Unlike most stock market seminars which only focuses on Technical analysis, this series of seminars presents a good balance between fundamental analysis and technical analysis. With the inclusion of Seminar 3, Claire takes this  further by going deep into fundamental analysis as she introduces the companies in the Philippine stock exchange, their management and other things you need to know about the companies you are investing in. To me this is the brief yet most comprehensive seminar that strips away the academics and the hard to understand jargon behind investing in the stock market. This no-non sense series of seminars gives you a practical down to earth knowledge on how to invest in the Philippine stock market.

The first seminar is on technical analysis while the next two are on fundamental analysis. Although it may cost you a lot,  however if you are new to stock market investing, I highly recommend you attend all of the three seminars because if you dive into stock market investing without any knowledge at all, you might end up loosing everything that you have invested. Of course you can choose which seminar to attend if you are already confident of your knowledge in either technical or fundamental analysis.

See the seminar details below, you might also want to visit the AET website at www.philippinestockmarkettraining.com or contact Claire personally at (02)-384-18-66; 02-2185362 call/text at 0928-474-4441; 09173574363. You can also email her at tradersgroup28NOSPAM@gmail.com (Please remove NOSPAM to reveal the true email address) By the way I’ve included the seminar details here for other locations.

Start making your money work for you now!….

Analysts-Traders Equities Training Center (AET)

In cooperation with

The Philippine Stock Exchange (PSE) Market Education Department

Presents

PRACTICAL TRADING IN THE PHILIPPINE STOCK MARKET SEMINAR

MANILA: April 13, 14, 15; 2/F, Investors Lounge, PSE Tektite, Pasig

DAVAO : April 17, 18, 19; Royal Mandaya Hotel, Davao City

CEBU : April 21, 22, 23; Baseline Complex Restaurant, (tentative venue) J. Osmena St., Cebu

BAGUIO: April 27, 28, 29; Max’s Restaurant, (tentative venue) Kisad Road, Baguio City

All ARE WELCOME!

Seminar 1. PRACTICAL TRADING (MODULES 1, 2 & 3)

Time: 9:30am to 5:00pm

Participation Fees:

Filipinos: Php5,000 for the CLASS & Php7,000 for the ONE-ON-ONE MENTORING

Foreigners: US$Php200 for the CLASS & US$220 for the ONE-ON-ONE MENTORING

Note: One-on-One Mentoring is by arranged schedule

PART V: Q & A

MODULE 2: INTRO TO TRADING

PART I: MECHANICS OF TRADING

Trading Time; Bidders and Sellers; Stock quotes, board lots, fluctuations; Market orders and executions; Done transactions; Commonly used market lingo

PART II: DYNAMICS OF TRADING

Trading Strategies. Discovering what are the trading strategies available and which ones will work for you.

Market Diagnosis. Analyzing market trends, speculative versus play trading, what links can do, the importance of volume, value and posted prices, why you should know who the buyers and sellers are.

Pulling the Trigger. Making orders (buy up, sell down, post, strategize, done at market, etc.)

Monkey Business. Learn how to defend yourself from the common malpractices in the trade.

Broker Assisted and On-line Trading. Feature, advantage and differences. How to trade Filipino stocks anywhere in the world.

PART III: Q and A.

MODULE 3: INTRO TO TECHNICAL ANALYSIS

PART I:

Intro to Technical Analysis; Charting Techniques; Trend and patterns-how to profit from it; How to determine buy and sell signals using the MOVING AVERAGES; How to determine buy and sell signals using an OSCILLATOR;

Sources of Information

PART 2: Q and A.

Seminar 2. FUNDAMENTAL ANALYSIS 1

Participation Fees:

Filipinos: Php5,000 for the CLASS & Php7,000 for the ONE-ON-ONE MENTORING

Foreigners: US$Php200 for the CLASS & US$220 for the ONE-ON-ONE MENTORING

Note: One-on-One Mentoring is by arranged schedule

INTRODUCTION TO FUNDAMENTALS & ECONOMY:

Economic Components – Natural Resources, Human Resources

Economic Releases that Move Markets

Fiscal & Monetary Policies

HOW TO READ

The Income Statement

The Balance Sheet

The Cash Flow Statement

How to choose stocks to buy using Fundamental Analysis

How to compute and use financial ratios

How to determine if you are trading on a discount or at a premium

Seminar 3. FUNDAMENTAL ANALYSIS 2

WHO IS WHO IN THE PHILIPPINE STOCK MARKET : Featuring 71 index stocks in 6 sectors: i.e., financial, commercial-industrial, Property, Holdings, Services, Mining and Oil

Participation Fees:

