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Wednesday, August 20, 2014

Episode 77 The Amazing Andrew Tan: How the rich get richer and the rest get screwed!


The Andrew Tan group of companies have always been a huge part of my portfolio through the years. I'm no stranger to other companies and stocks, but at the end of the day, its the stocks in the Alliance Global group which have always been my staple because I fundamentally believe in its growth story.

Andrew Tan is a visionary and a pioneer in the real estate community; building townships that supports foreign investments and create job opportunities and in the gaming industry providing entertainment and leisure.

Enough with the intro, here's where the story begins...

Last July, Andrew Tan's sold an Alliance Global block which made headlines. It was reported that the Php7.87 billion block was sold to Fidelity (a huge investment house the size of $1.3 trillion) which was brokered by UBS and reported in Inquirer's Biz Buzz.


At that time, AGI was seesawing at +- Php30/ share and Fidelity got in at a discounted rate of Php27.3 per share. Fidelity's entry fueled both positive and negative speculation amongst the masses, but in the end foreigners were net sellers for the rest of July dumping Php1.7 billion worth.


With the earnings season coming in, speculation flew the second time around. Foreigners were net buyers for the first week of August.They managed to pump the price up to Php28/share. The not so stellar earnings then started a selling frenzy. Year to date, AGI is 11% down.


Here's how the rich get richer and the rest get screwed:


Remember how Andrew Tan offloaded Php7.87 billion before earnings? Well! He's now buying it back at a 10-12% discount via his rumored broker Aurora Securities or broker 167. This means that he effectively made approximately Php800 million from the Fidelity sale and Fidelity lost that much at current prices assuming he's buying it all back.


But Andrew Tan isn't just buying AGI. He's buying Travellers International (RWM) as well. RWM has gone down 30% since its IPO last year. He's also bought a lot of Megaworld a stock analysts' peg at a target price of higher than Php5/ share.

_________________________________________________________________________________


Investing is a leap of faith. We are willing to pay a huge premium for solid companies with a strong management team and an interesting growth trajectory. Despite AGI's many hurdles: from rising operation cost for Golden Archers, weak sales for Emperador, slow down for Travellers amidst rising competition, the growth story is still there.

MEG is building a hotel monopoly partnering with global brand we love such as Marriott,Westin, Hilton, etc. It's building townships that will lure foreign companies (particularly in the BPO sector) and tourism projects that will lure foreigners to visit the country.

Emperador is entering uncharted territory buying up vineyards in Spain and has recently acquired Whyte and Mackay from Diageo (the world's largest liquor company). This opens doors for Emperador in distribution and brings the company to a global level.

While Mcdonalds is grossly lagging behind homegrown Jollibee, Golden Archers is aggressively expanding and building new stores to rival the later.

Let's not forget Travellers International, who benefits from the move of international carriers to Naia 3 from the old rundown Naia 1. Travellers is expanding Resort World Manila with the addition of Marriott hotel rooms and a grand ballroom, Maxims hotel rooms, a Hilton hotel and a Sheraton hotel. In the entertainment city along Roxas Boulevard, they plan to break ground this year.

Pretty exciting if you ask me....

_________________________________________________________________________________

Share price concerned, it's a goddamn endurance test watching the price descended down a slippery slope. AGI has broken a lot of key supports to get where we're at today and so have MEG and RWM.While there's never a foolproof guarantee when it comes to the equity market, a share price buyback by the head honcho is a positive indicator.

Thursday, August 14, 2014

Episode 76 PSE Party!: We're up all night to get lucky?!



You got to admit, the Philippine Stock Exchange is like a roulette table these days. It's not about buying the cheapest stock, because no one gives a fuck about Century Properties' 6x P/E ratio or Ayala Land's 33x P/E ratio. With global geo-political issues front and center and earning coming in for the first half of the year, the PSEi has been bouncing off the walls. Sometimes its up sometimes its down where the stock goes only insiders know...

If you're an average "Juan," there's no way of knowing what will happen to Dow Jones once the trading day begins in the West. Hell! Dow futures hasn't been working well because of the volatility as of late. We also have no clue what the MSCI re-balancing holds or if a listed company will beat analysts' expectations or not until the report comes out.

As of writing,  the market is up by more than 1% thanks to the increased weighing of Ayala Land (ALI) and PLDT (TEL). Combine TEL 32.35 + AC 13.01 + ALI 7.59 = 53pts out of the 88pts already. Out of the 30 stocks in the index and 300+ listed in the market, what are the odds that you'd have these?



