Investment Video for Kids, Funny, Social Proof, Stock Thoughts: Strengthening Peso Follow Up, BDO vs BPI

Investment Video for Kids

Will your kids be interested about investing if he/she will be able to watch this 3 min video?



A BABY doing his own trade!!!!

Not to mention he’s


Social Proof

Did you notice social proof in stock investing?

“Oh, Mr. X a super rich guy, is investing in the same stock I am invested in, I should be on the right stock.”

“Mr. A is investing in stock x, mr. B my friend is also in stock x, ms. Y is ALSO in stock x. There should be something wrong with me.”

Be aware on that psychological pitfall. 🙂

Think independently; invest only on stocks that YOU understand.
social proof

Even the angel fell on social proof! lol

Strengthening Peso Follow Up

A follow-up on my Jan 22 post:

Strengthening peso will benefit the following importing companies:





Strengthening peso will benefit the following company with large foreign denominated debt:




Is it just here in Bacolod that BPI service is ‘not so good’?

You got to know somebody or you should be what they consider as VIP for you to be accommodated well.

In contrast, BDO employees are very professional. They work fast and respect the time of their clients regardless of their net worth. They seem to be well trained in terms of client relationship. Idle employees had the initiative to accommodate waiting clients if the queue is already too long.

I like BDO’s service much better.
Tell me what you think about BDO or BPI’s service.

Can anyone tell me about china Bank? I only like their valuations, dividend yield, and balance sheet but I have no firsthand experience with their services.


PSEi, Stock and Family, Speculative vs. Investment


Index at all time high again and trading at high multiples.

When should one be worried? You should be worried if the company that you are investing does not have any promise of future earnings growth.

Is it time to buy?

I’m patiently waiting.

Stocks and Family

Last December 2011, Me and my client allocated plenty AAI. As some of you might have remembered it was very volatile at 25~35 range. During Christmas and New Year, we find our portfolio at negative 50%. I feel bad about it and have that unusual feeling in my stomach. I enjoyed the moment with my family but my mind just reverts back to my stock.

January 2012, I sold all my AAI stock for a 100% profit.

From that date on, I limit my speculative holdings to just 20% of my portfolio and I learned to disconnect my ego from my bank account. Never again an activity I passionately do distract me in my time for my family!


Speculative vs. Invesmtment

What exactly is a speculative and what is an investment?

A stock purchased for speculative and for investment purpose does not differ on the time frame but on the amount of information available prior to the purchase that can promise us safety and returns for our capital.

Stocks I consider an Investment

FGEN, AGI, PCOR, CHIB, and EDC are companies that allow us to project their earnings based on the readily available information that only requires number crunching.

Let’s have FGEN, FGEN derives 90% of their earnings from sale of electricity to MER. Electricity demand is almost certain not to decline dramatically so we can easily project FGEN’s earnings in the coming years.

Stocks I consider Speculative

LPZ, APX, GREEN are speculative.

APX is speculative since the mineral reserve estimates are not yet disclosed and that we are not sure if the increase in APX’s capacity can be met by APX’s reserve. Current APX reserve can only last for 5 years should the capacity be tripled.

LPZ is speculative since GLO buying LPZ’s BTI is in the mind of GLO’s decision maker.

GREEN is speculative since we have no comparable operating years to project earnings.

Why did I buy these shares?

Because, IMHO, the odds are very much skewed to the speculator’s favor. 🙂

APX to announce a substantial mineral resource is very likely.

LPZ’s BTI to be eventually purchased by GLO is very likely.

GREEN’s management declaring property dividends to increase shareholder value is very likely.

Petron Corporation (PSE: PCOR)

Figures in BOLD are author’s estimate.

Business Profile
Petron Corporation (the Company), the Philippines largest oil refinery enjoys a market share of 38% as of 2011. The Company was incorporated in the Philippines in 1966 as Esso Philippines, Inc and was renamed Petrophil Corporation in 1973 when the Philippine National Oil Company (PNOC) acquired Esso. In 1985, Petrophil Corporation and Bataan Refinery Corporation (formerly the Standard Vacuum Refining Corporation) were merged with Petrophil as the surviving Corporation. Petrophil later changed its corporate name to Petron Corporation.

In July 2008, a company owned by Ashmore Group, SEA Refinery Holdings B.V. (SEA BV), acquired 40% interest in Petron. In December 2008, SEA Refinery Corporation (SRC), a domestic corporation owned by SEA BV, acquired the 40% interest of PNOC in Petron. In a related development, SEA BV sold 10.1% of the issued shares to SRC. As of December 31, 2008, the capital structure of Petron was as follows: SRC – 50.10%; SEA BV – 40.47%; and the general public – 9.43%.

