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Basic intro to stocks 2013 11 08

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You become part- owner of Corporation OWNERS BOARD MANAGEMENT WORKERS Shares of Stock are “pieces” of the “corporate pie. “ When you buy a share of stock, you become: ONE OF THE OWNERS OF the COMPANY. Customer So far:
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Page 1: Basic intro to stocks 2013 11 08

You become part-owner of Corporation

OWNERS

BOARD

MANAGEMENT

WORKERS

Shares of Stock are

“pieces” of the

“corporate pie. “ When you buy a share of

stock, you become:

ONE OF THE

OWNERS OF the

COMPANY.

Customer So far:

Page 2: Basic intro to stocks 2013 11 08

Mr. Prudent Investor

Page 3: Basic intro to stocks 2013 11 08

Lucky Guy

Page 4: Basic intro to stocks 2013 11 08

Mr. Media Man

Page 5: Basic intro to stocks 2013 11 08

Ms. Long-Term Investor

You can be one

of the owners…

Page 6: Basic intro to stocks 2013 11 08

Ms. Long-Term Investor

You can be one

of the owners…

Page 7: Basic intro to stocks 2013 11 08

Ms. Long-Term Investor

You can be one

of the owners…

Page 8: Basic intro to stocks 2013 11 08

Ten million

Pesos

= Ten

million

Shares

ONE million ONE million ONE million ONE million ONE million ONE million ONE million,

each

ASSUME:

Ten founders chip in:

One million each.

Start a Company…

Page 9: Basic intro to stocks 2013 11 08

Market

Value:

rises over

time

“Par Value”

Constant 1 peso

= 100 PESOS

One hundred shares:

Page 10: Basic intro to stocks 2013 11 08

Market

Value:

rises

Original Cost:

One peso per square

meter Just like

real estate

“Land TITLES”

Page 11: Basic intro to stocks 2013 11 08

when many

Customers

The

Company: shareholders

Market Value rises...

Page 12: Basic intro to stocks 2013 11 08

Cash Dividends

You

become a

“Winner”

BUY

Shares of

Stock

Capital Gains

Page 13: Basic intro to stocks 2013 11 08

Capital GAIN:

70% a year for 5 years.

390

P60 in 2008

20 300 / 60 = 5x

Meralco

262

Page 14: Basic intro to stocks 2013 11 08

Cash Dividends

= Yield

Price

Cash DIV ÷ AEV = 4%

AP = 4%

GLO = 5%

MER = 3%

RLC = 3%

Semirara = 4.5%

TEL = 8%

URC = 4.5%

Cash “incentive”

ANS

1 / 5 =

20% !

Page 15: Basic intro to stocks 2013 11 08

Cash Div, 1

--------------------

Share price, 5

Page 16: Basic intro to stocks 2013 11 08

1.00 / 5.00 = 20%

Page 17: Basic intro to stocks 2013 11 08

CHINA

Bank

12 / 57

= 21%

Page 18: Basic intro to stocks 2013 11 08

Net profit in

2008: 292m

PhiL WEB

59% a year, for the

past three years

“I cannot put up

my own Lottery.

But I can be part-

owner of one.”

In 2011: 916m

Capital GAIN

Page 19: Basic intro to stocks 2013 11 08

Net profit in

2008: 13bn

In 2011: 18bn Union Bank

61% a year, for the

past three years

Capital GAIN

Page 20: Basic intro to stocks 2013 11 08

18

*One peso

per share,

at start

47 D M Consunji

*SOLD at Six pesos

Gosh, 61

DMCI. 30 years in

construction

firm, …

on retire-

ment… lump

sum P1m

Share price: One Peso

Page 21: Basic intro to stocks 2013 11 08

15

Dizon Mines

55

6

P100K from uncle..

U, expert on Economy,

…on Business.

IF Price of Copper

& Gold

Will Sales UP ?

IF SALES go

WILL Profits UP

IF Profits UP

WILL Share Price go UP

Exports Copper &

Gold…

Page 22: Basic intro to stocks 2013 11 08

P1 million of ABC 100 sh

P1 million of DEF

P1 million of GHI

Auntie’s Portfolio:

Shares

500 sh

600 sh

Value

Page 23: Basic intro to stocks 2013 11 08

AYALA LAND

ABOITIZ POWER

ABOITIZ EQUITY VENTURES

BELLE CORP

ICTSI …… JG SUMMIT

JOLLIBEE ..… MERALCO

METROBANK ..…. PLDT

UNIVERSAL ROBINA

Imagine, that you had invested in THREE stocks, some

years ago. Write down the names of the three stocks.

