After trying our best to withstand the sell off of the stock markets in other countries, our local index succumbed to the pressure. It comes as no surprise because as the cliche goes, no man (or stock market) is an island, even if you're an archipelago.
Investors and traders who witnessed the bloodbath in 2008 must be saying to themselves, "eto nanaman tayo" (here we go again).
Well, not exactly.
My opinion is that the government interventions made in 2009 paved the way for extra money to flow into the markets - whether in equities, minerals, etc. Now that uncertainty is back, the big players may be liquidating their positions, preferring to stay put in cash, hence the sell off.
Further, what's different is that governments worldwide have already used quite a bit of arsenal already. Injecting loads of money into their economies to stave off individual recessions in 2009.
So now, if governments can't do anything else, everybody's wondering if there's going to be a double dip.
And we're not talking about Oreos here.
What's left to do? Perhaps it's time to let the markets play out on its own.
Certainly, governments are scrambling to find ways to mitigate the crisis. What's an investor to do? Wait and see or do like Buffett - but when everybody's selling.
Stocks are usually forward looking, so the crash lately could mean economic hard times in the next few months.
Time to tighten your belt? Perhaps.
You wouldn't be hard pressed if you were able to set an emergency fund first before plunking hard earned money on real estate, stocks, bonds, or managed funds.
People have this notion that the best way to grow their money is to invest it right away.
That's not entirely correct. Before you decide on your investment instruments, you should set aside an emergency or savings fund.
An emergency fund represents 3-4 months of your monthly expenses. However, if you would like to be on the safe side, instead of expenses, use your monthly salary as your guide.
*********************************
LBC Bank recently closed shop. According to the news report, the reason is attributable to them offering higher interest rates than their peers.
As you know, if a deal sounds too good to be true, it probably is.
During financial crises, poorly managed financial institutions fold up.
The last time that happened locally, it was during the height of the US financial crisis.
Remember Legacy?
********************************
I'm elated that some of the stocks I was talking about last year went up substantially, namely GLO and ORE. My mistake was with MPI (I will have to uncover why it is underperforming).
Until then, appreciate the (heightened) risk, then appreciate the capital!
*** Blogger is a lousy blog service. Truly. I had a long text and it just disappeared. I hope to use a more reliable service in the future. Sorry I just had to say it. ***
Showing posts with label Guerilla Investing vs. Scams. Show all posts
Showing posts with label Guerilla Investing vs. Scams. Show all posts
Thursday, September 22, 2011
Sunday, December 14, 2008
Is Sanity Insured by the PDIC? Hmm...
Guerilla Investing is back! Thank you for patiently waiting for my new post, dear reader. I'd like to take a break first from my posting on the waves of Philippine business.
While this piece of news had broken out last week, I think that it will remain a strong reminder for us in the present time... and in the future. I'm talking about a series of bank holidays declared by a number of rural banks.
And I don't mean holiday as some sort of national holiday. I'm referring to a holiday that refers to your money bidding you a (potentially) eternal holiday from your wallet/passbook. Depositors beware.
Last December 10, I read in the Inquirer that two rural banks - Philippine Countryside Rural Bank Inc. (PCRBI) and its sister company, Pilipino Rural Bank Inc. (PRBI) declared a bank holiday. The two banks are under the Legacy group (I wonder what legacy they want to leave the depositors, hmmm?). What's also worry-some is that the Bankgo Sentral ng Pilipinas found that the Legacy group also had a slew of undercapitalized banks namely -
Rural Bank of San Jose (Batangas) Inc.,
Rural Bank of Carmen (Cebu) Inc.,
Rural Bank of Calatagan (Batangas) Inc. (now Dynamic Rural Bank),
Rural Bank of DARBCI Inc.,
Rural Bank of Kananga (Leyte) Inc. (now First Interstate Rural Bank), and
Rural Bank of Bisayas Minglanilla (now Bank of East Asia)
According to the same news article, "the rural banks under the Legacy group have a capital deficiency of P2.5 billion that ranged from P1.4 million for Dynamic Bank to P983.5 million for the Rural Bank of Parañaque."
