Caveat

I'm on to something! Been in #ResearchMode for days now...

Forum-hopping, I have come to the conclusion that I do not know what caveat means. So I had to do a bit of googling. According to Merriam-Webster:

a : a warning enjoining one from certain acts or practices
b : an explanation to prevent misinterpretation
c : a modifying or cautionary detail to be considered when evaluating, interpreting, or doing something

Aha! So that's why I'm seeing these caveats posted across forums.

Pick Stocks Like Peter Lynch

Invest for the Long Run

Lynch has said that "absent a lot of surprises, stocks are relatively predictable over 10-20 years. As to whether they're going to be higher or lower in two or three years, you might as well flip a coin to decide." It may seem surprising to hear such words from a Wall Street legend, but it serves to highlight how fully he believed in his philosophies. He kept up his knowledge of the companies he owned, and as long as the story hadn't changed, he didn't sell. Lynch did not try to market time or predict the direction of the overall economy.

In fact, Lynch once conducted a study to determine whether market timing was an effective strategy. According to the results of the study, if an investor had invested $1,000 a year on the absolute high day of the year for 30 years from 1965-1995, that investor would have earned a compounded return of 10.6% for the 30-year period. If another investor also invests $1,000 a year every year for the same period on the lowest day of the year, this investor would earn an 11.7% compounded return over the 30-year period.

Therefore, after 30 years of the worst possible market timing, the first investor only trailed in his returns by 1.1% per year! As a result, Lynch believes that trying to predict the short-term fluctuations of the market just isn't worth the effort. If the company is strong, it will earn more and the stock will appreciate in value. By keeping it simple, Lynch allowed his focus to go to the most important task – finding great companies.

Lynch coined the term "tenbagger" to describe a stock that goes up in value ten-fold, or 1000%. These are the stocks that he was looking for when running the Magellan fund. Rule No.1 to finding a tenbagger is not selling the stock when it has gone up 40% or even 100%. Many fund managers these days look to trim or sell their winning stocks while adding to their losing positions. Peter Lynch felt that this amounted to "pulling the flowers and watering the weeds".

#StockMarket

Stock Information (GMA7)

debt/equity = 0.25 (very very good)

price to earnings = 10.29 (cheap enough for me)

consistently growing revenues and earnings.

high profit margin of 20%, higher than ABS-CBN.

high return on equity of 25%.

dividend yield of 10%.

(Source)

#StockMarket

10 Tips For The Successful Long-Term Investor

1. Sell the losers and let the winners ride!
2. Don't chase a "hot tip".
3. Don't sweat the small stuff.
4. Don't overemphasize the P/E ratio.
5. Resist the lure of penny stocks.
6. Pick a strategy and stick with it.
7. Focus on the future.
8. Adopt a long-term perspective.
9. Be open-minded.
10. Be concerned about taxes, but don't worry.

___

#StockMarket

Stock Watch List

SECB, RCB, AP AND EDC. EntrePinoyBank

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WEDNESDAY, MARCH 23, 2011

ALI, BPI, JFC, MWC, SMPH AND TEL. COL EIP

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THURSDAY, MARCH 24, 2011

AC, ALI, SM, BDO, SMDC, SMPH, BEL, LR, DMC, SCC, SMC, PCOR, AP, EDC, PNB, MBT, BPI and ICT. Broker 204

#StockMarket

Plant In The Spring Or Beg In The Fall

My Driver Is Now Investing In The Stock Market
BoSanchez.ph


Because of my bestselling book, My Maids Invest In The Stock Market, my Maids are now the most famous Maids in the world. (Haha!) Yes, they have been investing in the Stock Market for a year now and are doing very well.

But my Driver just started two months ago.

Reason: He’s a 33-year old married guy. He has 4 little kids. His wife is a full-time mom, so the entire family depends on his salary of P12,000 a month.

That’s not all. His extended family and his wife’s extended family depend on his generosity during emergencies. Which happens every time they breathe.

In other words, his P12,000 is feeding an entire village.

So how can he save and invest with all these expenses?

I didn’t force him.

Instead, I just let him listen to the stories of my Maids.

You see, every other week, I lead a small prayer meeting with our 3 Maids and Driver. And almost every meeting, my 3 Maids share how God is blessing their Stock Market investments.

I told my Maids that if they keep on investing the way they did last year, they’ll hit their first million in 7 years. That caught his attention. Finally, he said, “Ayokong ako lang ang hindi millionairyo! Magiinvest rin ako! (I don’t want to be the only one who isn’t a millionaire. I’ll start investing too!)”

Each month, he now sets aside P3000 of his salary for his Stock Market investments. And for the first time in his life, he has hope. He knows that he too will be a millionaire one day.

Today, when a relative or a neighbor begs for money, and he has no more money in his pocket, he can honestly say—“Sorry pare, wala akong pera ngayon.” (So sorry, I have no money with me now.)

Obviously, no one asks him, “Diba, may pera ka sa Stock Market?” (But don’t you have money in the Stock Market?)

No one knows about it. (Shhhhh!)

Note: By doing this, he’s also teaching them not to be parasites anymore. (But that’s another topic altogether.)

I’m very happy for him.

He’s 33 years old now. If he invests P3000 in the Stock Market each month at 12% until he retires at the age of 60, he’ll retire with P7 Million.

But analysts have backtracked the Philippine Stock Market’s history. If 20 years ago, you invested in the top 5 companies, your average growth rate would have been 20% per year.

So if my driver’s investments grow at 20% per year (especially with my guidance), by the time he retires, my driver will have P37 Million.

At P3,000 a month!

If you retire poor, it’s not God’s fault.

God is giving you a choice today.

Will you plant in the spring or beg in the fall?

#StockMarket