“Choose Three of these Stocks”

?

?

?

1. ...............

2. ...............

3. ...............

Page 24: Basic intro to stocks 2013 11 08

35

10

Ayala LAND Malls, Build-and-

Sell, Offices

x 3.5

Next: A Pwr

Page 25: Basic intro to stocks 2013 11 08

Aboitiz Power 37

10

Generate

Electricity

x 3.7

Next: A E V

Page 26: Basic intro to stocks 2013 11 08

2008 Profit 4.3bn

56

10

Aboitiz Equity Ventures

Electricity,

Banking

x 5.6

Next: BELLE

Page 27: Basic intro to stocks 2013 11 08

Belle Corp. 6.5

1.5 x 4.3

Next: ICTSI

Page 28: Basic intro to stocks 2013 11 08

94

24 x 3.9

ICTSI Next: JG

Summit

Page 29: Basic intro to stocks 2013 11 08

Cebu Pacific AIR

Robinson’s Land

Summit Media

JG Summit

47

5 x 9.4

Next: JFC

Page 30: Basic intro to stocks 2013 11 08

Jollibee F.C.

141

55 x 2.5

Next: MER

Page 31: Basic intro to stocks 2013 11 08

395

200

x 1.98

Meralco Next: MBT

Page 32: Basic intro to stocks 2013 11 08

134

48 x 2.8

Metrobank Next: TEL

Page 33: Basic intro to stocks 2013 11 08

3190

2600

x 1.23

PLDT Next: URC

Page 34: Basic intro to stocks 2013 11 08

130

20 x 6.5

URC

Page 35: Basic intro to stocks 2013 11 08

“What if” Portfolio

P1 million of BEL = 4,300,000

P1 million of MER

P1 million of AEV

x 1.98 = 1,980,000

x 5.6 = 5,600,000

Belle + Meralco + Aboitiz Equity V

= 11,880,000 TOTAL, three-years’ investment

x 4.3

Page 36: Basic intro to stocks 2013 11 08

You may Calculate:

P1 million of JFC x 2.5 = 2,500,000

P1 million of JGS

P1 million of PLDT

x 9.4 = 9,400,000

x 1.23 = 1,230,000

Jollibee + JG Summit + PLDT

= 13,130,000 TOTAL, three-years’ investment

Page 37: Basic intro to stocks 2013 11 08

Why do

prices move

up, or down

Page 38: Basic intro to stocks 2013 11 08

Who wants to buy

Who wants to sell

Page 39: Basic intro to stocks 2013 11 08

Toyota CAR

900K

Buyer Sellers

700K

900K

900K

900K

“I want to

buy that

car, for : “

I “bid”... I “ask”...

Page 40: Basic intro to stocks 2013 11 08

House for Sale

5 million

Buyers Seller

4m

“I want to

sell this

house for

...” 5m

6m

7m

I “bid”... I “ask”...

Page 41: Basic intro to stocks 2013 11 08

Buyers & Sellers …fight over the price.

LATEST

TRADE:

12

BID

10

8

6

volume

5,000

10,000

60,000

ASK

12

14

16

volume

3,000

15,000

100,000

Who wants to buy Who wants to sell

Page 42: Basic intro to stocks 2013 11 08

BID

10

8

1.06

volume

5,000

10,000

60,000

ASK

12

14

1.16

volume

3,000

15,000

100,000 Who wants to buy Who wants to sell

BID HIGH

at “12”

Ask for a

LOWER selling

PRICE of 10

INSERT INSERT

You may post any price. You may jump the queue

LATEST

TRADE:

12

Page 43: Basic intro to stocks 2013 11 08

LATEST

TRADE:

12

BID

10

8

6

4

2

volume

5,000

10,000

60,000

29,000

30,000

ASK

12

14

16

18

20

volume

200,000

15,000

100,000

100,000

100,000

Seller can PLACE 5 orders, to capture all the BIDS

02

12

Page 44: Basic intro to stocks 2013 11 08

LATEST

TRADE

10

BID

10

8

6

volume

315,000

10,000

60,000

18

16

14

12

ASK

15,000

100,000

100,000

100,000

volume

BUYER can place 4

separate orders, to

capture all the ‘ASK’

