Gus Cosio says so

Ideas on the Philippine Stock Market

Money on the table

9:40am  Tuesday  12 January 2010

Foreign selling was Php 1.1 billion today.  Our market continues to be buffeted by hot money, but why am I not surprised.  It seems that foreign funds are taken all their gains already and shifting to other markets.  Notably, because the U.S. Dollar has strengthened all around and signs of growth are gaining traction in the U.S., global portfolios will be re-balancing in favor of the U.S.  Our market will be left mostly to local investors in the coming weeks until perhaps the 4Q2010 macro economic figures are released.  Also, we will need a better picture of corporate earnings before committed buying emerges again.

In the meantime, I think it will be the M&A activity that will provide profit opportunities.  This means having a look at CYBR, the RSA/SMC related stocks and LR  in spite of the fact that there are no fundamentals to scrutinize for these stocks.  That is always the case anyway in M&A activity.  You have to depend on your creative thinking.  The safer alternative is to make some bets on mining because I believe that a recovering U.S. will surely put pressure on commodities, particularly base metals.  NIKL to my mind is a sure bet while ORE will continue to invite both excitement and skepticism.

One stock that appears positive, in spite of the market coming off, is EDC.  I noticed that even in this decline, it has been holding its own.  I do not remember if I have ever mentioned it, but EDC is a stock that sits very well with socially responsible and environmentally oriented global portfolios.  I also learned from my friend Dr. Bernie Villegas of the University of Asia & the Pacific that EDC is in talks with joint venture partners to drill for geothermal facilities and build them over the next few years.  I think EDC is a stock that one can take on a 2 to 3 year view and make good returns.  Having said that, I would continue to think that MPI and DMC are very good long-term holdings due to the growth of capacities that they handle in power and utilities.

At this point in the game, it would be good to take a strong cash management approach.  I tend to compare playing the market with playing poker.  While poker involves playing with odds – just like betting on a stock – the one who comes up on top is the better money manager.  Why?, because he (or she) knows when to put more money in or when to fold and keep money out.  at the end of the day, it is the one who has money on the table that comes up ahead.

Advertisements

January 12, 2011 - Posted by | Financial markets in Asia

55 Comments »

  1. Hi sir Gus! I read somewhere that ORE will have 3 shipments this February. If this is true, would you recommend accumulating more shares of ORE? Thanks in advance!

    Comment by Sonn | January 12, 2011 | Reply

    • Where did you read? Can you place the link? I’m waiting for the shipments before I buy my second bath of ORE.

      Comment by jasper | January 12, 2011 | Reply

    • The geologist tells us that they have stockpiled 86,000 metric tons for shipment. They are just waiting for the ship to be able to come alongside their pier. It had been difficult because of the weather down there. Their pier is not as modern as the ones we see here in Luzon. I am a buyer at 3.60 or cheaper.

      Comment by Gus Cosio | January 12, 2011 | Reply

      • Thanks sir Gus! I have a question re: MBT. I bought at a relatively high price last week, unaware of the upcoming SRO. Would you buy MBT at current prices?

        Comment by Sonn | January 12, 2011

      • How much is the nickel price per metric ton?Thanks!

        Comment by James | January 12, 2011

  2. Ill Start buying/accumulate next week Bluechips are cheap right now…

    Comment by Mr.Bull | January 12, 2011 | Reply

  3. I love JFC…

    Comment by aCas | January 12, 2011 | Reply

    • I think the more important question is … does JFC love you? 😀

      Comment by Cris | January 12, 2011 | Reply

  4. Any take on SMP? I’ve been watching that stock since it posted it’s enormous jump on the first day of trading for this year. Too bad my online trading account wasn’t set up until yesterday. 😦

    Comment by ella | January 12, 2011 | Reply

    • I’m afraid I have no feel on SMP, ella.

      Comment by Gus Cosio | January 12, 2011 | Reply

  5. MER is really something. I sold mine at 242 thinking they cant get any higher since it was normally trading at 230ísh last year.

    But now its 280 and counting. Maybe 290 isnt so impossible after all.

    On other news – Come on DMC, I need you at 35 so I can sell half my holdings.

    Comment by jasper | January 12, 2011 | Reply

    • btw: Whats up with MBT? Is the stock rights receiving date(Is that the term for when you receive the actual stock you subscribed to) near?

