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

A bear market isn’t fun.  Nobody likes watching their portfolio values go down.  But there is opportunity if one were to have enough conviction.  I’ve heard many times, and from very experienced investors, that ‘bear markets make you rich’ as opposed to bull markets that can ‘make you some money’.  I’m trying to take that advise along with something else I heard: flip the unit of measure and count the value of the portfolio in BTC value (rather than fiat).  So, the theory I’m gravitating to is to use ‘cost averaging’ by buying small amounts of crypto daily.   Why daily? Well, I think of it like drinking coffee in the morning or reading the paper.  I think by buying daily, I will maintain a good ‘feel’ of how the price is moving since I’ll be checking it daily.  Besides, who wants to check the price in a bear market.  I need an excuse.  The hard part with cost averaging in a bear market is that the fiat value of the portfolio is almost al...

 This may be an unpopular thing to say:  those who believe in the resiliency of the Philippine economy and in particular Philippine companies have a bit of an opportunity to pick up shares of stock at a friendlier price every time there is an ECQ (Enhanced Community Quarantine).  Historically, the prices go down during the ECQ and when the ECQ has done it’s damage to the economy, and also accomplished its purpose in containing the Pandemic, prices start to rise again.  Personally, I believe so strongly in listed Philippine companies to weather this long, lingering economic storm.  I love rooting for the ‘little guy’ (i.e. small businesses). But, in this COVID-19 pandemic, the little guy will get crushed and will have a really hard time recovering, if at all. On the other hand, the big guy (i.e. large listed companies) stand a chance to recover quickly and become stronger than they have ever been (gaining market share of the little guys?).  While I don’t lik...

I feel like this question has been thrown around for the last five years or so.   What I see 'on the ground' is that real estate prices are insanely high, there is so much investment into new businesses (SMEs to large enterprises) and a lot more conspicuous consumption from a thriving new middle and upper middle class.  Where's all the money coming from? One significantly successful artist friend of mine said he personally sees a lot of success in his industry coming from China.  He recently participated in an exhibition in HK and spoke well of Chinese interest in art and how it is buoying the prices of art even in the Philippines.  It's a similar story in Real Estate.  The consensus had been that real property prices were ripe for a correction this year (2018).  However, there was no such correction. Industry experts pointed to the influx of Chinese immigrants in Manila as to why instead of a correction, there was actually a price increase! But,...

On its website, ABS-CBN news published an article stating that PH shares have fallen for the seventh time in eight trading days.  The stock market is said to be predictive.  And, if this bear market is indeed predictive, then the outlook of the Philippine economy may be not as sunny as we thought.   

The Philippine Daily Inquirer reported that the Philippine peso has hit a 12 year low. The Philippine Star reported that the BSP will likely raise interest rates gain due to the very high inflation we are seeing now. Based on what the current administration is doing (spending a lot of borrowed money), I think this trend will continue. I personally foresee Php100 to 1USD within the next couple of decades. My simple analysis is that if both trends continue, holding stocks of company's with good performance and whose operations are not sensitive to the exchange rate, will be good in the long run.  The peso is falling fast both in exchange rate and in terms of inflation.  In terms of avoiding inflation, holding private assets will in some significant ways be better than holding cash, or other interest bearing cash deposits/investments.  In other words, if the peso is sinking, theoretically, stocks are good place to put some of your money.  So playing out the ...

So, it's probably one of the most unexciting times to talk about or get into Bitcoin.  And yes, for trading, now is probably not a great time to jump in. Others say, it's a bad idea, period.  Take for instance, Mr. Warren Buffet.  He called Bitcoin "rat poison" two years ago.  Now, he calls it "rat poison squared."  Even those who love Bitcoin, like Mr. Tone Vays (a well known Bitcoin vlogger) believes that we're in a bear market for Bitcoin and he believes it is quite possible that the bear market will drag on for a while.  But, for me, I think Bitcoin is a great bet, period.  It's price is somewhere in the PHP400,000 (USD7,500) mark.  The world is far from truly understanding the impact and potential of Bitcoin.  And, I am referring only to Bitcoin.  I am not talking about cryptocurrencies or about the love affair the business world is having with the idea that blockchain is as big as the internet. I do not believe that crypto...

"Buy things that put money into your pocket (not things that take money out)" paraphrased from Rich Dad, Poor Dad by Kiyosaki So, it's easy to think of things that take money out of your pocket like an extra car or vacation home, etc.  But, what will put money in your pocket? One thing I took a look at today was dividends on stocks. These two articles are a nice source of data (though unverified, it can give an idea of what's out there): http://www.filipinoinvestor.com/2017/07/top-25-highest-dividend-yield-in.html https://www.entrepreneur.com.ph/run-and-grow/financial-adviser-5-dividend-paying-stocks-every-saver-can-invest-in-to-earn-up-to-8-p-a-a23-20170509-lfrm For preferred stocks, the highest yield in the Philippines is about 8% by LRP (Liesure Resorts Philippines).  If we factor in inflation of about 4%, that only leaves about 4% income per year.  Then, of course, don't forget to take note of the taxes on that (10% I think). For common shares, i...

