ThOuGhTs, iDeAs, oPiNiOnS, cHaTtEr

Financial Wellness With Efren Ll. Cruz

Part two of the financial wellness seminar being conducted by our company.  I thought the speaker is the professor I had in MBA, and he is very good.  That is why, planned to attend.  Was I wrong.  My professor is Elfren S. Cruz.  LOL

Anyway, here are my notes on "Investment Insight:  Can you really beat the market?"

Speaker:  Efren Ll. Cruz
Landline:  216-1541;  359-3094
Mobile:  (0917) 505-0709
www.personalfinance.ph
Ya!man

Passive Investing Proponents
*  Efficient market
   = Price is collective wisdom of smart people
   = Random walk theory
      - News quickly reflected in prices
   = Very difficult to predict long-term proponents
* Stock picking and quick asset allocation changes a myth
*  Active management = high fees

Active Investing Proponents
* US data shows that index funds tend to outperform in better times

Three Practical Approaches
Warren Buffett
* Easy to understand, solid, enduring
* Management is after shareholders' interest
* Ignore macroeconomic factors, stock forecasts, short-term fluctuations
* Focus on discounted cash flow
Benjamin Graham
* Two types of investors
   = defensive
   = enterprising
*  Defensive Investor
   = 50% high-grade bonds (GS)
   = 50% stocks (25%-50% range)
      - 10 to 30 names only
      - large-preeminent and conservatively financed
      - long record of continuous dividend payments
* Defensive investor's stock selection
   = avoid overly small companies
   = sufficiently strong financial condition
   = uninterrupted dividend payments for last 20 years
   = no losses last 7 years
   = EPS growth of 33% in past 10 years
   = price <= 1.5x book value
   = price <= 15x average earnings of past 3 years
* Enterprising Investor
   = 50% high-grade bonds (GS)
   = 50% stocks (25%-75% range)
      - include foreign, ordinary preferred and secondary
      - relatively unpopular
      - bargain issues (temporary crisis)
      - corporate or debt restructuring
* Enterprising investor's stock selection
   = current ratio >= 1.5x
   = debt <= 110% of net current assets
   = no losses in past 5 years
   = some dividends
   = strong earnings growth
   = margin of safety:  price <= 2/3 of intrinsic value
Peter Lynch
* "tenbaggers"
*  study before you invest
*  Stock Categories:
   = slow growers -- growth same as GNP
   = stalwarts -- 10%-20% earnings growth
   = fast growers -- 20%-30% earnings growth
   = cyclicals -- periodic rise and fall in sales and profits
   = turnarounds -- liquid assets and debt levels are essential
   = asset plays -- hidden treasure
*  The Perfect Company:
   = Dull Name
   = Business is Boring
   = Spin-off
   = Unknown to Institutions and Analysts
   = Toxic waste or run by Mafia
   = Depressing
   = Operates in no-growth industry
   = Niche
   = People keep buying their products
   = User of technology
   = Insiders keep buying company stock
   = Company is buying back its shares

Value Investing
* Don't buy bonds
* Lend to companies
* Don't buy stocks
* Buy the companies

5 Steps in Portfolio Management
* Assess return/ risk preference
* Ask if you are all s.e.t.
* Before you invest, investigate
* Diversify
* Monitor results periodically

Next Steps
Ask
Seek
Knock

"Beat the Market versus Beat the Target."

Did not finish the seminar and walked my way to Ayala Center.

Bought first (discounted) movie ticket for Chain Mail.  Went to Mercury Drug to buy water and have lunch at Food Choices.  Went to Carolina's to buy a string to tie (blessed) Benedictine Cross medals I own as a necklace.  My brother sent an SMS to me last night asking again a Benedictine Cross.  He said he felt something odd last night and the kids just started crying without any reason.  This is the third or fourth time he asked me for one.  It is either he is losing the item or someone is hiding them (and I think I know who if this is the case).  He also asked for a Holy Water.  So left the items (Benedictine Cross medal as necklace and a bottle of Holy Water for my Kuya, and rosary bracelet with Benedictine Cross medal for Nica) before I left home.  Good thing I have stock and they are already blessed.


Now, my movie.  Students and teachers of a school are dying suspiciously--all because of not forwarding an e-mail chain letter.  Hopefully, tracing the letters origin and means to correct it would stop the curse.  Ho-hum...

After the movie, window-shopped plus a dessert of McDonald's vanilla ice cream cone and fishballs.  Attended the anticipated Mass and had dinner at Luk Yuen.  Would be buying Nana's diaper at The Landmark but decided to look for a juicer.  Most juicers I see cost about PhP2K plus.  Found one worth PhP800.00.  Bought it.  Weh!

Stopped at Pet Express to buy Tsubasa's dog food, SM Hypermart for apple and carrot (to test the juicer I bought), before proceeding home.

posted by ~GFA~ @ 7/25/2015 05:29:00 PM