Gus Cosio says so

Ideas on the Philippine Stock Market

Is this such a stubborn move?

5:20 pm  Thursday  10 February 2011

Wow! this is one of the worst trading days I’ve seen since I closely followed the Philippine market.  Can you imagine, of the 20 most active stocks, all were red except BPI which was merely unchanged.  Yesterday, I was thinking that because selling by foreign funds had thinned out, things would start to get better.  I was pinning my hopes on the 3800 level to hold.  Now that it has been penetrated, I think the 3620 level is pretty much at hand.  There was not specific reason for the sell-off except that the entire region save Shanghai and Sydney were all in the red.  Nonetheless, the PSEi was the biggest loser, down 2.73% with KLSE Composite following a far second at -2.09%.  The tide is surely against us.

The good thing, though, is valuations are really becoming very attractive.  Unfortunately, valuations are not what traders are looking at right now.  People are just looking to sell at any price whether it makes sense or not.  One thin I noticed though is that the strong stocks have remained strong.  Take DMC, for instance.  The stock may have been languishing between 32 and 35 for a few weeks now, but it did not see a drastic sell-off today.  It merely slipped from 33.10 yesterday to 33.50 today.  The same thing with AP, closing 27.30 today from 27.50 yesterday.  Of course it gave a bit of a scare when it touched 26.85, but the fact that it closed much higher tells us that there are value shoppers out there.  BPI closed unchanged from yesterday although it traded to a low of 52; again, people are stepping up to the plate for this stock.  JGS closed at 19.50 against yesterday’s close of 19.60; perhaps most JGS sellers have gone to the exit already.

The stock that had it in a big way today was MBT, down 5.25%.  I hear that people reacted to a published December 2010 statement of condition which reflected a decline in total loans and total assets from the balance sheet published in September 2010.  Another stock is RLC, which has very strong fundamentals and yield but it had suffered the biggest loss for the day among blue chip firms – a bloody 6.98% drop.  This is a stock that I really like and took into my portfolio only yesterday (Wednesday), but it’s given me a one peso loss already in one day.

The big question again is whether this market would hold at these levels or not.  I’d like to see it happen but I would not put my life on the line for it.  I think until global sentiment in emerging market turns, we will not get much traction.  Not only should all these selling stop, but also the  propensity to sell has to die down.  Fear has been plaguing the market for more than 6 weeks now and people are still scared.  I think one should not be a hero at this point.  I think the indicators for net foreign buying should be watched closely such that when they run out, the locals can step in for stocks that have come to bargain basement levels.

This market will not change its direction overnight.  We have to be very sensitive to whether or not sentiment will change.  People have become very concerned about future inflation resulting to tight monetary conditions.  That kind of mindset does not reverse itself quickly.  There will, however, be special situations which will allow us to make money; but these will not be as plentiful as in the last 18 months.  Investors have to be very selective, prudent yet bold.

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February 10, 2011 - Posted by | Financial markets in Asia

118 Comments »

  1. invest in strong fundamentals to be immune..

    Comment by cliffhanger | February 10, 2011 | Reply

    • Cliffhanger, I agree that we have to invest on issues with strong fundamentals. But investing on them does not anyhow guarantee one’s immunity to get hit in the market. This is when patience should be practiced to the utmost.

      Comment by Shan | February 10, 2011 | Reply

    • Just look at MBT. Why did it do that?

      Comment by tina | February 11, 2011 | Reply

    • Strong fundamentals are only one part of the equation… the price at which you buy “strong fundamentals” is a very important factor…

      Comment by ML | February 11, 2011 | Reply

    • You can also look at FLI, meg and UBP. They are not immune

      Comment by Cris | February 11, 2011 | Reply

    • cliffhanger,

      immune from what? from swine flu? i have heard reports how stock trading increases the chances of getting swine flu.

      Comment by chris munti | February 12, 2011 | Reply

    • immune from fear 🙂

      Comment by cliffhanger | February 14, 2011 | Reply

  2. Sir Gus, I almost fell down from my seat while watching today’s trading. We can’t do anything about it but wait. And yes, my core DMC has never been the worst loser. There’s still that peace of mind when we’re cautious of what issues to hold.

    Comment by Shan | February 10, 2011 | Reply

    • Shan,
      if it is any comfort to you, I bought some DMC yesterday To replace positions that I sold above 34. I think anything below 33 for dmc is a good buy. I am looking at a 6 months horizon at least. In the last 12 months, I’ve never been without DMC. I just decrease position then buy it back.

      Comment by Gus Cosio | February 11, 2011 | Reply

      • Thanks Sir Gus. Just like you, I have been accumulating DMC since it went down. It’s really comforting to know that my guru and I believe in DMC’s future. More power, Sir!

        Comment by Shan | February 11, 2011

  3. I like the closing of PX today. Something seems cooking.

    Comment by Mark | February 10, 2011 | Reply

    • Mark,

      do you always have to base your investment decisions on what “seems cooking”? kung ganon, mag-chef ka na lang

      Comment by chris munti | February 11, 2011 | Reply

      • hahaha…. tindi ng comment mo, Chris munti

        Comment by Benson Lim | February 11, 2011

  4. Its almost impossible to time the market like knowing when there will be net foreign selling will stop or net foreign buying starts or when the market will drop or rise. Traders will always have a million different reasons on why the market dropped or rose.

