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Good stuff from @ekkaytrader

Themesong for the Philippine Stock Market - Apoy by Greyhoundz "Sunog Lang ng Sunog"

Was going through my daily playlist and this song from from Greyhoundz seemed to fit the current situation of the PCOMP. It's kind of timely actually, now that we're crossing the 2012 closing price.

The lyrics can be viewed in a bearish and bullish perspective, just like the market, the interpretation will be based on the judgement of the trader. :)

Apoy by Greyhoundz

Sir John Templeton... Respect...

Saw this interview with Sir John Templeton 25 years ago and it fascinates me that even though mankind has made a lot of changes a.k.a. "developments" in the last 25 years, the Philosophy of investing remain the same.

Interviewer: Where are you finding bargains today?
John Templeton: Where people are selling, you'll never get a bargain except when most investors are trying to sell.

John Templeton also nailed down Hong Kong being a financial center to cater for Mainland China. Dow Jones going higher in value and Nikkei (Japan) being over valued hence he liquidated his positions in the region. All of this outlook made on 1989.

How to Donate in ABS-CBN Sagip Kapamilya Through BPI ExpressOnline?

"The purpose of money is to be able to enjoy life and share it with others" - Bo Sanchez

And we at The Filipino Investor ask, what better time to share than now?

Below are the easy steps to donate in ABS-CBN Sagip Kapamilya through BPI Express Online.

Step 1. Go to www.bpiexpressonline.com

Step 2. Toggle on Payments & Reloading tab and then click on  e-Donation

Step 3. Fill out the forms!

Step 4. Once everything's complete click on Submit

Once the transaction is completed and successful you will be navigated into a confirmation page with the summary of your transaction. Your donation is finally completed!

It is no secret that our fellow Filipinos in the areas hit by Super Typhoon Yolanda is in a very bad shape. Any amount of help will make their life at-least a little easier.

Investment Idea - German Car Makers + Italy's FIAT

When I started looking at European stocks in the 1st quarter of this year it really surprised how cheap these companies were selling from a valuation stand point. Being a follower of Philippine stocks on the period when we were on the relentless rally towards the 7000-and-beyond levels, the spread between the earnings multiple, price to book, dividend yield etc between PHL and EU stocks to me was just too wide (PHL being expensive and EU being cheap). Now one could argue that PHL was expensive for a reason (potential growth) and EU was cheap for a reason (contracting economy) but that would be subject to an entirely different debate and will most likely end up not really knowing who's right or wrong, so to simplify things let's just take the numbers as they are, what's cheap is cheap and what's expensive is expensive. =)

Having this said, back then I really had the conviction that there is a compelling case for a long term investment on these EU stocks and damn If only I had the access (and capital LOL) to the Europeans stock exchanges I would have bought them right upfront hahaha! :D Anyways, back to the point of this article, here's the analysis I made during 1st quarter this year. 

**Analysis was made on 11-Apr-13.**

We were thinking that we take this recent correction on the European markets to position ourselves on German car-makers, BMW GR, VOW GR, DAI GR and Italy's F IM. See some fundamental and technical reasons below.

Nuff Said

Outlook on Debt Ceiling and US Government Shutdown

**Analysis was made on 07-Oct-13.**

Our outlook remains constructive on equities until the end of the year despite Government Shutdown and and Debt Ceiling concerns that is due to be fixed before 17-Oct-13.

This is due to the following reasons.

1. Technicals. SPX is bullish technically and is forming a falling broadening wedge pattern in the 1Y daily chart w/c suggests a continuation of the upside move in the short-term. This bullish outlook will be invalidated if the price breaks the Support of the rising wedge w/c will then turn the technicals bearish. A potential driver of this event happening is when the policy makers in the US don't come up with a deal before 17-Oct-13 to raise it's debt ceiling. However we'd take the opposite bet on this because given that they "own" the decision whether they will default or not and given that the whole world is looking at them the probability that they will decide not to default is higher.

Sell in May and Go Away, Go back in Late September to October

Some thoughts on Index Seasonality (Dow Jones)

Key takeaways:

- The Dow is back where it was 6 Months ago (around April 10 to Present)

- In a 1 Year perspective, it seems Index Seasonality is in play

Dow Jones YTD Chart

 Dow Jones 15Y Seasonal Average

JGS buys MER shares from San Miguel Group at P237 per Share

Based on the disclosure from JGS below, we crunched the numbers to compute how much RSA and JG was pricing their deal and we came up with P236.6/share - That's about 20% discount from yesterday's closing price. If the numbers are correct, this is a pretty good deal for the Gokongweis if you ask me.

Top 50 Richest Filipinos According to Forbes (2013)

The numbers are out for the Top 50 richest Filipinos for 2013!

Forbes magazine has just released its list of top 50 richest people in the Philippines.

Mall tycoon Henry Sy is still undisputed for the 6th straight year, with a $12 billion net worth - an increase of $2.9 billion from a year ago.