10

18

LATEST

TRADE

18

Page 45: Basic intro to stocks 2013 11 08

Buyers

Today:

BID

Sellers

Today:

ASK

You can SEE

All the BUYERS & SELLERS

Page 46: Basic intro to stocks 2013 11 08

Buyers Today:

which Brokers

Sellers Today:

which Brokers

Page 47: Basic intro to stocks 2013 11 08

When can you execute trades?

till

When can you ENTER an online ORDER?

ANY

TIME It gets

implemented

by 930am

AFTER HOURS !

NEXT DAY

Page 48: Basic intro to stocks 2013 11 08

Yesterday:

20

What’s the

mood of the

market,

today?

Computer: matches

“buy” orders with“sell” orders

Page 49: Basic intro to stocks 2013 11 08

What IF:

More

Sellers

Less

Buyers

Page 50: Basic intro to stocks 2013 11 08

What IF:

There are

More

BUYERS

FEW

Sellers

Page 51: Basic intro to stocks 2013 11 08

Investing in Equities

Investing

versus

Trading

Page 52: Basic intro to stocks 2013 11 08

Cash

Bonds

Over TIME In Three Years…

Money

Money +/- 1

+/- 1

+/- 1

+/- 1

SAME

Amount

at the start

5

4

3

2

1

0

18

16

14

12

10

8

6

4

2

0

+/- 1

+/- 1

Page 53: Basic intro to stocks 2013 11 08

Money

170

160

150

140

130

120

110

100

90

80

70

60

50

40

30

20

10

0

Stocks

In Three Years… Over TIME

200

BUY !

THINK

WAIT

WAIT

KEEP COOL

Page 54: Basic intro to stocks 2013 11 08

54 Buy NOW Buy Now

You get the

“average”

Disciplined, Patient

WIN

Decide to invest, then...

Make a plan. Stick to it.

Page 55: Basic intro to stocks 2013 11 08

1. Persistent, Disciplined

BUY

100

200

BUY

BUY

BUY

3,000

“Investing”

“Way, Better” Years

and

years

Page 56: Basic intro to stocks 2013 11 08

BUY

THINK

WAIT

WAIT

2. “Patient,

Long-term”

“Investing”

Years

and

years

Page 57: Basic intro to stocks 2013 11 08

3. How to buy stocks, like an expert: style of impatient short-term “maximization”

BUY BUY

BUY

BUY

BUY

BUY

SELL

SELL

SELL

SELL

SELL

“Trading”

Page 58: Basic intro to stocks 2013 11 08

Check the sales, profits, of the listed company

Do research, before buying.

Page 59: Basic intro to stocks 2013 11 08

Check the economic forecast, the outlook for industry, the flow of money.

Check the Price History, and

find out the Potential of a stock.

Get the news first, ahead of the rest

Page 60: Basic intro to stocks 2013 11 08

RetaiL Investor:

is in the cozy bedroom.

www.firstmetrosec.com.ph

If PLDT goes up 1 dollar, then + P41

Monitor

Page 61: Basic intro to stocks 2013 11 08

BUY ! Amateur, beginner.

Indecisive: Afraid to Make a Move.

WAIT “Afraid”

WAIT

WAIT

WAIT

WAIT

WAIT

WAIT

WAIT

WAIT

WAIT

WAIT

Page 62: Basic intro to stocks 2013 11 08

Amateur client :

BUY

BUY

BUY

PARALYZED

WITH SHOCK

CRY

SELL

SELL

SELL

Forecast

NOW

WAIT

FROZEN WITH FEAR

WAIT

Indecisive,

always Late.

Over TIME

Page 63: Basic intro to stocks 2013 11 08

Amateur, beginner.

Buy, when i’m excited. Sell, when i’m depressed

BUY BUY

BUY

BUY

BUY

WAIT SELL

SELL

SELL

SELL

“Emotional”

SELL

Page 64: Basic intro to stocks 2013 11 08

Phone

Investor

Broker

Walk - In

Internet

Phone in: Several minutes, per order

INTERNET…

MANY ORDERS

per second.