    The last 2 years were spectacular for both experts and market beginners alike as the index rose to all time highs. Performance should be evaluated not on a daily or monthly basis but it should be over several years. Stay the course with the companies you know will that grow and stick to your risk tolerance. Switching companies on a monthly basis is like reacting like a headless chicken abandoning any strategy.

    Forget earning 50% in a single year. Majority of local investors were blessed with doubling investments in the market over last 2 years. However, that is not the goal. Anytime you do over 15% compounded over a six year period , you are doing a great!

    Comment by cj ch | February 10, 2011 | Reply

    • You have the correct attitude and outlook, CJ.

      Comment by Gus Cosio | February 11, 2011 | Reply

    • Very well said. If you want the quick buck, there’s lotto for you.

      Rich people did not amass their wealth overnight. Time is your ally.

      Comment by Neo | February 11, 2011 | Reply

      • Neo,

        lotto does not even give you quick bucks. just calculate the probability of winning the jackpot or even a minor prize and you will be astounded by the odds against you… anyway, i agree with time being an ally; but take note that one’s lifetime is finite, which means that time cannot always be an ally… if you are 60 years old now and just started investing in the stock market, i doubt that time would be much of an ally for you to reap the benefits of investing; if you are 20 years old now, just make sure you don’t die young… hehe

        Comment by chris munti | February 11, 2011

      • furthermore,

        the rich that amassed wealth in time only consist 1% of the population… again the odds are against you. the other 99% die trying :>

        Comment by chris munti | February 11, 2011

      • Chris Munti,

        Instead of posting contrarian statements, why don’t you share something helpful for the readers of this blog? You’re posting as if everyone here is wrong, even the blog owner himself. Are you here to prove na ikaw ang pinakamagaling? O sya, ikaw na.

        Your statements aren’t even helpful, they’re discouraging.

        Comment by Neo | February 13, 2011

    • Hello CJ, just some additional perspective/math that is not typically intuitive. If you lose 50% it means you need to double your money to recover it. A 50% earning means all it takes is a 33% loss to break even.

      Compounded annually, 6 years of 15% means your money increased by 2.31 times (100 becomes 231). But if you loss 57% in the 7th year, you are back with your initial capital (100), alternatively 57% down also means a compounded losses of 25% in two consecutive years or ~16% compounded losses in three years.

      Comment by Chris M. | February 11, 2011 | Reply

      • Chris M.,

        i really do not understand why you have to point out this mathematical perspective… and fyi, contrary to your opinion, your calculations are typically intuitive… if you do your research well in picking the stocks you go for the long term, you need not worry about losing 57% or whatever because you should have minimized the probability of incurring such loss. stock investing is not gambling and if one confuses him/herself to be a long-term trader (rather than investor), one needs to rethink whether stocks are the right asset class to stash your cash in.

        Comment by chris munti | February 11, 2011

      • Any knowledge is valuable. So phrasing this in mathematical terms should be good for our knowledge base.

        And also, there is no guarantee that if you invest long-term you will make money. A person might simply be wrong. They lacked critical information, etc. Or else, some new development changed the business conditions. i.e. What if suddenly the government tried to took control of the tollways? then what do MPI do? there are things that can ram-rod our calculations beyond our control.

        I’m always worried about losses. Even if its not gambling. There is no guarantee in anything in stocks. I can’t say just because a stock is undervalued I will make money off it. Or I will recover loses.

        just my opinion.

        Comment by jasper | February 11, 2011

      • jasper,

        there is no guarantee in everything. there is even no guarantee that you would still be alive tomorrow. my point is that stock investing is a skill about risk management. you’re right. just because a stock is undervalued doesn’t mean it is going to make money for you. chances are undervalued stocks have a reason to be that cheap, such as they are obviously running out of business and will soon be delisted by the stock exchange… there are techniques to point out which undervalued stocks are diamond in the rough, and which ones are certified trash. unless you have that know-how and skill to pick the diamond in the rough, you will never make money investing in the stock market.

        and if you’re saying it doesn’t work, tell that in warren buffet’s face.

        just my two filipino sentimos of finger labor. cheers 😀

        Comment by chris munti | February 11, 2011

      • hello chris munti, my intention is to show that recovering money is psychologically tougher than growing it, and one must be careful not to lose a large amount of money arguing against the market. In recent times, the market is a leading indicator and not a lagging indicator of a stocks value. As we have seen in previous weeks, fundamentals are not sufficient to know where our market is heeding. Also for everyone’s information, if not for 15 out of the hundreds of stocks that Warren BUffet’s chose, his portfolio will be mediocre. Meaning, Buffet’s batting average is way below 10% . But what allows him to outperform the market dominantly is his ability to ride his few winners longer.

        In my opinion, the concept of compounded interest and my above calculation is not generally intuitive.
        If you borrow using 5:6 or 20% gain every month, in 10 years, the 1 peso that you borrowed will amounnt to more than 3 billion compounded monthly. If you have 425 billion (or 425, 795, 984, 000.81 to be exact) and you lose 20% of it every month, in ten years you will have less than 1 peso. The above example, i hope, will illustrate that maybe, the concept of simple ratio and proportion when scaled geometrically is not that intuitive.

