Showing posts with label Stock Market. Show all posts
Showing posts with label Stock Market. Show all posts
Did you EARN 20% in just 3 WEEKS with $PHEN?
I am a Money Magnet! We are Money Magnets!
Did you EARN 20% in just 3 WEEKS with $PHEN?
Did you EARN 20% in just 3 WEEKS with $PHEN?
PinoyInvestor’s Technicals Talk reports are stock reports that provide short-term Buy/Hold/Sell recommendations, together with a stock’s Price Support and Price Resistance level expectations.
This is how they make their members smart and happy — by giving exclusive access to stock trading reports that can help them earn profits or save you from potential losses!
If you trade or invest in the Philippine stock market, you will surely benefit from their exclusive content.
Recently, they recommended a BUY rating on Phinma Energy (PHEN). Back then, the stock was trading at PHP 1.65 per share. It is now trading at PHP 1.99 per share — which means their members who followed this recommendation achieved a GAIN of +20.1% in just 3 weeks!
Right now, PHEN's price is at PHP 2.61. That's 30% more gains for those who held on to the stock until today, June 24, 2019.
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Philippine Stock Market Update - COL
Philippine Stock Market Update
COL Financial recently released their monthly publication called COLing The Shots. In this report, they
highlighted the following points with regards to the Philippine Stock Market and what they think their clients and investors should do:
- The correction that everyone was waiting for came by surprise in April and the PSEi is now down by 3.1% from its 2015 high of 8,134. The best explanation for the market’s drop is funds flow. While we are seeing weakness in favored markets such as the Philippines, Thailand and Indonesia, markets in Japan, China and HK are performing well.
- Fundamentally, nothing has changed and we remain positive on the Philippine economy. For the said reason, we would like to reiterate our view that pullbacks such as this are opportunities to buy stocks. However, given the significant weakness that we are seeing in Indonesia and other regional markets, there is room to be less aggressive. And since nobody knows where the bottom will be or when the correction will finish, we recommend peso cost averaging instead of lump sum investing, especially when prices hit attractive levels.
COL Model Portfolio (COL Financial Stock Recommendations)
3 Phases of Investing in Stocks - Edward Lee
I am a Money Magnet! We are Money Magnets!
3 Phases of Investing
by Mr. Edward Lee of CitiSecurities and COL Financial
1. Does It Work?
Stocks, over time, outperforms all other asset class!
Does Investing in the Stock Market Work? YES!
The reason behind why companies continue to grow is because GDP continues to grow, driven by consumption and the growing population.
COL Model Portfolio - Stock Market Update
I am a Money Magnet! We are Money Magnets!
COL Financial Released the composition of their model portfolio last July 10, 2013. The Model portfolio contains the list of recommended stocks from the firm. In the latest release, they removed MPI (Metro Pacific Investments, MER (Meralco), and MWC (Manila Water Company, Inc.) due to "heightened regulatory risks." If you followed their advice, and removed MER from your portfolio right away, you would have been spared the recent drop in the shares price due to SMC's (San Miguel Corporation) sale of MER shares at a discount.
Here's the latest COL Model Portfolio:
Among these, MBT and BDO probably has the best potential for future gains. TEL is currently rising probably in anticipation of dividends in August.
COL Financial Released the composition of their model portfolio last July 10, 2013. The Model portfolio contains the list of recommended stocks from the firm. In the latest release, they removed MPI (Metro Pacific Investments, MER (Meralco), and MWC (Manila Water Company, Inc.) due to "heightened regulatory risks." If you followed their advice, and removed MER from your portfolio right away, you would have been spared the recent drop in the shares price due to SMC's (San Miguel Corporation) sale of MER shares at a discount.
Here's the latest COL Model Portfolio:
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| COL Financial Model Portfolio |
Pinoy Investor - Technical Analysis
I am a Money Magnet! We are Money Magnets!
The team behind PinoyMoneyTalk.com came up with a new site to help Filipino investors learn which stocks to invest in in the Philippine Stock Exchange. This new site is called Pinoy Investor.
Here's what the site is all about
The team behind PinoyMoneyTalk.com came up with a new site to help Filipino investors learn which stocks to invest in in the Philippine Stock Exchange. This new site is called Pinoy Investor.
Here's what the site is all about
Philippines is now Investment Grade
The Philippines is Now Investment Grade
March 27, 2013
- The Philippines got its first ever investment grade debt rating from global credit rating firm Fitch.
- Fitch upgraded the Philippines sovereign credit rating to BBB- from BB+
- An investment grade rating tells investors it is safe to do business in the country and encourages them to put huge capital in the country.
"Promising Returns" Variable Unit Linked Insurance and the PSEi
As we were browsing entries in Facebook, we came across this article entitled "Philamlife lures Pinoys with new insurance-investment schemes." Here's an excerpt from the news article:
Philamlife Lures Pinoys with New Insurance-Investment Schemes
by Edgardo Tugade December 3, 2012.
source: GMANews
The Philippine American Life Insurance Co. (Philamlife) on Monday said it was mostly foreigners who took advantage of the growing Philippine economy by directly investing in industries, while Filipinos kept their money in low-yielding accounts.
