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Miko's Blog for August 2011

Aug 31, 2011 (11:30 p.m.)

I still have a hang-over from all the booze that I drank over the weekend. I spent two days in Pico de Loro in Batangas. It was a great place with fantastic amenities. The beach wasn't Boracay but it was pretty good for Batangas. The service was good. The food was great. And, if you have kids, the kiddie station was super. You can leave your kids there the whole day while you and your spouse can swim in the pool, play tennis, or, do something in the hotel room (hehe). A night life is probably the only thing that was lacking but the bar in the hotel is open for 24 hours. The vacation came with a price though but it was worth it.

By the way, after being in a "floating status" for the last six months, my new home is now Nieves Sanchez Securities. :-)

Aug 27, 2011 (10:30 p.m.)

I'll be out of town for the next three days. The next update of Tsupitero.com will be on Monday, Sept 5, 2011. The next update of my blog will be on Wednesday, Aug 31, 2011. Happy Holidays Tsupiteros!

Aug 25, 2011 (9:00 p.m.)

I bet everyone was just staring into space and was in a state of shock at the end of trading today. With Gold plunging by another $80.00 last night, it finally gave people a reason to take profits from the mining issues. The thing is, when the leader falls (LC), everything drops along with it and that includes all the basura stocks. The market was only down by 23 points but if you were into the mining and/or basura sector, you probably felt like the whole market dropped by 10%. I'm sorry, whoever said that Gold was a safe haven?

PWR finally resumed trading today and rallied very strongly, however, are those buyers today really sure that they are not paying a steep price by buying at 3.00? Take note, RCBC Sec was a big buyer again today. Do you remember what happens when he buys a lot?

I'm getting dizzy na with BHI. I'll be damned if I see that one trade at 0.44 again by tomorrow.

With long weekend coming up and Bernanke opening his mouth tomorrow, I would salute anyone who would be willing to put a big position in the market tomorrow.

The PSE announced a recomposition of the index on Sept 12.

OUT - LC, FLI, ABS, FPH, SECB

IN - BEL, CEB, SMDC, SCC, SMC

LC will be taken out and will be replaced by BEL or CEB?! There is obviously something very wrong with how the PSE selects those stocks that will be included in the index.

Aug 25, 2011 (12:30 a.m.)

Dow was up by 322 points last night but why was the whole Asian region down? That's because no one wants to bid up prices for fear of getting caught buying at the highs. As of this writing, Dow is now down by 40 points after being up by as much as 115 points earlier. Did the Dow peak tonight? Gold, on the other hand, is now down by another $40.00. A lot are now probably thinking that the rally in Gold is over. But what if the Dow plunges below its support at around 10750 in the next few days? Isn't that a bear flag that I'm seeing in the Dow?

I see shooting stars on all JAP stocks today. Could that be it for JAP stocks, or, is this simply a correction within their overall uptrend?

I got very surprised with BHI today. I could have sworn that the stock peaked already yesterday, obviously, it did not.

PWR finally disclosed more information about its quasi-reorg today and will resume trading tomorrow. However, did they really clarify what the real value of PWR should be at this point? I still see people who are looking at 5.00 and some who are looking at one decimal point lower.

Can LC and MA continue to defy gravity by tomorrow, in spite of the big plunge in Gold? That depends on what Lolo is thinking. If you were Lolo, what would you do?

Aug 24, 2011 (1:00 a.m.)

The Dow is rallying strongly at the moment (up by 221 points as of this writing) and Gold is currently down by almost $50.00 right now. Still, the big question remains, did the Dow bottom out already and has Gold finally peaked, or, is the Dow merely doing another dead-cat bounce and this would be another opportunity to get in in Gold? If we follow the trend, one should still be bearish on the Dow and bullish on Gold. The thing is, both markets are at extremities right now and may very well be at a peak or at a bottom. The only problem is, if you make the wrong call and the Dow drops back down and Gold climbs back up, you may not only lose money by buying the laggard blues or second-line issues, you might also miss the chance to buy into the mining sector. Admittedly, I'm as dumbfounded as everybody else.

Aug 18, 2011 (9:00 p.m.)

I have to admit, I did not foresee the market to do what it did this morning. Either something changed for the better or today was big bad bull-trap. Doesn't the market know that the Dow is going to 10,000? From the way I see it, the Dow already did its first move down a few weeks ago. It made a rally upwards in the last few days. It's now about to begin its next phase down (futures down 225 points as of this writing). Foreign funds seems to be convinced though as they were net buyers today for the first time in so many days. If you'll notice, it is only our market and Indonesia that defied gravity in the whole region today. Obviously, these two markets are the preferred markets right now but can they defy gravity if the whole world is pushing downwards?

Another thing that really surprised me today was BHI. I was only expecting a move going towards 0.25. Not in my wildest dreams did I see 0.30. I bet a lot of people were thinking the same and shorted, which is why it was very strong today.

A lot of confusion going on in PWR's disclosure yesterday regarding its capital restructuring. The PSE must really make sure that PWR explains in detail the changes in the Company before it resumes trading so that no one gets confused on whether this should go to 5.00 or 0.50 cents.