        Is long term prediction easier than short or medium term forecast? This is debatable. In fact, from mathematical perspective, short term is always easier to predict. Weather variation for instance has inherent complexity that will not allow you to predict it after seven days even if you diligently and accurately measure all the involved data from humidity to wind velocity to solar flares. But yes, you can predict it quite accurately in four days or less. Physicists and mathematicians refer to this as the “butterfly effect”, a single flop of butterfly wings can cause a storm in seven days. Crowd psychology that drives our market is more complex than weather since collective behavior of human reacts irrationally due to limited information, a term coined as bounded rationality by game theorists.

        hey, cheers Chris Munti, i hope i was able to make myself clearer. If not, hehe happy weekend na lang sa lahat! Learning is a never ending journey, and this is the time when everyone should re-examine their strategies and learn profoundly from them.

        Comment by Chris M. | February 11, 2011

      • Chris M.

        thanks for taking the time to explain yourself. you have made your point clearer, but also had me laughing when you start invoking chaos theory into your explanation. math and physics, or whatever, is a world view; but if you are actually making money, it doesn’t really matter which world view you take. lucky you we are in the midst of a bull market. and if you really believe in the butterfly effect, or at least truly understand its meaning, you should know that by exactly putting your money in a stock, you are changing the course of its price action. that precisely contradicts your belief that technical analysis will give you an edge. Now its clear to me how ironic your thoughts are.

        “Short term” thinking is good but how much more productive could you have been in your line of profession if you had not to track the markets day to day to scour for opportunities you fear you might miss. that’s the kind of sacrifice you have to make — plus the stress you are probably accumulating along the way. I don’t know about you but I’m much more comfortable not having to read Mr. Cosio’s blog just to see what his thoughts are of this stock or that stock.

        Comment by chris munti | February 11, 2011

      • and by the way, don’t invoke the weather again and its complexity… crowd psychology is indeed complex but to say simply that humans are irrational because of limited information is a fallacy and a contradiction; if you believe that computing machines are rational despite being obviously limited by the irrational humans who write software to make them work.

        anyway, my view is that humans are characteristically irrational because they are inherently lazy to gather the right kind information to sufficiently form rational decisions. choosing a business (and buying shares of it) doesn’t take infinite loads of information, nor any complicated dynamical equations. there’s a reason why a company is said to be “publicly listed”. because necessary information about that business is being disclosed regularly. yet the crowd chooses to merely reading blogs and browsing up from rumor mills, effectively basing their investment decisions on gurus lurking around in forums and the like; and they call that “research”. goodness!

        Comment by chris munti | February 11, 2011

      • Chris Munti, i never argued that short term is better than long term or the other way around. I am just illustrating by means of examples that there are some perspectives that are not necessarily true. In fact, my “strategy” is to find the best strategy for a given time. It is not an easy tasks, and obviously i have not perfected a system that will work 100% of the time, otherwise i will not be wasting my time responding to you.

        Yes, i fully understand chaos. My line of profession is complemented by trying to understand the complexity of market dynamics (see: http://www.nip.upd.edu.ph/ipl/mem/homepages/chris/).

        I also think that by advocating and being active in this wonderful site, more Filipino people will learn the value of investing and will allow us to understand more our country. I also follow this site not only for market guidance but also because i like the literary value of the many articles written here. It`s better than my facebook account hehe.

        Comment by Chris M. | February 11, 2011

      • Chris M.

        interesting line of profession but nothing among your publications seem to actually talk about chaos theory. no offense; you may be a guy with a physics degree but a 100% perfect system cannot exist for a “complex system” like the stock market. you are a paradox. on the one hand, you seem to admit the unpredictability of human collective behavior; yet you are engaged in a quest for “the perfect system”…

        i will give you the benefit of the doubt for fairness sake: if you ever found a system, its real test should be in a bear market. marami “experts” lumalabas during bullish markets; maka 100% gain lang in 3 months or so, feeling na nila ang galing galing nila. hehe… no offense, but the only real system that works for me is to have a life outside stock trading. fundamental and technical analysis are merely tools not meant to predict, but merely to guide decisions. in the end, you cannot substitute a software, a robot, nor any mechanized technique to do the trading for you. that is a skill that the likes of Mr. Gus Cosio has learned by experience alone… maybe when the next bear market comes and you still survive, you shall realize what that “skill” is all about. and it doesn’t take a phd degree to acquire it. peace to you and may you succeed in your quest for the trading system that works for your psychology. huwag lang masyado seryoso, baka kunin ka ng maaga ni lord (*kiddin’)

        Comment by chris munti | February 12, 2011

      • Chrin Munti, Chris M,
        I hope you keep it friendly. I welcome constructive discussion on this blog – agreements and disagreements. In any market, a free exchange of ideas is very important because it is ideas that move people to trade or not to trade. If it is a matter of trading systems, there are as many systems as there are serious traders. What is important is to have a trading guide to reference your investing on. I write this blog not to convince people that I can foretell the future of stock prices. I do this to help people generate ideas and keep them interested in following stocks and portfolio investments whether they do it directly or through managed portfolios or mutual funds.
        I have been in various markets for over 30 years, and it is a lucrative place to be. What is a pity is when people come into any market with the wrong reasons and methods then they lose everything. That is what I hope to impart here. You may lose some money some of the time; but if you follow a system, whether it be a sophisticated or a common sense one, you will not lose everything. With a long term perspective, you will even come up ahead even if you have to speculate some of the time.
        My point is, you do not have to win a debate or an argument especially when it comes to the market. In the end, it is always the market that is right.

