Virtual Stock Trading Journal

In Partial Fulfilment of the Requirements

for ACC 212- Financial Markets

Submitted to:

Sir. Walter S. Delig, CPA

Submitted by:

Jerah Y. Torrejos

October 23, 2019

Introduction

I’ve heard of trading securities a long time ago. Still, the concept is new to me

because I did not really feel the need to study it before because I thought it was for

rich people. My reaction when I first learned about having trading as a requirement

was feeling excited to learn stock trading but somehow expectant to flop this. I

watched videos about trading and it just sounds so difficult so I don’t really have a lot

of expectations in my performance. Still, I treated the activity as something real so

that I can give it my best effort.

Since this is my first time trading, my understanding about trading is limited to

the learning I have from class discussions and my few readings about the subject.

However, I clearly understood the concept of diversification. I know that I need to buy

stocks from different companies to manage risks. Although they are not distinct type

of assets, but they came from different companies so I was thinking that maybe the

positive performance of some of my investments will neutralize the negative

performance of others. I also like think of myself as a value investor because I was

searching for potential stock that I thought was undervalued at this time and hoped

that it will somehow increase its value in the future. I belatedly realized that this

strategy will not work for me because I’m only going to trade for days and not years

and I don’t have any bit of information about the company and how well they were

doing with their finances.

Surprisingly, I have a high tolerance when it comes to trading. I don’t want to

incur losses so I did not sell my stocks prematurely. I waited it out so that I could

have revenue from my sale that will be enough to cover the transactions fees and

also gain a bit of profit. I’m still unfamiliar with the movement of the stock prices. I
can’t really predict if the prices will continue to rise or fall. Every time I can see that I

can gain profit if ever I sell a company’s stocks, I always sell it even if my profit did

not reach 2% because I think that it’s better to accumulate the small amount than

risk not selling it today and facing falling stocks tomorrow.

At this moment while writing this paper, the stock market is doing fine

compared yesterday because the day change today is +126.72 (0.13%). Yesterday

everything was on the red and I can’t sell anything but it was a good time to buy

stocks.

RESEARCH ON INVESTMENT STRATEGIES AND COMPANIES

I bought the stocks with an expectation that the price will rise at the end of the

day and I’ll be able to sell and gain immediately. I was disappointed for obvious

reasons; I was naive and ill-informed of what a stock market really is all about. Below

are three investment strategies I hoped that I read before I started trading.

Speculation

Speculation is a strategy that considers the price fluctuations and uses it as a

basis for buying and selling securities or commodities. For other people it has no

philosophical value because it was likened to gambling. In defense of this investment

philosophy, Milton Freidman wrote a book “In Defense of Destabilizing Speculation”.

He argued that speculators have an information that other investors do not know of

that can be used as an advantage in trading. Rather than blindly putting your money

everywhere, speculation is more of trading based upon a presumed information

advantage (Lewis, M., et. al., 2019).

Value Investing

Value investing, basically, is seeking and purchasing seemingly undervalued stocks

of a company with a huge potential. An investor does not randomly choose a no-

name company but typically choose strong companies and evaluate their financial

statements to gauge the intrinsic value of the stocks. Investors believed that the

valuations in the market place do not really reflect the true worth of the securities;

they try to look for this kind of securities and buy it at a price they believe as a

discount (Stock Investment Strategies, n.d.).

Passive investing

. Passive investing is a strategy that minimizes buying and selling securities

to maximize its returns. Its goal is to hold the investments for a long term because

passive traders believe that market returns is positive over time. In contrast with

active trading, passive trading does not capitalize in the short-term price fluctuations.

It seeks to avoid the fees and limited returns that happen when trading regularly.

Diversification is important in this strategy because it tries to imitate the market

performance (Chen, 2019).

Purchase/ sale of Stocks

I did not have systematic criteria for choosing companies to invest in. What I

considered mainly is if it’s selling at a lower price compared to the high price listed in

the stock information.

 Figure 1. The first stocks that I bought.

In figure 1, for example, I bought the stocks for 18.28. It is lower than the listed high

price of 19.36. At that time, I assumed that the stocks can still increase its price in

the coming days because it still has a huge room to grow. My choice of companies

was also influenced by their popularity. ABS-CBN, for example, is a popular network

in the Philippines. I only bought 1,000 shares for 18, 333.93 including other fees

because I learned not to put all my eggs in one basket. Basically, my investments in

other companies were not more than 5,000 shares each.

My stocks are largely on the conservative side. For this requirement, I

naturally want to profit that’s why I invested in less risky companies like BPI, ABS-

CBN, and Alliance Global Corp. They are businesses that made name in their

respective industries and are already deemed reliable because of their long years

operating the business. I also have aggressive stocks like from the mining

corporation Atok-Big and the newly formed corporation Axelum Resources Corp.

They are high risk but they merely comprise less than 30% of my portfolio which is

tolerable.