Filipinos: Php5,000 for the CLASS & Php7,000 for the ONE-ON-ONE MENTORING

Foreigners: US$Php200 for the CLASS & US$220 for the ONE-ON-ONE MENTORING

Note: One-on-One Mentoring is by arranged schedule

THE LISTED COMPANIES – UPCLOSE

THEIR DESCRIPTION & HISTORY – What they are; THEIR MOTHER COMPANIES, SUBSIDIARIES/ AFFILIATES/INVESTMENTS – what and who they own and what and who owns them;

THEIR MANAGEMENT – Who they are, their core people; THEIR EQUITY - How big they are; THEIR HISTORICAL DATA – Dividends, Profits; THE COMPANIES GIVING OVER 3% REGULAR DIVIDENDS; THEIR PRICE ACTION – Historical Price actions and movements

THEIR MARKET CAPITALIZATION - What is their influence on local stock market

THEIR LIQUIDITY - How often investors buy them, What are the most marketable stocks

THEIR STOCK CLASSIFICATION – Blue chip, second liner or third liner

THEIR PAR VALUE, BOOK VALUE, MARKET VALUE AND FINANCIAL RATIOS

THEIR LOCATION, CONTACTS & DATE OF STOCKHOLDERS MEETING

TO CONFIRM REGISTRATION:

BY EMAIL: Fill-up registration slip below, attach deposit receipt of participation fee then email back to tradersgroup28@gmail.com.

BY TELEPHONE OR TEXT MESSAGE: Call at 384-18-66; 02-2185362 call/text at 0928-474-4441; 09173574363.

Upon receipt of payment, AET will confirm your registration via e-mail/call or text message

Online payment of participation fees can be made to any BDO branch.

PESO ACCOUNT – BDO Current Acct. No. 004958012614 Analysts-Traders Equities Training Center

DOLLAR ACCOUNT – BDO Dollar account number 49502124 Analysts-Traders Equities Training Center

Note: OFWs can also pay in dollars

WE ENTERTAIN SEMINAR REQUESTS FROM SCHOOLS, ORGANIZATIONS AND BUSINESS GROUPS IN THE PROVINCES AND FROM FILIPINO ORGANIZATIONS ABROAD OR OFW GROUPS WITH AT LEAST 50 PARTICIPANTS. PARTICIPATION FEES CAN BE NEGOTIATED. JUST EMAIL LETTER OF INTENT.

So what are you waiting for ? Those who are not from Cebu grab your Jack Georges luggages now and come to Cebu to attend this stock market seminar !

Because of this, sometimes some of my other topics has been over shadowed by articles on said topics. Hence, I have decided to start a new blog on stock market investing, business and personal finance.

My new blog  is www.stockmarket-investing.com. This new blog is still a work in progress; however most of the elements found in a regular blog is already setup there. As of the time of this writing I have written about 5 posts there already. What’s good about setting up this new blog is that instead of writing whatever I feel, I am somewhat compelled to write about the topics sequentially. So you can notice that my early posts in the blog still does not discuss stock market investing directly, instead I start from the very foundation of investing itself which are business concepts and finance concepts. It’s like I am lecturing in this blog. As of now, I pattern the sequence of my post there based on the outline I follow when I lecture to my students about corporation law-stock marketing investing.

So if you are a frequent follower of this blog I won’t be featuring stock market investing, business and personal finance in this blog anymore. Old post about these topics will still be retained in this blog for SEO purposes. If you have questions on these topics, I will answer them and feature them in my new blog. Click here to head over to my new blog and learn more about stock market investing !

You don’t need to have an accounting degree to understand financial statements. All you need is the willingness to learn. Don’t even worry if you are not good in math, besides prominent value investor Peter Lynch once said “Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.”

If you want to have a free web directory introductory lecture on financial statements you might want to attend the Street Strategist’s free seminar on Introduction to Financial statements.

I’m teaching business law at the Cebu Institute of Technology. Currently we are now tackling the Corporation code. I believe that students can learn more if we apply theory into actual practice that is why I usually relate my discussions on the corporation code to publicly listed companies and the stock market. Further, I encourage them to understand how to read the annual reports especially the financial statements in order that they can full grasp the concepts presented in the Corporation Code. That is why I encouraged my students to attend this very important free seminar.

If you are not into stock market investing, this seminar is also useful for those who are in business, especially those who own small business who want to learn more about financial statements.

The seminar lecturer will be Thads Bentulan, otherwise famously known as the “Street Strategist.” If you want to know more who the Street Strategist is check out my blog post “Guerilla Blogger meets the Street Strategist.”

Don’t waste your time, grab this opportunity. Attend the free seminar on Introduction to Financial statements to be held this Friday, July 24, 2009 form 10 a.m. to 12 p.m. at the T.V Barn at ABS-CBN Broadcasting – Visayas Complex North Road, Jagobiao Mandaue City, Cebu. Please call (032)-422-1953 in order to reserve your seat.