Page 65: Basic intro to stocks 2013 11 08

100

120

160 Stocks

80

40 Stock FUNDS

Also:

Next Month

Or, Next Week

You buy at …

What

should you

do, this

this case?

OK! …

Now, when

do i sell?

Page 66: Basic intro to stocks 2013 11 08

CASE ONE: recovery

25

16

Yes, you can

BUY, and BUY,

and WIN

22

24

30

Page 67: Basic intro to stocks 2013 11 08

Vista Land. Brittany, Crown Asia, etc. Housing

160

3

Down from 1998 to 2012

2012 1997 2003

BYE BYE

CASE TWO:

this happens

Page 68: Basic intro to stocks 2013 11 08

130

65

BYE BYE

CASE TWO:

this happens

Page 69: Basic intro to stocks 2013 11 08

Investing in Equities

How to set

“take Profit”

&“CUT Loss”

Page 70: Basic intro to stocks 2013 11 08

100

120

FOR

Trading:

80

Monitor !

Always

What to DO?

Something Wrong …

You buy at …

Page 71: Basic intro to stocks 2013 11 08

100

120

300 FOR

Trading:

Monitor !

Always

What to DO?

You buy at …

Let profits

run

600 !

Page 72: Basic intro to stocks 2013 11 08

100

FOR

Trading:

80

1 Monitor !

Always Something Wrong …

You buy at …

Emergency

Exit.

CUT loss.

Page 73: Basic intro to stocks 2013 11 08

100

“What

iF…”

Stocks

80

8 Stock FUNDS

Also:

You buy at …

1

“Sell,

na nga...”

“Bui-set”

Page 74: Basic intro to stocks 2013 11 08

The ‘execution’ REQUIRES

superhuman

strength. 74

Buy NOW Buy LOW

Sell HIGH

Wait

The ‘principle’

is easy.

The Objective

Page 75: Basic intro to stocks 2013 11 08

75 Buy LOW

The rational

approach

SELL HIGH

WAIT…

1 …know

the future

2 … execute trades

Page 76: Basic intro to stocks 2013 11 08

76

Forecast,

then Invest

PRICE TARGET

1 …know

the future

2 … execute trades

Page 77: Basic intro to stocks 2013 11 08

77

Forecast,

but WAIT (?)

PRICE TARGET

1 …know

the future

2 … Hesitate WAIT

BUY?

CONFIRMED?

BUY !

huh?

SELL !

WAIT

CONFIRMED?

BUY ! TOO

LATE The Amateur

Beginner

Page 78: Basic intro to stocks 2013 11 08

78

Regular Intervals

Fixed amount

BUY PLDT, Meralco, GT

Capital…

Consistent,

disciplined

Cure:

Page 79: Basic intro to stocks 2013 11 08

Start

BUY STOCK "A"

BUY STOCK "A"

BUY STOCK "A"

BUY STOCK "A"

BUY STOCK "A"

BUY STOCK "A"

BUY STOCK "A"

So on 12x

Buy P30,000 of

Stock A, per month,

for one year

PLDT, for

Year 1

JAN FEB MAR DECEMBER

Page 80: Basic intro to stocks 2013 11 08

Start

BUY Stock "B"

BUY Stock "B"

BUY Stock "B"

BUY Stock "B"

BUY Stock "B"

BUY Stock "B"

BUY Stock "B"

So on 12x

Buy P30,000 of

Stock B, per month,

for one year

Meralco, for

Year 2

JAN FEB MAR DECEMBER

Page 81: Basic intro to stocks 2013 11 08

Start

BUY Stock "C"

BUY Stock "C"

BUY Stock "C"

BUY Stock "C"

BUY Stock "C"

BUY Stock "C"

BUY Stock "C"

So on 12x

Buy P30,000 of

Stock C, per month,

for one year

___?, for

Year 3

JAN FEB MAR DECEMBER

Page 82: Basic intro to stocks 2013 11 08

Month

Month

Month

Month

Month

Month Stock Price

CONSISTENT, REGULAR

“Accumulate”

₱ ₱

Page 83: Basic intro to stocks 2013 11 08

• stocks to choose from . PPT

Page 84: Basic intro to stocks 2013 11 08

PRICE

TARGET

Emergency EXIT

Standing Order,

“Good Till Month”

ENTRY PRICE

Page 85: Basic intro to stocks 2013 11 08

Emergency EXIT !

