Maids are investing in the stock market, shouldn’t you be doing it too?
Scouring the internet for useful materials regarding stock market investing I stumbled across this little 28 page ebook written by Bo Sanchez entitled “My Maid invests in the stock market and why you should to”
If you don’t know Bo Sanchez, well let me give you a little bit of a background. He calls himself as the “preacher in blue jeans” alluding to his “practical” style of preaching. He is a popular Roman Catholic lay preacher and author in the Philippines. His ministry is called the Kerygma family.
Now I don’t agree with much of Bo’s Sanchez theology mainly because most of them are not biblical. Nevertheless, I won’t discuss them here, I will probably discuss them in the near future in my personal blog. However I appreciate the fact that he is trying to teach ordinary people to do stock market investing the right way and that he has written this helpful little ebook.
Believe it or not the Philippines is the 48th biggest economy in the world. Despite this, our stock market is one of the smallest in the world and less than 1 % of Filipinos invest in the stock market.
The major reason I believe why Filipinos are not investing in the stock market is that they don’t understand how it works. They have a lot of misconceptions about the stock market. I wrote about this extensively in the series of post entitled “Ten myths of stock market investing.”
Bo Sanchez, here has done a wonderful thing. Since he has a knack for explaining complicated things much more easily, he has done a great service to the Filipino people by showing ordinary people that investing in the stock market is not as hard as you think. Add to this is the wonderful fact that he has a huge audience following.
Now, I do not agree with all the investing strategy that Bo mentions in the ebook. More specifically I do not believe in Money Cost averaging as this does not work, later on I will write an extensive article on this. As you all know, I adhere to the Buffetenian philosophy of buying “Great companies with durable competitive advantage at a fair price.” Sadly, Money cost averaging does not let you do this.
In the ebook, Bo Sanchez advocates buying these types of companies. He doesn’t use the exact term “Great companies with durable competitive advantage” but he wrote “great companies” and I believe he means the same thing. However Bo’s strategy cannot enable you to do the part about buying them at a fair price because when you money cost average you just buy these “great companies” consistently irregardless of the market price. This is where Bo got it wrong.
Citiseconline, the online broker that Bo is recommending is a great brokerage firm and they exactly let you do the strategy he is suggesting. In fact Citiseconline was the one who introduced this program, and Bo Sanchez just caught on. They call it the “EIP” – Easy Investment program. The program has this cool feature that reminds you via email on when you should plunk in money to buy shares of stocks. (This is the hall mark of money cost averaging that is investing on a regular schedule over a lengthy period)
What Citiseconline should have done is that instead of using money averaging, they should have set a “recommended buying price” based on value investing analysis. If the price is fair, Citiseconline will notify you that the stock is cheap or fair based on value investing analysis or Buffetenian analysis and that you should buy it. In the meantime while waiting for that email, in order to force you to save, you can save regularly by depositing the money with Citiseconline and when the time comes for you to buy a stock of a great company than you can pull the buy trigger. This I believe is the real and ideal easy investment program and this will make you richer than the current EIP or their so called “Super EIP.” If Citiseconline does this I would be the first to recommend this kind of program.
By the way this post also answers the question on what I think about Citiseconline’s EIP program. I think somebody asked me a question about this, and I promised him that I would write it.
Anyway, Bo Sanchez’ “My Maid invests in the stock market and why you should to” is a really informative short ebook on stock market investing. For those of you who haven’t yet decided to invest in the stock market this ebook will help you understand what the stock market is all about. After all maids are already investing in the stock market, there’s no reason why you shouldn’t be.
P.S: I’m awaiting Bo’s next ebook on “My Triskad driver invest in the stock market . .. “ hehehe just kidding, perhaps I will write that ebook. Anyway here’s a copy of the ebook “My Maid invests in the stock market and why you should too.” Happy investing!
My Maid Invest eBook by Bo Sanchez
Hi ! my name is Zigfred Diaz, Thanks for visiting my blog where you can learn stock market investing the Warren Buffett way and using other value investing methods ! Never miss a post from this blog. Subscribe to my full feeds for free. Click here to subscribe to D’Intelligent Investor by Email
Hi Zigfred,
What else should I say, I spent like an hour reading the whole thing. I’m regularly reading Bo’s blog but he didn’t post the whole thing that’s why I so love it that you did the job. You’re writing what exactly I always wanted reading.