The Street Strategist is no other than the famous Thads Bentulan perhaps one of the greatest minds of the 21st century. Thads has a degree in engineering and an MBA from the prestigious Asian Institute of Management. He is famous for his “out of the box” thinking on very interesting topics. He currently anchors a radio program every 9 p.m. from Mondays to Friday in station DYAB, ABS-CBN Cebu. The program is called “Side walk 1512” where he talks about business, finance and economics. On Saturdays he hosts a very controversial radio program. (Try listening to it if you want to know what it is all about:-) ). His “hyperwage theory” has caused quite a stir not only in Cebu but in the blogsphere and the entire country as well.

The Street Strategist not only seems to have a knack for attracting controversy, he also seems to have the “gift of prophecy.” Almost a decade ago, being a former columnist for Business World (our equivalent of the Wall Street Journal) he wrote about the business strategy that San Miguel will take and that Meralco will be taken over by an internet or communications company. Today, his “prophecy” seems to be coming true with the recent corporate events happening in both companies. I’ll take more about this in other post. All of the Street Strategist’s writings have been compiled into 13 volumes of book. You might want to check it out in the blog he calls as “The misadventures of the Street Strategist.”

I’ve followed the Street Strategist over the radio and the internet for quite some time. His insights into business finance and economics has been of interest to me considering that I am so much into value investing. So when I learned over the radio that he is conducting a 2 day seminar, I jumped at the opportunity.

The two-day seminar is not your typical “accounting for non-accountants” seminar for several reasons. First of all, the “accounting” is taught by a non-accountant. Secondly, the seminar claims to make you into an “accounting wizard” in just a day and that what is taught is the world’s fastest way to learn debit and credit. Thirdly, the seminar is more than your usual accounting seminar wherein you are taught just debit and credit. In this seminar you are taught how to analyze financial statements the basic principles of finance, the time value of money, rv financing a business among other things.

On the first day, we learned about debit and credit. True to his claims, the “accounting wizard” is indeed the fastest way to learn debit and credit. The Street Strategists does not go about the traditional way of teaching debit and credit. He follows his own unique system. So efficient is the system that he lambasted those in the academe for not coming up with this system to make student’s lives more easier. As usual, being able to immediately attract controversy, the PICPA (Philippine Institute of Certified Public Accountants) produced a full page ad in response to the “Accounting wizard.”

I certainly agree with the Street Strategist. The system he came up with certainly makes a student’s life easier. This system should be taught in every course that has an accounting subject.

Although I learned a lot on the first day, the second day is much more interesting as this is the meat of what I am waiting for, the analysis of financial statements other topics in finance concepts we also discussed, albeit shortly.

While the Street Strategists does not seem to be a very firm believer in investing in the stock market investing himself, the principles about finance he taught me certainly helped me increase my knowledge about how to evaluate a stock.

True enough at the end of this two day seminar, it seems that the Street Strategist has magically waived his wand over our heads and transformed us into “accounting wizards.” While I may not be able to say that I am now ready to take the CPA board exams, I can clearly and confidently say that I have become a much more better and more equipped value investor because of his seminar.

For those of you who missed the seminar, fret not ! There will be another “Financial Literacy” Batch 17 seminar this coming Augusts 21 and 22, 2009. You can call (032)-319-0717 or email streetstrategistconsulting @ gmail.com. If you want to be a better value investor by learning how to evaluate a company’s stock properly I highly recommend this seminar !

If you want to know more what other materials I recommend in order to be a better value investor check out my post entitled “Recommended reading materials for the value investor.”

I first wrote “Follow Warren Buffett’s signal on WHEN TO BUY stocks-Part 1” last December 17, 2008. It was followed up by “Follow Warren Buffett’s signal on WHEN TO BUY stocks-Part 2” almost 2 months later that is on February 2009.

I really thought I have uploaded part 3 of the series, but a search on the posts I wrote revealed that I haven’t uploaded it in my blog. Anyway here is the last part of this 3 part series. To read the previous parts just click on the links above.

3.) Individual calamity – Another good time when to buy stocks is when companies suffer individual calamity. These refer to situations when brilliant companies do something stupid ending up losing money or when something adverse happens to an individual company but nevertheless does not affect its long term economics. An example cited in the book was Buffett’s move in buying stocks of American express, despite the company’s losses in the “Salad oil scandal” of 1963.

The best Philippine example of this is that of Manila Water Corporation (MWC), whose stock price dropped more than 30 % in less than 7 days when the company encountered concession problems as reported in the newspapers starting January 15, 2009.

