Stock Market Terms for Filipinos

Streetsmarts - Yung klase ng talino na magagamit mo para mabuhay sa kalye pag nalugi na lahat ng pera mo sa PSE.

McArthur Stock - Mga stock na bumabagsak bago tumatalbog sa mas mataas na presyo. "I shall return"

Sharon Stock - Mga stock na sobrang bigat hindi na makagalaw sa charts.

Delata - Stock na kahit ibaon mo ng 3 taon e hindi nagbabago ang estado.

Bull Market - cycle ng stock market kung saan lahat ng hulanalysis e tama.

Bear Market - cycle ng stock market kung saan lahat ng hulanalysis e tama daw.

Annual Stock Holder meeting - Libreng doughnuts at aircon in exchange for depreciating investments.

Long term investment - Term na ginagamit ng mga tsupitero pag sobrang baba na ng value ng stocks nila, pwede nang ipaconvert sa certificates at ipamunas ng pwet para lang magkaron ng silbi.

Regarding NiHao (NI)'s rescheduled SRO

This is related to my previous posts regarding trading with NiHao(NI). Reposted from my favorite message board.

Maybe JAP and his gang had this planned out from the start. Everybody knows the moment Dec 11 neared, the stock will drop. Looking at the drop the past week or so, they could have sh**ted along the way to a very huge profit. And then they execute an extension at the last possible minute, disrupting the timing of everybody.

Eto lang po idea ko.

Now we're thinking, maybe they are going to push the price up again? One week is more than enough to squeeze in yet another rise/fall cycle. People will look into buying becuase of this thought. And the jockeys aren't stupid. They will expect this mentality and work their magic trying to reinforce that idea by jockeying the price and let the buyers play last touch until sometime next week. They have the funds after all, from the sh*rts they could have done.

If the jockeys play their cards right, the stock price will rise at a rate higher than ever, and there's no way in hell even a pricedrop halfway through the week can bring it back to the level it's touched today. Because if we learned something about NI, its price doesn't avalanche down, so by the time the SRO shares get released, the amount will be bigger.

Guess what's happening after the SRO listing date? LIHC ASM. They'll announce the par change, the SRO and let the sellers jump ship to yet another M7 stock.

Talk about keeping money within the community eh?

Of course, you'd ask, this is a zero sum game right? Unless new investors start flocking, it's probably true. Then how come everybody seems to be winning? The people who got stuck at the top, those to cut loss. That's where the profit is coming from. The philosopher's stone is made with the blood of victims.

Now all of this is just a theory. I cannot say I'm exceptionally good in TA or FA. Best indicator I can think of is is if the price of NI starts rising on Friday and continues on Monday. In that case, the real game begins.

Again, just a wild theory.

Stock Talks NI SRO Notes (Part 2)

To those following Nihao Mineral Resources (NI), after I posted my last entry about the stock, the price of the stock came crashing down like a badly made house of cards down from 14.25 to a measly 11 pesos just before the EX date.

HOLY SHIT THAT WAS SCARY.

Computing the paperlosses if you bailed out at the last minute, it would have been very bloody.



That's a whopping 20% cutloss.

I'd admit I cut losses as well at some point during the drop. The fear kinda just got to me. But that's just how trading goes. Anyway, the SRO came and went and yesterday, the intial price settled at, guess what, 3.25.

Break even for the guys who bought at 14.25.

But that's not really how it ends.

As of the end of today, the price of the stock has risen to 4.8 and it still looks poised to trend up further in the medium term.

What does that mean?

That means 4.8/3.25 = 50% paper gain on your investment, or following our example, 70,000 pesos for December on top of the initial 140,000 investment. Fuck time deposit. This is like Back-To-The-Future-Time Deposit.

Of course, paper gain is paper gain, and from what I've seen, prices on the release date come december will probably send prices dropping again, regardless of market status, but with the jockeys around, chances are they wont really let it end at 5 pesos per share.

