Common Sense Trading - A Blue Jeans Approach to Philippine Stock Market Trading

the overall reason of course is to earn money :) 1. It forces you to get out of the bed before nine in the morning (trading is @ 9:30-12:10) 2. Convenience - trading can now be done online 3. It serves as "small talk" for people you don't really want to talk to. 4. It's fun 5. It's a good mental exercise 6. You get better chances at good returns - Interest rates at ordinary bank accounts rarely beat .5%; 7. It encourages savings - instead of spending your spare cash on the latest gadget, you get equity! (ownership in a company) 8. You can earn money off short-term trades 9. You can earn money in the form of dividends 10. If the short term is bleak, good stocks will almost always grow in the long run anyway.

The market went up today when I thought it would go down. I was wrong, but not entirely I think. With so much good news, we only went up by around 28 points. That's got to be a sign of downward pressure. Foot in mouth My gut feel was that the recent 3 day rally was over. I took a peek at the market and then politely put my foot in my mouth. I was looking at the numbers last night and really thought we'd see some negative movement today. I even blogged about a ending rally. tsk tsk tsk. The good news for the day Here came the news of 7.3% GDP growth for the Philippines in 2007. It was the highest in 31 years. In addition, we just saw the BSP cut interest rates by .25 basis points and the new numbers indicating 9% year on year money supply growth last december. Why only a tiny rise? So, all this good news couldn't help but push the market up. But why did the PSEi go up by so little? I think its a clear sign of downward pressure. The market went up for the sixth time in the la...

A nice feature of online trading is "off-hour orders" but there's a very annoying downside. The convenience comes at a price. I felt it today. My favorite online company, citiseconline.com has this feature and I use it for days that I cannot watch the trading real time. As I had class today during trading hours, I put in a sell order for a tiny amount of MER shares at 81.50. At the time I was doing this, I was working on the assumption that the recent rally was sputtering and coming to an end. I was wrong. When I got out of class early, I saw MER at 84! My sale at 81.50 was of course completed by then. I could have easily sold it for more. But nonetheless, a profit is a profit no matter how tiny it is. I realized that we rallied today because there was tons of good news, the kind that will push our market up. -The Philippine's GDP grew by 7.3% in 2007 which was labeled as the fastest in 31 years. -Also, the BSP cut interest rates by .25 basis points and the government...

Here's a good reminder on why this stock is good. Business world has just recently selected Geograce Mining's stock as their pick. "The company’s share price surged by 157.1% as of end December from its end-2006 price of P0.63, making Geograce the 17th best performing stock out of 296 stocks traded in the local bourse last year. Along with the surge in price, average value turnover for the stock also jumped by 498% to P146.5 million from P24.5 million." — Ernesto B. Calucag of Business World

Right after I blogged about how nicely BPI's stock was doing, they made an announcement of net profit for the year that was below what was expected of them. BPI's net profit rose to 10 Billion, rising by about 10.7%. Well, a profit is a profit. Citisec's target price is at Php 71. BPI fell today to 57.50 from 62.50.

I looked at how the market did today and I noticed that the PSEi inched up nine points. Looking at the chart of the day, I saw a flat line. It looked like a very lifeless trading day. Surprisingly though, the value of the trades was very near the Five Billion Peso mark. Last week, we saw a three day rally that was stronger than what we saw through the beginning of this week. I'm guessing that the Psei is sputtering at this point and will tumble towards the end of the week closer to the support at around 2900. I hope I'm wrong about this but my gut feel is that this tiny rally is over. Todays (January 31, 2008) overall stats at the Philippine Stock Exchange: Index----------------------Previous-----Current----Change PSE Composite----------3,256.53-----3,266.00---9.47 All Shares----------------1,977.98-----1,973.96---(4.02) Financials----------------776.71-------743.77-----(32.94) Industrial----------------3,928.57-----3,970.94---42.37 Holding Firms-----------1,724.94-----1,713.39...

I think there's good news out there but not enough ears that really want to hear it. That means the bad news is always under the spotlight. I see that as a good thing, at least for now. U.S. interest rates were slashed ever so aggressively but investors seem to have paid more attention to their fears. Instead of rejoicing over the feds move, they cast their doubts on the feds policy. I'm sure I'm not the only one getting tired of all the bleak news on the stock market and the economies of the world. Its probably because I'm not experienced enough or daring enough to keep trading stocks during a time like this, so its getting really boring. Nonetheless, I much rather prefer to wait it out. I didn't even wake up early enough today to watch the trading. (9:20-12:10 MLA.) I don't know if its the antibiotics weakening me or the lack of a futsal/football game for the week or the thought that the market is just going to keep moving sideways ever so sluggishly that kee...