4.) Structural changes – These refers to situations wherein internal structural changes such as mergers, consolidation and re-organization have an impact on the stock price. This is the most unique among the five since this kind of situation can either have a positive or negative impact of a certain stock. What we will be looking for is the negative impact since this translates to lower share price which indicates a perfect time on when to buy stocks of a certain company. Structural changes that have a positive impact on the stock may be considered “buying opportunities” but should be considered with caution. As what Warren Buffett used to say “The dumbest excuse to buy a stock is when the price is going up.”

In the Philippines, there are several examples of structural changes having a positive impact on their stock prices. Like for example just this year the stock market reacted irrationally and widely overpriced Meralco. (MER) It priced the stock to almost P 130 per share in less than 2 months time from the P 50 territory. This was the market’s response to a structural change more specifically to rumors of a take over by San Miguel Corporation. However I could not cite a structural change that had a negative impact, drop me a comment if you know of one so I can cite it here.

5.) The War phenomenon – War not only translates profits for makers of war machineries, it also gives a signal as to when to buy stocks since this translates to lower share prices which again means buying opportunities. “The time to buy,” says Nathan Rothschild Rothschild, “is when blood is running in the streets.” If you take a look at the chart at wrote “Follow Warren Buffett’s signal on WHEN TO BUY stocks-Part 2” you can see how the Bombings of Bali and the Gulf war brought prices down even if the war is far from our shores.

So there you have it. These are the five situations that have been cited by Mary Buffett and David Clark wherein Warren Buffett considers buying stocks. During these times, the average lay man would not want to get into the stock market because of fear. But these are just the perfect time to start buying stocks and start getting rich. As Warren Buffett says, the secret to getting rich is to “ . . . be fearful when others are greedy and greedy when others are fearful.”

Before you read any further take note that this recommendation is most especially useful for those who are interested in investing in the stock market (most especially the Philippine stock market) and those who are interested on being a value investor.

It’s a good thing that readers of this blog are asking what they should read. It shows that they are interested in becoming a value investor. When asked how he became so successful in investing, Buffett answered: “We read hundreds and hundreds of annual reports every year.” If Buffett who is already a genius in investing reads  hundreds and hundreds of annual reports every year, we mere mortals should reads thousands if not hundreds more pages than what Buffett reads. But the question is what specifically as a value investor should you read?

I read a lot of books and materials on business, finance and books for the value investor but what I’ve read is only the tip of the iceberg. I’m sure there are more good books and materials out there for those who want to become a better value investor. My recommendation is based on what I have found useful on what I have read so far.

1.) Current events research – To be updated in the world of personal finance and the latest news on business, I read the following materials:

a.) Money Sense – Money sense is the Philippines only magazine on personal finance. It is published once every two months. It sells for only P 120.00. It is available via subscription or over the counter purchase through a news stand. With a tagline of “Save, spend and invest wisely,” Money sense helps you achieve just that through its useful articles, tips and information on personal finance. Although you can’t find anything specific here that is helpful for the value investor, you can uncover a lot of gems here on personal finance. What I like best about this magazine is the book reviews. It is here where I learned first about the book Rule #1 which gave me an introduction to the world of being a value investor. Other helpful features are announcements on seminars regarding personal finance.
b.) Business World – This is perhaps the Philippine equivalent of the Wall Street journal. Business World helps me be updated on the latest news on the company whose stock I consider as good value investment deals. Informative articles on the world of business helps you become a more informed value investor and business person.
c.) Business section of other news papers – For other regional business news, I try to read the business section of the all other news papers online such as Inquirer, Sun-Star and the Philippine Star.

2.) Books – There are hundreds if not thousands of good books for the value investor. So far these are the best ones I have read.

a.) Complete Idiot’s guide to Value investing – So simply written that indeed even an idiot can understand it! I am trying to find the “For dummies” equivalent of this book but until now there are no copies available yet. Don’t let its simplicity deceive you. There are powerful lessons that you could learn here as a value investor. In fact I highly recommend this as an introductory book to value investing.
b.) Books written by Mary Buffett and David Clark – So far this dynamic duo has written five books and I have read four of them. Their books are the most detailed in revealing the methods and techniques of the world’s greatest investor, Warren Buffett. You can start off by reading, “The Tao of Warren Buffett” which will give you an “intellectual” framework on how Warren Buffett thinks. Afterwards you can then read “Buffetology” and then follow it up with “The new Buffetology.” Next in line would have to be “Warren Buffett and the interpretation of financial statements” which is not doubt and attempted remake of the “The interpretation of financial statements” by Benjamin Graham. Last but not the least you can get hold of “The Buffetology workbook.”
c.) Rule #1 by Phil Town – My very first book as a value investor. Rule #1 opened my door to value investing and Warren Buffett. After I finished reading the book, I got hooked on becoming a value investor.
d.) How Buffett does it by James Pardoe – This 100+ page book is such an easy read and is highly recommended as an introductory book on being a value investor more specifically on Warren Buffett.
e.) Reading from Warren Buffett himself – Warren Buffett may not have written a book but he is a very prolific writer. He writes a lot to his shareholders through his annual reports. Most books on Warren Buffett quote from his reports. Lawrence Cunnigham has done a magnificent job of compiling the Berkshire Hatheway annual reports into a book entitled “The essays of Warren Buffett – Lessons for Investors and Managers.”
f.) Other Warren Buffett books – Hundreds of books are written about Warren Buffett and his investment techniques. Some of the best I’ve read are those by Robert Hagstorm.
g.) Naked Finance – Strips down the nuances of finance into it’s bare naked form. Kind of like a finance for dummies book.