      Comment by jasper | January 12, 2011 | Reply

    • The market is closed and as we can all see, 290 is indeed possible. The stock market never ceases to amaze.

      Comment by beanstalker | January 12, 2011 | Reply

    • Jasper,
      I think DMC will slip to 33 before it goes back to 35.

      Comment by Gus Cosio | January 12, 2011 | Reply

  6. Sir Gus,

    At current price will you be a buyer of AP? Thanks

    Comment by jaayem | January 12, 2011 | Reply

    • Jaeyem,
      I think 26.20 is aleady low enough, but i will first check out the current earnings forecast for 2011 and 2012.

      Comment by Gus Cosio | January 12, 2011 | Reply

      • My bid at 26.20 got hit today. *crosses fingers*

        Comment by KennyV | January 12, 2011

    • I have read from a research somewhere that AP will focus to raise output by 400MW through various projects, joint ventures and expansions. The planned increased in capacity is sustained by coal power plants and hydro plants. Forecasted earnings for 2011 is at 20B pesos. Technically, it is already oversold with a single digit PE.

      Comment by Seth | January 12, 2011 | Reply

      • I’m thinking of stockpiling once again on this stock. This is one of the few that you can own and still sleep better.

        Comment by Seth | January 12, 2011

      • AP comprises a majority of what I currently hold.Hope this will bounce back. RSI is already around 30.

        But people who bought MER below 200 should be smiling this time around. Hope I have bought some during those days. Anyway, that’s what stock market is all about.

        Still bullish..

        Comment by jopard | January 12, 2011

      • Anyone who can’t sleep because they’re afraid of losing money on whatever stock is stupid. You shouldn’t have invested money in ANY stock if you can’t handle losses

        Comment by Cris | January 12, 2011

  7. CYBR is cool but be careful.

    Comment by marketbeginner | January 12, 2011 | Reply

  8. Good day to all & to sir gus..

    Any insight about RFM,

    Thank in advance..

    Comment by sophomore | January 12, 2011 | Reply

  9. Does anyone knows when is the receiving date for LC gonna come out?

    Thanks.

    Comment by JV | January 12, 2011 | Reply

  10. any idea why finacial sectors continue to slip?

    hope to hear from you.

    thanks!

    Comment by irving | January 12, 2011 | Reply

  11. Hi sir Gus,

    What are your thoughts on VLL?
    Correct me if im wrong, i feel that this is one of the few stocks in the property sector which has good growth potential compared to the other big ones that is quite mature already.

    Also, it is liquid with good volume…

    🙂 More power sir Gus!

    Thanks!

    Comment by rommel | January 12, 2011 | Reply

  12. Property Stocks are very CHEAP right now RLC @ 13.++, Ali @15+ and SMPH only @11…Buy Before the Foreign Funds start BUYING…..

    Comment by PnoyInvestor | January 12, 2011 | Reply

  13. Sir Gus may I know how to interpret the sale of ABLE of its LR shares? I am thinking this not a good sign since if the partnership of LR with Bel would add more value than the current price they should not be selling. But since they are, it seems they themselves think that LR is over priced at 6 pesos, the price they sold. On the other hand I might be missing something in the story? Hope you can enlighten me. Thanks.

    Comment by jovy | January 12, 2011 | Reply

  14. Sir Gus, whats your take on CEB and BEL, bought bel at the highest price =( , you think I should wait till end of january to look for good bargains?

    Comment by night phantom | January 12, 2011 | Reply

  15. Strong BUY/Accumulate TEl and SMPH….Tel will be going to 2750 while SMPH to 15 then to 20…

    Comment by Jack Bogle | January 12, 2011 | Reply

  16. Pardon my ignorance, but what does M&A stand for?

    Thank you

    Comment by Johann | January 12, 2011 | Reply

    • Mergers & Acquisitions (I think)

      Comment by jasper | January 12, 2011 | Reply

      • thank you very much Jasper…

        Comment by Johann | January 12, 2011

  17. 86,000 tons is a lot of ore. Maybe I should just buy again then forget about stocks.

    But RLC has gone down significantly. Its actually near the price it had exactly one year ago. And yet, they’ve already earned more for 2010, than they did for 2009. At 11x pe and 1.4x book, its not so high..

    And MBT is nearing 60 pesos again.

    Everyday, Mr Market is getting depressed and quoting me mouth watering prices.

