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If a person has a half a million peso, what stock...?

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Keyboardcontrol

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If a person has half a million peso just sitting in a bank without any real reason to be there and just waiting for it to be invested in the stock market, what are the ideal shares to buy?


warlocksfs

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Reply #1 on: Jan 21, 2012, 03:46 PM
TEL,JFC,MER,MBT and GLO

caveat :D


ferrariEverest

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Reply #2 on: Jan 21, 2012, 05:19 PM
If a person has half a million peso just sitting in a bank without any real reason to be there and just waiting for it to be invested in the stock market, what are the ideal shares to buy?
find the ones u like &/or find a few that have growth potentials.
pili ka ng 1-5stocks, wag masyado marami para hindi ma-dilute ang potential profits mo.

BEFORE U DO any of that, pag-aralan mo muna. wag basta mag-invest.


uranium698

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Reply #3 on: Jan 21, 2012, 08:32 PM
TEL,JFC,MER,MBT and GLO

caveat :D

nice picks

newbie ba? pick TEL/GLO, MEG, PGOLD, DMC
MER maybe if it breaks 300
JFC if it breaks 100


DonT

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Reply #4 on: Jan 21, 2012, 08:57 PM
go into MF's or UITF's na muna...while you learn stocks. When you feel confident...and you think you can outsmart the fund managers of BDO, Metro, BPI et. al....then go on to stocks.


naldcagape

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Reply #5 on: Jan 21, 2012, 09:50 PM
go into MF's or UITF's na muna...while you learn stocks. When you feel confident...and you think you can outsmart the fund managers of BDO, Metro, BPI et. al....then go on to stocks.
You don't need to outsmart the ALL the fund managers EVERY year. You just need to focus on your portfolio and invest in companies/industries that you're willing to study and follow.

If you study and develop a system that works for you, I believe investing in stocks is better in the long run because you'll get better returns and you'll grow smarter because of all the studying that you did. You can't grow smarter with mutual funds. There's nothing to learn there IMO.


freefront

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Reply #6 on: Jan 22, 2012, 01:14 AM
You don't need to outsmart the ALL the fund managers EVERY year. You just need to focus on your portfolio and invest in companies/industries that you're willing to study and follow.

If you study and develop a system that works for you, I believe investing in stocks is better in the long run because you'll get better returns and you'll grow smarter because of all the studying that you did. You can't grow smarter with mutual funds. There's nothing to learn there IMO.

I beg to disagree. What are you if not a fund manager to yourself? UITF,MF(esp. equity and balance funds),and stock trading share the same terminologies. It's like one foot in the door before you finally go inside the room that is a stockmarket. You have to wonder how and why your MF co. chose their top 10 stock picks. While you don't have to a
gree with all their choices, you now have a starting point. If you are a value investor, you have a demo account you can silip. If you want to be a trader, there's always PMT.

@fE and co.---talaga? 5 lang? Ba't parang ang susungit nyo?


Keyboardcontrol

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Reply #7 on: Jan 22, 2012, 04:24 AM
paano ang breakdown ng buy ng mga suggestions nyo mga sir?


DonT

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Reply #8 on: Jan 22, 2012, 08:44 AM
You don't need to outsmart the ALL the fund managers EVERY year. You just need to focus on your portfolio and invest in companies/industries that you're willing to study and follow.

If you study and develop a system that works for you, I believe investing in stocks is better in the long run because you'll get better returns and you'll grow smarter because of all the studying that you did. You can't grow smarter with mutual funds. There's nothing to learn there IMO.
I assume the thread starter is not well informed and versed with stocks...hence why he opened the thread with this question.
Everybody has to learn somehow. Best is to learn from other people's mistake.
Investing in Funds will not give you the possibility to rake in fantastic returns in stocks which is better than Funds...but it will not make you lose more money done stocks as well.

As Freefront mentioned...try to understand first how Fund Managers think...select...buy.


