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| English: logo of Banco de Oro (Photo credit: Wikipedia) |
Financial IQ Philippines Quick Hit(s):
Interesting take. Marvin's five long-term companies to hold are: Metro Pacific Investments (MPI),
Ayala Corporation (AC),
Banco De Oro (
BDO),
Jollibee (JFC), and
SM Prime Holdings (SMPH). What is your take?
Just some items that I want to point out and clarify before I give my mythical five stocks:
- I really don’t do Buy and Hold as part of my strategy. I continually buy stocks in my long term portfolio and just don’t buy one time big time.
- If you want to employ buy and hold your timeline must be longer to maximize the gains from both capital appreciation and dividends
- If you plan to put money on a steady pace on a monthly basis it would be best to do peso cost averaging.
- As you know like in basketball, offense wins games but defense wins championships. So the best place for you to get far over the long term is to make a good combination of stocks. Some stocks which will be offensive in rapid bull markets and some stocks that will be your defensive anchor during bad markets. The key is to create a good team that will that will be good in both offense and defense.
Here are the Mythical Five:
- Center – Metro Pacific Investments (MPI) – As the center is the anchor of the defense in every basketball team, MPI is one centerpiece that should be in your portfolio for years to come. First it is an ultra defensive stock that will stand the test of time. It is exposed in almost everything that is essential that every Filipino needs – electricity, water, hospitals, and toll roads! This are the bare necessities that we as country would need and I think no amount of recession can close this company down!
- Power Forward – Ayala Corporation (AC) – The power forward plays a similar role to the center as it is their responsibility to protect the post, make the rebounds, and score close to the basket. As they are known for their sheer size and stability the same is true with Ayala Corporation! One of the biggest conglomerates in the country gives you the exposure to growth and large earning potential via its property development and mall operations courtesy of Ayala Land and it’s ever profitable BPI. It also has a facet of a defensive stock as it can give you a steady source of cash flow from Manila Water and Globe Telecoms
- Small Forward – Banco De Oro (BDO) – The small forward is the most versatile position in basketball as it they are positioned in a way that they get to score either inside or outside, rebound, run with the guards, and do almost anything that the other positions can do. The same is true with BDO, it is the biggest bank in the country and as the economy grows banks have the biggest exposure to almost every industry imaginable. As the economy expands banks make the biggest money. As Ayala Corporation already has BPI you already have a good exposure of banks under your arsenal.
- Shooting Guard – Jollibee (JFC) – Michael Jordan, Kobe Bryant, and Dwayne Wade. This are prolific scorers who at one point or another have taken game winning shots and have brought scoring when it counts the most. This is what we can see in Jollibee as we see its business just rake in cash every time. Jollibee continues to deliver and expand not just in the Philippines but now the world is becoming its playground. This is a consumer story, that as Filipinos get richer and richer you can expect more of Jollibee, Mang Inasal, Red Ribbon, Greenwich, Chowking flourish in the country!
- Point Guard – SM Prime Holdings (SMPH) – The point guard sets the pace of the offense, delivers the ball and makes everything cohesive. That’s what SMPH does! Like Jollibee you can see an SM Mall in almost every major location in the country! That trend will continue to increase as more OFW remittances come into the country and our BPO industry continues to increase you can expect more people spending and spending money! As this happens you can see SMPH as a stock setting the pace in increasing your portfolio!
As you can see this are all varying stocks with different functions, stories and sources of earnings. What’s good about this is that for every season either in a bull or bear market your portfolio is covered and protected. Some may perform better than the other at certain times but over the long term this stocks will complement each other and give good returns to your account as a whole. This are all stocks also that you can hold and sleep well at night. These are companies that are earning, led by professional managers who over the years will take these corporations further!