Okay, what's the punchline here?
Rural banks, at least from my experience, are the ones who offer double-your-money-in-five-years time deposit placements. But to just define it that way would obviously highlight my bias. Let's take a brief view of what the Philippine banking system looks like, based on how banks are classified -
Universal Banks
Commercial Banks
Thrift Banks
Rural Bank / Cooperatives
Primarily, the distinction among them are what they can do, how much capitalization is required, and what loan/deposit products they can sell. For more details, visit the online encyclopedia Wikipedia. Here's the link.
Using my Neanderthal internet skills, I could not find anything substantial about the banking system history in the BSP website. Maybe you'd have better luck?
As of December 13, 7 of the 10 banks under the Legacy group had already been placed under BSP receivership-
1. Philippine Countryside Rural Bank (PCRB) with branches in Mandaue City, Lapu-Lapu City and Liloan in Cebu,
2. Bank of East Asia based in Minglanilla, Cebu
3. First Interstate Bank in Tacloban City.
4. Rural Bank of Paranaque
5. Rural Bank of Bais in Negros Oriental
6. Pilipino Rural Bank (with branches in Mandaue and Argao in Cebu and Tagbilaran City in Bohol)
7. Rural Bank of San Jose in Batangas.
What is receivership? According to Investopedia, "A type of bankruptcy a company enters when a receiver is appointed by bankruptcy courts or creditors to run the company." In this case, the PDIC is the receiver.
The RBAP or the Rural Bankers Association of the Philippines issued a statement that amidst these problems were isolated and unique to few and that most rural banks “continue to outperform the entire Philippine Baking System.”
Okay. If you say so.
Why do I have a bit of sarcasm there?
Well, last May, a person came to me asking me if he should make a placement with Bank of Paranaque. He said that the bank was offering him 20% p.a., which meant that your money would be doubled in just five years. Naturally I was skeptical.
He said that the bank representative, who I am sure had this person's interests in mind (ho-hum) said, "If you want, just deposit 250,000 only. This is almost risk free as the PDIC insures your deposit up to that amount."
This guy also defended the rural bank since "hindi ito scam, kasi kasama siya sa RBAP." (This isn't a scam since the bank is a member of the RBAP.")
Go figure.
I hope he didn't commit to the investment since he didn't want conservative investments like pension or regular boring interest rates time deposits.
If you are in the same shoes as this person, and somebody is offering you a product like this, regardless of the institution, ask yourself this -
We are in the midst of a global recession. How and where will the institution get a return of 20% YEARLY?
Next question to ask yourself is, if Wall Street was able to put a triple A rating on subprime mortgage backed securities, what else is there that can't be manipulated? I smell a ticking time bomb in the local banking sector if some banks out there continue to sell their double your money in 5 years time deposit products.
What tips can I offer you? Check the t-bills rate. Check the performance of the real estate sector. Look at the stock market. Do you see offers of 20% yields?
Didn't think so.
While this piece of news had broken out last week, I think that it will remain a strong reminder for us in the present time... and in the future. I'm talking about a series of bank holidays declared by a number of rural banks.
And I don't mean holiday as some sort of national holiday. I'm referring to a holiday that refers to your money bidding you a (potentially) eternal holiday from your wallet/passbook. Depositors beware.
