My First SRO Experience

Whenever people find out that I dabble in stocks, the next question after what stocks to buy usually is "When will I know when to buy or sell?". And the honest answer is it really depends on you. Buying or selling depends on whether or not you're an investor or a trader. It depends on the gameplan you have set for yourself. It really doesn't depend on the market, as some people might think, because the market is a fickle creature so you should be the constant thing in your stock investing/trading.

However, to get your gameplan into order, you have to dive headfirst into the world of stocks. Sure it's nice to do some studying before purchasing your first lot, but there's nothing quite like the threat of losing money that will force you to learn anything and everything you can about stocks.

I've been investing in stocks for about 2-3 years now and in that time I've tried peso cost averaging, sold a laggard stock only to see it regain and then bounce back from its sleepy ways, came up and revised my investing strategy several times, saw my losses plunge to a scary -45%, rejoiced when my gains reached my threshold of 25% and executed a sell order triumphantly, only to see the same stock zoom up in value in the next few days (toink!). In short, it was those wins and losses that gave me my most valuable lessons in stock investing. Lessons that I will never forget because I literally had something to lose or gain.

And the lessons keep on coming as I went through my first stock rights offering (SRO) just last month. Metrobank (MBT) is one of the two stocks I still have in my very slim portfolio and its presence there can be attributed to its lack of movement in the last year. As in seriously, ang bagal ng growth niya. Hindi siya nakakatuwa.

As it turned out though it was a good thing that I hung on to MBT because I got to participate in an SRO, which Aya Laraya explained so well in this post. Fehl of DailyPik also had a great write-up on what an SRO was and even went further to suggest what an MBT stockholder can do with an SRO. See what I mean about being more receptive to knowledge when you have something at stake? If I wasn't literally invested in MBT, I would have ignored the SRO and wouldn't have bothered learning more about it.

Here's how my MBT portfolio looked like before the SRO: (Images are clickable!)

And then after the SRO, when my discounted MBT stocks were credited to my account:

The average price of my MBT stocks went down by almost 1p (from 79.9312 to 79.0643) which is really not a lot because my pre-SRO shares weren't that many to begin with. But I was pleasantly surprised to see that even the MBT presence in my portfolio went up (from 26.44% to 29.65%), diluting my FPH stocks dominance by 3%. #minicelebration

I'm beginning to see that between stocks and mutual funds, the former is where it's at because the opportunity for growth is much better and the fees are way smaller than mutual funds. I don't think I'll be closing my mutual funds account any time soon though since they're growing at a steady pace, but I will be paying more attention to my stocks moving forward from now on and will add 2-3 more companies to my portfolio before the year ends. Lezdodis.


rach said…
I am interested to know if there is a way that I can understand how investing on stocks works.

I know it was kind of discussed when I was in college but now that I have matured (naks) parang mas naging interesado ako sa kanya than ever before...
edelweiza said…
I sold my MBT shares a few months ago and used the money from the sale to buy a different stock. I was waiting for MBT to reach my target price of P100 but it wouldn't go up. Urung-sulong sya. Hehe. Okay din pala ang SRO, parang nagco-cost averaging din, tama ba pagkaintindi ko? :)
Jillsabs said…
Yeah, it's interesting (and fun!) to invest in stocks nga.
Jillsabs said…
Parang it's more of averaging down than cost averaging, since the SRO sells stocks at a discount. In the MBT SRO, the price was discounted by 20%++, that's why your average stock price will go down.
edelweiza said…
I see. Ang galing pala, bababa ang price dahil discounted sya. :)
Jillsabs said…
Yup, ok talaga ang SRO.
Startup Mommy said…
I'll watch out for my stocks that will offer SRO. Actually di ko na-gets agad dun sa notification sa COL account ko. Talagang marami pa akong dapat pag-aralan sa investing/ ;0

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