Question: Arnel, I am an avid reader of your blog and I became interested in the Stock Market. However, when I tried to read some materials about stocks, it is so overwhelming with figures. I became so frustrated, if this is so hard then why should I try it.
- Sandy Aquino Diaz, OFW, sent by email
Hi Sandy, thank you for following my blog and for your interest in investing. Although, you have negative impression of the materials you read online, I'm going to clarify that investing is simple and stress-free. It is very evident that what you are referring to is an online trading,where you see numbers running across with confusing figures. Lets leave it to the analyst, what I will teach you in this blog is to invest the easiest possible that even the laziest people in the world can do it.
Stock Market is so complex, yet, it is so simple that an ordinary person can do it. When I was a newbie investor, I learned these basic steps that until now I am still applying it. This is basic but very important. It is so simple that I can do it with close eyes! I learned this through my broker and I'm always keeping list on this when buying a winning stocks. How to buy the best stocks that will build your wealth? These are the things that we need to consider...
Growing Industry
Stock is a business and before buying, think its relevance to the customer and to our country as a whole. For example, you are buying Ayala Land (ALI) which is on the property sector, the question is always how's the trend right now with their business along with the competitors. How many OFW are renting and buying condos? How about shopping centers? Is SM (SMPH) still on the trend? Is banking sector in right now? Why one bank is now even open during weekends? Our country is a consumer-driven country, stocks that are in demand are Manila Water Co. (MWC), Meralco (MER), Globe (GLO), and many more...
As long as the market is doing well and growing, you can't help but the price of the stock will continue to go up and the business continuous to expand.
When, the Duterte administration came into play, the Mining sector and Gaming sector were affected most and that also affected their business and earnings. So it goes without saying that, you can't touch mining sector this time. If you are looking on the big picture, you can already see what is the best pick. Choosing your winning stocks can be done through common sense. Kindly read my previous blog A Former Ofw to a Multi-Millionaire.
Earnings
How to know if the stocks are earning well? Using my broker's platform, I can easily access a very important section there which is "Investment Guide" where you can see all the data needed. Having the data, it is now very easy to know what to do. By the way on the board, these are already an well-earning companies. You dont need to study up to 300 listed companies to know the top earners.You can also see the revenue and the revenue growth which are always up to date. When it says ''Buy", that means that you can buy them and when that says, ''Hold" that means, that you have to stop buying because it's already expensive and you need to wait for the price to drop. It is as easy as that and don't make it too complicated!
Management Stability
This is more on "Who's running the Business?". It is more on credibility and integrity of the person. When you hear Ayala, Gokongwie, Henry Sy; You already have an impression that they're very good at doing business and managing people. These personalities have printed image to the lives of the people because of decades of consistent service and innovation. They made the lives of people easier that is why the trust to them have been already built.
Last year, I can still remember that Cebu Pacific Airlines (CEB) paid big time of fines because of delayed flights. Did it affect the business? Yes, for short-term, but what happened now? They were able to bounced back and keep their competitive edge in the market and their stock is soaring high. Ask me Why? Who owns Cebu Pacific? Gokongwei. Who owns Robinson Malls? Gokongwei. Who owns URC, the maker of C2,Chippy,etc.? Gokongwei. So, that's why. The reason is the person!
These tycoons have hired the smartest and the best people in their management team and if there's some problem, they were able to go back to the track again. You can also read my blog Start Now Not Later.
Last year, I can still remember that Cebu Pacific Airlines (CEB) paid big time of fines because of delayed flights. Did it affect the business? Yes, for short-term, but what happened now? They were able to bounced back and keep their competitive edge in the market and their stock is soaring high. Ask me Why? Who owns Cebu Pacific? Gokongwei. Who owns Robinson Malls? Gokongwei. Who owns URC, the maker of C2,Chippy,etc.? Gokongwei. So, that's why. The reason is the person!
These tycoons have hired the smartest and the best people in their management team and if there's some problem, they were able to go back to the track again. You can also read my blog Start Now Not Later.
Superior Products/Services
When I say chicken joy what comes into your mind? When I say kid's favorite mall what will you answer? When I say cheaper flight, what is that? We know without thinking twice that they are Jollibee, SM Malls, and Cebu Pacific. When buying stocks, think of it if it will still be relevant 10-20 years from now. Warren Buffet, the greatest investor once said; "Only buy something that you would be perfectly happy to hold if the market shut down for 10 years. Buy a company that you can trust that will stay in business up to 50 years.
Strong Balance Sheet
Companies which have been here for a while like Ayala (AC), Universal Robina Corp. (URC), and Jollibee (JFC) have a strong balance sheet. That means that these companies have enough fund to sustain for long-term. Let me give you an example, When Mang Inasal came into the food business, it was the biggest threat of Jollibee. That was their greatest headache. For the long time, they have been puzzled how this new player was trying to beat them while their customers are divided. What Jollibee could do because it couldn't beat the new player was to buy it. Jollibee bought 70% shares of Mang Inasal for 3 Billion. Wew! You can't do that without having much strong balance sheet.
I hope these tips can help you in investing winning stocks. These are the things that you need to familiarize to be successful in building your wealth. Buy it and Hold it for a time and see it yourself. You can also learn from my story on How I Made my First Million in the Stock Market. Happy Investing!
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