And if you were holding on to these three stocks, I'm sure you may not have followed or fully follow the other stocks run up. Because that's the way markets work. You win some, you lose some and you definitely can't have it all. There have even been studies about random selection besting or rivaling professional stock picking. As much as we'd hate to admit it we're all here to get lucky!

______________________________



Last week, I said on this blog that sooner or later the inevitable would happen and the market will crap out. It hasn't by the way. Heeding my own advice, I sold 30% of my portfolio and I felt like shit immediately one day later. I would have been an even bigger dumbass if I bought back the shares I sold at a higher price.

Today, I feel like I just dodged a god damn bullet. Two of the stocks I sold were Alliance Global (AGI) and Cosco Capital (COSCO). AGI is down 2.5% from my selling price and COSCO is down 8%.

There's no shame in cashing out when the going gets rough. If the market goes up, there's bound to be another opportunity sooner or later. Kevin O Leary from Shark Tank would say "go to bed richer than you woke up," before listening to this, listen to JP Morgan first who said, "Sell down to your sleeping point."






Friday, August 8, 2014

Episode 75 World Markets and PSE recap: Blood in the streets...


Let's be real for one second: Our market has been robust and resilient since the start of the year, but no market is invincible. Since last week, all major indices started to tumble down for more reasons than one and here's a cliff notes version of it:



WORLD NEWS
LOCAL NEWS

With everything happening around the world, risk just seems to pummel reward. To top it all, foreigners are liquidation and all of a sudden the potential for profit just doesn't seem enough. As of today, I've taken a hint from foreign investors and sold my shares. I'd hate to be the last person to leave the room. You got to admire the ballsy locals out there trying to be the next David to the foreign's Goliath.



Fearless Forecast?
Although to be honest not much of a fearless forecast because I have no doubt that this will eventually happen.

Here's my prediction volatility is rising and prices are dropping. Eventually, this will meet and the meeting point is somewhere near 6,500. The chart below is a depiction, so don't take the timing so literally.


I'm also getting the same numbers from my favorite chart analyzer. The bottom half of the Fibonacci arc shows that it could hit 6,500 --> 6,300 --> 6,000.



Wednesday, August 6, 2014

Blame it on my OCD!: Command Hooks Galore (Lifehacker reblog)


I don't know about you but this just makes me positively drool. For the full article head on over to Lifehacker.com. My hook obsession isn't healthy. First it was the BJÄRNUM Folding hook from IKEA and now this. Damn it!


Marketing Talk: Apparel brand relevance based on Stock prices

The fashion business is one tricky business. 
It revolves around perception and brand image. You have to move fast and always be current and on trend. As supermodel, Heidi Klum says: "one day you're in and the next day you're out!"

Luxury brands that are hot have astronomical margins which they dictate however they choose to, while fast fashion brands which sell to the mass market price their goods dirt cheap relative to luxury brands.


What's hot and what's not?


Stock prices are often a reflection of sales and profitability. When a company is doing well, the stock price tends to rally and inversely if a company is struggling or underperforming it plummets. As of August 6, 2014, the following retailers listed below have met or exceeded the investing public's expectations.



Company 1-Yr Rtn
FCCN French Connection 76%
KATE Kate Spade 57%
HMB H&M 20%
BOSS Hugo Boss 19%
NKE Nike 17%
ANN Ann Taylor 12%
KORS Michael Kors 12%

On a sour note, certain brands have struggled to stay relevant.
Adidas for example has recently taken a massive hit because of the geo-political tension in Russia and Ukraine. Lululemon which was once selling like pancakes has fizzled down after facing recalls for sheer yoga pants and fiercer competition in the fitness apparel segment. The overly priced basics company, American Apparel has tremendously come down from its once $2 billion valuation as consumers look for better value.


EXPR Express -31%
COH Coach -32%
ADS Adidas -32%
AEO American Eagle -36%
LULU Lululemon -47%
BEBE Bebe -50%
APP American Apparel -57%
ARO Aeropostale -77%

Its hard to understand a segment where companies' clutch at straws all the time. Aeropostale and Coach rallied as the global market fell last night so hold on to your hoodies and purses because they  might still be worth something.


Episode 74: Calling out Analysts' Bullshit (Part 3): Bloomberry Resorts


Monkey see, monkey do is the worst way to go about investing!
Ever since the start of August. The market has been on the edge. DJIA lost 300pts on July 31st and the PSEi gained 40pts after plungging 80pts on "AuGHOST" 1. The market has defied the law of relativity and there seems to be no way of telling where the market is going in the short term these days.

