Why you should never follow any list of stock recommendations, including mine.

The original title of this post was supposed to be, "How to choose the best stocks." But I wanted to make it sound very urgent, hence the new title.

If you're one of my "older" email followers, you should've noticed that I've already stopped sending stock picks and recommendations. It was not to leave you hanging. Instead, I tried to teach how you could become independent. That's probably the best decision I've ever made in this blog's life.

And as usual, I'm going out of the norm again telling you that you should never.. I repeat.. NEVER follow ANY stock recommendation. And that includes mine (as if I'm still sending them).

Why this is an urgent concern.

Since my email followers are mostly (if not all of them) beginners, it's just natural for them to ask my recommended stocks. But rather than giving them recommendations, I give my insights on a particular stock. So far, it has worked for them. And at the end, they're the ones who make their own decision.

But there are a lot of things happening in the stock market more than the price action. There are tender offers, merging, IPOs (initial public offering), companies getting delisted, stock splits, and many more. These are on top of the challenges that some companies are experiencing, (like EDC's shut down of the Bacman plant).

Because of that, my followers' new found confidence start to flush down the drain. Suddenly, they don't know what to do with their stock anymore. They ask questions like these (but are not limited to):

"What should I do with stock-x? I'm already losing 10% (or whatever amount)."
"What do you think of stock-x? The price is rising like crazy. Is it ok to participate?"
"Why are you not invested in stock-x? Is it not a great company?"

At first, only a few followers ask me about it. But lately, I've been getting a lot of them.

To my email followers, I strongly encourage you to ask more of these questions so that they can be addressed. After all, I answer all of them. So the only wrong question is the one you'll never ask.

Why some most people follow (and pay) for stock recommendations.

People don't want to be accountable.
If you're in a corporate world, there's this thing called "transferring the risk". Do do that, companies hire a third party. Example, if your supplies need to be delivered from one place to another. Instead of delivering them on your own, you hire (and pay) someone to do it for you. Pag may nangyari sa supplies mo, may masisisi ka. Tama?

Sadly, people like these flock the stock market world. They just make the because-I'm-only-a-beginner excuse. Hindi ko naman nilalahat. That was just my observation. (Break: I was actually surprised to find out that many TRC members were very mad at Bo when he recommended to sell CEB at a lot of loss).

My friends, making mistakes is part investing in the stock market. Even your so-called mentors make mistakes. Everyone is entitled to it. Of course you lose money in the process. I say you use it as a motivation to gain it back, if not more.

Remember: Unaccountability is one ingredient for you to fail in the stock market.

Why I recommend you to never follow them.

The disclaimer.
Most, if not all services have disclaimers. In the stock market's case, a disclaimer is a clause where the mentor is waived of the responsibilities in case losses are incurred to his clients because of the services that he/she gives. 'Pag nalugi ka, wala kang habol at wala kang laban! That alone should already ring a bell for you.

Imagine yourself paying for a stock market mentor who will never be liable in case they're wrong.

They don't solve the problem.
For my long time readers, I hope you already know the major problem that this blog wishes to solve - the increasing number of investors who want to be (please allow me to be brutally honest)... wait for it... spoon-fed.

If you notice, most of these recommendations only give you a list but fail to give the thesis behind it. In short, they don't teach you. That's perfectly okay because that's how mentors get their paycheck. Nothing personal, just business.

Anyway, back to the problem. Lack of spoons is not the problem. Hence, increasing the number of spoons won't solve the problem. Kung hindi ka pa marunong kumain, 'wag kang humanap ng magsususbo sa 'yo. Humanap ka ng magtuturo sa 'yo kung paano kumain. It doesn't rhyme but I hope I got the message across.

You should be picking your own!!!
This is the solution to the problem I mentioned earlier. If you won't follow any recommendation, then you must make your own recommendation for you. I know it's a bit scary at first, but you at least have to try.

I'm sure you drowned first before you learned how to swim.
I'm sure you had bruises when you first rode a bike, then tripped.
I'm sure you were dead scared when you first drove the freeway.
I'm sure... I'm sure you get the point.

Be accountable and answer to no one but yourself.

How can you come up with your own picks?

Now THAT is the million dollar question. This is where I come in. I going to teach you how you can come up with your own stock picks that suits your personality (fear, greed and risk appetite).

But there's a catch.

I will be sending out the copy only to my mailing list. If you're a newcomer, don't be disheartened. I haven't started with the post yet, but I already have a structure in mind. If you want to receive it, you just have to subscribe to my mailing list.

Why give it only to my email subscribers?

This is serious stuff.
Look, people pay for this kind of stuff. For most of them, a stock recommendation (specially from the truly rich club) is the holy grail. TRC earns millions of pesos every month by sending this, and I'm going to teach you how to come up with something similar at no charge.I want this stuff to be in the hands of people who are very serious to respond to my call to action. Pwede 'nyo ito pagkakitaan 'noh!

