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					                Presents
“Investing in the Stock Market Today”



                                Presented by:
                                Juan G. Barredo
                                Vice President
                                CitisecOnline.com Inc.
                      Introduction
           Outline                     COL: About us

                           • Established in 1999, CitisecOnline (COL)
•Wealth Building through   is the leading innovator in online stock
 Stock Market Investment   trading in the Philippines
                           • Management team is composed of
•How to Pick Good Stocks   professionals in the financial and IT
   Fundamental Analysis   industries
•Methods of Investing      • Driven by our core competency in
                           research, investor education and
   Peso Cost Averaging    technology
   Technical Analysis     • Capitalized at over half a Billion Pesos
•Getting Started with      and a Member of PSE & HKE
                           • COL publicly listed in the PSE in ‘06
 Online Trading
                   Part One

Wealth Building through Stock
     Market Investment
       I need to secure my future!
  I start working for money to
       build my nest egg…
However my goal is for money to
      one day work for me…         Retirement


                                     Children/
                                     Education

                                  Dream
                                  House
                            Why Invest?

Savings
• Is the gradual acquisition and
  safekeeping of wealth                               Interest Rates (91-day T-Bill)
                                    22.00
• Rewards: Low
                                    20.00
• Risk: Very Low (only Inflation)   18.00
                                    16.00
                                    14.00
Investments                         12.00
                                    10.00
• Provides the avenue for            8.00
  wealth to grow more                6.00
  meaningfully                       4.00
• Rewards: High                      2.00
                                     0.00
• Risks: Low to Very High
                                            93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
                  The Stock Market
   What is it?

• The stock market is the place where you
  can invest in other peoples’ publicly listed
  companies.
• A company sells shares of stock through
  an Initial Public Offering (IPO) to raise
  capital to grow their business
• You invest into a company to participate in
  its growth through: a) Price Appreciation
                      b)Dividends
                   What Stock Markets Offer
• Capital Appreciation – the ability for a stocks’ price to increase in
  value as driven by business prospects
• Dividends – company returns wealth back to shareholders
  (distributes some profits either through cash or added shares)
Cash Dividend                  Stock Dividend                 Dividend Dates
• Money given back to the      • Additional shares given to   •Ex-Date – the cut off point for
investor as his share of       the shareholder                dividend entitlement is a day
distributed profits            • Ex. Stock div of 20%: if I   before this date (you must be a
• Ex. A Cash div of            had 1000 shares, I would       shareholder as of the day
20¢/share: if I had 1000       get an 200 additional          previous to this date)
shares, I would get P200.      shares                         • Date Payable – the day when
• Stock price will adjust by   • Share price will adjust      the dividend is given to
dividend value                 down by: price / 1.2           shareholder (usually a month
• This is taxed at 10%         • Choice to cash in is yours   after the Ex-date)
What Stock Markets Offer

                   History has proven that
                  investing in quality stocks
                     can provide greater
                      returns than most
                 instruments; giving a good
                     run over inflation…
               Part Two

How to Pick Good Stocks
                 Task # 1: Know Prices
   Actual Value
   • the real value to which a stock can be said to be worth, it is
     commonly stated as Fair Value or Target Price
   • studied through Fundamental Analysis

   Market Value
   • that value determined by market forces (demand and supply),
     and is also commonly known as the Market Price
   • reviewed through Technical Analysis

Ticker
 Tape
Task # 2: Know some Fundamentals
Fundamental Analysis

• “Is a technique that attempts to determine a security’s
  value by focusing on underlying factors that affect a
  company’s actual business and its future prospects.”

•
• We buy quality stocks today for what we believe it will
  be worth tomorrow!


