Taking stock

Fiona Patricia S. Escandor gets an education in finance and risk taking from an equities broker

The idea of dealing with the stock market can be daunting.

With all those digits, industry slang and hand signals, it is an entity that has remained a mystery to many. Add the fact that it involves money—a hefty sum of it—and that should be enough to have neophytes steering clear of it, leaving it to finance experts with MBA degrees.

Norman Jay F. Go is one of the brave few who dared enter the world of equities and ticker symbols. Though he hasn’t exactly stayed unscathed over the years, encountering crashes and losing a few bucks along the way, he continues to work in the industry—fueling other people’s curiosity on what really goes on at the trading floor.

“A lot of people say that you have to be a financial whiz. You have to do this or that, and you have to be really good with numbers. I only had three units of economics in college, but here I am,” he said.

Norman began trading when he was only 19 years old. Still a student at that time, he reasoned it was boredom that led him to invest in stocks or equities.

“Back then, the markets were really high, so I thought I might as well get into something that would give me passive income,” he recalled. “I never planned it to be a career. Understanding the markets—it’s more of a passion.”

With no formal background in finance, Norman gradually got by with a sense of inquisitiveness and desire to learn. He asked advice from seasoned market professionals and started reading business news.

Before he knew it, he had raked in an impressive 600 percent in returns in one of his investments.

“First, you have to have common sense,” he started. “That means taking everything with a grain of salt, understanding how it works and following what you think is right.”

Pioneer

A graduate of mechanical engineering from De La Salle University, Norman had briefly worked with his dad in their family’s lighting business prior to pursuing a career in brokerage.

The opportunity to do so materialized when First Metro Securities Brokerage Corp. opened its first branch in Cebu in November 2011. Then through word of mouth in the local investors’ circles, Norman was invited to be part of its pioneering team.

Now 26, Norman stands as equity sales officer for the company, a job that has him going around the region, encouraging individuals to invest in stocks. It’s a task that is somehow hard to associate with anyone else, save for Norman who is personally interested in it, and articulate enough to spread the word on the industry’s complexities.

“A lot of people are afraid of the unknown, and I think that’s what’s stopping most Filipinos. That’s where we come in. Our job is to basically go out there and explain how it works,” he said.

So why invest there? The broker attests, “You won’t get the same kind of returns anywhere else.”

Comparing it to other monetary investments, Norman explained: “Fixed income and bank instruments are more liquid, but returns are lower. They’re not as volatile, but they’re lower. On the other hand, stocks have been giving an average of 18.9 percent for the past 25 years.”

“With commodities like gold, it’s trading a lot more, around 22 percent,” he continued. “But by law, you aren’t allowed to sell it to anyone else, so you have a problem with liquidity. And hiding money under your mattress? We don’t even have to go there.”

“The biggest problems I have been getting had little to do with numbers because there’s always the calculator,” Norman said. Oftentimes, he said, it has more to do with curbing people’s false impression about the stock market—like seeing it as a one-way ticket to easy money.

“Make your money work for you, and you don’t have to work anymore? It doesn’t go that way,” Norman insisted. “Invest what you can. If you’re young, invest more. If you’re older, taper it down.”

Norman, nevertheless, believes Cebu is more than ready to have a bigger role in the stock exchange. He also pointed out that investors are eyeing the Philippine market as one of the most promising in Asia.

“The Philippines is one of the few bright spots in the world,” he said. “We’re on the verge of the best credit rating upgrade in our history, and we’re one step away from investment level. That goes on top of demographics—we have a young population, very mobile; we’re sitting on an estimated $860 billion of mineral reserves; untapped coal reserves; and a BPO (business process outsourcing) and OFW (overseas Filipino worker)-based economy that weathers any economic crisis. There’s a lot of interest in the country.”

That’s not just sales talk either. On Jan. 7, the Philippine Stock Exchange had a grand start to 2013 when its index reached an all-time high of 6,000 points, a stellar market performance that had traders carrying slogans of “It’s more fun at 6,000” inside the trading arena.

Fun aside, though, the industry still possesses an inherent volatility that not even Norman can deny. “Some people can take it; some people can’t,” he admitted.

But how does one move forward without a bit of risk anyway? As intimidating as all the flashy digits may appear to be, an appetite for risk—which Norman pretty much started with—might just do the trick.