Posts Tagged ‘Stock Trading’

How To Invest Stock Market?

To invest stock market one is not qualify when he can have faint of heart.

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Passive Income thru IMG

I didn’t noticed that I got two (2) unclaimed checks already from my sideline job as a broker of IMG (International Marketing Group).  I got my 1st check last June and from that, I started to get encouraged to work hard (but not really trying hard) as this passive income will sort of level to my active income from being a call center agent! At this point, my salary from my nocturnal job still pays good. But if you have all sorts of passive income like google adsense, stocks investments, brokerage, freelancing and etc. which I all have, isn’t it just amazing that when you aggregate your earnings from these income, it’s even more than my active income (salary)?!  So it means, I’m receiving double!

My previous articles stated ways to save money! Like, I did all learn about this financial education stuff when I joined IMG, April of this year! It’s when I started to know about the Rule of 72, Stock Investments, Healthcare, Insurance, Mutual Funds, Savings, Passive Income which I find it really helpful and important if you want to be wealthy! And yes, I’m so thankful that IMG is able to enlighthen me on that!

My dad has been a broker of IMG since 1997 and at that time, I was in high school then. He tried to convince me to join him but I just said a big NO. Later that I realize, when I’m already working, I came across that I have to really do something good for money. Like,  I have to save it where it could give me double or tripple or more interest of my money than saving it in a bank.

Yes, it took 8 years for me to realize that! And my dad just give me the freedom to choose to do what I want. Now, he is happy. I became a broker of IMG which is just a part time money venture for me but I consider it as an income generating which I would like to share with my fellow Filipinos.

What is IMG?

International Marketing Group is one of the few companies of its kind in the industry today – a marketing company that is dedicated to serving the financial needs of individuals and families from all walks of life.

International Marketing Group’s independent associates do not just work with clients who have large amounts of discretionary income – instead they work with everyday people helping them make critical financial decisions that help move them from where they are to where they want to be.

International Marketing Group is one of the biggest and fastest growing financial distribution companies in the US, Canada, Taiwan, Hongkong, Philippines and going worldwide. IMG has established agreements with many of the world’s leading financial services companies to provide us a broad array of financial products & services. IMG will help you comply accreditation and licensing requirement of all its Product Provider Companies. Multiple companies (Multiple products) will help you get the best product…Best service … Highest Rate Of Return…. Diversify investments, etc.
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What Earning potentials can IMG provide?

IMG offers an excellent income opportunity, whether you’re looking at the business as a twin career or a full-time commitment. With IMG’s attractive compensation package, you can also take advantage of a number of incentives, including renewals, as well as participation in bonus pools and stock programs.

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Who are our Business Partners/Providers?

These are the companies who give exclusive rights to IMG as their official broker to transact business in behalf of them. And these are:

• Kaiser Intenational
• Cocolife (a subsidiary of San Miguel Corp)
• Grepalife
• Generali Pilipinas (owned by Henry Sy)
• Phil Equity Management Inc.
• Ayala Land
• Crown Asia

Are our providers big time? Yes, in deed! Visit here for more of our providers!

Interested?

I’m currently based here in Cebu. Our IMG office is at Lahug and FGU tower in Ayala. But if you want to know about having a good business, passive income, and being a broker, just email me at admin@thegetwealthy.com or text me thru 09239776792 or simply leave your infos here and I will get back to you the soonest time.

Ten Principles of Investing

I got this Ten (10) Principles of Investing from Freeinvestmentreport.com. I would like to share it. This is one way to condition our minds in terms of stock investing. Hope this helps!

1. 1. Start investing now. You could be getting better returns on your money today to prepare yourself financially for your future.
2. 2. Make a financial plan. You must know what your goals are to be a successful investor.
3. 3. Do not follow the crowd. When investing, do what the wealthy do and look for opportunities to get in before the masses.
4. 4. Don’t overpay for stocks simply because the companies behind them are large and well known. Too many large companies are overvalued, and their prices will eventually fall back to earth.
5. 5. Have patience when investing. Wait for the right time to enter and exit your trades.
6. 6. Research, research, research. And if you can’t do your own research, seek advice from experienced professionals who specialize in the markets.
7. 7.Remember that all big companies were once small companies. Look for high-potential opportunities in the micro cap and small cap sectors.
8. 8. Be cautious when investing borrowed money. Your investments can fluctuate in value, whereas the money you borrow must be paid back in full.
9. 9. Don’t put all your money in one place. To protect yourself, make certain your portfolio is diversified across a number of unrelated financial instruments.
10. 10. If necessary, close out losings investments to cut your losses. Stocks do not always bounce back.

Entry Credit: http://www.freeinvestmentreport.com

Trading Band Exemptions for Some Stocks

The Philippine Stock Exchange (PSE) approved in August 2009 rules to exempt certain stocks from the price trading band or the limit in the increases or decreases of stock prices within the day.

Trading band: Max 50% price increase; max 40% price decrease

Stocks traded on the PSE currently have a limit of 50% in terms of price increases (price ceiling) and 40% in price decreases (price floor). This trading band is supposedly installed to protect investors from price volatility.

With the August 26 memorandum, the PSE agreed to lift the trading band in the following scenarios:

1. When trading resumes for securities that have been suspended for a period of one year or more;
2. When the Exchange determines that: (a) there has been an event or occurrence that may cause the price of the security to change drastically; or (b) the application of the trading band on the price may render impractical the trading of the security upon prior notice by the Exchange as may be warranted under the circumstances.

Stockbrokers see a benefit to the trading band exemption primarily with regard to the first scenario because, according to them, a stock suspended for more than a year will have to catch up with its fair market value upon resumption of trading.

Read more at pinoymoneytalk.com

Stock Picks: PERC is hot today!

August 26, 2009- I was able to materialize profit today when I sold all my shares of PETROENERGY RES. CORP. (PERC) at P7.50 when I bought it a few weeks ago at P5.60. That’s 32% rate of interest in almost 3 weeks!

It rallied today! The lowest trade is at P6.20 and the highest is at P7.60. The price of P7.60 is the highest it reached within the 30 day period. Well, not bad for moi when I traded my PERC shares at P7.50. It’s profit-taking day for moi!

Its closing price is at P6.80! I will be waiting for it to go down in the next days to come so I could buy it again at a lower price. The news is still helpful. PERC will be a good one to start with!

BUSINESS PROFILE

PetroEnergy Resources Corporation (PERC), formerly Petrotech Consultants, Inc., was organized on September 29, 1994 to provide specialized technical services to companies exploring for oil in the Philippines. On June 25, 1999, the Department of Energy authorized the assumption by PERC of Philippine oil exploration contracts. The Ministry of Energy of Gabon, Africa had also been duly notified of the transfer to PERC of a Production Sharing Contract covering the Etame discovery block in the Atlantic shelf.

The principal properties of PERC consist of various oil areas located in the Philippines and in Gabon, Africa. PERC’s local Service Contracts are located in Northwest Palawan, Offshore Mindoro and East Visayan Sea. PERC derives its revenues from its Gabon operations. The Philippine contracts are in the exploration stage and some contracts are being farmed out to reduce risk inherent to the business.