Thus, the insurer is introducing new products to help Filipinos benefit from the economic growth of 7.1 percent as measured by the gross domestic product in the third quarter, the fastest growth in South East Asia.
The company is promising returns of at least 8 percent in an insurance and investment plan.
Rex Mendoza, Philamlife president and chief executive officer, said most Filipinos placed their hard-earned money in savings or time deposits which earn 0.375 percent and 2.75 percent per year, and cannot even catch up with the benign inflation rate at 3.1 percent.
As you probably know already, the Philippines Stock Exchange Composite Index (PSEi) has reached a new all-time high of 6,171 this January 2013. As a result, insurance and investment companies are banking on this positive development and are aggressively marketing their investment products. (Read more after the jump)
Stock Market Blueprint - Philippines
I am a Money Magnet! We are Money Magnets!
In Summary:
- With a Price Earning Ratio (PER) of above 14x, the Philippine stock market remains to be the most expensive. This is above the country's 15-year average of 15.5x but still significantly lower that it's peak of 16.7x back in 2007. (BPI Asset Management)
- Philippine PER is higher than Asian market PER of 12x (Julian Tarrobago Jr., ATR Kim Eng Asset Management)
- While expensive, fund managers still believe that the PSEi will surge in the fourth quarter and end the year with record highs. BPI Asset Management said that 5,500 is very much achievable. While Julian Tarrobago of ATR Kim Eng has set a higher target of 5,800.
- Growth will be powered by a surging Philippine economy, better than expected corporate earnings, low inflation rate, and higher market turnover (participation in the stock market).
- Sector-wise BPI is still bullish on PROPERTY firms, CONSTRUCTION companies, and FINANCIAL institutions.
- Mr. Tarrobago on the other hand suggested looking at small cap stocks that are "less-known, small and medium-sized companies capable of strong growth."
Cash Flow vs. Capital Gains
I am a Money Magnet! We are Money Magnets!
I got hold of Robert Kiyosaki's Rick Dad's Conspiracy of the Rich: The 8 New Rules of Money a couple of years back. I spent one month reading the first few chapters and it bored me to death. It talked all about history and stuff that I really didn't get a grasp on. A few days ago, I decided that since it was taking me a decade to finish this book, I might as well return it to the owner already. I was giving up. I told myself this book wasn't for me. And to prove my point, I browsed through the content one more time just to be sure. It was then that I caught a glimpse of the second part of the book which offered ideas that I have never encountered before. In a way, it was very enlightening as most of what Robert Kiyosaki was preaching was in contradiction to some of the contents we've written here on our site. Read on to know more about these contradictions.
I got hold of Robert Kiyosaki's Rick Dad's Conspiracy of the Rich: The 8 New Rules of Money a couple of years back. I spent one month reading the first few chapters and it bored me to death. It talked all about history and stuff that I really didn't get a grasp on. A few days ago, I decided that since it was taking me a decade to finish this book, I might as well return it to the owner already. I was giving up. I told myself this book wasn't for me. And to prove my point, I browsed through the content one more time just to be sure. It was then that I caught a glimpse of the second part of the book which offered ideas that I have never encountered before. In a way, it was very enlightening as most of what Robert Kiyosaki was preaching was in contradiction to some of the contents we've written here on our site. Read on to know more about these contradictions.
Cash Flow vs. Capital Gains
First Metro Capital Markets Seminar Series
I am a Money Magnet! We are Money Magnets!
First Metro Investment Corporation together with its affiliates under the Metrobank Group is holding another seminar under the First Metro Capital Markets Seminar Series. The topic this time will tackle issues regarding Initial Public Offerings (IPO) and their outlook and strategy for the capital markets.
You probably have read in the newspapers about the forthcoming Initial Public Offerings (IPO). In the past, many have subscribed to IPOs blindly without understanding what they are getting into. Many have lost money thinking that IPOs were a sure thing. Given our advocacy for Investment Literacy, we will be conducting this seminar to help people understand the IPO process, mechanics and how to understand companies that bring their shares to the public. Hopefully, more people will gain understanding of the process and will invest with a critical eye rather than with blind misunderstanding.
Market Focus: Effects of S&P Downgrading US Sovereign Credit Rating
"Shaking the Status Quo: S&P Downgrades US Sovereign Credit Rating for the First Time in History" is an article published by BPI Asset Management under their "Market Focus" segment. While the global equity markets were hounded by debt and double dip recession fears all year long, one could say that the tipping point for the recent volatility in the market was caused by S&Ps downgrade of the US sovereign credit rating.
In summary, BPI Asset Management believes that even after the downgrade, US Treasuries will still be highly favored for their liquidity and for lack of other alternatives. The US Dollar will also remain as the favored reserve currency considering that the only alternative, the Euro, is also hounded by its own problems. With regards to our local equity market, they believe that the sell-off is only a knee-jerk reaction and that the slide in prices will only be temporary considering that investors have been anticipating this downgrade beforehand. They remain a bullish outlook for the long term and encourage investors to buy cheap and accumulate on the dips with a long-term view of the markets.
Read the full article below to fully comprehend the possible effects of this event on our local securities as seen by fund managers of BPI Asset Management.