Now the only factor we have left for this equation is, "What will happen to the market in 2 months time?"

Stock Talks: NI SRO Notes

Yesterday, I talked things over with Anna and decided to go along with the 1:5 SRO of NiHao Mining Resources (NI) this coming Monday. Here's a short computation for my stake, not including the charges which is about 0.5% per transaction:

Original purchase: 10,000 shares at 14.25 = 142,500 pesos

Price per SRO stock: 1 peso

SRO Purchase: 50,000 shares at 1 = 50,000

Total investments: 192,500 pesos

Total shares: 60,000

Adjusted break-even price: 3.20 pesos

Theoretical Adjusted target price: 5 pesos

Projected value @ target price: 300,000 pesos

Net earnings: 107,500 pesos

Money Shot:
Now the question is whether or not the price of NI will go up higher than this price by the time the lockdown period until December expires. For sure, the price will avalanche the moment people start selling off their stocks, IF they still would want by that time. Risky if you think about it, because there's also the gamble on assuming that the market will still be healthy by the end of this year (which can't be guaranteed). The only safeguards I can think of is that NI is a strongly jockeyed stock and that the outlook for the end of this year is better than last year.

Ah well. Risks risks.

Stock Disclosure

BRN - long term "sit my ass on this stock for a while" investment.
MEG - "waiting for announcement of the bidding results and then some" ipit stock
FLI - I am not sure why I keep on buying this stock and selling it at a loss.

Let's just wait for tomorrow and next week.

Spice and Wolf Economics Explanation

Okay, normally I don't really take too much time writing about the anime I watch because one, it highlights how much of a nerd I am and two, anime is supposed to be readily digestible cartoons made for hyperactive children and needs no further elaboration.

Spice and Wolf has continually proven itself as an exception. Set somewhere in a medieval world, the story follows the exploits of a merchant named Craft Lawrence as he moves from city to city to earn money through trade. Joining him is a wolf goddess who wants to go back to her home town in the far north, livening up Lawrence's life along the way.

While the premise is simple enough, the concepts of the anime uses to keep things keep on surprising me, as complex ideas like short selling, marginal profitting, and psychological price resistances are routinely presented to what I can only imagine as a core audience of 14-18 (the likely age where nearnaked cartoon characters should sell the most)

(spoilers and actual explanation begin after jump)

After looking around the internet for some existing explanation for the last few episodes (Season 2, ep 1-6), I couldn't find any. Granted I've been studying the very same things in a more localized scenario lately, I've decided to write down and share what I've been able to make of the show.

The climax of the arc is about Lawrence selling off his partnership with Horo (the wolf girl) to that other merchant Amati (guy with crush on Horo). Amati strangely reminds me of Quatre Winner of the Gundam Wing franchise, actually.

Anyway, all the while a festival is going on in town. In the middle of it, a strange commodity called Pyrite is accumulating demand for the hype brought by a travelling fortuneteller. Hype usually increases the price of a commodity more than its actual production value, the same way trendfags pay wads of cash for iPods that pretty much do whatever other cheaper products do.

Amati, being the trader that he is, planned to gain the amount he needs to pawn off Horo by accumulating a large amount of pyrite early on and waiting for the demand to push the price higher up to a target price that will enable him to sell his stash at a value equal or greater than 1000.

The price Amati is waiting for is called the Target Price or Target Exit Price, and this sort of baseline can be seen even in our modern commodity/stock markets. The behavior exhibited by Amati is called the Target Price Oriented Action Strategy (PAOS)

The town's market in Spice and Wolf has its own primitive commodities/stock market control, similar to our country's Philippine Stock Exchange. The primitive board is actually a display board of the number of people willing to buy/sell a commodity at a certain price.

In case you're wondering what the big board does, here's a breakdown:

One row on the board represents one commodity whose symbol is indicated in the middle. The roman numerals basically display the current price of a commodity if you sell it (highest buying price) on the left and the current price of a commodity if you buy it (lowest selling price) on the right. The wooden bars show the current stocks of merchants willing to sell/buy at that certain price.


