at high price-earnings ratio (over 15 times the current earnings). Thus, two common stocks may show the same current earnings per share, may be paying the same dividend rate, and be in equally good financial condition. Yet stock ABC may be selling at twice the price of stock XYZ simply because security buyers believe that stock ABC is going to earn a good deal more than XYZ next year and the years after.
When neither boom nor deep depression is affecting the market, the judgment of the public on individual issues, as indicated by market prices, is usually quite good. If the market price of some issue appears out of line with the facts and figures available, it will often be found later that the price is discounting future developments not then apparent on the surface. There is, however, a frequent tendency on the part market to exaggerate the significance of changes in earnings both in a favorable and unfavorable direction. This is manifest in the market as a whole in periods of both boom and depression, and it is also evidenced in the case of individual companies at other times.
At bottom the ability to buy securities-particularly common stocks-successfully is the ability to look ahead accurately. Looking backward, however carefully, will not suffice, and may do more harm than good. Common stock selection is a difficult art-naturally, since it offers large rewards for success. It requires a skillful mental balance between the facts of the past and the possibilities of the future.

i thought....

Hello again there to everybody who follow this blog of mine. :) its been a week since i wrote an article here and what can i say a lot has happened! Like mark mobius has announced publicly that investing in emerging markets is a good hedge against volatility and can give better returns. :) is this the shift of funds to asia we were talking about? :) then gold and oil has started to make a strong move going up. And looking at the oil chart i could say that technically gold could reach $880 by april 09. but of course that is not a guarantee i am just saying what the charts are telling me and if you think about it fundamentally it is also possible because of the weakening us dollar. :) time will tell what will really happen. In the 1970's gold reached as high as $850 or if my calculations are correct around P400/gram during that time and if you adjust that for 25 years of inflation the price today would be around P2,900. Can you imagine that?? if you look at gold from that point of view gold is really way undervalued. But lets be conservative and say that gold during the 70's reached as high as P250 and adjusted for 25 years of inflation the price today should be a little over P1,800 and as of the moment gold is doing P1,050-1,100/gram. :) i also heard over the news that jp morgan is overweight on asia across the board. And that the us dollar-peso exchange rate could be in the low 40's by the year end. Our accountant also discussed with me yesterday the new bir rules which i believe they patterned after the irs in the us. They said that they'll computerize everything which will make evading taxes difficult. :) but of course let us see if that will ever become a reality but if it really does it will be really good for the country taking into consideration that our politicians wont put our money to waste. But lets just wait and see maybe this is all good in theory for all we know. :) i would like to congratulate the newest billionaire in the philippines mr. Andrew tan. :) i admire all your work sir and i like all the projects that your doing right now. :) there is just so much potential in your company. :) i envy you for you won that beautiful wristwatch during the tatler ball last sept. 29. :) market had a strong close yesterday and i dont know if the market will bring that kind of sentiment next week considering the tragic bombing that happened yesterday at glorietta. :( it was such a barbaric act and i hope they get whoever committed this crime. But i was surprised today because when i checked the other parts of the mall in glorietta was still open i really thought that they were going to close the mall for a few days. If you think about it thats also a good sign but i know the stock price of the company will surely take a hit in the next few weeks. But even after this setback i still like the company and to show you the culture of the company they said that they will shoulder all the medical expenses of those who were injured. And another thought why destablilize the government??? what for when everything is going well for the country. Tsktsk im sure whoever is behind this wants to take over the presidency. Tsktsktsk that is not good. Why dont we just shut up and work to make our country better. Thank you Lord for giving my sister a healthy baby boy. :) another bundle of joy for the family. :) good luck and God bless to everyone. :)

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!!!