Shaking the Status Quo: S&P Downgrades US Sovereign Credit Rating for the First Time in History
August 8, 2011
Please find below our views on the likely implications on local financial assets of Standard & Poor’s (S&P) downgrade of the US long-term sovereign credit rating to AA+ from AAA along with a "negative" rating outlook.
We wish to stress that the move was not unexpected; a smaller US- based ratings agency, Egan Jones along with China's Dagong Global Credit Rating Co. were first to downgrade the US sovereign credit by a notch lower.
In our own Research Note / Market Commentary released on July 29, 2011 entitled "A US Default or Downgrade? What if? Evidence from the Past, and Signs from the Present" we mentioned that the downgrade of the US to AA+ will be a likely scenario. Our view is that US Treasury prices may encounter a mild sell-off in the medium term especially if another agency downgrades them along with S&P to AA+ and AA, respectively. For now though, we are on the view that interest rates will not rise dramatically to AA+ levels such as those of Belgium and New Zealand, other AA+ rated countries by S&P as US Treasuries are still highly favored for its liquidity (so far) and for lack of other alternatives. Just this morning, Credit Suisse was quoted saying that less than 2% of global bond funds have triple-A rating mandates (i.e. there will be only contained forced selling). Moreover, major buyers of US Treasuries, which have huge liquidity requirements, would have no other option to park their funds. In fact, Japan, the second-largest holder of outstanding US Treasuries commented that they will continue to buy US paper as part of their international reserves program. The only other alternative to the US dollar as a reserve currency is the euro, but the region is also hounded by its own structural challenges, which many believe are far worse than that of the US. Very few bond markets can match the depth and liquidity of the Treasury market, which has almost US$10 trillion in outstanding debt.
In terms of specifics, we summarize the possible reaction/implications on the local fixed income and equities markets:
Local Fixed Income:
- We see immediate pressure on ROP bonds, as investors try to reduce duration amid increased risk aversion and rising US Treasury yields.
- ROP bond prices lost 1.25 percentage points for maturities greater than 10 years in today’s session, on top of the almost 1 percentage point decline last Friday.
- We expect intermediate securities, those with maturities of less than ten years, to be supported as fundamental factors in the Philippines remain sound.
- We see less pressure on peso-denominated bonds which are supported by strong local data on the inflation and fiscal front, though not entirely immune to some risk-reduction as local financial institutions try to incrementally lower risk.
- Inflation averaged at 4.81% year-to-date, still below the Bangko Sentral ng Pilipinas’ (BSP) target of 3-5%. The country's gross international reserve (GIR) stood at US$71.0 billion as of end-June 2011, a fresh high, and is up 13.83% year-to-date. This translates to around 10.5 times the country's short-term external debt. The country's path towards fiscal consolidation has shown a stark improvement through the years. The budget deficit amounted to Php17.2 billion in the first half, lower than the Php152.1 billion recorded in the first semester of 2010. As of end-March, the country's debt-to-GDP level stood at 51.2% from a peak of 74.4% in 2004.
- The sell-off so far has been more of a knee-jerk reaction.
- Sell-offs at the open have been met with buying later in the day that helped arrest declines: a good sign of local support and local conviction. The market shed 3.78% in the last two trading days with the index falling by as much as 152.71 points on Friday, and 105.04 points today. Buying recovered before the close of both days with the index eventually giving up just 57.22 and 94.38 points, respectively, from the open. Despite net foreign selling today amounting to Php1.633 billion, the biggest since May 25, locals stepped up their game and dominated the market by grabbing 71.23% of the total traded value. Local purchases usually account for 61% of total trades.
- We believe that the slide in equity prices is temporary as the market has been anticipating the downgrade beforehand.
- Consensus is that the US will still be able to maintain some growth albeit at a slower-than-initially forecasted, and that global growth would still be led by emerging markets.
- The bottom line is that, local stocks should be well supported by healthy economic and corporate fundamentals. For one, the Philippine banking system remains stable as the average capital adequacy ratios (CAR) across the industry continues to exceed the BSP's minimum ratio of 10%, registering at 16.02% as of December 2010 on a solo basis and 16.97% on a consolidated basis. Similarly, the Tier 1 (T1) capital ratios of the banking system remained high at 13.64% and 13.69% on solo and consolidated bases, respectively. As of end-May 2011, the average non-performing loans (NPL) ratios of universal and commercial banks (U/KBs) improved to 2.80%, lower by 0.15 percentage points from last month's 2.95% and lower by 0.51 percentage points from last year’s 3.31%. This is the fourth consecutive month that the average NPL ratio has been below 3.00%. Growth in outstanding loans of commercial banks, net of banks' reverse repurchase (RRP) placements with the BSP, accelerated in May to 18.8% from the previous month's expansion of 14.2%. The increase is the highest rate recorded since April 2009.
- Long-term, we remain bullish, but guarded on the short-term due to a confluence of external risks coming mostly from the US and Europe. Our strategy remains buying cheap, buying gradually into dips, and buying for the long-term.
