Weekly Summary - Sep 24 - 28

PSE Index
Sept 21 - 3,423.73
Sept 28 - 3,572.90
Change - 149.17 pts
%age gain/loss - 4.35%

Stocks on Hand
COL - 11.2500
MER - 83.0000
PNB - 48.5000
VLL - 5.1000

Transactions for the week
Sold CMT 41,000 shares at 1.18
Sold AC 190 shares at 510.00
Sold FLI 43,000 shares at 1.62
Sold NRCP 21,000 shares at 3.65
Sold MBT 900 shares at 56.50
Sold AP 17,000 shares at 5.40

Percentage Earning/Loss for the Week - 4.11%

My Hot Picks for Sept 24-28. How they perform
1. MER -82.5
2. PNB - 47
3. MBT - 52.5
4. BPC - 4

What Is Buying On Margin?

Buying on margin is borrowing money from a broker to purchase stock. You can think of it as a loan from your brokerage. Margin trading allows you to buy more stock than you'd be able to normally. To trade on margin, you need a margin account. This is different from a regular cash account, in which you trade using the money in the account. By law, your broker is required to obtain your signature to open a margin account. The margin account may be part of your standard account opening agreement or may be a completely separate agreement. An initial investment of at least $2,000 is required for a margin account, though some brokerages require more. This deposit is known as the minimum margin. Once the account is opened and operational, you can borrow up to 50% of the purchase price of a stock. This portion of the purchase price that you deposit is known as the initial margin. It's essential to know that you don't have to margin all the way up to 50%. You can borrow less, say 10% or 25%. Be aware that some brokerages require you to deposit more than 50% of the purchase price.

You can keep your loan as long as you want, provided you fulfill your obligations. First, when you sell the stock in a margin account, the proceeds go to your broker against the repayment of the loan until it is fully paid. Second, there is also a restriction called the maintenance margin, which is the minimum account balance you must maintain before your broker will force you to deposit more funds or sell stock to pay down your loan. When this happens, it's known as a margin call. We'll talk about this in detail in the next section.

Borrowing money isn't without its costs. Regrettably, marginable securities in the account are collateral. You'll also have to pay the interest on your loan. The interest charges are applied to your account unless you decide to make payments. Over time, your debt level increases as interest charges accrue against you. As debt increases, the interest charges increase, and so on.

Therefore, buying on margin is mainly used for short-term investments. The longer you hold an investment, the greater the return that is needed to break even. If you hold an investment on margin for a long period of time, the odds that you will make a profit are stacked against you.

Not all stocks qualify to be bought on margin. The Federal Reserve Board regulates which stocks are marginable. As a rule of thumb, brokers will not allow customers to purchase penny stocks, over-the-counter Bulletin Board (OTCBB) securities or initial public offerings (IPOs) on margin because of the day-to-day risks involved with these types of stocks. Individual brokerages can also decide not to margin certain stocks, so check with them to see what restrictions exist on your margin account.

http://www.investopedia.com/university/margin/margin1.asp

Weekly Summary - Sep 17-21

PSE Index
Sept 14 - 3,294.55
Sept 21 - 3,423.73
Change - 129.18 pts
%age gain/loss - 3.92%

Stocks on Hand
AC - 510.0000
AP - 5.0000
CMT - 1.1200
COL - 10.7500
FLI - 1.4600
MBT - 52.5000
MER - 82.5000
NRCP - 3.5000
PNB - 47.0000
VLL - 5.0000

Transactions for the week
Sold ALI 5,400 shares at 14.7500
Sold CMT 1,000 shares at 1.1800
Sold BPC 13,000 shares at 3.9000

Percentage Earning/Loss for the Week - 1.89%

My Hot Picks for Sept 24-28
1. MER
2. PNB
3. MBT
4. BPC

HKEx

I wasn't able to update my blog last week since i had a short vacation to Hong Kong. Took the chance to drop by the HK Stock Exchange while i'm there. (attached picture of HKEx building in Central, Hong Kong).

I made some changes with my postings also. Instead of posting the daily summary of the stock prices, i planned to make it on a weekly basis. I'l stil post my forecasts and hot picks also.

cartoon

Margin Trading

Imagine this: you're sitting at the blackjack table and the dealer throws you an ace. You'd love to increase your bet, but you're a little short on cash. Luckily, your friend offers to spot you $50 and says you can pay him back later. Tempting, isn't it? If the cards are dealt right, you can win big and pay your buddy back his $50 with profits to spare. But what if you lose? Not only will you be down your original bet, but you'll still owe your friend $50. Borrowing money at the casino is like gambling-on-steroids: the stakes are high and your potential for profit is dramatically increased. Conversely, your risk is also increased.

Investing on margin isn't necessarily gambling. But you can draw some parallels between margin trading and the casino. Margin is a high-risk strategy that can yield a huge profit if executed correctly. The dark side of margin is that you can lose your shirt and any other assets you're wearing. One of the only things riskier than investing on margin is investing on margin without understanding what you're doing.

Daily Summary/Forecast - Sep 7

September 7, 2007

PSE Index - 3332.97
Change - 6.44 pts.
%age CHG - 1.32%

Stocks on Hand
AC - 472.5000
ALI - 14.2500
AP - 5.2000
BPC - 3.7000
CMT - 1.1400
COL - 11.7500
FLI - 1.4600
MBT - 55.0000
MER - 81.5000
NRCP - 3.3500
PNB - 46.0000
VLL - 5.0000

Transactions for the Day
Sold MIC 10,000 shares @ 4.75
Sold TBGI 27,000 shares @ 2.85
Bought MBT 900 shares @ 55.00

Percentage Earning/Loss for the day - 1.32%

My hot picks for Sept 10
1. MBT - 55.00
2. BPC - 3.70
3. GLO - 1320.00

Yesterday's pick (Sept 7) - How they perform?
1. FLI - 1.48
- Opened at 1.48/share and rise up to 1.50 before closing at 1.46, which gives u 1.35% gain
2. BPC - 3.80
3. MWC - 14.00