In case “something

wrong went”….

PRICE

TARGET ? Might not

reach ?

Evacuate !

Page 86: Basic intro to stocks 2013 11 08

Active trading requires expert control over Emotions. Buy, when “stocks are down” Sell, when “stocks are UP.”

BUY

BUY

BUY

BUY

BUY

SELL

SELL

SELL

SELL

SELL

“Trading”

Page 87: Basic intro to stocks 2013 11 08

The Amateur

Beginner

Falls, from the sky.

Page 88: Basic intro to stocks 2013 11 08

Amateur, beginner: Buy, and then.. Bahala na. DO nothing, even if “FAIL.”

BUY

Page 89: Basic intro to stocks 2013 11 08

91

Regular Intervals

Fixed amount

BUY PLDT, Meralco, GT

Capital…

Until you

have

plenty of

of stocks

in your

account.

For investing

Page 90: Basic intro to stocks 2013 11 08

Mistake of the

Beginner

Focuses

on the

PAST

Thinks only

of the

PRESENT

“Ang

Taas na,

ng

Market”

“Ayoko

Bumili”

Page 91: Basic intro to stocks 2013 11 08

Mistake of the

Beginner

Focuses

on the

PAST

Thinks only

of the

PRESENT

“Ay,

DOWN

ang

Market”

“Ayoko

Bumili”

Page 92: Basic intro to stocks 2013 11 08

Excuses,

not to BUY

Sayang, I

missed

that

move

Wait for the

stock to

come down!

“Sobrang

mahal na,

lahat ng

stocks”

“mag-

research

muna

ako”

Page 93: Basic intro to stocks 2013 11 08

If the price

comes down…

This

must be

a lousy

stock

Because the

price is

dropping!

“Masama

ang

Panahon”

“mag-

aral

muna

ako”

Page 94: Basic intro to stocks 2013 11 08

By FACING YOUR FEARS…

Not by reading books

Not by watching other drivers

How do

you

learn to

drive?

Page 95: Basic intro to stocks 2013 11 08

How do you …

learn to Swim?

By diving into

the water.

When you

are about

to drown..

Page 96: Basic intro to stocks 2013 11 08

Mistake of the

Beginner

Focuses

on the

PAST

Thinks only

of the

PRESENT

What is

the

mark of

a

profes-

sional

Page 97: Basic intro to stocks 2013 11 08

Mark of a

professional

Focuses

on the

FUTURE

Thinks only of the

STRATEGY, to get from

HERE to THERE.

Page 98: Basic intro to stocks 2013 11 08

“COOL under Fire,” training.. Face your fears “I’m not afraid of

bullets.

I have my own

weapon.”

Page 99: Basic intro to stocks 2013 11 08

Investing in Equities

Method for

buying stocks:

ON-site / Phone /

Internet

Page 100: Basic intro to stocks 2013 11 08

Phone

Investor

Broker

Walk - In

Internet

Phone in: Several minutes, per order

INTERNET…

MANY ORDERS

per second.

Page 101: Basic intro to stocks 2013 11 08

How to open a

stockbroker account

How to buy

Mutual Funds

Page 102: Basic intro to stocks 2013 11 08

Deposits are

insured: For Risky Assets:

Universal

Bank, does

both, plus, it can

own insurance

company.

Stockbroker

They put money

“to work”

PRIVATE MUTUAL

BANK FUND &

“U.I.T.F.”

Savings B

Comm’L B

Investing

your millions

for you

“Safe” Unsafe, Uncertain !

Investing your

thousands for you

Page 103: Basic intro to stocks 2013 11 08

Which “bank” invests

your millions for you?

Minimum = 5 million

Charges = 4% per year

$ DOLLARS

Private Bank:

Page 104: Basic intro to stocks 2013 11 08

Who can invest your

P5,000 for you, at low cost.

Mutual FUND. The “private bank”

for ordinary people.

Minimum = P5,000

Charges = 1.7% percent a year.

Page 105: Basic intro to stocks 2013 11 08

107

Mutual

Fund 1. You have

money.

2. You hire a

professional,

to manage it.