Aug 17, 2011 (9:30 p.m.)

The market is now getting smaller and smaller to Tsupiteros like me. I was thinking that the mining sector might be immune to drops in the market because Gold is still very strong but PX, LC and MA were all down today despite Gold climbing strongly last night. I was thinking that some select 3rd line issues might be immune but today, I felt like the sector, if you can call it a sector, lacked conviction. Some previous darlings that already dropped from its highs doesn't seem like is rebounding anymore and those that are currently strong tend to peak in just one or two days. I can't go to the big caps or second-liners because they all seem like the "living dead". I guess no where else to go but to stay in cash for now.

I thought WPI would finally do it today but I guess the market got quite scared when they saw a new foreign entity selling (CLSA). Wow! Those must be "ipits" from four years ago.

PWR will be suspended tomorrow as the Company announces some equity restructuring in light of Century Property's entry into the company. While the news may seem bullish, the big question now is, will there be dilution on existing shareholders? Remember, the company has a negative P14 billion in its retained earnings and P9 billion in liabilities. There's a reason why the previous shareholders of PWR sold the Company to Century Properties by a mere P0.04 centavos per share. Still, it's all a perceptions game and the next move of PWR will depend if the market will look at the dilution or will look forward and will look at it becoming Century Properties.

I overheard Lolo this morning saying, "My turn!" (hehe, j/k)

Aug 16, 2011 (11:00 p.m.)

There was a mini-panic in the market today as LC collapsed from its peak at 1.57. The stock dragged the whole third line sector and some mining issues as well. I've been targeting 1.55 in my newsletter for the last few days now so it would seem that I was dead on. But did LC really peak already?

PWR seems to have peaked at 2.89 today as well. RCBC Securities is quite weird. When prices are at the lows, he sells a lot, but when prices are the highs, he reverses and buys a lot. Is he doing that on purpose or is he simply a contrarian indicator?

News came out this afternoon that NI issued an additional 100 million shares to JAP at 2.00. No comment. (I'll do my best and try to keep my mouth shut)

New high for Gold coming up?

Aug 15, 2011 (8:00 p.m.)

EDC declares a P2.3 billion net loss in the first semester. Could this be a sign of things to come?

As I stated the other day, the only stocks that can or may survive in this current environment are the speculative issues, which do not care about the concerns of the world. Of course, those stocks that have jockeys may be the best bets. JAP stocks are an obvious bet. Lolo stocks are, of course, still in my radar but I find them too high already for my taste. Those obscure and exotic stocks like PWR, BSC, BHI, EVER, etc. may be able to survive if the insiders don't sell, of course. My best bets though are the Gatchalian stocks as they have been dormant for a very long time now (4 years). The only condition left for them to really take off is "T+3". 

Aug 13, 2011 (8:00 a.m.)

Obviously, equities have indeed found a bottom, however, this may just be a short-term rally as the bigger picture is indeed in a downtrend already. For those who are currently long, you should take this rally as an opportunity to get out, in my opinion. Markets are quite deceiving though. This rally will peak when everybody becomes a bit bullish again (maybe not yet at this time).

Gold, on the other hand, has now dropped by $60.00 from its peak at 1800. Could it be that Gold has already formed a multi-year peak at 1800? Or, maybe just a short-term peak? If one is bearish on equities, then, one should be bullish on Gold. But, Gold is on a parabola and everybody is so bullish with it already. So bearish both on equities and Gold? I really couldn't figure it out.

So where's a safe investment now? You can either look to short-sell the US markets on the rally or just buy a bear fund or ETF; You can look for stocks that seems to be jockeyed and does not care about the worries of the world; or, You can just stay in cash, wait for everything to collapse in the next few months (or couple of years), and, plan ahead in investing in the greatest buying opportunity of a lifetime. :-)

Aug 10, 2011 (5:00 p.m.)

Finally! Markets have found a bottom.....or have they?

The PSE's volatility in the last couple of days have suddenly multiplied by six times. From an average volatility of just half a percent per day, the PSE's volatility has suddenly jumped by 3% per day. What does this mean? Your portfolio can increase or decrease by 3% per day, depending on the mood of the markets. It's ok if the general trend is up. The problem now is, the general trend is still down, thus, there is more chances that you will lose 3% than making 3% the following day.

What the market made in the last one and a half months, it destroyed in the last six days. Don't be sad if you already made 15% in your portfolio in the last one a half months, only to lose it all in the last six days. I bet most people are in the same boat as you. When markets crash from a new all-time high, that's when everybody gets hit. That's because people have become so accustomed to buying the dips.

Isn't this funny? When you lose 5% in one day while the whole market is going up, you would feel very depressed about it. But if you lose 10% in one day because the whole market crashed, you don't feel as bad.

