LET\'S CHECK LectureLecture PDF

Preview

Summary

Lecture...

Description

STOCK TRADING JOURNAL

Submitted to

Khen Enriquez College of Accounting Education University of Mindanao

In Partial Fulfillment Of the Requirements in Financial Markets (ACC212)

Niel Gabriel Cabanig 2922 | 6:30-7:30 PM

December 21, 2020

TABLE OF CONTENTS

TITLE PAGE TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES Page SECTION I: EXECUTIVE SUMMARY

1

SECTION II: INTRODUCTION Stock Expectations

2 5

Investment Strategies SECTION III: ANALYSIS Stocks and Its Sector/Industry Classification of the Stocks Stock Performance

5

SECTION IV: CONCLUSIONS AND FINDINGS Lessons Learned

9

Summary on the Stocks, Shares, Profit/Loss, and ROI SECTION V: CHARTS/DIAGRAMS OF PORTFOLIO PERFORMANCE

11

Records Order History

SECTION VI: BIOGRAPHY

16

SECTION VII: APPENDIX

I

CURRICULUM VITAE

X

LIST OF TABLES Page Table 3.1 Classification of the stocks: aggressive or conservative

6

Table 3.2 Best to least performing stocks Table 4.3 Summary on the stocks, shares, profit/loss, and ROI

7 9

Table 4.4 Return on Investment per Stock

10

LIST OF FIGURES

Page Figure 5.1 My Current Portfolio Figure 5.2 Diagram form for the gain/loss

11

Figure 5.3 Order History of the stocks bought and sold Figure 5.4 Order History of the stocks bought and sold cont.. Figure 5.5 Stocks Graph

12

Figure 5.5.1 PSE: BSC Figure 5.5.2 PSE: DITO

13

Figure 5.5.3 PSE: BLFI Figure 5.5.4 PSE: SHLPH

14

Figure 5.5.5 PSE: VITA Figure 5.5.6 PSE: ACEN

15

SECTION I EXECUTIVE SUMMARY

A month-period was allotted for the virtual stock trading in Investagram. The platform has allotted ₱100,000.00 virtual money for investing it in the stock market. On December 08, 2020, I begin to buy stocks from PSE: BSC, PSE: DITO, PSE: BLFI, PSE: SHLPH, PSE: VITA. These stocks are filtered through my three (3) established requirements. These requirements are grounded from the concept of EIC analysis, Technical Analysis, and conservatism approach. These concepts allow me to evaluate the Industry which plays a vital role in my analysis. I also keep myself updated on the current news. After several days, I decided to pull out PSE: BSC, and PSE: VITA. After selling the said stocks, it gives me a realized gain of 6,463.48. For my last batch of the transaction, I sold PSE: SHLPH and bought PSE: ACEN. I also keep my stocks PSE: BLFI, PSE: DITO, and PSE: ACEN for long term investment. Throughout the month a managed to generate a total profit of 9,268.88. This profit is composed of two. These are the unrealized profit of 2,805.40 and the realized profit of 6,463.48. My total return on investment is 10.84%. My most profitable stock is PSE: BSC and my least performed stock are the PSE: SHLPH. . Trading is always been embedded with a certain risk. I'm just somehow anticipated it by outsourcing some information. All in all the activity is fun and memorable. I have learned a lot of things especially on building strong emotional and psychological attributes.

1

SECTION II INTRODUCTION

Conducting virtual stock trading through Instagram is a very convenient form of hands-on learning of the stock market during this pandemic. I know that trading in the virtual stock market is less intense compared to real stock trading with real money. In either way, trading in a real or virtual stock market is still intensifying, especially for my part to see a losing or winning trade considering that I’m a beginner in trading. Luckily I was already preparing myself for all the inconsistency of emotions that I would be experiencing throughout the process. Every significant gain would mean a lot, while those significant losses would also mean so much. My overall expectation towards this activity still falls on a calmer state of playing a game like Chess. Being mindful enough is the key to winning. However, this time the chessboard is the entire economy, which is very complex. Still, whatever happens, it’s a win-win situation for me, even if I am earning profit or not from this virtual trade. Learning something on this activity is already an achievement for me all through the primary goal of this trading is to earn a profit.

