June 2, 2019
The Spark of What We Do
What really got me into stocks was the story of a friend’s grandmother who bought SMC shares all her life and lived off its cash dividends and share price appreciation. She lived independently and occasionally sold shares for emergencies.
I imagine SMC being less than a peso probably in 1948, when it was listed, as I cannot search how much it was. There was no financial research website back then as well, and she probably thought that San Miguel, which was just a brewery, had great beer that will last for a very long time. It did, and it is now sold worldwide and has variants. SMC also eventually transformed into the food, beverage, fuel, infra and power conglomerate it is right now.
What appealed to me was that my friend’s grandmother was real proof that it can be done right here in the Philippines. Here, we work 24/7 doing stocks research because we love it, and that hopefully one day, we can have a waterfall or a secure cash-flow that we can live off until the rest of our lives and probably to pass on to our children. We think the best way is through stocks which, by the way, is also called securities. It was really meant to provide financial security and not the exciting pursuit of short term gains from intense and heart-pounding day-trading.
My friend’s grandmother did passive investing in a stock that she thought had value. She kept on buying SMC shares with the extra money that she had. Not only the share price appreciation, but I imagine the cash dividend yields being huge eventually after all her buying since 1948.
We do active investing, and by this, we mean investing in stocks with qualities of stability and growth at bargain prices. We also buy and take profits on market peaks and bottoms based on the stock market versus the economy’s value.
They may not be the same, but the similarity between the method of my friend’s grandmother and ours is that we keep investing in good stocks. We reinvest our gains from share price appreciation and cash dividends to accelerate growth through compounding. Our end result is also the same. It is to create that waterfall of financial security.
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