Quotes Part III

Stop making excuses & start making progress. What you imagine, you can begin. Want you begin, you can finish


Worrying that there's not enough time leaves you with even less time.
The only difference between a Good Day And a Bad Day Is your Attitude ~Dennis S Brown


Try not to become a man of success, but rather try to become a man of value." - Albert Einstein


Try not to wait for others to motivate you....be the motivation


A man is what he thinks about all day long." - Ralph Waldo Emerson


The only limits are the ones you place on yourself


Nothing can sabotage winning, except for fear of losing. Success usually lies just beyond failure." Cortes 


You never achieve success unless you like what you are doing. ~ Dale Carnegie

Life is what we make it, always has been, always will be.Life is what we make it, always has been, always will be.Life is what we make it, always has been, always will be.

Quotes Part II

• Be proactive. Do what must be done long before it must be done & have much more time to do what you love to do

• To be a great champion you must believe you are the best. If you're not, pretend you are. -Muhammad Ali
  

• If it's important to you, you will find a way. If it's not important to you, you will find an excuse
  

• Vision really boils down to learning, and learning really boils down to passion
  

• What you do speaks so loud, I cannot hear what you say - Ralph Emerson
  

• WHAT WINNERS KNOW: Many people just do the minimum. Every extra step you take puts you that far ahead of the crowd
  

• There are those who talk endlessly about what they're going to do. Then there are those who get busy and do it
  

• Habit is a cable; we weave a thread of it each day, and at last we cannot break it
  

• You have to expect things of yourself before you can do them — Michael Jordan
  

• Success lives in the effort, in the experience, in the learning, in the growing, not in the rewards
  

Quotes Part I

The best motivation is to constantly keep yourself in contact with your reasons

Be brave and steadfast; have no fear or dread of them, for it is the LORD, your God, who marches with you; He will never never fail you or forsake you Dt 31:1-8

We need to stop listening to our excuses and realize that the only thing stopping us is us

Whatever happens, take responsibility. ~ Tony Robbins

Remind yourself again & again of why you must. Hold your head high & keep your eyes on the goal

Motivation is what gets you started. Habit is what keeps you going.~ Jim Ryun

Improvement begins with I —Arnold Glasow 

Diligently and effectively put forth your best effort, without concern for the result. It will be worth your while

Once you know what's causing the result you don't want, you'll have a strategy for creating what you do want

The secret of getting ahead is getting started." ~ Sally Berger

Review of Banking Firms

Industry:Banking and Financial

Stock Pick: China Bank Corporation

This is the second part of my take in applying my skill of reading numbers and ratios to my stock trading. 

If you haven't read the first part, read it here. You need to read the first part for quick explanation for the basis of the analysis.

Using the same process, the stock pick is CHIB or China Bank Corporation. The stock has figures above industry averages. 

Again, without following the point system, i'll go for SECB for posting 47% net profit margin coupled with 20.93% sales growth. 

The only thing that worries me is the negative cash flow from operations.

I don't own any stocks from the banking sector. I use to hold MBT but i have sold it and took profits. I bought it when it was still trading at 67 and took profits after reaching P76.

Right now, i don't have excess funds to invest but if I have additional cash, I'll probably put it in SECB then CHIB.

Review of Property Firms

Industry: Property

Stock Pick: Robinson Land Corporation

I have never really tried applying my knowledge about financial ratios or accounting skills in trading stocks. In the past, i relied on news, stock tips on forums and gut feel. So this is the first time I am doing this and by tomorrow, I'll post my first buy order for RLC. Just want to write it down here so I'll remember and determine after six months, if making an analysis is worth it.

First, let me explain the table above and each of the column,

STOCK - This column pertain to the ticker symbol of each of the public corporation engaged in the property business listed in Philippine Stock Exchange.

Price - This column is the closing price of the stock as of August 1, 2011.

COL Rating - This column pertain to my stock broker recommendation for the stock as of August 1, 2011.

Target Price - This column is the target price for the stock. The stock may or may not reach this price.

Upside - This is the potential return of the stock. The difference between the target price and stock price over the closing price. 

Sales Growth - This column pertain to sales growth forecast for 2011. This is important because we want to get in the company that is getting the big chunk of the industry's revenues. Sales is the starting figure and it is important that a company continue to increase its sales. 

Net Profit Growth - The company not only need to earn revenues but must also exhibit improving margins. It is not favorable to us investors if the company is increasing its sales and with it goes the expenses. A good company should be able to control costs.

Net Profit Margin - This ratio shows what percentage of sales is eventually reported as a profit after deducting the company's expenses. The industry's average is 29%. This means that for every peso of sales, the company has to spend 71% for expenses. We want to choose higher profit margin as much as possible. 

Cash Flow Operating - This shows how much cash the operations of the company generates. It is important to look into this number to gauge the liquidity of the company. This is not a hard and fast rule but negative cash flows from operations means that the company might need to obtain cash from creditors or investors to continue its operation. The number above will differ due to the size of the company's operation. For the meantime, just assume that any positive number is good. 

P/E Ratio - Price Earnings ratio means how much an investor is paying for the earnings of a stock. This number shows us how expensive a stock is relative to its competitors. 

Dividend Yield - I would not explain this much but this ratio just shows how much is the yield of a company's dividend relative to its current price. The higher the number, the better.