Unit Investment

Trust Fund: 1. BANK Trust

Fund, open to

the public.

2. You buy a

UNIT.

Page 106: Basic intro to stocks 2013 11 08

109

Mutual

Fund

Unit

Investment

Trust Fund

OPERATED

BY A STOCK

BROKER

Sold by SALES

AGENTS

OPERATED

BY A BANK

Sold at bank

branches

Page 107: Basic intro to stocks 2013 11 08

Buy 100K of

stocks, directly

Buy 100K of

mutual funds:

Pay P2000 now.

(2% of assets)

Pay P1700/year (1.7% of assets)

Like: Hiring a

“Driver”

Pay P 261 in commissions,

for the entire

trade.

Page 108: Basic intro to stocks 2013 11 08

Fixed-Income and

other Stocks

47%

Power

10%

Telecoms

7%

Holding

Companies

13%

Properties

21%

Transport

2%

• P 8 bn

• Growth -Oriented

• All Stocks

• For Aggressive Investors

Equity Fund 2006 Net Yield 67.58%

2007 Net Yield 12.62%

2008 Net Yield -30.70%

2009 Net Yield 53.11%

2010 Net Yield 63.37%

2011 Net Yield 8.18%

YTD Yield (8/23/12) 18.88%

CAGR 24.40%

Page 109: Basic intro to stocks 2013 11 08

How to buy mutual funds

Get application forms at:

www.fami.com.ph

Invest 5,000

At 5 / share

1,000 shares

Buy MORE

shares, each

month

Page 110: Basic intro to stocks 2013 11 08

Inflation, 4%

To Choose

High returns, %

Safe (good credit) RISKY (uncertain)

CONSERVATIVE MODEST GAINS

11% / year

Moderate

CAPITAL GAINS

18% / year

ALL

Bonds

Half

Bonds,

Half

Stocks

AGGRESSIVE CAPITAL GAIN

24% / year

ALL

Stocks

Your

personality

determines

your approach

Page 111: Basic intro to stocks 2013 11 08

Inflation, 4%

Track record

High returns, %

Safe (good credit) RISKY (uncertain)

“Save & Learn”

Fixed-Income Fund,

11% / year

“Save & Learn”

Balanced Fund,

18% / year

ALL

Bonds

Half

Bonds,

Half

Stocks

“Save & Learn”

Stocks Fund, 24% / year

ALL

Stocks

Get Forms:

at www.fami.

com.ph

Page 112: Basic intro to stocks 2013 11 08

www.firstmetrosec.com.ph

www.firstmetrosec.ph

Page 113: Basic intro to stocks 2013 11 08

FAMI “Equity Fund”

Page 114: Basic intro to stocks 2013 11 08

Stocks

49%

Bonds

26%

Deposits

24%

Others

1%

• P3 Bn

• Launched in May 2007

• For Long-term investment

• Moderate Returns

• A balance of stocks and bond investments

Balanced Fund 2007 Net Yield 4.07%

2008 Net Yield -4.86%

2009 Net Yield 45.36%

2010 Net Yield 61.97%

2011 Net Yield 6.62%

YTD Yield (8/23/12) 17.26%

CAGR 18.54%

Page 115: Basic intro to stocks 2013 11 08

To consistently

make money:

invest LONG-

TERM 118

Buy NOW Buy LOW

Sell HIGH

Wait

The principle is

the same:

The Objective

Page 116: Basic intro to stocks 2013 11 08

With Stocks: With Mutual

Funds:

You ‘drive

your car.’

You decide

freely.

They ‘drive

your car.’

They decide

freely.

You get the stress They get the stress

Page 117: Basic intro to stocks 2013 11 08

Stocks: Mutual Funds:

You choose the

companies. They choose the

companies.

Page 118: Basic intro to stocks 2013 11 08

121

Drive your car,

yourself?

Or: hire

a driver

Page 119: Basic intro to stocks 2013 11 08

50,000

65,000

46,000

52,000

48,000

JULY

2012

FEB

2013

FAMI EQUITY FUND

Page 120: Basic intro to stocks 2013 11 08

Adjust the percentages.

