Wednesday, October 22, 2008

My Portfolio (Oct 22, 2008)

Digitel Communications Philippines, Inc. (DGTL)
P/E Ratio: 6.19
My Buy Price: 1.6
Current Price: 1.14
% Profit: -29%

Filinvest Land, Inc. (FLI)
P/E Ratio: 6.33
My Buy Price: 0.62
Current Price: 0.45
% Profit: -28%

Megaworld Corporation (MEG)
P/E Ratio: 5.85
My Buy Price: 1.38
Current Price: 0.89
% Profit: -35.42%

San Miguel Brewery, Inc. (SMB)
P/E Ratio: 17.88
My Buy Price: 11.3
Current Price: 9.3
% Profit: -18.40%

SM Development Corporation (SMDC)
P/E Ratio: 6.06
My Buy Price: 2.14
Current Price: 2
% Profit: -7.40%

Save up cash, and try to buy existing stocks (to average down) at the same time buy bargain Blue Chip stocks. Remember to spread it out over a few weeks. So for example you have 100,000, don't spend it all at once. Split your money by 20% and spread the buying per week , once every two weeks or monthly.


Monday, October 20, 2008

Broker's must BUY tips (Oct 20, 2008)

Megaworld Corporation (MEG)
Last Sale : 0.92
Buy Price : 0.8
P/E: 6.05

Philippine Long Distance Telephone Company (TEL)
Last Sale : 2,226
Buy Price : 2,100-2,200
P/E: 11.99

Philippine National Bank (PNB)
Last Sale: 23
Buy Price: 20-25
P/E: 9.46

Ayala Corporation (AC)
Last Sale: 242
Buy Price: 200-210
P/E: 6.40

San Miguel Brewery (SMB)
Last Sale: 9.40
Buy Price: 8
P/E: 18.07

Tuesday, October 14, 2008

Blue Chip Stock Picks

Blue chip stock picks.
Holding Time : 1 - 2 years

As of October 15, 2008

Ayala Corporation (AC)
Price : 262.50
P/E : 6.94
52 Week High : 645.00
Minimum Order: 2,620
MAX Gain : 145% (96% with stock dividends adjustment)
Notes: Gave 20% Stock Dividends.

Metropolitan Bank & Trust Company (MBT)
Price : 27.50
P/E : 7.63
52 Week High : 68.50
Minimum Order: 2,750
MAX Gain : 149%

First Gen Corporation (FGEN)
Price : 16.75
P/E : 2.79
52 Week High : 69.00
Minimum Order: 1,675
MAX Gain : 311%

SM Investments Corporation (SM)
Price : 239.00
P/E : 12.15
52 Week High : 407.50
Minimum Order: 2,390.00
MAX Gain : 70.50%

Globe Telecom, Inc. (GLO)
Price : 1,000.00
P/E : 9.99
52 Week High : 1,750
Minimum Order: 10,000
MAX Gain : 75%

Bank of the Philippine Islands (BPI)
Price : 40.50
P/E : 10.71
52 Week High : 71.50
Minimum Order: 4,050
MAX Gain : 76% (41.23 % with stock dividends adjustment)
Notes: Gave 20% Stock Dividends

* My MAX Gain Computation is = ( ( 52Week - Current Price) / Current Price) * 100
This is an optimistic projection, the realistic projection would be half of the Max Gain figure.

Friday, October 10, 2008


All right, I'll give my portfolio details when the market opens again. But this week just crippled my stock position. I'm down by 20%!

I'm tempted to cut my losses and sell, but I'm sticking to my plan of buying and holding. $700B did not work?

Ok, I agree with Bush, the cure was injected to the system, the body just need a couple of weeks, months or even quarters to heal.

My Plan:
2. Cut back on luxury expenses to save cash
3. Hold that cash until the first ray of light show up.

Last February 2008, MEG currently is swinging at 2.10 - 2.45, I tried to buy at 2.08, unfortunately I was not able to. The next day MEG rallied at an average of 0.1 per trading day.

Come April 2008, MEG price went back to 2.08, that looked like a bargain to me, and I started buying in 2000 share increments per week. MEG price, declined consistently to 1.80, 1.60, 1.50, 1.40 ... until 1.14.

I steadily bought MEG at 2000 share increments as it went down, since

-MEG paid dividends,
-MEG was a bargain at P/E 8 to10, and I thought that
-MEG will dominate the Mid Level market in the condo business.

But, I was also saving a lot of cash thinking that when it hit 1.00 per share, I'll go ALL-IN on that stock. Thus, when the price hit 1.14, I bought a lot of it and made the average buying price per share @ 1.30. Meg rallied again on the next month and made me a whopping 30% gain.

That's why investors should not PANIC SELL. Just like in Poker, you'll never know until you see the cards.

If you bought 10 shares of ABC stock at PRICE = 10 per share (should be 52 week average of 10)

Thus, 10 shares @ Php 10 = Php 100.

In the next month, the price dropped from 10 per share to 1 per share.