In my honest opinion, there are so many things to learn to be succesful in stocks. And investing before doing so is probably doubling anybody's risk. Hence, to save time, invest muna in equity funds. Yun lang po.


vicces

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Reply #9 on: Jan 22, 2012, 05:29 PM
Quote from: KeyboardControl
paano ang breakdown ng buy ng mga suggestions nyo mga sir?
first, for long term ba ang gusto mo or hindi? siguro kumporme na yan sa preference mo pati na rin sa budget na meron ka, or kung short term lang, i'd probably just watch all those stocks mentioned and wait for the dips ng mga preferred ko na stocks so i can ride the upside agad (watch the charts or makibalita ka kung malapit na ang correction).. but if you wanna be cognitive about it, here is what Joel Greenblatt in The Little Book that Beats the Market, suggested as the Magic Formula (note that VI principles din ito so strictly for long term holding):

1. Paying a bargain price when you purchase a share in a business is a good thing. One way to do this is to purchase a business that earns more relative to the price you are paying rather than less. In other words, a higher earnings yield.
 
2. Buying a share of a good business is better than buying a share of a bad business. One way to do this is to purchase a business that can invest its own money at high rates of return rather than purchasing a business that can only invest at lower ones. In other words, businesses that earn a high return on capital.

3. Combining points 1 and 2, buying good businesses at bargain prices is the secret to making lots of money.


so to answer your question, you rank the stocks suggested based on these two criteria, high earnings yield + high return on capital

If you want more details on how to do just ^that, here's how Greenblatt explains it: (disclosure: nosebleed will shortly follow this geektalk)

Quote
The Magic Formula
The magic formula ranks companies based on two factors: HIGH return on capital and HIGH earnings yield . These factors can be measured in several different ways:

1. Return on Capital

EBIT/(Net Working Capital + Net Fixed Assets)


Return on capital was measured by calculating the ratio of pre-tax operating earnings (EBIT) to tangible capital employed (Net Working Capital + Net Fixed Assets).

This ratio was used rather than the more commonly used ratios of return on equity (ROE, earnings/equity) or return on assets (ROA, earnings/assets) for several reasons.

EBIT (or earnings before interest and taxes) was used in place of reported earnings because companies operate with different levels of debt and differing tax rates. Using operating earnings before interest and taxes, or EBIT, allowed us to view and compare the operating earnings of different companies without the distortions arising from differences in tax rates and debt levels. For each company, it was then possible to compare actual earnings from operations  (EBIT) to the cost of the assets used to produce those earnings (tangible capital employed).

Net Working Capital + Net Fixed Assets (or tangible capital employed) was used in place of total assets (used in an ROA calculation) or equity (used in an ROE calculation).

The idea here was to figure out how much capital is actually needed to conduct the company’s business. Net working capital was used because a company has to fund its receivables and inventory (excess cash not needed to conduct the business was excluded from this calculation) but does not have to lay out money for its payables, as these are effectively an interest-free loan (short-term interest-bearing debt was excluded from current liabili-ties for this calculation). In addition to working capital requirements, a company must also fund the purchase of fixed assets necessary to conduct its business, such as real estate, plant, and equipment. The depreciated net cost of these fixed assets was then added to the net working capital requirements already calculated to arrive at an estimate for tangible capital employed.

2. Earnings Yield - calculated by dividing the earnings per share for the year by the share price

EBIT/Enterprise Value

Earnings yield was measured by calculating the ratio of pre-tax operating earnings (EBIT) to enterprise value (market value of equity + net interest-bearing debt). This ratio was used rather than the more commonly used P/E ratio (price/earnings ratio) or E/P ratio (earnings/price ratio) for several reasons. The basic idea behind the concept of earnings yield is simply to figure out how much a business earns relative to the purchase price of the business.

Enterprise value was used instead of merely the price of equity (i.e., total market capitalization, share price multiplied by shares outstanding) because enterprise value takes into account both the price paid for an equity stake in a business as well as the debt financing used by a company to help generate operating earnings. By using EBIT (which looks at actual operating earnings before interest expense and taxes) and comparing it to enterprise value, we can calculate the pre-tax earnings yield on the full purchase price of a business (i.e., pre-tax operating earnings relative to the price of equity plus any debt assumed). This allows us to put companies with different levels of debt and different tax rates on an equal footing when comparing earnings yields.
remember that this is just one approach. madami pang FA principles na pwede mong gamitin on how to do that ranking and choosing the best stocks at a bargain. komunsulta ka na lang kay TSO at mga VI heroes natin dito kung seryoso kang matutunan yan. :D

so pano, gagawin/aaralin natin yan lahat or magsusubscribe na lang tayo sa newsletter ni bo sanchez? the debate continues. :hihi:
« Last Edit: Jan 22, 2012, 05:48 PM by vicces »


naldcagape

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Reply #10 on: Jan 22, 2012, 11:10 PM
I assume the thread starter is not well informed and versed with stocks...hence why he opened the thread with this question.
Everybody has to learn somehow. Best is to learn from other people's mistake.
Investing in Funds will not give you the possibility to rake in fantastic returns in stocks which is better than Funds...but it will not make you lose more money done stocks as well.