Whew ! I’m sure that looking at those list of reading materials makes you feel dizzy already ! Well that’s really the way it is. Nothing in this life comes easy. If you want to be a good value investor, you’ve got to work hard to hone your skills and you can do this by reading. I’ve not even started recommending reading from Warren Buffett’s mentors like “The Intelligent Investor” from Benjamin Graham. This book is considered as a classic and the “Bible” of value investing.  Anyway you don’t need to read all of these materials. Books are like food. Some may taste better to me while others might taste like eating sand to you Just try to read the book reviews on the books I am recommending and have your pick.

Also take note that to be a good value investor you must have think like a good businessman. Always remember that when you are buying a stock you are buying a piece of a business before you buy a stock you have to think from a business perspective. Warren Buffett once said that “I am a better investor because I’m a businessman, a better businessman because I’m an investor.” Buffett’s mentor Benjamin Graham also said “Investing is most intelligent when it is most business like.” So do not be surprised when some of the reading materials I recommend on becoming a value investor in the stock market relates to business.

If you want to follow what I am currently reading or what I have just read  you can check my right side bar.

Online there are hundreds of websites that provide helpful information for the value investor. Above all a value investor never fails to read zdiaz.com. You can click here to read my other articles on Financial management and investments.

What compelled me to write about this subject is that a reader of this blog sent me this interesting email.

Since the message he sent is a bit long, I have only presented parts of the email just to let you understand what his current situation is and how this relates to his questions. Here is his email in relation to his question regarding financial freedom.

“ . . . I’ve been working here in Bahrain for two years now but I must confess that I dont have any idea of what savings and investments are all about. For two years, my financial cash flow is this: all I have to do is to wait for payday then “remit” then whatever is left is to be expended until the preceding payday comes. This was my routine. . .

. . . Until I found Salve Duplito’s account at PDI last quarter of last year. That triggered me to take a pause and evaluate my finances. But what worries me much is that I have 6 months remaining before this year expires . ..

. . . By the end of December 2009, I want to declare myself ‘DEBT FREE’ and have save 10th of my first million. I am praying that I will make it. Sir am I leading my way . . . towards financial literacy? “ – Ferdie

Dear Ferdie,

Your letter reminds me of myself years ago when I was still struggling to achieve financial freedom. To see a part of my personal story you can check out the post I wrote a year ago entitled “The financial script of life.”

I appreciate your candor and honesty and that you have finally realized that you need to do something to achieve financial freedom. Actually, your situation does not surprise me at all. Sadly, thousands of OFWs like you end up with nothing after working for several years abroad. I wrote a post about this entitled “Financial Literacy for OFWs.”

With regards to your question if you are leading your way towards financial freedom or financial literacy I would have to say yes. The reason for such is because the first step towards financial literacy or financial freedom is to come to the realization that you have not been managing your finances well and that you need to do something about it.

Once you have come to this realization and that you have strived to determine to do something about it, then I suggest that you follow the steps that I also followed towards financial freedom. I wrote a post about this almost two years ago entitled “6 steps to financial freedom.”

I also suggest that you never stop learning about financial freedom. Until now I read a lot of books and materials on financial freedom. I read about 2 to 3 books a month on finance. I also subscribe to business newspaper (Business world) and a personal finance magazine, Money sense. I suggest you do the same. Drop by from time to time in this blog as I frequently write about financial management and investments. You can click here to read my previous posts on “Financial management and investments.”

Currently I am working my way to financial freedom more specifically Step no. 5 that is, Building long-term asset accumulation. There are lots of ways to do this, some focus on real estate and some focus on businesses. Personally I have chosen “business” as my vehicle of investment. Aside from having personal businesses I heavily invest in the “stock market.” That is why I read a lot about investing in the stock market and I write a lot about the subject in this blog.

