I received a question in my post entitled “Applying value investing in the Philippine stock market” and I wrote such a long response to the comment that I decided to turn it into a blog post. The question is as follows: “Im still a student and ive been searching for philippine large-cap value stocks.. we have a project on constructing a financial portfolio just wanna ask if whats the best valuation method to determine if a stock is a value stock? and how are the phil stocks classified into large cap, or small cap? US has this $5 billion range ive been looking for that same sort of classification applicable to the phils . . .” - Enji My response is as follows: Dear Enji, It seems that you have two questions here. The first one is concerning classification by Market Capitalization in the Philippine stock exchange and secondly is with regards to the best valuation method to determine “value stocks” in the Philippine stock exchange. I do not dub myself as an expert, but let me … [Read more...]
How to invest in the Philippine Stock Market – Part 4a
Stock Market Conventions and Terms If you have read my previous post you must have already known why companies trade in the stock market and why you should invest in the stock market. In order to successfully trade in the stock market you must first understand the language that is being used in trading. There are several terms that might still sound foreign to you. Take note the definition of the terms that will be discussed here will not be very technical. This is not meant to be a comprehensive, “encyclopedic” dictionary or list of technical and detailed stock market terms and conventions. If you wish to have a deeper technical meaning to stock market concepts, then try searching for other sources. The concepts explained here is intended for the ordinary layman. 1.) UNDESTANDING SHARES OF STOCK – First of all we need to understand what a stock is. A stock is in a sense “a piece of ownership of a company.” To fully understand this, I will have to give a “crash course” in … [Read more...]
How to invest in the Philippine Stock Market – Part 1
Part 1 - Basic principles that each prospective investors should understand A lot of people have asked me on whether they should invest in the Philippine stock market. Most of those who asked also wanted to know how to start doing it. I do not know if they are really serious about investing or if they are merely curious about it since it has been given emphasis lately considering its very positive performance. Investing in the Philippine stock market is not for the faint hearted. As an investor you must have expectations as to how much you are going to earn for a certain vehicle of investment. Such is expectation is measured in terms of how much your money will grow at a certain period of time. (Most usually this is measured in interest per annum) Because the Philippine Stock market is in its all time high for several months now, people think that they should join the band wagon. They do not even understand the basic principles involved nor do they understand how the stock market … [Read more...]