The Enterprise Ethereum Alliance is the reason why my attention is on ETH (Php44,440 as of this writing). Microsoft, Telus, JPMorgan, Intel, UBS, BP among others are part of the launch members.   The purpose of the organization is to team up and figure out how to use ETH for business.  By "use ETH for business" I'm not referring to those companies investing in ETH or any crypto asset but rather, using the blockchain to improve internal processes. The security of a decentralized network opens up new possibilities for companies that use databases.  I would imagine that it will be of high value to businesses that share databases with third parties or even allow third parties to update the database.  A database covering a network of suppliers for instance or if the company itself is within a network of suppliers, would offer a higher level of trustworthiness if it were running on a blockchain like ETH.  While unrelated to this post, just as an FYI, I'm l...

So, this has been said many times already.  Even then, blockchain is still in the early days and how the decentralized network will change the world still sounds like sci-fi to the general population. Having done some basic research on it, I think it will change the world significantly.  I'm not just talking about the crypto currency craze (a bandwagon which I have been unable to avoid joining). Ethereum's (arguably the #2 crypto currency) method of utilizing the blockchain is making a lot of companies excited. I'm posting this here for posterity. And, for the record:  BTC on coins.ph is at Php601,406 and ETH is at Php44,440.  Also for the record, I'm long on both.

"What comes up, must go down" is not a too comforting thing to hear and yet it is happening. to the PSEi.   The index fell by 1.27% as reported by  The Philippine Daily Inquirer here . News of good GDP was ignored in the face of news reports that overseas remittances fell to five month low.  Philippine Star reported that: " Money sent home by OFWs fell by 8.3 percent year-on-year to $2.2 billion in September, the central bak reported." The article further stated that: " The countries that registered the biggest declines in cash remittances in September were Saudi Arabia, followed by Kuwait, Qatar and Australia."   "The BSP noted that reports that a number of global correspondent banks have closed their service facilities on money service business might have “partly” affected remittances flows during the month."

I awoke to notifications of another 5% jump in the price of bitcoin on the international market.  I checked coins.ph and saw a buy price above Php400,000!  Just a few days ago, I was able to covert some pesos at a rate just above Php300,000.00.  I share in the sentiment that we will end the year somewhere around the Php500,000.00.  My simple understanding of Bitcoin is that it is at a point where it is being "born" and its true purpose and value is emerging.  Around the world, it is being used as a safe haven for value/assets.  The initial plan to have Bitcoin focus on transactions seems to have changed. The people behind Bitcoin now want it to be like gold.  Current events illustrate this perfectly.  Just a yesterday, I read about (and heard on the news) political instability in Zimbabwe.  A decades long dictator, Mr. Mugabe, was placed under house arrest.  Notably, that Bicoin's price in Zimbabwe is soaring . Due to difficulty in f...

Inquirer reported here that the Philippines' GDP was better than expected. The Philippines Statistics office noted that the main drivers for growth were:  Manufacturing, Trade, and Real Estate, Renting and Business Activities. The official press release from the PSO can be viewed here .

I was wondering about the Philippine Mining industry. I came across this article.  It seems that our mining industry is profiting from a shortage in Nickel.  Indonesia seems to have passed a law that limits the exports in favor of domestic use.  Looks like they are building up some of their industries.   What strikes me is that it is a very artificial increase in demand of Philippine sourced Nickel.  If Indonesia changes its mind what will happen?  Rumors of that have already been spreading and some Philippine Mining stocks have been going down. This makes me feel that mining stocks are still rather risky purchases.  I think its a good idea to buy in small quantities whenever the price dips for reasons such as this.  While the risk is high, so will the returns when the time is right. click here for the full article.

As I imagine the point of view of a fresh College graduate in the Philippines, call centers do not exactly seem like a prestigious choice for work.  It's really about the salary.  Work is hard, hours are tough and it's hard to call it fulfilling.  But there are hordes of Filipinos signing up and taking home a lot more money than they could before.  Notably, Filipinos turn out to be really good at customer service thanks to our general politeness and fluency in the kind of English Americans use - something that matters since most clients are American.  It turns out there's a practical side to our obsession with American movies, television and music.  We can answer their phones.  While that's not glamorous, it's a humongous part of the Philippines' recent economic renaissance. I'm all for a common sense approach so this may seem like a simplistic analysis. With more than just a mob of young Filipinos getting what is arguably excellent pay for local sta...