Buy 1000 shares @ Php 1 = 1000

Your average stock price is Php (1000 + 100) / 1010 shares = 1.089 per share.

Now wait till the next BULL comes, price goes back to the average price and there's your X-folds of gain. But the key here, is that to have buffer cash to dig yourself out when you made a wrong stock pick. Just don't put in your kids college fund or rental money.

One more thing. You never really lost money in stocks until you sell at a loss.

Wednesday, October 8, 2008

DO NOT PANIC SELL: Investor panic despite Central Banks' Intervention

My Portfolio :
(6.41% of portfolio) DGTL - 24.21%
(9.53% of portfolio) FLI -16.44%
(50.46% of portfolio) MEG -15.16%
(6.31% of portfolio) SMB -18.64%
(27.29% of portfolio) SMDC +4.54%

So you've seen/heard the news, almost all central bank of almost all countries had tried to bailout the financial sector. However, instead of helping the economy it increased investor panic.

I'm tempted a couple of times to cut my losses and sell of my remaining equity at a loss of more than 15%, but I won't. Instead I'll make sure that I have enough capital, that when the worst is over, I'll have enough to buy back my losses.

My opinion is that a companies stock price does not reflect its performance. (The stock market is just a means for a company to easily raise capital). Thus, as long as you're not betting on the financial sector, and the company you are betting has a healthy financial statement, then there should not be anything to worry about.


Tuesday, October 7, 2008

Price to Earnings P/E Ratio

Price to Earnings or P/E Ratio maybe the simplest way to know the value of the Stock.

Here's how the P/E is computed.

Company ABC has a
- total shares of 1000 shares.
- Income of Php 100 annual

Earnings Per Share (EPS) may now be computed by dividing the Income / No. of Shares
In this case 100 / 1000 = 0.1 Earnings per Share.

This means that a share of a company makes PhP 0.1 per year.
EPS - shows the true value of the company.

Now P/E ratio on the other hand show how much a share of stock is valued by the investor.
If ABC company was selling for Php 1 per share
That gives it 1/0.1 = 10 P/E.

In the simplest terms, EPS may be compared to the COST-OF-PRODUCTION of a product. A cake may cost Php 100 in ingredients and labor. (Cost = EPS). The cake can now be sold for Php 200 (Price), which gives it a "sort-of" P/E ratio of (2). However, due to the demand of the cake people are willing to buy it for Php 1000 a piece, that gives it a P/E of 10.

Now since you know the value of EPS, you'll know that a particular stock is over priced. So always keep the look out for bargain stocks P/E of less than 15. But, make sure that the financial statement of the company is healthy.

Effects of the $700B not going as planned

My Portfolio :

(50.46% of portfolio) MEG -6.38%
(27.29% of portfolio) SMDC +9.21%
(6.41% of portfolio) DGTL -19.21%
(9.53% of portfolio) FLI -6.804%
(6.31% of portfolio) SMB -15.10%

I thought that I would make a killing this week. But the opposite happened, my stock position is down by -5%. I'm not panicking though. It's just that investors has not grasp the effects of the $700B in the market. With fractional reserve banking, the $700B impact in the economy would approximately $7 Trillion.

So just be patient wait a couple of weeks or months and prepare to invest more in your current portfolio if the stocks continues to dive to average out the losses.

My Stock Picks:
FLI 0.58 (P/E 8.16)
MEG 1.28
(P/E 8.42)
SMB 9.6 (P/E 18.46)

FLI and MEG has a P/E ratio less than 10, which makes it a bargain. SMB on the other hand, requires some speculative analysis, I choose SMB even with a P/E of 18.46, is that even though that figure seems so high and may make SMB overpriced, but based from my research, SMB is still paying SMC for the company split. Thus, this affects the net income of SMB which then affects the Earnings per Share (EPS). But after the debt is paid, the EPS may rise significantly.

Saturday, October 4, 2008

My Opinion on the 700B Bailout Package

I just recently increased my portfolio by 20%, due to the bailout issue.
Just 2 days ago, the bailout bill was approved in the U.S. congress after it was rejected last week.
The reason the bailout package is important to my stock position is that it will make the money supply increase.

From my observation, when the money supply increases, loan approvals becomes easy, and there will be another boom in the business. Jobs will be created, people will have more purchasing power. And since, there are a lot of US companies with offices/plants in the Philippines, my speculation is that the Philippine economy will also feel the effect of the 700B bill.

So get the 25% of your saving and start investing. Check the financial statements of the company you wish to invest in and make sure that the company's P/E ratio is less than 15. That will tell you that the stock is not overpriced and is really making money.

And when the bull market comes, wait a couple of months, then be ready to sell all your stocks.

Current Portfolio:

(53.34% of portfolio) MEG +5.32%
(24% of portfolio) SMDC +2.67%
(6.4% of portfolio) DGTL -13%
(9.7% of portfolio) FLI +1.24%
(6.3% of portfolio) SMB -9.35%

Total Gain = 1.05%