A friend of mine asked me a few days ago if it was time to buy the dollar.
At first, I was hesitant to answer. How do you give financial advice to a friend without sounding like a know-it-all?
I just gave a straight and honest question -
Why are you buying the dollar?
No words were uttered.
I broke the silence by asking the person a few more hard-nosed questions -
Are you using the dollar for something? e.g. going abroad, paying for something, among others.
Then I further told the person that if there is no need to use the dollar, why bother buying the dollar? I said that there are a lot of peso investments out there like mutual funds and unit investment trust funds, the stock market, bonds, etc.
Then I was greeted by the million dollar (or peso) cliche -
The person had a friend who bought dollars before, and then kept it for a long time, and "is doing well now."
For a moment there I felt like the words were taken from my mouth.
Flashback to a few nights ago, I was watching the Suzie Orman show. There was a caller who was asking if she should take the advice of her good neighbor who happens to also be a financial advisor. The neighbor was suggesting that she take some big investments in a fund (or some such).
Suzie Orman then probed further, how many years has her neighbor been a financial advisor? The caller said that it's been about 2 years. Obviously Suzie was not in favor. In fact, she went into hysterics.
The friend asking me was experiencing the same dilemma.
Just because a friend has the best intentions mean that they are giving you the best recommendations.
To be continued...
Showing posts with label Guerilla Investing - Financial Gurus and Business Titans. Show all posts
Showing posts with label Guerilla Investing - Financial Gurus and Business Titans. Show all posts
Monday, November 23, 2009
Wednesday, January 21, 2009
Guerilla Investing is Back
... After securing an internet connection one month after the last post.
I am using Sun Cellular's mobile broadband and I tell you, the monthly rate is quite a steal. So far, in my two weeks of using the service, it has been quite consistent. (Unlike their mobile phone service). If you already have an existing Sun Cellular line, you can avail of the service for just Ph 799 a month.
Before I go back to my usual guerilla posts, I'd like to blab about personal observations heh. O.o
These aren't trivial posts though, my ever observant and critical mind could not stop wandering and wondering about the real state of the economy. I used to say that the Philippine economy is a student economy. I forgot to mention that the country is also driven by the mall culture economy.
Last month I went to Robinsons Place Ermita and SM Manila due to the proximity from where I am based. Both were open until midnight on the occasions I went there. It was a pitiful sight. There were only scant shoppers and every shop had the "S" word. I wondered if it was because everyone was at the Mall of Asia or that the economy was that bad.
In any case, I am of the opinion that the mall business has reached saturation point. Apart from that, the growth rate of personal wages will fall behind the rate of expansion of malls. Malls are just snatching away customers from each other. The industry is much like the cellular network industry. While there may still be growth, each provider is just eating away at the share of the next competitor.
More than just wooing customers from the next competitor, each company is also at risk of cannibalizing its own market. Smart has Talk and Text. Globe has Touch Mobile. Their prepaid promotions (text all you can, etc) is used to flank Sun Cellular. Now, Red Mobile is attempting to eat a pie that's already saturated. When one company reports growth while another report losses, you know that the industry has reached saturation point.
Is the Philippines just one big saturated market?
Have you seen the distance between Banco De Oro branches? You should visit Binondo. Along Soler street, you will see not one, not two, but three Banco de Oro branches along the same street! This isn't the best example as some were recently converted Equitable Bank branches. Nonetheless, it makes you wonder if there is any room left for new players in local industries.
Going back to the malls, I wouldn't be surprised if malls compete with each other and decide to have parking rate promos or, better yet, waive parking fees on selected hours just to entice customers to visit their malls. SM alone already has 32 malls if I'm not mistaken. And like the relationship of Jollibee and McDonalds, a Robinsons mall is never far away from SM.
*****
Thank you for patiently waiting for a new post. When you come back here, you'll get more guerilla investing tips. Ciao!