        Comment by Gus Cosio | February 12, 2011

      • Hehe peace Chris Munti! I actually think your comment is worthy of a reply, and thanks to you, this is the first time i believe i actually elaborated some of my ideas on what i think is “the way” to develop an optimal trading strategy. I`m definitely far from it. I recognize the inherent probabilistic nature of the market but i`m not saying its inherently unpredictable, i`m just pointing that creative and counter intuitive notions might improve one’s strategy. In this light, i used the term “perfect strategy” to refer to a technique that will give you the highest probability of maximizing your gains and minimizing your losses. Sorry for the confusion.

        I have been trading since 1999 (i started young in Phil standards) and i was a long term investor mostly in ayala companies from 1999 to 2009. But upon encountering this site and having discussions with Sir Gus, which fortunately coincides in this so called bull phase, i realized that the market is a very interesting system that is worthy of my time.

        Hey, 100% in 3 months is quite impressive! Hehe magaling talaga pakiramdam mo pag nagawa mo iyon especially if 100% of your money is in that stock. Huwag ka lang mag loss ng 50%, bawi lahat.

        Chaos is now basic enough that its the standard method in analyzing the stability of nonlinear systems, i am teaching the subject in both undergrad and grad courses.

        Chris Munti (it feels i`m talking to myself!), i have not taken any offense from your comments/suggestions/responses, in contrary, i find them witty and straighforward. Things i appreciate very much. On the lighter side, i feel you are taking me more seriously since i think your reply is written in the wee hours of friday evening or very early saturday morning, di ba you are supposed to be in a party or something? hehe, what a life! (KIDDDINNG! :P) Ako, i admit to being a geek kaya walang problem na nakaharap ako sa computer everytime haha.

        Comment by Chris M. | February 12, 2011

      • Chrin Munti, Chris M,
        I hope you keep it friendly. I welcome constructive discussion on this blog – agreements and disagreements. In any market, a free exchange of ideas is very important because it is ideas that move people to trade or not to trade. If it is a matter of trading systems, there are as many systems as there are serious traders. What is important is to have a trading guide to reference your investing on. I write this blog not to convince people that I can foretell the future of stock prices. I do this to help people generate ideas and keep them interested in following stocks and portfolio investments whether they do it directly or through managed portfolios or mutual funds.
        I have been in various markets for over 30 years, and it is a lucrative place to be. What is a pity is when people come into any market with the wrong reasons and methods then they lose everything. That is what I hope to impart here. You may lose some money some of the time; but if you follow a system, whether it be a sophisticated or a common sense one, you will not lose everything. With a long term perspective, you will even come up ahead even if you have to speculate some of the time.
        My point is, you do not have to win a debate or an argument especially when it comes to the market. In the end, it is always the market that is right.

        Comment by Gus Cosio | February 12, 2011

      • Chris M.

        did it ever occur to you that blogging can also happen via iPhone these days, anywhere, anytime. while getting bored in a potty (este, party) session, i was just picking out somebody who seems sensible enough from this blog. sorry, i picked on you, but im glad you’re sport about it.

        anyway, i gotta bed myself now. and may the geek in you be convinced to have a life away from the computer once in a while.

        just a tip (since you are into nonlinear dynamics): try to read about the applications of fibonacci sequences in understanding the fractal nature of stock price historical charts. adios!

        Comment by chris munti | February 12, 2011

    • Lets not over complicate things. Investing is also a form of gambling. There are always a level of risk involved in almost anything we do. I am assuming that the investor has made his research on the company that he or she chooses to own and has passed the certain criterias as far as quality of management, growth prospects, transparency, ROE’s(my main concerns).

      You are gambling that the market will eventually realize the real value of the company as how you see it now and in the future and this will increase the value of your investment. Time should be a friend in this case. What I am driving at is to be consistent in your strategy to outperform the market. If you are reactionary, you will never outperform the market, If you want to minimize your risk, then one can always utlize safer deposit instruments.

      Dont forget to have a look at the long term historical charts of Major Markets. There will be major ups and downs. It will show you that if you earn over 15% compounded per anum over a very long period of time you will have outperformed a lot of indices and funds. Thats a very tough challenge since you double your money every 6 years. Over the past couple of years the PSE hit historical highs and we had extraordinary gains and this as we know is unsustainable.

      From my experience, Investing in only 5 or 6 stocks at most makes the most sense. If it passes your criteria and risk profile Learn as much as you can about it and keep abreast with developments. Guys, there is also such a thing as overdiversification wherein you get really distracted and most of the time underperform the market. Sorry for the long comment.

      Comment by cj ch | February 11, 2011 | Reply

      • The problem with most investors is they like seeing big gains but are stressed by big losses. That’s what makes it gambling. You may be able to beat the market using only 5 to 6 stocks in a bullish market but you won’t do it in a bearish market or in a market where the stocks aren’t moving in relative lockstep.