  Remember: ‘What you don’t know you don’t touch!
   Task # 3: Do a Top Down Review
Is the Economy growing?
• A technique that attempts to determine a company’s
  value by focusing on underlying factors that affect its
  business, earnings and prospects

What Industry seems attractive?
• Are there enough investments and potential moving in
  on these sectors? Money must be moving in, not out…

What are the best Stocks in that industry ?
• Pick out the top performing stocks in terms of valuation,
  earnings growth, prospects and market participation
      Task # 3: Do a Top Down Review
Economic View
                        2005          2006          2007      2008            2009
  GDP                  5.10%         5.50%          7.10%     3.80%           0.9%
  T-Bills (IRates)      6.4%         4.89%          3.4%      5.40%           4.2%
  Inflation             6.9%          5.0%          2.8%      9.3%            3.4%
  Forex (P-$)          53.06         49.13          41.40     47.50           46.40

Industry View
          Turnaround           Growth            Maturing    Consolidating
        Earnings and       Profits and         Profits and   Profits and
        performance        business            business      business
        stabilizes         opportunity         opportunity   opportunity
                           rise attractively   slow or are   deteriorate or
                                               capped        lose

                     Invest Here
Task # 3: Do a Top Down Review
Industry : Property         Industry : Banks
                      Banks Non-Performing Loans % (NPL)
                                                       20

                                                       15

                                                       10

                                                       5

                                                       0




                      2001
                      1992
                      1993
                      1994
                      1995
                      1996
                      1997
                      1998
                      1999
                      2000

                      2002
                      2003
                      2004
                      2005
                      2006
                      2007
                      2008
                      2009
Task # 4: Know a Company’s Prospects
Company Analysis

Look for companies that show:
   •The Ability to Grow Earnings = Look for strong
   or increasing profitability; watch earnings per   PROFITS

   share (EPS= income / # of shares)

   •Good or Cheap Valuations = Look for good
   stocks whose Market Value is notably lower
   or discounted to its Actual (Fair) Value

   •Good Story = Look for new buzz, solid
   products/services or catalysts for growth
                 Task # 5: Choose the Best
 Company Analysis


                      Stock “ABC” P5.25          Stock “XYZ” P1.16
                        2005     2006     2007    2005    2006      2007
  Recurring
 Earnings (Bil)         3.00     3.45     4.24    1.15    1.60      1.84

   (Growth)              7%       15%     23%     43%     39%       15%
       EPS              0.28     0.32     0.39    0.11   0.124*    0.125*
 (EPS Growth)           21%       14%     22%    22.2%    13%      0.5%

Proj. Fair Value ‘07           P16.50 (214%)         P2.10 (81%)
* Sold new shares (dilution)
               Task # 5: Choose the Best
       Company Analysis

                                  SUMMARY
                          8.54    Positive impact to price:
A                         (37%)   1. Growth in Income/Value
              6.23
B             (19%)               2. Prospective Story for business
C                                      expansion
5.25                              3. Potential Buyout
                                  4. Worthy Dividends

                          1.53    Negative impact to price:
              1.27                1. Slowing Growth or a loss
                          (20%)
X             (9.0%)
                                  2. No Story, no dividends, no
Y                                     nothing…
Z                                 3. Too much debt
1.16
                                  4. Inefficiency / poor relative
                                      performance
             Part Three

Methods of Investing
          How to Invest in Stocks
Popular Techniques


               • A Gradual Buy and Hold
Peso Cost        Strategy
               • Make steady and fixed
Averaging        Peso investments through
                 time on good companies


               • Trading through Technical
 Market          Analysis
               • Time market swings to
 Timing          provide short term entry
                 and exit strategies
         Method #1: Cost Averaging
 What is Peso Cost Averaging?


