lesson learned: follow the strategic averaging method

so, after my losses with $pgold, $cosco and the first mistake with $bhi (because i have not followed my plan [as written in my last stocks-related post]), i have now recovered my losses by buying and selling $nikl and $uni. i was not very concerned with fundamentals, but this is the trend now. i just went with the flow. i guess i would not have tried this very risky move if i did not trust my trader friends' charts and analyses.

but, yeah, i will have to do it on my own. he's not gonna be there for me forever. i will have to learn the things he knows, and try to grasp the things he explains whenever he does.

oh well, now that i have re-gained all my losses, i am now going to stick to peso-cost averaging for real. i know that i won't get lucky like this everytime, so i am going to take the safer and better path: investing for the long term and following bo sanchez's strategic averaging method.

if you are interested to learn this method, you can search it online. if not, am just a message away. i'll be happy to help, and orient you about it. ☺️

midterm exam in slu is here again. i better be working now. catch you all around!

invest, don't trade

lessons from last week

i have stopped posting on my blog for a week because i felt like i failed myself once again from a bad trade. i lost Php 5,200 from a bad decision, which should not have happened if i did stick to my plan.

this is what happens when i do not follow my plan, and get bored easily. boredom is a dangerous enemy in investing-- we want to gain so much in such a short period of time. the truth of the matter is, i knew that i was making a critical decision but i did it anyway just because i was already bored with my stocks. if you are curious about it, let me illustrate so you will learn from this bad trade that i have executed last week:

with the Php 100,000 fund that I have left in my bigger portfolio (because the bulk of my fund i invested in my mom's forex business), i bought three starting positions: $MER (Meralco), $RRHI (Robinsons Retail), and $BHI (Boulevard Holdings).

🌀mistake 1: i did not buy in tranches. if you have a relatively big fund like this, do not buy at once. buy in tranches. the reason here is that if you buy one stock in bulk just once, you will miss the chance to buy more if the price drops lower than your entry point.

🌀mistake 2: i was having this trader temperament. as i have proven many times over, i have not been a successful trader as i am as an investor. to be a day trader is to buy a certain stock when it looks like it is gaining momentum to go up in the near term, or within the day (for example). i have had lucky trades, because i was copying my friends' trading plans. but, they exactly know when to cut their losses and when to take profits. i do not. kung feeling trader ka, you must know technicals professionaly well. the thing is, i do not. i know some basic stuff (reading candles) and some advance stuff (understanding ichimoku clouds and jay's Arc). i am really still learning to master them.

so there. i have good reasons for buying these issues. $MER was oversold because of the bad news about the electricity issues in manila. also, it is on its support level when i bought it (lowest level you can possibly buy it). i bought this when everybody was fearful that Meralco is in deep shit because of the power outages and the legal woes that sorround it.

$RRHI was looking good, too, as all of the gokongwei stocks are doing well. $URC and $JGS just reached its all-time high, $CEB is having higher lows in the past months, and the retail industry just can not be influenced negatively just in case interest rates hike a little more.

and finally, $BHI because i have had a good experience with this stock before. i gained as much as 23% last year with this stock, and it apparently returned to that support level again. i bought it also because there were rumors that it got its puerto azul and friday's establishment going well again (which turns out to be true according to their public disclosure); it is not bad to speculate, especially when you have good fundamentals to back up your reasons of buying a certain stock.

i held my horses, and just waiting for my target prices to be met perhaps within 3 months up to a year. i had a sound plan to offset my wrong decision of buying all at once. 50% on $MER, 25% on $RRHI and another 25% on $BHI.

in the next 3 days after i bought these stocks, $RRHI and $BHI were already green (they are already trading well above my buying price) but $MER was having a hard time going up. i read the disclosures and the recommendations of my broker (col financial) and it published a reiterated buy rating on $HOUSE, a property stock. i was apprehensive that it is an interest rate-sensitive stock but the fair value is just so high versus its current price back then. what i did, i held my breath and sold all my $MER shares to buy $HOUSE. and i just did the greatest mistake of my life.

🌀mistake 3: i sold at a loss. i sold $MER even when it was red. if you are an investor, you do not sell when it is red, you should buy more because it is giving you a chance to accumulate more shares at a lower price to have a lower buying average. but i did not.

so, i have been posting all these financial wellness stuff on my blog but i have not been so disciplined myself either. it also crossed my mind that i can not control my greed very well just yet. waiting has never been an easy thing to do for me, but it is an important ingredient for success, patience. i ended up losing from my trade on $MER which from the time i sold it at a loss has already risen almost ten percent, and $HOUSE has not stopped going down as of writing.

but, i have to stick to my plan. if i followed my instinct again, i would have sold $HOUSE again and buy another rising stock, but i am keeping my original decision, to buy and hold until my target prices are met.

