The Investor in Securities is Like a High-jumper

Sold my Conception Industrial Corp for a 34% speculative gain. Securities bought at a speculative price will always remain speculative unless fundamental values catch up with the speculative price. (Which may take years)

Rule: Invest only for the long term /in dividends when REAL values safely, comfortably and adequately back or protect the security. 

The investor in securities is like a high jumper with 3 safety blankets to break his fall. These 3 safety nets are also usually the ones that raise the security's price. 

As well, the lower the price below these 3 security blankets, the better chance you are getting a good deal.

The first of the blankets that usually raise the price are dividends. Historically, people pay more for stocks that pay higher dividends than stocks that don't. On the other hand, the lower prices relative to the dividends, the better for you because the higher the yield for yor investment. Dividends will always make price drops worth it because of the higher yields.

The second blanket is the earnings figure or P/E ratio. A good earnings report usually raises the stock price.

And lastly, the third and rather defensive blanket is the equity or net tangible asset value of the company. This value is the equity, or what the owners really own; total assets minus debts or total liabilities. When the company goes into bankruptcy, these assets go into a huge garage sale or liquidation and the proceeds are the ones that the shareholders or owners get back. 

Remember, the lower the price below these blankets, the better deal for you, becuase when the price falls, these are the real values that will hopefully keep you up.

Century Properties Group Fundamentals Chart

My average price: 1.3126

Total shares outstanding:

12/31/2013        9,685,287,027

2012 8,241,031,784

2013 11,435,040,207

YEAR         Book Value Per Share       EPS      P/E Ratio       Dividends Per Share

2011                                                  0.102      12.87                 0.0097

2012               0.85                            0.212        6.19                 0.019024

2013               1.18                            0.193        6.80                 0.0190

2014               1.14                            0.18                                  0.019046

2015               1.25                            0.13

Quarterly Reports

Quarter       Book Value Per Share      EPS

2014 Q1          1.23                            0.05

Filinvest Land Incorporated Fundamentals Chart

My average price: 1.3926

YEAR        Book Value Per Share        EPS         P/E Ratio     Dividends Per Share

2012                     1.91                       0.14          10.64             0.0475 (May

2013                     2.02                       0.16            8.60             0.048 (May)

2014                     2.15                       0.19

2015                     2.30                       0.21

Conception Industrial Corporation Fundamentals Chart

My average price: 26.00

YEAR       Book Value Per Share     EPS      P/E Ratio     Dividends Per Share

2013                 4.95                       1.63       

2013                 8.75                       1.95       12.6

Cityland Development Corporation Fundamentals Chart

My average price:  1.0785

Dividends:

Stock (April), cash (June)

YEAR    Book Value Per Share      EPS       P/E Ratio    Dividends Per Share

2012                1.52                     0.12         9.50          10% stock + 0.03

2013                1.55                     0.12         9.17            5% stock + 0.03

2014                1.30                     0.10                            5% stock + 0.03

2015                1.47                     0.21                                               0.027

San Miguel Corporation Fundamentals Chart

My average price: 60.1030

YEAR    Book Value Per Share       EPS       P/E Ratio      Dividends Per Share

2012             71.88                       8.67         12.09              

2013             63.77                     13.36           4.65

2014             67.65                       3.78        

2015             66.32                       2.53

Metro Pacific Investments Corporation Fundamentals Chart

My average price: 4.7347

YEAR       Book Value Per Share        EPS        P/E Ratio    Dividends Per Share

2012                 3.83                        0.239         18.54                      

2013                 3.63                        0.277         15.54

2014                 3.98                        0.30

2015                 4.30                        0.34

Shang Properties Inc. Fundamentals Chart

My average price: 3.0729

YEAR     Book Value Per Share     EPS      P/E Ratio     Dividends Per Share

2012                4.252                  0.225        8.79          0.04 (Sept)

2013                4.564                  0.103        7.74          0.06 (Feb) + 0.05 (Aug)

2014                4.56                    0.42                           0.07 (Mar)                  

2015                5                         0.57                                                               

Harbor Star Shipping Fundamentals Chart

My average price: 1.4976

YEAR       Book Value Per Share        EPS        P/E Ratio   Dividends Per Share

2012                   2.10                       0.36           2.78                           

2013                   2.13                       0.24           5.04

2014                   2.30                       0.21                            0.035 (Yld 2.34%)

2015                   2.38                       0.13

Why using Technical Analysis and Fundamental Analysis is sometimes confusing:

There is some confusion with regards to using technical and fundamental analysis at the same time. These two are completely different schools of thought. The confusion boils down to this:

Technical analysis prompts you to buy when prices are going UP because it relies on TRENDS, i.e. breakout, uptrend etc.

Fundamental investing on the otherhand prompts you to buy when prices are LOW as illustrated by Warren Buffett's analogy of stocks and hamburgers: "If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions, of course, answer themselves" As they also say, it is only in the stock market that people rejoice when prices have gone up and become more expensive.

Mortgage loans and staggering the payments

I have this aunt who lives in the US. When she bought an investment property, a condominium in the Philippines, what she did was she staggered the payments as much as she can so she could get the monthly payments lowest to about P15,000 per month. The cash that she could've used to pay more for the property, 1 million pesos, was instead put in a deposit account earning 3% interest per annum. The interest from this was used to help pay for the monthly mortgage payments. I'm just not sure if it is absolutely worth it. But the method might work if you hold bonds that earn a high amount of interest. Instead of liquidating these high paying bonds to pay for the property, why not use the interest to help you pay off the monthly mortgage payments? 

Update: My aunt confirmed she was earning 3% PER MONTH (not per annum), that's a whopping 36% per year!!! She put in 1 million pesos instead of putting it in the condo equity, so she now earns P3000 per month or P36,000 per year.. The average return of the stock market is at 42% per year.. That's not a bad deal for a loan/investment at all.

Turns out she invested the 1 million in a construction company, a corporate bond sort of scheme. The construction company was better off with my aunt's 3% a month than a bank who charges 9% per month. Now I believe truly good deals exist!!!