"Be greedy when everyone is fearful, be fearful when everyone is greedy" -Warren Buffet We did exactly the opposite. The first time my friends and I entered the stock market, we came with little more than our bravado. So naturally, we dove in head first, armed with a few pretty pennies. We set out to earn money from the philippine stock exchange. This was about Feb of 2007. When we bought in, it was a time to be fearful - (while all were greedy) It started with us trooping to the Philippine Stock Exchange in Makati and opening an account with IGC Securities. A few days prior to this, I recall seeing the Philippine Stock Exchange being featured on the front page for reaching all time highs. (3200 at that time, i think) On the very day we opened the account, our own President Gloria Macapagal Arroyo was on the floor to ring the bell and have her picture taken. These were signs of a greedy and overconfident investor sentiment. We should have bought when it was a time to be greed...

MEG (Megaworld) and GEO (Geograce Mining) have fallen far. MEG closed at 2.7 and GEO closed at 1.26 after seeing highs not to long ago in the mid fours for MEG and low threes for GEO. Not a pretty sight. But these still remain among my favorite stocks particularly because they trade in very high volumes. What I like the most about them is that they are all over the place. They go really high. That of course means that they also go really low and that I time, I think is now. Most of it, for a guy like me, is a waiting game. I'll pick it up when I think its low and let it go when I think its high. Too bad I'm all locked in and positioned. This would have been a great time to buy in. What keeps me sane in times like these, is that I know that both these companies have good enough fundamentals (or at least I think so anyway) to keep them trading within the same range, or better than the year before.

BPI's stock closed at 62.5 two days in a row. It had a high of 63.50 today. The last time I saw BPI at this price level was when the index was at around 3500. It also keeps popping up among the top traded stocks. This might be why its rising: Bank of the Philippine Islands (BPI) said that its common shareholders will receive: 1) a regular cash dividend of 90 centavos per share on Feb. 5. 2) A special cash dividend of 1 peso per share on February 20. As a reminder, here are a few reasons why one might want to buy some of this stock while its relatively cheap and why those who have some should smile: some nice stats: -BPI is the country's biggest bank by market value (technistock) - BPI previously reported net profit of 7.6 B pesos for the first nine months of 2007, up 11 percent from a year earlier, on gains from service charges and commissions, insurance business, and asset sales. (technistock) some good forecasts: -BPI expects its loan portfolio to grow 12 percent, following a...

A rarity! I found an article entitled "The U.S. economy is fine (really) in the Asian Wall Street Journey dated January 29, 2008 by a man named Brian Wesbury. He starts out by saying "It is hard to imagine any time in history when such rampant pessimism about the U.S. economy has existed with so little evidence of serious trouble." Among all the dark rumors surrounding the U.S. economy, its hard to find a guy saying such relatively positive things on the subject these days. But he's not the first person I've heard saying something like that. Just yesterday, CNBC had a headline implying that the U.S. is talking itself into a recession. Wellety wellety wellety. The prophets of doom theory sounds quite logical to me. n.b. Tom Blummer of News busters noted the same article by Brian Wesbury and posted snippets on his blog .

Here's why I'm becoming more bearish on Philippine mining and energy stocks for now, but still remaining bullish for long-term outlook. To add to all the prophets of doom in the United States, we have a few things to be worried about here in Asia, particularly in China and Japan, that may affect our exports. Worry is a dead weight on market prices and there's plenty to go around. China and Japan have been known to gobble up minerals and what not from the Philippines. What hurts them, will hurt us. Even if it won't really, common-sense of an average trader will likely tell them so. In China Gordon Fairclough of the Asian Wall Street Journal wrote an article published today entitled: Winter Storms threaten China's Economy. Apparently the storms are pretty bad. People have been dying and power outages have been reported in 17 out of 34 provinces and regions. Many find themselves stranded at train stations. Houses have been destroyed. Xinhua estimates $3Billion in direc...

