28. Swabeng Discussion: Lots and Lots (Board and Odd)

Whenever you trade a stock, have you noticed the amount of shares needed for you to buy or sell a stock? While you may buy a stock on a per share basis, there is a standardized way of trading them.

For starters, a board lot is defined as a standardized number of shares for a specific price range. This facilitates easier trading.

Let us refer to the table below.

Lets say you're interested to invest in Jollibee (Stock Code: JFC) on May 10, 2017 and you want to buy 100 shares. You need to check the price range for the stock. Upon checking you noticed that it costs 211.00 pesos (at the close). From there, when you checked on the table it is within the 200 to 499.8 peso range which means that the minimum number of shares for JFC would be 10 shares or equivalent to 1 board lot. Since you will be buying 100 shares of JFC, this means that you'll be buying 10 board lots of JFC.

Now, lets say someone gave you 4 shares of PLDT (Stock Code: TEL) and you wanted to sell them since you have already profited from it. Upon checking on the board, the number of your shares is not listed, hence you have to sell them via Odd Lot hoping that there are buyers out there who can match the number of shares and the price that you intend to sell the stock. Anyway, these are very seldom cases when you got to hold a stock that is an Odd Lot.


Till the next topic.

27. Swabeng Discussion: The Two Types of Stock Market Players in General

Now lets move on to this topic.


I've seen several types of players in the Stock Market based on reading. But for the mean time, I'll classify them in general.


1. Traders: These are stock market players that mostly rely Technical Analysis on charts, indicators and price action for their buy and sell signals. These type usually disregard any news as they focus more on the technical aspect of the stock and its movement. These are typically active people and who are mostly alert. They can hold a position (of a stock) from as short as a few seconds to as long as a year (or sometimes two).

2. Investors: These are stock market players that mostly focuses on the fundamentals of the company. They usually invest for the long term (mostly more than 2 years) up to the time that either they're old already to pass on the shares to their heirs or a couple of years when the company has solid earnings already. They use fundamental analysis to determine the soundness (how strong the company) of the stock. These people are not affected with the noise (hype and bash) and the price movements (charts) regarding their position of the stock and always look at the bigger picture (Company's Growth). Not that they are the passive type but rather they're in for the long haul.

3. Hybrid: These are the type of Stock Market players that has a combination of skills of a trader and an investor. While hybrids read reports, financial statements and news for fundamentals, they also rely on technical skills to determine the best time to enter and exit the trade. Hybrids can hold a position from a few seconds up to a few years depending on how their stock goes. This is where each one of us here should strive for.


Anyway, which of the three types would you go for?

26. Swabeng Discussion: Earning through The Stock Market by Dividends

That Price Appreciation for the previous post was quite exciting right? Anyway, here is the other way to earn in the Stock Market


2. Dividends

As a part owner of the company, aside from the gains that you have earned (or losses incurred), you will be rewarded with dividends. These dividends can be in a form of cash (called cash dividends) or extra stocks (stock dividend).

1. Lets say at April of 2012, you bought 10,000 shares of Jollibee (Code: JFC) and you didn't add more share up to the present day. Aside from the price appreciation that you've gained, you will earn cash dividend per stock (refer to the table below)

Jollibee Dividends

Starting from the bottom part, a 0.58/share, cash dividend for that period would yield 5800 (excluding 10% witholding tax). The for the 0.65/share, cash dividend for that period would yield 6500 (excluding 10% witholding tax) and so on. When you add up all of the cash dividends on the table, it would give you 64,890 pesos (net of taxes). Not bad right?

Can you imagine if you bought more than 10,000 shares (lets say between 50,000 to 100,000 shares), I'm sure you'd be very delighted with your earnings through cash dividends.

That's for Cash Dividends.

Stock Dividends would be a different matter since you'll be rewarded with an additional number shares as the company has earned for a certain period (quarter or semi-annual or annual). I'll try to look for a better explanation for Stock Dividends.

That's all for now.

25. Swabeng Discussion: Earning through The Stock Market by Price Appreciation

My apologies for just showing a few on the last post. :D


Anyway, Here are the two ways how to earn in the Stock Market. This will be the first part.


1. Price Appreciation.

A. Let's say on January 4, 2010, you bought 1000 shares of Jollibee (Code: JFC) priced at 59.00 pesos per share (closing price) which means you have spent around 59,000 pesos (exclusive of fees and charges).

Then on August 4, 2016, you decide to sell all of your 1000 shares of Jollibee for 260.00 pesos per share (closing price). This means your 59,000 pesos has grown to 260,000 (exclusive of fees and charges) or your money has grown to around 340% since the time you bought shares of JFC. You may refer to the chart below for the price movement of JFC from the time the shares have been bought to the time the shares have been sold.

Jollibee's Uptrend

B. On the other hand, on September 4, 2014, you bought 100 shares of PLDT (Code: TEL) priced at 3460 pesos per share (closing price) which means you have spent around 346,000 pesos (exclusive of fees and charges).

Then on December 5, 2016, there was an emergency that you needed a certain amount of money but your only source was the stocks of TEL that you have. You have no other choice but to sell all 100 shares of TEL for 1280 pesos per share (exclusive of fees and charges). From the time you bought TEL until you sold them, your loss was at 63%, some that all of us don't want to happen (sell at a loss). You may refer to the chart below for the price movement of TEL from the time the shares have been bought to the time the shares have been sold.

PLDT's Downtrend

Then how did the price per share of JFC went up from 55 pesos to 260 pesos? and How did the price per share of TEL went down from 3460 pesos to 1280 pesos?


Here's the explanation.

Price of a Stock is usually dictated by the buyers and the sellers. In a wet market it is usually called the law of supply and demand. If there is a high demand for a stock, its price would usually go up. On the other hand, if the demand for the stock is low, its price would usually go down.

Other factors for the increase and decrease of the stock's price includes updates (positive/negative) from the business, market sentiment, annual (or quarter) earnings report, as well as local and global issues that may have something to do where the certain stock is categorized.


On the next post, we will show you the other way on how to earn money in the Stock Market. Stay tuned.