Bloomberry hit the slot machine jackpot recently. It profited P2.3 billion in the first half of 2014 from a loss of P1 billion the same time last year. This renewed interest in the stock sending First Metro into a buying frenzy. From July 21 to present First Metro bought P83 million at an average of P11.54.


Yesterday, Bloom disclosed that a foreign investor sold 245 million shares at P11. This sent the stock down 5% for the day. On his twitter account, Gus Cosio of First Metro sent the tweet below:


Today, as of writing, Bloom is somewhere near P11.2 to P11.3 with UBS and Philippine Equity selling heavily. You might be wondering what First Metro (who talked about investor confidence and a buying window) has been doing so here's a summary below.


Selling at P11.23 when they spent more than two weeks buying at an average of P11.54. Damn! I hope its not interns running the fund. Where's the strong P11.4 support now?


Update as of 11am:


First Metro Securities is now the top seller for the stock. That just oozes confidence. Remember: What comes from an analysts' mouth can sometimes be different from what he does...

Tuesday, August 5, 2014

Tech talk: Daily driver and TOP 10 APPs I love...


In the age of social networking and start-ups galore, there's not much that impresses me these days. Technology has spoiled us rotten and I feel like we've seen it all (probably not though!) based on the grand gestures from the past decade. There's no more android or ipad-like concepts to wow us. Heck! They've even managed to bring to life driverless vehicles.

From large scale macro perspectives, the future is in micro ventures and the way they wow us is by making things more intuitive, making this understand us and work for us. Google is awesome at this! 1. Gmail for example, I never would have thought my email needed tabs, but now I mock other providers without. You can save so much more time and be more productive by skipping the advertising fat in your mail.

I love how every android phone has a personality of its own. You and millions of other people in this world could have the same phone and have another person with the same phone feel like his device is alien to you. 

 
I'm using a Samsung S3 as most non-Apple users are and I hate the native homescreen Samsung has. It looks just so bright and happy and I need it to reflect who I am which is quite the opposite of that. With the help of an app called 2. Launcher Pro, I can keep my android devices looking the same. I was previously using a Motorola and it looks exactly like my Samsung.

I'm widget obsessed. The widgets I use are 3. Folder player widget to plays songs based on folders,  4. a calendar widget (not pictured above), 5. S Memo widget for immediate note taking, 6. a calculator widget, and 7. Taptu widget.

I love how Taptu offers curated information. You can tailor fit your reading materials depending on which categories pigue your interest or the source of information/ publication. S Memo is a great way to ditch boring old post it notes and its environmental friendly as well. For navigation, 8. Waze occassionaly gets remote places wrong but if you're directionally impaired like I sometimes am, it helps.

On the desk related end, there's 9. Feedly which I use for RSS feeds. In case you're not familiar with RSS, its a format of delivering content. Every site has a feed and Feedly combines feeds so you can read it in a single location without having to open multiple sites to check if there's something new.


Lastly, there's 10. Pinterest. This is mostly for recreation purposes. Pinterest is great for exploring interests and learning new thing/ storing things or memories. I talked about being wowed by an app earlier and the content people put on Pinterest is amazing. I love learning about life hacks and Pinterest just gets me.

I was supreised with the 'explore interests' feature which came out with items I was genuinely interested in based on my previous post.


Saturday, August 2, 2014

Healthy gawker: Vegan vs Paleo in Manila


Apart from trying the GE Diet once (which is the stupidest thing because you're eventually gonna gain the weight back plus more), I've never been much of a dieter. I'm guilty of loving junk food and if there's a cake in the room, I'm most likely to stuff my face into it. So whenever I felt like I was gaining weight, I usually stick to physical activities to get back in shape.

Being in my mid-twenties, my metabolism just ain't what it used to be.  And seeing as I'm not a yoyo-dieter, I'm more of a yoyo-exerciser, I needed something more permanent. Hence venturing into a legit lifestyle change via a diet plan.

I've been Vegan for about three weeks before switching over to Paleo for almost the same amount of time. I have weekends off to stuff my face with carbs and sugar. For those of you wanting to try either diets here's what you need to know:

1. Vegan diet is a plant based diet, so that means no meat or meat by-products.
2. In Paleo (the caveman diet), you stick to food products that your body can easily digest, so that means no processed foods, no grains and no legumes (not even peanuts but yes to almonds, cashews and pistacios).


VEGAN PALEO
1. NO MEAT
2. NO DAIRY
3. NO EGGS
1. NO GRAINS
2. NO LEGUMES
3. NO DAIRY
4. NO Refined sugar
5. NO Processed foods
*no potatoes, corn, refined oils…

3. No dairy
Both diets are sans dairy, but in this modern day and age there are dairy alternatives. Like soya milk for vegans and almond milk for both on vegan and paleo.

