for December 2012
31, 2012 (6:30 p.m.)
My lame excuses for underperforming this year:
1. The chart below is my proprietary Tsupitero index.
Notice that, after the big surge in the early part of the year, the
index just moved flat for the rest of the year. The vertical line in the
middle of the chart marks the beginning of 2012. The chart is actually a
two year chart starting from Jan 2011. Of course, a big reason why the
chart is flat is because mining dropped a lot and actually went into a
bear market. The drop in the mining stocks are being offset by the rally
in other sectors.
2. The volatility of the market for the most part
of the year was very low. The chart below shows the average true range
of the market on a daily basis for the whole year. Notice that except
for the months of February, May and the latter part of the year, the
indicator was barely moving at its lows. Notice also that the market was
trending upwards despite the indicator at a low level. So what if
volatility was low? Tsupiteros die when volatility dies. Whipsaws and
transaction costs will kill Tsupiteros. Those who just bought and held
3. Will you still buy when prices are already overbought
and are already trading at very high multiples? Will you buy a business
that will let you break-even in 20 years? Both from a technical and
fundamental point of view, the market is already very high. Still,
prices continue to climb and those who didn't join the party got left
out. I guess I'm one of those who opted not to drink. Below is the chart
of the PSEi index from the 2008 bottom.
4. Managing trades this year was very difficult for
Tsupiteros. It was very easy two or three years ago. You buy, place
tight stops and try to run it. If it doesn't work, you lose a little. If
it works, you make a lot. This year, to make money, you need to place
wide stops and wait for it to move. Placing tight stops will just kill
you from too much whipsaws. However, by placing a wide stop, you run the
risk of getting hit big time. Furthermore, running your winners isn't
exactly such an easy task to do. If you don't take the small profits,
75% of the time, you will regret for not having taken it. So, profits
are actually small, yet, the market is forcing you to place a wide stop.
Not exactly the recipe for success.
5. I didn't know how to follow the trend. Being a
natural contrarian, I opted to buy those issues that have yet to move
and are possibly forming a bottom. The problem is, those that went up
are the high ones and those that are seemingly bottoming-out continued
to stay low. In hindsight, being a contrarian was actually buying those
high flyers that continued to climb higher like most of the banking
I have no idea how to play the market in 2013. If the
market continues to climb, will you still be willing to buy at such
lofty valuations? But, maybe that's the more contrarian thing to do. I
assure you though, the higher that this market climbs, the more choppier
it will be. If, on the other hand, the market begins to drop, 2013 might
finally mark the end of this 4 year bull market, thus, it might also be
dangerous to buy as you might be buying a falling knife. There should be
an opportunity in the mining sector somewhere but trying to time it is
very difficult, it not impossible. Gaming will always be in play, I
suppose, but you need to time it correctly, otherwise, a 20 to 30%
drawdown is not impossible. I'm also looking at the Oil sector as well
as the Power sector, more specifically the small cap power sector. As
for the blues, the only group left that totally did not participate in
this bull market were the RSA stocks. Maybe it would be their turn in
2013. But, again, that might already be what the majority is thinking.
One thing that I learned throughout the years is, when I buy the low
ones when the market is high, they tend to drop as well once the high
ones starts to drop. Thus, buying something like SMC right now, we be no
different from buying SM, which is currently trading at 25x P/E. Some
people view the P38 billion net foreign buying in our market this year
as bullish as it means that foreign funds are confident of our economy.
The thing is, it could also mean that P38 billion of foreign funds could
suddenly reverse and sell out of our market.
Happy New Year Tsupiteros and Good luck in 2013!
27, 2012 (9:30 p.m.)
Finally! We are down to the last trading day of the year
tomorrow. The big question in everybody's minds now is, will there be
window-dressing? I'm sure there will be on some select issues but
finding them might be a bit of a challenge. Tsupiteros might want to
skip the whole day and just open your computer by 3:19 p.m. tomorrow.
Aside from the usual suspects, one stock that I have
been noticing in the last couple of days that is currently being
"dressed-up" is CHIPS. Who knows? 30 by tomorrow? Too late to get in
now, if you ask me.
