January 28, 2012 – Greater Appreciation for Management Discussion Analyses

Truth be told, I didn’t realize just how much my life has been missing until I actually read Management Discussion and Analysis reports archived in Philippine Stock Exchange company disclosures.  I used to just sleep over these details because I don’t think I’ll really profit from reading financial statements.  Plus, it’s really such a bore reading so much text, so many pages etc.  Well, I just realized how much profits I’ve been leaving at the table for not reading.

Well… this is just lil old me, learning and relearning about the usefulness of company reports, management reports etc.  I understand this is all boring for most people, but the big money is made by reading these sleepy reports during your free time to uncover businesses that are earning a lot, not much written about by a lot of analysts (if they’ve written about it, chances are they’ve accumulated the stock 3-6 months ahead — well at least, they put their money where their mouth is right?).

Technical Analysis is very useful in finding out the support levels as well as where demand and supply on a stock comes in, but for people who’d plow 5% stake ownership in a company, chances are they’re not betting on people’s emotions of fear and greed but on healthy prospects about the business, and the earnings growth they estimate these companies to do whether the markets are up or down this year.  Everything else is gravy (when foreigners want to invest in the Philippines, and when all other regional markets are rising.)  Hence, just a lot of love right now for fundamental analysis and basically reading through sleepy long reports.

Well, I guess this may be a little common cents for others, but it doesn’t quite seem much to me until now. 🙂

Good luck in reading, researching and understanding the companies you’re investing in 🙂

While I’m at heart a trader, it takes such an equal appreciation for me to realize that the world of investing is also a great place to learn from.  Looking at businesses’ earning potential, and not merely what the central banks’ money printing policies do, or what the charts are saying can boost those returns, and help you sleep at night (especially if you’re managing money meant for the long term – a year at least, and not merely for 3 days :D)

If you know your fundamentals well, you can just be patient with sleepy companies (consolidating stocks) and be confident doing your “Apple a day”/peso cost averaging strategies and beat the markets day in day out.  So that’s where all these “seeking Alpha”‘s all about.

See ya 😀

– Faceless Trader

Views expressed on this blog belong to FT alone and do not represent her employers, past or present.

Advertisements

About Abc

Abcdefghijklmnopqrstuvwxyz
This entry was posted in A Little Common Cents Corner. Bookmark the permalink.

9 Responses to January 28, 2012 – Greater Appreciation for Management Discussion Analyses

  1. shoyu_ramen says:

    wehehe .. i think u just had kensho FT-san! welcome to the club. 😉

    Like

  2. ScIoN says:

    That is what other people call as Information arbitrage. 😀

    I just hope that the PSE will improve more on its website. The beta sucks. :p

    Like

  3. Out of Stock says:

    another great post sir!

    let me just add a little anecdote. One should be careful in reading MDA’s. Sometimes, the “juice” can be found by reading between the lines. and sometimes its just pure BS. It depends on the company.

    Reading past MDA’s of companies helps a lot in giving investors and traders alike an idea of the company’s management. Whether they deliver or they are just a bunch of pathological liars.

    looking forward to you next post!

    -OutofStock-

    Like

  4. Joey Garcia says:

    I can see the book already: it’ll be titled the Way of the Sleepyhead 🙂

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s