🌀mistake 4: i did not follow my original plan. all right, so i can not emphasize enough the importance of sticking to your plan. if you plan to do peso-cost averaging, you have to stick to it no matter what. besides, it is the most effective plan that i know right now that suits long-term investors like me. i just got too bored and too greedy, but i also learned my lesson once more.

if you are planning to do invest in the stock market, i also recommend that you do not just believe in recommendations from your brokers, people online, or me, as a matter of fact. it is difficult when you belong to a herd, you believe too much your shepherd without due diligence. i follow bo sanchez but i also have many mentors, and sources. and in the end, i will have to execute my trades based on my own decision without blaming anybody for it.

and i decided to commit my last mistake in this blog 🌀 mistake 5: revealing your current positions. it will not help you when you expose your current stocks because, in fact, some traders can scare you out of your stock picks for you to sell low so they can buy them. another negative thing about it is when you post your projections about a certain stock, people will think that you are writing well about them because you want to lead them into buying the same stocks that you have. well, it is the price i am willing to pay because i am helping others to know my mistakes, that i hope they will not replicate in the future.

so i am getting over my past mistake (and regaining my confidence now), and at the moment, i am ready to just wait. waiting is good. classes will already start this 11th, and i am reading in advance so i can update my syllabus with newer and more relevant poems, stories and novels. i will be doing my job and will not be needing to monitor my portfolio very often because i can sleep well thinking that i have good stocks to wait on, and ready to be invested on even more every 15th and 30th of the month. :)

remember, plan your trades and trade your plan. it always works.

(i am writing this blog from my  ipad moleskin app, so i apologize for the lower case typography)

Time to Start Investing

I hope at this point you have already opened and funded your stock market account. Accord Capital is good. COL Financial is also good. But whatever is most convenient to you is okay. The more important thing here is that you do it now. Rather than regret you've started later than sooner. I encourage you to start today.

Anyhow, I've just convinced Mark to re-open his account at Accord Capital and he agreed to start with Php 5,000 again. You don't need to start big. All of us must have to start somewhere small and safe. And again, invest only the amount you're sure you won't be needing in the near future.

So there, I just purchased Mark's first stock last week. I bought 7-Eleven at P82/share.

I particularly like $SEVN because it is well-run by its CEO, Victor Paterno, and is continuously having expansions throughout the country. The price may fluctuate up and down in the next few months but it should be fine. We are doing this for the long term. Just eye on the target.

I also bought this because I do not see a catalyst that would make it reach its target price right away-- it will give us time to accumulate for a long period of time at a low price.

Since my portfolio is already fully positioned (meaning, I have already consumed all the balance it has to buy stocks), I am poised to wait for the time my target price gets met.

But, by the way, I am planning to open a new account with an initial investment of Php 5,000 so we can start the journey together. I will be buying Php 2,000 amount of shares every 15th and 30th of the month, just like what the SAM says, but with my own research fused in to it as well. You can do the same, or you can invest the amount that you have always planned to invest. Just be consistent.

I like Bo Sanchez's SAM (Strategic Averaging Method) because it tells you the buy below price of a stock and it also tells you its target price. If you are curious, it looks something like this. -------->>

The thing is, Bo's Truly Rich Club membership does not come free. One has to pay a certain premium. But the membership comes with all of Bro Bo's E-Books like My Maid Invests in the Stock Market, The Turtle Always Wins, among many other investment books written by him. And what I think he can give you that I (or any other mentor) can't is his ability to calm you when you feel like you've done the worst decision (in stocks, or in life itself). He would also email you inspirational stories and quotes to go along with your journey towards wealth creation.

I strictly suggest that as a newbie investor, you do not just buy a portion of a company without knowing its fundamentals. And, fundamentals are always better when you know the right price to enter (the buy below price). Do not deviate from the stocks listed there unless you have a very good reason (and research) to do so. I have deviated from SAM stocks many times in the past, and I regretted most of it. But, of course, now is different since I already read financial statements and public disclosures of companies every trading day. I do my homework religiously.

If I were to give 3 companies that aren't in the SAM but are great stocks to watch out are (although, this is always with CAVEAT attached to it), they would have to be:

1. Vista Land and Lifescapes, Inc. ($VLL) of Manny Villar: Property Sector. I have seen the resilience of this stock since I started in the stock market. The business of VLL is selling mid-high end residential properties. But it has lately been venturing into commercial spaces very aggressively. Aside from COL Financial and Regina Capital recommending this stock for long term, I personally believe in this company and in Villar's business capability.