My Investment Philosophy and Strategy Trading is not a guessing game. You need to do research in executing a trade. Solely relying on my best guess is not enough to secure a profitable trade. It is very risky to go all in and decide on a specific stock without any clear supporting evidence of growth. As a supplement for this, I established and follow my three requirements before considering a trade. These requirements are the following: 1.The company must not belong or part of the affected industry during this pandemic. 2.The moving average of the graph must clearly reflect a consistent trend of positive growth. 2

3.The company must have a stable foundation in the industry and not very exotic.

My Risk Tolerance Trading in the stock market is always affiliated with a certain risk. There is no such term as a risk-free trade or 100% certain. In order for me to cope up with all of the risks, I establish a certain risk tolerance that I am willing to sacrifice and forgo before I pull out my stocks and incurred an acceptable loss. For those profitable stocks, I have not set up a certain peek level. However, I slowly pull it off the moment it falls for about 5% to 10% of its current price and its trend clearly reflects to be bearish.

Current Situation of the Stock Market According to the Department of Finance, as of this month, the stock market is steadily recovering from the impact of the pandemic and the subsequent community lock-downs around the country. In addition, citing a report from Philippine Stock Exchange (PSE) president Ramon Monzon to the Capital Market Development Council (CMDC), the DOF said the stock market index has gradually climbed since it plunged to 4,623 in March when the government started to impose quarantine measures to contain the spread of the Coronavirus. Our year-to-date average trading volume is P7.19 billion, it is just 1.4 percent below the 2020 average trading volume. Monzon said. that the trading was weakened by the pandemic but has regained ground in the past two months.

My Initial Expectation for my Stocks PSE: BSC, PSE: DITO, PSE: BLFI, PSE: SHLPH, and PSE: VITA are my initial purchased stocks. These stocks came from a diverse Industry namely: Fuel and Energy production, holdings and finance, IT and telecommunications, and agriculture. These sectors and industries are generally expected to be resilient from the impact of 3

the pandemic due to its stable demand. I have also researched the integrity of each company. I have also viewed their respective graph to see if their current trends are consistent. After doing all my research, I initially establish a strong expectation that these stocks are all reliable investments that are less likely to generate losses. My initial expectation was supported by there successful passing of my three requirements for considering a trade. The risk of a loss due to the factor of pandemic becomes significantly lowered expecting that other factors will not interfere.

My Investment Strategies My established requirement before considering a trade is grounded on specific investment strategies that my professor discussed. These investment strategies are the following: 1.Economy, Industry, Company (EIC) Analysis EIC analysis is a type of Qualitative analysis. It focuses mainly on evaluating the background information and current situation of certain stocks. 2.Technical Analysis This analysis is a type of Quantitative analysis that mainly focuses on the technical aspects and the patterns of the graphs, price movement, and trends. 3.Conservatism Approach Practically speaking, this type of approach somehow psychological and personal in a way that it uses all available information to create safer and ideal assumptions in making a decision.

4

SECTION III ANALYSIS

Stocks and Its Sector/Industry From December 08, 2020, to December 22, 2020, I bought six (6) stocks in total. Below are the chronological order of my purchase stocks: 1. Basic Energy Corporation (PSE: BSC) 2. DITO CME Holdings Corp. (PSE: DITO) 3. BDO Leasing and Finance, Inc. (PSE: BLFI) 4. Philippine Shell Petroleum Corp. (PSE: SHLPH) 5. Vitarich Corporation (PSE:VITA) 6.AC Energy Philippines, Inc. (PSE: ACEN) In my first batch of purchases (PSE: BSC, PSE: DITO, PSE: BLFI, PSE: SHLPH, PSE: VITA), I conducted some background analysis about stocks and reviewed their past market trend. Then I waited for about one to two days to see if the trend is still bullish before finalizing my decision. The industry plays a vital role in doing my background analysis. I begin with identifying those favorable sectors and industries, especially those highly resilient to the pandemic. I found out that the most attractive industry for this current year is the following: Energy Production, Holdings and Finance, telecommunication and Information Technology, and Agriculture. After this, I move forward and seek the best company in each industry. I have PSE: BSC and PSE: SHLPH for the energy sector, PSE: DITO for telecommunication and Information Technology, PSE: BLFI for the holdings and finance, and PSE: VITA for the agricultural sectors. After several days, I’ve decided to let go of PSE: BSE, and PSE: VITA, after noticing a declining trend and some intriguing news. This particular news is all about the RFID of NLEX for their cashless toll collection. I’ve also heard that the management fails to fix the traffic issue of place and other minor news. I certainly 5