For the next points, please allow me to be a little bit melodramatic.

My email subscribers are loyal readers.
I know there may be some loyal readers that are not subscribed, but I'm sure most loyal readers are part of my mailing list. People landing on your page is one thing. But for them to return is another story.

In fact, most of them are already very good when it comes to investing in the stock market, yet they still care to read every new post that I publish.

My email subscribers are engaged readers.
I love leaving comments to other blogs, so there's no surprise that I love to have them on my own page. What I love most about my readers' comments are they're don't just leave "Nice post!" or "Great article!". They give their views, questions and opinions that would benefit new readers. Sometimes, their comments make a better "post" than the article itself. Good job readers!

Some of them may not look engaged in the comments section. But they actually send their comments to me thru email. Though I'd still encourage them to leave it in the comments section. Remember, those comments benefit not only me, but also new comers.

My mailing list is the life of my blog.
Think about it, even if Google would put my blog at the 1,000th page of its search results, my blog will still survive. With just one email, my traffic would spike up because they care for what I say. Frankly, Google only gives roughly 11% of my total traffic. I gain huge readership through referrals from my mailing list.

GROUP HUG!

I'd like to ask a small favor.

If you'll allow, please share this post in any social media. I strongly feel that this is by far the best and most beneficial post (specially to beginners) I've published to date. Don't worry, I wouldn't mind if you won't share :)


Closing.

I hope I had everyone thinking (but not confused) again, and would consider switching to the "dark side". I was actually saving this for my future post, but the situation calls for it already.

Anyway, usually I would ask you something about the topic and leave them in the comments, but I can't think of something right now. So just leave whatever you want to share in the comments section.

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Why too much reading and studying is a waste of time

Whenever a beginning investor would ask for tips on how to invest in the stock market, he/she would most probably get the response of, "Read and study. Invest on educating yourself first." I couldn't agree more. In fact, one of the biggest mistakes that beginners make is that they jump right into investing without building a strong foundation on financial literacy.

However, I would not advise for you to read too much.

What is THE goal?

Remember that financial literacy is the foundation, not the goal. The less time you spend on building up your foundation by reading, the earlier you could start reaching that goal. But take note that the lesser time spent reading DOES NOT always equate to a lesser quality of education, though that's what happens most of the time.

Why waste of time?

How many finance books have you already read? I'd assume that you learned something from all of them. But were you able to apply them in real life?

Also, most materials of the same niche would probably have the same content, just written in a different manner by different authors. How many of those were just a "repeat" of the other?

Just like my post about how not to diversify your portfolio, you only need a few right decisions to be rich. It's the same case in reading.


The three (3) books that I highly recommend.

Rich Dad, Poor Dad by Robert Kiyosaki

If investing sounds Greek and a whole new planet for you, then this book is for you. And if you think that My Maids Invest In the Stock Market is an eye-opener, then try this.

In here, you'll realize that whatever you learned in school does not and will not prepare you on the terror lies ahead in life. But it does prepare you on one thing - your future desk job.

Personally, I like how this book was written because of the choice of words. Here are some excerpts:

"If you want to learn to work for money, then stay in school. That is a great place to learn to do that."

"Mike and I learned more sitting at his (referring to Mike's dad) meetings than we did in all our years of school, college included. Mike's dad was not school educated"

Take that!

To sum up the whole book, it basically tells you to build your asset column and stop spending on liabilities that you think are assets. If you're investing in the stock market but did not understand what I meant, then I seriously advise you to read this.

8 Habits of the Happy Millionaire by Bo Sanchez

If Rich Dad, Poor Dad teaches you what you should do to get out of the rat race, this second book that I recommend will teach you HOW to do it.

Compared to western countries, Filipinos have a different way of spending money. For one, most of us still support our parents, and extended families for some. That's why I recommended a book that's written by a Filipino author.

The best chapter in this book for me is where Bo taught us how to divide our income into several parts (expenses, retirement, emergency, etc). If you're too lazy to read the whole book, just read that chapter and you're good to go.

For me, the two books that I mentioned above is already enough to build your foundation. Anything more than these is just extra. In my point of view, it will already be a waste of time.

For those venturing in the stock market, here's my last recommendation:

The Tao of Warren Buffett by Marry Buffett and David Clark

For value investors, this is the best book that I can recommend. Most, if not all the stock principles that I apply came from here. This book is a summary of all the Warren's investment strategies and beliefs.

I tried to love technical analysis but I'm always drawn to value investing because of this book. Needless to say, I cannot recommend a technical analysis material because it has never worked for me.

This book is has been the backbone of my top 5 stock picks, and is the reason why buy and hold (but not forever) is my most favorite strategy and why I don't diversify.