Source: SEC Form 17-A (2008)

Secrets of Millionaire Traders

My own take on the ebook as described by Netfutures.com and the-way-to-trade.com

Would really like to thank, Intelinvest Co. for sharing the ebook on Secrets of Millionaire Traders. For those who have no access to the ebook file, let me share to you what I’ve read and hope it will help those newbie traders! This source is a big help to me. I will be summarizing it into vital keypoints.

Introduction:

Only a few traders are successful yet some are earning a million of profits from stock trading!

There are rules that are already familiar to several millionaire traders and these are generated from interviews from them.

Let’s uncover these.

Rule 1 Use Money You Can Afford To Lose

- It must be the money we are willing to lose.
- We can’t use the money reserve for our family’s budget.
- Mental freedom or independence is important.

Rule 2 Know Yourself

- You must have the attitude of being unemotional or able to control emotions
- Must have an objective temperament as the market keeps on changing.
- Successful traders suggest that people who can’t control emotions look elsewhere for profits.

Rule 3 Start Small

- Begin to trade at a small amount
- Learn the mechanics of trading before going in for volatile contracts
- Note, big things start from small things

Rule 4 Don’t Over Commit

- Keep three times the money in your margin account than what is needed in your particular position
- It means if you trade P30, you must have P90 savings as your margin account.
- Don’t go beyond that rule.

Rule 5 Isolate Your Trading From Your Desire For Profit

- A successful trader is able to isolate his trading from his emotion.
- Hope is a great virtue in other areas of life but it can be a hindrance for traders.

Rule 6 Don’t Form New Opinions During Trading Hours

- Decisions during the trading day based on price change and news is disastrous for many
- Formulating your own opinion before trading opens is advised by successful traders.
- Sometimes, the ups and downs of the trading game might upset traders.

Rule 7 Take A Trading Break

- It’s good to take a break sometimes to give yourself a fresh look at the market when you get back.
- To see a better perspective in your trading lifestyle may be achieve after taking a break
- Everyday trading  makes you dull in judgment

Rule 8 Don’t Follow The Crowd

- Don’t go with what everyone is up to. You need a breathing room.
- If 85% of the analysts are bullish, this indicates an overbought situation. If less than 25% are bullish, this indicates an oversold condition
- Periodic government reports on the position of traders of various sizes provide “overcrowding” clues. Another clue is “contrary opinion”

Rule 9 Block Out Other Opinions

- Don’t get easily influenced by what someone says, it may change what’s on your mind
- Find someone who could give you logical reasons for a change in view
- Form your own basic opinion of the market

Rule 10 When You’re Not Sure, Stand Aside

- Don’t feel to trade everyday, it might be costly
- Develop discipline and patience to wait for an opportunity

Rule 11 Try To Avoid Market Orders

- Put specific price limit when buying or selling.
- Minimize the use of market orders

Rule 12 Trade The Most Active Month

- If you’re trading emini contracts, trade it on the nearest months. Like some are expiring on March, June, September, November, December. Most active a few days before expiry.
- For trading commodities like soybeans, trade at the highest volume and open interest. March, July and November are active months.
- Trade on high volume commodities so you could easily liquidate your position.

Rule 13 Trade Divergence With Related Commodities

- Watch the families of the commodities. Ex: soybeans, related to it might be grains, meat and metals,
- If all grains except soybeans were moving higher, the millionaire traders would look for an opportunity to sell soybeans as soon as the grains in general appeared to be weakening. The reverse of this is true also. The traders would buy the strongest commodity in the group during periods of weakness.
- Be detailed on the related products you are trading.

Rule 14 Don’t Trade Many Markets At Once

- Know your limitations and trade within your limits
- Listen to yourself and your capability

Rule 15 Trade The Opening Range Breakout

- If there’s a major break out with the price in a day, it will signal you the next price-decision making the next day or days to come

Rule 16 Trade The Breakout Of The Previous Day’s Range

- Buy if the price is below the previous day’s closing price
- Sell if the price is above the previous day’s closing price
- Just wait for a breakout of the market.

Rule 17 Trade A Weekly Breakout

- It’s similar to the daily rule but this one in on weekly basis
- Basing on the week’s high and low closing.

Rule 18 Take A Breakout On A Monthly Range

- Monthly basis in making decision gives you’re a broader view of the market
- Same rule applies to days and weeks

Rule 19 Build A Trading Pyramid

- Don’t add more stocks beyond your money capacity
- If you’re trading on 3 Bank Securities, you may add 2 then 1 after the other.
- Avoid “inverted pyramiding”, it will make you vulnerable!

Rule 20 Never Enter Your Position At One Price

- The important key is Market Action
- Never put your entire investment in only 1 stocks position not unless you’re sure with it
- Wait for the market to be in favor with you.

Rule 21 Never Add To A Losing Position

- Some traders don’t agree on this rule as they believe in “Price Averaging”
- It will Lead you to Rule No. 5 “Hoping”
- Don’t add or buy if it continues to give you losses.

Rule 22 Cut Your Losses Short

- Liquidate your position when the market is against you.
- Don’t hope for the market to turn in the favor to you

Rule 23 Let Profits Run

- Never take a profit just for a profit. It should be reasonable profit-taking.
- Some technical rules on reversals and formats may help
- Don’t cut profits short

Rule 24 Be Impatient With Losing Positions

- Never carry a losing position more than 2 or more days or over a week
- Force discipline on yourself

Rule 25 Learn To Like Losses

- Be a good trader, never fear losses
- Losses are part of the business
- Having the right attitude in accepting losses helps you gain emotional stability

These 25 Rules of Secrets Of The Millionaires may be a big help to you. You might agree or disagree on some keypoints, but here’s what I learn the most, DISCIPLINE.

Happy Trading!
-Bullish Trader

Links

netfutures.com
the-way-to-trade.com

Today’s Stock Buzz- August 21, 2009

Investors secure gains ahead of weekend

SHARE PRICES closed lower on Thursday after investors booked profits ahead of the long weekend, analysts said.

The benchmark Philippine Stock Exchange index (PSEi) slipped by 1.47% or 40.71 points to 2,720.18, while the all shares index shed 1.2% or 21.34 points to 1,744.29.

A total of 3.58 billion shares worth P4.25 billion were traded. Net foreign buying totaled P332 million.

Decliners led advancers 71 to 32, while 55 shares did not move.

“The trading week is shorter so it was already expected that investors [would not be] as aggressive,” 2TradeAsia.com said.

“Investors were also checking for ’momentum progression’ that was absent during the past trading days.”

The online brokerage noted there wasn’t enough buying momentum that would have encouraged investors to enter the market. In the past five trading sessions, for instance, the market rose only once and the gain was not even significant.

The composite index managed to gain 29 points on Wednesday on bargain hunting but this failed to prevent the PSEi from sliding. The index lost 4.77% week-on-week.

Jun B. Calaycay of Accord Capital Equities Corp. said investors also remain “sensitive” to market declines after experiencing a “big scare” last year when the market shed almost half of its value.

“[Yesterday] was also the first day of the ghost month. So traditional thinkers tried to avoid the market ahead of the long holiday, especially since Wall Street continues to be volatile,” he said.

Investors, Mr. Calaycay said, will monitor how the US market will do during the break before charting their next moves.

