A Short Story of an Impatient Juvenile

When my laptop crashed last month, my network visibility narrowed. With limited time and internet access, I was visiting my stock market account just to see if my target price has been reached or my sell orders were already cancelled. Just to be sure that I won’t miss my target price, whenever there is a chance to go online I will cancel my current transactions and press the sell button again using GTC. However, the market has been bearish in the past couple of weeks. Just when I thought I was about to reach my first 100k mark in May or June. It’s like I’m asking for a miracle. But, who knows?

I have been in the stock market for 10 months already and it got me thinking. The market is low again, is investing in the stock market really worth it?

Just a little flashback. In July 14, 2011, I used PhP 6,000 (which I borrowed from my generous mother) to open an account with COL Financial (formerly Citiseconline). Four days later, I bought 10 stocks in Ayala Corporation (AC) and 100 stocks in Robinson’s Land Corporation (RLC). Did I really understand what I did? By tracing the chart of both AC and RLC, I was convinced that their market price was cheap at that time. As the saying goes ”Buy low Sell high. With that quote in mind and PSE’s price chart as my pillar, I believed that it was a sure way to make money only to realize that my knowledge about the stock market was so juvenile.

My investment continued to grow whenever there was extra cash until it came to a point that our household expenses were mounting. And so the stock market took the back seat. My initial plan to invest small amounts monthly eventually didn’t push through forcing me to use Plan B: Reinvest. From being a supposedly long-term investor I suddenly became a trader. For almost every single day, my attention was glued in studying the critical matters affecting the rise and fall of the market prices, how to interpret the different charts and a whole lot more. I would buy and sell stocks in a span of two trading days to two weeks. But I am such an impatient trader. My short thread of patience resulted to a bunch of regrets. There were many occasions that I entered the market with relatively low price and ended up gaining 2% or even lose money because I didn’t wait long enough. The next day or two, the market price skyrocketed missing a great opportunity to yield larger numerical figures. That happened to AAI (now BLOOM), ABS, AC, ALI, EDC, FOOD, LPZ, MEG, MPI, ORE, PSE and RCBC.

Since last year, I was experimenting to some extent. I was brave to test the water. In effect, I was gaining and losing money at the same time. Blame it to my impatience and bad entrance and exit. But as days passed by, I am becoming more cautious in choosing the stocks to buy and when to sell. At present, I have shares in six companies and my portfolio is completely red. Due to my inactiveness in the market lately, I wasn’t able to sell before the plunge. But no worries, I have learned my lesson in my numerous mistakes. For now I only have two options: (a) do nothing and (b) press the sell button with GTC as term and hope for a miracle that my target price will be hit in situation like this. Otherwise, to wait is absolutely a wise thing to do. 

Hashtag: #Wishing upon a star.

P.S. I’m grateful that my cousin has a laptop. That’s why I’m back with a long blog post. :)

Photo grabbed @ medrizzz.blogspot.com

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Why Filipinos are not Investing in the Stock Market?

One night my uncle and I were stuck in a heavy traffic. Running out of stories to share, our topic arrived at the possibility of investing in the stock market. He asked me a number of questions such as “Ano ba ang produkto nyan?,“ “Paano yan ibebenta?,” “Kanino yan iaalok?” etc. Though apprehensive, I tried to answer him to the best of my knowledge. I guess my answers were fairly compelling since in the end he agreed to do so. However, his questions couldn’t get of my head even after we parted ways.

Base on an article posted in PSE Academy website, the Philippine Stock Market has 498,838 accounts in 2010 which means not even 1% of the country’s 94 million population has invested in the stock market. There are so many stories in the internet testifying that investing in the stock market has a powerful potential to earn great returns. If the stories are true and verified, what are the possible reasons why only few Filipinos are into stock market?

Just a Personal Analysis

1. Lack of knowledge. I remembered recently that stock market was actually one of the topics that I reported in a Management subject way back in college. I started and ended it reading a number of paragraphs scribbled in a Manila paper. Totally forgettable. It was a subject matter that even my professor couldn't give a speck of input.

We don’t really study stock market in school. PSE’s Market Educator, Jay Penaflor, even admitted that his primary purpose of taking up a masteral degree was to learn how the stock market works. He was delighted when he heard his professor utter “stock market” on the first day of class only to realize it was also the last time that he would hear it. Thus, if stock market is not taught in regular school (even in much higher education), how would we know that stock market is a great avenue to create wealth?