Why do I recommend these three (3)?

These are examples of evergreen materials. The concepts and solutions that they offer are not bounded by time. They would remain true and applicable in many generations to come. Pwede mo pa ipamana sa kaapu-apuhan mo.

Are there other reading materials that you'd like to recommend?

Whatever I apply in my journey towards financial freedom was based from these three (3) books. From mindset down to application, they were all taken from these three. I've read a few best-sellers, but trust me, if I recommend them, I'd put them here.

I'm sure there will be questions why I don't recommend some best-sellers and favorites, specially the ones written by Bo Sanchez. If you think there are reading materials that I should include here, please drop them in the comments and tell us why. Like what I've said, I've only read a few best sellers. I'm sure there are books that you've read but I haven't. Please do share. Other readers might pick up a thing or two from it :)

Pero sa totoo lang, waste of time lang naman ang pagbabasa 'pag hindi natin na-apply sa totoong buhay, 'di ba?

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Why you should not always follow COL's ratings

Clearly, a well thought of strategy will be your greatest weapon in the stock market. The very same strategy that will protect you from wrong emotions. But unfortunately, no strategy is 100% perfect.

Compared to fundamentalists, traders deal with a lot of changes in the market. They have contingencies whenever the price action does not go their way (eg. stop loss). But for a value investors, how would they adjust if ever the fundamentals of a company have changed?

Let's take the Truly Rich Club for example. The very first email alert that I received from them when I was still a member was a sell alert on JFC. Not because it hit the target price, but because JFC is having challenges in the international market. The SAM strategy no longer applies.

Take note: That time, TRC's rating on JFC is a SELL, while COL's rating is HOLD. Same goes with CEB, due to challenges in the oil industry.

Remember this: Before you follow any mentor's stock picks, make sure that both of you follow the same strategy! Both of you must be on the same page.

That's why I don't always follow COL's ratings (and yes, I think you should too)! COL and I are not in the same page.

Then what's COL's strategy? I don't know. But even if I don't know, I'm presented with facts that lead to their recommendation. I'd be posting an (yes, just one) "exercise" at the end of the post, so please read through until the end :)

When do I buy?

Buying is a no brainer. When COL presents nothing but praises, that company is a BUY!

Positive earnings.
Expansions.
Discounted prices.
In-line with estimates.
No challenges.
Positive everything!

Those are my BUY signals (but not limited to).

When do I sell?

Obviously, it's just the exact opposite of my BUY signals.
Also, I sell whenever there's uncertainty (yes, I fear the unknown). Ofcourse, nothing is really certain in the stock market. When I said "uncertain", I meant that COL can't even produce an estimate.

There will always be a better company (there are many fishes in the sea). Why hold "uncertain" positions when you can always buy something better, right?

A perfect example of this case is when EDC announced to halt the operation of its Bacman plant. COL's rating was a HOLD. Think about it, how would you expect EDC to generate power without the Bacman plant? To top it off, there were no details from management on how long the shut down will last.

Now the tricky part: When do I hold?

Whenever COL reports that a company still has good fundamentals BUT is having some challenges, I hold my positions.

In my vocabulary, hold means two things: I will not buy, and I will sell at fair value (if ever I currently have positions). Compared to COL, hold simply means DON'T buy, and DON'T sell.

An example would be FPH (EDC's mother company). COL released a revision of its fair value factoring the negative effect of the Bacman plant. They retained a BUY rating on FPH with fair value at 134.40/sh.

Companies woo you (the investor).

A company would woo you to invest your hard earned cash. As an investor, you would want that company to have a solid performance, right? Yes?

Imagine EDC's CEO present the company profile, earnings (past, current, and projected) to you.
Imagine FPH's CEO do the same thing.

What would be your call? Remember that even big time investors refuse or pull-out their investments if needed. There's no shame if we do the same.

I'm sure we view these things differently.

In analyzing these news, nothing is really right or wrong. It really depends on the strategy you're in to. Heck, traders won't even bother! But if you may, I'd like to ask what's your view on this (nothing new, really):

The talks on SMPH and SMDC merger.

What's your strategy, and why? Again, imagine that the CEO will be presenting and will be throwing these words to you:

• SMPH and SMDC will merge in order to beat real estate giant ALI.
• Only one company will remain listed in the PSE.
• Chances are 50-50.

What will you do? Please leave you thoughts in the comments :)

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Pinoy Stock Market's call to action

Just a month ago, I received a comment from a reader after I published my post about the cancellation of my truly rich club subscription.

Though it's not surprising to receive this kind of comment, it still came as a shock. Iba parin pala kapag natanggap mo talaga. Of course I felt bad. But after talking about it with my wife and a few of my email-followers-turned-friends, I sort of pulled myself together.

Off the bat, I approved this comment and was ready to reply. But on second thought, I had it taken down due to a very petty and a non-petty reason.