I'd like to point out that the numbers is in US Dollars! To put this in perspective $12 Billion is roughly PHP 516 Billion.. Damn! Let's stop and reflect for while. LOL!

So what do you think these guys have in common? =)


Here's the Forbes list of the richest people with their estimated net worth:

1) Henry Sy; US$12 billion

2) Lucio Tan; $7.5 billion

3) Andrew Tan; $4.6 billion

4) Enrique Razon Jr.; $4.5 billion

5) John Gokongwei Jr.; $3.4 billion

COL Mid-Year Market Briefing - The Tides of Opportunity

Got this invitation from COL. If you're a client and you're free on the said dates, make sure you don't miss this event. =)

Registration is strictly on a first-come, first-served basis and will automatically close once maximum capacity has been reached. Reserve your seat today. Please do not forget to print out your e-ticket as this will be presented at the registration table on the day of the event.

Click here to register now.

See you there!

Philippine Composite Index (PCOMP:IND) - Where Are We In Terms of Valuations?

PSEi seems to be struggling to breach 6800.

We think there is a good reason for that simply because we cannot hide the cold fact that at current prices, our market is in the higher end (expensive) of the "value" range as measured by Current and Forward PE, Price to Book, and Dividend Yield.

Picture paints a thousand words. See for yourself.

Price = White

Current PE = Red

Forward PE = Orange

Price To Book = Blue

Div Yield = Yellow

Slowing China: A Monster Under The Bed Story?

Some thoughts on Disappointing China PMI.

If this data really suggests that the worst is yet to come in China then why did the CSI 300 stayed afloat it's Nov/Dec low? And why did  the price today not able to close below yesterdays open? If the markets think that China is going to get "Slower" or even "More Slower" (pun intended) in the future confirmed by the PMI data then a drastic sell-off should have occurred and a Lower Low should have been formed, but this doesn't seem to happen in the price. We think the price action is a confirmation that the Chinese slowdown that the market is thinking (as shown in Financial Media) is already reflected in the price, if not over-reflected.

What Happens to Equities and Bond Prices When There is a Sudden "Spike" in Interest Rates?

**This analysis was done last May 03, 2013 - Before Ben Bernanke's "Tapering".**

This is in relation to Lloyd Blankfein's "Biggest Worry" -  Interest Rate Increases in Parallels to 1994

http://www.bloomberg.com/news/2013-05-02/blankfein-sees-parallels-to-1994-interest-rate-increases.html

"Goldman Sachs Group Inc. Chief Executive Officer Lloyd C. Blankfein warned that the interest- rate environment has parallels to 1994, when a sudden and sharp increase in rates caught many investors off-guard."

___________________________________________________________________

Question: What happens to Equities and Bond prices when there is a sudden hike in interest rates?

Methodology: We've examined the 10Y US Goverment Yields, S&P 500 Index and US Long Bond from 1981 to Present (32 years) and tried to find out what happens to Equity prices and Bond prices when interest rates make a sudden move up a.k.a "Interest rate spikes".

We've identified 5 interest rate spikes between the 32Yperiod.

Wall Street Banks and Hedge Funds

Bloomberg’s Stephanie Ruhle interviews Stan Druckenmiller, an American hedge fund manager and founder of Duquesne Capital Management LLC.

Topic of the interview was pretty wide but I lol'd on their specific discussion about hedge funds and banks, excerpts below:

Stephanie: You have these big banks that are now doing business where they look more like utilities, I don’t know how are these guys going to make a ton of money going forward, maybe there does need to be more consolidation?

Stan: I’d like to see them operate more like utilities, I couldn't care less whether they make money, unless I own their equities, but if we're talking about as a United States citizen, I have no problem with banks being

How to be a successful trader

I've read a lot of  stuffs on how to become a successful trader and investor in the stock market and perhaps this is one of the best.

I think Faceless Trader nailed it on this one.

More than studying the charts or the company’s fundamental positions, the more important thing that trading entails is the aspect of knowing yourself and complementing that personality to the unique trading system that you’ll eventually use to enable yourself to be a better and consistent trader. - Faceless Trader

Know your self. Find a strategy that works and makes sense to you. Stick with it.

Investment Thesis: A Call on COL

I've been looking at COL for some time now and as you might already know, COL Financial Group Inc, the leading online stockbroker in the Philippines is actually listed in the PSE. I personally trade with them and I like their trading platform. Having this said, I really had the interest on investing on this company not only because I like it's service and products but also because of the type of business it is in. Since COL is a stock broker, they make money from brokerage commissions. Every time you and I buy or sell stocks they make money.

I have been closely monitoring how much money they make on a daily basis from their online brokerage operations since Nov last year to present, and when I saw this news below it really came to me that COL is really on a very sweet spot in it's brokerage business and it's position in the Equity capital markets in the Philippines.