Not too different from what we have.


If the stock gets exhausted from buying and nobody is willing to sell at that price anymore, the price goes up to a price where people are willing to sell again. If the buyers are all given what they want and nobody wants to buy anymore, the price lowers until people want to buy again.

For the case of Pyrite, the demand is so high, nobody who holds pyrite wants to let go of their stash. The stock exhaustion kept on happening and the price of pyrite skyrockets. Meanwhile, Amati, having lots of stash at hand, is a happy sunnovabitch.

Craft Lawrence, realizing he's going to get screwed if the trend continues, then devices a plan to "jockey" the pyrite price. To jockey a stock means to artificially introduce stimuli into a market to influence the people, and consequently the price, to behave in a certain way. This concept is widely used even in our existing markets, specially in smaller commodities/company stocks.

His plan is to incite panic to the Pyrite market by making it look like the price is going to crash. While it looks devious, it's perfectly legal in most situations, as long as nobody loses an eye, dies, or gets pregnant.

See, the Pyrite market is already at an "overbought" condition, which is basically what happens when the demand is so high that the price is driven up waaaay beyond the actual price (pryite is just a rock but is currently being sold as a talisman, so we can just imagine how much overpriced this is). When a commodity is already overbought, current holders of the item tend to get antsy to let go of their stashes, because they start to think the price may no longer go any higher (and what doesn't come up will most certainly go down)

The jockeying idea of Craft is to become the first few people to start cashing in at the highest price. When somebody sells, the other merchants may take it as a cue that the price is no longer going up and the second market condition (no more buyers) will drive the price down. Volume helps support this idea, which is why Craft needs a lot of pyrite from Deanna - to make his action more psychologically significant.

Another idea he had as a supplement is to let a kid say something about now being the right time to buy wheat, while in a public area. The logic behind this is that the antsy merchants who are already earning good profits may suddenly think that the underpriced commodity of wheat to be the next place where profit can be made. This commodity exodus can also drive a selling spree which will drive the prices of pyrite down due to overstock.

In the end, Horo helped Lawrence out by dumping her share at the same moment as Lawrence, triggering the price crash that he actually needed.

As for the deal that Lawrence did with Amati where he bought some pyrite on credit, this is what the modern stock world calls Short Selling, which is basically selling somebody a computer you don't have and promise to deliver it after 3 days, and then buying at the last day when a stock is already at a lower price. In effect, you bought stocks today cheaply and sold it yesterday at a higher price, which is kinda like timetravel trading.

For Lawrence's case, he sold pyrite to Amati 2 days before he crashed the market, and then bought pyrite after he crashed the market and gave Amati the stash, telling everybody how to earn even from a market that's already tumbling down. This activity is not contributary to the main story, but it's the author's way of saying LOL I LOVE TRADING

Short selling drives the market even lower, but helps maintain a healthy price movement range. It's illegal in some countries including here in the Philippines.

Alright. That's basically it.

Questions?

Stock Trade Experiment #1: MEG (UPDATE)

Just an update to those who still remember this one.

Bought 20k stocks of MEG at 0.67 apiece last May 5
Sold 20k stocks of Meg today at 0.78 apiece.

(update: lol it's at 0.82 now, I stand corrected. Note to self: When the resistance line is at .85, the resistance is 0.85 damn it)

Computation is as follows:




Net profit over a two week timespan is 2,036.45

Driving factors of the price increase are
1. Inherent undervalue of the stock.
2. Sister stock FLI's increase in capital expenditure
3. Stock Market Rally in the dow last night

Expected decrease in price after 1-2 trading days.

Recommend buying price after drop is at least 0.72

Stock Market 101 (part 2)

I'm writing this with the assumption that you've read part 1. This is the second installment of my "get to know the stock market while treating it as a joke" series. And no, I did not sell my soul to satan to enter the stock market.