Last December 10, I read in the Inquirer that two rural banks - Philippine Countryside Rural Bank Inc. (PCRBI) and its sister company, Pilipino Rural Bank Inc. (PRBI) declared a bank holiday. The two banks are under the Legacy group (I wonder what legacy they want to leave the depositors, hmmm?). What's also worry-some is that the Bankgo Sentral ng Pilipinas found that the Legacy group also had a slew of undercapitalized banks namely -
Rural Bank of San Jose (Batangas) Inc.,
Rural Bank of Carmen (Cebu) Inc.,
Rural Bank of Calatagan (Batangas) Inc. (now Dynamic Rural Bank),
Rural Bank of DARBCI Inc.,
Rural Bank of Kananga (Leyte) Inc. (now First Interstate Rural Bank), and
Rural Bank of Bisayas Minglanilla (now Bank of East Asia)
According to the same news article, "the rural banks under the Legacy group have a capital deficiency of P2.5 billion that ranged from P1.4 million for Dynamic Bank to P983.5 million for the Rural Bank of Parañaque."
Okay, what's the punchline here?
Rural banks, at least from my experience, are the ones who offer double-your-money-in-five-years time deposit placements. But to just define it that way would obviously highlight my bias. Let's take a brief view of what the Philippine banking system looks like, based on how banks are classified -
Universal Banks
Commercial Banks
Thrift Banks
Rural Bank / Cooperatives
Primarily, the distinction among them are what they can do, how much capitalization is required, and what loan/deposit products they can sell. For more details, visit the online encyclopedia Wikipedia. Here's the link.
Using my Neanderthal internet skills, I could not find anything substantial about the banking system history in the BSP website. Maybe you'd have better luck?
As of December 13, 7 of the 10 banks under the Legacy group had already been placed under BSP receivership-
1. Philippine Countryside Rural Bank (PCRB) with branches in Mandaue City, Lapu-Lapu City and Liloan in Cebu,
2. Bank of East Asia based in Minglanilla, Cebu
3. First Interstate Bank in Tacloban City.
4. Rural Bank of Paranaque
5. Rural Bank of Bais in Negros Oriental
6. Pilipino Rural Bank (with branches in Mandaue and Argao in Cebu and Tagbilaran City in Bohol)
7. Rural Bank of San Jose in Batangas.
What is receivership? According to Investopedia, "A type of bankruptcy a company enters when a receiver is appointed by bankruptcy courts or creditors to run the company." In this case, the PDIC is the receiver.
The RBAP or the Rural Bankers Association of the Philippines issued a statement that amidst these problems were isolated and unique to few and that most rural banks “continue to outperform the entire Philippine Baking System.”
Okay. If you say so.
Why do I have a bit of sarcasm there?
Well, last May, a person came to me asking me if he should make a placement with Bank of Paranaque. He said that the bank was offering him 20% p.a., which meant that your money would be doubled in just five years. Naturally I was skeptical.
He said that the bank representative, who I am sure had this person's interests in mind (ho-hum) said, "If you want, just deposit 250,000 only. This is almost risk free as the PDIC insures your deposit up to that amount."
This guy also defended the rural bank since "hindi ito scam, kasi kasama siya sa RBAP." (This isn't a scam since the bank is a member of the RBAP.")
Go figure.
I hope he didn't commit to the investment since he didn't want conservative investments like pension or regular boring interest rates time deposits.
If you are in the same shoes as this person, and somebody is offering you a product like this, regardless of the institution, ask yourself this -
We are in the midst of a global recession. How and where will the institution get a return of 20% YEARLY?
Next question to ask yourself is, if Wall Street was able to put a triple A rating on subprime mortgage backed securities, what else is there that can't be manipulated? I smell a ticking time bomb in the local banking sector if some banks out there continue to sell their double your money in 5 years time deposit products.
What tips can I offer you? Check the t-bills rate. Check the performance of the real estate sector. Look at the stock market. Do you see offers of 20% yields?
Didn't think so.
Monday, March 10, 2008
Some People Just Never Ever Learn
I just had to find time to post this, and inform the public.
You'd think that people would wise up already with the recent uncovering of various "investments" (sic). Browsing through the news yesterday on the Inquirer, I found out that various people were again duped into an investment sham. Big names topped the list, read this article and see how much they invested, and most probably lost as a result of the fallout.