Although I considered the industry where the company I should invest in

belonged to, but it was the least of my concern during buying stocks. I belatedly

learned its importance, but now I know that some industry in the economy actually
perform well compared to others. I need to seek it out and find a company that is

spearheading it.

My decisions were not influenced with any news because I stopped reading

news a while back because it became toxic and full of hate. I realized that I should

not limit myself in the mainstream media but to seek out more information especially

the business news. It will help me in the long run because my course is business

related and maybe sometime in the future I will try investing in stocks for real.

So far, my best performing stock is ABS- CBN. I realized a gain of 496.024.

There were few that were performing least like AXLM and ABSP. The two were on

the red since I bought them.

Figure 2. My best performing stocks

Figure 3. My least performing stocks

 My Return on Investment is:

ROI= Income X Sales

Sales Invested Capital

897.49 X 59,734.54 = 1.53%

59,734.54 58,837.05

I sold stocks from 5 different companies namely ABS-CBN, 2GO, AGI, and

BPI. I realized a total gain of 897.49. I choose to sell them because they can give me

profit, although miniscule, but still I want to accumulate them. Given the time

constraints of this requirement, I thought that it was better to sell them already.

Conclusion

I had a lot of realizations because of this requirement. I realized that trading is

hard. It took a lot of my patience just to buy and sell those stocks. It requires timing

and prior knowledge. I also realized that I shouldn’t have invested wantonly just

based on the prices. I need to read the company profile before making buying

stocks. Now I understand the advantage of a well-informed decision.

Name of No. of Purch Purchase Selling Sales Gain/ ROI
Company Shares ase Cost W/ Price Loss
Sold Price Fees
ABS-CBN 1,000 18.28 18,333.93 19.00 18,829.95 496.024 2.71%

2GO 1,000 10.12 10,149.85 10.42 10,326.74 176.887 1.74%

AGI 1,000 10.78 10,811.80 11.06 10,961.01 149.212 1.38%

ABG 800 12.68 10,173.92 12.88 10,211.78 37.854 0.37%

BPI 100 93.40 9,367.55 94.90 9,405.06 37.512 0.4%

TOTAL: 3,900 58,836.45 59,734.54 897.49 1.53%

If given a chance to do trading again, I will apply my learning from this activity

to the new one. There were things that I wished I did differently and now that I have

a better grasp at trading, I know that I will do better the next time. I will read the

company’s information first before buying their stocks. I will research about the best

performing industries within the current economy and seek out the leading

companies. And I will invest my money there. I will also try to be more of a risk taker

because, as what I learned from this subject, “the higher the risk, the higher the

return”.

What I enjoyed most about this requirement was checking the prices everyday

after I went home from school. The first time I saw that one of my investment turned

green, I was ecstatic. It’s like an achievement for me. Over all, it was a different

experience and I’m glad we did it.

Citations

Lewis, M., et. al. (2019, May 29). 4 Types of Stock Market Investment Strategies -

Investing, Speculation, Trading & Bogleheads.

https://www.moneycrashers.com/types-stock-market-investment-strategies/.

Stock Investment Strategies. (n.d.)

https://corporatefinanceinstitute.com/resources/knowledge/trading-

investing/stock-investment-strategies/.

Chen, J. (2019, October 8). What Is Passive Investing?

https://www.investopedia.com/terms/p/passiveinvesting.asp.
APPENDIX

My portfolio Holdings as of October 22, 2019

My Order History
Alliance Global Group, Inc. (AGI)

Alliance Global Group, Inc. is one of the

largest companies in the Philippines. It

was founded by its CEO Andrew L. Tan

on October 12, 1993. Currently, the

company is into food and beverage

production, real estate, and gambling.

ABS-CBN Corporation (ABS)

ABS-CBN is a media and entertainment

giant in the Philippines founded on June

13, 1946. Its activities span from content

creation to production for television.

2GO Group, Inc. (2GO)

2GO Group is a company that deals

with transportation of people and cargo.

It was founded on May 26, 1949 and

was formerly named as Aboitiz

Transport System.
Asiabest Group International, Inc. (ABG)

Asiabest Group is a registered

company since October 23, 1970 which

main activity is investment holding.

Ayala Corporation (AC)

Ayala Corporation is a longstanding

corporation which operates since 1834.

It holds the interest of Ayala Group.

Axelum Resources Corp. (AXLM)

Axelum Resources Corp. is a newly

made company. It is coconut products

manufacturer based in Misamis

Oriental.
Bank of the Philippine Islands (BPI)

Bank of the Philippine Islands is a

bank under Ayala Corporation and

was founded on August 1, 1851. It is

handled by its CEO, Cesar P.

Consing.

ABS-CBN Holdings Corporation (ABSP)

ABS- CBN Holdings is a corporation

mainly for holding investments. It

was founded on 1999.

Atok-Big Wedge Company, Inc. (AB)

Atok-Big Wedge Co. is a mining

company incorporated on September

4, 1931. Its activities are mainly

exploring and developing natural

resources.