That is my most popular post, and the commenter is a blogger too. I don't want to give him a link back in exchange for that kind of comment. Fair deal, right? That's the petty one. The other reason is that I don't approve comments that does not help my readers. I only allow a healthy discussion.

I wonder what this guy would say if he saw this statement:

BLOG/BLOGGING IS STUPID DUMB!!!

[Update] I was allowed to revisit the presentation again, and the term used was "DUMB".

Yes, someone sent me that. More on this later. For now, let's name him kuya. Anyway, what does kuya and I have in common as far as our followers are concerned?

Before and after the change.

Last February, I notified my email followers that my blog will undergo a major overhaul. I've changed my layout, and deleted some crappy but SEO healthy posts. But the most major one is the change of "flavor" in my next posts. I decided not to write for Google, but write for my readers. After all, it's not called "not your ordinary stock market blog" for nothing.

Before, my post would only achieve one thing for my readers - inform. I thought to myself that in order for me to really help my them, they must be willing to things a little different. After they read my post, and before pressing that "x" button, I want them to think and reflect. I want to challenge them to act and do something. I want to leave a mark. In every post, I want to have a call to action for my readers.

Side comment: In kuya's case, he wants you to quit blogging and do something else. Well, I have to agree that some blogs are stupid dumb! Not all, but some.

I made the right choice. My blog grew exponentially! Maybe not in the aspect of monetizing it, but I had more engaged readers. Before, I feel that my post is being ignored. Now, I have comments left and right. I get emails from readers too! And some of them became my friends. As in ka-BBM-at-ka-FB-message-kahit-nasa-Palawan-ako type of friends (they sent me the news about the investment grade, and a bunch of other stock market stuff)! Anyway, this is not about me or the blog, so enough of that already.

The change continues.

I mentioned earlier that I want my readers to do something for themselves after reading my posts. I'm dead serious about that. Therefore, I'm kicking the changes up a notch:

1. I will no longer send emails about COL's news and alerts.
For my readers who are in COL, I do this because my other readers are with other brokerage firms. Since I want my readers to take action, if you could, please dump your broker and switch to COL Financial! I hardly heard anything bad about them (if there are any).

Also, I noticed that not all my emails are being opened and clicked at (yes, I can monitor them and I know who does not open). I have a limit in sending mails, so I want to make the most out of it. Please bear with me.

What if you really don't want to switch?? Well, that would be too bad. But don't worry, I'll be posting those news and alerts in my Facebook page. You just have to LIKE it. Fair?

2. My earlier email followers probably noticed this already: I stopped sending BUY&SELL advice.
When I sent the news that I sold all my shares, I noticed something - my readers are "unique" investors in their own way. Some do EIP, some do SAM, some have no strategy yet, surprisingly. So a "standard" advice just won't cut it. If they want to trade or invest, who am I to tell them otherwise?

When my email followers received their ebook, I already "shout" a call to action - for them to become independent and [more] intelligent. So instead of spoon-feeding, send me an email on inquiries about a certain company. Most of my email followers do that already. Some even go as far as showing me their whole portfolio.

Of course there will be exceptions. In such cases, I'll broadcast through email.

Suggestions?

These changes were made with the intention to help you further. If there are any other things that you want me to do in this blog to help you out, please feel free to let me know. Just drop them in the comments section.

Ohh about kuya. Can you take a guess? Clue: He's also a pinoy and an internet marketing guru. Leave your answer in the comments too.

To my blogger friends, what's you take on that? Is our blog stupid dumb? :)

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Why I stopped diversifying. And why you should too.

If you've already read tons of stock market reading materials, I'm sure you've already come across of the recommendation to diversify your portfolio. Invested in 10 to 20 great companies so that you'll have a margin of safety. What do they mean by that?

Photo credit

If you're invested in 20 companies, and one of them would screw up, you still have 19 left. That way, you protect your capital. It's even written in the bible that you should diversify, because you can never tell what can happen. Great strategy, aye?

But why am I discouraging you from diversifying?

Warren Buffett once said, "Wide diversification is only required if investors do not understand what they are doing."

I'm sure for most of you who read this for the first time would feel a bomb explode in your heart. That's okay. We all had our days. As for me, I was never guilty of diversifying, BUT...But was guilty of being ignorant. As I've said, we ALL had our days.

In this post, I'll share with you why I never diversified, and never looked back.

1K, 10K, 100K or 1M doesn't make a difference.

I'd like you to think of the day when you were investing for the very first time. Maybe some of you have an initial capital of 25K, while most have 5K. With that in mind, I'd like to ask you two questions, specially to those who are doing EIP:

• How many companies did you buy when you started out?
• How and why did you come up with that choice?

If I have to answer those questions: I invested in three companies, and I know they are the best of the best, that's why I invested in them.