After Performance Investment Products Corp (PIPC), the latest addition to the ever growing list of Ponzi scams now include Royal Manchester Five Trading Corp. (RMF). Its product is the same, foreign currency exchange. Its USP, or unique selling proposition, (more like usual scamming proposition), is this - a promised return and the issuance of PDC's.
I researched more about it over the Internet, and came across two forums discussing said company. In both forums, there were two forum members (bearing different names) which sought to give unsolicited advice for forum readers to go ahead with this "investment".
They may have been honest comments, but any uninformed reader enticed with the lustful glitter of money, i.e. greed, will probably invest his hard earned money for something that will give them a quick return. Greed and laziness are such strange bedfellows.
In this forum, go to post #19 by a person named shainen27, I have also posted parts of it here for you to read,
"Yes, this company is legit. My husband and I have an investment from this company since last year. We have renewed our contract last November and actually increased our investment. The first time, we're actually receiving our interest monthly and decided to get it every six months kasi po mas malaki ang kikitain ng pera."
I understand that this person and her husband have an investment FROM this company. So does this mean that Royal Manchester United (hehe) invested in the husband and wife team? Seriously though, I know this is just semantics.
You're lucky if you were able to recover your investment. But is that how you want to make money? Make money out of nothing (or almost nothing) at all? Hard earned money is always more fulfilling and more real than making money "the easy way". Even stock market traders don't make easy money, they have to study charts.
There is a saying, Money easily earned will be money easily lost.
On the other forum, there is this person named lowscore, down the bottom of the page, and he had this to say (parts only),
"I have been investor of this corporation for almost 2 years and so far so good.
Before we invested on this corporation, we (my friends conducted research and investigation ) and the result gave us GO signal that it’s legitimate and safe especially from SEC registration, business permits from the municipality of PASIG and MANDALUYONG. BIR registered.
Type ROYAL MANCHESTER FIVE TRADING CORP and ABBA-DEO PRIME EXPRESS CORPORATION on the search bar. Don’t forget to click the “start with the given phrase”
Go to this link in SEC and true enough, Royal Manchester is indeed registered, I typed ABBA DEO and yes, they are registered, but so what? What's this? A new deodorant? It's probably another scam.
If you believe what this person said about his research then read this from the SEC itself. Before you are directed to their online corporation name search facility, you are brought to a screen with the following text:
"The name(s) generated using this facility, however, is not an indication that the identified corporation is authorized to sell to the public, securities or other investment instruments."
The SEC site does not have multiple pages. If you want to search for the corporation name, just go to "Online Transactions" on their menu bar, then click on Search Registered Companies.
If this person indeed researched well, then that warning alone from the SEC should have already made him think twice. Unless during the time of his search, the SEC had not yet had that line written on their page. The SEC has an investment scam checklist as well and YOU SHOULD READ IT.
Here are my pointers for you (corrected sentence, not "myths") -
1. An office does not make an "investment company" legitimate
2. Being licensed as a corporation does not make it a legitimate investment house. An investment house needs to secure a different form of license, not just a corporate license.
3. Just because you have a friend that has made money on it makes it real. This scam needs new recruits to survive.
4. When this so called investment company promises you a return, it is a scam. The only thing that has a guaranteed return are renewable time deposits, government securities and corporate bonds.
And always remember they have their USP - usual scamming proposition - foreign currency trading and the returns are GUARANTEED and PDCs to be given to you. Investments generally do not have promised returns, even mutual funds and unit investment trust funds do not guarantee you anything.
Moreover, as of my last check, currency trading is still disallowed in the country, therefore a corporation that wants to sell you this sort of investment will ask that you open an account with them. They will certainly ask for a minimum deposit, but not as big as these scams. Moreover, they will not guarantee you any return. Their service will likely have an online trading platform where you can trade on your own. This is the only way I can say that it is legit.
You'd think that people would wise up already with the recent uncovering of various "investments" (sic). Browsing through the news yesterday on the Inquirer, I found out that various people were again duped into an investment sham. Big names topped the list, read this article and see how much they invested, and most probably lost as a result of the fallout.
