As I venture into stock investing in the Philippines, I realized a few things.
1. You can invest for cash flow for slow and steady returns or capital gains for fast & quick returns.
2. There's a lof of greedy businessmen and managers in the Philippines
I thought about it for a long time and though capital gain is very tempting and its what fuels liquidity and traders in the market, I realized that its better to invest in cash flow.
I like the steady stream of income from dividends instead of varying gains and losses each month. For one thing, its stressful and second, it takes a lot of my time. I like to never worry about if my holdings went up or down, but only concerned and happy about the checks that comes in every month.
I think, in the longer term, stock investing mainly for cash flow is more secure and fun. Because you get paid after you buy a stock for a lifetime.
Wednesday, July 25, 2012
Sunday, July 22, 2012
Why Puregold Will Never Be Like Walmart
At first IPO of this great business model, I was excited. Finally, a Walmart - like business in the Philippines. Affordable retail and it might conquer the Philippines like that of Walmart. I bought as much as I can in this IPO and I just sold all of them a few weeks back. I made a hefty amount of profit but I am very disappointed that I have to sell. Here's the reason why...
When I bought into Puregold, the goal for me is to hold on to it forever. Judging by what Wamart accomplished, I see myself having a comfortable retirement just with this company. It did what Walmart did... Until now. Walmart is owned by a close knit family with a frugal tradition and will never do anything stupid for the business and that in turn will also translate to a positive shareholder / investor value. They will never pay themselves ridiculous amounts of bonuses. And that is where Puregold I think messed up.
I could forgive that Puregold expanded very rapidly, taking advantage of low interest rates, taking loans everywhere, building expansions, acquiring... I can forgive all that, although that alone is a red sign for me. You can not expand too fast or borrow money too fast. But the last draw was that, they decided to pay the managers large sums of money, devaluing shareholder's investments. That's the last draw. I'll take my money elsewhere. Too bad Puregold... You might go up once I sold. And that's good. I'm happy for you. But I can't trust you with your managers sucking all the money. I can't trust you now as a business partner.
When I bought into Puregold, the goal for me is to hold on to it forever. Judging by what Wamart accomplished, I see myself having a comfortable retirement just with this company. It did what Walmart did... Until now. Walmart is owned by a close knit family with a frugal tradition and will never do anything stupid for the business and that in turn will also translate to a positive shareholder / investor value. They will never pay themselves ridiculous amounts of bonuses. And that is where Puregold I think messed up.
I could forgive that Puregold expanded very rapidly, taking advantage of low interest rates, taking loans everywhere, building expansions, acquiring... I can forgive all that, although that alone is a red sign for me. You can not expand too fast or borrow money too fast. But the last draw was that, they decided to pay the managers large sums of money, devaluing shareholder's investments. That's the last draw. I'll take my money elsewhere. Too bad Puregold... You might go up once I sold. And that's good. I'm happy for you. But I can't trust you with your managers sucking all the money. I can't trust you now as a business partner.
Tuesday, July 17, 2012
Think About The Future, Are You Prepared?
While reading a book about personal finance, it came to me that I might not be as well prepared as I thought I'd be for my retirement. Come to think of it, I only think of myself when I retire and how much money I would need to live comfortably. I forgotten about my parents, they will be dependent on me as well.
As more and more Filipino parents depend on their children for financial support, I think its mandatory for each one of us to learn how to invest. And for future parents to think about the future of their kinds. Personally, I don't want to depend on my future kids to feed me on my old age. Though, I'm a little agitated because I need to support my parents, I think I have no choice.
For those of you reading this blog, don't let your future children support you financially. You will only drag them down to whatever they want to achieve in life. I know it sounds harsh but its the truth. I think its a dangerous cycle. You support your parents, then you don't have much money saved for old age, your parents die, you get old, your children becomes adult and they need to support you. Then your children will do the same thing for your grand children because they didn't saved much for retirement either because of you.
As more and more Filipino parents depend on their children for financial support, I think its mandatory for each one of us to learn how to invest. And for future parents to think about the future of their kinds. Personally, I don't want to depend on my future kids to feed me on my old age. Though, I'm a little agitated because I need to support my parents, I think I have no choice.
For those of you reading this blog, don't let your future children support you financially. You will only drag them down to whatever they want to achieve in life. I know it sounds harsh but its the truth. I think its a dangerous cycle. You support your parents, then you don't have much money saved for old age, your parents die, you get old, your children becomes adult and they need to support you. Then your children will do the same thing for your grand children because they didn't saved much for retirement either because of you.
Wednesday, July 11, 2012
Puregold (PGOLD) and Greedy Managers
What would you feel if you went into a convenient store to buy a pack of cigarette for P100. Then after a while someone dressed in suit walked in and bought a pack for P75? What's even more insulting is that, he wants to buy your pack of cigarette for P75. And you have no choice when a gun is pointing at your head. Will you be pissed?
Of course... I'll totally be pissed. I bought the product at a regular price and someone dressed in a suit just walked in an bought at 25% discount? And he also wants to get what I bought, making me lose 25%.
This is what happens to PGOLD. I love this company... Used to... I think the business model is great. But the managers are sooooo greedy. I unloaded all my shares. I did plan to hold on it forever but I don't want to do business with greedy bastards like that.
When managers are awarded with stocks at discounted price. That price is shouldered by the common shareholders. When they bought the stocks you can see their portfolio already up by 25%. They can sell at anytime. 25% profit is already huge. But at the cost of diminishing the value of the shares kept by the common holders.
Puregold, I think you have a great business. But you're not a good business partner. Why make my investment less valuable just to pay your managers?
Of course... I'll totally be pissed. I bought the product at a regular price and someone dressed in a suit just walked in an bought at 25% discount? And he also wants to get what I bought, making me lose 25%.
This is what happens to PGOLD. I love this company... Used to... I think the business model is great. But the managers are sooooo greedy. I unloaded all my shares. I did plan to hold on it forever but I don't want to do business with greedy bastards like that.
When managers are awarded with stocks at discounted price. That price is shouldered by the common shareholders. When they bought the stocks you can see their portfolio already up by 25%. They can sell at anytime. 25% profit is already huge. But at the cost of diminishing the value of the shares kept by the common holders.
Puregold, I think you have a great business. But you're not a good business partner. Why make my investment less valuable just to pay your managers?
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