Random Thoughts

1) I thought Bernanke and Yellen were very clear that tapering will not start until unemployment is firmly 6.5% or better. Latest report is best at 7%. 0.5% is still a big gap, which would probably need a 3 months more time to close. But the funds are withdrawing in droves now. Are they preparing ahead? Are they foreseeing that this will be closed sooner than 3 months? Or are they betting that the FED will break their word and taper even before reaching that target? (The Fed of course is also being looked at now by Congress for having accumulated a very fat balance sheet from printing and printing money).

2) Im sure many countrymen are shell-shocked and frustrated with this tapering news that has been hanging on our heads for 6 months now. Those that are already nursing negative 20% paper loss (or more) sure are saying to just get over with it already.

3) If not for the profits that I took from MEG, MBT, et al that I took during the small upturns, and the cash position that Ive maintained, I'll be shell-shocked myself.

Profits bagged in August-October provided some luxury and mindset to cut-loss freely on Haiyan-hit EDC and FGEN. And in our small-sized PSE, it's even more important (than vastly-sized NYSE or Hang Seng markets, for example) to maintain a 30% cash position always. Before entering a new position, you must be thinking at the same time the cash outs that must be done in another. It also helps to keep only a small number of stocks in your portfolio in uneven times. More than 10 is already difficult especially if the overall sentiment is strong bearish, and the impending right move is to cut-loss.

4) My own bet is that tapering will not start until February, but what I think is moot. What the bigger fund managers think are what's important. We should ride the wave of their thoughts.

5) My small moves the past two weeks was partially influenced in disbelief that we're back to square one, like it's January 2012 in PSEi like there were no good news, no stellar gdp reports, no upgrades from Moody's et al, that happened throughout the year. I think we must get at least +10% from Jan 1 to Dec 31, 2013. We must end above 6100 by Dec 29?

PSEi surged up, but...

...foreign investors were still net sellers at Php2.92 billion.

I was surprised to read this, and that statement says a lot. The foreign funds are firm on their disposition regarding our stock market vis-a-vis the potentia QE taperingl. Are local fund managers just window dressing at this time? Or we can now stand on our two feet without relying on the bullish thrust from foreigners? We all know that when foreigners want to buy up, they really buy up with conviction. If they want to sell, well...

I have some green in AGI, and almost-green in GTCAP from stubborn averaging down. I would probably sell partial tomorrow. I hope to be able to see some other greens also before the FED's press conference Thursday morning. 

AGI is tempting, MBT is tempting, but...

Many favorites are oversold (some severely oversold), but better stay out if you dont have the time. If youre itching for a play, then play with these fundamentally-solid stocks. Only, you must be vigilant and cut immediately if you see a -3% instead of the hoped for bounce.

The stronger force is the FED meeting which will happen late next week. Watch out for the press conference Friday morning (our time). Although Yellen and Bernanke played it very clear that they wont taper the QE until the unemployment rate in the US reaches below 6.5% (theyre still on 7 today), the speculators and fund managers still appear to want to exit early and fast. Then the technical followers also began following in droves as moving averages and supports are breached. Locals are included in this herd selling and there are still many of them still poised to sell on rallies.

And so, the safest route is still to be in the sidelines.

Grabacious... but tempting

I didnt have the time the whole day to look at the market, so I was surprised to see a -2% after opening my online trading account.

Funds are exiting because of the upcoming FED meeting and the potential taper that has been haunting us since mid-year. Amazing how we're back again to where we started at the beginning of the year. It seems like there was no good news in terms of GDP throughout 2013. I find this hard to swallow, but there you go.

As probably most of you, Im also stuck with my pets at negative 8 to 12% already with averaging down imputed. It's good that I maintained 30% cash. Im now tempted to participate in the

AGIat 10 P/E I think is a bargain. Other companies like ROCK at 6 P/E I think will be bought by insiders asap. I think I'll already get in in some stocks. MBT at 7 P/E is a candidate for average down. I hope I find some time to participate in the market tomorrow.

Good luck on your trades. All will depend on your personal tolerance.

Pick of the Week for WK50: Cash... stay on the sidelines

The foreigners are either absent or selling in small tranches. Because of the low volume of trades, our index a being jittered to lower. It's not worth to gamble in especially if you have a day job.

Ive been getting in on some favorite stocks but only on minimum tranches. And these stocks are dividend-paying for protection.

But in general, stay in cash, stay in the sidelines.

Pick of the week for Wk 49: TEL

If you've already sold and took the gains from MBT, the safest thing to do is stay with cash and wait for an uptrend indicator (check moving averages) before getting in.

The next safest move is to wait for good buy prices on MEG and other 'reliable' favorites. (Remember: they are "reliable" because the company is fundamentally sound).

But if you are really eager to enter some position, buy TEL.

It's current forward P/E is just 15, significantly below 18 P/E of PSE index. The past 12 months, it was unusual for TEL to have market valuation below index. Also, its only competitor GLO is already trading at 21.5 P/E. Either TEL will catch up in short term or it will be the among the first stock to jump up the moment we are on a general uptrend. (Probability-wise, an uptrend must happen within the year or there is really another debilitating bad news for our country).

On top of these positive factors, as mentioned before, TEL is paying out 4-6% dividend annually. Above any time deposit rate from any bank. This offers margin of safety, even if your disposition is a trader rather than an investor.

If you're going to get in this week...

... it will be for momentum moves and/or the hope of the end-year and Jan-Mar upsurge will start.

If indeed you'll buy in, choose low P/E solid companies and non-lightly-traded companies. Select those that trade preferably at 50 M average a day.

Choose also those that have no negative news hanging on their heads--NOT the companies supposed to be affected by Yolanda. Also not those have current or impending debt issues (some of our companies might be issuing too much bonds too fast this year without any immediate use for the cash that they will raise). Also not those having negative development on their businesses

Check around. There are even blue chips that are trading below 10 P/E, like last week's pick MBT. If MEG flirts back to 3.0ish, it's P/E will also kiss 10, so that will be a strong buy as well.

Beloved TA is still being battered. Ive cut some position here last week to raise cash and will buy strong if it reaches 1.35 (again, it will be below 10 P/E at this price point).

I played VLL and BHI to profit last week, but I did that only after being sure that I will have time to follow the market.

If you do not have the time, the safer option is still to wait for more uptrend. Wait for index to cross all the significant moving averages.