Words of wisdom from the Warren Buffett of the Philippines

By David K. Ongchoco MR.Wilson Sy Dubbed as the Warren Buffett of the Philippines, Wealth Securities and Philequity Fund founder Wilson Sy wasn’t always the stock investment virtuoso he is known to be today. Sy remembers fondly his days at Xavier School and his education under the Jesuit priests. He credits Xavier School and the Ateneo De Manila University for the values these two schools inculcated in him. Through the rigorous English lessons, theology classes and liberal arts education, he learned the importance of focus, discipline and hard work. Working even on holidays and during Christmas break when everyone else was on vacation, Sy would wake up at 8:30 a.m. to help out in the family store, selling such products as soap and toothpaste. At a young age he learned the value of money. “You don’t just throw away money, it isn’t that easy to earn. For every Colgate I sold, I’d earn one centavo. You then realize that everything counts,” he says. These childhood lessons came in handy as soon as he landed a summer job at Multinational Bancorporation where he worked in fixed income, money market and equities—his first foray in investment banking. He moved on to investment banking pioneer Bancom after finishing a Management Engineering degree at the Ateneo. After the 1986 Edsa revolution, he chose to work at Wealth Securities after a seat in a stock brokerage was offered him. After one client after another asked him to manage their portfolio, Sy, with several stockbroker friends, decided to launch a fund management company called Philequity Management, Inc. (Pemi). This was in 1994. Twenty years later, Pemi has become the distributor of the best performing mutual fund in the Philippines, Philequity Fund, Inc., with an average annual yield in excess of 20 percent. Through the years, Sy has made it a habit to read newspapers, analyze tables on Bloomberg, give talks in investor briefings, sit on the board of big companies, and trade stocks. He tries to learn something new every day. “No matter what your status in life is, be grounded. When you start believing that you’re the best, that will be the start of your downfall. You have to keep working hard and learning new from other people,” he points out. Why invest? “If you don’t know how to invest or manage your own money, your money will run out.” Sy believes that learning how to invest is as important or even more important than learning how to make money. He also stressed that the beauty in investing in stocks is that you get to become partners with the best brands, the best managers and the biggest names out there, while still remaining anonymous. Moreover, the stock market is very liquid; you can easily get out when you want to. “Companies make mistakes and they’re stuck, but you aren’t. If you see a mistake in a company, you can easily get out of it if you’re a stock investor,” he says. “When you have something good, keep it. When your stock is doing well, hold on to it; keep your bulk. When your stock isn’t doing so well, learn to let go.” Sy practically eats, sleeps and breathes the stock market: “When you get into stocks, you get hooked. Something new comes up every day; nothing is the same. You never get out of stocks once you get hooked because nothing is similar. Even if it’s similar, there’s always some twist that makes it different.” The only other thing that keeps Sy awake are NBA games, as he is a big fan of the Los Angeles Lakers. It’s rumored that he even memorizes the statistics of the players the way he keeps in mind stock price quotations. More focus Sy is a firm believer in education as the solution to our country’s rich-poor gap. He constantly stresses the importance of going to school and how it gave him the different values he practices to this day. Sy tries to do his part in helping educate Filipino investors by sharing his ideas, opinions and thoughts on market trends through the Philequity Corner, which is published both on the Philequity website and in a major broadsheet. With Philequity hitting the 20-year mark this year, Sy plans to release a compilation of his best articles, ideas and lessons on investing. I ended my interview with Sy more inspired than ever. I had just talked to my dad’s idol and arguably the best Filipino fund manager. The last piece of advice he shared with me: “I’m not really more intelligent than other people. It’s just that I probably have more focus. So listen to your father, keep working hard, read more, study what the best in their field do, and stay focused.” Read more: http://lifestyle.inquirer.net/168010/words-of-wisdom-from-the-warren-buffett-of-the-philippines#ixzz39loC0tPZ Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook

Equity-linked insurance products gain popularity

By Doris C. Dumlao
Philippine Daily Inquirer

Filipinos are gobbling up more equity-laced variable unit-linked (VUL) insurance products in search of better yields given the prevailing low-interest rate environment.

This is also amid expectations that equities will continue to outperform fixed-income instruments for the long haul, driven by robust corporate earnings and a rosy macroeconomic backdrop, said Arleen May Guevara, chief investment officer at The Philippine American Life and General Insurance Co. (Philam Life).

Sharing the view that the Philippines is “still in a sweet spot,” Guevara said that corporate Philippines may grow its earnings by 12-14 percent in 2014.

This is despite the likely drag on earnings by the banking sector, which posted this year large extraordinary gains that will be difficult to replicate next year.

“The fundamentals are there. It still makes sense to invest in the Philippines and participate in that kind of growth,” Guevara said.

She noted that many analysts expect equities to still outperform fixed income instruments, at least in the next two to three years.

For Philam Life, 80 percent of its sales are now coming from VUL and 20 percent from traditional life insurance products. Around 70 percent of its VUL sales consist of equity-laced funds, including the balanced funds.

Eric Nicdao, senior agency manager at Philam Life, said this growing market preference for equity-laced funds reflected investors’ search for better yields.

VUL, a hybrid between a mutual fund and life insurance, becomes variable as investment returns depend on the market performance of the fund where the premium is invested.

With more funds to be unlocked from the Bangko Sentral ng Pilipinas’ special deposit accounts, Philam Life officials said there was great opportunity to look at investment options.

“An individual looking for capital growth should always look for investments that offer returns higher than inflation, to grow their money over time and reach their long-term financial goals,” Nicdao said.

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