Wall Street closed higher on Wednesday after crude prices for September delivery jumped by 4.7% or $3.23 to close at $72.42 a barrel on the New York Mercantile Exchange. This was after the US government’s weekly inventory showed that crude oil supplies fell last week.

The Dow Jones industrial average rose by 0.66% or 61.22 points to 9,279.16 after investors scooped up oil-related firms on anticipation that demand for crude would rise.

The Standard & Poor’s 500 index added 0.69% or 6.79 points to 996.46, while the Nasdaq composite index rallied by 0.68% or 13.32 points to 1,969.24.

At home, however, mining and oil stocks led the losers, retreating by 2.33% or 190.54 points to 7,985.75.

Industrial stocks fell by 2.26% or 91.30 points to 3,944.18, while the service sector slid by 1.25% or 17.76 points to 1,397.08.

The property sector tumbled by 1.23% or 12.03 points to 964.72, while holding companies shed 0.87% or 13.33 points to 1,518.44.

Financial firms lost 0.1% or 0.64 point to 592.84.

Manila Electric Co. shed 5.31% or P11 to P196, while Lopez-led holding company Benpres Holdings Corp. dropped 5.26% or 20 centavos to settle at P3.60.

Benpres unit First Philippine Holdings Corp. slipped by 3.52% or P1.50 to P41, while Andrew Tan-led property company Megaworld Corp. was down by 3.12% or four centavos to P1.24.

Philex Mining Corp. declined by 2.43% or 25 centavos to P10, while index heavyweight Philippine Long Distance Telephone Co. dipped by 1.63% or P40 to P2,405.

Ty-led Metropolitan Bank & Trust Co. shed 1.33% or 50 centavos to P37, while Lopez-led Energy Development Corp. lost 1.14% or five centavos to P4.30.

Ayala Land, Inc. did not move at P9.70, while the Bank of the Philippine Islands stayed at P43.50.

Entry Credit: http://www.bworldonline.com

Today’s Stock Buzz- August 20, 2009

Bargain hunting ensues after downturn

SHARE PRICES closed 1.07% higher yesterday due to bargain hunting following a three-day downturn, dealers said.

The Philippine Stock Exchange index closed 29.34 points higher at 2,760.89. The all shares index rose by 1.07% or 18.79 points to 1,765.63.

A total of 2.89 billion shares worth P3 billion changed hands.

Advancers led losers 89 to 22, while 47 issues closed unchanged.

“Tomorrow, we expect the market to continue its reversal,” Ron Rodrigo of DBP-Daiwa Securities told Dow Jones Newswires.

Analysts also pointed out that the market’s rebound yesterday resulted from the US market’s recovery on Tuesday night.

“As expected, the market turned green due to the Dow’s recovery due to better-than-expected results of some retail companies and positive news about Germany’s economy,” said Daniel C. Picache of Papa Securities.

“This was inspired by recovery of the Dow in the US. It was just a relief rally from the profit taking in the past two days,” said Astro C. del Castillo of First Grade Holdings, Inc.

He added that speculation on some stocks because of rumored interest by specific parties also pushed the rebound.

The Dow Jones industrial average finished 82.60 points or 0.90% higher at 9,217.94 after a sell-off on Monday night.

The Standard & Poor’s 500 and the Nasdaq composite index similarly rose, each moving up a percent to 989.67 and 1,955.92, respectively.

Mr. Picache said late trading on Tuesday already gave signs of a rebound since there were already signs of bargain hunting especially on Lopez-led companies.

“But with a long holiday coming, it may lead investors to trim their positions. They may adopt a sell-on rally stance today, which may result in consolidation,” he said.

Mr. Picache placed the support level at 2,693 and the resistance at 2,984.

“The two-day correction already gave investors enough room to reenter the market… Buyers won’t be as aggressive as before though],” he said.

Mr. Picache noted there is still money on the sidelines since some investors were not able to get in when the market staged its run-up from the 1,800 level.

Mr. del Castillo said the market would probably hover at the 2,700 level as investors continue to digest numbers and look overseas for direction.

Mining and oil companies climbed the sharpest, going up by 3.47% or 274.52 points to 8,176.29, followed by property shares that rose by 2.39% or 22.79 points to 976.75.

Shares of service firms finished 20.15 points higher at 1,414.84, while holding companies inched up by 1.08% or 16.31 points to 1,531,77.

Industrial companies improved by 0.59% or 23.98 points to 4,035.48, while financial firms closed at 593.48, up 0.29% or 1.75 points.

Lopez holding firm Benpres Holdings Corp. climbed by 7.04% or 25 centavos to P3.80, while the Manila Electric Co. was flat at P207.

Market heavyweight Philippine Long Distance Co. closed 1.24% higher or P30 up to P2,445.

Banco de Oro Unibank, Inc., the country’s largest bank, went up 1.47% or 50 centavos to P34.50, while Ayala Corp. was steady at P297.50.

Harry G. Liu of Summit Securities, Inc. said that with the market having reached its targets, its direction would be dictated by market movements abroad.

“[What’s happening is] base building for the medium term so that the long term would catch up in anticipation that the global slide is improving,” he said. — AFP and Don Gil K. Carreon
Entry Credit: http://www.bworldonline.com

TAKE PROFITS!- Absolutetraders.com

“Take profits” is what stock mavericks of absolutetraders.com is recommending! Although the PSEi is on a short correction mode, there is a positive way that it will be bullish on the next days to come!

The nearest level of resistance for PSEi is at 2890. The MACD (below) indicates a short sell for traders. Weeeh!

So, if you find a perfect time to sell you shares, go on before the final day of the ghost month will change your portfolios.

Rule: Buy low, Sell high!

Links:

www.absolutetraders.com

Happy Trading! – Bullish Trader

Stock Picks: MEG, looking forward to it!

When I started to join the stock market last June 2009, I was advised by my mentor to buy Megaworld (MEG) and Manila Water Company (MWC) stocks. I initially acquired 5000 shares of MEG at P 1.12 and 100 shares of MWC at P 14. And on July 7, 2009, I stopped buying MEG shares as I don’t have funds anymore. Actually, just exhausted my salary payout with some stuff. As of August 3, 2009, I sold out all my shares of MEG and retained my MWC shares. In the span of 2 months, I got 30% profit/gain from what I initially invested for MEG. That’s why I got saving my money thru this scheme.

I acquired a total of 43000 shares of MEG at an average price of P1.092857 with a gross amount (excluding tax) of P 46,240. On August 3, 2009 at the peak of its high price when the local stock market seems bullish with its up trend in all major shares, I decided to sell all my MEG shares at P1.42 and it gives a gross total sale of P 59660. So that’s a 30% profit-taking!

Days after I sold all my shares at MEG, its NAV went down to 1.38 and below. Currently, I have invested the other proceeds in buying shares from Filinvest Land Inc (FLI), GMA Networks Inc (GMA7), Philex Mining Corporation (PX), Petroenergy Reserve Corp (PERC) and Meralco (MER).

As of the moment, still waiting for MEG to go down like P 1.20 and I will definitely buy lots of shares at one time!

Happy Trading!-Bullish Trader

Today’s Stock Buzz- August 19, 2009

US market slump drags down share prices

SHARE PRICES fell further yesterday, pulled down by the chain reaction of sell-offs that started in regional bourses in Asia on Monday on news that China plans to tighten bank lending, analysts said.

