Steering Clear of DITO and BTC


My stock investment style is boring and predictable because I have designated my equities as my children's educational fund, so I cannot afford to play fast and loose with my equities investment. I invest in stable companies that have good intrinsic values and can pretty much run on autopilot so that a change of management will not significantly affect their performance. I firmly believe that investing should be boring, repetitive and should never take up more than 15-20 minutes of your brain space on any given day so that you can concentrate on your family, job, hobbies, BTS etc.

This is why Dito Telecommunity (DITO) and Bitcoin (BTC) are not part of my investment strategy.

I'm in this stock trading group on Facebook and it's interesting to see the reactions to DITO's once meteoric rise (growth has since slowed down). There are the braggarts who post screencaps of their ports with gains of several hundred percent, but I don't care about them. What concerns me are those who buy DITO because of FOMO and then fret why the stock price isn't steadily going up as it has over the last few months. Or who ask when they should sell considering that they've already made a tidy profit (the usual answer is: Hold! Aabot pa yan ng 20p! Or 100p! Or 1,000p!). In short, those who invested/gambled on DITO solely on the hype. 

What do we really know about DITO? It's touted to be the next big player in our telecommunications duopoly and it also cleared its first performance audit just a few days back. But what seems to draw people to it is Dennis Uy's close ties with the current administration. Clearing the next performance audits and having the necessary infrastructure to operate seem almost secondary, because being part of President Duterte's inner circle is seen as enough reason to invest.

That is not investing, that is speculating.

DITO's stockholders hope that it will pass its next performance audits. They hope that DITO will wrestle a huge chunk of the market from Smart and Globe once it is finally fully operational. They believe that with the Dennis Uy - President Duterte connection, DITO has no way to go but up.

If I had some fun money for investing, then I would have bet it on DITO when it was just below 5p/share. But I don't have extra money for that and I can't afford to bet my children's educational fund, hence, I'm sticking with slow and steady investing, even if I'm potentially missing out on a DITO run.

The same principle holds true for me when it comes to BTC.


Unlike DITO which at least has assets and will provide a service, BTC has no intrinsic value and its price is dependent solely on how its investors perceive it. This makes it a very volatile asset.

My stomach cannot handle BTC's volatility, while my brain cannot fathom fixing the price based on public perception alone. Is this some kind of a Mean Girls universe, where your popularity is your biggest draw?

So it's a no for BTC too. Which is just as well because at Php2,279,104.70/ bitcoin as of this writing, I clearly cannot afford it :p

When investing, it's always best to know what your goal(s) and timeline are so that you can intelligently gauge if the hot new investment opportunity is a fit for your needs. I know that my equities investment is for my children's college education 10-15 years from now. With that as my goal, I must then act accordingly because giving in to the hype and excitement over the latest "can't lose" investment opportunities might only blow up in my face and make it harder or near impossible to complete my children's education fund. Knowing this, I can then confidently say no to DITO and BTC without regretting my decision if they end up being good buys in the future (ok, maybe just a tiny bit of regret).


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Comments

Pinag uusapan pa lang namin ito ng husband ko kanina. Same kayo ng argument re: DITO. Pumayag pa din siyang bumili ako ng shares pero for some reasons nagka error yung system, di pa din ako nakabili. hehe.
Jillsabs said…
It's a sign na wag ka na raw bumili...joke! Go ahead and buy, basta ba pasok sa budget at hindi ka magsisisi if the price goes down or doesn't go up as fast you would like.
Che said…
This is why I left investing / trading groups. Everyone has different goals and I don't understand what people are talking about most of the time. LOL. When I read blogs and instagram microblogs, I get to know where the person is coming from and what their goals are. They're/You're doing your thing and I'm doing mine, and it's beautiful :D
Jillsabs said…
Yeah, it's best to read about people who have the same investing or saving goals as you so you can learn something you can apply to your own situation. In one of Paula Pant's interviews, the guest said something like you get in trouble when you're an investor but you're taking your cues from a trader. The trader would have already sold within the same day or the next few days, because that's what traders do, and an investor who followed a trader would have been left holding the bag.
We live in an amazing time where everybody seems to be a stock trader! Haha.. no financial analysis, just buying the hype. Tsktsk.

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