Okay, so you have a broker and you already have money at hand. You're ready to trade, playah.

Let's take a closer look at a typical stock index query website such as Technistock.net (I'm using this site since it's more likely to not crash during trading hours compared to the PSE website, which offers more comprehensive information on stocks.)

Starting with the Stock Quotes section, you'll see that every company has a 3-4 letter stock code. They're used to identify companies with inconveniently long names, kinda like nicknames kids gave you when you were younger, "spud". To get the stock code of a company, you can either visit the pse website or use the symbol guide link on this page.

At the bottom part, you see the following elements:

PREV. It's the price of the stock from the previous trading day. Trading days are usually mondays to fridays 9:30 -12:15 except public holidays and special emergencies.

OPEN The price of the first trade made during the day.

HIGH Highest price used in a trade made during the day.

LOW Lowest price used in a trade made during the day.

LAST Price of the most recent trade during the loading of your screen.

RANGE The fluctuation of the price from it's high point to its low point.

DIFF Difference of the price of the last sale compared to the price yesterday

%CHG The difference in percentages of the last sale compared to yesterday. A positive value means the stock is gaining value and a negative one means the stock price slid down from yesterday.

TVOL Total number of stock that changed hand during the day. A low amount means the stock is not very active and not many investors are interested in playing with this stock. Active stocks means prices may fluctuate faster (higher highs and lower lows, depending on the situation) than usual.

TAMT Total amount involved in the changing of hands. This is a good index for comparing the activeness of a stock with respect to other stocks, since some stocks differ in price per stock by as much as 1000%. (see megaworld, meralco)

Next we have the items on the top part of the Quote tab, which is the ASK PRICE and ASK VOL as well as the BID VOL and BID PRICE.

The ASK PRICE here is the highest possible asking price that buyers would like to buy their stocks. ASK VOL is the total number of stocks that investors want to buy at that price. If you have a stock that you want to sell at the moment, ASK PRICE is the highest amount that you can possibly get for your stocks. If the ASK VOL drops to zero, that means nobody wants to buy in that range anymore and you will have to look for

Stock Trade Experiment #1: MEG

Bought 20,000 stocks of Megaworld (MEG) today at 0.67 for a short-medium stay.

Let's see how this one goes.

Stock Market 101 (part 1)

This post goes out to all the guys who keep on asking me about trading stocks here in the Philippines. I won't claim to be an authority, and I'm relatively new to this whole stocks thing, but I can give you some of the things that I learned in my experiences of playing with stocks. I'm not very learned in the terms too, but I'll try to make things as clear as possible. Feel free to correct me if you know better.

What is Stock Trading?
Basically, stock trading is just buying company ownership in piecemeal manner. Partial company ownership is represented in stocks. The more stocks you have, the bigger part you own in the company. As a company owner, you are entitled to attend stockholder meetings where you elect officers that run the company, cast votes on company decisions, and partake in free doughnuts and coffee while pretending your small share actually matters.

Earnings of the company are also given to you depending on the percentage of your ownership. (more on this later). Values of stocks increase or decrease depending on the value people think of the company and the actual "fundamental" value of the company.

Why Stocks Trading?
The stock trading is one of the highest yielding investments out there, just below selling drugs and kidnap for ransom. I'd like to point out that among these three, only stock trading will not put you in a wanted dead or alive poster, or in presidential races - both of which are unfavorable to your reputation.

Trading Stocks is a good way to make your existing money grow. Compared to other legal methods, mutual funds earn about 20% per year on a good year, government bonds get about 7%-15% per year, and time deposits give about less than 5% per year. In stocks, you can get that 20% in a matter of days.

Other legal alternatives that can par up to this kind of earning is Forex trading, which is somewhat like a more brutal form of Stocks trading. There are of course commodities trading, futures trading and many others, but we won't cover those. I'm just saying if stocks isn't your thing, there are other things you can trade.