On December 24, 2008, San Miguel Corporation (SMC) and SEA BV entered into an Option Agreement granting SMC the option to buy the entire ownership interest of SEA BV in its local subsidiary SRC. The option may be exercised by SMC within a period of two years from December 24, 2008.

SMC exercised its option to acquire 40% of SRC on June 15, 2010. SMC exercised its option to acquire the remaining 60% of SRC’s shares, in December 2010. With the exercise of the option, SMC beneficially owns approximately 68% of the outstanding and issued shares of stock of Petron.

At present, the Company has the following subsidiaries and affiliates and its percentage of ownership:

New Ventures Realty Corporation (NVRC)
A realty firm established on August 24, 1995 and 60% owned by Petron Retirement Fund (PRF). NVRC is authorized to acquire and develop land but does not engage in subdivision business. Land suitable for use as service station sites, bulk plants or sales office is purchase by NVRC which are then leased to Petron.

Petrogen Isurance Corporation (Petrogen)
Serves the insurance requirements of Petron and its allied business Partners such as contractors, suppliers, and dealers.

Overseas Insurance Corporation, Ltd. (Ovincor)
Ovincor was incorporated under the laws of Bermuda on November 16, 1995 for the purpose of expediting the reinsurance of Petron’s insurable interests as covered by Petrogen.

Petron Freeport Corporation (PFC)
PFC is engaged in the business of importing, transporting, trading, and retailing petroleum products and related products. As a registered Subic Bay Freeport (SBF) Enterprise, PFC is entitled to tax-free and duty-free importation of raw materials and capital equipment for use solely within SBF. PFC has retail division which handles the service station operation and manufacturing division which is engaged in refining, distilling, and manufacturing petroleum products, oil, gas and other vehicle substance.

Petron Marketing Corporation (PMC)
PMC operated sixteen (16) outlets at various locations. PMC also operated twenty three (23) quick service restaurants (QSRs) which are located in various service stations. PMC aims to convert company-owned company-operated (COCO) to company-owned dealer-operated (CODO). With this new direction, PMC will concentrate in the Franchising Business and support Petron Reseller’s network expansion program through providing manpower for the start up operations and assistance in the operations of stations with newly-appointed dealers.

Petron Singapore Trading Pte. Ltd. (PSTPL)
The subsidiary aims to optimize crude procurement and participate in Singapore’s Global Trader Program (GTP), which allows the Company access to a wider selection of crude alternatives, resulting in further optimization of Petron’s crude selection.

Petrochemical Asia (HK) Limited (PAHL)
In July 2010, the Company acquired 40% stake in PAHL with an option to raise interest to 51%. PAHL is the parent firm of the Philippine Polypropylene Inc. (PPI) which operated a polypropylene plant in Mariveles, Bataan. Propylene raw materials which is needed to produce polypropylene will be sourced from Petron’s refinery which can produce 140,000 MT of propylene yearly.[1]
Polypropylene is a raw material for making plastic. Polypropylene is resistant to heat and fatigue and is used for piping, flip-top bottles, plastic items for medical or laboratory use, clear bags, plastic ropes and packaging.[2]

Limayan Energen Corp. (LEC)
On August 3, 2010, the Company together with Two San Isidro SIAI Assets, Inc (Two San Isidro) incorporated LEC. LEC was formed to build, operate and maintain a cogeneration power plant as the Bataan refinery. The first phase will be online by early 2013 followed by the 2nd phase at the end of the same year. The cogeneration plant has four Circulating Fluidized Bed boilers that can generate a nominal capacity of 216 MW.[3] The power plant will be fuelled by petroleum coke or petcoke, an oil refinery by-product which will be sourced from the Bataan Refinery.[4]

Manila North Harbour Port, Inc.
On February 2, 2011, the Company acquired 35% equity in Manila North Harbour Port, Inc., which holds a 25-year concession from the Philippine Ports Authority to operate the Manila North Harbor. [5] Moving Petron’s depot facilities to North Harbor from the Pandacan Terminal would reduce the Company’s handling costs by as much as 80%. North Harbor has deep-water facilities which tankers can use directly which will allow bulk transportation of oil.[6]

Petron’s attraction is the Company’s expenditures towards efficiency, cost savings, and developments to increase revenues.

The year 2013 and 2014 are years where the Company will enjoy a substantial growth in revenues as the 216 MW cogeneration power plant will go online by 2013 and the Refinery Expansion Project (RMP-2) will be in commercial operation by 2nd quarter of 2014 which will enable the Company to process a wider range of crude oil types. The 216 MW petroleum coke fired power plant will be able to generate the needed steam and power for the Bataan Refinery and sell the excess to the Wholesale Electricity Spot Market (WESM).


The author does not own any of the stock mentioned at the time of this writing.