Trading the Philippine Stock Market

[vondave]

hehe.. daghan na jud.. with the help of bro ep and vondave and inno.. dako kaayo tabang sa mga newbies like me.. capital ra kulang.. lol

Glad to help.

Time is money bai. So if you're young, and I bet you are, then you've got lot's of capital. Small regular investments now will really become huge over time. Ako kay late nako gasugod, mao na gadali jud ko ani. I'm 38 na baya and I want to stop working by 45 or earlier.

[Metz]

kaning Peso cost averaging... you have to pick a blue chip stock for this?
or research gihapon ka ug stock nga modako and bahala na mo fluctuate but at the point nga ni plateau na?

[TWINSCAN]

Techguys,

Yes, this is a great product. Scientific jud ni siya nga approach. In the US, they call this DCA. But please note lang that if you plan to deposit every month nga around 3k or less, then you won't really be buying more of a stock when they are cheap and less when they are expensive, coz at 3k or less, gamay ra kaayo imo options because of stock prices and board lot restrictions. DCA works best kung dako imo regular investment lumps. But in principle, sakto jud ni siya. In practice, lisud lang pag implement effectively.

My suggestion is to discipline yourself to invest regularly, period. Whether you use DCA or you just deposit manually to your trading account and choose stocks yourself, you'll enjoy the benefits of growth jud, guaranteed especially kung time frame nimo is longer than 10 or 15 years. Stocks are the top asset class jud for paper assets. This is proven historically across all markets and economies.

I do the latter bai. I deposit regularly to my trading account but I build my portfolio and constantly rebalance it myself. I refer to valuation reports from my broker. And, like what DCA does for you automatically by design, I intentionally buy more stocks when they are cheap and none when there are strong rallies, like today.

Here's a tip that really works bai based on my experience. When the market has bull rallies and everyone is excited, don't buy stocks at all. Pasagdi lang na sila magkiat diha. You might even consider selling your mature stocks when rallies happen. Only buy stocks when everyone is scared of the market, like when there's been a series of bearish days, like last week or when bad things happen, like after the Quirino hostage event. Stocks prices go down so look for good value stocks that are on bargain. That's the best time to buy, when stocks are on bargain sale. Then wait.

This takes patience bai, coz when you have extra money, you will always be tempted to buy a stock, any stock at all. Wrong approach. Keep it in cash and wait for the right time to buy. Diskarte jud ka dapat.

Good luck bai.

Agree with vondave, and as what the famous 18th century british investor/banker Mr. Baron Rotschild say's "The time to buy is when there's blood in the streets, even if the blood is your own". This is contrarian investing at its heart - the strongly-held belief that the worse things seem in the market, the better the opportunities are for profit. Most people only want winners in their portfolios, but as Warren Buffett warned, "You pay a very high price in the stock market for a cheery consensus." In other words, if everyone agrees with your investment decision, then it's probably not a good one. This is going against the crowd, buy when the market is down and stop on rally. I'm also more on value investor i'm holding my positions for 4 months now and maybe 5 or 7 more years and buy shares every month in every pullback. As what some economist studies would say recession cycle is every 5 or 7 years so the next recession would be 2015 then we hold our position till 2015. Anyway bear market or recession is a big opportunity in getting rich fish at the bottom.

[techguys]

kaning Peso cost averaging... you have to pick a blue chip stock for this?
or research gihapon ka ug stock nga modako and bahala na mo fluctuate but at the point nga ni plateau na?

sa ako lang nga analysis bro, mura mo palit ka ug stocks nga blue chip like BPI, ALI, AC, JOLIBEE, FLI, MBT, TEL, RLC, JGS etc.

unya timingon nimo nga barato siya ana nga day, palit dayon - mura diri ang lisod lisod nga part kay mangayo tag tabang ani sa mga expert sa technicals like vondave, innosoft and EP ect. pwede sad ka basa basa didto sa traderspizza.com.

mao na ni imo buhaton every month regardless kung unsa nga dates of the month basta ang golden rule is LOW price.

sakto ba ni. hehehe

naa lang ko question:

kung ang imo napalit nga stocks are BPI, ALI, AC, MBT, FLI, unya ang imo range is 10 years. mao ra ba gyud ni nga stocks imo paliton every month for the 10 year period? regardless of the business condition unless m close ang company.