Most people do this:

They only have 5K so they invest only in the best companies out there. Let's say, those were SMPH and MBT. Suddenly, when they already had 100K, their portfolio multiplied quicker than a gremlin on a rainy day.

This is my belief: SMPH and MBT are great companies when you had your 5K, and still remains great when you had your 100K. And would probably still be great when you will have your 1 million. When I earned 133% in one year, ALI was the only company in my portfolio.

Choose one: Invest your 500K in 10 crappy companies or in 2 of 3 blue chips? Warren Buffett, again once said, "You only have to make a few good choices in order to get rich."

Save yourself from all the headache.

This varies from one person to another. In my whole investment career, I've only had at most 5 companies at a time in my portfolio. Why? Because if I go higher, I won't be able to monitor them properly.

When I say monitor, I'm not referring to just looking at its current price, target price, trend, etc. That's only half-baked monitoring, and won't do for me. I read news, target profit, future projects, reported earnings, current challenges, etc (COL Financial provides these items everyday).

For those of you who can pull this off with 10+ companies in your portfolio, then I salute you! Maybe for some of you, this is the reason why you resorted in subscribing in the truly rich club. So that someone will just prompt you to either buy, sell or hold. Maybe. Just maybe.

Minimize, if not totally remove your risk.

You may not believe it, but yes, you can minimize your risk by not diversifying.
Imagine these companies in your portfolio:

JFC: Chinese business facing challenges.
CEB: Downgrading on negative airline industry outlook.
AP: More challenges seen in 2013.
EDC: More challenges ahead.
FGEN: Hydro plant to disappoint this year.
SMDC: Bloom to replace SMDC in PSEi
SCC: landslide could potentially disrupt mining operations.

While these companies face these challenges, they remain good companies with great long-term fundamentals. But can your fear handle it? When these news broke out, share prices dropped faster than you can say I'm going to sell!

Had you chosen your companies very carefully, you could have spared yourself with all the heart attacks.

Quality versus quantity.

This has been a never-ending debate, thus this topic does not need any more explanation. It's a personal choice that I go for quality companies over quantity.

Why invest in SMDC if there's SMPH or ALI?
Why invest in EW, SECB, PBB if there's BPI, BDO and MBT?

In every sector, there's always the bigger shark that just eats the rest for snack.

You never go wrong with quality. Besides, most beginners that I know go only for quantity because a stock is matunog. Can't blame them, it's easy to go with the crowd than against it. On second thought, it's not that hard, isn't it?

Lesson from my mother.

If I were to name my greatest mentor, it would be my mother. I learned not to diversify from her. Did you know that she only invested in one company? That would be her employer. Talk about confidence.

You see, my mom works in the finance department of a giant that have been in the business for more than 100 years. Being part of the finance dept, she had access to budgets, earnings, target profit and future projects. She knew what her employer can pull off. That gave her confidence.

She was able to do many things (which I will not mention in this post), and was able to help other people outside our circle because of that one investment.
 
Conclusion.

Clearly, a non-diversified portfolio can also give you great benefits. And in my book, it has better benefits than a diversified portfolio. Since one has both advantages and disadvantages over the other, neither is superior. It still depends on your own strategy, goals and emotions.

What did I miss?

For those of you who don't have a diversified portfolio like me, I'd like to know how you're doing. Were there times that you're influenced by the mob and jumped to another stock? How many companies do you have today?

If you have a diversified portfolio, are you doing it for the sake of "safety". Is it worth it?
Do you have companies in your portfolio that you wish to dispose? What's preventing you from doing it?

Did I fail to mention other benefits that a non-diversified portfolio might have?

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How I earned 133% in the stock market after 1 year using buy and hold.

The first steps in my stock market journey are the both the best and worst experiences in my investment "career". It was the worst because I lost nearly 20% of my capital (which is forgivable for a beginner, at least in my belief), and it was the best at the same time because I earned back with a whopping 133% gain in just one year.

For those of you who don't know, a sloth is an animal used by Bo Sanchez to describe investors who use the  buy& hold strategy. Truly rich club members call themselves the turtle, and "they always win". In this post, I'll show you that a turtle can be beaten.

Other race joiners are (taken from Bo's book, "The Turtle Always Wins"):

1. Squirrel - the novice trader.
2. Rabbit - the trained trader.

 Here are the mechanics of the race:

1. We all invest equal total amounts of cash (approx 70K).
2. Starting point is the month of March 2009.
3. The finish line is at the May 11, 2010 mark.
4. For simplicity, we'll just have ALI as an example, and board lots are not followed.

Let's begin the race!
Remember that Bo Sanchez's turtle divides his capital into 12 (14 for this case) then invest them every month slowly. So the turtle have approximately 5K/month.