They are saying that the Philippines is no longer the "sick man of Asia." http://www.bloomberg.com/news/articles/2015-01-30/move-over-thailand-the-philippines-is-southeast-asia-s-strong-man Click here for full article I came across this article saying really nice things about the outlook of the Philippine economy while not so subtly cautioning another. The article listed a few reasons for saying so including GDP growth, manufacturing growth, exports surge, swelling consumption, and a demographic dividend. I was surprised about a few things including how population growth can be a boon. This was curiously called a demographic dividend.  Having 31% of the population aged 10-24 years old was described as an advantage and population growth considered a good thing.  There's a debate ongoing regarding current notions on the impact of population and the need for population control.  There's growing belief in focusing on per capita income rather than simpl...

So the last post I wrote implied that tracking the index was a good idea. I was wondering what companies are currently part of the Philippine Stock Exchange Index (PSEi), formerly known as PHISIX. I looked it up on google.  Here's what wiki says: The following are the companies listed on the PSEi (effective 17 March 2014) : AYALA CORPORATION (AC) ABOITIZ EQUITY VENTURES, INC. (AEV) ALLIANCE GLOBAL GROUP, INC. (AGI) AYALA LAND, INC. (ALI) ABOITIZ POWER CORP. (AP) BDO UNIBANK, INC. (BDO) BLOOMBERRY RESORTS CORPORTION (BLOOM) BANK OF THE PHILIPPINE ISLANDS (BPI) DMCI HOLDINGS, INC. (DMC) ENERGY DEVELOPMENT CORPORATION (EDC) FIRST GEN CORPORATION (FGEN) GLOBE TELECOM, INC. (GLO) GT CAPITAL HOLDINGS INC. (GTCAP) INTERNATIONAL CONTAINER TERMINAL SERVICES, INC. (ICT) JOLLIBEE FOODS CORPORATION (JFC) JG SUMMIT HOLDINGS, INC. (JGS) LT GROUP INC. (LTG) METROPOLITAN BANK & TRUST COMPANY (MBT) MEGAWORLD CORPORATION (MEG) MANILA ELECTRIC COMPANY (MER) METRO PACIFIC ...

I have been out of the country and was wondering how the Philippine stock market is doing.  The first time I talked to a broker was around seven years ago.  I had just finished college and wanted to try buying stocks.  It was supposedly a booming market.  Daily trades were at a remarkable Php4-ish (or was it 5) mark.  I didn't know anything about it back then.   So I just had a look at my online account today and found the following information for the most recent trading day: Total Trade  31,744 Total Value  13,124,067,307.50 Total Volume 1,372,853,880 Php13billion! ($98M) That's a huge jump in seven years!  That'll make for a great sales pitch for brokers.  But really, what is the implication of the trade value jumping three times in value in seven years.  Does that mean that if I throw money into the market, I could potentially triple my money?  How I wish it was that simple.  The PSEi (index) was at around 3,...

I've noticed a lot of good press on the Philippine economy for over a year now.  I typed in "Philippine Economy" on google.  This first hit (after wikipedia), was a neat little article by Walden Bello, a writer for the Philippine Daily Inquirer (my favorite of the 3 big dailies).  The article was entitled Hot Emerging Markets? The curious case of the Philippines and Mexico . It's a good read. Check it out here . Bello highlighted the praises given to the president's of both countries, in bringing about positive change.  He also gave a sobering reminder of poverty and inequality issues. So the question is, if the economy is growing, who's pockets are getting deeper.  I think the average Filipino has a good idea of what the answer to that question is.  The real question I want to ask is if the stock market can help the average Filipino get a piece of that growing pie instead of the crumbs that trickle down.

News of Manny Pacquiao's assets being frozen spread like wildfire the day after he beat Rios.  His victory, coming after a calamity, is seen to raise spirits of many Filipinos.  Yet, he faces another difficult fight back home.  The Philippine taxing authority wants Php2.2 billion from him in alleged back taxes.  That amount is larger than his net worth.  In U.S dollars that around fifty million. Taxing authorities in the Philippines have been way more aggressive lately and that probably helped the country to achieve its investment grade rating from all three major ratings agencies: Standard and Poor, Moody's, and Fitch.   (see:  http://www.philstar.com/business/2013/10/03/1240995/moodys-gives-phl-3rd-major-investment-grade-rating )

Here's a good article explaining why the Philippine economy has "good fundamentals" for economic growth. http://www.philstar.com/business/2013/11/28/1261583/phl-remains-star-performer-nomura