Good news for this generation, I learned in one seminar that there is a proposal in our government education agency that a subject about financial literacy would be very beneficial specially for the youth. In this subject, all forms of investment will be discussed and other money matters. Perhaps, this plan is formed with an intention to help put a solution to every human’s problem: money.

2.  Stock Market Looks Intimidating. I’m sure you have seen or heard the term stock market in all forms of media. Economic issues are usually discussed by English proficient people in corporate attire. Personally, this example leaves me an impression that stock market is just for the society of the rich and famous. This explains why it took me years before I had the guts to attend a seminar fully concentrated about this matter. Just the thought of being surrounded with English speaking men in black suit pretty scares me. Worst, the speaker in front would ask me “Do you have any idea how the stock market works?” Let’s just say, I didn’t wish to humiliate myself in front of the members of the high society. With this in mind, I felt that my ability to learn the stock market is limited to reading informative articles and hearing news. But I was completely wrong. If you wish to educate yourself through seminars, all you need to do is register, appear on the scheduled date, sit and listen. And by the way, blue jeans are not prohibited inside the training room. And most importantly, there are various seminars that are free of charge.  PSE, for instance, conducts basic stock market seminar every last Tuesday of the month. Online Stockbrokers, Colfinancial and First Metro Securities Brokerage Corp or FirstMetroSec, also have set of free trainings. Just check out their website for more information. 

To put this long story short, education plays a vital role to help increase awareness about the pros and cons of investing in the stock market or any other forms of investment. But as a popular saying goes, It takes two to tango. I believe that the government and private sectors actually have numerous projects underway. But it will only take effect, if we Filipinos will respond to the call.

                                                                                                                                 

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What Have I Learned in Seven Months?

Yesterday, I sold one of my most sluggish stocks few minutes before the market closes. Then I opened my Twitter account and was greeted with this quote:

Don't settle for less, just because you're too impatient to wait for the best!                                                                                                            

What an opening salvo?! Bull's Eye! Now, I can only hope that it will not soar high tomorrow (I mean at least not too soon). It happened to me before. I sold some stocks in negative so I can catch those in sale with much better fundamental or at least the ones in upward price movement. The next day, BOOM! The market price skyrocketed and I lamented. Blame my short thread of patience.

Last week, I accompanied a friend to the seminar I mentioned in my previous post. Same speaker. Same speech. Different effect. The seminar was actually sweeter the second time around. Why? (1) My industry vocabulary has improved and; (2) now I know what he meant by this: “At some point you will lose money. If you can’t accept this, stock market is not for you.”

No investor in his right mind will rejoice if he loses money either in the stock market or even literally but behind this heartbreaking fact are valuable lessons. In my seven months of investing, I have learned that losing money has two different meaning: (1) You lose money when you sell your stocks at the current market price lower than your average market price. As a result it decreases your actual balance as well as your purchasing power; and (2) You lose money in paper once the current market price of your stocks becomes lower than your average market price. This is a common phenomenon. Price will move up in time (unfortunately no one knows exactly when). Here, no transaction is executed.

In my case, my most recent transaction falls under the first definition. Since there were no signs of progress in weeks (as far as the chart is concerned), I took a difficult decision. Instead of waiting for the boost, I thought of looking for other companies that are technically performing better. And hope that this risk will bear better fruits in shorter period. For investors/traders with limited resources like me this is one risky strategy that at one point you might just have to consider than lose money in paper for uncertain time.

  

Flashback. In my first month, I was able to savor the feeling of earning money (in paper) without a sweat. Ecstasy. And then August came, my portfolio suddenly turned bloody red. I experienced definition no. 2: losing money in paper. Just when I thought I was about to make a breakthrough, the stock market got terribly affected by the European economic crisis. And I tell you, losing money in paper is no joke. It’s tragic. Scary.

  

Today, I’m gradually learning from research and actual experience (mistakes included). Looking back, the effects of the European economic crisis in the Philippine Stock Market were actually not as bad as I thought. The wiser and more experienced investors probably consider it as a blessing more than a tragedy. For the well-offs, Christmas sale started in August. In January, when the market started to bounce back, I bet many rejoiced. Indeed, patience is a virtue. And that’s one thing that I have not learned by heart in seven months. But I really wish I will...SOON.