Let's assume that turtles were able to buy at the lowest prices posted every month.
A sloth like me is "lazy", so I invested my 70K ALL IN.

This is how the turtle did in the race:

And this is how I did:

I bought ALI at 5.8/sh last March 25, 2009.
Then sold it at 13.5/sh last May 11, 2010.

That's 133% gain in 14months!

Even if we followed the boardlot, I would still win!

This is not an accident, by the way!
What have you noticed with my buy date? You could easily answer it had you been listening to the news back then. 2008 is the year of recession and the stock market crash (the bear market)! And in 2009, the market is starting to recover (going up trend) already.

This is one, if not the only time that you'll be able to "beat" the turtles. It was a big risk, but a risk that's well managed.

Like I've said, it's not an accident. I was well informed in this phase of the bear cycle by my broker. Here are some samples of their report during the most recent bear market:

That's why it's very important for you to get the services of the best broker available. Had I not been informed, I will not risk all my capital. Information is key!

You will only get another shot at this in the next bear market bottom, where the market has no other choice but to go up!

Don't get me wrong, turtles have a fool-proof SAM strategy. In fact, I use this strategy more often than the buy-hold. But I believe rabbits, though risky, can earn more than everyone else. Rabbits are exception to the rules - and most of us are the rules, not the exceptions.

The reason why most of us are "eaten by the bear" in the stock market, is that most of us think we're rabbits, but we're actually squirrels. And some are already too late to be a sloth. Consequently, we become the turtle. Better safe than sorry, right?

I'd like to learn from you.
Do you have a strategy that gives you more earnings than the normal peso-cost average (or strategic cost average)?
If you're sticking with peso-cost-average (PCA), I'd like you to share why.
If you're a technical analysis trader, how did it go compared to PCA?

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Why you will fail in the stock market in less than a year

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By now, you probably have an online account. Maybe attended their free seminars.
The raging bull market excites you. Your 5,000php (or more perhaps) is ready. And you're itching to buy your very first stock. But before that, there are a few issues you have to settle, that if you do this very soon, will save you a lot of headache, and a lot of cash!

In this post, I will give you the reasons why you will fail in the stock market in probably a year or two less.

You have no goal.
This is one of the most important ingredient in the field of finance. Goals give directions. It's like running. Without an end goal, you'll just keep on running and running and running. And once you get tired, you'll just stop. These are some examples of goals in the stock market:

• To earn at least 10M pesos worth of retirement after 20 years, and give some to charity.
• To earn 1M pesos in 10yrs.
• To increase my money by  at least 30% every month.

Goals should be realistic, measurable, attainable and time bound. Have a short, medium and long term goal.

You have poor money habits.
What happens to your paycheck as soon as you receive it?
Are you more of a spender than a saver (or investor)?
Do you keep on buying stuff that you want, rather than the ones that you need?

Notice this: Investors (be it big time or small time) have very good money habits. Investors are old-testament when it comes to budgeting. In tandem with their mindset, this is the backbone of their business success.

If you can't pull this off, what makes you think you can succeed in the stock market?

You're drowned in debt.
It's compound interest working against you, instead of for you. If it's working for you, you'll be richer and richer and richer. I'm sure you wouldn't want to hear what happens if it's against you.

Credit cards ain't a bad thing, as long as you pay you bill in full. You can still invest without settling you debts, but I don't think you will succeed in your investment. I don't know anyone who did. My wife and I have one each, by the way.

Settle your [bad] debt first!

You don't have patience.
You bought a stock today at 10/sh. After 1 week, it went don to 6/sh. After another week, you waited for it to recover at 12/sh then sold it, only to find out that the stock price went up to 30/sh after three (3) months. 

This happened to me, by the way.

You don't have a system.
Another story: You bought stock-A at 10/sh. It dropped at 8/sh. Because of fear, you decided to sell it. You saw stock-B rising very fast. You got excited that you want to ride the trend, so you bought it at 15/sh, only to find out it's oversold then the price started to drop again. You just buy, sell and hold whenever you feel like it.

I'm offering a trading guide (similar to Truly Rich Club SAM strategy) to get you started. Get if for free by subscribing by email.

You don't have discipline.
If you failed on the points above, you can't deny that you don't have discipline. Stock market is not just putting your money in and watching them grow.

• You need to put in small amounts of cash every month for 20yrs+
• You need to monitor your broker's research (or hire an adviser).

And the most important of all (in my point of view):

You are not accountable.
Many people tend to blame other because of the situation that they're in. That's no different in the stock market. Investors blame their mentors for recommending a stock that's falling down. But who pushed the buy-button in the first place?

These very same people keep on committing mistakes and they never learn because they think it's not their fault. They blame others and wash their hands clean.

A FINAL NOTE:
The difference between the rich and the poor is not the amount of money that they have, but their mindset and attitude towards money. Just take a look the publications of Robert Kiyosaki, Warren Buffett and Bo Sanchez. Most of them are about proper handling of money.

