Stock Investing is like driving

source: http://www.2gn.com.au/banks.htm

So many people are still confuse or have many question about investing in the stock market. I know it's a mind boggling activity and a very serious vehicle or means of investing in a sense that you could be a millionaire or broke in just a second.... only if you don't know what you are doing.

The key to a successful or profitable stock investing is really knowing what you are doing. That is why it is said to be one of the secrets of the affluent or the rich one because of the lower tax rate(in the Philippines stock transaction tax is 1/2 of 1% of every sale. I heard about a new law being discuss but have no details yet) and two because you are only placing idle funds(remember only idle funds) which could earn higher to fight inflation.

Now why did I say it is like driving?

 source: http://order.uprintinvitations.com/

I am just a newbie driver. I learned  to drive because I have to drive. Because here in Guam public transport is not famous. Yes there are buses but they come every after hour and it is not fast. There are taxis but the cost is not affordable. Driving is still better and it will get you to your destination sooner.

Stock investing is like driving because like stock investing in order to be good at it you must learn it and really focus on it or else you gonna get into an accident. You don't just drive a car and go into a high way. You need a driver's license and you must have the will to drive(for those not driving you will feel this "will" I speak of when you get to drive a car... if it is your first time you might have thoughts that you can't drive because that fear of getting hit or hitting other cars is always in your mind).

You need focus when driving and it also applies to stock investing. Focus on what you are investing on. You have to learn about the company you want to invest, learn its growth potential, and make a strategy on how to increase your holdings on such stock. The thing is when you make an investment and then suddenly the price drop our tendency is to sell it and get another(for first time investors you will go through this just like what I did). If you invested in a sound company with a proven growth and a stable financials it is still possible that its price will drop(look at TEL today). But when a strong company's price drop don't just go to panic mode and sell it, you have to learn why it is going down.  When its operations is good and yet the price went down then it could be that the market or investors' appetite for it slowed down thus the price is stagnant or gradually goes down. On such occasion it is the best time to cost average.

In driving you have 3 mirrors to guide you but always remember to look at what is in front of you or else you will surely hit somebody. Same thing in investing. You have to look what is in front of you, if you need to you can look at your side mirrors and rear mirror if you need to make a turn or change lanes. In investing you must have one direction and that is to earn. There are times that you will be caught in traffic and thus you need to change lane or take a turn. On those instances you use your mirrors to make a safe turn but you are still going to the intended destination. 

I guess that explains it. If you have more queries or if you have questions don't forget one of the rules and that is don't be shy to ask questions. Search the Internet go to www.pse.com.ph, call up the online stockbrokers(some have free seminars), join a stock investing forum and post your questions( click here for a stock investing forum), or simple ask a friend who is into stock(click here or this one).

Stock Investing is like driving

source: http://www.2gn.com.au/banks.htm

So many people are still confuse or have many question about investing in the stock market. I know it's a mind boggling activity and a very serious vehicle or means of investing in a sense that you could be a millionaire or broke in just a second.... only if you don't know what you are doing.

The key to a successful or profitable stock investing is really knowing what you are doing. That is why it is said to be one of the secrets of the affluent or the rich one because of the lower tax rate(in the Philippines stock transaction tax is 1/2 of 1% of every sale. I heard about a new law being discuss but have no details yet) and two because you are only placing idle funds(remember only idle funds) which could earn higher to fight inflation.

Now why did I say it is like driving?

 source: http://order.uprintinvitations.com/

I am just a newbie driver. I learned  to drive because I have to drive. Because here in Guam public transport is not famous. Yes there are buses but they come every after hour and it is not fast. There are taxis but the cost is not affordable. Driving is still better and it will get you to your destination sooner.

Stock investing is like driving because like stock investing in order to be good at it you must learn it and really focus on it or else you gonna get into an accident. You don't just drive a car and go into a high way. You need a driver's license and you must have the will to drive(for those not driving you will feel this "will" I speak of when you get to drive a car... if it is your first time you might have thoughts that you can't drive because that fear of getting hit or hitting other cars is always in your mind).

