Are You Still Lost at the Stock Investing/Trading Craze in the Philippines? Check this Infographic

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Was searching the web for good content and it led me to this infographic by mint.com

It explains the basics of investing and even a history where did all this crazy stories I am writing about. Check it out and start learning, eventually you will surely jump in and be an investor in the Philippines by buying and selling shares in the Philippine Stock Exchange.

Pesos and Sense pilot episode: Interview with Bo Sanchez

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Finally Pesos and Sense uploaded their first episode in YouTube. Below are the videos of the first episode:



Interview of  Bo Sanchez one of the most sought after speaker and preacher in the Philippines. He has written the Simplify Series and 8 Secrets of the Truly Rich and other books that can guide you in your investing journey.

Cup and handle: Technical side

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source: http://ammegan.tblog.com

Ever heard some friends who say they are seeing a cup and handle formation?

Weird huh? But what is that cup and handle they talk about?

I am not a full Technical guy but let me enlighten you about this wonder most Technicians and Chartist call CUP AND HANDLE formation. Below is a graph of FPH(First Philippine Holdings)

Here is what our friendly Investopedia.com say  about CUP AND HANDLE:

A cup-and-handle pattern resembles the shape of a tea cup on a chart. This is a bullish continuation pattern where the upward trend has paused, and traded down, but will continue in an upward direction upon the completion of the pattern. This pattern can range from several months to a year, but its general form remains the same. 

Note that a cup and handle pattern is a pattern in which the stock is generally on the uptrend and due to correction or consolidation it dipped down forming a cup. Though there is a deep correction investors who believe in the stock hold onto it thus after the dip it rises back to form the cup part of the pattern.

In our example FPH enjoyed a brief comeback from the cup and handle formation due to the correction that the market is in right now. But if you noticed it there was a small downtrend after the cup formation thus completing the cup and handle.

But lots of chartist have various interpretations and view on a cup and handle formation. Also such formation may take a short period or a long period lasting to months and even years.

Not all cup and handle pattern go to the expected reversals thus I warn anyone who reads the chart to do check it and do some calculations. As always check volume if it confirms it. When a formation is forseen and the volume picks up there is a great likelihood that such pattern will lead to reversal.

Investing word of the day: Stock Market Index

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source: www.pse.com.ph

Many of you may have read in the business section of newspapers or maybe in the business news like CNBC, Bloomberg, Reuters  and others about stock market  index. In the Philippines the main index is the PSEi, so what does stock market index or "index" mean in the stock market?

I searched the PSE website and I got this: a medium used to denote trends in securities market. 

Unsatisfied with that, because it seems to deep and hard to understand, I relied to our friendly Wikipedia.com which gives this definition: A stock market index is a method of measuring a section of the stock market.

And then I stumbled into a great definition from www.abcsofinvesting.net which says:

An stock market index (or just “index) is a number that measures the relative value of a group of stocks. As the stocks in this group change value, the index also changes value. If an index goes up by 1% then that means the total value of the securities which make up the index have gone up by 1% in value.

Also got this video from Youtube.com
 

In layman's term: An index is a grouping of stocks that reflects a section or a part of the entire market. It is a measure the general investing public refer to as an indicator of the economy or the trend in stock market.

If you are trading stocks online or doing some stock index trading it would be great to have some form or tool that you use as your guide. As I have mentioned in my previous post, the general investing world has looked at the Dow as an indicator. In the Philippines we usually follow the Dow's movement. The PSEi mostly follows the Dow. So I assume that the investing public here in the Philippines use the Dow as their guide in investing. The PSEi has also been used by investors as an indicator on how healthy our economy is. Recently the PSEi has gone a rollercoaster ride and now as of this writing it is on its upward trend again.

Updating yourself about the PSE listed companies you are interested in

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One way to keep yourself updated regarding the companies you are interested in is through off course reading the PSE website daily and watching TV programs like CNBC, Bloomberg, and CNN among others.

But if you don't have the time to catch up with these TV shows or if your only time you get to read is through your email then Google Alerts would be a great tool for you to use. All you need is a Google account which is basically free. If you don't have one create a Gmail account and you automatically have a Google account. 

Go to http://www.google.com/alerts and log in using your Gmail account info.

In the Search field type in the name of the listed company you want to be keep updated. Select the source of the information in the Type field. You can customized how often the alerts would be like daily, as it happens, or weekly. You can also specify the maximum results you wanted to appear in your email  and last but not the least the email address you want this to be sent to which off course your Gmail address.

You can create a folder in your email to segregate this updates for quick view just like what I did to my Outlook.

 

Google alerts are formatted like feeds thus you can see a short info about the news report or blog and you just chose that interest you. To have a broader perspective I have included in my alerts "Philippine Stock Exchange" to get news regarding the stock exchange itself. Also I have added alerts on the stocks that I have in my portfolio to give me a heads up about any significant information that may cause a rise or drop in their trading price.

PSE website: Company Stock Information part 2

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Lets check again the Philippine Stock Exchange's website this time at the Stock information. Will use Jollibee Food Corp(JFC) as an example(again I am not endorsing Jollibee)

See those arrows? Remember my post regarding PAR VALUE, BOOK VALUE, and MARKET VALUE if not click here to read my post. In addition to that are other values per share that an investor would like to know. We call these two 52 week High and 52 week low.

These two values represent the market price range of a certain stock for a given period which is a one year. If you look at it they are far apart that is the highest is Php 63.00 and Php 45.50. From this you have an idea regarding this particular stock's trending pattern. 

It means when the market is high and the stock is active the highest or the ceiling price that one can expect is at Php 63.00. On the other hand the lowest point is at Php 45.50 when the market is down.

Now again you might ask me, "Louis why is this important?" Say example you just joined the investing bandwagon and you wanted to check out stocks; of course you wanna buy stocks at a lower price right? So check out the best companies around that is companies in good financial standing and good performance which could be done by looking at the companies Balance Sheet and Profit and Loss reports. From the list you made you will now check their current prices and match it with the two figures. You buy a stock when it is near its 52 week low. This stocks are undervalued because as you have reviewed their financial statement you will know that these are performing well but the market has valued it lower thus the term undervalued.

The 52 week high gives you an idea until were this stock can go. Always remember the principle "buy low sell high." You are not in your right mind if you buy a stock at its highest price then sell it at its lowest price, that is insane. Remember this figures and add it to your guides in choosing the stock to invest into. 

And always remember, don't be ashamed to ask. You are the investor thus the brokers should pay well attention to you. And remember that information gives you an edge in investing.