Pwede man siguro nga if mahal ang BPI ana nga month dili sa ka mupalit unya daghanon lang nimo palit si FLI which is barato ana nga time? or ma break na iya essence sa peso cost averaging?

[redhorse1L]

^^ COL's EIP provides lists of blues to invest in using cost averaging.
These companies have the best potentials to grow long term.
That is why it is better to stick to these companies when cost averaging.

[techguys]

^^^ naa gyud pili lang ka pero wala ko nituman sa uban. hehehe

click lang under EIP then stock list:

STOCK

STOCK NAME ALI AYALA LAND, INC. BPI BANK OF THE PHILIPPINE IS JFC JOLLIBEE FOODS CORPORATIO MWC MANILA WATER COMPANY, INC SMPH SM PRIME HOLDINGS, INC. TEL PHIL. LONG DISTANCE TEL.

[techguys]

unsay ikasulti ninyo sa IPO sa Cebu Pacific gipa increasan nila ila price from 95 to 150 pesos? or mahal ra?

IPO for globe asiatique realty - nindot ba mupalit ani?

[vondave]

sa ako lang nga analysis bro, mura mo palit ka ug stocks nga blue chip like BPI, ALI, AC, JOLIBEE, FLI, MBT, TEL, RLC, JGS etc.

unya timingon nimo nga barato siya ana nga day, palit dayon - mura diri ang lisod lisod nga part kay mangayo tag tabang ani sa mga expert sa technicals like vondave, innosoft and EP ect. pwede sad ka basa basa didto sa traderspizza.com.

mao na ni imo buhaton every month regardless kung unsa nga dates of the month basta ang golden rule is LOW price.

sakto ba ni. hehehe

naa lang ko question:

kung ang imo napalit nga stocks are BPI, ALI, AC, MBT, FLI, unya ang imo range is 10 years. mao ra ba gyud ni nga stocks imo paliton every month for the 10 year period? regardless of the business condition unless m close ang company.

Pwede man siguro nga if mahal ang BPI ana nga month dili sa ka mupalit unya daghanon lang nimo palit si FLI which is barato ana nga time? or ma break na iya essence sa peso cost averaging?

Hmmm, good question bai. I don't have a quick answer to how I would approach this. I think the thing to remember is that you should try to balance your overall portfolio so that you are not overly invested in one single stock or industry. Meaning, you try to create a well balanced portfolio to manage your risk. If you keep buying a single stock, or several stocks but they are all energy stocks like AP, FGEN, EDC for example, you expose yourself to huge risks because they all behave similarly and might move down at the same time hurting your portfolio badly.

I'm currently studying Capital Asset Pricing Model (CAPM), portfolio construction, asset allocation, etc. These are subjects that deal essentially with the question you raised. When I know enough to discuss this more, I'll share it with you, but what I know so far is that the correct and scientific approach should be:

Step 1 -- decide on a benchmark portfolio. In our case, maybe base it on PSE index, I believe coz we don't have S&P 500 or Russel 2000 index man gud nga equivalent diri sa Pinas. Kung PSEi then your portfolio should have categories like 20% Commercial Industrial, 20% Financials, 10% Mining, etc. I don't really know coz I don't have data on hand, hehe.

Then step 2 - Noting the benchmark portfolio, you then buy stocks based on the breakdown choosing the best stocks within each category for your portfolio (or your preferred stocks).

Step 3 - You then overweight certain categories (or stocks) that you feel will perform better if you want to capture extra gains (alpha) and underweight others categories if otherwise. The more you tweak, the more volatile (beta) your portfolio becomes but the more extra gains you potentially earn. Diskarte na ni nimo.