The benchmark Philippine Stock Exchange index closed down by 1.43% or 39.63 points to 2,731.55, while the all shares index slipped by 17.14 points to 1,746.84.

A total of 4.07 billion shares worth P3.19 billion changed hands. Decliners led advancers 72 to 33, while 55 did not move.

Jose Mari B. Lacson of Campos, Lanuza & Co. said the local bourse’s slide yesterday was caused by the decline in the US market, which itself was partly due to the weakening of regional bourses on Monday.

“The drop yesterday had a feedback loop… Markets in Asia performed weakly on Monday and it continued to the US and then affected us,” he said.

The Dow Jones industrial average finished at 9,135.34, down by 2% or 186.06 points. The Standard & Poor’s (S&P) 500 index gave up 2.43% or 24.36 points to end at 979.73, while the Nasdaq Composite index plunged by 2.75% or 54.68 points to 1,930.84.

Reuters reported that it was the Dow and S&P 500’s worst one-day percentage sell-offs since July 2.

Mr. Lacson said this was triggered by talks that the Chinese government would increase lending rates, signaling US investors to sell on concerns that the move would slow down that country’s growth.

The Shanghai stock exchange tumbled almost 6% on Monday, as investors grew anxious over the government’s plan there to tighten lending.

Oliver P. Plana of Asiasec Equities, Inc. said aside from the US market’s fall, the local bourse was also hit by the decision of foreign funds to sell their holdings, after the major companies disclosed their earnings.

Mr. Lacson agreed investors parted with their shares after the release of their first-half performance, which did not meet expectations.

“There are underlying concerns about the earnings in the Philippines since some of the reports were below expectations and cautions were made that the worst is not over… The sentiment is really to take profits so unless we see something that could change that, the selling would continue,” he said.

Mr. Plana noted that there were signs that some major markets in the region are improving, which could prop up local trading.

“The next major macro announcement is the [economic growth results for the first half on Aug. 27]…. So investors would observe day-to-day developments to guide them,” he said.

Holding firms were the only ones to end in green, inching up by 0.04% or 0.73 point to 1,515.46.

Mining and oil companies lost 1.91% or 153.65 points to 7,901.77 followed by service firms, which gave up 1.89% or 27.01 points to 1,394.69.

Shares of financial companies slid by 1.09% or 6.50 points to 591.73, industrial firms declined by 1.08% or 43.96 points to 4,011.50, and the property sector dipped by 0.78% or 7.53 points to 953.96.

Index heavyweight Philippine Long Distance Telephone Co. lost P55 or 2.23% to end at P2,415, while competitor Globe Telecom, Inc. shed 2.02% or P20 lower at P970.

Metropolitan Trust Bank & Trust Co. was unchanged at P37, while Sy-led Banco de Oro Unibank, Inc. declined by 1.45% or 50 centavos to P34. The Bank of the Philippine Islands eased by 2.19% or P1 to P44.50.

Jollibee Foods Corp. moved up by 1.96% or P1 to P52.

Entry Credit: http://www.bworldonline.com

Where To Invest Your Money

When I first engaged myself in the world of stock market, I have lots of questions and apprehensions. That’s when I tagged myself as a “newbie”. Certainly, I’ve been wanting to know how to trade and invest money thru stocks when I was in the university but never get the chance to have a hands-on training or sit with a stock market expert.

I learned much on financial education and how money works for me just early this year, 2009 when I joined the great people at International Marketing Group (IMG). This is the time I know that financial security is a priority for everyone. Hence, I came to value the worth of my money, investing it to where it could earn double or triple or more. That’s money working hard for me!

Confuse on where to invest your money where it could earn more at bigger interest rate still an issue? No worries, I will share my experiences in where I invested my money.

Point 1

First to consider is to secure yourself, which is, SAVING for your future. It is important that you have LONG-Term Healthcare, Life Insurance, and Investment. Just these three!

*Healthcare – the very basic and first to secure. Why? To get sick is really expensive. People who don’t have healthcare but have lots of money in the bank will just exhaust their savings just to pay for their medical expenses. You don’t want to touch your savings or income right? Then get a healthcare program that will pay your hospital bills and medicare if the need arises. Philhealth is not just enough (for Pinoys). Your savings are still intact if you get your own personal healthcare!

*Life Insurance- if you’re the breadwinner of the family and in the event that you lose your job or death cut your life short, the family you left behind could still continue their living as Life Insurance companies will give the coverage benefits to them. Or when you get disabled and you can’t function doing your normal job, life insurance will support you to start a new life! So get one!

*Investment- if you have extra money, then you could start to look for something new to start to grow your money. You may want to acquire solid assets like houses, cars, business, etc. Or you may participate in the Stock Market where you could earn high returns of your money but also with high risk! But risk is manageable if you know how to deal and play with it which is easy to learn. For first timers, investing in Mutual Fund is advisable.

Yes! I got those three on the second quarter of the year. How? When I joined IMG, they have a business partner that caters to the three above. It’s an all-in-one program! I’m positive in getting the Kaiser Premium Health Builder. This is my SECURED investment/long-term investment. It’s giving me back a fix 10% annual compounded interest for 10 years or more. SECURED? Money put in this program is placed in stock bonds and other securities and is managed by professionals.

Note: Returns that yield a rate of interest from 12% below is a SECURED investment. Anything beyond that is a Risky one!

Point 2

The next thing I took advantage of is putting my money in Mutual Funds. If interested in joining the stock market but with no experience at all, mutual fund is what I recommend that you engage in.

Mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities. The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually-Wikipedia.

My mutual fund at the moment is PhilEquity. It is the Philippine’s best performing equity fund in a 10-year, 5-year, 3-year category. Now, make your winning investment today!

Point 3

Having quite an ample of knowledge on financial education. I started to actively participate in the stock market. I have 2 mentors, friends and online buddies (forums) who helped me in how to deal with the stock market! I say, it’s addictive!

Investing in the stock market involves risk. Why? It’s giving you high return of your money! 12% more, even 100% , 200% and even more than that! That’s why it’s risky! Your loss might be equivalent to that rate. But in any market condition, it’s guaranteed that you will be earning! It’s just how you play it.

To date, I already earned 45% return of my stock investment in the span of 2 months. I was able to play around with Megaworld’s (MEG) stocks and yeah, profit-taking is done! Will be divulging information on stock trading in my next post!

RULE in Stock Market Trading: Buy LOW, Sell HIGH!

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Profit-taking for the Local Stock Market

Since many are taking advantage with most of their investments due to profit-taking in the past week, we are expecting that the local stock market to pull lower. This is what we see from our point of view. Check the article below and say your piece:

LOCAL STOCKS ARE SEEN becoming increasingly vulnerable to profit-taking despite the rosy economic backdrop here and abroad, analysts said.

The main-share Philippine Stock Exchange index rose 2.41 percent last week to 2,850.01 after the Federal Reserve said the recession gripping the United States was easing.

“There are two bright spots in the fundamentalists’ glasses today. First, inflation is at record lows. Second, this has pulled policy interest rates to similar levels as well. Furthermore, there are other bright spots developing. Most recently, although exports were reported to continue to slow, the pace at which it does has dissipated. Concerns on the budget gap for this year has largely been addressed with the successful bond float,” said Justino Calaycay Jr., a dealer at Accord Capital Equities.