I am using Sun Cellular's mobile broadband and I tell you, the monthly rate is quite a steal. So far, in my two weeks of using the service, it has been quite consistent. (Unlike their mobile phone service). If you already have an existing Sun Cellular line, you can avail of the service for just Ph 799 a month.
Before I go back to my usual guerilla posts, I'd like to blab about personal observations heh. O.o
These aren't trivial posts though, my ever observant and critical mind could not stop wandering and wondering about the real state of the economy. I used to say that the Philippine economy is a student economy. I forgot to mention that the country is also driven by the mall culture economy.
Last month I went to Robinsons Place Ermita and SM Manila due to the proximity from where I am based. Both were open until midnight on the occasions I went there. It was a pitiful sight. There were only scant shoppers and every shop had the "S" word. I wondered if it was because everyone was at the Mall of Asia or that the economy was that bad.
In any case, I am of the opinion that the mall business has reached saturation point. Apart from that, the growth rate of personal wages will fall behind the rate of expansion of malls. Malls are just snatching away customers from each other. The industry is much like the cellular network industry. While there may still be growth, each provider is just eating away at the share of the next competitor.
More than just wooing customers from the next competitor, each company is also at risk of cannibalizing its own market. Smart has Talk and Text. Globe has Touch Mobile. Their prepaid promotions (text all you can, etc) is used to flank Sun Cellular. Now, Red Mobile is attempting to eat a pie that's already saturated. When one company reports growth while another report losses, you know that the industry has reached saturation point.
Is the Philippines just one big saturated market?
Have you seen the distance between Banco De Oro branches? You should visit Binondo. Along Soler street, you will see not one, not two, but three Banco de Oro branches along the same street! This isn't the best example as some were recently converted Equitable Bank branches. Nonetheless, it makes you wonder if there is any room left for new players in local industries.
Going back to the malls, I wouldn't be surprised if malls compete with each other and decide to have parking rate promos or, better yet, waive parking fees on selected hours just to entice customers to visit their malls. SM alone already has 32 malls if I'm not mistaken. And like the relationship of Jollibee and McDonalds, a Robinsons mall is never far away from SM.
*****
Thank you for patiently waiting for a new post. When you come back here, you'll get more guerilla investing tips. Ciao!
Tuesday, January 22, 2008
Making Sense of The Market
I have been trying to view my blog but for the past 3 days, I couldn't. My browser informed me "your connection timed out". Naturally, I pin the blame on my notorious DSL provider.
Well, enough of that.
For the past 3 weeks, investors, traders and institutional buyers have been on the edge of their seats vis-a-vis the market. This is not because of excitement but due to panic. There's a saying that someone's panicked response (i.e. consequential selling) could be someone else's buying opportunity. But in this bear market, there's a "sell on rally" mindset, meaning, people who have held their stocks since last year, and can't take the paper loss anymore will likely sell their shares at each upturn of the market.
What is your best bet during these times?
In the Philippines, where there's only an estimated 1% of the population trading the stock market mainly due to lack of investor education. Hence, 50% of the trading transactions done locally are from foreign brokerages. This makes our market highly sensitive to changes, there's just not enough people investing in the stock market.
I've said in an earlier blog entry (I can't link to it since I can't view my own blog!) that people who buy and sell stocks in the stock market are what I call stock market participants. In general, there are two, the trader and the investor. Last night on CNBC, John Bogle, said that there are two types of people - the investor and the speculator. Even before I heard of John Bogle, I already thought of those two distinctions, albeit in different nouns/descriptions ^_^ This is not to gloat, rather this boosts my confidence in the way I perceive the stock market.
So far, I have heard a lot of friends who say that "be careful" of the stock market. I can't blame them since a lot still have the memories of the half decade spanning 1997 - 2003, where no stock was sacred nor spared. But that is just wrong, if one is to view it that way. Why?
Bato bato sa langit, matamaan huwag magalit, a majority of those who participate in the local stock market are traders, sometimes I prefer to call them gamblers. It is a cynical view of mine of people who try to make the stock market a form of legit gambling house, where people will always ask you the question, what's the next stock to buy? What do you think is the target price of that stock?