- From a valuation perspective, despite price-earnings (P/E) multiples tracking higher than the region's average of 12.74x forecasted P/E for 2011 and 11.14x forecasted P/E for 2012, the local bourse is still trading below its historical mean of 15.0x, implying further upside. With the recent mass exodus out of equities, the index is currently trading at around 13.29x forecasted P/E for 2011 and 12.09x forecasted P/E for 2012, with prices dipping to attractive levels. Earnings for the second quarter continue to trend in line or above consensus forecasts, signifying greater interest for local equities. According to data on hand, 5 out of 9 index members have already reported earnings which blew past estimates in the second quarter.
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Learning how to Invest in the Stock Market through Songs
The global stock markets have been very volatile these days and certainly it's not the time to play around and risk your hard earned money if you don't know what you're doing. While one may consider this as "extraordinary times," it's still just one of those crises that we have to face and surmount. Like what we wrote in our previous post, "Welcome to Crisis", what's more important is to know how to survive and to thrive in such situations. Every crisis is an opportunity for us to grow to our full potential and in every crisis, there's an opportunity waiting to be discovered. While the global markets may be in turmoil, it doesn't mean that we can't have a little fun in our continuous pursuit of mastering the skills necessary to thrive in the stock market. Recently, we've encountered some few interesting ideas about the stock market which were related to songs that we know by heart. Hope this helps us remember a few points about investing and trading in stocks.
1. "It's just emotions taking me over." Bee Gees
Yesterday a US-based stock broker was quoted in saying that he thinks the current US Stock market is a "Bee Gees Market" because he believes it's just emotions taking stock traders over. This is a good tip to remember for short-term traders. When you're trading the stock market, you're not actually trading the stock itself but more so trading the emotions of the other traders. Supply and demand in the short term is largely influenced by how other traders perceive where the market is going. If you want to be successful in short-term trading, you might want to heed Jesse Livermore's advice and take emotions out of your trading. Create a trading plan and follow your plan all the way.
2. "Say a Little Prayer"
For those more inclined to just buy and hold their stock positions, don't just buy and then say a little prayer afterwards hoping that what you bought will increase in value. Make sure to do your homework first and look at companies with good fundamentals before you choose which stocks to put your money in. Warren Buffet, one of the world's successful investors, uses this strategy. With this approach, he doesn't have to monitor the stock prices everyday. He's not that concerned with daily price movements because he knows that eventually the company will earn and with these earnings, the stock's price will increase without a doubt.
3. "Yesterday Once More"
This song will have to be the theme of stock traders who solely rely on Technical indicators. By looking at a stock's price chart, certain trends and patterns can be observed. And when these patterns repeat, it's yesterday once more.
While this approach has its advantages, we believe that it would be wiser if a trader combines both technical and fundamental analysis, as prescribed by William J. O'Neil in his book "How to Make Money in Stocks", in coming up with a winning portfolio.
Keep on attracting wealth Money Magnets! Happy investing to all!
For more music-inspired learnings about the stock market, read Efren Cruz's article Music-inspired approach to Stock Investing here.
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Seminar: How to Pick Stocks and Beat the Market
I am a Money Magnet! We are Money Magnets!
| Course Name | How to Pick Stocks and Beat the Market Create Wealth by Investing in Stocks |
| Schedule | August 5, 2011 - August 6, 2011 Friday - Saturday 8:30 am - 5:30 pm Ateneo Rockwell Campus 20 Rockwell Drive, Makati City |
| Price: | Php 10,800 |
Description
How to Pick Stocks and Beat the Market: Create Wealth by Investing in Stocks teaches concepts of business strategy and performance through an examination of valuation as value-creation. This course surveys and applies the interrelationships between business strategy, execution, performance, and valuation: in other words, plans, actions, cash flow results, and forecasts.
Traditional and advanced performance and valuation techniques are examined in specific relationship to valuation issues, such as: behavioral finance; competitive advantage analysis; business strategy; and execution. This course tackles guiding insights for fundamental valuation through macro theme identification, idea generation, bottoms-up analysis, and asset allocation strategies.
Applications range from corporate finance to investment management to strategic business planning. It focuses on the link between strategy and valuation – converting qualitative understanding of company initiatives into quantitative forecasts and ultimate impact on valuation – and the reverse. For this reason, it covers fundamental and quantitative techniques, which have been dubbed Quantamental™ linking planning to actions to results to forecasts.
Outline
- Embedded expectations: the single most important concept in fundamental valuation analysis
- Relative valuation in an absolute value world: Multiples as DCF heuristics
- Breaking valuation biases: Avoiding strategic decision errors from value-creation measurement errors
- Themes, macro, allocations, and stock-picking: understanding the mega-trends
- Why Bruce Lee would have been great at valuation (Yes, that Bruce Lee)
- When cash is not cash and why: Rethinking the cash flow statement and ROIs
- Competitive advantage periods, fade, and genuine assets; in practice, and application
- The DuPont Formula: Not the chemicals but the financial drivers. Never margins without turns.
- Issues in growth: Organic, M&A, share buyback conundrums
- From Fama and French to the quants' big three: V, Q, and M: What happened in August 2007?
