Author Topic: Outside the Box by John Mangun, columnist from Business World (Read 764 times)

kithe · « **on:** Jul 24, 2012, 05:10 PM »

John Mangun is my favorite columnist in Business Mirror, I always read his column, OUTSIDE THE BOX, under the Opinion Column..

Just sharing his insights and opinion..
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"YOU SHOULD NOT INVEST IN THE STOCK MARKET"
MONDAY, 23 JULY 2012

TOO many of the people that invest in the stock market only have a minimal understanding of what it is all about. Most people should not invest in the stock market.
If you believe there is a fool-proof strategy for making money in the stock market, you should not invest. I wish there was, but after more than 30 years in this business, I have yet to find one. There is no guaranteed winning formula. Anyone who tells you that there is, is either a fool or a liar.

The most popular “guaranteed” strategy is one of several variations of dollar-cost-averaging. You buy the same peso amount of shares of a big blue chip stock every month and eventually you will be a millionaire. It is based on the idea that stock prices will always eventually go higher. The other premise that the “expert” does not tell you is that you better not ever need your invested money until you do become a millionaire. They like to quote Warren Buffet saying, “I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.”

Buffett does not buy stock. He buys companies using the stock market as a vehicle. If the company and its share price do not do well, he likes taking them over and running them. That is his Plan B and he is good at it. You cannot follow Buffett’s Plan A without being ready to do Plan B.

San Miguel is a big company. It is a well-operated company. Let’s suppose you started buying P5,000 of San Miguel every month since January 2011. You would now be down 10 percent. Start your monthly buying in January 2010, you made an annual return of 7 percent. Even if your buying started in January 2009, you still only earned 7 percent per year.

Imagine walking into an automobile dealership ready to buy and being told you could buy but not drive the car. Or having the property salesperson inform you that you were not allowed to live in that new condo you just bought. Better yet, the bank manger thanks you for opening a new account but says that when you do want to withdraw, you might have to wait days, weeks, or months to get your money back.

Every form of dollar-cost-averaging goes against the basic stock-market principle of instant liquidity in the same sense of a bank account being instantly available. Having to hold issues until they become profitable is like buying the same lotto numbers over and over until you win. It makes no investment sense.

But there is an even better way to lose money and opportunity than using dollar-cost-averaging.

Again, too many stock-market investors use less care in buying securities than they do buying a pair of shoes. They look only at the price.

Have you gone into a department store and found a pair of shoes previously priced at P5,000 marked down to only P1,000? Of course you have. And you immediately put your money on the table and bought them. Of course not. You waited to make your purchase to find the shoes in your size. A pair of shoes you cannot wear is not a bargain, is not cheap, if you cannot wear them.

Price is one of two considerations in purchasing a stock. The other is the trend of the price. An issue that was at P200 that is now at P100 is not a bargain if it is trending to P50. However, too many investors look for bargains. A stock that was P50 that is now P100 on its way to P200 is a bargain. But many investors do not look at it that way and should not be putting their money in the market.

If you do not know what you are doing, stay away from the stock market.

E-mail to mangun@gmail.com, web site is www.mangunonmarkets.com and Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by COL Financial Group Inc.

bauer · « **Reply #1 on:** Jul 25, 2012, 05:31 PM »

napahamak ako dyan kay john mangun nang baguhan pa lang ako sa stock trades. advise nya to buy a cement company na later e bumaba instead na tumaas ang price.

hay buhay....... just do the analysis yourself.

ferrariEverest · « **Reply #2 on:** Jul 25, 2012, 05:47 PM »

talaga? kelan yun Sir?

licensed at experienced (36years) stock broker na yan a, what more yung kagaya kong maliit lang at yung mga mas bago sa akin

tama, analyze yourself. have self-reliance.

bauer · « **Reply #3 on:** Jul 25, 2012, 05:53 PM »

^ di ko na maalala. dati kasi columnist yan sa Inquirer. wala kong alam, sinunod ko yung tip.
rule no.1 - dont believe in others (stock tips) - specially it is given for free.

ferrariEverest · « **Reply #4 on:** Jul 25, 2012, 05:54 PM »

tumpak

dapat may bayad, lol

d nyo na maalala, mukhang matagal na nga yun

george88 · « **Reply #5 on:** Jul 25, 2012, 07:26 PM »

Kung my million lang ako during recession ang yaman yaman ko na ngayon... I bought Aboitiz power corp. at 11 pesos and the market price today is 30+ pesos =)) sayang stock trading game lang hehe...

TSO · « **Reply #6 on:** Jul 26, 2012, 01:30 AM »

Quote from: bauer on Jul 25, 2012, 05:53 PM

^ di ko na maalala. dati kasi columnist yan sa Inquirer. wala kong alam, sinunod ko yung tip.
rule no.1 - dont believe in others (stock tips) - specially it is given for free.

Always verify stock tips. It doesn't matter who the source is. Even if Warren Buffett himself gave you the tip, you should still do your due diligence.