Security Name	COL Financial Group, Inc.
Date	03/05/2013
Headline	DCL #1976: Press release: "COL's operating performance rebounds..." - 1
Source
Content
Operating profits of leading online stockbroker COL Financial Group Inc. (COL) rebounded during the fourth quarter of 2012. During the last three months of 2012, COL's operating profits jumped by 16.1% to Php50.1 Mil. This brought operating income for the whole of 2012 to Php339.2 Mil. Although still lower by 15.6% compared to the 2011 total of Php401.7 Mil, the drop was much slower than the 19.4% decline registered during the first nine months of the year. Consolidated net income for the full year fell 8.6% to Php305.9 Mil. Profits rebounded as COL benefited from the recovery of trading activity by local investors in the PSE.

The key takeaway of the above news is that COL's operating profit rebounded in the 4th quarter last year. Noting this, when I checked my gathered data since Nov 5, 2012 to Dec 31, 2012 (2/3rds of the 4th quarter) the average commission they get is about PHP 1.6MM per day (I computed the daily commission by multiplying the daily value turnover under COL x 0.25%). As per the article, this was achieved mainly on the increase in trading activity in the 4th quarter accompanied by COL's increase in number of clients amounting to about 46,536 as of end 2012 from only 27,704 last 2011.

My 2nd Online Stock Broker - BPI Trade

It was about 3 years ago when I opened my first online trading account with COL Financial, they were referred to as CitisecOnline then, but it's been quite a while that I've been contemplating on signing up for a 2nd broker because I want to have a 2nd account to track the performance for my different portfolio constructed using a different strategy other than my personal calls. Hence the idea of opening an account either with FirstmetroSec or BPI Trade.

But it was EkkayTrader who convinced me to just go with BPI Trade as a 2nd online broker since as she pointed out, there was a major improvement on BPI Trade's trading platform, not to mention it was pretty easy to open an account with them. So yeah, thanks to E! haha

COL and BPI Trade

Though BPI Trade has improved, I personally think that COL is the superior broker in terms of functionality, ease of use, research and built in functions. For the COL account owners I think the extra value you get with opening a 2nd trading account with BPI Trade are as follows:

Some points on Adversity Quotient (AQ)

Adversity - is defined by google as "difficulties" or "misfortune" w/c is synonymous to having experience disaster - distress - calamity and hardship.

Pretty heavy words right? In business or life in general, these are not just mere words but real challenges that one has to manage everyday. Whether you're a start-up company, a diversified conglomerate or just an individual investor managing his exposures in different types of risks from various asset classes from different markets. One should always have the ability to survive in the event that things go wrong the next day or few years down the road.

The Filipino Investor Quantitative Model Portfolio

I have conducted a Multi-factor analysis on stocks listed in the Philippine Stock Exchange last Jan 23, 2013.

From the top 25 stocks that passed that analysis, I made a dummy or a "model" portfolio if you may to track it's performance. 

The model portfolio is dominated in PHP and assumes a PHP 10,000 exposure for every stock on purchase date. The purchase date is on Jan 24, 2013 w/c is one day after the analysis was done. The purchasing price is the closing price of the Jan 24, 2013. There are 25 stocks in this model portfolio hence the initial capital  is PHP 250,000. Brokerage cost and taxes are not accounted for this model.

Let's find out if this "Multi-factor" strategy can outperform the Philippine index (PCOMP:IND) in terms of return.

This is a buy and hold strategy w/c re-balances annually. I'm not sure yet how i'm going to account for the dividends or if this Bloomberg watch list can account that for me (though I think it cant). Anyways, I'll just figure that out later.

For tracking purposes let's name this model portfolio as "The Filipino Investor Quantitative Fund" or in short, "TFI Quant Fund".

TFI Quant Fund:

Capital: PHP 250,000

Analysis date: Jan 23, 2013

Purchase date: Jan 24, 2013

Number of stocks: 25

Exposure per stock: PHP 10,000

Benchmark: PCOMP:IND

TFI Quant Fund return since Jan 24: +8.04%

PCOMP return since Jan 24: +5.58%

TFI Quant Fund

DISCLAIMER: 

This is not an investment advice and the Author does not have any position on the stocks mentioned above as of the publishing date of this article - Feb 08, 2013. The author shall not be responsible or liable for any trading or investment decisions made based on this information.

The author hereby expressly disclaims any responsibility for any error or inaccuracy in the information.

The Wisdom of Benjamin Graham

I stumbled upon this great video of Benjamin Graham's "legacy" in Youtube and I thought the followers of The Filipino Investor should really know about it, hence I'm sharing it on this blog.

To those who do not know who Benjamin Graham is. He is actually one of the "look-up-to-guys" when it comes to Value Investing. If you ask me, I think it is even safe to say that he is the father of value investing. Ben Graham is a business professor at Columbia University where he taught Warren Buffet and the other business tycoons (shown in the video below) on how to view stocks in a business and value investor's perspective. He is also an author of various books such as "The Intelligent Investor" and "Security Analysis" to name a few.

My top 2 favorite lines are the segment below.