Some traders in our firm still tried to day-trade this
market today. So, I went to the drug store this afternoon and asked if
they had a pill to cure over-trading. They said, the drug got sold out
26, 2012 (10:30 p.m.)
Value turnover today was just a mere P3.5 billion.
Obviously, a lot are on vacation and, most, are probably just waiting
for the fireworks on Friday, which is the last trading day of the year.
Will there be window-dressing as what most people expect? Every year, I
keep on selling too early during December because I figure, if everybody
expects the window-dressing to occur, then, maybe, it won't occur
anymore. Every year, I am wrong and window-dressing still almost always
occurs. With the foreign funds long by P35 billion worth in our market
this year, I'm almost certain they would try to prop up their positions
on Friday. I expect the locals though to take this opportunity to sell.
I still can't understand why CMT is as strong as it is
right now. The fact that it no longer was able to sustain its ceiling
price may indicate that the dividends or whatever it is that is propping
up the stock, is already being discounted by the market.
Only two backdoor-listing plays still alive in this
market - MMI and EVER. Let's see which one is the real thing.
Whoever was still trying to day-trade this market today
are certified addicts in trading already. Let me know if I need to refer
you to a doctor. :-)
25, 2012 (2:30 p.m.)
Merry Christmas Tsupiteros!
While the world continued to go around and the Mayans
were proved to be wrong, Dec 21 may indeed have started a financial
catastrophe with the US House of Representatives unable to find enough
support to avert a fiscal cliff by the end of the year. The fiscal cliff
is actually something that needs to be done in order to get the US
economy back in shape, however, its short-term repercussions might spell
doom to this four year worldwide bull market.
Congratulations to all those who were able to buy CMT. I
can't quite understand though why it went to the ceiling. The cash
dividend is worth a 25% increase in the price while the free treasury
shares are worth an additional 17% increase in the price. Is my
understanding merely incorrect?
AB is now surging quite strongly as some shares held by
one of its major shareholders were sold to comply with the minimum
public float requirement. Notice though what happened to VVT.
SMPH last Friday is ALI last Thursday.
Sorry, I'm a bit lazy to update the website. I'll try
and update the entire website by Jan 2, 2013. My blog will
continue to get updated though.
20, 2012 (11:00 p.m.)
Window dressing season actually begun yesterday. With
four more trading days to go 'til the last day of the year, who knows
where AC and ALI will be by the close of Dec 28?!
There are now three current plays in the market:
window-dressing, which means buying the big caps; backdoor-listings;
and, those issues which are able to remedy their lack of public float.
Those stocks that dropped a lot because the market expected them not to
comply but were able to do so at the last minute, should give very good
returns. These companies have four days to comply.
VVT went to the ceiling today because they were able to
comply. Notice the huge volume and foreign buying in AB today. They too
were able to comply. Funny that these companies really waited for the
last hour before complying. Maybe they thought the PSE wasn't serious.
MMI, on the other hand, is rising on backdoor-listing
speculations. I guess people thought ATR was an insider but, when he
sold most of what he bought, the market figured that he was merely a
speculator as well.
It's the last day before the end of the world. Be sure
you are able to ride at least one ceiling play before you die. :-)
18, 2012 (11:15 p.m.)
Obviously, the market already peaked at 5866. The
question is, was that just a short-term peak or could that possibly have
been the end of the 4 year bull market? Another question that everybody
is asking is, will there still be window-dressing on Dec 28?
TSI, is this just a short-term pullback before another
run, or, is the play over? Who the hell is RS Lim? I don't think I ever
saw him buying.
RPL peaked today at 11.88?
EVER, another backdoor-listing in the works perhaps? Our
firm, Nieves Securities, has been the top buyer of this stock for the
last few weeks now. Let's see if they really know something we don't.
Trust me, out of 10 issues that flies due to rumors of a
backdoor-listing, only 1 or 2 will end up to be true. Thus, finding the
real one like APM or MIH is like finding a needle in a haystack. As a
Tsupitero, you just have to keep on trying and trying. You will realize
that, at some point in time, rumors on backdoor-listings will all but
disappear. It's the season for backdoor-listing rumors for now. Insiders
as well as Tsupiteros better take advantage of this while it lasts.
