by Aurelio Pena
WAY BACK in 1995-96, I conducted a series of lecture-forum for All Asia Capital stock brokerage firm as part of its efforts to increase its stock clients. Due to the low volume of business generated by stock broker companies from Davao, the firm recognized the need to come up with an “education program” to teach beginners what the stock market is, what it does, how to buy stocks, etc. The forum was aptly titled “Stock Market For Beginners”.
We conducted the lectures right in the conference room of All Asia Capital (now defunct) which overflowed with so many participants eager to plunge into the stock market. The demand for this type of lecture-forum was so much that I was invited twice by Ateneo de Davao University economics-finance classes to two huge seminars held at the Royal Mandaya Hotel ballroom with each seminar exploding at the seams with 600 students. Of course, I couldn’t it alone : I was with a top Securities and Exchange Commission official, a stock brokerage branch manager and a Chinese trader.
If I were to do this again, the following will form part of that lecture :
IT’S JUST A MARKET (Palengke ito!)
Just like any wet market in your city in the Philippines, it’s just a place where people come to BUY and SELL. Vendors go to the market to SELL you rice, sugar, fish, vegetables, fruits, etc. If you’re another vendor, you go there to buy from them and sell those commodities again somewhere for a little profit. The Stock Market is practically the same thing— you go there to buy and sell “stocks” of companies, hoping to make profits from your little capital.
ANO BA ANG “STOCK”?
When you buy a “stock” in a company, you’re buying a small slice of OWNERSHIP in the company. Pare ko, may-ari ka na sa kompanya ! Isa ka nang “part-owner” after you buy some “shares of stocks” sa isang kompanya! Example : If you bought 100 shares of San Miguel Corp, you become part-owner of SMC, Kasi you own 100 shares. Ang maganda dito, you can buy and sell those shares anytime you like— for profit.
BUY AND SELL (Ganoon lang ba?)
Instead of rice or sugar, people buy and sell stocks to make money— well, sometimes they do make money— when they aren’t stupid and ignorant of what’s happening in the market. Ganoon lang yan— you buy stocks at a certain price, wait for the price to go up, then sell it when you’re making a profit. Example : If you bought 1,000 shares of Ayala Land Inc (ALI) at P7.00 a share and sold it later at 14.00 a share, you DOUBLED your money. That’s a 100% profit gain on your capital money!
STOCK EXCHANGE
Ang tawag sa palengke sa mga stocks ay ang “stock exchange”. Sa country natin, ito ang Philippine Stock Exchange. (website: www,pse.com.ph) This is where all the selling and buying of stocks take place everyday Monday to Friday from 9:30 in the morning up to 12:30 in the afternoon. Lahat mga “buy orders” at mga “sell orders” coming from over a hundred stock brokerage offices from Makati, Manila, Davao, Cebu , Iloilo, etc will be matched electronically in seconds. Itong mga brokerage offices have their own cubicles inside the huge PSE building along Ayala Avenue in Makati as well as on Ortigas, Pasig.
Dito mo makita mga traders, talking to their clients over their phones, and punching the keys of their computers to confirm buying or selling orders.
RISKY BA ANG STOCK MARKET?
Maski anong gagawin mo, lahat ay risky! When you go out to work everyday, no one knows one day, (simbako lang!) makaka aksidente kayo. Even your own bathroom is a very risky place for you—many have been killed just by slipping on the wet bathroom floor while showering and hit their heads on the toilet bowl! No matter how careful you are with your money by depositing it in a “strong, stable, safe” bank, it can go belly-up. This bank can suddenly collapse and go bankrupt, taking away all your millions in savings. Walang safe sa mundo. Lahat ay risky! But in the stock market, with all its risks, there are ways to control the risks and minimize possible losses— with you ending up with winning profits. May paraan yan, pare ko!
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