As a result I can pretty much say that I have somewhat gained a mastery about the subject. I have not yet written a post on why I consider stocks as the best investment, anyway just drop by form time to time in my blog to be updated on this.

I have to warn you though; there are those who say that stock can make you an overnight millionaire. Others say that the stock market is a gamble and that you end up loosing money instead. Take note that when you buy stocks, you are buying part of a business and just like any business it takes time for your money to grow. That is why I prefer to stay at the value investing-Fundamental analysis side rather than the technical analysis side. I believe that staying in this side of stock market investing will give me a greater chance of not loosing money in the stock market and that I can maintain my financial freedom and buy a lot of acnepril,

Lastly let me leave you a quote I read somewhere in cyberspace about financial freedom “Knowledge is only potential power. Real power is when you put your knowledge into action! To achieve financial freedom you need to take action!”

God bless you as you journey towards financial freedom.

Sincerely,

The Guerilla investor

After several days, she emailed me back and gave some follow up questions. I enjoy answering questions from my readers as it forces me to write on a topic and to know exactly what my readers want. Here is my response to her email:

Dear Ashley,

Sorry it took me a long time to response as I had been very busy with other matters

I have tried to break down your questions into 5 parts and have done my best to present it just the way it is, unedited. I hope by answering this questions and posting it in my blog, others with similar questions might find the answers that they are looking for. In a way you are helping others who might have similar questions but are to shy or too busy to ask. Anyway, here are my answers to your questions:

1.) “ . . . I just wanted to ask, by “match” do you mean an EXACT match? What if I wanted to buy the stocks for 1 peso and 50 cents per share and someone is selling it for just 1 peso and 25 cents, wouldn’t that also be a “match”? Similarly, what if I wanted to sell my stocks for 1 peso per share and someone wanted to buy it for 1 peso and 10 cents, wouldn’t that also be a “match”?”

Yes, technically it is also a match. You do not need to meet at a certain price. For as long as there are willing buyers and sellers you will get a match. For example the other day, I wanted to buy a certain stock for P 3.00 per share. But the minimum amount that the sellers were selling was at 3.05. Anyway, I entered my buying price. Before the closing bell closed, somebody sold the stock to me for P 3.00 per share. Remember that the stock market is just like your regular market where people sort of “haggle” over the price, although not physically but electronically. The price wherein you buy and sell will be dictated by the law of supply and demand. The hotter the stock, the more people will buy and the more the price will go up. The more sellers there are of a certain stock, prices will go down as more and more people want to get rid of a certain stock. This is what they meant that the investing in the stock market is like a roller coaster ride as there is too much volatility.

2.) “ . . .Can you recommend a good book to read for a newbie like me? . .. ”

I am glad you asked that I have been asked by others as well about this. Although I highly recommend the book Rule #1 by Phil Town which is my very first introductory book to the world of value investing, I recommend that you read first the book entitled “How Buffett does it” by James Pardoe. It’s only 154 pages and is such an easy read. After that you can read Rule #1 by Phil Town. Other books I strongly recommend are The Tao of Warren Buffett, Buffetology and the New Buffetology by Mary Buffett and David Clark. After reading Rule #1, I grabbed all the value investing books that I could get my hands on especially those on Warren Buffett. I have read more than 20 value investing and Warren Buffett books so far. If you live in the United States you can purchase these books via my Guerilla Blogger eStore which is powered by Amazon. Just click on books and enter “Value investing” or “Warren Buffett” in the search box. If you live in the Philippines you can get copies at your nearest Fully Booked or Power Books.

You might want to follow what I am reading, so just drop by from time to time in this blog. In my right side bar I usually display what books I am currently reading and what I have just read.

3.) “. . . Also, in BPI Trade Online, they said that the credit/debit will be posted to your account after 3 transaction days. But I was just thinking, what if the closing price of the stock I wanted to buy today is 0.20 pesos then I decided that I wanted to buy it today. Now, I entered to BPI Trade Online and entered my transaction but it’s already 1pm. Can you give me the possible results for this scenario? I’m afraid that the price of the stock will rise the next day and I will never ever get a match since there’s like a day of delay (I entered my transaction today then the next day the price went to 0.30 pesos). When will my online broker actually post my offer at the market? After 3 days? After a day? . . .”

You can only do actual real time selling and buying of stocks during trading hours that is between 9:30 am to 12:30 pm. The PSE was planning to add 2 hours of trading session in the afternoon, but I heard recently that the implementation of this has been postponed. Anyway, you can post “off hours” orders but you can’t buy and sell during these times as the market is closed. So the possible result of the scenario you are presenting is this, if you posted an off hour order, the next day when the market opens your order will get posted. If your off hour order gets matched then you either successfully executed a buy or sell order. However if you get no match, then you could cancel your off hour order and enter a new one.

