Warren Buffett is undoubtedly the world’s best investor. Aside from his excellent ability to analyze a company’s fundamentals, he is also very good in knowing when to buy stocks and when to sell it. While knowing when to sell is quite tricky, knowing when to buy stocks the Warren Buffett way is easy. The ideal on when to buy stocks is to “Buy low and sell high.” Ironically most people only pay lip service to this fundamental principle on when to buy stocks because what most are doing is exactly the opposite. For example in 2007 people were asking the “experts” when to buy stocks. The “experts” said “now” in order not to be left behind. The Philippine stock index (PSEi) was at 3800 points (from a mere 1000+ points) The “experts” at that time were saying that it will reach 4400 points. At 3000 points, people want a slice of the action so they jumped into the band wagon and bought when stocks were at its all time high. The PSEi eventually reached 3800 points but never went … [Read more...]
Applying value investing in the Philippine stock market
Ever since I started reading Warren Buffett books more than 3 months ago, I had been hooked on value investing. I bought all the value investing books I could get my hands on. Perhpas I should consider taking some diet pill to stave of my hunger for value investing books. hehehehe :-) I wrote about my value investing book purchases in the post entitled “How Warren Buffett made me poor” and “I’ve got the latest Warren Buffett book!” Recently, I read some Benjamin Graham books. Benjamin Graham is Warren Buffett’s mentor and is considered the “Father” of value investing. “Value investing” according to Wikipedia “involves buying securities whose shares appear underpriced by some form of fundamental analysis” Graham refers to value investing as buying an item worth $1.00 for half the price. The definition of “Value investing” has evolved throughout the years and has been refined by Warren Buffett. Warren Buffett is said to have a consistent above 20 % return per annum for more than 50 … [Read more...]
The financial script of life
Have you ever tried seeing a movie by watching the ending first and working your way backwards to the beginning? Sounds weird hugh? But that is exactly what we will be doing now. For most people, sadly their financial script of life ends with the words “Bankrupt” instead of “. . . .and they lived happily ever after” that is, they end up relying on their little social security pension or worse rely on their children to take care of them . So how does an educated middle income individual end up with the words “bankruptcy” written at the end of his script of life? Watch this youtube video on the financial script of life. After the video on the financial script of life, there are other informative videos as well such as the effect of interest rate, the difference between an asset and liability and the types of investor. This youtube video on the financial script of life is courtesy of the International Marketing group (IMG) of which I am a member of. Although I am not a very … [Read more...]
I’ve got the latest Warren Buffett book!
I’ve added the latest Warren Buffett book to my collection bringing my Warren Buffett book library to a total of 14 books. They say that there are about 200 books on Warren Buffett, so I have 186 more to add to my Warren Buffett book library whahahahha ! ? I have three passions when it comes to collecting items. These are pins, artifacts from another place or culture and you guessed it a Warren Buffett book ! Lately, I had become a fan of Warren Buffett and I have searched far and wide for materials to add to my Warren Buffett book collection. Last month, I wrote a post entitled "How Warren Buffett made me poor." You might want to check that out. My parents just arrived from the United States and I asked them to bring me some pins and some Warren Buffett books. They brought three with them; those are “The Snowball – Warren Buffett and the business of life” by Alice Shroeder, “Warren Buffett and the interpretation of financial statements” by my favorite Buffetologist, Mary … [Read more...]
Next major tsunami, the European financial crisis
I don’t want to sound like a prophet of doom, and as an investor, I don’t want to sound pessimistic when it comes to the economy either. However it seems that the worst is far from over as there is another financial tsunami that may hit the world as badly as it did the first, the European financial crisis. Of course it cannot be denied that the European financial crises have partly been caused by the United States’ subprime mortgage problem. Since Uncle Sam contracted the Flu, Europe has lost more than $ 300 billion in asset write downs. Banks has been bailed out, and big European countries have been injecting cash into their banking POS systems to increase liquidity in the hopes of averting a European financial crisis. But the European financial crisis does not end there. Since Europe dropped its interest rates several years ago, it experienced a real estate boom all across the region which in turn led to the growth of the banking and construction sector. This growth is … [Read more...]
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