After Performance Investment Products Corp (PIPC), the latest addition to the ever growing list of Ponzi scams now include Royal Manchester Five Trading Corp. (RMF). Its product is the same, foreign currency exchange. Its USP, or unique selling proposition, (more like usual scamming proposition), is this - a promised return and the issuance of PDC's.
I researched more about it over the Internet, and came across two forums discussing said company. In both forums, there were two forum members (bearing different names) which sought to give unsolicited advice for forum readers to go ahead with this "investment".
They may have been honest comments, but any uninformed reader enticed with the lustful glitter of money, i.e. greed, will probably invest his hard earned money for something that will give them a quick return. Greed and laziness are such strange bedfellows.
In this forum, go to post #19 by a person named shainen27, I have also posted parts of it here for you to read,
"Yes, this company is legit. My husband and I have an investment from this company since last year. We have renewed our contract last November and actually increased our investment. The first time, we're actually receiving our interest monthly and decided to get it every six months kasi po mas malaki ang kikitain ng pera."
I understand that this person and her husband have an investment FROM this company. So does this mean that Royal Manchester United (hehe) invested in the husband and wife team? Seriously though, I know this is just semantics.
You're lucky if you were able to recover your investment. But is that how you want to make money? Make money out of nothing (or almost nothing) at all? Hard earned money is always more fulfilling and more real than making money "the easy way". Even stock market traders don't make easy money, they have to study charts.
There is a saying, Money easily earned will be money easily lost.
On the other forum, there is this person named lowscore, down the bottom of the page, and he had this to say (parts only),
"I have been investor of this corporation for almost 2 years and so far so good.
Before we invested on this corporation, we (my friends conducted research and investigation ) and the result gave us GO signal that it’s legitimate and safe especially from SEC registration, business permits from the municipality of PASIG and MANDALUYONG. BIR registered.
Type ROYAL MANCHESTER FIVE TRADING CORP and ABBA-DEO PRIME EXPRESS CORPORATION on the search bar. Don’t forget to click the “start with the given phrase”
Go to this link in SEC and true enough, Royal Manchester is indeed registered, I typed ABBA DEO and yes, they are registered, but so what? What's this? A new deodorant? It's probably another scam.
If you believe what this person said about his research then read this from the SEC itself. Before you are directed to their online corporation name search facility, you are brought to a screen with the following text:
"The name(s) generated using this facility, however, is not an indication that the identified corporation is authorized to sell to the public, securities or other investment instruments."
The SEC site does not have multiple pages. If you want to search for the corporation name, just go to "Online Transactions" on their menu bar, then click on Search Registered Companies.
If this person indeed researched well, then that warning alone from the SEC should have already made him think twice. Unless during the time of his search, the SEC had not yet had that line written on their page. The SEC has an investment scam checklist as well and YOU SHOULD READ IT.
Here are my pointers for you (corrected sentence, not "myths") -
1. An office does not make an "investment company" legitimate
2. Being licensed as a corporation does not make it a legitimate investment house. An investment house needs to secure a different form of license, not just a corporate license.
3. Just because you have a friend that has made money on it makes it real. This scam needs new recruits to survive.
4. When this so called investment company promises you a return, it is a scam. The only thing that has a guaranteed return are renewable time deposits, government securities and corporate bonds.
And always remember they have their USP - usual scamming proposition - foreign currency trading and the returns are GUARANTEED and PDCs to be given to you. Investments generally do not have promised returns, even mutual funds and unit investment trust funds do not guarantee you anything.
Moreover, as of my last check, currency trading is still disallowed in the country, therefore a corporation that wants to sell you this sort of investment will ask that you open an account with them. They will certainly ask for a minimum deposit, but not as big as these scams. Moreover, they will not guarantee you any return. Their service will likely have an online trading platform where you can trade on your own. This is the only way I can say that it is legit.
Subscribe to:
Posts (Atom)