Step 4 - Regularly rebalance your portfolio. If Financials are supposed to be only 20% of your portfolio but they gain in value and become 30% because they grew, then you sell the 10% extra and distribute it into other categories to maintain your portfolio's design. You need to do this regularly. Most financial services do it quarterly for their clients.

Wheeeew!!!!! This is modern portfolio theory but I'm still learning this guys. I will put this in practice by next month siguro after I've fully finished studying the two books I have on this right now. By the way, this is a scientific approach bai. And portfolio theory works not just in allocating categories within your stock portfolio but even asset classes within your overall investment portfolio, e.g. bonds, treasury bills, real estate, cash.

[techguys]

murag nindot ni sundon imo principles bai da! hehehe.

e apply unya nako ni nga approach: 20% Commercial Industrial, 20% Financials, 10% Mining

thanks

Hmmm, good question bai. I don't have a quick answer to how I would approach this. I think the thing to remember is that you should try to balance your overall portfolio so that you are not overly invested in one single stock or industry. Meaning, you try to create a well balanced portfolio to manage your risk. If you keep buying a single stock, or several stocks but they are all energy stocks like AP, FGEN, EDC for example, you expose yourself to huge risks because they all behave similarly and might move down at the same time hurting your portfolio badly.

I'm currently studying Capital Asset Pricing Model (CAPM), portfolio construction, asset allocation, etc. These are subjects that deal essentially with the question you raised. When I know enough to discuss this more, I'll share it with you, but what I know so far is that the correct and scientific approach should be:

Step 1 -- decide on a benchmark portfolio. In our case, maybe base it on PSE index, I believe coz we don't have S&P 500 or Russel 2000 index man gud nga equivalent diri sa Pinas. Kung PSEi then your portfolio should have categories like 20% Commercial Industrial, 20% Financials, 10% Mining, etc. I don't really know coz I don't have data on hand, hehe.

Then step 2 - Noting the benchmark portfolio, you then buy stocks based on the breakdown choosing the best stocks within each category for your portfolio (or your preferred stocks).

Step 3 - You then overweight certain categories (or stocks) that you feel will perform better if you want to capture extra gains (alpha) and underweight others categories if otherwise. The more you tweak, the more volatile (beta) your portfolio becomes but the more extra gains you potentially earn. Diskarte na ni nimo.

Step 4 - Regularly rebalance your portfolio. If Financials are supposed to be only 20% of your portfolio but they gain in value and become 30% because they grew, then you sell the 10% extra and distribute it into other categories to maintain your portfolio's design. You need to do this regularly. Most financial services do it quarterly for their clients.

Wheeeew!!!!! This is modern portfolio theory but I'm still learning this guys. I will put this in practice by next month siguro after I've fully finished studying the two books I have on this right now. By the way, this is a scientific approach bai. And portfolio theory works not just in allocating categories within your stock portfolio but even asset classes within your overall investment portfolio, e.g. bonds, treasury bills, real estate, cash.

[vondave]

unsay ikasulti ninyo sa IPO sa Cebu Pacific gipa increasan nila ila price from 95 to 150 pesos? or mahal ra?

IPO for globe asiatique realty - nindot ba mupalit ani?

Globe Asiatique is currently in a controversy involving fraudulent loans or something using SSS members misrepresented. The way I see it, they probably won't push through with their IPO anytime soon coz they won't get a good market welcome because of this latest controversy.

As for Cebu Pacific, now is the best time for CP to IPO coz PAL is hurting bad because of their union problems. CP is probably a better deal than Globe Asiatique, (can you trust their CEO who dresses kinda weird? hehehe) but guys, just be careful with IPOs. Most of the people who play are speculators -- very unpredictable. Its a rowdy crowd on the first days after an IPO and joining a mindless herd is exactly the place you can get hurt real bad.

Personally, I stay away from IPO's bai. I got hurt really bad when I joined the mad rush to buy IMI when it was introduced this year. Look at its chart. The highest point was where I was able to buy. Imagine my shock when I saw thousands of pesos disappear in front of my eyes in a matter of minutes.

I'm just giving fair warning, but good luck.