As Freefront mentioned...try to understand first how Fund Managers think...select...buy.


In my honest opinion, there are so many things to learn to be succesful in stocks. And investing before doing so is probably doubling anybody's risk. Hence, to save time, invest muna in equity funds. Yun lang po.
To be honest, I started with MF with that objective, to learn from the fund managers. But I didn't really learn anything because the fund managers don't explain their daily trades or even their past decisions. Maybe I missed their newsletters.

Frustrated because I wasn't learning anything, I read Bill O'Neill and Peter Lynch and just decided to follow their train of thought because the technical analysis books and sites went way over my head.

I ended up investing in real estate stocks because that's where I'm most familiar and most comfortable. I read the analysts reports on the real estate stocks and wow, I understood them! Because of that, I ended up investing with confidence and hopefully, smarter. I just believe that's something you can't have with MF's.

Anyway, to each his own way I guess.


warlocksfs

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Reply #11 on: Jan 23, 2012, 07:10 AM
haha andaming post about what to do and what nots... this were already covered on other threads.
Stocks I chose were my 5 personal choice with just half a million.

Speaking of Fund Manager(s) each fund is always being handled by team of analyst, will not bet my decision against their team who do this all day.


Keyboardcontrol

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Reply #12 on: Jan 23, 2012, 08:36 AM
haha andaming post about what to do and what nots... this were already covered on other threads.
Stocks I chose were my 5 personal choice with just half a million.

Speaking of Fund Manager(s) each fund is always being handled by team of analyst, will not bet my decision against their team who do this all day.
Actually tama ka sir... ung ibang post medyo hindi na sagot sa topic. hehehe anyways. ok lang mga sir. =D


ferrariEverest

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Reply #13 on: Jan 23, 2012, 11:24 AM
@fE and co.---talaga? 5 lang? Ba't parang ang susungit nyo?
paanong masungit?  :D
+/-5 stocks lang, mainly to maximize potential returns & reduce potential stressors. :D

Actually tama ka sir... ung ibang post medyo hindi na sagot sa topic. hehehe anyways. ok lang mga sir.
pag nagbigay kasi lahat posters ng specific stocks, lalabas nun mangongopya ka lang, which is delikado, IMHO.
yung napili nilang stocks were based on their analyses, investing style/personality, all of which ay different from YOURS. (of course, yung iba nangopya rin)
u have to trade/invest based on YOUR decisions & trading/investing personality. sa ganitong paraan, mas kabisado mo ang diskarte/kung ano gagawin mo.

Since (i assume) u are new to stocks, this is the way forward for u.
start with the basics. build a foundation. find your style.


freefront

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Reply #14 on: Jan 23, 2012, 07:05 PM
paano ang breakdown ng buy ng mga suggestions nyo mga sir?

 :offtopic: na naman siguro 'to pero game ka naman, eh.

According to one chief investing officer, their fund management company does not go beyond 10% of their available money( pegged at 90% of the pooled fund, the remaining 10% of is on standby for investors who need to redeem funds in an emergency) per stock. The reason for that is to lessen the exposure to risk---that the stock pick will move unfavorably or that when they make a move to sell, nobody will be buying the whole lot of what they hold in number of shares or vice versa ( forgot the other reasons). In the second instance, it would be great if, as they are waiting for the sell order to be fully executed, the stock price continues to go up. If it drops, the gains will suffer.

But since you are an individual investor and you are developing your style, maybe the 10% reserve will be parked and be ready for a buy ng isang target mo na ayaw pang bitawan ng mga damuhong may hawak nun? Tweak it to your comfort level.

paanong masungit?  :D
+/-5 stocks lang, mainly to maximize potential returns & reduce potential stressors. :D

Para kang nagbigay ng 500K pambili ng halo-halo, ta's sasabihin mo, " 5 ingredients lang. Kasama na yelo at gatas." Baka puede hanggang 7-10? Mas stressed ako sa 5 lang. (I found myself talking to the monitor once: One of you move! Now!). What happened to diversifying into different asset classes( dat the term?)


 


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