PNB, while the talks with BDO or BPI may have bogged
down for now, the bank will still eventually be up for sale to the
highest bidder, just like most of El Kapitan's assets.
13, 2012 (11:30 p.m.)
The market has already gone up by 400 points just in the
last 4 weeks alone. Is it time to get scared? Exactly 9 more trading
days 'til the last day of the year. It's highly unlikely that we'll drop
big at this time of the year, however, I'm just no longer quite sure if
there is any upside left.
The market is ganging up on TSI and MMI now, which are
possible backdoor-listing candidates. I'm going to bet, most of these
so-called backdoor plays are just nothing but rumors being spread by
holders of the stock so that they could sell at a high price. To trade
these stocks successfully, you need to distinguish very, very quickly
whether the play is for real or is just trying to pull a fast one on
Mining has been trying to resurrect recently. I have to
say, I still don't trust any of them. The only one for me that may have
a chance of really trending up is AT.
They say, you have to be scared of the market if the
lousiest stocks in the market suddenly goes up. The rationale behind
this is that the market can no longer find anything cheap, thus, are
already buying the only ones left that still haven't gone up. Notice
that all the Jap stocks went up recently.
13, 2012 (1:00 a.m.)
There are two plays that you'd like to look for in this
market: those stocks that are doing parabolic spikes, which are normally
one of the big caps stocks; or, those stocks that may be backdoor
candidates, which are in the speculative issues. They are out there
somewhere but it's very difficult to find them especially if you are
always concerned that the market might already be at the top.
To all my subscribers in the newsletter and the
Metastock data, I'd like to apologize for not being able to send them
tonight. My computer crashed again and had it up and running just now. I
expect to normalize by tomorrow.
10, 2012 (10:30 p.m.)
Just a correction or did the loss of Manny finally
triggered the peak of this 4-year bull market?
Was MIH a sell on the news? Congratulations to Mr.
MIH appears to have triggered another round of basura
plays as people began speculating on the next backdoor play. The market
is now betting on either IMP, IS, PA or TSI.
I can understand a 4% drop on VITA or MRC but a 3% drop
on AEV looks overdone to me.
6, 2012 (10:30 p.m.)
Parabolic spike in the works for the best performing
market in Asia! Some big caps doing parabolic spikes today are BDO and
MEG. I wonder who's going to be next?
The monster has re-awaken in MIH but maybe time to sell
Did TEL finally bottom-out?
Someone just make a big bet in SEVN today.
I bet the whole market is watching Thing-on everyday and
is just making contra everything that he does.
6, 2012 (8:30 a.m.)
Not much to talk about today. Blues are still lingering
at the highs and mining as well as the 3rd line sector are still very
much trending down.
One stock that was quite extraordinary yesterday was EG.
Could this be the start of another giant rally or could Chucky just be
pulling our legs?
SMPH finally succumbed to profit-taking. I expect a
higher low for that one somewhere.
Thing-On finally made money in AGI but got killed in
everything else. Let's see what he does in PSE, the stock.
4, 2012 (11:30 p.m.)
What a move by SMPH! While some people are still looking
at APM. SMPH is now the new APM.
What's up with GERI? Credit Suisse seems to know
something we don't.
I'm still curiously watching this fellow from Thing-On.
Lost money in STI and again in APM but may have found a winner in AGI.
Let's see if Andrew Tan will let him pass.
Did LC and IP finally found a bottom?
PSEi is now at the 5700 level! Yehey!!! ....but how come
I'm not feeling it at all?
3, 2012 (11:30 p.m.)
Quite a number of breakouts today on some big caps.
Again, if you aren't in the big caps, you are not part of this bull
Try inverting the charts of most of the big caps and
you'll notice that they are almost identical to some charts in the
Actually, the bear isn't just in the mining sector, it
is in most of the 3rd line sector. Did you see IP today? What do IP and
EG have in common? They are both Gonzalez stocks and you don't want to
buy both of them.
Thing-On was still at it today. Unless that guy is a
dealer account, transaction costs will just eat him to death.