He said corporate earnings did not look too bad as listed firms remained generally profitable and profit levels were “a lot more hope-inducing” in the second quarter compared to the first.

“Yet, the charts suggests caution. Technicians are singing the correction chorus. Indeed, we are currently enjoying a 50-percent year-to-date gain, give or take. While such is evidence of the magnitude of the positive sentiment, it alternatively raises the flag with ‘beware’ boldly written on it. A decline of a big magnitude is not entirely discounted,” Calaycay said.

Calaycay added that the market could go either way but noted that the bias would be toward a downside in the near-term but over the medium- to long-term, the momentum was still favorable.

Banco de Oro Unibank chief strategist Jonathan Ravelas said last week’s close suggested a test of the 2,875 to 2,900 levels.

“However, trading volume shows the current rally is waning. This is supportive of a topping out market,” Ravelas said.

A clear break of 2,780 would suggest that a reversal was in place, Ravelas said. Doris C. Dumlao

Entry Credit: http://business.inquirer.net

Today’s Stock Buzz- August 17, 2009

Mixed trading expected on lack of catalysts

THE LOCAL market is expected to continue trading within its current range as some investors might book profits due to lack of catalysts.

Analysts, however, said select issues might trim the market’s losses or help it close higher.

“For [this] week, the market is expected to take a breather on lack of catalysts as the central bank has already hinted there will be no rate movement when they meet on [Thursday],” DBP-Daiwa Securities, Inc. said.

The brokerage said this, along with a shortened trading week, would make investors wary of entering the market or allowing their investments to stay long in equities.

There will be no trading on Friday, which is a holiday to commemorate the death anniversary of Benigno “Ninoy” Aquino, Jr.

Selling, DBP-Daiwa Securities noted, had become evident since last week, with foreign investors posting a net selling of P1.15 billion, reversing the P707 billion in net buying the previous week.

“[They] have started taking advantage of the market’s recent rallies [as an opportunity to book their gains],” it said.

DBP-Daiwa Securities also pointed out that as far as seasonal factors are concerned, August has never been on the side of investors since historical data during the past 21 years showed the market declining during this “ghost” month.

With activity expected to slow down this week, Prince Anthony A. Yeung of AB Capital Securities, Inc. said buying would likely be focused on “select stocks with specific plays,” especially now that it remains to be seen whether the US market’s main indices could post new highs.

The US market closed lower on Friday after reports showed that consumer confidence slipped during the early part of the month. The Dow Jones industrial average shed 0.82% or 76.79 points to 9,321.40.

The Standard & Poor’s 500 index dipped by 0.85% or 8.64 points to 1,004.09, while the Nasdaq composite index shed 1.19% or 23.83 points to 1,985.52.

Despite some investors booking their gains last week, the Philippine Stock Exchange index managed to close 2.41% higher week-on-week to settle at 2,850.01.

For this week, however, Mr. Yeung said: “On the local front, there also would not be much catalyst for the local market to move higher [especially] since the Bangko Sentral ng Pilipinas will most probably leave interest rates unchanged.”

The Monetary Board of the central bank is meeting this Thursday to revisit key rates.

The Manila Electric Co. (Meralco) and Philex Mining Corp., which pushed up the index, might remain the focus of investors, however.

Meralco and Philex Mining are being rumored to be the subject of a bidding war by two of the Philippines’ most influential businessmen: San Miguel Corp. President Ramon S. Ang and Metro Pacific Investments Corp. Chairman Manuel V. Pangilinan.

“It seems that the market [would find it hard to go beyond] the 2,900 level [although] it would [be able to] find some support at 2,800. This will most probably be the narrow range that the market would move within this week,” Mr. Yeung said.

Nonetheless, DBP-Daiwa Securities said it welcomes the anticipated correction since the market needs to take a breather after an increase of 17.11% since the start of the second half.

“Should the market correct this week, we recommend that investors buy on the dip since the upward trend of the index has remained intact while the global economy slowly shows signs of improvement,” DBP-Daiwa Securities said.

Entry Credit: http://www.bworldonline.com

What is Ghost Month?

If you’re new to the world of Stock Market, you might be hearing the term “ghost month” by the investors/traders circle. Well, we visited some sites on how they view the Ghost Month as it influences business market for many. Read below:

* This years Ghost month starts on August and ends September.

The Ghost Festival is a traditional Chinese festival and holiday, which is celebrated by Chinese in many countries. In the Chinese calendar (a lunar calendar), the Ghost Festival is on the 14th night of the seventh lunar month.

In Chinese tradition, the seventh month in the Chinese calendar is called the Ghost Month, in which ghosts and spirits, including those of the deceased ancestors, come out from the lower world to visit earth. The Ghost Festival is the climax of a series of the Ghost Month celebrations. Traditionally, ancestor worshiping was an important part of the festivals, with activities including preparing ritualistic offering food, and burning hell money and bags containing cloth to please the visiting ghosts and spirits of the ancestors, as well as other deities. A very solemn festival of ancestor worshiping, the festival nevertheless represents a connection between the ancestors and the descendants, the living and the dead, earth and heaven, as well as body and soul.

So why does this matter to you? Well ghost month is embedded in the chinese tradition where you’re not supposed to spend unnecessarily during the ghost month. this really does happen every lunar ghost month of the year, as some foreign (Asian) funds do not like to make investments at this time. Stock trading is considered an unnecessary expense what this means for traders is less liquidity. If there’s nobody there to really buy up a stock then there’s really no way for stocks to go but sideways or even…. DOWN

Credit to: http://financemanila.net

*Bearish mood to persist as ‘ghost month’ rolls in

TRADING AT the stock market this week would still be influenced by crude prices and the performance of US stocks, analysts said, but consolidation is also expected during this “ghost month.”

“The outlook for the market remains bearish for the long and medium term,” said Jose L. Vistan of AB Capital Securities, Inc. “Short-term view looks cautiously positive as the near-term rally seems to be on shaky legs.”

He added that although last week’s rally might continue this week, the market still lacks the solid fundamentals to make it snap out of its downtrend.

The composite index last week made a surprising gain of 2.8% or 71.49 points to 2,584.21 as local investors focused on crude prices on Friday, ignoring the drop in US stocks.

Credit to: http://www.bworldonline.com

* Ask advice with any old timer in stock market and he’ll tell you to stay away from stocks during the Chinese ghost month. Indeed, the table below shows that stocks tended to perform poorly during this period (12 out of the last 19 years), registering an average loss of 4.1 percent.

PHISIX Performance during the Hungry Ghost Months (1987 – 2005)

*Source: Technistock, Philequity Research

Double whammy

This year is a double whammy of sorts because of the occurrence of a double ghost month. The Chinese lunar calendar (as the name implies) follows the cyclical movement of the moon. Therefore, in the Chinese calendar, a year has a total of 354 days or 11 to 12 days shorter than the solar year. To balance the lunar and solar calendars, a leap lunar month is added every three years. And this year, the leap month occurs in the seventh month with the regular seventh month from July 25 to August 23 and a leap seventh month from August 24 to September 21.