You need focus when driving and it also applies to stock investing. Focus on what you are investing on. You have to learn about the company you want to invest, learn its growth potential, and make a strategy on how to increase your holdings on such stock. The thing is when you make an investment and then suddenly the price drop our tendency is to sell it and get another(for first time investors you will go through this just like what I did). If you invested in a sound company with a proven growth and a stable financials it is still possible that its price will drop(look at TEL today). But when a strong company's price drop don't just go to panic mode and sell it, you have to learn why it is going down.  When its operations is good and yet the price went down then it could be that the market or investors' appetite for it slowed down thus the price is stagnant or gradually goes down. On such occasion it is the best time to cost average.

In driving you have 3 mirrors to guide you but always remember to look at what is in front of you or else you will surely hit somebody. Same thing in investing. You have to look what is in front of you, if you need to you can look at your side mirrors and rear mirror if you need to make a turn or change lanes. In investing you must have one direction and that is to earn. There are times that you will be caught in traffic and thus you need to change lane or take a turn. On those instances you use your mirrors to make a safe turn but you are still going to the intended destination. 

I guess that explains it. If you have more queries or if you have questions don't forget one of the rules and that is don't be shy to ask questions. Search the Internet go to www.pse.com.ph, call up the online stockbrokers(some have free seminars), join a stock investing forum and post your questions( click here for a stock investing forum), or simple ask a friend who is into stock(click here or this one).

Citiseconline Platform No.3: Company Snapshots

Citisecoline has a report called Company Snapshots where analysis of there certified technicians give an overview of a particular stock. Log in to you Citiseconline account and follow theses steps:

From the Home page go to the Research tab

Click Fundamentals

Click Company Snapshot

Citiseconline Platform No.3: Company Snapshots

Citisecoline has a report called Company Snapshots where analysis of there certified technicians give an overview of a particular stock. Log in to you Citiseconline account and follow theses steps:

From the Home page go to the Research tab

Click Fundamentals

Click Company Snapshot

Happy Heart's Day!!!

 source: http://www.sodahead.com/entertainment/expression-101/

I know I am kinda late to post this but nonetheless as Filipinos say " Huli man at magaling nakahabol din!"

Just a thought on the occasion. It is great thing if we invest on our relationships. 

source: http://www.womenpr.com

When I say "relationship" it is not limited to the boy-girl, gf-bf, husband-wife kind of thing. Relationship covers a lot of things. Friendship or what we call "barkada", group classmate in school, student-teacher or the sensie- deshi, parent-child are some forms of relationships. It is important for one to spend time in these relationships to strengthen the bond which one will carry as one matures.

In the future we will reap the benefits of these relationships which are nurtured and taken cared of. That is why it is important to invest on such. Investing here means time. The question is what kind of time? It should be quality time.

Time has a great effect on everything for example in a bank deposit with compounded interest. As time passes the small amount we place on such grows not linearly but exponentially due to the effect of the passage of time. Same thing with relationships. As it progresses it develops and grows due to the "interest" it earns over the years.

On this day we learned two things(this now is purely about investing application):

1. The importance of time

2. The effect of time

Happy Heart's day everyone!!!

Happy Heart's Day!!!

 source: http://www.sodahead.com/entertainment/expression-101/

I know I am kinda late to post this but nonetheless as Filipinos say " Huli man at magaling nakahabol din!"

Just a thought on the occasion. It is great thing if we invest on our relationships. 

source: http://www.womenpr.com

When I say "relationship" it is not limited to the boy-girl, gf-bf, husband-wife kind of thing. Relationship covers a lot of things. Friendship or what we call "barkada", group classmate in school, student-teacher or the sensie- deshi, parent-child are some forms of relationships. It is important for one to spend time in these relationships to strengthen the bond which one will carry as one matures.

In the future we will reap the benefits of these relationships which are nurtured and taken cared of. That is why it is important to invest on such. Investing here means time. The question is what kind of time? It should be quality time.

Time has a great effect on everything for example in a bank deposit with compounded interest. As time passes the small amount we place on such grows not linearly but exponentially due to the effect of the passage of time. Same thing with relationships. As it progresses it develops and grows due to the "interest" it earns over the years.

On this day we learned two things(this now is purely about investing application):

1. The importance of time

2. The effect of time

Happy Heart's day everyone!!!