        It’s not just about diversification, it’s more about hedging your stocks. Meaning you need investments that has low correlation with your prime stocks. So if the markets goes up by 3% and I may only go up 2% because the hedge dragged it but then the next day a bad news comes in and the market drops 1% but instead I went up .5% because my strong stock didn’t go down as much while my hedge went up.

        Now in a bullish market this strategy won’t work because you will continuously underperform (I just drop my hedge completely when the market is confirmed to be bullish), but on any other market you will have the advantage. That’s why it’s important to have different strategies on different types of market and which is also why it’s important to understand if the market is trending up, trending down or simply consolidating. And sometimes its important to look at it at a per industry sector cause it’s rare that they move in lockstep. Most new investors unfortunately were spoiled by last year’s bullish market.

        Comment by Mars | February 12, 2011

      • chris m, chris munti…get a room

        Comment by A.J. | February 12, 2011

      • A.J.

        this is a democratic blog, is it not? and if you have nothing “stock related” to say about, why don’t you “get a room” and isolate yourself for a long time so when you emerge you don’t have to lash out about your red portfolio on anyone.

        hitler started world war II because of his hate against the jew.don’t act like him. you can always choose to filter what you read and what you don’t.adios!

        Comment by chris munti | February 12, 2011

  5. sir gus,
    what’s your insight on mbt in the next few days? 30% of my portfolio. avg price of p63.50 should I avg down?tnx

    Comment by poker | February 10, 2011 | Reply

    • mbt is on a downtrend (technically speaking)

      Comment by buhawi | February 10, 2011 | Reply

    • MBT is nearing its bottom. It will not go below 56 to 57 pesos. Now is your time to average down, this is the price technicians are waiting for.

      Comment by Jacky | February 11, 2011 | Reply

      • tnx jacky. hope it doesnt break the support of 56-57. you never know what will happen with the current market condtions. long & medium term i’m still optimistic of mbt.

        Comment by poker | February 11, 2011

    • If you look at the big banks, the year to date performance of their prices are not far from each other. i think prices of bank stocks are adjusting to the prospects of higher interest rates. There could be some downside risk in MBT but on a 3 month outlook, you could see it back above 63.5

      Comment by Gus Cosio | February 11, 2011 | Reply

    • same here, been hurting since MBT SRO announcement. i remember seeking advice from sir gus last feb 2 seminar, when i still have 50% of my porfolio at 73+. i did top sliced MBT as adviced, and loaded up NIKL. thanks sir gus…
      it’s now going 55, way below 56-57 level. wishing to buy it cheap and average down my remaining shares of MBT(down -25%).
      your loyal MBT holder…

      Comment by blooddeewings | February 11, 2011 | Reply

  6. I don’t know whether to be happy, because I was bearish at the right time, or sad, because it looks like high inflation will hit us all.

    Comment by abitrade | February 10, 2011 | Reply

  7. RLC was a stock I’ve been wanting a long time. Although, like gus i’m down 1 peso per share already 😦

    I have been saving up for when they do the secondary offering. But now, I do not know whether to just buy some more..

    Comment by jasper | February 10, 2011 | Reply

    • Jasper,
      I am now thinking of averaging down on RLC because it is such a good stock.

      Comment by Gus Cosio | February 11, 2011 | Reply

      • My bid was hit today at 12.50 with just a few share, just in case I can average down as well. 😀

        Comment by al | February 11, 2011

      • Bought RLC today at 12.50 too

        Comment by Neo | February 11, 2011

  8. Sir Gus, thank you for your thoughts today. When you were silent for almost 7 days from the start of this month, I seemed to be walking in the dark without a flash light. hehe… On my part, I am seeing my PNB losing ground from P60, now to only P47, but I still want to hold it because the book value is P46. I really can’t afford to sell now.

    Comment by Benson Lim | February 10, 2011 | Reply

  9. If the market does not rally tomorrow, I think it’s a good idea to start lightening positions or at least move to the defensive issues.

    -LaidTrades.com

    Comment by Ron Acoba | February 10, 2011 | Reply

  10. It looks like the funds are going back to the USA. DOW is above 12,000.

    Comment by Alvin | February 10, 2011 | Reply

  11. Sir Gus, for us loyal MBT shareholders, please give us any news on why this is falling down more than the other bank stocks, and what is happening with the company.

    Thank you.

    Comment by tina | February 11, 2011 | Reply

    • start averaging down today. MBT has already hit its bottom (not going below 56 to 57 pesos.

      (based on the technical perspective)

      Comment by Jacky | February 11, 2011 | Reply

      • Hmmm… it’s doing 55.50 now (10:22am). Be careful about saying absolutes (i.e. a stock will not go below/above…), nobody knows exactly how a stock will move.

        Comment by ML | February 11, 2011

      • fundamentally, MBT is among the most overvalued banks listed on the exchange; and technically, it looks like it would revisit psychological support @ 40ish level. the tangible book value for MBT is also around 41.23 based on most recent financial disclosure.

        Comment by chris munti | February 12, 2011

    • from the news yesterday, mbt shows a balance sheet where deposit or assets are lower compared to closing of books of 2009.

      Comment by Benson Lim | February 11, 2011 | Reply

    • Fundamentally, MBT is very strong. It is a well managed, well capitalized, conservative bank with great connections in China. It is also a heavily traded stock which some portfolios use as proxy for the broad market. It is not unusual to see such volatility. May I suggest that you follow some technical analysis in trading this stock since it is so heavily traded.