So far, the Philippine Stock Exchange Index (PSEi) is up 3.9 percent since the ghost month started last July 25. Will it stay up or will the jinx of the ghost month finally haunt it in the end? Only time will tell.

Trading simulation

Heeding the old advice of staying out of the stock market during the ghost months should have earned investors more money in their pockets. A simulation below shows that if one peso was invested in the PSEi in 1987 and a strategy of selling before the ghost month and buying it back afterwards was employed, the investment would now be worth P15.10 (or an annual compounded rate of 14.8 percent). Meanwhile, a simple buy-and-hold strategy would have resulted to only P5.01 (or an annual compounded rate of 8.6 percent).

Credit to: http://www.yehey.com/finance

*August is known to be the Chinese ghost month where the perception is that liquidity and the index takes a breather due to the Chinese tradition. However, it has been proven that this phenomenon does not have its usual hold on the market anymore. How will it be this year?

Credit to: http://www.absolutetraders.com

Will Philex Mining (PX) follow Meralco (MER) trend?

Big time stock market veterans might be on the verge of bid war in acquiring shares of ownership with Philex Mining (PX). Be expecting the two big group who are suspected to be responsible on Meralco’s (MER) sudden boom in price value for the past months will continue to do some bidding business!

To quote a post from pinoymoneytalk.com”

In just one week, the price of PX has ballooned by 36%, closing today (August 11) at P10.75.

Look at the recent 3 trading days’ price increase of PX:

* August 7: Closed at P9.00; up 13.9% from previous trading day
* August 10: Closed at P9.90; up 10.0%
* August 11: Closed at P10.75; up 8.6%

Are you interested in buying PX now? Buy at 10.50 or below. Target to sell at 12. But hold to buy at 9 just in case it goes south. Note, PX is quite into the bullish trend and our current market is not yet so BULLISH yet. So how much more if it is? Profit! This is just my view, if you take it, it’s up to you. Happy trading!

President GMA Stock Ownership

This is an excerpt on the news published by www.gmanews.tv regarding President GMA’s undeclared wealth in houses and in stocks.

Few profitable firms

The president, according to SEC records updated as of October 2008, still has business and financial connections in at least five entities: Optima Research & Consultancy Agency, Inc., incorporator as of Sept 15, 1980; L.T.A. Realty Corp., incorporator, as of Sept. 28, 1992; EVA Development Corp., incorporator/board member, as of May 18, 1993; Circulo Pampangueno of Guam, Inc., board member, as of Sept. 29, 1997; and Centrist Democrat International Asia-Pacific, Inc., stockholder, incorporator, board member, as of July 24, 2005.

The First Gentleman, by the SEC’s records, still has business interests and financial connections in at least nine entities: Trans Realty Co., Inc., incorporator, as of Oct. 8, 1980; Raco-Trading Philippines, Inc., incorporator, as of Oct. 9, 1980; L.T.A. Realty Corp., incorporator, as of June 28, 1982; Aviatica Travel & Management Corp., incorporator, as of July 22, 1987; Eva Development Corp., incorporator, board member, as of May 18, 1993; Philippine Blooming Trade and Development Corp., incorporator, as of Sept. 5, 1995; and Pacific Mint International Corp., incorporator, board member, as of May 15, 1997.

The First Gentleman is also connected with three foundations: Ateneo Law Class ’72 Foundation, Inc., board member, as of March 14, 1996; Kaibigan ni Gloria Macapagal Arroyo Foundation, board member, as of May 17, 1999; and First Gentleman Foundation, Inc., incorporator, as of May 28, 2002.

All these firms are not listed in the SALNs that Arroyo filed from 2001 to 2008. But since most are not particularly big or profitable, they could not have served as sources of the First Couple’s additional cash or equity shares.

Could she forget that she owns a couple of shares on the above-mentioned companies? These are all speculations for now until further investigation proves it. Now, do you find investing in stock market as one of the profitable way to earn big (think of dividends)? Let’s start and make also our own way to stock market investment.

Today’s Stock Buzz- August 12, 2009

Profit taking caps gains by mining stocks

SELECT MINING issues managed to push up share prices yesterday despite investors pocketing gains due to lack of positive leads, analysts said.

The benchmark Philippine Stock Exchange index (PSEi) gained 0.34% or 9.96 points to 2,860.54, while the all shares index added 0.32% or 5.82 points to 1,813.28.

A total of 7.93 billion shares worth P5.45 billion were traded. Net foreign selling widened to P323 million.

Advancers led decliners 57 to 43, while 66 shares did not move.

“The upside came from mining-related stocks, led mostly by Philex Mining Corp.,” Eunika B. Maloles of 2TradeAsia.com said.

“The rally, however, was tempered by [profit takers] who took their cue from the [drop in Wall Street stocks on Monday night].”

Doreen Mijares of IGC Securities, Inc. said the PSEi’s gain was minimal since most mining stocks are not part of the index.

The mining and oil sector climbed the most yesterday, surging by 5.8% or 475.89 points to 8,670.36, buoyed mainly by Philex and Lepanto Consolidated Mining Co.

Philex jumped by 8.58% or 85 centavos to P10.75. Lepanto “B” shares, open to all investors, climbed by 6.45% or two centavos to 33 centavos, while “A” shares, exclusive to locals, also added 3.22% or a centavo to 32 centavos.

Both companies recently figured in newspaper headlines. San Miguel Corp. President Ramon S. Ang said he was interested in acquiring a stake in Philex. Lepanto, meanwhile, confirmed rumors that Hong Kong-based First Pacific Ltd. Co. is interested in making an investment in the mining firm.

Other mining-related issues that rallied yesterday included Nihao Mineral Resources International, Inc. that jumped by 16.66% or P1.75 to P12.25 and Abra Mining and Industrial Corp. that rose by 10% or P0.0005 to P0.0055.

But with the market having already reached an overbought level, Ms. Mijares said it is bound to correct, which explains the PSEi did not close higher despite reaching an intraday high of 2,873.53.

“Right now, our outlook for the market is it will continue to correct but it will not fall steeply since those investors who were left behind when the market was rallying will view whatever correction as an opportunity to enter,” Ms. Mijares said.

Profit taking also pulled down Wall Street stocks on Monday. The Dow Jones industrial average lost 0.34% or 32.12 points to 9,337.95.

At home, holding firms climbed by 0.41% or 6.25 points to 1,527.84.

The service sector added 0.35% or 5.10 points to 1,424.11, while industrial shares rose by 0.005% or 0.23 point to 4,419.53.

Financial stocks, on the other hand, dipped by 0.24% or 1.47 points to 603.02, while property shares slipped by 0.13% or 1.37 points to 987.33.

Blue chips closed mixed, with index heavyweight Philippine Long Distance Telephone Co. rising by 0.2% or P5 to P2,485.

Manila Electric Co. did not move at P262.50.

Ayala Land, Inc. was flat at P9.50, along with sister firm the Bank of the Philippine Islands, which stayed at P45.50.

Rival bank Ty-led Metropolitan Bank & Trust Co. remained at P38.50 apiece.

Andrew Tan-led Megaworld, on the other hand, lost 1.44% or two centavos to P1.36, along with Sy-led Banco de Oro Unibank, Inc., which dipped by 1.42% or 50 centavos to P34.50.