It may sound very trivial, but many people still fail in these departments. Settle that first, then the rest will be as easy. It's really that simple.

"Stock market success is 20% strategy, and 80% discipline."

What did I miss? I'm sure there are points that I've not tackled. Feel free to share it your comments.

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How my money earned 41% in the stock market after six months.

The last 7 months of 2012 were the times that I test the waters of the truly rich club system. And at that time, I already earned 41%.

It was the highest earnings I've ever had in that short amount of time. That's when I realized to use this system as the backbone of my trading plan.

I don't know about you, but as it is, 41% is a very high gain already! And to be able to earn it in just 6 months is just... AMAZING, to say the least!

In this post, I'll show you how I made my money did it after 6 months. But note that what I'm about to show you is nothing new, specially to club members. I just want to show this to you so that you'll be able to appreciate the very simple, yet powerful system.

I'll illustrate:

• The transaction confirmation from COL (evidence).
• Which stocks I bought and sold.
• When I bought and sold them.
• The buying & selling prices.

So basically, I bought SMPH, sold it, then used the funds to buy MEG, then sold again. Here's the summary:

How did I gain the 41%? Let's say you have an initial capital of 5,000 (for the sake of simplicity, let's ignore the board lot for now).

After selling SMPH, your 5,000 became 6,123.92 (22% gain).
The use that fund to buy MEG.
After selling MEG, your 6,123.92 became 7,071.14 (15.47% gain).

From an initial capital of 5000, your money became 7,071.14 after 6months.

Total gain is 41.42% in 6 months!!!

That's just 2 stocks! This is further discussed in my Bull Market trading guide. Now take note: Neither I nor the stock market guarantees you that gain in 6 months. It does not work that way. I'm just showing you that you can make significant gains as long as you invested in great giants, and you have a solid strategy.

What's your experience?

Were you able to gain more than 41%?
Were you able to gain it in less than 6 months?
 

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Why I UNSUBSCRIBED to the truly rich club, and why you should too

Seven months ago, the stock market was going through probably the longest consolidation phase ever! Prices were very overbought, so I took profits! I was happy in my earnings, but felt like something was missing.

I realized I needed something fresh - a new investment strategy. A friend then referred truly rich club to me. (Note that I've been investing for 4 yrs already before I knew and joined the club). I was like, "Okay, I'll check it out."

After 4 months, I felt that 500/month was no longer worth it. I've thought things through, asked experienced investors, and posted on FB groups. Today, I'm no longer subscribed. And I'm sure you're asking, "why?!"

In this post, I'll tell you:

• Why did I sign-up to the truly rich club.
• What are the things I've learned from the club.
• Why I cancelled my subscription (and why you should too).
• To whom shall I recommend the club.

My truly rich club story.

I subscribed to Bo's mailing list, and read through the free ebook. I learned one thing - the buy-below price concept. I did not finish the ebook, by the way.

My question was, "So how do I come up with a buy-below price?"
Unfortunately, it wasn't in the ebook. The only way to get in, was to sign-up. So there goes my 500pesos.

On that very same day, I already knew how the club sets their buy-below price. I adapted it, and came up with my own buy-below price. It already changed my investment to a whole new level.

Aside from the monthly stock update, there are email alerts too! Amazing! Note that by that time, I still did not know that Bo's mentor was THE no less than the COL Financial chairman himself, Edward Lee! So I was very happy with the updates. But then there was a soul food newsletter about these two. Toinks!

So again, I asked, "How does Bo come up with those email alerts?"

It took me 4 months to figure that out! Geez!

After that, the club has nothing new to offer to me anymore. Heck! I never followed the SAM list in the first place! Except that one future email alert on the forthcoming bear market. But the next bear market is like the "second coming" and the apocalypse - only God knows when it will happen.

Since I hardly refer to it these past few months, it's already time to call it quits.

So why did I sign up in the first place?
Signing up was the only way for me to learn. I repeat: LEARN! Not depend! If what I wanted was already in the eBook, there's no need for me to sign up. Plus, I got more than what I signed up for, so it's all good.

What did I lean from them?
I learned that everything they publish in the email alerts and monthly stock updates, can be found in the COL Financial website.

Why did I cancelled my subscription?
Keeping my subscription will be like paying a tuition fee after graduating from college. I can already do it on my own. Besides, there are groups and forums available already. People there are very much willing to help for free.

Also, I only have one last concern - the bear market. I've asked around in FB groups who's been a club member during the last bear market (2008). Turns out, the club was not yet established that time. So there's not a single club member who can tell me, "The club was really a great help during the bear market!" or, "I survived the bear market, thanks to the truly rich club!". Nobody. That means the club has no solid track record during a bear market.

Do you remember this SAM rule: "Invest even if there's a crisis."?

In my vocabulary, invest means ride, and crisis means bear market.
I only ride bulls. Riding bears is not my style!
I ride the bulls, and I trade with bears! Never in my life will I accumulate shares, and get a "good" cost average on a down trending market!

The SAM strategy works! No doubt about that. But that only works in a bull market! If you don't believe me, try hitting the target prices on a down trend. If you did, please let me know. You can only hit the target prices in an up-trending market.

To whom do I recommend the club?
What is the most, if not the only, question asked by a beginner? C'mon, think!
It's, "What is a good stock to buy? Pls help!"
If you're the type who ask that question frequently, and is willing to be stuck there, then the club is for you. The club gives that to you every month (or as needed), for a fee. If you're an investor who have zero knowledge in the stock market, the club is also for you.

What are the club's "other" offers?

• There's an everyday God's whispers.
• Monthly (or weekly) Wealth Strategies for your future or existing business.
• Bo's Power talks (I give this for free when you subscribe to my mailing list) to inspire you.
• Success mentors' interviews.
• Loads of free eBooks by Bo Sanchez.

Final note.
I will never deny that the club has been a great help in my stock market investments. It really was. But just like any other student, I have to graduate. And that day has arrived.

Obviously, the club is more than just spoon-feeding updating you on the stock market. More than the money, it shows you how to be truly rich. And it makes you closer to God. In short, they make you rich without burning your soul. For others, this is enough to make them stay subscribed. Also, proceeds of our payment goes to charity.

Calling all club members!
Are you an existing club member?
Are you also thinking of cancelling your subscription? If not, what's making you stay?

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Why you should give up your current broker and swtich to COL Financial

Your stock market journey starts with opening an account with a broker. As discussed in my eBook, I firmly believe that getting the best stock broker is one of the most, if not the most, important ingredient to your stock market success.

With the huge number of available stock brokers in the Philippines (online and non-online alike), how would you know the best of them all? If you already have an account, are you happy with your broker's services?

In this post, I'd like to talk about why you should give up your current broker, and switch to COL Financial. If you haven't heard of COL Financial, you've been living under a rock!

Setting things right from the very start will save you a lot of headache heartache in the future. We're talking about real money here. So I'd really want you to consider (and REconsider) switching to COL Financial, in case you're using the services of other brokers.

But before I tell you why you should switch, you have to know what a broker must to for you.

1. Brokers must charge the most minimum fee possible.
It's human nature to demand for the impossible (specially in business). We want low investments with high returns. High commissions are just a no no.

2. Brokers must provide highly reliable, up-to-date information for free, every single trading day!
I repeat: information must be reliable, up-to-date, and most of all, free! If you get nothing from your broker, except handling your orders, better ditch them out!

3. Brokers must educate you for free!
Providing information is one thing, educating you is another. What will you do with all the information if you don't know how to interpret them? It's just as good as not having the information at all.

4. Brokers must be able to provide timely warnings in case of emergencies.
The stock market is very volatile. One time it's up, next time it's up! Brokers must be able to calm us down during panic, and too much excitement.

5. Brokers must be able to provide you recommendations.
This is very valuable specially for beginners, who most of the time, does not know what to do.

I may have missed some points, but the things mentioned above are the ones that matter to me most. Now, back to the question: Why should you switch to COL Financial? Simply because they have everything I mentioned!

1. No application fees when you open an account. Just an initial deposit of 5,000php for you to start investing. Commission is just 0.25% of the transaction (or 20php whichever is higher).

2. Their market information (both fundamental and technical) is updated every single trading day. And they're backed-up with extensive studies and research from their hired financial analysts.

3. COL Financial provides free seminars, both for members and non-members. But note for non-members, there's a fee for the advanced courses. I suggest that you open an account with them. It's free anyway.

4. In my 5yrs of staying with COL, I've received three valuable emails from them:

• During the start of the B-wave rally (where the stocks start to pull upwards during a bear market).
• When the bear market ended.
• After the inauguration of our new President (2010), where business investors are starting to come in.

5. COL provides BUY, SELL and HOLD recommendations for both fundamental and technical analysts.

And if I may, COL Financial is the top online stock brokerage firm in the country - beating foreign owned firms! They're on top for a reason. Plus, they're even listed in the PSE (yes, you can buy shares of COL).

Brokers must be someone whom you can rely on. In my free eBook, I discussed further the importance of having the best and reliable broker, for you to become an independent and intelligent investor.

What did I miss?

Are there significant points of the best broker that I failed to mention?
If you're not with COL, what are your reasons on staying with your current broker?
Also, please let us know what sets your broker apart from the rest of the bunch.

Disclaimer: This is not a paid post. I am not in any way affiliated with COL Financial, or to any of its owners and employees. I'm just a satisfied costumer.

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