      Comment by Gus Cosio | February 11, 2011 | Reply

      • Dear Sir Gus,

        can you comment on this alleged negative December 2010 report that came out for MBT as the possible cause for this sell-off?

        please clarify what it discusses, and how accurate is it.

        Thank you.

        Comment by WMB | February 11, 2011

  12. disgusting COL, website unavailable di ako maka-order, is this intentional or what? is this to avert the selloff??
    very nice tricks COL.

    Comment by chiefy | February 11, 2011 | Reply

    • I think this is not the place for you to complain about. why don’t you direct it at COL instead of guessing.

      Comment by claire | February 11, 2011 | Reply

      • why cant i? this is also related to stocks right? are you the moderator or owner of this blog? If not, and you cant come up with a good suggestion then better STFU b*tch!

        Comment by chiefy | February 11, 2011

    • @chiefy

      i am a COL client but i didn’t have any problem transacting today. early morning, the default website was not working so i used the alterbative/mirror site: http://www.colstocks.com.

      when the default website doesn’t work, use the mirror sites…there are 2 mirror sites but i only know one of them, the one i mentioned above.

      Comment by ricky | February 11, 2011 | Reply

    • try mo rin isa pang mirror citiseconline.com.ph or tawag ka na lang sa 6333777 instead of whining here

      Comment by A.J. | February 11, 2011 | Reply

      • good luck na lang masagot tanong mo. pwera sa mahirap macontact yung number nila,malabo kausap yung customer service ng COL. paikot-ikot lang ang sagot palagi.

        Comment by ann | February 11, 2011

    • what did claire say to you for her to deserve being called b*tch? ang jologs mo naman

      Comment by A.J. | February 12, 2011 | Reply

    • @ chiefy,

      Your message for Claire is inappropriate, unwarranted, and without class.

      She actually had a point.

      Had I known that you’d react that way to her post, I would have not provided you with the info that you needed.

      Comment by ricky | February 12, 2011 | Reply

      • Why? are you his boyfriend you cocksucker ricky.
        And to you AJ, let me repeat it again for you,, Claire is a BITCH, ok? ciao

        You are all COL peeps, and try to cover up the dirty tricks of COL. Nice job, keep it up. “Conviction buy” pala ah, pwe!

        Comment by chiefy | February 13, 2011

      • Chiefy,
        I would ask you to keep the language decent on this site. I would like the site to be a friendly place where ideas are shared freely. I would also comment on those who may be giving deceptive information. The market has a way of filtering out the truth. Consequently, these deceptive means will eventually surface in the market itself. There is no way people can do tricks in the market without it being revealed. Let us keep integrity on this site.
        Please.

        Comment by Gus Cosio | February 13, 2011

      • i don’t have time to argue with people like you. It’s a waste of time.

        you are an example of a person with LOST values, so western culture-influenced.

        if you could just reflect, maybe think of the situation like this: “the woman (claire) is your aunt or mom (i’m not saying Claire is old), would you have said the things you’ve said to Claire if this was the case?
        I don’t think you would. if you would..then what else could I say?

        Come on people, before we say or post anything, let us first reflect and think whether it is appropriate or not.

        We should be responsible for every word that comes out of our mouths/minds….

        Comment by ricky | February 13, 2011

    • to AJ, ricky, and claire. If you found chiffy to be just whining and guessing, why are you still responding to his posts. Isn’t it better to just ignore him? Unless..hmmn..

      Comment by tina | February 13, 2011 | Reply

      • tina, unless what? 🙂

        initially i didn’t think of it as chiefy was just whining as can be seen in my initial post.

        after some posts made though, I wanted to make a point to chiefy’s that’s why I replied…

        i know from here onwards, the best way to deal with the matter is ignore so that’s what i’d most probably do…

        Comment by ricky | February 13, 2011

  13. sir Gus,
    What is your take on PNB? Price continue to spiral down. Tnks!

    Comment by tina | February 11, 2011 | Reply

  14. There are still many bears than bulls today…2/11/11..

    Comment by jopard | February 11, 2011 | Reply

  15. I am really tempted to buy MBT and AGI but somethings telling me to hold for now. Or is this the FEAR thats a sign to buy?

    Comment by Chriss | February 11, 2011 | Reply

  16. Is this the fear thats a sign we should buy?

    Comment by Chriss | February 11, 2011 | Reply

    • Same here. When there is fear in the market then it’s time buy. But I do it gradually because it is impossible to predict the bottom.

      Comment by Alvin | February 11, 2011 | Reply

      • do it gradually as you might still have fear tomorrow

        Comment by rodimus | February 11, 2011

    • This fear can be an opportunity in disguise. I can say, if you have a longer term investment horizon, most probably you make money if you buy at this point. If the outlook for equity returns in 2011 is 20%, stocks you buy today may give you 30%.

      Comment by Benson Lim | February 11, 2011 | Reply

    • There is always fear in the market. Even during the strongest bullruns there are some people who are afraid and sell. Does this mean we just keep buying when we money?

