8 and 20 Led to 5 and Forever
February 10, 2014
It has been five years since we started Corpecon Research. It actually started with a news video on an interview by CNBC Squawk Box with Warren Buffett. The two hosts were “sharpshooting” his decision on investing in a brick-making company and his renowned thriftiness. Visibly annoyed but with class, the self-made, unpretentious and humble billionaire went on with the interview and ended it with a note that the best write-ups on investing were Chapters 8 and 20 of “The Intelligent Investor”. This, I have to read I said five years ago, and I read the whole book. What happened next were enlightenment, guilt and action.
The knowledge Graham shared in the book just made complete sense. It was the purest oil pouring on rusty gears and was light shining on the dark side in my cerebellum which was a vast area like 95% of it. It also brought guilt to the memory of the days when I was part of the herd trading machinery of Philippine stocks. So I and my partner took action by embarking on a quest of “Seeking Value and Minimizing Risks in the Philippine Stock Market. Like what the dwarf Gimli said in the Return of the King on the need to face Mordor’s battalion to distract them from Frodo’s mission, “Mmmh, big certainty of death, minimal chance of success, so what are we waiting for??”
But of course, as students of Graham, we learned about margin of safety and proceeded with patience and caution. Turned down by a potential capital partner, we had to establish the business ourselves. This turned out good since we became the masters of our fate. It took a year in 2009 to re-develop and update the old database from the crater of the Asian financial crisis with the principles of intelligent-investing or value-investing as it is now called. It was a year meant with zero clients, a year meant for training, learning and experimenting. When we were ready, we released our first product, the Philippine Stocks Book, in January 2010 with our global marketing partners. We generated a whopping sale of one book.
Still, with minimal interest on what we had to offer, we continued studying and applying value-investing on the Philippine stock market. This is with safe distance away from all the trading in the market and the research of other groups. A break-through came in May 2010 when Angping Securities decided to sign with our service. Nieves Securities and PNB Securities followed suit in November 2011. We launched our Economic Research Service in 2013 headed by our trusty Chief Economist. Emerging Frontiers and ISI EMIS also started presenting our research to their readers and clients globally in January 2014. Still, we continue to be students of the greats such as Graham, Schloss, Buffett, Lynch and many others. To give back to value-investing, which empowered us and our clients over the years, we developed our own value-investing tools, the PSEi Bands, the PSEi Tracker and the Blended Multiplier Limit.
Five Years is a landmark. We came to accept that our practice is our lifelong calling. We also learned that it is imperative to generate our own ideas firm in the roots of value-investing amidst constant risks in and the scrutiny of the Philippine stock market. We will continue to empower our clients and those that want our brand of research. It is challenging. However, Independent Thinking is the Most Freeing Thing.
The Philippine Stock Market Research report is solely for information. It should not be constituted as an offer for solicitation for the purchase or sale of securities mentioned. The information herein has been obtained from sources believed to be reliable. Whilst every effort has been made to ensure accuracy, we do not guarantee the accuracy or completeness of the report. All opinions and estimates expressed herein constitute our judgment as of this date made on a reasonable basis and are subject to change without notice. No liability can be expected for any loss arising from the use of this report or its contents. As this is general information, it does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may obtain this report.