2. Jollibee Food Corporation ($JFC) of Tony Tan Caktiong: Consumer Sector. I must say that this stock does not fail to amaze me. Just when I feel it's already too pricey, it does not stop getting higher and higher achieving all time highs in the past months. Jollibee, Greenwhich, Chowking, Red Ribbon and Mang Inasal are all under this listed stock, so as long as Filipinos eat in these establishments, you are assured JFC is in good condition.

3. Century Pacific Food Inc. ($CNPF) of Christopher Paulus Po: Consumer Sector. If you love Century Tuna, you would want to have this stock in your portfolio. Aside from its innovative management, it is also your best bet in the coming ASEAN Integration because of its tuna business, as most ASEAN counties are Muslim. And if you must know, CNPF is also behind leading brands such as 555, Argentina, Swift, and Birch Tree.

But I will reiterate this, I only recommend you put them on your watch list. Observe their movement both in the short term and in the long term. I am not recommending the purchase of these stocks because I do not foresee the future. There are many suggestions out there, but you will have to do the decision by yourself. Have a plan and stick to it.

Stock Market is basically a waiting game. If you get bored or spooked out, you will lose a lot. The market is an expensive place to know yourself. You should already have a plan and be ready to execute it whatever it takes. Control your fear. Wait for the target price before you sell. Diversify. And most of all, think positive.

"Sir, ang yaman niyo siguro 'no?"

Hindi ko malaman minsan kung saan nakukuha ng mga estudyante ko ang mga ganitong hinala samantalang kumpara sa mga kasama ko sa faculty, ako na ang pinaka-tamad pumorma.

Dahil sa pagtataka ko, sinubukan ko minsan ang i-Google ang pangalan ko. Nagulat ako nang makita ko sa search engine ang blog ko noong college ako, ang Facebook ko, at ang LinkedIn account ko. Ang dami pala nilang pwedeng mahalukay. Pati ang aking mga madilim na nakaraan! Hehe. Gaya nito:

Kaya ngayon, I have learned my lesson-- never write/post many things online under your real name. Hahaha. gagawa na lang ako ng troll account kapag nagka-oras. :)

Pero for the heck of it, kung binabasa man ako ngayon nung estudyanteng nagtanong kung mayaman ba ako, sasagutin ko na siya rito. Hindi po ako mayaman.

Siguro ay nababasa niya ang mga post ko sa Facebook tungkol sa earnings ko sa stock market trading. Oo, I may not look like it (and yes, I still hate math), but yes, I am investing (and sometimes, day-trading) in the stock market. And in the past nine months that I have been buying equities, I have lost as much as 109,000 pesos (during the market breakdown because of super typhoon Haiyan), but able to break even in 5 months. And now, I am proud to say that I have already gained 7,000 pesos.

Ang liit naman ng 7,000 pesos sa 9 months diba? Considering that I have invested around half a million (I used most of my saving in BDO as my main fund).

Right.

Pero imagine, when I invested in this venture, I was half-ready. I committed a lot of wrong decisions. I invested in big companies, the biggest companies out there (Manila Water, PLDT, Pepsi), but, I entered at the wrong time (I will be blogging about this thing next time). And the bad decisions I made cost me a lot. But throughout the months I have experienced losing, and winning, and losing again, I never gave up. Hinabol ko ang 109,000 thousand hangga't mabawi ko (ng may pag-iingat parin), at hanggang tuluyan na akong tumubo.

Pero hindi naging madali. It's a roller coaster ride of emotions. Plus, only when I became serious in studying company's fundamentals, charts (long term and short term) and disclosures did I start to make better decisions (more often than not), because no matter how veteran one is in stock market trading, he can never get all trades right. And on top of that, I monitored the stock market ticker from 9:30 AM to 3:30 PM while I checked papers, made quizzes and stuff, because I was also teaching at the university in the afternoon.

So, there. Iyan ang kwento ko. Sasagutin ko uli ang estudyante ko, hindi ako mayaman. Bakit pa ako nagpapagod lumagari kung mayaman na ako, diba?

I only started to save two years ago. Before that, lahat ng sini-sweldo ko, ginagastos ko sa pagbili ng cellphone, bags, sunglasses, shoes at sa pag-gala (nightlife, out-of-town trips, etc.). Pero noong umalis ako sa pagiging principal (ito ang trabaho ko bago ako napadpad sa pagtuturo sa unibersidad), nahirapan akong maghanap ng bagong trabaho dahil noon pa lang ako mapapadpad sa Baguio, narealize ko nang kailangan ko nang mag-ipon.

Kung meron pala sa inyong gustong matutunan ang pag-invest sa stock market, ang minimum lang ng pag-open ng account ay 5,000 pesos (you may choose your own broker din [accord financial, col financial, etc.]). You may ask me about this, I will be glad to help as far as I can. Good luck! And have a great weekend. :)