Do not confuse entering orders with “credit/debit.” What that means is that if you cash out or transfer money from your trade account to your settlement account (Which is usually the account where you can withdraw via ATM) is that it takes 3 days for this process to take effect. This also refers to the selling of stocks. If you sell a certain stock today, the proceeds will be credited to your trade account after 3 days. The same thing also applies to dividends that you received from companies. After the payment date, it takes 3 days before you get the money gets into your trade account.

4.) “ . . . I read somewhere (not sure where over the vast space of the internet) that the common misconception of newbies in buying/selling stocks is that, if the price of your stock go down, then wait until it goes up I mean, isn’t it the most logical thing to do? You don’t want to lose some possible profit, do you?”

I am not sure what you mean by this, but yes I agree it is the most logical thing to do. Probably you are confused because the author of the article says that it is the “common misconception” of newbies in the stock market. Well most likely the author of that article is a technical investor. Most of those who invest in the stock market especially the Philippine stock market are technical investors. (Probably 80 or more than 90 %) Purely technical investors or Day traders do not care about the fundamentals of a company. All they care about is the price. If the price starts to go up and the charts and their technical analysis say that it will keep on going up then they buy. If the price starts to go down and the charts and their technical analysis say it will go down further they start to sell to “minimize their losses.” This is probably why the author of that article said that “holding” on to a stock is a misconception for newbies because for them dumping a stock to minimize their losses is the most logical thing to do. (Whatever happened to the old time adage of “Buying low and selling high ?” it seems that the technical investors forgot about this hehehehe) Technical and or day traders engage in a lot of buying and selling in the stock market. They could buy a stock today and sell it tomorrow, or buy a stock this minute and sell it after several minutes or hours.

As a value investor I find such activity repugnant. With due respect to the technical investors, frankly it is the most stupid thing to do. It reduces stock market investing to speculation and makes investing in the stock market become a gamble. Even you as an ordinary person who is a newbie to stock market investing finds such statement confusing and deems it “illogical” and that the most logical thing to do is to wait for the stock to go up. Warren Buffett has this to say about stock market forecasting “We’ve long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.” With regards to indiscriminately buying and selling of stocks for the short term, Buffett has this to say “Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, ‘I can calculate the movement of the stars, but not the madness of men.’ If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases.”

As value investors we do not read the carts. We do not care if the stock price goes up or down. We do not even care what the market’s activity is at all. In fact we act as if the stock market do not exist. This is what Buffett meant when he refers to himself as a “Rip Van Winkle” investor.

Remember that shares of stocks represent real and actual businesses. All we care about is if the fundamentals of the underlying business of the stock we are buying are sound. For the technical investors or day traders a stock is merely pieces of paper or a commodity that they trade around. For the fundamental investors or value investors when we buy stocks we are buying a business. This is what Benjamin Graham, Buffett’s mentor meant when he said “Investing is most intelligent when it is most business like.”

5.) “. . . another newbies misconception is that, if the price of a stock is going up, then don’t buy it yet. Wait for it to go down again, then buy it, then wait for it to go up again, then sell it. Is this really a misconception?”

In value investing we do not care if the price is going up or going down. Besides who in the entire world can predict this except from a few clairvoyant individual like Madam Auring (Or can she predict it ? hehehehe, if she did she’d be richer than the world’s greatest investor, Warren Buffett)

In value investing remember this rule of the thumb “The price you pay determines your rate of return.” Before I buy stocks, I look for “wonderful businesses with a durable competitive advantage.” Then I look at the fundamentals of the business. Once I determine its intrinsic value, I set a price wherein I project that I will get a minimum of 15 % compounded rate of return per annum. Why 15 % for more on this you might want to read my post entitled “Determining the best rate of return”

I buy only at that price because the price I pay determines my rate of return. Even if it is “a wonderful business but the price is too high, it might affect my rate of return. The higher the price, the lower my expected rate of return. So if it exceeds my target price then I wait until the price drops. How do you know when the price will drop ? Frankly you don’t, however there are some conditions that might cause prices to drop you might want to learn more about this. Learn more about when to buy stocks in my three part post entitled “Follow Warren Buffett’s signal on when to buy stocks”

Warren Buffett has this to say about waiting for the right moment on when to buy a stock. He calls this as the “Fat pitch” he wrote “I call investing the greatest business in the world because you never have to swing. You stand at the plate, the pitcher throws you General Motors at 47! U.S. Steel at 39! and nobody calls a strike on you. There’s no penalty except opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it.” In contrast Warren Buffett has this to say about most fund managers “The stock market is a no-called-strike game. You don’t have to swing at everything–you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, ‘Swing, you bum!’”