Stock Market News: Megawide IPO

MEGAWIDE CONSTRUCTION CORPORATION(source www.pse.com.ph)   KEY DATA Company Name  :  Megawide Construction Corporation   Status  :  APPROVED  (26-Jan-2011) Address  :  2/F Spring Bldg., Arnaiz Ave. cor. P. Burgos St., Pasay City   Listing Price  :   --  Tel. No/s  :  414-0680; 376-3425   Offer Price  :   --  Fax No/s  :    Offer Shares  :   --  E-mail Address  :    Offer Amount  :   --  Company Website  :  www.megawide.com.ph   Total Expenses  :  0 CEO  :  Michael C. Cosiquien   Minimum Subscription  :  100 No. of Employees  :   --    Shares Over Alloted  :   --  Place of Incorporation  :  Philippines   Shareholder Shares Offered  :   --  Symbol  :  MWIDE   Shares to be Listed  :   --  Date of Incorporation  :  28-Jul-2004   Shares Outstanding  :  565,000,002 Fiscal Year End  :  December 31, 2010   Lockup Period (days)  :   --  Board  :  First   Lockup Expiration  :   --

FINANCIALS Revenue  :  P3,036,991,580.00 Net Income  :  P245,839,080.00 Total Assets  :  P3,125,474,373.00 Total Liabilities  :  P2,239,553,344.00 Stockholders' Equity  :  P885,921,029.00

EXPERTS Lead Underwriter  :  BDO Capital & Investment Corporation Underwriter(s)  :  -- Company Counsel  :  Quasha Ancheta Peña & Nolasco Underwriter Counsel  :  Martinez Vergara Gonzalez & Serrano Auditor  :  Punongbayan & Araullo Transfer Agent  :  Banco de Oro Unibank, Inc. - Trust Banking Group Receiving Bank  :  Banco De Oro Unibank, Inc. - Trust and Investments Group

Stock Market News: Megawide IPO

MEGAWIDE CONSTRUCTION CORPORATION(source www.pse.com.ph)   KEY DATA Company Name  :  Megawide Construction Corporation   Status  :  APPROVED  (26-Jan-2011) Address  :  2/F Spring Bldg., Arnaiz Ave. cor. P. Burgos St., Pasay City   Listing Price  :   --  Tel. No/s  :  414-0680; 376-3425   Offer Price  :   --  Fax No/s  :    Offer Shares  :   --  E-mail Address  :    Offer Amount  :   --  Company Website  :  www.megawide.com.ph   Total Expenses  :  0 CEO  :  Michael C. Cosiquien   Minimum Subscription  :  100 No. of Employees  :   --    Shares Over Alloted  :   --  Place of Incorporation  :  Philippines   Shareholder Shares Offered  :   --  Symbol  :  MWIDE   Shares to be Listed  :   --  Date of Incorporation  :  28-Jul-2004   Shares Outstanding  :  565,000,002 Fiscal Year End  :  December 31, 2010   Lockup Period (days)  :   --  Board  :  First   Lockup Expiration  :   --

FINANCIALS Revenue  :  P3,036,991,580.00 Net Income  :  P245,839,080.00 Total Assets  :  P3,125,474,373.00 Total Liabilities  :  P2,239,553,344.00 Stockholders' Equity  :  P885,921,029.00

EXPERTS Lead Underwriter  :  BDO Capital & Investment Corporation Underwriter(s)  :  -- Company Counsel  :  Quasha Ancheta Peña & Nolasco Underwriter Counsel  :  Martinez Vergara Gonzalez & Serrano Auditor  :  Punongbayan & Araullo Transfer Agent  :  Banco de Oro Unibank, Inc. - Trust Banking Group Receiving Bank  :  Banco De Oro Unibank, Inc. - Trust and Investments Group

Listed company profile: San Miguel Corporation

 source: http://nickledimepenny.blogspot.com/2009/02/san-miguel-corporation.html

San Miguel Corp.(SMC) has been in the country since the Spanish times with their brewery business. As the years went by SMC has added other areas of business in the food and beverage area. 

But as of today with Ramon S. Ang (a.k.a. RSA) diversification program for SMC the company has been entering new industries. One of this is power generation with its stake at Meralco(MER) and other is their bid on Philippine Airlines(PAL) of  Lucio Tan.

Below is the Corporate structure of SMC 

(source: http://www.sanmiguel.com.ph)

As per SMC's financial statements as of Sept, 2010 current ratio is at 1.7  but with a 1.87 Debt to Equity ratio.