- Decomposing the capital markets: Sell-side, buy-side, consultants, and the company focus
- Corporate governance, shareholders, insiders, and valuation impact: Strategy over structure
- Cross-capital signaling: Incorporating credit and derivative signals in company valuations
- Financial Red Flag analysis: Ticking time bombs seen in the financials
A stock seminar that we are interested to join. It's quite pricey but the outline seems promising. Unfortunately the schedule doesn't suit ours. You can register here.
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PSE Extended Trading Hours
The Philippine Stock Exchange (PSE) board today approved the extension of the PSE Trading hours. Starting on the first monday of October, October 3, 2011, the PSE will be open from 9:30 am to 01:00 pm. This is the initial implementation of the extended trading hours.
PSE President Hans Sicat said that the board approved the extension of trading hours to align our local equities market with the rest of the world. This is in preparation for the planned linkage of the PSE with other Southeast Asian bourse. Another thing to look forward to next year!
Starting next year, the tentative schedule for the new trading hours will be from 9:30am to 12:00nn and from 1:00pm to 3:30pm. A one hour break will be imposed starting 12nn and the market will open again for the afternoon session by 1:00pm.
Hopefully this initiative will attract more investors and increase the liquidity in our equity market.
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Free Stock Market Seminar
Philippine Stock Exchange, Inc. (PSE) will be holding a free stock market seminar in Cebu and Davao entitled "Building Wealth with Stocks: Investing for Beginners."
Cebu Schedule:
February 23, 2011
13:00-17:00 at the main ballroom of Cebu Parklane International Hotel
Davao Schedule:
February 25, 2011
12:00-16:00 at the main function room of Apo View Hotel
Registration is on a first come, first serve basis. Please sign up by calling (02)688-7537 or text 0932-6068740. You may also inquire by sending an e-mail to PSE Roadshows project head, Jay Penaflor, through cgpenaflor@pse.com.ph.
Stock market experts will talk on stock investing topics including online stock trading, equity mutual fund investing, initial public offerings, and many more. There will be free consultations with stockbrokers during the event as well.
This activity if part of PSE's intensified investor education program to increase local participation in the stock market. Through this financial literacy campaign, the Exchange also hopes to promote the stock market as an effective venue for mobilizing capital for business enterprises outside Metro Manila.
In preparation for the event, you might want to download the e-book "Building Wealth with Stocks" through this link. It's free, prepared for all of us by the PSE and Citiseconline.
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Anyone Can Pick Good Stocks
If Chef Gusteau's motto in the movie Ratatouille was "Anyone can cook" then Peter Lynch would have to be the stock investing guru with the motto "Anyone can pick good stocks!" In his book One Up On Wall Street, Peter Lynch wrote that it is actually very easy to pick good stocks and that anyone can do this. Peter Lynch suggested that one only has to be observant to be able to pick good stocks. By this he meant watching out for promising companies with great products that consumers rave about. Basically, his strategy is a fundamental approach to stock market investing. He said that while prices move up and down in a volatile market, a stock's price will eventually follow its fundamentals. That's why it is important to pick stocks with solid fundamentals. He suggested that before one buys a company's stocks, it would be good to write the company's "story." This story is a brief description of what the company is, where it is headed, and why it is a good buy. He then added that as long as the company's "story" is intact, then there should be no reason to sell the stock even if the price dips in the short-term.
What I really liked was the part when he presented the 12 silliest and most dangerous things people say about stock prices. Read on the learn what these are.
12 Silliest Things People Say About Stock Prices
- "If it has gone down this much already, it can't go much lower." There is no rule as to how much a stock can go up or down.
- "You can always tell when a stock has hit bottom." Trying to catch the bottom of a falling stock is like trying to catch a falling knife. It is always a better idea to wait for the knife to hit the ground, sticks, and vibrates a little before you try to grab it.
- "If it has gone this high already, how can it possibly go higher."
- "It's only 3 dollars a share, what can I lose?" Buying a lower-priced stock per share is not less risky than a higher-priced stock. A lousy cheap stock is just as risky as a lousy expensive stock.
- "Eventually they always come back." Some companies never regain their prosperity.
- "It's always darkest before the dawn."
- "When it rebounds, i'll sell." Very often, downtrodden stocks never return to the level which you decided to sell. It can sometimes take years before they rebound to the same level!
- "What me worry? Conservative stocks don't fluctuate much." Even conservative stocks like utility stocks can be very volatile. Simply, there isn't a stock that you can afford to ignore.
- "It's taking too long for anything to ever happen." If you give up on a stock because you're tired of waiting for something wonderful to happen, then something wonderful will begin to happen the day after you get rid of it. Patience will be rewarded.
- "Look at all the money I've lost because I didn't buy it." Warning: Don't try to catch up with already rising prices!
- "I miss that one, I'll catch the next one." The next one rarely works.
- "Stocks gone up, so I must be right." or "Stocks gone down, so I must be wrong." This is the one of the greatest fallacy in stock investing. All this means is that there was somebody who was willing to pay more or less than you. It doesn't mean that you've instinctively made a good or bad investment. It's what happens to FUNDAMENTALS that really counts in the LONG-TERM.