      Comment by Garver | February 13, 2011 | Reply

  17. I’m just so happy today AEV went up to 37. I gained 7% was able to raise cash to average down on most of my favorites. I’m still -10% in ALI but I’m willing to wait since experts are saying it will go up to 19 sometime this year. If you have losses I think it’s best to average down at this time if you can. I just can’t wait till the market recovers. It always does!

    Comment by weena | February 11, 2011 | Reply

  18. it’s tough. almost all my money in stocks now,and there will be a point i run out of money and market still goes down. what best way to handle running out of money?

    Comment by Johnny | February 11, 2011 | Reply

    • sir gus always make it a point to have free cash in his portfolio and i try to keep in mine as well…

      i used to be all-in but tried my best not to do it from the moment i missed some great opportunities due to unavailability of cash in my account.

      when i ran out of money, i sold some of the least preferred among my positions (it can be the least performing, less potential, etc)

      Comment by ricky | February 11, 2011 | Reply

      • Ricky,
        I am very happy to know this. This is the kind of maturity that is needed to become a good investor. Keep it up.

        Comment by Gus Cosio | February 13, 2011

      • sir gus, that’s one of the things i learned from reading your blog posts.

        i know i’d learn things from experienced people like you that’s why i make it a point to read each post, including the comments section.

        thank you so much for sharing your thoughts and giving us insights.

        keep up the good work po.

        Thanks and God Bless!

        Comment by ricky | February 13, 2011

    • I also had some “down” cash just in case these events happen. But I was already able to deplete this because I already used them when I thought the market was already down. Apparently, it still slid. Right now, im already all-in. My investment horizon is for around 10 years so ill just keep on adding when I have free cash.

      Comment by Bam | February 11, 2011 | Reply

    • Maybe you should lighten up on your positions… do you have cash that’s worth 6 months to 1 year’s worth of salary? If not, you shouldn’t put everything in the market.

      Money invested in the market should not be to pay bills/short term expenses. Otherwise, you will make the worst decision at worst possible time.

      When you find yourself “hoping” that the market will go up and erase your losses, you should get out. Unfortunately and with respect, there’s no room for hoping/praying/wishing in the stock market.

      Comment by ML | February 12, 2011 | Reply

    • Johnny,

      my iota of advice is to not resort having to borrow money from other people to add to a losing portfolio. since you are running out of cash, stop adding more for the mean time and wait out until the market finishes correcting. take this time as a good opportunity to learn more about your trading/investment style, about fundamental/technical analysis, and of course to make more cash you could use in case emergency happens. the best lesson learned is during the time you seem to be losing all that you have. lastly, do not commit suicide. adios!

      Comment by chris munti | February 12, 2011 | Reply

  19. it’s Friday but the INDEX ended in green… hmmm… is this a sign? sign na matatapos na bleeding ng portfolio ko. lol

    it is still a week more before i can have my salary, want to buy stocks from power sector as per sir Gus’ advice before…

    enjoy your weekend guys!

    Comment by RmR | February 11, 2011 | Reply

    • Sir RMR,

      I think the main reason why the index ended green is because of AEV. Most of the followed stocks are actually bleeding.

      Comment by KennyV | February 11, 2011 | Reply

  20. stocks to buy NEXT Week:

    1. DGTL
    2. PAX
    3. MBT
    4. an energy stock (will reveal on wednesday)

    No. 4 is still going down, but 1 to 3 should be going up!

    Mubarak has already resigned. Intraday of index has formed cup and handle. expect a nice greeny green green index the coming week.

    (PSEi will still fall down to 3600 levels, so watch out)

    Comment by Jacky | February 12, 2011 | Reply

    • May I ask why you think the stocks you listed will move up?

      Comment by ML | February 12, 2011 | Reply

  21. Hi Sir Gus,
    Sir I am holding MPI, EDC, AGI and FLI but currently I am down by almost 10%. I am hoping to add some fund to able to average down. Sir any thoughts on my portfolio. Thank you so much.

    Comment by jaayem | February 12, 2011 | Reply

  22. now that Egypt President Mubarak resigned,

    will this help stop the bleeding of our portfolio starting Monday?

    Comment by RmR | February 12, 2011 | Reply

    • We’ll see… Let’s observe the market how it goes tomorrow… There are still other factors that’ve affected our local stock market. I think China’s issue affected us most…

      Bargain hunting/bottom fishing would probably do…

      Comment by Ogie | February 12, 2011 | Reply

  23. @Munti,Chris m and everybody.. Greed and Fear is the only force that can influence the Market not the chaos theory.butterfly effect , random walk or the efficient market hypothesis…But Greed and Fear can be created if you can control them you can control the Market….

    Comment by Joseph Goebbels | February 12, 2011 | Reply

    • yes indeed, greed and fear…
      but i don’t think anyone can control the market…i believe it’s the collection of events, performances of economies and companies, actions and reactions of investors that move a market….

      Comment by ricky | February 13, 2011 | Reply

    • joseph,

      everybody knows about greed and fear; but few people really understand. so your “control” is easy to say but difficult to practice unless you apply yoga in your trading. do you? 🙂

      Comment by chris munti | February 13, 2011 | Reply

  24. we must adhere the words of graham and rethink what are motives…….are we an investor or speculator?

    Comment by gerald | February 13, 2011 | Reply

    • Me an investor more than trader. I base my decision on fundamentals like book value vs market value and the P:E of the stock…

      Comment by Benson Lim AXA Life | February 13, 2011 | Reply

  25. Egypt’s political situation has stabilize now, let’s be excited on how will the local bourse performs tomorrow. Good luck everybody….