Now, assuming we consider all the criteria as equal and we give 1 point each time a company statistic is well above the industry's average. We'll get the following points

Based on the analysis, we want to get RLC for exhibiting above average numbers among the industry.

Of course, you can also decide on a single factor alone. Using the potential rewards, SMPH will be the stock choice given its 29% potential upside.

Using P/E ratio, we'll see that VLL is the cheapest among the industry players. 

Using Profit Margin, FLI ranks highest with its 40% margin.

I'm actually half-decided. Without assigning points, I'll go for FLI or MEG. FLI because it is cheap, has the fastest sales growth and high profit margin. 

MEG because it is the cheapest and has 25% upside potential. 

Right now, i own VLL, MEG and ALI. I don't own FLI and RLC and based on the ranking above, i should get these two. I only have P14k free cash in my bpi account. Let's see. I'll try to buy RLC and FLI.

Update: Bought 700 RLC and 6,000 of FLI today, August 3, 2011. Let's see what happens after six months. 

Update on My Mutual Fund

I've been busy thus was not able to post new articles to this blog.

If you happen to read this, then thank you. Most of the time i wonder and I ask myself "Is anyone out there reading my blog beside me, my wife and my brothers)". Truth be told, this blog is aimed at employees like me. Someone who aims to save, earn more and learn. Plus, my entries serves as a reminder to myself.

Like a written contract, this blog serves as a reminder to my forgetful mind; about what i said i'll do, what i have been doing and what i will do next to make sure i reach what i have intended to do.

Without a topic in my mind, i decided to give you an update on my mutual fund.

If you remember, I started putting in a regular amount in a mutual fund. To recap for those who haven't read my previous posts, investing in mutual fund is similar to buying a public company's stock. You  own a certain number of shares based on the amount of your investment. Share price fluctuates depending on the performance of the fund. Performance of the funds depends on the performance of the companies that comprises on the fund. It is becoming an co owner of publicly traded companies indirectly by owning shares of mutual funds. 

I decided to invest following the belief that stock prices increase through time supported by a good company performance. I also invest in the stock market but i don't really have the time and expertise of mutual fund managers so i have decided to try mutual fund.

The table above shows that I've put in P5,000 every month to purchase shares of mutual fund. You'll notice that my P5,000 purchased fluctuating number of shares. That's because share price of mutual fund fluctuates. My P5,000 bought more shares when prices are down and less shares when prices are up. It is worth noting that from Jan - June, the general price trend is upward.  As of this post, the share price (called Net Asset Value per share or NAVPS) is P2.8319 per share. Assuming that today I no longer want to invest, the company who manages the mutual fund will pay me P2.8319 per share (excluding charges). Overall, my money earned 8.5%. Not much but definitely way above what bank deposits offer.

What's Next

I plan to continue putting in P5,000 plus I really need to find another source of income to increase that my monthly investment. If you look at it, my total investment is just enough to buy me an ipad. Not much and definitely low to sustain a living. But it is a start. If you are interested to learn and invest too, comment on this post or follow me on twitter (@accabiao). I don't earn from sharing what I know but more than willing to help.

From Evernote:

Personal Financial Planning

I was fortunate to attend Coffee Talk yesterday at Social Hall B of One Serendra. The COFFEE TALK is one of BPI's Preferred Banking Enrichment Series wherein financial management professionals from BPI Asset Management Group shares and enriches its clients understanding of the latest economic and business trends.  As expected, the coffee talk also included presentation of different investment options that caters to various individuals depending on each investment horizon and risk appetite.

Personal Financial Planning

The talk presented a simple definition of personal financial planning through four simple steps

1. Determining what you have
2. Knowing what you want
3. Finding out how much you need
4. Making a plan to achieve what you want

The four simple steps are very clear. The statements are also simple that everyone can understand and relate to.

Determining What You Have

This process involves making a personal listing of income and expenses and assets and liabilities. A simple inventory taking of sources of income and list of expenses. The difference between income and spending is the money available for investment. For an employee, income is the bi-monthly salary and expenses are money spent for food, rent, telephone bills and other expense. The excess of income against expenses is the money left that can go to savings or investment.

Listing of assets and liabilities can be accomplished by writing down your current cash, savings in the bank and other investments as part of assets. Liabilities on the other hand pertain to credit card dues, money you borrowed from your friend and other payables. Cars and Homes are assets too but they may also be liability. For simplicity, i don't list down cars and homes as assets since they don't generate cash fast. 

After doing the exercise, this should give you your financial standing. 

Knowing What You Want

This step is knowing what you want to do with your life and future activities. Taking a long vacation in Europe can be one. Enrolling your children to a well known and reputable university is also a goal. For me, buying my own house and lot. There are many goals to choose from but may I suggest to limit it to five goals and write the down.

Finding out How Much You Need

The third step is putting value in your goals. How much money will you need for that vacation, for the tuition fees and that house and lot. 

Making a Plan (& executing it) to Achieve What You Want

Knowing what you want, then how much you'll need plus your current financial status will tell you where you stand at this point. Your savings/investments might not be enough thus you have to make a plan how to get that money you need by the time you want to have your goal.

Summary

Financial Planning seems easy but it is tough. Tough but doable. 

For starters, i suggest tackling that income and expenses list then your assets and liabilities statement. You have to know first your standing before moving forward.