For some time SMC's stock has been stagnant but the recent news and moves regarding RSA's diversification has caught the attention of investors. Some say it is more of a playing of the stocks by the few people and some say it is the doing of the very people that are already there.

Nonetheless it is worth looking back and checking SMC and be considered specially now that they have been aggressively diversifying into new areas.

Listed company profile: San Miguel Corporation

 source: http://nickledimepenny.blogspot.com/2009/02/san-miguel-corporation.html

San Miguel Corp.(SMC) has been in the country since the Spanish times with their brewery business. As the years went by SMC has added other areas of business in the food and beverage area. 

But as of today with Ramon S. Ang (a.k.a. RSA) diversification program for SMC the company has been entering new industries. One of this is power generation with its stake at Meralco(MER) and other is their bid on Philippine Airlines(PAL) of  Lucio Tan.

Below is the Corporate structure of SMC 

(source: http://www.sanmiguel.com.ph)

As per SMC's financial statements as of Sept, 2010 current ratio is at 1.7  but with a 1.87 Debt to Equity ratio.

For some time SMC's stock has been stagnant but the recent news and moves regarding RSA's diversification has caught the attention of investors. Some say it is more of a playing of the stocks by the few people and some say it is the doing of the very people that are already there.

Nonetheless it is worth looking back and checking SMC and be considered specially now that they have been aggressively diversifying into new areas.

Investing word of the day: Liquidity Ratio

What is Liquidity ratio and why is it important?

source: http://www.myjourneytomillions.com

Investopedia defines Liquidity ratios as:

A class of financial metrics that is used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts.  

Liquidity ratio is a metric or an indicator where one can see or gauge a company's ability to pay short term debts. It enables one to determine if the company can pay off maturing debts that supports its operations. Short term debts are incurred to fund current operations thus if the capability of a company to pay such is impaired, the company might have to stop its operation causing a delay in operation thus affecting its earnings.

 Liquidity Ratios include the following:

1. Current Ratio - is derived by dividing current assets by current 

                            liability. A number higher than one is a good 

                            current ratio.

2. Quick Ratio - also known as acid test ratio is a                            

                           stricter/conservative way of determining liquidity

                          by taking out inventory in the current asset amount. 

3. Operating Cashflow ratio - is derived by dividing cashflow from 

                        operations by current liabilities.

With these ratios we can now determine if a company is liquid enough to pay off its outstanding or due debt. Determining if a company is liquid enables us to project if the company will continually generate earnings since it has enough fund to support its day to day operation without need of additional capital from investors or lenders. 

It is a sign that a company manages its finances well by having enough liquid funds to avoid interest expense.

On the contrary there is a thinking that if a company has a good earnings and have a current ratio below one then it is able to leverage. This means that the company is earning on borrowed money. As long as it is able to meet its debt obligation on time without incurring additional finance cost then that is okay. 

Investing word of the day: Liquidity Ratio

What is Liquidity ratio and why is it important?

source: http://www.myjourneytomillions.com

Investopedia defines Liquidity ratios as:

A class of financial metrics that is used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts.  

Liquidity ratio is a metric or an indicator where one can see or gauge a company's ability to pay short term debts. It enables one to determine if the company can pay off maturing debts that supports its operations. Short term debts are incurred to fund current operations thus if the capability of a company to pay such is impaired, the company might have to stop its operation causing a delay in operation thus affecting its earnings.

 Liquidity Ratios include the following:

1. Current Ratio - is derived by dividing current assets by current 

                            liability. A number higher than one is a good 

                            current ratio.

2. Quick Ratio - also known as acid test ratio is a                            

                           stricter/conservative way of determining liquidity

                          by taking out inventory in the current asset amount. 

3. Operating Cashflow ratio - is derived by dividing cashflow from 

                        operations by current liabilities.

With these ratios we can now determine if a company is liquid enough to pay off its outstanding or due debt. Determining if a company is liquid enables us to project if the company will continually generate earnings since it has enough fund to support its day to day operation without need of additional capital from investors or lenders. 

It is a sign that a company manages its finances well by having enough liquid funds to avoid interest expense.

On the contrary there is a thinking that if a company has a good earnings and have a current ratio below one then it is able to leverage. This means that the company is earning on borrowed money. As long as it is able to meet its debt obligation on time without incurring additional finance cost then that is okay.