Depends on your info. __% in Stock market

MUTUAL FUND

__% in Stocks that you

will personally select and

monitor

A

B

C

D

E

F

Page 121: Basic intro to stocks 2013 11 08

124

A B

Time

B.... (BLUE) is

leading

Which fund:

best track

record

Depends on

the TIME of

Measurement

Page 122: Basic intro to stocks 2013 11 08

Fair

CLAIM

ALL are

“number

ONE”

125

A B

Time

A.... (RED) is

leading

Page 123: Basic intro to stocks 2013 11 08

126

A B

Choose

a FUND

Performance

is the same.

The FUND that

> takes care of you

> answers your phone calls

> replies to your emails.

Test their

customer service

Page 124: Basic intro to stocks 2013 11 08
Page 125: Basic intro to stocks 2013 11 08

Earnings in 2013

Earnings in 2012

Earnings in 2011

2011 2012 2013

Expensive

Cheap

Cheap

Expensive

What drives the market upwards: earnings growth

Page 126: Basic intro to stocks 2013 11 08

-1%

2008 2009 2010 2011 2012 2013 2014

-1%

61%

-7%

14% 12% 11%

Page 127: Basic intro to stocks 2013 11 08

Earnings grow

+12% in 2013

Earnings grow +14 % in 2012

Earnings -6% in 2011

2011 2012 2013

Expensive

Cheap

Cheap

Expensive

Know when to BUY, know when to SELL.

Page 128: Basic intro to stocks 2013 11 08

The price moves from “cheap” to “expensive,” and

cheap again.

Company

Earnings = net

profits

BUY

BUY

SELL BUY

Page 129: Basic intro to stocks 2013 11 08

Which is cheaper

Can of fuel

P50/Liter

Same fuel

200/5 Ltrs More

expensive

per Liter

Cheaper

despite bigger

price tag

Big Can Small Can

Page 130: Basic intro to stocks 2013 11 08

Cash Dividend

Share price

= 8% - 11%

Earnings per

Share x 10%

PLDT

Common Shares PLDT

Preferred Shares

Therefore:

Cash Dividend:

10% / share

Earnings per

Share x 10% Share Price

...varies

Page 131: Basic intro to stocks 2013 11 08

Deposits are

insured: For Risky Assets:

Universal

Bank, does

both, plus, it can

own insurance

company.

Stockbroker

They put money

“to work”

PRIVATE MUTUAL

BANK FUND &

“U.I.T.F.”

Savings B

Comm’L B

Investing

your millions

for you

“Safe”

Unsafe,

Uncertain !

Investing your

thousands for you

Page 132: Basic intro to stocks 2013 11 08

6700

12,000

Outlook for PHILIPPINE

stock market index

2013 2017

Now

Normal Trend:

zig zag

Page 133: Basic intro to stocks 2013 11 08

1990– 2000: 2.5%

Yes, stocks have overshot

their Long-Term Average. 6,400

1987 – 2012: 10%

2002– 2012: 20%

1,200

2000 -2010: 4.5%

2010 - 2020: 6.5%

YEAR

2002

YEAR

2013

6,000 ECONOMI

C

GROWTH

Page 134: Basic intro to stocks 2013 11 08

13,200

Participate for the

LONG TERM !

Stocks have overshot their

Long-Term Average

6,600

1987 – 2012: 10%

2002– 2012: 20%

2012: 33%

Next 5

years:

+ 15%/yr

1,200

6,000

Annual

growth of

INDEX %

Page 135: Basic intro to stocks 2013 11 08

The value that investors attach,

to Philippine stocks

PER: 16x

PER: 12x

1980 1990 2000

“Moderate Value”

PER: 12x

Page 136: Basic intro to stocks 2013 11 08

140

3,000

2,700

3,500

2,500

PLDT .... “Telephone”

Forms a CUP and HANDLE

2012 2013 ‘14

Page 137: Basic intro to stocks 2013 11 08

141

P166 bn market value of these stocks

Page 138: Basic intro to stocks 2013 11 08

Alexander Gilles

• Lecturer on “MARKET EDUCATION” for

First Metro Securities (stockbroker)

• Financial analyst. Educator.

To introduce:

[email protected]

Page 139: Basic intro to stocks 2013 11 08

[email protected]

www.SLIDESHARE.COM/SANDYGILLES

8590600 / customerservice

@firstmetrosec.com.ph

Invite me, to conduct seminars;

to give lectures


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