Yahoo (finance.yahoo.com) says S & P went up, citisec says it went down. How strange. One thing is for sure, someone made a mistake. tsk tsk tsk. Yahoo says S&P was at 1,353.97 +23.36 +1.76% today. Citisec says S&P500 was at 1,330.61 -21.46 -1.59% today.

It looks like a small rally, but not the kind that will last. In as much as we've still got that umbilical cord to the U.S. markets, we may just join that little rally they had yesterday. Dow Jones +176.72 +1.45% Nasdaq +23.71 +1.02% S& P +23.36 +1.76% Madlen Read of the Associated Press tells us that this rally is mostly in anticipation of another rate cut in an article entitled Stocks Rise on Rate Cut Hopes . Its another week of speculation on what the fed will do. :)

"your emotions play little role in the trading" - John Porter My favorite technical analysis website, tsupitero.com , offered some good news based on last weeks numbers. He says there are signs that the downtrend may be reversing itself but there is no reason to be complacent about it. We must still take caution. In his weekly analysis, he pointed out that the market must break about 3400/3500 before we're to see any certainty in the reversal. He said that many have positioned themselves at this level and are waiting to sell when it returns there. I smirked when I read this because I'm among those who positioned at that level. Anyhow, I'm not too keen on selling everything right away when it hits that level. I will likely just lighten to join in the some of the short action or keep my positions long :) On the other side of the coin. Tsupitero says we are to watch out if prices immediately retest the lows of 2950 and 2875. If that happens, I'll be playing a muc...

Finding stocks that can weather the storm in the Philippine Stock Market is the ideal strategy but it is no easy task. Our market feeds on perceptions and plays on fears. To find the ideal stock, it must not only be truly be isolated from the economic downturns , it must also be popularly known to be so among the trading community. My strategy is to go long, and go domestic. Common mistakes The first common sense strategy would be to find the companies that have zero or limited exposure to the United States. But prudence will have us make sure that they are neither directly or indirectly exposed. For example, we may have a company that in theory exports only to singapore and hong-kong. But if we find out that those exports are components of parts or items that go to the United States, then the exposure is there. I would stay away from exporting companies altogether for a safe bet. My current opinion on exports is that the whole world is intricately connected directly and indirectly to ...

I was just arguing yesterday that I am certain that the Philippines will not be dragged into a recession in the hypothetical event that the U.S. suffers one. This mornings inquirer included an article by Cielito E. Habito Saying just that. His article is entitled: "Will we import a US recession?" The short of it was: no, we won't. His definition of a recession was similar to what Ron Nathan used in his article last January 22, entitled American idle referring to two succeeding quarters of negative GDP. Mr. Habito's main argument is that the U.S. isn't as great a buyer of Philippine exports as before. In his very words: "the US has already been dislodged as our largest export market, whose 17 percent share of our exports is now just second to China-Hong Kong's 23 percent." My reservations: Our main consumers of export probably have substantial exports to America as well. Any slow down in their exports to America may in turn reduce their imports from u...

I don't think the U.S. is in recession, I am almost certain. Even if it was, I don't think the Philippines would follow, with that I am absolutely certain. Whenever U.S. stocks suffer, its almost a sure thing that Philippine stocks will suffer also. The movement of U.S. stocks serve as one of many indicators of where our stock market will go. Yet, I don't think that the same is true with the economy. On the first point, I will have to paraphrase Ron Nathan of the Inquirer. The definition of a recession that he follows is two succeeding quarters of negative GDP growth. To this date, we haven't seen any shrinking in U.S. GDP. As for the Philippines, I don't see us joining any possible recession for the following reasons: 1. Strong fundamentals 2. Growing trade relations with neighbors 3. Growing BPO businesses beyond call centers 4. Growing amount of remittances Even the average person can see for himself that things are still going well for the Philippines. For one t...

The interviews are back. The results for the annual University of the Philippines College of Law Law Aptitude Exam came out last week. Everyone was surprised to see that there was only one list. Prior to this year, the College would let in a number of students that ranked high in the exam without need for interview. With this, we would see two lists. One for admission and one for interview. This was the policy for only a few years though. I was part of the first batch that allowed some students in without interview. Now, I'm a senior student, hopefully, God-willing to be graduating this year. Another surprising thing was that there were students exclaiming: "60% is the undergraduate grade" outside the college secretaries office. I'm assuming that the policy now is to give majority of the weight of the admission score to the undergraduate grades. I cannot find myself to agree with this fully. It appears that this formula ensures that students admitted will have a good...