I hope you find my answers to your questions satisfactory and I hope that the wit and wisdom of the world’s greatest investor has enlightened your path to investing once again as he has done with mine.

The Guerilla investor

Investing in the stock market does not only seem fun exciting and sophisticated, it also gives you real return on your money that is IF YOU KNOW EXACLTY WHAT YOU ARE DOING. You might want to read my post on the advantages of investing in the Philippine stock market. Stories of fortunes and failures abound in the stock market. To prove my point that you can make money in the stock market you might want to read my post “Applying value investing in the Philippine stock market”

Anyway if you want both an introductory and comprehensive course on how to invest in the Philippine stock market check these seminars out.

PSE-GCIC Stock Market investing Seminar
When: June 15 to 17 6 p.m. to 9 p.m.
Where: Global City Innovative College, Bonifacio Global City, Taguig Metro Manila
Cost: P 5,000.00
Click here for more details on the PSE-GCIC Stock Market investing Seminar

AET-PSE Practical Trading Seminars
When: Almost every month for the year 2009 for all modules
Where: Philippine Stock exchange training room at the PSE Centre exchange Road in Ortigas
Cost: P 5,000 for modules 1 to 3 (Covers Introduction and technical analysis) and Module 4 cost P 3,000 (futon covers fundamental analysis)

Click here for more details on the AET-PSE Stock Market investing Seminar

Both seminars are equally good, has good speakers and is definitely worth your money. Personally I however prefer the AET-PSE seminar because you get an actual tour of the Philippine stock exchange gallery. Their seminar for modules 1 to 3 is also just for one day, so this is an added advantage for those who do not live in Metro Manila. The PSE-GCIC seminar is however much cheaper and includes a bonus seminar on equity portfolio management.(The portfolio management seminar will probably espouse the modern portfolio theory which for me is not very advisable. For more on this check out my post entitled “What is the best portfolio diversification strategy”)

Although the topics are almost similar, if you want you can attend both seminars in order to get the best of both and to let the information sink in deeper.

For those who can’t attend the above seminars due to budget and distance constraints you might want to attend the free seminar this month of June 2009 offered by the PSE in the upcoming Cebu-Leyte PSE road show. For more details check out my post entitled “Philippine stock exchange in Cebu!”

A word of caution though, I’ve always emphasized value investing and most of those who lecture on stock market investments most likely will always emphasize technical analysis although the seminars above includes a part on Fundamental analysis. For me, technical analysis is just good to know but has little benefit to value investors. At least you get an idea on what it is, but always remember I believe that value investing is the best strategy in investing in the Philippine stock market or any stock market for that matter. I look forward to the day when value investing seminars will be offered to the public ! Since nobody is offering this now, I suggest you read books about the subject. Click here to get Value investing books or Warren Buffett books at my Guerilla blogger eStore.

From time to time I write all original posts on value investing and on Warren Buffett.  If you want to learn more about value investing you might want to subscribe to this blog for free. Enter your email address below to subscribe via email.

No, the PSE is not building a stock exhange in Cebu, rather they will be having a “Road show” on June 22, 2009 at the WaterFront hotel. There will also be a similar activity at Leyte, to be held at Tacloban City’s Leyte Park Hotel on June 24, 2009. Both activities will start at 1 p.m. and end at 5 p.m.

This road show is part of the PSE’s investors education program. As I have mentioned in the post entitled “Newbie’s questions to investing in the Philippine stock market” only less than 1 % of the Philippine population is involved in investing Philippine stock market making our stock market one of the smallest in the world. The road show also aims to promote the stock market as an effective avenue for businesses to raise capital. There will be seminars on investing in the stock market, exhibits, investment consultation and sessions with stock market practitioners.

The schedule for the afternoon even will be as follows:

1:00 – 1:30 p.m. – Registration
1:30 – 1:45 p.m. – PSE Audio Visual Presentatio ((The stock market: Where your Money works for you) / Opening Remarks
1:45 – 2:30 p.m – Equities 101: The basics of Stock Trading
2:30 – 3:00 p.m – Online stock trading and mutual funds investing
3:00 – 3:30 p.m. – A primer on Technical analysis
3:30 – 3:45 p.m. – Refreshments (Best part of the program ! better bring your best weight loss pills hehehe )
3:45 – 4:30 p.m. – Listing in the Philippine stock exchange
4:30 – 5:15 p.m – Open Forum

It seems like the registration is free. So if you want a crash course on an introduction to investing in the Philippine stock market see you there! Just sleep during the technical analysis session as we value investors don’t need it hehehehe, no offense to the technical analysis people hehehehe just kidding