Jonha: You are more than welcome ! Glad you could drop by and spend time to read my blog !
Hi Zigred,
Just a question: If Bo’s strategy is peso cost averaging, then what’s yours? I learned a lot just by reading your blogs, and learning still!
Yoseeboy: My strategy is simple, and it can be found all over my blog. I buy wonderful companies with durable competitive advantage at cheap and or fair prices. This is has been the mantra of all value investors. Thanks for your patronage of my blog. Be back for more ! God bless.
Hi Zigfred,
I find your site very helpful and informative for small investors like me. Thanks for painstakingly putting it up and updating.
Seems i have a problem downloading the ebook on PSEs Promer on Stock Investment, i hope you wont mind to email me a soft copy of the same.
Again, thanks and more power.
Mon
Mon: I just emailed you a copy of the primer.
Hi,
Good day! I am planning to start investing in the stock market this year. i am curious on how would i know if the price of the stock is cheap or fair-priced. Anyway, thanks for your blogs. they are really helping me understand more about stocks.
Karen: That is a good question, which requires a comprehensive answer. Stock Analyst have differing opinions on how to know if a stock is cheap or fair priced, but there are some basic rules. Thats what this blog is all about. Anyway if you want to learn ahead you can research that on the internet or read my recommended books. You could also drop by this blog and learn how to do it once I get to that topic. Cheers !
Will you please expound why peso cost averaging strategy does not work? For me, that strategy makes sense until i read your blog criticizing it. Perhaps, you could write something about peso cost averaging and why it DOESN’T work. Thank you.
Neo: Actually I gave my reason in this post on why it doesn’t work please re-read the post again. If it is still not that clear, don’t worry, I will soon write a more comprehensive article on why peso cost averaging does not work.
Zigfred,
Whose your stockbroker? I’m planning on opening an account with BPI since well it’s relatively close to where I live. And i think they have very low deposit to open a trading account. I already attended the free seminar with COL, but to avail their trading account you must have at least Php 25k. Do you have any stockbroker in mind that offers the lowest opening fee/deposit, and is reputable?
Mike: My online stock broker’s are COL and BPI. Both have advantages and disadvantages. COL’s disadvantages is the high entry fee. But I like their research and the fact that you don’t have to wait for the 3 days clearing before you can use the money to buy and sell stocks. BPI’s disadvantage is lack of access to comprehensive research and the 3 days clearing, but I like the fact that the trade account easily accesses with my savings account. So to get the best of both worlds I got both as my brokers. I started with BPI, I recently signed up with COL.
Hi Sir!
I was your former student before in CIT-IE. I was reading your blogs about stock market investing lately since I have wondered on how to invest in stock market and have financial freedom (sort of hehehe!). Any tips on how I may jumpstart towards that direction? I hope you won’t mind sending to me a step-by-step process on how you actually did it. I’ll be very grateful. Thanks Sir!
Jane: Hi ! Glad to give back in the form of imparting knowledge. I’m teaching because I want to give back. Regrettably I will not be teaching this June 2011 in CIT as I have to cut back on my work load to spend more time with my family, maybe in the future I will teach again. But anyway, glad that you are interested in finance and investing. I know I’m still young, but I sure wished I learned all that I have learned now during my high school days. You are still in the best position to learn as I assume you are still in your 20s. Hang around and read my blog, you I will slowly but surely reveal how I did it. (I was thinking of coming up with a book someday)
Learn all you can about investing and finance while you are still young. Get the books I recommend in the recommended books section and read about personal finance.
Oh by the way I sent stock market investing reading materials in your email. God bless !
Sir,
Just want to clarify two things:
1) On COL:
You can actually open an account in COL with as low as P5000. This is what they call an EIP account. Don’t let the name confuse you though, you can open an EIP account even if you don’t avail of their EIP program. That’s how I opened an account with them. I started with P5k then bought some shares (not through their EIP) and just slowly added funds afterwards.
2) On BPI:
You can actually use the funds from your sell transactions even if it’s not cleared yet (T+3 days). Your transaction has to be approved by BPI people (in about 5 to 10 minutes on the average) but you can really use the said funds to buy shares of stock. I have done this multiple times already.
Ricky: Thanks for the clarification. This will certainly help readers of this blog. More power to you.
Your welcome, Sir.