think that this event will significantly impact the price of other related industries, such as agriculture and energy sectors. After I’ve noticed that the price trend also decreases, I started to pull out my investments from the said industries. For my last batch of transactions, I have decided to pull out my stocks from the PSE: SHLPH because of its continuous decline in the price. I can no longer afford to lose more than 5-10% of my trade. On the other hand, I have also decided to buy AC Energy Corporation (PSE: ACEN) as part of my long term investment. Their vision of developing renewable and sustainable energy is an ideal and realistic attribute for me to expect of their growth in the long run. Energy is a very precious commodity nowadays. It is also a necessity to fuel a growing economy. For any reason, I am still willing to support the vision of the company for the growth of our country. Classifications of my Stocks Table 3.1 Classifications of Stock: Aggressive of Conservative Classification No.

Stocks

Aggressive

Conservative

1

Basic Energy Corporation (PSE:BSC)

/

2

DITO CME Holdings Corp (PSE: DITO)

/

3

BDO Leasing and Finance Inc. (PSE: BLFI)

/

4

Philippine Shell Petroleum Corp. (PSE: SHLPH)

/

5

Vitarich Corporation (PSE: VITA)

/

6

AC Energy Philippines, Inc.

/

Generally, my strategy of trading is to play it conservatively. However, I took some manageable aggressive steps to maximize the returns if I am highly certain about a specific stock. I've played somehow aggressively the stocks of PSE: BSC,

6

PSE: DITO, and PSE: BLFI. To expound further, I have invested a huge amount from these stocks for expecting a much higher profit. On the other hand, I prefer to invest in other stocks safer than my first three purchases. The reason behind this is to minimize the additional potential huge losses.

Stock Performance Table 3.2 Best to least performing stocks Rank

Stocks

Profit

Realized or Unrealized

1

Basic Energy Corporation

6,683.29

Realized

2,966.33

Unrealized

27.09

Unrealized

2.11

Realized

(PSE:BSC) 2

DITO CME Holdings Corp. (PSE:DITO)

3

AC Energy Corporation (PSE:ACEN)

4

Vitarich Corporation (PSE:VITA)

5

BDO Leasing and Finance, Inc.

-188.02

Unrealized

-221.91

Realized

(PSE:BLFI) 6

Philippine Shell Petroleum Corp. (PSE:SHLPH)

Total Realized Profit:

6,463.48

Total Unrealized Profit- 12/22/20

2,805.40

Total Profit- 12/22/20

9,268.88

7

From the information given in the table above: the best and the least performing stocks according to their gains and losses are the PSE: BSC and PSE: SHLPH, respectively. In addition, my total return on investment (ROI) is 10.84%, my total unrealized return on investment is 4.87%, and my total realized return in investment is 23.14%. The following figures are computed as follow (refer to table 4.3): ROI = 9,268.88/ 85,535.55 = 10.84% ROI (unrealized) = 2,805.40/ 57,606.80 = 4.87% ROI (realized) = 6,463.48/ 27,928.75 = 23.14% Composition: Unrealized = 4.87% /(4.87% + 23.14%) = 17.38% Realized = 100% - 17.38% = 82.62%

From this virtual trading activity, I manage to earn a profit of 10.84%. From this profit, 17.38% is unrealized, and 82.62% is already realized. The value of the unrealized profit is not yet final. All the necessary deductions are not included in the computation. These deductions are the service fee and the price risk of the market.

8

SECTION IV CONCLUSIONS AND FINDINGS

Stock trading is intensely difficult yet interesting because it somehow gives me a sense of achievement. During the process, I significantly struggle to conduct my research about the stock market. The pieces of information about it are overflowing on the internet. The real challenge for me here is for me to filter them all with all my efforts and patience. Luckily, my sacrifices have been paid because of the learning that I’ve gathered.

Table 4.3 Summary on Stock/Shares, Profit/Loss, and ROI No. of shares

No. Stocks 1 Basic Energy Corporation (PSE:BSC) 4

Philippine SHLPH)

Shell

Petroleum

Corp.

