General

DigiTel and Debt

By on Tuesday, October 5, 2010

DigiTel, who owns Sun Cellular, seems to be a gaining a lot of interest. P/E at 40.5 is quite high compared to its competitors Globe at 9.4 and PLDT (who owns Smart) at 12.6. Apparently, quite a few people believe that the company is worth a lot.

But one thing that’s holding others back, is that DigiTel has loads of debt. Debt can actually be good especially if you’re setting up infrastructure which takes time to mature and start earning. Allow me to illustrate:

  • DGTL has 87B in assets mainly in infrastructure. Say D is 85.5B, E is 1.5B, D/E is 57. If income is 145M, ROA is 0.17%, ROE is 9.67%.
  • Now if say D and E is evenly 43.5B each and income is 145M, ROA is still 0.17%, but ROE is a dismal 0.33%.

Remembering that your share of stock is equity, which would you rather have?

Another thing is if DGTL goes belly up, how much do stockholders lose? Is it better to lose 1.5B vs 43.5B? I guess that sufficiently settles it: Debt can actually be good.

A high D/E does seems alarming, but does it look like DGTL is alarmed? Are creditors and suppliers alarmed? Or are there still creditors and suppliers willing to lend and sell? Maybe someone can tell me.

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General

Nandy Pacheco and the Gunless Society

By on Monday, October 4, 2010

First, I have to say you can’t help but admire Nandy Pacheco. He is a crusader with a vision: that of a gunless society. And he has been tirelessly pursuing the realization of that vision. More recently, he was involved in the filing of a bill restricting guns.

But if you study the subject even for just a little bit, you realize that firearms are already heavily restricted:

  • Firearms are defined as “rifles, muskets, carbines, shotguns, revolvers, pistols and all other deadly weapons from which a bullet, ball, shot, shell or other missile may be discharged by means of gunpowder or other explosives”. Even though they are not propelled by gunpowder or explosives, airguns are covered. Even the barrel of any firearm as defined is already considered a firearm.
  • Civilians can legally own only one pistol up to 9mm.
  • Civilians can legally own only one rifle of up to .22 caliber only or one shotgun of up to 12 gauge.
  • Civilians cannot own automatic fire or burst fire firearms.
  • Anyone who has a firearm has to have regularly renewed firearms license. Getting a license requires gun handling training, psychological exams, and criminal record checks.
  • A civilian cannot bring his firearm outside of his residence unless he has an annually applied-for Permit To Carry Firearm Outside Residence (PTCFOR). This permit is not applicable when there is a gun ban such as during the numerous election periods.

And yet, Nandy Pacheco keeps harping about the lack of laws and highlighting the millions of illegal or loose firearms. Quite clearly, they are called illegal because they are already in non-compliance of the law so how can more laws help? Make it more illegal?

What we actually need is more and genuine enforcement, as with every other law in this country.

bullet, ball, shot, shell or other missile may be discharged by means of gunpowder or other explosivesRead more at Suite101: Law on Firearms in the Philippines http://www.suite101.com/content/law-on-firearms-in-the-philippines-a245876#ixzz11LT2VScf

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General

Lancer EX GT-A vs Impreza 2.0R Sport

By on Saturday, September 25, 2010

Since I’ve been thinking of a new car, I thought I’d compare them. They have to have a 2.0L engine just because it’s a nice balance between fuel economy and power. Plus it’s 2.0 is a nice round number compared to 1.8, 1.6, and 1.5. They also has to be reasonably priced.

That still leaves quite a few options: the Ford Focus, the Mitsubishi Lancer EX, the Subaru Impreza, the Honda Civic, and the Toyota Altis. The list needs to be trimmed down to two  (nice round number).

The Ford Focus, the Mitsubishi Lancer EX, and the Subaru Impreza are interesting to me because they’re domesticated versions of monster rallying cars. They’re the poor man’s rally machines. The Honda Civic and the Toyota Altis don’t have such heritage and are just too dime-a-dozen to boot so they’re out.

The top-of-the-line Ford Focus has an awesome 2.0L diesel engine and a PowerShift dual-clutch transmission. However, even with the face lift, the current look just doesn’t appeal to me at all. The 2011 model does look good but it’s still not here or even out. Plus, it’s a bit bare in terms of features.

It therefore boils down to The Mitsubishi Lancer EX GT-A and the Subaru Impreza 2.0R Sport.  The tale of the tape:

Mitsubishi Lancer EX GT-A Subaru Impreza 2.0R Sport
Mitsubishi Manufacturer Subaru
Philippines Country Manufactured Japan
2.0L DOHC Inline 4 Engine 2.0L DOHC Boxer 4
155hp HP 148hp
199Nm Torque 196Nm
FWD Drive Layout AWD
INVECS-III CVT 6-speed Sportronic Transmission ProDrive SportShift E-4AT
Vented disc/solid disc Brakes (front/rear) Vented disc/solid disc
Ind. MacPherson/Ind. Double Wishbone Suspension (front/rear) Ind. MacPherson/Ind. Double Wishbone
18” Wheels 16”
215/45/R18 Tires 205/55/R16

Yes Paddle Shifters No
Yes Keyless Entry Yes
Yes Start Button No
5 Seats 5
Fabric Seat Material Fabric
Projector HID Headlights Projector HID
No Headlight Washer Yes
Yes Adaptive Headlights No
Yes Auto Lighting No
Yes Auto Wiper No

7 Airbags 6

It seems that, based on the specifications, the clear winner is the Lancer EX GT-A. But how do these two drive? Unfortunately, I haven’t’ drove them. Is it time for a test drive? Hmmmm.

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General

Mobile Phones Onstage

By on Tuesday, September 21, 2010

Saw this today at the Inquirer:

PNoy should fire those two clowns behind him. Is what they’re doing really so important that it couldn’t wait? It doesn’t do their public image any good. If you want to project seriousness, authority, and– more importantly– power, you better not show that mobile phone and how you are a slave to it.

I once saw Jaime Zobel de Ayala speak onstage. This guy owns Globe, one of the largest mobile phone services providers in the country. And yet when he walked up the stage and spoke, there is no hint that he is carrying a phone anywhere on him. Now that is how it should be!

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General

Steering Pump Problem

By on Thursday, September 16, 2010

The car’s power steering pump has been making groaning sounds for a few months already. Also the steering wheel would occasionally become harder to turn. Both were signs that the power steering pump was about to give up. And last Tuesday, night, as Michelle was parking the car, it started making a clatter. Steering was still functioning but the noise was unnerving so I decided to drive the car to Fusion R the next day.

Once I got there, we popped the hood, and the mechanic confirmed that the power steering pump was making the noise and must be replaced. Since the car was in for repairs anyway, I requested for a host of other things : change oil, change oil filter, change spark plug oil seals, change valve cover seal, change crankshaft oil seal, throttle body cleaning, idle motor cleaning, and tightening of belts.

It took till the next day because they had to remove the power steering pump and use it as a sample for matching with an appropriate replacement. It was a hit-and-miss affair: the first candidate had a faulty pulley and the second candidate wasn’t an exact fit.  But, as they say, third time’s a charm, and they finally got it right.

When I got the car back, there was no more noise, steering was working perfectly, and there were no rpm dropping problems. Fusion R has worked their magic again!

(Car repairs by Fusion R, E. Rodriguez, Q.C. Call them at +632-724-3921 or +63922-853-2700 and ask for Jona)

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