April 28, 2014. Monday. I woke up very early… I felt like it was my first day on my new day job. And I didn’t want to be late so I came to work early. But in real life, I was just at home. I logged in to my computer around 8:30AM. Read some articles and news on COL and PSE’s websites. Reviewed the stock list and quotes. And did some comparisons with the stock prices.
At exactly 9:30AM, the trading began. I didn’t know what to do… I didn’t understand the numbers. I just observed the changes in the values of each stock and the changing of the colors from green to orange and to red which I didn’t understand either. I observed the numbers of the companies that I’m familiar with like PLDT, Jollibee, Meralco, BPI, BDO and ABS-CBN. The rest, I didn’t know what they are.
While observing, I also did some side research about the other companies on the active traders list. And as I was getting keen on the changes of the values, my mathematical and analytical skills also started to get involved. So I made computations from the current values to the previous ones, for one company to another, checked the highs and lows, analyzed historical data and charts, and reviewed what other traders were buying and selling and at what values.
I already got an idea on how to do it based on my observations. But I wasn’t confident. I was hesitant. I was afraid. I knew that this is totally different from the Cashflow 101 board game that I played before. There weren’t emotions like these during that time even if I lost money because I knew that it was all play money. And this one is the real game. We’re no longer talking about play money here but REAL MOOLAH. Hard-earned money yes. And that’s what makes it more challenging.
Time was running and the values were constantly changing. I felt the urge to start doing too. So, despite the varied emotions that I was feeling that time, I finally made a move. I picked two companies that I haven’t even heard of before and made my judgment based on what I have observed so far. The first company was Marcventures Holdings, Inc (MARC) and the second was Bloomberry Resorts Corporation (BLOOM).
Why these two companies of all the others on the list?
Simple. I did the math. Not algebra or calculus but just the simplest math. In fact I only used division, multiplication, and subtraction.
I may not be very good in explaining the numbers yet but I’ll try my best to explain it the simplest way I can.
So this is how I did it. For example, I have P50,000 and the current value of the company or stock that I want to buy is P11.40 per share. I divided 50,000 by 11.40 and I got 4,385.9 which becomes my total number of shares. When the price of that stock went up to let’s say P11.9 per share, I then multiplied 4,385.9 (my total number of shares) by 11.9 (price per share) and I got P52,192.21. My initial capital was P50,000 and after buying and selling my shares, I earned a profit of P2,192.21. Assuming there’s a 20% (could be lower) deduction for charges and tax which is about P438.442, my net profit would be P1,753.768.
50,000 / 11.40 = 4,385.9
4,385.9 x 11.9 = 52,192.21
52,192.21 – 50,000 = 2,192.21
2,192.21 x 20% = 438.442
2,192.21 – 438.442 = 1,753.768
I don’t know if you’ll find this easy but this is just how I used my mathematics. I could be wrong. Or there may be other blogs and articles that will show you better computations or techniques on how they do their math and analysis. I’m just sharing mine in case some of you may be interested.
Remember this is my first day of trading and I didn’t have any fundamental or technical knowledge about stock market. I just did it my own way. And as I’ve said in my previous post, I’m looking forward to learn more along the way.