One thing that I just couldn't decipher up to now is Gold. Gold is now moving in a parabola, which means that it may be nearing the end of its move. However, if world markets are going to continue to come crashing down, then, Gold will continue to trend up? But everyone's already looking at one direction in Gold. Could it be that equities are now bullish and Gold is now bearish? But I can't see equities being bullish anymore after what it did in the last few days. Something's not right in my assumptions.  Hmmm...

Aug 9, 2011 (6:30 a.m.)

Just when we thought nothing can get worse than this, the S&P downgrades the US debt ratings. The news have caused equities to dive once again with Dow dropping by 634 points last night. Markets are now reaching extremely oversold conditions though (not yet for the PSEi). I wouldn't be surprised if, during the week, the Dow snaps back up and rallies by 1000 points in one day. The fear in the markets are now just at an extreme. The $60.00 spike in Gold is an evidence of that. I wouldn't be a buyer in Gold at this point and I would definitely not be a short-seller of the Dow right now.

The God of Stocks (Zeus) continued to rocket higher this morning and seems totally unmindful of what is happening with the whole world. Actually, it seems like it is the Black Samurai that has become very bullish on the stock. However, Lolo seems to have other plans in mind as he seemed to be the one selling. Value turnover today for ZHI was a whopping P800 million. If I see value turnover increase to P800 million in a stock like Ayala Corp., I will be very bullish on that stock. But when I see value turnover increase to P800 million in a stock like ZHI, I start getting worried.

Another stock that seems to be bucking the trend of the market is PWR. I don't know if this is because the market knows that SB Equities is almost done with his selling or it's because Paris Hilton is coming to town on Saturday. Century Properties, the company that bought PWR, has invited Ms. Hilton to be its designer in one of its projects. Up to today, everyone's still guessing what's to become of PWR.

Aug 8, 12:00 (12:00 a.m.)

The table above shows the performances of some select equity indices around the world and their performances year to date as well as what they did in the last 12 days. As you can see, our very own PSEi is the top performer dropping by only 1.54% in the last 12 days. Notice that even the mighty Indonesia has now fared worse than us. The question now is, is the strength justified? Personally, I believe we have a lot of "catching up" to do.

 Above is a picture of me and my friend, the God "Zeus". :-)

Above is a picture of the participants of my recently concluded seminar. Congratulations to all that attended! You are now one step closer to finding your holy grail!

Aug 5, 2011 (12:30 a.m.)

I don't know if you've noticed but ZHI and BSC seems to be climbing in alternating fashion. If this is true, then, ZHI is now a sell and BSC is now a buy. The only problem now is, a lot of people may have already caught up with the trend that it may no longer happen.

With Gold still glittering, Lolo is continuing to be alive and kicking.

Unbelievable rocket ship moves from JAP's ORE and AGP. He sure seems to be quite "lenient" nowadays.

Gatchalian appears to have begun its "second round" today. Will Gatchalian stocks, led by WPI, be the next big thing? Take note, Gatchalian hasn't moved for the last four years. I'm betting that he is now dying to make a comeback.

As of this writing, Dow is currently down 300 points. The big caps and second-line issues will most certainly take a beating if the Dow closes this way. The question is, can the basuras continue to remain unscathed and go their own separate ways?

Aug 3, 2011 (11:00 p.m.)

I stand corrected, I'm scared of ghosts. The big question now is, is 4563 just a short-term peak or was that already a medium-term peak?

Why did the US Markets accelerate to the downside last night? It's because a lot of people are using the 200-day moving average as their "line in the sand" and those lines got broken last night. The big question now for the Dow is, is the 2-year bull over? My last line of defense is the 11700 level.

Whereas the whole world is collapsing, the "blue-chip stocks" are continuing to climb and are oblivious to the world. Thank God, we still have some playgounds left. As for the real blue chips, all of them are now trash!

JAP is now certainly on the move. I don't know but, somehow, I have a weird feeling that the "old JAP" is back. I surely would love to take his stocks out of my black list. :-)

Aug 2, 2011 (9:00 p.m.)

Who says they're afraid of ghosts? Although the ghost month already begun last Sunday, the market registered five ceilings today. Wow!!! Any basura stock that hasn't moved yet up to now can now be considered even lower than trash (haha).

Gatchi - The man of the hour as two of five ceilings were his and WPI has already tripled from its lows at its highs today.

I see a lot of people worshipping the God of Stocks (Zeus). :-)

With MA now trading at a new 52-week high and LC still going at it, some people are thinking that Lolo has already found the secret to longevity.

A new classification based on the market's new order:

     Blue chips - LC, MA, PWR, ZHI, ORE, BHI and BSC.

     Second-line stocks - EVER, WPI, UNI, VITA, MARC, LIHC, etc.

     Basura stocks - CPM, T, TBGI, ANI, SLI and any other basura stock that hasn't rallied yet up to now. (Take note, I would be very, very concerned of the market if these stocks begin to rally already, hehe)

Despite the inevitable agreement on the US Debt Ceiling, Wall Street failed to rally as some economic reports came out and were worse than expected. Last night was the 7th consecutive drop in a row for the Dow. Could it go for an 8th tonight? Will 12,000 break?