Entry Credits: http://www.bworldonline.com

***

Today’s Stock Buzz-August 10, 2009

Wall Street, corporate news push up prices

UPBEAT INVESTOR sentiment, buoyed by corporate developments at home and a rally in US stocks on Friday, pushed up share prices yesterday, analysts said.

The benchmark Philippine Stock Exchange index gained 2.42% or 67.60 points to 2,850.58, while the all shares index rallied by 2.05% or 36.34 points to 1,807.46.

A total of 6.81 billion shares worth P10.21 billion were traded. Net foreign selling summed up to P163 million.

Advancers led decliners 83 to 32, while 49 shares did not move.

“The local market got a boost from the US market and this countered what could have been another week of correction,” said Francisco M. Liboro of PCCI Securities Brokers Corp.

At home, stories on planned acquisitions and corporate earnings helped push up the index.

“The market’s valuation is still not that high so [there is still room for it to go up],” he said.

“Moving forward, favorable economic data and corporate income should continue to drive up the composite index.”

The US market closed higher on Friday after the US Labor department reported that the unemployment rate fell for the first time in 15 months, easing slightly to 9.4% in July from 9.5% in the previous month.

The Dow Jones industrial average gained 1.21% or 113.81 points to 9,370.07, while the Standard & Poor’s 500 index rose 1.34% or 13.40 points to 1,010.48. The Nasdaq composite index climbed by 1.37% or 27.09 points to 2,000.25.

Mr. Liboro also pointed out that the market’s ability to stay above the 2,800 level means that investors remain upbeat on their equity investments although the local market would continue to take its cue from the US market.

Astro C. del Castillo of First Grade Holdings, Inc. agreed, saying investors are reacting favorably to economic and corporate news.

“Right now, it is hard to stop a train that is so full of money. The market is so liquid and [equities] are still a better investment vehicle for most investors,” he said.

“Eventually however, it will correct but as long as there is positive news, the market will continue to rally.”

All six subindices rallied along with the composite index yesterday.

Mining and oil stocks jumped by 7.38% or 563.61 points to 8,194.47, while industrial shares climbed by 4.9% or 206.78 points to 4,419.30.

Holding firms rose by 1.62% or 24.31 points to 1,521.59, while property stocks gained 1.34% or 13.14 points to 988.70.

The service sector advanced by 1.32% or 18.56 points to 1,419.01, while financial shares added 0.91% or 5.47 points to 604.49.

Blue chips closed higher, led by Lopez-led First Philippine Holdings Corp. that zoomed up by 11.84% or P4.50 to P42.50.

Unit Manila Electric Co. jumped by 11.7% or P27.50 to P262.50.

Philex Mining Corp. soared by 10% or P0.90 to P9.90.

Andrew Tan-led Megaworld Corp. rose by 2.98% or four centavos to P1.38.

Sy-led Banco de Oro Unibank, Inc. added 1.44% or P0.50 to P35.

Index heavyweight Philippine Long Distance Telephone Co. climbed 1.43% or P35 to P2,480.

Ayala-led the Bank of the Philippine Islands gained 1.11% or P0.50 to P45.50.

Metropolitan Bank & Trust Co., meanwhile, lost 1.28% or P0.50 to P38.50, while Ayala Land, Inc. did not move at P9.50.

Entry Credits: http://www.bworldonline.com

***

Good corporate earnings and the lack of bad news in the economic front pushed Philippine shares to open strong Monday.

The bellwether 30-company Philippine Stock Exchange index surged 67.60 or 2.42 percent to 2,850.58 while the broader all shares climbed 36.34 points or 2.05 percent to 1,807.46.

Optimism was felt across the board as all sectors ended in the green led by Mining and Oil’s 7.38 percent leap and Industrial’s 4.90 percent jump.

Similarly, market breadth was positive with 6.818-billion shares worth P10.23 billion changing hands. Net of crosses, market turnover was valued at about P2.7 billion.

Some 756-million shares of Pilipino Telephone Corp. were crossed at a special block share on Monday. Smart Communications has made a tender offer to acquire the 7.2-percent stake in Piltel held by the public. Smart and Piltel are both subsidiaries of telecommunications giant Philippine Long Distance Telephone Co.

“Both in the domestic and overseas fronts, there was no bad news. Corporate results are also indicating recovery of the worldwide economy,” said Emmanuel Soller, EquitiWorld Securities trader.

Last Friday, the Dow Jones industrial average rose nearly 114 points at 9, 370.07, breaching a key level.

In Asia, most bourses were trading in the green led by Hong Kong’s Hang Seng with a 2.21-percent ascent.

Entry Credits: http://ph.news.yahoo.com/gma

Meralco’s Rise and fall

Rise and fall of Meralco: Your questions answered
PHILEQUITY CORNER By Valentino Sy (The Philippine Star) Updated August 03, 2009 12:00 AM

We have received many queries on the recent price action of Meralco. Many are still befuddled on the steep rise and the equally sharp fall of its stock price. Last week, market watchers have been asking why Meralco shares have gone up to a closing price of P205 per share. They commented that at P205 per share it was already overpriced.

However, after Meralco reached P302.50 per share this week, the same people are questioning why it dropped when in fact it closed at P229 per share, which is 12 percent higher than the previous week’s close.

Because of the many queries of our readers and investors, we are changing the format of our column today to a question and answer (Q&A) type.

1) Why did Meralco’s share price zoom to astronomical levels these past few weeks?

In our article Turf Wars (see July 13, 2009 issue of The Philippine Star), we said that Meralco’s price action continues to defy gravity because the battle for control, given the limited free float circulating, is exerting upward pressure on the share price.

We mentioned the possible scenarios:

a) That the PLDT Group or the SMC group may be buying in the market to get a majority stake,

b) That fund managers sympathetic to either side may be accumulating

c) That a risk arbitrageur may be gobbling up the free float with the intention of selling the shares to the highest bidder

d) That maybe all of them are doing the buying at the same time.

Note that buying in the market is less costly than for one party to buy the other out which would trigger a tender offer for all the shares.

2) Why did it reach a staggering level of P302.50 per share?

It appeared that the race to own 50-percent stake + one share was decided by “photo finish”. Therefore that last one or two percent — which matter the most — commanded a huge premium. Buying two percent of the company at P300 per share to gain control is actually cheap.

Morover, many fail to realize that the bulk of the stakes of PLDT Group and SMC Group are priced at P90 per share (in SMC’s case it is even less because it is payable in three years).Thus, even if the winning bidder paid P300 per share for the last two percent, the average cost would just be a little over P90 per share.

3) Why did the Meralco drop sharply after reaching P300 per share?

To the experienced eye or seasoned investors, the block of shares that was crossed at P300 per share last Wednesday was a clear signal that the game was over. It was clear at that instance that one party sold and that the other party bought the deciding block.

It did not really matter which party won. It was apparent that when the fight for control was over, the demand for the shares and the buying frenzy would no longer continue.

4) Why is that block of shares traded on Wednesday a game-changer?

It was a game-changer because that block of shares represents nearly two percent of Meralco. Therefore it meant minus two percent for one side and plus two percent for the other side – a swing of around four percent.