One good thing about it is even Muslims can do it without breaking the Islamic laws, since it does not work on the prohibited concept of interests earned from debt. Although there are a few regulations. (no joke)

There are, of course risks involved and I'm not fucking around when I say risks. The reason why time deposits, bonds and bills, have low interest rates is partially because these are very secure investments. You can sleep at night knowing that unless your bank or the Philippine government gets annihilated overnight, your money will still be around when you wake up.

Stock market on the other hand, is often compared to gambling. The value of your investments have no certainty, even for stocks of big corporations (referred to as Blue Chips). If a company closes, your money is gone. If tomorrow, the company is found out to be satan spawn, and the investors lose confidence on the company, your stocks values may turn from gold to goop overnight.

Of course unlike gambling, you can try to predict how a company will perform and you can try to catch trends by reading the news or analyzing the price graphs. If you do those things, that lessens risks and makes stock trading more of an intelligent guessing game. You can make the odds favor your side, but of course odds are still odds and there's no real certainty (and you can still end up homeless)

Big yields, big risks. That's the name of the game.

So how exactly do you earn money?
You earn money in two primary ways - buy and sell, and dividends.

First, after buying a stock of a company at a certain price, it's possible that the company will become more valuable or at least sound more valuable. Because of that, the price of ownership of the company may rise as well. If you sell your stocks after the price of each stock rises, you earn money. For example, if I bought 10,000 shares of Megaworld (MEG) a few weeks back at 0.54 pesos a piece at a total cost of 5,400 pesos and then one week later the share price rose to 0.61 pesos, my 10,000 shares now has a value of 6,100 and I'd have earned 700 pesos (enough to pay for cable)

Second, as I mentioned earlier, companies share profits with their stockholders on a periodic basis. These are called dividends. Dividends be either stock dividends or cash dividends.

Stock dividends are earnings in the form of additional stocks. For example, a few years back, Meralco declared a 10% stock dividend. That means for every 10 stocks you have of Meralco, you get an additional 1 stock. If you bought 100 shares of Meralco at 100 pesos each, that means you end up with 10 new shares worth 100 pesos each (a 10% profit) (enough to pay for premium porn channels). It should be noted, however, that stock dividends often alter the value of a company, causing the worth to plummet just after the dividends are released so you have to wait for prices to restabilize before you can cash out.

Cash dividends are a more direct approach, which give you cash directly for every share you own. If Meralco announces a 5 peso cash dividend, that means for every stock you have, you get 5 pesos. So as with the previous example, if you have 100 shares, you get 500 pesos (yay).

There are other ways to make money, such as short selling, but we can cover those in some other post.


So how exactly do you get into the game?
To buy, sell, and trade stocks, you have to have a stock broker, or a brokerage firm. They act as the middlemen for any trades. In movies, theyre the ones running around the stock trading floor with paper and phones on their hands shouting jibberish. They should not be confused with elves.

There are two types of brokerages in terms of investor-broker communication: Online and offline.

Traditional brokerages let you trade stocks by calling your broker or faxing him during trading hours. Brokers are people who do your trading for you. One good thing you can get from this sort of arrangement is that you can get the advice of your broker which you may or may not follow. (Warning: Some brokers are natural assholes who are just out for comissions and will force you to trade as much, even though it's not to your advantage)

Online brokerages can let you manage your own stocks online, where you can place orders for buys and sells. These online firms are now more favored since they give you direct control of your own stocks, minimizing the time wasted between you thinking of selling/buying and actually issuing the order to do so.

Stock brokers require you to go to their office to sign up and give a minimum investment amount. Trading firms like Ackerman require high minimum initial investment amounts while citiseconline requires 25k. Still others require only 5k minimum, which is good for starters.

Any sort of trade, be it buying or selling is charged a certain amount of commission, which is lessened to the amount you should be getting or added to the amount you will be paying. Rates vary from 0.2-1%.

http://redkinoko.blogspot.com/2009/04/stock-market-101-part-2.html