This is an immature and premature question, especially for people who have nil knowledge of what really happens and what the objective of the stock market is. Imagine, I was once told that a person, who was new to the stock market, opened with a brokerage firm located in Ortigas, and this person was advised by the broker to buy AJO, PA, "because they have bigger swings", i.e. mas malaki ang kikitain.
If this is how some brokers "advise" their clients, then no wonder we have wild swings in the markets, especially during down days.
Instead of doing that, these "advisers" should first ask the client if they are investing for the short term or for the long term. Time and time again, it has been proven that the stock market will always have short term volatilities, but in the long run, it usually points upwards. The stock market was never meant to be a short term investment.
Think of it this way instead:
Stocks are shares of companies. Companies are business ventures. There is no such thing as a business venture that is built up to lose money. Businesses are put up to make money. However, business cycles will always be there, so there won't always be profits every fiscal year, but in the long run, these businesses will remain. You just have to realize what companies you want to invest in.
Well, enough of that.
For the past 3 weeks, investors, traders and institutional buyers have been on the edge of their seats vis-a-vis the market. This is not because of excitement but due to panic. There's a saying that someone's panicked response (i.e. consequential selling) could be someone else's buying opportunity. But in this bear market, there's a "sell on rally" mindset, meaning, people who have held their stocks since last year, and can't take the paper loss anymore will likely sell their shares at each upturn of the market.
What is your best bet during these times?
In the Philippines, where there's only an estimated 1% of the population trading the stock market mainly due to lack of investor education. Hence, 50% of the trading transactions done locally are from foreign brokerages. This makes our market highly sensitive to changes, there's just not enough people investing in the stock market.
I've said in an earlier blog entry (I can't link to it since I can't view my own blog!) that people who buy and sell stocks in the stock market are what I call stock market participants. In general, there are two, the trader and the investor. Last night on CNBC, John Bogle, said that there are two types of people - the investor and the speculator. Even before I heard of John Bogle, I already thought of those two distinctions, albeit in different nouns/descriptions ^_^ This is not to gloat, rather this boosts my confidence in the way I perceive the stock market.
So far, I have heard a lot of friends who say that "be careful" of the stock market. I can't blame them since a lot still have the memories of the half decade spanning 1997 - 2003, where no stock was sacred nor spared. But that is just wrong, if one is to view it that way. Why?
Bato bato sa langit, matamaan huwag magalit, a majority of those who participate in the local stock market are traders, sometimes I prefer to call them gamblers. It is a cynical view of mine of people who try to make the stock market a form of legit gambling house, where people will always ask you the question, what's the next stock to buy? What do you think is the target price of that stock?
This is an immature and premature question, especially for people who have nil knowledge of what really happens and what the objective of the stock market is. Imagine, I was once told that a person, who was new to the stock market, opened with a brokerage firm located in Ortigas, and this person was advised by the broker to buy AJO, PA, "because they have bigger swings", i.e. mas malaki ang kikitain.
If this is how some brokers "advise" their clients, then no wonder we have wild swings in the markets, especially during down days.
Instead of doing that, these "advisers" should first ask the client if they are investing for the short term or for the long term. Time and time again, it has been proven that the stock market will always have short term volatilities, but in the long run, it usually points upwards. The stock market was never meant to be a short term investment.
Think of it this way instead:
Stocks are shares of companies. Companies are business ventures. There is no such thing as a business venture that is built up to lose money. Businesses are put up to make money. However, business cycles will always be there, so there won't always be profits every fiscal year, but in the long run, these businesses will remain. You just have to realize what companies you want to invest in.
Thursday, December 13, 2007
A Tip from Donald Trump
Whether you like him or not, he's got only one advice. With his name alone, his words should carry much weight. DON'T GIVE UP.
Subscribe to:
Posts (Atom)