5) So, who eventually got control of Meralco?

A quick look at the PSE quotation report last Wednesday showed a net foreign buying of P2.03 billion. A foreign broker known to be used by the PLDT Group and foreign funds sympathetic to PLDT crossed 6.7 million shares last Wednesday. Meanwhile, a local broker which represented one of the local funds sympathetic to the SMC Group crossed six million shares.

Apparently the funds that are allies to SMC Group flipped and sold to the highest bidder. Obviously, the PLDT Group now owns the majority of Meralco.

6) Why is getting control of Meralco important for PLDT?

The PLDT group sees real synergies between Meralco and PLDT. The company mentioned eight specific areas where they can work together, namely: powerline broadband, fiber optic backbone network, electric power poles, easements and rights of way, prepaid electricity service, business offices, ICT or data center, bill statement printing & enveloping and access to subscriber base.

Moreover, losing Meralco at this point, when it has already invested billions of pesos, would be disastrous for PLDT. In fact, PLDT’s share price has lagged the market during the battle for control of Meralco but when it was clear that PLDT maintained control, the stock price went up.

7) What do we do now with Meralco?

For those who have a short-term perspective, especially the punters, the answer was clear. If the fight for control is over, they have no choice but to sell.

For those with a long-term view, PLDT Group’s entry in Meralco brings many opportunities. Manny Pangilinan’s track record of turning companies around, cost-cutting and creating synergies to optimise profits and enhance shareholder value is definitely a positive for the stock. MVP has proven this in PLDT with its shareholder value and stock price steadily increasing since he has taken over.

While Meralco’s stock price has gone up too fast too soon, the company has a strong franchise, a good business model and sound fundamentals.

Is the turf war over?

As far as the fight for control of Meralco is concerned, the game is over. But in other battle turfs, the war would probably continue as both parties are involved in telecommunications, infrastructure and other businesses in the Philippines.

Lessons learned

The meteoric rise in the share price of Meralco and the sharp drop afterwards provide valuable lessons for investors.

1) One important lesson is that you should do your own research rather than following without thought what your brokers are doing. In Meralco’s case, most brokerage houses had recommended a SELL on Meralco when it first reached P90 per share. Their recommendation may have been based on fundamentals, not considering the battle for control.

But if you did your homework and realized that there was a battle for control and limited free float circulating, you would have known that the rich valuations were justified.

In the same manner, when the race to get majority is over, you should recognize that valuations will revert back to fundamentals.

2) Another lesson is that you should follow strictly your investment profile. If you are a short-term trader, you should be alert and nimble because while profit potential is high, volatility at the turn will be wild.

If you are a retail punter, it is important to do your homework rather than following blindly what bigger brokers or investors are doing. In this case, the block sale of Meralco may have triggered an immediate change in view from these investors. Instead of being buyers, they may have become sellers.

Finally, if you are a long-term investor, you should buy when the price is being offered at a bargain or as Warren Buffet and Benjamin Graham put it “you should buy when the price of a stock offers a huge margin of safety.”

Today’s Stock Buzz- August 8, 2009

Prices dive as investors continue pocketing gains

Without any leads to spur buying, investors again pocketed profits on Friday, sending share prices down.

The benchmark Philippine Stock Exchange index slipped by 2.04% or 58.23 points to 2,782.98, while the all-shares index declined by 1.56% or 28.17 points to 1,771.12.

A total of 5.22 billion shares worth P2.84 billion were traded, with net foreign buying at P89 million. Decliners led advancers 80 to 40 while 46 stocks did not move.

“The market experienced a major correction after rallying so much in the past. But this should be seen as something healthy since this would give investors a chance to enter,” Jeng T. Calma of A&A Securities, Inc. said.

She said stocks might rally again but it is hard to say when considering now is the “ghost” month of August, when stocks normally slump. She advised investors not to do heavy buying but to instead accumulate stocks slowly.

Ms. Calma, however, said it is unlikely the market would go below 2,700 since there is a strong support at this level as shown by the market’s past behavior.

US stocks, meanwhile, closed lower on Thursday night — giving no clues to investors — ahead of the release of employment data for July.

The Dow Jones industrial average lost 0.27% or 24.71 points to 9,256.26, while the Standard & Poor’s 500 index declined by 0.56% or 5.64 points to 997.08. The Nasdaq composite index slid by 1% or 19.89 points to 1,973.16.

At home, the service sector dipped by 3.18% or 46 points to 1,400.45, while holding firms declined by 2.39% or 36.79 points to 1,497.28.

Industrial shares lost 2.37% or 102.40 points to 4,212.52, while financial shares was down by 1.87% or 11.43 points to 599.02.

Property stocks slipped by 0.13% or 1.28 points to 975.56.

Mining and oil stocks, on the other hand, climbed by 6.72% or 480.89 points to 7,630.86.

Blue chips closed mixed, with the Manila Electric Co. tumbling by 4.47% or P11 to P235 and index heavyweight Philippine Long Distance Telephone Co. dipping by 4.11% or P105 to P2,445.

The Bank of the Philippine Islands lost 2.17% or a peso to P45.

Metropolitan Bank & Trust Co. and Andrew Tan-led Megaworld Corp. did not move at P39 and P1.34 per share, respectively.

Read more…

Stock Trading Tips

Once you already got familiarized with the stock market and started doing stock trading, here are some of the useful tips that I learned from my stock trading experience:

Stock Trading Tip No. 1: First of all, I’ve seen a study conducted by ATR-Kim Eng Securities comparing the monthly stock returns on election years as against any other “normal” year. As seen from the graph, the month of August, historically is considered as the “ghost month” in stock trading since it is in this month that registered the lowest yield as against other months whether election year or not. You can also see from the graph that historically, the month of December gives the most yield and so it “may” be good to buy stocks on the month of August when stocks are low and later sell it on December when stocks prices are picking up.

Stock Trading Tip No. 2: Don’t buy in smaller volumes. If you have enough capital to spend in stocks, then try to buy huge volumes of your favorite stocks because if you buy in smaller volumes, then chances are you will incur higher stock trading fees such as broker’s commission, VAT, etc.

Stock Trading Tip No. 3: Transaction costs in buying vs. selling stocks. Each time you make a transaction, whether buying or selling stocks, you will incur transaction fees. Based on the transaction costs that I learned, it is “more expensive” for you to sell stocks than to buying it because selling stocks incurs a much higher transaction costs.

Read more…

Playing with the Stock Market

First and foremost, what is

Pros:

1. To raise capital. Companies hire an advisor called underwriter to formulate the Initial Public Offering (IPO) price of the company’s stock depending on several factors. Then executives of these companies will conduct a roadshow usually out of the country to entice foreign investors to buy these shares. The IPO price is the starting price of the company’s stock in

Cons:

Since the company’s stock is now open for public, it can be subject to several external factors. Investors can now play its stocks. It can now be a subject for scrutiny by investors and analysts. Also, it can be a subject for manipulation. A company that did well, meaning, it beats analysts estimates on its earnings and profits will probably go higher as investors buy these shares. In contrast, those that did not meet or has some problems in liquidity, credit, labor, compliance, etc. will be dumped by the investors that will lead to the so-called ‘equity dry up’. This led to the recent bankruptcy of Lehman Brothers.

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