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GLOSSARY


Here’s a running list of the special terms and phrases I used all throughout this blog (and the links where to find them), listed alphabetically of course.

Arbitrage: an opportunity to profit from a transaction (i.e. via exchange rates, etc)



Asset play: it works for the benefit and value of the company if they have assets with high or appreciating disposable value (e.g. land, precious metals, exclusive rights, etc) where the true value is not necessarily reflected in the company financial reports, just the book value


Asset price bubble: When the prices of assets sharply rise over a relatively short period due to increased demand.The bubble bursts or the price falls sharply once prices are already too high that the buyers can no longer afford it, or buyers start to default on their loans again due to high property price. It’s like waking up from a dream of buying spree, except that, here the losses are for real.



Bulbs and bubbles: light those bulbs, don’t burst those bubbles; let me know of your ideas and thoughts, and you can read mine here 


Business models: how a business works in its end to end process, from planning to production to customers to after sales services; the ins and outs of the business and all the factors at play, from suppliers, customers, competition, seasonality, processes, trends, regulations, best practices, etc. 


Business Risks: your business, no matter how big or small, is exposed to various interconnected business risks, not just the risk of financial loss per se, but risks that can incur you losses in terms of money, reputation, customers, etc


Company shopping: the art of picking stocks to invest on via walking and traveling around, observing various companies in our environment (neighborhood, main roads, malls, products we use, etc) and see whether they are doing well or not; technique used by Peter Lynch to gauge company fundamentals 


Credit card financial leverage: the purchase now pay later (20-50 days after) advantage of using credit cards, but which must not be abused if you don’t want to end up in deep debt 


Financial freedom: the point in one’s life when monthly passive income is always more than monthly expenses, as such wealth just accumulates monthly; where passive income is coming from investments and businesses, and not from employment income; having our money work for us, instead of us working for money 


Indeterminate Price Oscilation (IPO): refers to the unpredictable movements of stock prices of newly listed stocks (listed via initial public offering) in the first few days or weeks from listing; by unpredictable I mean more volatile and more difficult to predict compared to older listed stocks since visible trends have not yet formed 


Investment Horizon: How much time are you willing to spend waiting on realizing the desired gain of an investment? Or how long can you keep the money invested without necessity of pulling it out or pre-terminating it to augment present cash flows?


Life of lines: life is a line to a certain death for all of us, and while we live, we spend a significant part of our waking hours queueing in various lines, daily


Life is a risk: a series of choices and decision-makings with both long-term and short-term implications, trade-offs, payoffs, rewards and punishments, in whatever path you take


Market capitalization: share price multiplied by number of outstanding shares; the estimated value of the company, in the eyes of the stock market; a quick and easy way to compare the valuation sizes of the listed companies, for sanity checks on stock prices 


Microfinancing: small ticket loans usually given to microentreprises and the poor, with the loan to be used to come up with sustainable livelihood; effective tool in improving the lives of the poor in Bangladesh; better than dole outs and better than 5-6 


More impatient with more speed: we have enjoyed super speeds and fast things in life, way faster and much improved compared to what the previous generations had, and yet we have become more impatient as well, more and easily impatient compared to previous generations 


Net Cash position: the amount of cash held by the company after deducting short-term and long-term loans and liabilities; company valuations are easier to establish when a company has a good and substantial cash position, after all, cash is king



Pre-sell properties: Real estate in form of house and lot, buildings, office space or condominium units sold and for sale even before completion of the said property. Usually, buyer pays down payment portion while the unit is still under construction. Upon completion, the unit is then turned-over to buyer. Counterpart of RFO or ready-for-occupancy units.

Reverse engineering: process of understanding how competition does its productsby breaking down its finished products to see its parts and how these parts make up the whole product


Risk appetite: How much are you willing to risk (and potentially lose), just to have a shot on the potential gain? Will depend on your investment horizon, and how you asses the risk factors involved.


Sachet economy: refers to the FIlipinos love (and sometimes out of lack of resources) for small-ticket items, to buy retail instead of wholesale, to buy tingi, per piece and not in discounted bulk, to have things on installment rather than buying in full even if effectively, we spend more in buying tingi in the long run 


Social networks: the connections in life of Filipinos, not limited to social network friends and followers and fans, but more on who the Filipinos know in life that may be counted on for certain needs and requirements; the important connections in life; a measure of the saying it’s not what you know but it’s who you know 


Twisted sense of entitlement: Filipinos at times ask for less than what they deserve, and yet sometimes expect more than what they deserve. Talk about feeling a sense of entitlement at the wrong place at the wrong time 


Virgin pictures: pictures in ads unaltered by photoediting, as is where is pictures in ads; pictures that were captured and printed without the editing and enhancements and improvements in between, where the editing and enhancements (photoshop) sort of divirginizes the picture 


Word-on-Web: the new found power of word of mouth, where word of mouth marketing and advertising is no longer done via oral tradition but via web posts, tweets, status messages, etc. Nonetheless, these words-on-web are still as spontaneous, frank and voluntary, as that of word-of-mouth


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