I guess that last line really sums up what Peter Lynch has to say about picking the right stocks. A company's stock price will likely follow its fundamentals in the long run. Emphasis must be put on the time frame. In one of his statements, Peter Lynch actually mentioned that on the average, it took him 3 to 4 years to earn multi-baggers* in certain stocks.
*A multi-bagger is a stock that multiplies your capital/investment by the number stated. Ex: A double-bagger is one that doubles your investment.
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Top Gainers and Losers in 2010 (PSE Stocks)
Top Gainers (Philippine Stock Market 2010)
1. UEM Development Phils, Inc (MK) 5697.33%
2. San Migure Pure Foods Company, Inc (PF) 779.12%
3. Oriental Peninsula Resources Group, Inc. (ORE) 372.50%
4. Fil-Estate Land, Inc. (LND) 356.35%
5. Aboitiz Equity Ventures, Inc. (AEV) 312.22%
6. DMCI Holdings, Inc. (DMC) 278.95%
7. Petron Corporation (PCOR) 261.92%
8. Aboitiz Power Corporation (AP) 261.63%
9. Semirara Mining Corporation (SCC) 236.36%
10. Belle Corporation (BEL) 223.94%
11. Holcim Philippines, Inc. (HLCM) 222.92%
12. Bogo Medellin Milling Company (BMM) 221.43%
13. RFM Corporation (RFM) 216.36%
14. Manchester Int'l Hldgs. Unltd. Corp A (MIH) 216%
15. San Miguel Brewery, Inc (SMB) 212.50%
16. JG Summit Holdings, Inc. (JGS) 211.11%
17. Alliance Global Group, Inc. (AGI) 204.88%
18. Leisure and Resorts World Corporation (LR) 179.41%
19. Philippine National Bank (PNB) 167.37%
20. SM Development Corporation (SMDC) 164.79%
Top Losers (Philippine Stock Market 2010)
1. Century Peak Metals Holdings Corporation (CPM) -64.55%
2. AgriNurture, Inc. (ANI) -57.80%
3. Atok-Big Wedge Company, Inc. (AB) -57.10%
4. Marcventures Holdings, Inc. (MARC) -55.68%
5. Asia Amalgamated Holdings Corp. (AAA) -52.63%
6. Paxys, Inc. (PAX) -50.71%
7. I-Remit, Inc. (I) -44.33%
8. Imperial Resources, Inc. A (IMP) -44.00%
9. Federal Resources Investment Group, Inc.(FED) -42.86%
10. ATN Holdings, Inc. A (ATN) -41.00%
11. Wellex Industries, Inc. (WIN) -40.83%
12. Island Information and Technology, Inc. (IS) -39.35%
13. ISM Communication Corporation (ISM) -37.60%
14. South China Resources, Inc. (SOC) -34.51%
15. TKC Steel Corporation (T) -32.43%
16. Pacifica, Inc. (PA) -32.41%
17. Phil. Estate Corporation (PHES) -30.91%
18. Alliance Select Foods Int'l, Inc. (FOOD) -29.90%
19. IP Converge Data Center, Inc. (CLOUD) -28.57%
20. Information Capital Tech. Ventures, Inc. (ICTV) -28.57%
Wow! Imagine just buying and holding on to any of the stocks among the top gainers in the market. On the average your investment would have tripled by the end of the year! But imagine buying and holding on also to some of the stocks among the top losers. Your investment by the end of the year would have reduced by half on the average. This goes to show how volatile the market is and that even on Bull markets, some stocks will still end up on the losing end. That is why it's important to choose the right stocks to buy.
Some observations with regards to the list:
- Some Blue chip stocks are among the Top Gainers
- No Blue chip stocks are among the Top Losers
- Having winning stock codes like AAA, WIN, and CLOUD does not guarantee success (^o^)/
- Stocks tend to rebound. Just ask PAX and FOOD! (Prices rebounded at the start of 2011.)
Happy Investing Money Magnets!
Up next, some insights on the investing strategies of Peter Lynch. I finally got hold of a copy of "One Up On Wall Street!"
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Stock Trading and Investing Books
Good Morning 2011!
2011 will be a great year. I can just feel it. This year and probably for the next couple of years as well, I've decided to focus on learning how to trade and invest in equity markets. I've started this journey a few years back but it was only the last quarter of last year that I decided to really follow the market and learn both technical and fundamental analyses. If you are looking to embark on the same journey as well, I found the following recommended books on the internet.
Recommended books for budding Stock traders and investors:
1. Technical Analysis of The Financial Markets by John Murphy
2. The Intelligent Investor by Benjamin Graham
3. One Up on Wall Street by Peter Lynch
4. Trading for a Living by Dr. Alexander Elder
5. Market Wizards and The New Market Wizards by Jack D. Schwager
Last year, I finished reading Technical Anaysis of The Financial Markets and learned a few tricks on how to do technical analysis. It has proven to be helpful in trying to time by BUY and SELL actions in the equity market. A little more experience and I know I will get the hang of it.