Net Proceeds/ Market Value

Profit/loss

70,000

21,412.98

28,096.27

6,683.29

200

4,473.07

4,251.16

-221.91

2,000

2,042.70

2,044.81

2.11

(PSE:

5 Vitarich Corporation (PSE: VITA)

Total Cost

Total Realized

27,928.75

6,463.48

2 DITO CME Holdings Corp (PSE: DITO)

5,000

38,162.25

41,128.58

2966.33

3 BDO Leasing and Finance Inc. (PSE: BLFI)

5,000

15,846.61

15,658.59

-188.02

500

3,597.94

3,625.03

27.09

6 AC Energy Philippines, Inc. Total Unrealized

57,606.80

2,805.40

Total

85,535.55

9,268.88

9

Table 4.4 Return on Investment per Stock Rank 1 2 3 4 5

Stocks PSE: BSC PSE: DITO PSE: ACEN PSE: VITA PSE: BLFI

6

PSE: SHLPH Total

Total Cost Profit/ Loss 21,412.98 6,683.29 38,162.25 2,966.33 3,597.94 27.09 2,042.70 2.11 15,846.61 4,473.07 85,535.55

-188.02

ROI 31.2% 7.8% 0.8% 0.1% -1.2%

-221.91 -5.0% 9,268.89 10.84%

After everything, I have managed to generate a total profit of 9,268.89 with a return on investment (ROI) of 10.84%. This value is composed of two types of profit, which were the unrealized and the realized gain of 4.87% and 23.14%, respectively. My computation of the unrealized gain is not yet final. It is only intended for the disclosure of my portfolio. The ROI of the unrealized gain does not include any deductions. The service fee and price risk of the market are not been taken into consideration. The unrealized profit comes from the remaining stocks in my portfolio. The reason why I still haven’t sold them from my portfolio is for long term purposes. Even if I’ve earned a significant profit from this activity, I still need to learn a lot of things before stepping up with real stock trading. I need to improve more on reading the graphs using the available indicators provided by the platform for technical analysis since I’m not yer fully develop at it. Also, I will reread all the materials from this course and understand each concept more deeply. With all the hard work and patience that I’ve invested in this activity, I manage to enjoy the process. I have become more aware of the bigger world. Seeing a small glimpse from the whole picture of the corporate world excites me so much. It gives me a higher purpose of studying.

10

SECTION V CHARTS/ DIAGRAMS OF PORTFOLIO PERFOMANCE

My Current Portfolio

Records

11

Order History

Stocks Basic Energy Corporation (PSE:BSC)

12

DITO CME Holdings Corp (PSE:DITO)

BDO Leasing and Finance, Inc. (PSE:BLFI)

13

Philippine Shell Petroleum Corporation (PSE:SHLPH)

Vitarich Corporation (PSE:VITA)

14

AC Energy Philippines, Inc. (PSE:ACEN)

15

SECTION VI BIOGRAPHY

Stock Data. (2020, December 21). Edge.Pse.Com.Ph. https://edge.pse.com.ph/companyPage/stockData.do?cmpy_id=28 Company Information. (2020, December 21). Edge.Pse.Com.Ph. https://edge.pse.com.ph/companyInformation/form.do?cmpy_id=28 Virtual Trade. (2020). Investagrams. https://www.investagrams.com/Login?ret=https%3A%2F%2Fwww.investagr ams.com%2FvTrade Padin, M. G. (2020, December 18). DOF: Stock market steadily recovering. Philstar.Com. https://www.philstar.com/business/2020/12/19/2064789/dofstock-market-steadily-recovering

16

SECTION VII APPENDIX

Appendix 1. Virtual Stock Trading Guidelines

I

Appendix 1. Virtual Stock Trading Guidelines

II

Appendix 1. Virtual Stock Trading Guidelines

III

Appendix 2. Basic Energy Corporation (PSE:BSC)

IV

Appendix 3. DITO CME Holdings Corp (PSE:DITO)

V

Appendix 4. BDO Leasing and Finance Inc. (PSE:BLFI)

VI

Appendix 5. Philippine Shell Petroleum Corp. (PSE:SHLPH)

VII

Appendix 6. Vitarich Corporation (PSE:VITA)

VIII

Appendix 7. AC Energy Philippines, Inc. (PSE:ACEN)

IX

CURRICULUM VITAE

X...