Prospera · « **Reply #7 on:** Jul 26, 2012, 09:27 AM »

Agree with the above. Besides no guru is fool-proof. And if all the analysts are correct all of the time (and if they all always agreed), there'd be no market.

But Mangun is correct: you can't be successful if you don't take the trouble to understand what you're supposed to be doing. That's true for stock-trading as it is for any other activity.

kithe · « **Reply #8 on:** Jul 26, 2012, 10:09 AM »

This was yesterday's issue of OUT OF THE BOX... July 25, 2012
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SONA THOUGHTS

FAR be it from me to dissect and analyze the most recent State of the Nation Address. Ben Kritz, a friend who writes at grbusinessonline.com does it much better than I could. I listened with interest and sadness as I see the Philippines moving in the same direction that is destroying the West.
On September 17, 1787, a group of men approved a document creating a nation and defining its government. They wrote that the purpose of government was to, “establish justice…and promote the general welfare.”

Almost exactly 200 years later, another group of men and women came together and did the same thing, writing, “We, the sovereign Filipino people…establish a Government that shall…promote the common good…and secure to ourselves and our posterity, the blessings of independence.”

Each of these groups, separated by two centuries, lived under and threw off governments that had become too powerful and therefore too oppressive. Governments cannot create power; they must take the power away from the people.

Modern governments want as much power as possible over people’s lives. Prior to the 1987 Constitution, the Philippine government controlled power generation, the water supply, telecommunications, and many of the other basic necessities of life.

Notice the words of both of these Constitutions’ Preambles: “promote the general welfare” and “promote the common good.” Promote means “Further the progress of something; support or actively encourage.”

Neither Constitution uses the word “provide” which means, “Make available, equip or supply.” This difference is critical.

What modern governments including the Philippines have ignored and thereby lost is the partnership with the people so brilliantly voiced by John F. Kennedy during his 13-minute inaugural address in 1961. “In your hands, my fellow citizens, more than in mine, will rest the final success or failure of our course. And so, my fellow Americans: Ask not what your country can do for you; ask what you can do for your country.”

Politicians and the administration were absolutely gushing at all the things the government had or was going to provide. The “school books for every child” promise? Ninety percent of all the people in the room had been in a position to provide school books for many years. Why only now? To quote Donald Trump, “You’re fired.”

The President introduced many government officials that had done their jobs as if it were an amazing accomplishment. Ok. Maybe it was. But what of the other participants of the true Public-Private Partnership Program that government is? Where were the Thank Yous to the taxpayers who get up every day and go to work?

The speech spoke of all that government is going to do for job creation. What about acknowledgment and appreciation for actual job creators? Where was the part in the speech that spoke about what the government is going to do to promote their efforts?

The President may be a fine man but he has no understanding, as with most political leaders, about the private sector. In the 1970s, a man named Tony Tan Caktiong probably lost many nights of sleep wondering if changing from ice cream to hot dogs was a good business decision for his family’s Jollibee store.

In 1945 another man, a highly educated teacher from Stanford University, Maximo Gimenez created a legacy of job creation called Max’s Fried Chicken. When did he get his thank you?

Also in 1945, a man started providing medicines to the people from a push cart. His name is Mariano Que and he built Mercury Drug.

Yet another man in 2003 put some 3,000 people to work without the title of Cabinet secretary, using, note this well, his own money. His name is Edgar Sia II. Ever heard of Mang Inasal?

The President spoke about the people being his boss.

Maybe next year one of “The Bosses” should give the Annual Performance Review and tell the elected and appointed employees what they should be doing to make the country better.

E-mail to mangun@gmail.com, web site is www.mangunonmarkets.com, and Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by COL Financial Group Inc.

bajoyjoy · « **Reply #9 on:** Jul 26, 2012, 10:17 AM »

Mga tweets nya (abouts stocks), laging sarcastic at antipatiko ang dating. Parang meron laging sneer. Yung ganung klaseng yabang coz he’s supposed to know what he’s talkin’ about. Dislike. But I follow para lang I know what stocks are on his radar.

kithe · « **Reply #10 on:** Jul 26, 2012, 11:07 AM »

Yes, its up to us ang decisions kung susundin or not..

pmtmember · « **Reply #11 on:** Aug 01, 2012, 07:56 PM »

Quote from: bajoyjoy on Jul 26, 2012, 10:17 AM

Mga tweets nya (abouts stocks), laging sarcastic at antipatiko ang dating. Parang meron laging sneer. Yung ganung klaseng yabang coz he’s supposed to know what he’s talkin’ about. Dislike. But I follow para lang I know what stocks are on his radar.

ganon lang siguro talaga ugali niya. Poren yan. Nakasagutan ko rin yan dati pero on another field hindi sa stocks hehehee. Mas mabuti na rin yan maraming mapag kunan ng idea tungkol sa stocks. Sa atin pa rin ang pag click ng buy and sell. Tama yan, follow pa rin.