•Peso Cost Averaging is a personal
wealth-building strategy that
involves investing a fixed amount
of money at regular intervals over
a long period
• Buying stocks over time reduces
volatility risk in the market
• Invest what you can at your own
pace
             Method #1: Cost Averaging
  How it works…


Month 1
                          Buy fewer shares when prices are higher
Buy P5,000 worth of
                      6
stock ABC at market
price                                                               P5,000 will buy
Month 2               5                                             less shares here
Buy P5,000 worth of
stock ABC at market
price                 4
                                                                    P5,000 will buy
Month 3
                                                                    more shares here
Buy P5,000 worth of
stock ABC at market   3            Ave Cost
price                      Buy more shares when prices are lower
             Method #1: Cost Averaging
  How it works…


Month 1
Buy P5,000 worth of   6
stock ABC at market
price
Month 2               5
Buy P5,000 worth of
stock ABC at market
price                 4                                        You get buy
                                                               more shares
Month 3                                                        when prices
                                                               are low, less
Buy P5,000 worth of               Ave Cost per Share           when prices
stock ABC at market   3                                         are high…!

price
                      1   2   3    4    5    6    7    8   9
                                       Month
                   Method #1: Cost Averaging
    Peso Cost Averaging… down the road…
   Stock/            Effective           Time
  Indicator         Annual Yield        Frame        Retire with an Extra 10 Million!

           TEL        18.88%            18 yrs   Invest Monthly             Php5,000
                                                 # Years                       21
           BPI        16.92%            18 yrs
                                                 Return Rate                 16.9%

            AC        11.16%            18 yrs   Total Investment (P)       1,260,000
                                                  Will result in a…
           JFC         10.7%            14 yrs
                                                 Future Value (P)           Php10M+
   Inflation            5.7%            18 yrs   Investment Gain              740%
Share price history from 1990 to 2007
          Method #2: Market Timing
 Technical Analysis


•Technical Analysis is the study of
market action (or market price) by     Price   Study     Spot
reviewing price charts for the        Action   Charts   Trends
purpose of forecasting future price
trends.
• Aim: Watch and Follow market
direction
•Technique: Buy into Up Trends;
Sell into Down Trends thereby
limiting risk
              Method #2: Market Timing
   How to Read Graphs and Trends?

                                      Ayala Land Inc (1990-2008)




     Stock: “A”          “B”

3 Trends:
Up Trends – higher lows and higher
highs tracked by an up trendline
Down Trends – lower highs and lower
lows tracked by a down trendline
Consolidations – sideways shifts
        Method #2: Market Timing
Markets swing in Cycles: BULL and BEAR
              Part Four

Getting Started with
  Online Trading
         In the Palm of your Hands
Getting Started     CitisecOnline provides:

                  • Direct execution and Off Hours Order
                    Placement
                  • Live quotes and market statistics
                  • Live portfolio monitoring
                  • Research studies and Seminars
                  • Charting tools
                  • 24/7 online service
                  • Customer Service
                  • Best commission rates
      In the Palm of your Hands
Research                                              Open an
                      COL EIP
                                                      Account
           • Investing made easy               • Fill up application
           • For the Busybody, No                form
             need to time markets              • Provide 1- valid copy
           • Allow us to help pick               of a Gov’t issued ID
             good stocks                       • Provide copy of billing
           • Take advantage of                   statement (for non-
             technology                          personal appearance)
           •   ALI, TEL, SMPH, BPI, JFC, MWC   • Fund account:
                                                   • COL EIP - P5,000
                                                   • Trading - P25,000
                     Summary
  What have we Learned?


1. The Building of Wealth
2. The Stock Market Option
3. Understanding Price
4. Choose Fundamentally Good
   Stocks
5. Cost Averaging or Time Markets
   through Technical Analysis
6. Power up with Online Trading      “Knowledge born from actual experience
                                    is the answer to why one profits; lack of it
                                                     is the reason one loses…”
                                                            - Gerald M. Loeb
           Thank you and have
               great day!


 To learn more about our COL Easy Investment Program or know
more about our services and seminars please visit our website at
                       www.citiseconline.com
For inquiries: call our customer hotline at 6-333-777 or email us at
                     helpdesk@citiseconline.com

				
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