[ferrariEverest]

^ sobrang dami nga, Sir.
diluted ang winnings mo pag tama ka, while compounded ang losses AT specially stress mo pag mali ka.

most traders/investors should stick with around 1 to 10 stocks.

sa pagkakaalala ko, bihira yung talagang yumaman na maraming tinatayaan. usually, ang yumayaman one or a few businesses/stocks/instruments lang ang tinatayaan nila, dun sila nagfofocus.

mukhang hindi ka naman average trader Sir, so I think you should 'move on to the next higher level'  -- trading/investing with a laser focus.

[rds]

A lot of my friends have the same reaction. I think I reached my limit though, roundabout 20 stocks is what I consider comfortable. One time it got over 25 stocks and I felt a little pressure from monitoring and updating their FS, right there and then I realized I need to pare down my portfolio to a manageable stress free level. Having said that, I think the portfolio remains focus as I have a single stock that is 25% of my portfolio and around 4 stocks making up the core of the portfolio. As you can see all of them are not value stocks. I've had some miss steps here and there hehehe, but it got to where it is by not opting to sell. I remembered sitting beside one "Chinese-Filipino lola" in a stock market seminar telling me that she does not sell stocks, she just buys and keep them. That time I thought she was clueless, but now, I think she may have wisdom after all. I'd like to qualify the last part, buy excellent businesses on the cheap and keep them forever.
Post Merge: Jul 16, 2012, 11:23 PMerratum: As you can see not all of them are value stocks . . . instead of  . . .  all of them are not value stocks . . .

must be age hehehe!

ano ba ang definition ng value stocks. RCB, FMIC, FEU, SMPH...hindi ba value yan?

[bauer]

mukhang hindi ka naman average trader Sir, so I think you should 'move on to the next higher level'  -- trading/investing with a laser focus.

I think this one is most rewarding - "laser focus" investing.
Post Merge: Jul 17, 2012, 03:26 AM

ano ba ang definition ng value stocks. RCB, FMIC, FEU, SMPH...hindi ba value yan?

Value stocks - If the stock's fundamental value is higher than your buying price.

[TSO]

Value stocks - If the stock's fundamental value is higher than your buying price.

+1

On a personal note, I've been having private discussions about this with some of my LinkedIn contacts, and honestly, "value investing" should be differentiated from "cheap investing". Unfortunately, people never do.

[magtibaygom]

If you're bored investing that way, try investing in your own business. Leave your job, and start a dynamic business that squeezes your nerves!

[rds]

Value stocks - If the stock's fundamental value is higher than your buying price.

so that means a "value stock" is relative. a certain stock can be a value stock to one VI but not on the other, it depends on a person whose making the analysis.

and that that my value stock today may not be a value stock tomorrow...
Post Merge: Jul 22, 2012, 12:07 AM

+1

On a personal note, I've been having private discussions about this with some of my LinkedIn contacts, and honestly, "value investing" should be differentiated from "cheap investing". Unfortunately, people never do.

can you define what "cheap investing" is?

[TSO]

According to a 2002 paper by Robert Kahl,

There have been numerous studies on the subject of value versus growth investment strategies.  Table 1 summarizes ten of the studies on the subject.  The studies cover different time periods and different stock universes.  Two of the studies include foreign stocks.  The Bauman, Conover, and Miller study is the most comprehensive with regard to international stocks and includes 2800 stocks in 21 countries over a ten year time period.

The most common variables which were tested were price/book value (P/BV), price/earnings (P/E), and price/cash flow (P/CF).  Other variables that were tested included price/sales (P/S), price/depreciation, earnings growth rates, sales growth rates, and dividend yield.  Stocks with a low price relative to book value, earnings, cash flow, or sales were considered to be value stocks while those with high ratios were considered to be growth stocks.  Stocks with high dividend yields were also considered to be value stocks.

The studies utilized similar methodologies with regard to the testing of variables.  Table 1 shows the types of companies included in the studies, how they were grouped, the frequency of rebalancing and the variables tested.  Stocks in the selected universe for the studies were ranked on the basis of the independent variables to be tested.  Portfolios were then formed by grouping stocks on the basis of the rankings. After a certain period of time, stocks were then ranked again and the portfolios were rebalanced accordingly.  The returns on the various portfolios were then compared.

The results of all ten studies were consistent.  When value portfolios (stocks with the lowest P/E, P/BV, etc.) were compared to growth portfolios (stocks with the highest P/E, P/BV, etc.), the value portfolios outperformed the growth portfolios in all ten studies.  The value portfolios were also compared to a benchmark index in eight of the ten studies and outperformed the benchmark in all of the eight studies. This held true for all of the variables in the various studies that were used to identify value stocks.  Several studies compared investment returns after different time periods.  For purposes of comparison in Table 1, all differences in investment returns shown are after one year.

There was no one variable that appeared to be better than the others in identifying value stocks that outperformed the market.  For the Nicholson study, price/earnings was a better indicator of value than price/sales.  In the Lakonishok, Schleifer, and Vishny study, price/cash flow was a better indicator of value than price/earnings or price/book value.  In the Calderwood study, value stocks selected on the basis of high dividend yield outperformed those selected on the basis of price/book or price/earnings by a small margin.  In the Bauman, Conover & Miller study, price/book value was a better indicator of value than price/earnings, price/cash flow, or dividend yield.

Let's say a man reads this.

When that person sees a stock that's trading for less than 1x book value, or for less than 7x earnings, and buys it right then and there... that's "cheap" investing.

And to me that is as risky as growth investing.

[Aero]

Para sa akin if you are investing money sa tamang lugar then good for you. Tamang lugar meaning kahit low investment pero ang laki ng balik. Marami dyang mga businesses na ang liit lang ng naging capital pero ang laki naman ng balik. matinding tsaga lang talaga at sipag ang kailangan.

[bauer]

i do not have any definition for 'cheap investing'. for me, if it is cheap, it does not carry a good value.  cheap are synanomous with low quality. so cheap stocks = low quality stocks.

[alacrity]

Just want to share a quote from John Maynard Keynes' book, "The General Theory of Employment, Interest and Money".

"The game of professional investment is intolerably boring and over-exacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll."

[freefront]

Just want to share a quote from John Maynard Keynes' book, "The General Theory of Employment, Interest and Money".

"The game of professional investment is intolerably boring and over-exacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll."

I knew it! I have to learn how to play blackjack! 

[pinoyinvesting]

investing is fun
though it's also boring

[alacrity]

I knew it! I have to learn how to play blackjack! 

Actually, I played blackjack before I got into the stock market.

Blackjack is harder than most people think, it's almost like a 9-5 job, discipline is very important. Card counting is totally not like what they show in the movies. My rough estimate is that 70% win in the casinos but only 5%-10% of the 70% have the discipline to quit while they're ahead.

The counting part is easy, anyone can add +1,0,-1. Pretending you're relaxed while concentrating with all the distractions around, that's another story.

You also have to know the right amount of cash to bring, and you need to calculate how much money you're winning or losing per hour. And you also need to have a team, one man working alone can only do so much, with a team you can have a bigger bank roll.

[GIG]

I knew it! I have to learn how to play blackjack! 

kudos to you freefront, you can't fail to spot the humor in an otherwise serious discussion hehehe. I'd like to be around people like that . . . how 'bout coffee friday night hehehe!

[freefront]

^ You're on!  When's the next stockholder's meeting ng FEU  #PD: almost non-existent talent in card games.