I was looking at google's listing on the top searched items. One of their lists included the "mosquito ringtone" as number one. I found it really odd. As it turns out there's a site www.freemosquitoringtones.org that claims to have a ringtone that has a very high pitch so as to be inaudible to adults. Then I remembered something I saw on television a few months ago. This became an issue as school children were thought to have begun to use it in school so as to avoid detection from their teachers. Anybody know if this is true?

As we watched the number one and number two of this years Australian open give thanks to their supporters and fans, we just couldn't help but notice that neither gave thanks to God. I'm not trying to be self-righteous or anything, but its something my dad noticed and pointed out. I wonder if its because they were just trying to be sensitive about religious matters much like the U.S. Government has been. It would have been nice if they thanked God. :)

Though appearing to be injured at some points, Djokovic put an end to the great surprise of the unseeded Tsonga carrying on all the way to the finals. The match ended 4-6, 6-4, 6-3, 7-6 ending a fourth set that was overflowing with suspense by winning the tie break. A nervous looking Tsonga appeared to be holding on quite well to the rather irritated and jittery looking Djokovic. In the fourth set, right before his deuce at 5-5, Djokovic looked thoroughly annoyed as he requested the umpire to say "quiet". He followed through with two marvelous points to end up with the advantage and then the game making it 6-5. Making it truly a great final, the fourth set ended with a tie breaker. At this point, Djokovic made it very convincing to the fans by winning the tie breaker 7-2, winning this years Australian Open.

I caught a glimpse of the television one morning at the gym and was quite shocked. I pulled my earphones from my ears to take a break from my banking audio codals. I looked in awe as I saw what looked like two or three straight aces and a look of despair in Nadal's face. Up until that moment I never heard of tsonga, and even thought that he was hispanic. Turns out that he's french. The game was fun to watch, though I didn't get to see all of it. I was alternating between my free-weights, my audio-codals and the television. Tsonga seemed to have Nadal completely figured out! It was nuts. 6-2,6-3,6-2 all for Tsonga. The game was thoroughly entertaining and I'm guessing its because both these players show so much emotion. Nadal loves to celebrate. Tsonga looks like he's more ego than man. Its a fresh change from the perfect botox model like Federrer. story: http://www.orange.co.uk/sport/news/2265.htm?linkfrom=feed_sport&link=link_2&article=sport#

here's something i wish i could do... http://www.youtube.com/watch?v=EhDJYN76R7Q&feature=related

Civil Law - 2007 I. Distinguish the following concepts: (a) Occupation v. possession. (5%) (b) Illegal and impossible conditions in a simple donation v. illegal and impossible conditions in an onerous donation. (5%) My short answer from the top of my head is (please correct me if i'm wrong): (a) Occupation refers to physical presence while possession refers to legal presence. (b) [haha. I'm not sure about this one. All I can remember about this is that onerous donations are treated in a very different light. They are governed by the rule on contracts.] Such conditions in either case are considered not imposed. I don't know of any distinctions :( uh oh. somebody help! hahaha ...ma'am baviera might kill me if she reads this

One of the happiest things I discovered last year was that futsal was gaining popularity in the Philippines. My friends invited me to join the night games at magallanes village every monday and wednesday from 10pm onwards. I know there are also games at the Palm or is it Palms? at alabang on friday nights. :) In Quezon City, there are games on tuesday night at Club 650. This is particularly good for me as I quasi-dorm during the week at Katipunan. Does anybody know where else there are games in Metro Manila? I'd like to compile a list. :)

Last week, I could barely look at the PSEi. Most of my positions were entered while the market was around the 3500 level. I think I saw it fall to as low as 2900+. It managed to close the week at 3237.41 at about the four billion peso value mark. It was a good ending i think. But the question on my mind, and I'm guessing everyone else's question as well is "how long will it last?" According to Miko Sayo at tsupitero.com as of January 21, 2008, any rally up to 3350 would be easy, but a reversal of the short-term downtrend will not be certain unless we see the market climb above the 3500 level in a convincing fashion. I cannot help but agree with that for the reason that he crunches numbers with sophisticated methods of technical analysis to say so. But not just that, it really does make sense given the surrounding circumstances. My favorite online trading company's advice (citiseconline.com) seems to be as vague as ever. Hehe. Don't misunderstand me, their adv...