  • You can buy almond milk in a lot of supermarkets these days. But be warned, it comes with a hefty price tag.
  • The brand I use is Blue Diamond: Almond Breeze (no sugar): you can buy it in S&R for (Php600+ for a box of 6).
  • Almond milk has twice the calcium and 1/3 the calories of regular milk.
  • For cheese, you can experiment with cashews or almonds, but that just ain't for me.

***FOR #4-5 note that I would never starve myself just to get thinner. I eat as much as I want when I want, only I now folow a certain set of rules.

4. What I ate as a vegan?
  • Apart from veggie dishes, I ate a lot of cereal and oatmeal.
  • I made burgers out of mushrooms from a recipe online. 
  • I had tofu nuggets and garbanzo (chickpeas) nuggets as an alternative to meat. They were really simple to do. For the tofu it was just bread and bake while for the garbanzo it was crush, bread and bake.
  • I was able to get away with junk food. I particularly liked the Veggie Straws in S&R which were healthier than regular potato chips.

5. What I ate while on paleo?
  • I make a week supply of grill chicken breast for lunch.
  • On other days I have canned tuna (yup! processed)
  • Snacking is hard on paleo. I can barely eat anything from the supermarket aisles these days. SO its mostly fruits.
  • My junk food alternative is kamote (sweet potato chips). Sliced using a mandolin, seasoned with olive oil and herbs placed on top of wax paper and microwaved for 3:30 minutes.
  • I tried baking muffins out of almond flour, almond milk and a ripe banana/ apple sauce which was really good, but expensive. You can get almond flour/ powder at Rustans for Php1,100 a kilo. 150 grams will make you 8 muffins.
  • No soda, no alcohol. SO its either fruit infused water or tea.

6. Why I switched to paleo?
I was a happy little vegan until I accidentally saw an interview of Jack Dorsey (founder of twitter) who made the same switch. It just seemed more logical to eat food that your body can process/ breakdown faster rather than the one's they cannot.

Being on paleo is easier when you're dining out with others. You just avoid the carbs and the legumes. People won't even know you're on a diet.

Friday, August 1, 2014

Episode 73 Sharknado 2: Local vs Foreign in the PSE



In case you weren't watching, the entire world went to shit last night. Indexes lost 1.5-2% overnight as news of weaker earnings in Europe and the US, the second Argentinian default of the century and heightened geo-political risks in Ukraine and Gaza took the spotlight. Gold went down 2% and so did Oil. On top of it all, as of 4 pm yesterday, the Bangko Sentral ng Pilipinas (BSP) increased its policy rates by 25pts to curb inflation.

 With everything going on (ghost month included), it was enough to send panic across the PSEi index. Shortly after opening, the market dipped close to the 6,800 support then the sharks came in and took over bringing the index close to yesterday's closing level as of writing.


For those who stayed invested and sold early in the trading day, they could have easily lost 1.5 - 3% and that's excluding transaction fees. Add the cost of buying back and selling at current prices and that's at least 2.5 - 4%. It may not seem like a lot, but throw in a couple of zeros depending on the size of your portfolio and it adds up.


LOW CURRENT
PX 12.1 12.44 2.8%
MEG 4.15 4.25 2.4%
AGI 25.75 26.35 2.3%
PCOR 12.02 12.3 2.3%
MCP 11.44 11.68 2.1%
BEL 4.85 4.95 2.1%
SMPH 15.08 15.32 1.6%
ALI 30.6 31.05 1.5%


With investing as with anything else, you pick and choose your battles. Fundamentally, making money is just buying low and  selling high. It's not that difficult to understand in principle, but it takes practice in well practice.


For 10-20 minutes today, the sharks had a feeding frenzy using noneother than the locals as their snack. UBS and Philippine Equity (formerly Morgan Stanley if my intel is correct) went to town. Those sharks (yes sharks! it seems more fitting than bulls) smell blood in the water, they go in for the kill.

Now who knows what the next few days will bring. It could be a bounce it could be more bloodshed. Whatever happens small investors need to play smarter not harder or we'll hardly stand a chance. This means sell on rallies and buy on dips (intraday or otherwise). Never be emotional! Never panic!

Monday, July 14, 2014

Favobooks.com: Book recommendations from successful people


In the age of information technology, its sometimes hard to believe that people do still read books. When was the last time you finished a good old fashion piece of literature? Because the last time I did was about a year ago and that was an audiobook. A one point or another I'm sure a lot of us have asked the question: who still reads books?