    Comment by Benson Lim | February 13, 2011 | Reply

    • excited na for this week…

      Comment by RmR | February 13, 2011 | Reply

  26. Chris Munti,

    Instead of posting contrarian statements, why don’t you share something helpful for the readers of this blog? You’re posting as if everyone here is wrong, even the blog owner himself. Are you here to prove na ikaw ang pinakamagaling? O sya, ikaw na.

    Your statements aren’t even helpful, they’re discouraging.

    Comment by Neo | February 13, 2011 | Reply

    • what do you think is useful? contrary comments shed light on the other side… just because im not patting your back im not saying anything important anymore. and you can always click on my link if you are truly convinced im not saying anything important. 🙂

      Comment by chris munti | February 13, 2011 | Reply

      • “the rich that amassed wealth in time only consist 1% of the population… again the odds are against you. the other 99% die trying :>”

        This statement of yours aren’t useful at all. This is nonsense, pessimistic, and very discouraging.

        It is better to tell everyone “you won’t get rich if you’re not doing anything.”

        See the difference?

        Well, I’m not expecting you to agree with me because you always think you are better than everyone.

        I’m beginning to think you’re just advertising your site and getting some publicity and attention.

        Comment by Neo | February 13, 2011

  27. Clicked on your link. Still convinced you’re not saying anything important.

    Comment by Garver | February 13, 2011 | Reply

    • His site doesn’t impart any wisdom for the readers. Puro tsupita.

      Comment by Neo | February 13, 2011 | Reply

      • Garver, Neo,

        I agree. The truth hurts. Its up to you whether to deem my comments unimportant or not but I believe I am unbiased about them. My opinion may seem “discouraging” to you but experience tells me that if we have too much “hope” we blind ourselves of the subtle signs the market is telling us. If you had started investing in 2007, when people neglected all the signs because they hope that the bull run would strongly continue, but instead see your portfolio plummet by more than 30% until 2009, that is truly “discouraging”.

        “Minsan kung puro puri hinahanap mo, baka mawawalan ka ng puri” -Warrin Buffet

        Comment by chris munti | February 13, 2011

      • You take quotes from Buffett, but you don’t trade like him.

        What you are imparting is a tsupita mindset.

        Comment by Neo | February 14, 2011

      • Furthermore, Mr. Cosio doesn’t tell everyone that they’re wrong, he doesn’t impose himself to his readers, which is the opposite of what you are doing.

        Giving the credit to Mr. Cosio, a reader could easily have doubled or even tripled his money just by buying and holding, and by listening to his sound advice. Looking at your portfolio, it didn’t even earn more 35% in a bull market.

        Comment by Neo | February 14, 2011

      • Neo,

        you are right. but if you think criticizing you is equivalent to a critique of Mr. Cosio, you are only flattering yourself. 🙂

        by the way, there is an ocean of difference between 35% of 100M and 300% of 100k. returns is another illusion people like you give so much importance about. cheer up, dude. if you truly are a value investor, you should not be worried about a red portfolio today.

        Comment by chris munti | February 14, 2011

      • Well, it would be very nice if 100M had a 300% return, haha!

        Comment by Neo | February 14, 2011

      • of course! it’s even nicer if it were your portfolio, isn’t it?
        ’nuff said. get a life, dude. i think you’re better off vandalizing cliffhanger’s walls. 🙂

        Comment by chris munti | February 14, 2011

      • Gaining 35% of 100M is actually quite good already. The bigger the amount of your investment, the harder it is to grow since having so much money invested could rock the market already when you buy and sell. Some PSE stocks only take a few millions, say 10M, to depreciate their price from 1-15% in a single day. It takes alot of strategy if you have 100M to invest here in the PSE. So kudos to Chris munti.

        Comment by Seth | February 14, 2011

      • Some mutual funds had more than 50% return, and they are handling billions of pesos in funds.

        Kudos to you two. 😉

        Comment by Randy | February 14, 2011

      • Randy,
        Our equity laced funds returned over 50% in 2010. We manage over Php 3 billion.

        Comment by Gus Cosio | February 14, 2011

      • Wow, 3B earned over 50%. Now that’s “an ocean of difference”. What do you think Mr. Munti? :>

        Comment by Randy | February 14, 2011

      • Randy,

        50% return for a 3B is great! but I don’t have a problem about it. you should redirect that question to Neo since he/she seems to have a hard time figuring out how puny his experience is in comparison to his arrogance. *peace* 😀

        Comment by chris munti | February 15, 2011

  28. Hi Guys,

    With due respect to everyone, can your postings have always the semblance of decency as some postings are dilluting the healthy exchange of ideas in our investing and trading of stocks. It’s understandable that most of us if not all are hurting with the heavy down trend of the market but we have chosen to be investors and as such goes with it our gains and losses. And our losses should not dictate our emotions to the point of being rough and indecent in our postings here.

    Comment by Ralph | February 13, 2011 | Reply

  29. LOL! kaya gustong gusto ko rito sa blog ni Sir Gus. marami ka ng matututunan, maaaliw ka pa…

    Comment by RmR | February 13, 2011 | Reply


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