                                

Photo grabbed @ worststockmarketcrashes.com                 

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The Courtship Was Over

Seven months have passed I can still vividly recall how elated and terrified I was when I attended Citiseconline’s seminar, Investing in the Stock Market Today. I was already in Tektite more than an hour before the schedule. Hesitant to be the first participant to sign on the attendance sheet, I waited in the ground floor for more than thirty minutes. When I entered the training room, it was almost half full. I proceeded at the right side of the room and sat in the third row. While waiting for the speaker, my head was turning left and right, back and forth. Observing people.  That’s when I realized how naive I was. The thought of sitting beside a man in black suit was actually the root of my uneasiness. Thank God the majority was just in blue jeans. The discomfort subsided and I felt everything was just right. Finally! Another dream came true.

Yes, to attend a seminar about investing in the stock market was a simple dream I used to share with a friend. We were both dreaming of investing in the stock market long time ago but were totally clueless. Unfortunately, I came alone since her medical condition did not allow her. After the three-hour seminar, there was only one thing running in my head: I WANT THIS! Upon arriving home, though apprehensive of my mom’s probable reaction, I told her my plans. For the first time after several objections in the past, we had a peaceful conversation about this matter. And on the same night I got her YES. That was the climax of my day.

After a week, I attended another free seminar still in Citiseconline. At 6:30 pm I submitted my requirements together with my initial investment. It was so small but damn it was worth a million for me. And that marked the beginning of a seemingly endless journey in the world of the men in black suit and men in blue jeans.

Photo grabbed @ article.wn.com

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Investing in the Stock Market Simplified

For many years, SM North EDSA was sensational - a huge household name for shopaholics particularly for Quezon City residents. When Triangle North of Manila or more popularly known as TriNoma opened in 2007, SM North has started vying for the number one spot. Last week I was stunned to find out that the Ayalas have begun building another money empire in Fairview, Quezon City where one of the kingdoms of Henry Sy has long been in supremacy. With this new development at hand, do you smell another rivalry?

It is so easy to assume that Ayala Corporation is the antagonist to SM domination. But, really? There may be a big truth to this but a wise man knows how to strategize. That’s what I have realized when I opened the list of Top 100 Stockholders (common) of AyalaCorporation as of December 31, 2011 in PSE website. I was in awe to see Shoemart Investment Inc. at no.5, Henry Sy Sr. at no. 7 followed by SM Investment Inc at no. 8. Isn’t that brilliant? Henry Sy and his companies will continue to prosper even though his malls don’t make much money (which I doubt will ever happen). In times of famine and loss, I bet, Henry Sy will remain the richest man in the Philippines.

To sum it up...
1. In business, if you can’t completely beat your foe, make him your ally.
2. That is Stock Market simplified.

2.1   Choose.

2.2   Share.

2.3   Earn.

Photo grabbed @ business.inquirer.net

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When Red Turned Green

I've been hearing about it since 2007. However, I didn’t pay too much attention until the last quarter of 2010.

Last November, I was granted with a free seat to How to be Truly Rich seminar for winning in Bo Sanchez’s blogging contest. Yes, my blog entry "The Ups and Downs of Taking Risks" was one of the lucky winners. : ) It is no secret that I admire Bro. Bo’s passion and creativity in sharing God’s words through his books and weekly spiritual meeting called "The Feast." To see a Catholic preacher talks about money might be a bit bizarre if not totally odd. But personally I think that’s also one thing that the church fails to directly teach us.

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The Ups and Downs of Taking Risks

When I was still in high school, my parents invested in a clothing business. We were bankrupt because we partnered with a wrong person. Five years ago, while we were renovating a rental space into internet café, we were swindled by a couple whom we thought were the owners of the commercial building. We lost thousands. Worse, the only way to get justice was to file a suit. Knowing the justice system in the Philippines, we decided to just forgive and forget. Few months after the incident, we revived our plan in a different location. The business lasted for only six months. We were neither gaining nor losing money. It was break-even, so to speak. I guess, my parents’ patience way back was so short to give it one more chance. Last May 2010, we took another risk. This time, it’s a sari-sari store. And here’s the story…

Putting up a sari-sari store is a no joke. It is not as simple as it may seem. There are a lot of elements that must be put into consideration such as capital, location, market, delegation etc. Yes, even a small business as sari-sari store is a challenge and a risk. And I am glad, that our family was able to surpass all the initial trials. When we started, the net profit was so small. We barely felt the product of our hardwork. But we thought it was ok since we were just starting. After few days, we decided to invest more. We filled our storage cabinet with typical goods found in any sari-sari store and other items for human consumption. When we had enough, we invested in improving our facility by putting a roof outside to cover our customers from the scorching heat of the sun and the rain. We also put a wooden bench where one can sit and relax while sipping a soda. Thus, our actions have been producing good fruits gradually. I am happy to say that we now have regular customers or in tagalong “suki.”

Venturing into business is actually exciting. Seriously. In spite of everything that we’ve been through, I can honestly say that in bad days business can be so complex and demanding but in good times the fulfillment is divine. It is not only a source of income moreover it teaches us lessons. Recently, I went over the Kerygma Feast Prosper Series (How to Open Your Life to Abundance) bulletins. The Bo Sanchez’s talk has six sub-topics (1) Believe; (2) Serve; (3) Grow; (4) Duplicate; (5) Invest and (6) Tithe. Unfortunately, out of the six bulletins only three were left and these are about Serve, Duplicate and Invest. Now that my parents have finally entrusted me to be involved in the operation and decision making, the messages of Bro Bo are starting to become more valuable.

In the Feast bulletin, Bro Bo said…

(1) February 28, 2010 Session 2: Serve. If you want to be rich, I encourage you to find more people to serve. The more people you serve (number of customers), and the more ways you serve (number of products), and the more excellent your service becomes (quality of products), the richer you’ll become.

Insight: When we started the business, our products were very limited because we were afraid to spend a lot and lose a lot. But our notion was so wrong. When we added more goods and improved the façade of our store, it became more attractive. Thus, more people began to recognize our small business and eventually we are now serving more people.

(2) March 14, 2010 Session 4: Duplicate. If you want to become wealthy, you need to duplicate yourself. Why? When you duplicate yourself, you serve more people. And more people served means more financial rewards.

Insight: My mother used to tell me “Kapag late ka na nagbukas, maghahanap ang mga tao ng ibang tindahan kahit malayo. Mababawasan tayo ng suki.” And I think she’s right. Besides, if we open at an early time and closes late, the possibility of earning more is bigger. And we shouldn’t be comfortable with what we have now because there is always a threat of competition. Someday, other businesses might flourish so in this line of investment, business development is highly recommended.

(3) March 21, 2010: Invest. Handling your money isn’t just an isolated area of your life. It reflects your character. It exposes your values. So bring this area under God’s rule. Live below your means and learn to invest for your future. By doing so, you develop patience, perseverance and detachment.

Insight: Two weeks ago I formulated a system that will help us handle finances properly and I call it “Income Allocation System.” Regularly, I divide our earnings into four categories which I put it in my piggy banks. My belief is simple: Money is tempting. If you want to save, don’t let money entice you.

In the topic, Invest, Bro. Bo also cited the three types of money pumps: (1) Business, (2) Property and (3) Paper Assets. The talk focused on paper assets. The talk was so powerful. My desire to learn stock investing was awakened and empowered. Unfortunately, I had no job then and the family was not yet into new business. I was totally broke. Since I was also hesitant to ask my parents for a capital, nothing has happened until this day.

Although we have a small business now, there is no harm in learning stock investing. If we talk about long-term plans and much bigger profit, I think investing in paper is a wise option. Realistically speaking, our earnings are either enough or inadequate to pay the monthly bills and other expenses. We are only able to save because certain percentage goes to piggy bank with label “savings.” Good thing, everybody is too lazy to hook bills and coins in a small rectangular hole except the perpetrator. And that’s me, of course. Hehe! And when I am able to reach a thousand I will deposit it to the bank only to withdraw it few weeks later for our monthly outlay. What a joy! Lol!

However, our current venture is still a big blessing from God. And  I truly believe that it is just the first step towards bigger undertakings. The question is, are we now ready to step further and take new risk? Well, I think it’s irrational to pursue something that we have no knowledge of. That is why I am glad that there are various tools available to educate us with essential information on how to invest in the stock market and other means of investing. For example: 8 Secrets of the Truly Rich is a book written by Bo Sanchez. In this book, you will neither find tips from a former lotto winner nor 6 lucky numbers that you can bet in 6/49 raffle. The book reveals the importance of having a wealthy mindset which is the root of any success story. The website Investing in Philippines is a blog that shares and discusses investing opportunities in the Philippines. Bo Sanchez and his Truly Rich Club are conducting seminars about gaining financial wealth and spiritual guidance at the same time. And so much more…

In short, there is no good excuse not to learn and widen my knowledge on investing. If still nothing happens, it’s called laziness.

Photo grabbed @ pcij.org

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