Apparently successful people do...


 
I'm currently obsessed with Favobooks.com. The site tracks a wide the list of books that businessmen, politicians, influential people/ celebrities and even what writers love to read. And its interesting to read about what people read because it feels like a gateway into a persons mind or thought process.The site also provides a brief synopsis for each book making it easier for one to find books to add to his or her reading list.

Everyone needs a mentor/ role model and while we may not have access to the people we admire, this information age makes it possible to connect without contact. Just some successful people on the site listed at the top of my head: Elon Musk, Bill Gates, Malcolm Gladwell, Jay-Z, Oprah, Steve Jobs, Bill Gates and the list goes on...





Wednesday, July 9, 2014

Absolutely Insane Megastructures!: Dubai Mall of the World




 
If you've been to the tallest tower in the world, the Burj Khalifa in Dubai you may have noticed a quote saying that:

“The word impossible is not in the leader’s dictionaries. No matter how big the challenges, strong faith, determination and resolve will overcome them.” 

Yeah! H. H. Sheikh Mohammed bin Rashid Al Maktoum said that. And in essence with his leadership this encapsulates everything you need to know about Dubai. Dubai quashes all our preconceived notions proving that nothing is impossible with its massive urban planing projects and breathtaking mega structures. Just when you thought the Dubai Mall was friggin' insane, out comes the mother of  malls.
THE MALL OF THE WORLD
The Mall of the World will also include a 3-million-square-foot wellness district and theaters modeled after famous cultural landmarks like the West End and Broadway. There will be 100 hotels and service apartments built on the 48-million-square-foot premises in order to accommodate the 180 million visitors the mall hopes to host annually. "The objective is to create an integrated city with a plethora of best-in-class options within pleasant environments," said United Arab Emirates Prime Minister Sheikh Mohammed bin Rashid Al Maktoum in a statement.

Neither a budget nor a completion date have been announced as of yet. The Mall of the World might seem like an outlandish, capitalistic fantasy, but Dubai is no stranger to extravagance. Among other things, the city is famous for containing the world's tallest building and throwing a record-breaking fireworks display.


Source:


Tuesday, June 24, 2014

Episode 72: Calling out Analysts' Bullshit (Part 2)...


Brokerages are all alike. The end goal after all is to make money and that is why we're here...

When it comes to trading, all is fair in love and war. Shame on you if you fool me once, shame on me if you fool me twice. I could list down a dozen other cliches but who gives a fuck! Right?!

In the last couple of days, Philex Mining was one of the hot stocks in the market. A combination of higher gold prices due to concerns in the Middle East and lifting of the Padcal mine suspension after 2 years made the stock skyrocket. While a lot of foreign fundies shied away from the stock, only ATR was on top of it.
 

Atr Kim Eng started buying in at 9 peso something and cashed out above 12 pesos for 20-30% profit. Not bad for a couple of days work. ATR was the first one in and the first one out.

If you've been in the market for the last year or two, you'd probably know that mining fell out of the favor. The governments indecisiveness on the mining revenue sharing scheme and metal prices plummeting worldwide made it tough for the sector.

ATR's company update pegged Philex's future value at Php31.12 pesos from Php34.54 in June 2013. The stock was only going for Php9.31 back then. Several months later, ATR lowered its target price to Php17.19. Just yesterday, ATR was selling at an average of Php12.18.


This just goes to show that you can't trust analysts' forecast. We are all motivated by making money. An analyst may say one thing probably even believe it if we give them the benefit of doubt, but they need to make money in the short term  otherwise they wouldn't be very good at their jobs.

In all my years in trading, if there's one thing I've learned is to never fight the biggest meanest bully in the playground. It's great when you have them on your side, but hell hath no fury like a fundie scorn

Just take a look at what Deutsche Bank did to Belle Corp when it found out that the parent company, Belle was injecting its gaming interest into Sinophil. It sent out a comprehensive analysis on Belle with a future value of Php7.20 and sold down the share at less than Php5 the same day.




Some might say its unethical, the bastard/ douche thing to do, but ethics doesn't really have much to do with making money. We've seen far worse in this market. Like how BDO securities was the first to cash out on Belle corp before we even knew what was going down. Or how deviously shrewd money makers such as Felipe Yap cashed in on the Philex hype by selling shares of Lepanto.


There are only two types of people in this market:winners and losers. If you want to add a third then its the trained monkeys pushing buttons to buy and sell for their clients. You need to decide which one you are...


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