Since I couldn't find a copy of Peter Lynch's One Up on Wall Street, I started reading Beating the Street instead. It's by the same author and I think similar if not the same concepts are being taught. Early on, Peter Lynch stressed the fact that historically, the equity market has proven to provide better returns than any other investment vehicle. The first chapter also showed how 7th graders outperformed market portfolios created by professional fund managers. He elaborated that anyone can truly invest in the stock market and that investing doesn't have to be hard and difficult. The simplest stock picking strategies in fact have proven to be more effective than complicated systems developed by professionals.
Then I came to realize that John Murphy himself, stressed the point that when doing Technical analysis, it's important to not over complicate things and to simply rely more on a simple approach given the fact that there are already a lot of variations introduced.
While scavenging the net for information, I also bumped into the following sites which provided credible information and helpful tips and hints about the Philippine Stock Market.
1. Finance Manila
2. Gus Cosio Says So
3. Absolute Traders
4. Laid Trades
Well, it's time to get back to my readings and learn more. I look forward to sharing more with you, Money Magnets, in the weeks to come. Happy investing everyone and keep on attracting money even in 2011!!!
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Bubbles: Are we in a Market Bubble?
What is a bubble? Was the recent run of the Philippine Stock Market a bubble? Did this bubble just burst? In "10 Market Bubbles That Could Soon Burst", author Charles Wallace listed Emerging Market Stocks as one of those 10 market bubbles that could soon burst. Although the Philippine Stock Market wasn't specifically mentioned, it definitely is part of this group being the top performer in Asia just a couple of weeks back. With the recent decline of the PSEi for the past 6 days, can we conclude that indeed we were in a bubble and that the bubble has just bursted?
Investopedia.com defines a speculative bubble (some may refer to it as a market bubble, economic bubble, price bubble, etc.) as "a spike in asset values within a particular industry, commodity, or asset class." It went on to say that the driving forces usually involve fundamental and psychological forces. It stated that "in the beginning, attractive fundamentals may drive prices higher, but over time behavioral finance theories suggest that people invest so as to not "miss the boat" on high returns gained by others. When the artificially high prices inevitably fall, most short-term investors are shaken out of the market after which the market can return to being driven by fundamental metrics."
Just basing it on this definition, then I would say that indeed the Philippine Stock Market was in some sort of a market bubble. With analysts coming out with forecasts predicting the market to produce hefty returns for the next year, some even arguing that it would last for the next 3 to 5 years, investors rushed to get in the market so as not to be left behind. This caused the market to appreciate in value in a very short time, forming a bubble of some sort. (Believe it or not, ALFM Growth Fund is already oversubscribed. They would have to wait for SEC approval to be able to add shares before they can accommodate new investors.)
However, I would have to say that the current market is backed by very strong fundamentals. Just this week alone we've had around 10 companies reporting double-digit returns. Some even reporting net incomes more than double that of the previous year. In this regard, I'd like to think that it was just a small bubble worth at least a week or 2 of decline. In effect, a healthy correction that was very much needed by the market. And as the last sentence in that definition indicates, the Philippine stock market will soon be ready to be driven by fundamental metrics again.
As to whether the Philippine market and other emerging market stocks would definitely turn into a bubble, i guess only time will tell.
Along with emerging market stocks, Charles Wallace also included the following in his list: Gold, Real Estate in China, Alternative Energy, Commodities, Apple (No, not the fruit but the company that makes iPhones and iPods), Social Networking, Small-Tech Companies, the U.S. Dollar, and the US Government Debt. If you have the time, read the article. It's very interesting.
Keep on attracting money, Money Magnets! Let's achieve our GOALS in life together! (^o^)/
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Investing in the Stock Market
I am a Money Magnet! We are Money Magnets!
It looks like there's no stopping the bull market from charging onwards. The PSEi continues to go up and make new all-time highs! If you trade in the stock market or hold an equity-based portfolio, you might find this article by Ron Nathan very helpful. It's an old article but still very insightful. Enjoy reading it after the jump.
It looks like there's no stopping the bull market from charging onwards. The PSEi continues to go up and make new all-time highs! If you trade in the stock market or hold an equity-based portfolio, you might find this article by Ron Nathan very helpful. It's an old article but still very insightful. Enjoy reading it after the jump.
TIPS ON HOW TO BECOME A BETTER INVESTOR (Excerpts)
by: Ron Nathan (Mr. BearBull)
...the rest of this article and the next one will completely change your investment psychology and you will be a far better investor in the future. What follows is based on 52 years' experience in London and Manila. You can profit from my observations and mistakes. It will be particularly useful for beginners whose knowledge of investing is limited. Good luck, and if you find it useful, cut out the articles and paste them on your bedroom or office wall, in between your pin-ups of Beyonce and Anna Kournikova.
1. Do not trade against the trend
You will be shocked to learn that almost 90 percent of investors in the Philippines, US, UK and Japan lost money in the stock market. This is because they ignore the first commandment and jump in only after the market has already had a big rise. ...
You only BUY when the market has fallen and the technical indicators say that it is about to turn up. There are many indicators and I will deal with some of them next week so do not ask me what they are now. Conversely, you SELL when that index has had a big rise and the indicators show that momentum is slowing down or is about to decline. ...
Players do not use their head, they trade on their emotions, and this is nearly always wrong. I will tell you where to get the necessary fundamental and technical data, but in the meantime, you can use a 20-day moving average of the index or any stock, which you hold.