    Comment by jasper | January 12, 2011 | Reply

  18. Sir GUS,

    What is your thoughts on LND? going UP since the rumored acquisition of AGI. what can you say bout its fundamentals vs current market value after the acquisition? TIA!!

    Comment by Blogspot | January 12, 2011 | Reply

  19. I’ve bought some AP shares the last 2 days but it keeps going down (huge loss already in my portfolio). I still think AP is good in the long run, but I hope that it bounces soon just to boost my spirit a little bit 🙂

    Also, it was great to hear from Sir Gus (and Mr. Gilles as well) this evening for the seminar. Looking forward already to Feb 2

    Comment by blue7 | January 12, 2011 | Reply

  20. Hi Sir Gus,

    I was one of the attendees of your seminar today, and due to time constraints, not all questions have been answered.

    Anyway, I’ll ask it here in your blog. What’s your 2011 outlook for MBT? Do you think the capital raising via the SRO will have a significant addition to the bank’s earnings?

    Comment by Neo | January 12, 2011 | Reply

    • excellent seminar by the way. I’ll be back again Feb. 2. =)

      Comment by Neo | January 12, 2011 | Reply

      • Hoping something like that in Cebu soon. Anyway, Pit Senior!

        Comment by jopard | January 13, 2011

  21. Congrats to your seminar sir Gus. I’ll also enjoy your co-speaker. Congrats to both of you, madami ako natutunan. May I ask sir if I need to pay another 300 if i’ll be joining again the seminar on Feb 2. Thanks again.

    Comment by jaayem | January 12, 2011 | Reply

    • Jaayem,
      yes, we will charge again. We just have to recoup expenses for food, materials, and other fees. If you open an account with either firstmetrosec or FAMI, we will reimburse the 300 or not charge you at all if you are already a client. It only takes a Php 5,000 to open a mutual fund investment with FAMI.

      Comment by Gus Cosio | January 13, 2011 | Reply

  22. Thank you sir gus for that very enlightening seminar. I have an account with fmsbc and although i did well on my investment last year, i am planning to invest some funds in FAMI this february. Hope our luck would continue this 2011 :))

    Kudos also to Mr. Gilles!!

    Comment by arce | January 13, 2011 | Reply

  23. Hi Sir Gus. Thanks for a very informative Seminar. Anyway, may i ask your take on ACR? It has gone up again from 1.38 to 1.54 which is a huge change of +11.59%. =))

    Comment by StarbucksCofi | January 13, 2011 | Reply

    • ACR used to have a story related to the Tampakan mine with Indophil. I have not followed the stock since they did not confirm the injection of the mine holdings. Anyway, ACR would still benefit from projects in Mindanao. I think they have a power project over there. Why don’t you have a look at the ACR disclosure statements on the PSE site.

      Comment by Gus Cosio | January 13, 2011 | Reply

  24. I’ll ask my question here na lang because it wasn’t picked last nite.

    What’s the difference & similarities between Mutual Fund & UITF?

    Comment by nikmatik | January 13, 2011 | Reply

    • Followup questions.. between the two (MF & UITF) which is the better placement for one time investments of senior citizens? Can clients take profit periodically from both? How? Thank you.

      Comment by newbie | January 13, 2011 | Reply

      • MF and UITF are generally the same. What makes the difference is the track record of the portfolio managers and the style of management. For senior citizens, it is not so much of a choice between UITF or MF; rather the type of fund whether fixed income, balanced or equities. Senior citizens would be averse to volatility, so usually they should go for fixed income and perhaps a minor allocation towards balanced for a kicker in returns.

        Comment by Gus Cosio | January 13, 2011

    • MF and UITF are generally the same. What makes the difference is the track record of the portfolio managers and the style of management.

      Comment by Gus Cosio | January 13, 2011 | Reply

  25. we have tried investing in UITF offered by a bank but wasn’t satisfied with the return of our investment after 3 yrs or more that’s why we are really eager to try the offer of FAMI’s MF. I have asked a friend who have invested in FAMI’s Balanced i was suprised of the return,around 12K, in just 1 yr knowing the capital is only 20% of the amount we have invested in UITF .hopefully we can process everything until next week if i can’t make it by tomorrow 🙂

    Comment by Mich | January 13, 2011 | Reply

  26. thanks 🙂

    Comment by haribon2007 | January 13, 2011 | Reply


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: