Date: 10:26 2009/02/01
Cash Balance: 991,024.00
Holdings:
comp num_shares price
EEI 10,000 0.88
Total Portfolio Value: 999,648.00
Transaction History:
time date type num_shares price cost
10:20 2009/02/01 BUY 10,000 0.88 8,976.00
Showing posts with label stock portfolio. Show all posts
Showing posts with label stock portfolio. Show all posts
Monday, February 9, 2009
Stock portfolio: Buying EEI
Sunday, February 8, 2009
Stock portfolio: Change in strategy
Previously, selldown made the following strategy:
1. Trade a maximum of one buy-transaction per month.
2. A buy-transaction must not exceed 33,000 Pesos.
I thought about it and I think it would be better to change it to the following:
1. Buy transactions for a single month must not exceed 33,000 Pesos.
This would mean that one could issue an infinite number of buy transactions in a single month as long as the sum of the transactions do not go beyond 33,000 Pesos.
On why I think this is better is because there are so many good companies out there that isolating a buy transaction to a single company for a given month would lose us the opportunity of cost-averaging the purchase of other good companies. So our strategy would be to cost-average the purchase of several good companies simultaneously over time.
1. Trade a maximum of one buy-transaction per month.
2. A buy-transaction must not exceed 33,000 Pesos.
I thought about it and I think it would be better to change it to the following:
1. Buy transactions for a single month must not exceed 33,000 Pesos.
This would mean that one could issue an infinite number of buy transactions in a single month as long as the sum of the transactions do not go beyond 33,000 Pesos.
On why I think this is better is because there are so many good companies out there that isolating a buy transaction to a single company for a given month would lose us the opportunity of cost-averaging the purchase of other good companies. So our strategy would be to cost-average the purchase of several good companies simultaneously over time.
Wednesday, January 28, 2009
Stock portfolio: Initiation
The following are some initial strategies for the stock portfolio simulation:
1. Trade a maximum of one buy-transaction per month.
2. A buy-transaction must not exceed 33,000 Pesos.
Given that the global economy is in a recession, it would be best to be prudent with investments. As such, we should be extra careful in buying companies, or else the stock prices may fall significantly any time and we become stuck with the stock holdings, being unable to liquidate them without realizing large losses.
I am estimating the economic recession or stagnation to last from about two to five years. As it would be unwise to plunge all cash into stocks very quickly, it would likewise be unwise to wait for five years before starting to invest again, as we never know when the next bull run will start all over again in the cycle that is called the economic cycle.
As such, we take a balanced approach by slowly buying into stocks that are undervalued. We spread our investments over a course of about two and a half years. Investing about 30,000 Pesos every month for the next two and half years, would sum up to a total investment of one million pesos, which is the starting cash balance of our stock portfolio.
Going forward into the recession, we will expect stock prices to further drop. We will be able to take advantage of these drops by investing as we go deeper into the recession. But we cannot wait to reach the bottom of the recession, or else we will miss it.
In a way, what we are doing is what is called cost-averaging. That is, the strategy of buying small amounts of stocks at regular intervals in time, in the hope of averaging down the total costs of purchasing these companies. Also, it is a good way to compromise the impossibility of finding the rock bottom of bull market conditions such as today.
1. Trade a maximum of one buy-transaction per month.
2. A buy-transaction must not exceed 33,000 Pesos.
Given that the global economy is in a recession, it would be best to be prudent with investments. As such, we should be extra careful in buying companies, or else the stock prices may fall significantly any time and we become stuck with the stock holdings, being unable to liquidate them without realizing large losses.
I am estimating the economic recession or stagnation to last from about two to five years. As it would be unwise to plunge all cash into stocks very quickly, it would likewise be unwise to wait for five years before starting to invest again, as we never know when the next bull run will start all over again in the cycle that is called the economic cycle.
As such, we take a balanced approach by slowly buying into stocks that are undervalued. We spread our investments over a course of about two and a half years. Investing about 30,000 Pesos every month for the next two and half years, would sum up to a total investment of one million pesos, which is the starting cash balance of our stock portfolio.
Going forward into the recession, we will expect stock prices to further drop. We will be able to take advantage of these drops by investing as we go deeper into the recession. But we cannot wait to reach the bottom of the recession, or else we will miss it.
In a way, what we are doing is what is called cost-averaging. That is, the strategy of buying small amounts of stocks at regular intervals in time, in the hope of averaging down the total costs of purchasing these companies. Also, it is a good way to compromise the impossibility of finding the rock bottom of bull market conditions such as today.
The stock portfolio simulation
Assumption of the stock portfolio:
1. The stock portfolio is unreal. It is just a simulation game.
2. It assumes an initial cash balance of 1,000,000 (1 million) Philippine Pesos.
3. It assumes a 2% charge for every transaction.
4. It assumes Philippine time is used.
5. It assumes the currency of the Philippine Peso.
The purpose of the stock portfolio is to test whether the strategies to earn money via stock trading, as discussed in this blog, are successful. A strategy is considered successful if it was able to earn money. It is considered a failure if it lost money.
The following is the initial stock portfolio:
Date: 10:34 AM, 29 January 2008
Cash Balance:
1,000,000
Stock Portfolio
No stocks in portfolio.
Transaction History:
No transactions in history.
1. The stock portfolio is unreal. It is just a simulation game.
2. It assumes an initial cash balance of 1,000,000 (1 million) Philippine Pesos.
3. It assumes a 2% charge for every transaction.
4. It assumes Philippine time is used.
5. It assumes the currency of the Philippine Peso.
The purpose of the stock portfolio is to test whether the strategies to earn money via stock trading, as discussed in this blog, are successful. A strategy is considered successful if it was able to earn money. It is considered a failure if it lost money.
The following is the initial stock portfolio:
Date: 10:34 AM, 29 January 2008
Cash Balance:
1,000,000
Stock Portfolio
No stocks in portfolio.
Transaction History:
No transactions in history.
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