2. Cut your losses quickly
.. (follow) the principle of POP COLA.
Prolong Our Profits Cut Our Losses Aggressively
Incredible as it may seem, although they took great care in their entry points, 63 percent of their transactions resulted in small losses. About 30 percent made small gains while the remaining seven percent scored huge gains, doubling, tripling, quadrupling or even becoming 10-baggers, because of the leverage. (Side note: In short, you'll have lots of losing transactions in small amounts and actually have only a few winning transactions but bringing in huge profits.)
So, when you get it right, let your profits run until momentum stops rising. But when you get it wrong, SELL three percent below your buying price. ... Sometimes, this will be a mistake but it protects you against disaster. After all, you don't complain about paying fire insurance because your house didn't burn down. You can afford to cut small losses. It is the big ones that ruin you.
3. Do not average down
Under normal circumstances, I am against the death penalty, but not for those who break this commandment. They should be barbecued slowly over a fire while concentrated hydrochloric acid is dropped upon them. All the people I know who went bankrupt averaged down.
(He narrated the stories of two clients who went bankrupt because of averaging down)
If you follow the second commandment, such disasters cannot happen to you, so you will never be faced with the decision of whether to average down.
4. Do not overtrade
If you are trading everyday, the only person making money is your broker. The expense involved is too high. You have to pay two commissions, usually 0.5 percent plus value-added tax, and a 0.5-percent sales tax. In addition, there is the difference between the bid and offer price, usually about two percent. So you have to make four percent just to break even. This is fine, so long as you BUY just as the stock is turning up, but if you deal constantly, the expense will ultimately cripple you.
That small percentage is enough to make all the incredibly costly casinos in Las Vegas profitable. They can afford to give free rooms, free food and drinks, and free shows to high rollers because they know that a percentage advantage of 3.6 percent is enough to guarantee the house a sure profit over the long run. Trade only when the technical indicators tell you to. For the remainder of the time, do nothing. Patience is a virtue.
5. Do not trade on tips
6. Do not chase prices
When I recently recommended Pilipino Telephone Corp. (stock symbol: PLTL) for long term, subscribers bought at around P1.88 and a week later readers bought at P2.04. But those who did not read the article until the evening piled in next day, paying up to P2.55. This was sheer lunacy and I told subscribers to SELL and wait for a correction. The SEC has now stated that Smart Communications does not have to make a tender offer after all, as they bought the shares at P0.2059, so it would have been an appalling waste of time and money. I repeat that there is nothing to go for in the short-term, but if you can take a one-year view, the shares should go up to at least P3.
When shares take off, they usually fall back.
When shares take off, they usually fall back.
7. Be wary of inactive stocks
The documentary stamp, which made trading in shares well below their par value prohibitive, has been removed. As a result, trading has increased tenfold and, numerically, third-liners comfortably exceed leaders. But in value, out of 122 stocks that traded last Friday, only 10 traded P10 million and accounted for over 90 percent of turnover.
I have a computer program that tells me when a stock increases in price by five percent, and its volume is 50 percent above its 50-day moving average. This alerts me to inactive stocks that suddenly become more active. Often, the spread between bid and offer is too great or the number of shares available is too small to be of any interest. But occasionally, it throws up something interesting.
8. Buy low priced stocks
By this, I don't mean stocks quoted at a fraction of a centavo. I mean decent stocks standing around, or above, their par value of P1.00. Obviously, it is easier to double your money on a low-priced stock than on a high-priced bank or insurance company.
The last commandment is
9. LEARN TECHNICAL ANALYSIS
THE ABOVE commandment is slightly misleading because if you desire to become a really competent investor, you must also learn global economics and fundamental analysis.
By global, I do not mean that you have to study every country, but you must at least know what is happening in the United States.
Wherever the American stock market is heading, the rest of the world will follow. After the 9/11 attack, the US market got battered for a few months and every other stock market followed the downtrend. When the US market finally got back on its feet, every other market recovered.
When Wall Street sneezes, the rest of the world catches pneumonia.
Basic knowledge
For the local market, the business section should give you all the necessary information. But if you want more details, go to the websites of the National Economic and Development Authority or the Philippine Stock Exchange. You can also enroll in courses at universities and colleges.
Next, you should have a basic knowledge in fundamental analysis.
This means that you need to know all about companies. You must know how to read a balance sheet, calculate the earnings per share and from this, the price/earnings ratio.
You need to understand what a yield means, how many times a dividend is covered, and what preferred and convertible stocks are.
You should know book value and understand such concepts as debt and cash flow.
You can take a course in accounting or business management, and there are plenty of books, local and imported, in all the major bookstores.
Do not ask me to recommend one because I studied accountancy in 1951 and have not read any books since then.
By now, you are probably too discouraged to read on, but don't despair because help is on the way.
If you want to buy a simple but excellent technical analysis book, try TECHNICAL ANALYSIS OF THE FUTURES MARKET by John Murphy, available possibly at local bookstores or at amazon.com.
It was written years ago but is still considered to be a classic. Every aspect is explained simply and it can be used for trading stocks, commodities, currencies or futures.
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