On MBT on April 2014

I have unloaded almost all of my MBT positions in my nimble port, where MBT used to occupy 40%. In my main port, I still have a substantial position (although I have unloaded some already yesterday). 

Im keeping the rest for until we near 90+? I think the 'healthy' foreign buying is still consistent.  

And, while we are on the subject of trendlines, all possible downward trend seems to have been breached. I expect chartists also believing in MBT again.

Only the upward channel remains:    

If MBT goes down, it could be relieving overbought conditions only. My only worry is we're May already by next week. The Sell-in-May crowd is real and almost tangible. Theyve hit in June-July last year, yes. It's probable that we do another steep dive (temporary or not) within the next 3 months. So it's always good to maintain a 30% cash position (minimum), for the buying down.

We're also waiting for the earnings announcement of MBT, which should be out today or Friday.

Pick of the week for Wk19 is cash (but enter already a small amount on some issues, when they hit good buy prices)

I was not able to open account the whole day, and was surprised to see 1+% in negative, I think it's not worth it to bet big this week, unless there's going to be a big push upwards by tomorrow or Wednesday. In fact, I was hoping for an Obama-induced positive, but it did not happen. So the general recommendation this week is to stay in cash. My nimble port is at 60% cash position, my main port at 30%. I have taken in profit that can serve as war chest if there is a need to cut loss, but I'll be on averaging down mode on most issues that I still hold (like TA) even if we tumble down back to 5900.

Also another point of view to consider...
although we are going negative, the volume is small. There is hope that our issues is just forming handles and being relieved of overall overbought conditions.

THUS

It is worthwhile already to enter in minimum tranches some issues when they hit a good buy price. On top of AGI, MEG, DNL, PGOLD, and issues that I mentioned recently that I want to go back to (with target prices indicated in a previous post), Im entering one tranche in SMPH at 15.5 (this might be hit tomorrow), and would average down to 15, 14,...

AP is also worthwhile to look at.

Trans-asia .... to hell and back

My two portfolios (one nimble for short to intermediate trading; and one main (for intermediate to long-term) )  have so far beaten the index by a wide margin. One of the big contributors is because we decided to stick it out with Trans-asia. 

It was like going to hell with Trans-asia late last year, when WEALTH and other funds decided to sell-down brutally the issue the moment that the news about a partner's abandonment of the drilling in Palawan came out. 

From a 52-wk high near 3.0, it tumbled down to 1.4, which means the stock shed more than 50% of its value. Even when it was hovering at a high of 2.4, just before the plummet down, still almost half of its value was lost. It was a hard splat, making those of us remaining in TA needing the price to double just to break even.

Possibly, part of WEALTH's purpose that time is to see how low can TA go before it's good to buy back. But still, I bought and bought until at 1.88, 1.55, 1.5, 1.43, etc mainly because I can not understand the big weight that WEALTH put in the one area of TA's business. I thought TA's management already has good foresight that the petroleum arm of the company, and its risks, may compromise the view of the market toward the whole company, so they announced early on that a separate company will be listed and gave away future shares as dividend. There was sincerity here that you cannot see in many company. I also cant imagine the other partner in the drilling abandoning the project altogether.

From a very deep bottom, TA has come back +70% starting when it was announced that the drilling project will continue. I have been selling only gradually the huge position that Ive accumulated. And now, analysts are harking left and right that the target price of this issue is 4 PhP.

I still have substantial position. I may sell half as our index nears 7 K, and retain sizeable core shares for long term (3-5 years). I wont leave this resilient stock. Its opportunities for growth is very wide. And I owe a lot of gains last year and this year to TA. This has a bright present and future.

Moves at 6800 index

I was selling shares at 6800 as planned and wanting to transfer the gains immediately to issues that are fundamentally sound but are still far off (for some reason) from their 52-week high. Having too much cash while there is still upward momentum is obviously not optimum.

I would like the issues that I freshly get into to not to have a negative news or pending decisions attached to it. MWC and PNX are examples of issues very much below their peaks but have attendant problematic [regulatory] news attached to them, so these are stricken off.

FLI, SECB, SMPH, BPI, are the others Im looking at. They still have room before hitting resistance against 52-week highs again, but of course these are not guarantees. The assumption is if we're on a general uptrend already, these should wake up some and we can benefit riding them as they stand up the bed of slumber, even for short-term.

For SMPH, I would like it to correct to 16 to relieve overbought conditions before going up again. It is also not a long-term issue for me, because of its high P/E. If I do get in, the intention is just to ride for short-term.

SECB--it would also be useful to watch for increase in foreign buying again (like last year) before getting in or adding to existing positions. It would be ideal to see a combination fo 3 among MACQ, CLSA, CSUISSE, JPMORGAN to buy in bulk again. I'd also like to see WEALTH buying as well.

Im holding the rest of the position in blues to ride them until we near 7 K or index weakens and breaks 50-moving average line. Breaking below 50 is always a possibility is we near that dreaded month of May again.

Congrats to those who already profited. You should have already recovered from last year, and gained substantially these past five months, if you stuck buy our attractive fundamentally-sound picks.

Pick of the Week for Wk18 is BEL

BEL is the pick of the week for intermediate term (hold until Q4 2014), for the following reasons:

1) BEL still has room to increase vis-a-vis its 52-week high. It stayed above 6 for more than a month, which tells something about its true base value assuming the casino is already open.

2) it is a relatively 'safe' bet in small tranches/ Even if it goes down with a sudden negative market sentiment, we know it has an upside as its casino is nearing opening in Q4. Yes, it's better to wait until Q3 to invest here, but by that time the price might not be as 'cheap' as it is today.

3) It was already explained elsewhere in this blog why BEL's business model is attractive in its uniqueness. The company is almost guaranteed to show profit year on year beginning last year.

Technical Analysis and Multiple Trendlines

As most of the readers of this blog knows, Im not fully into Technical Analysis. I like more 

1) the news (especially if my current disposition is that of a short-term to intermediate trader)

2) balance sheet and p&l statement, 

3) the caliber of the CEO and other executives of the company, 

4) the current price of the stock compared to its growth potential, 

5) and the inherent growth story of the firm 

to speak for themselves. 

I also try to make myself aware of foreign buying. 

But TA believers would say that the chart should be able to reflect all these. Meaning the sentiment on fundamental and management should all be in the chart. I dont agree. 

Within the chartists sphere, these have some weight on my buying or selling moves:

--the cup and handle patterns is based on a solid psychological nature of humans, so Im on the lookout for this pattern always. 

--simple moving averages at 50 (for short term) and exponential moving average at 150 or 200 (for intermediate). I also watch these because many chartists are supposed to buy (or sell) in droves when these are broken. We of course want to ride with them, and hopefully pluck some short-term profit. 

--RSI is okay as a guide if the increase or decrease is fairly gradual. A jerky increase up and down are more news or hype-based; RSI is invalidated in these cases. 

--spikes in volume are also very meaningful. 

--psychological supports and resistances (especially if the number converges with a moving average) also appear valid, especially on large-volume traded stocks 

--if i know i will have time to monitor short-term trading (where, win-or-lose, I intend to sell back the same position that I bought in  to 3 weeks), I also check candlesticks.  

One TA area that appears iffy to me is the turf of trendlines. 

A famous chartist getting paid for his analysis (selling subscription) was spouting last year that our index will reach 8500, solely because of the black, purple, and moss green trendlines that are supposed to be pointing upward of 8000. Those to me seem arbitrary, especially since the P/E of our index was already a very expensive 20+.

And then beginning on the sell-down last June, an infinite number of triangles and lines can be formed, almost at leisure. Could trendlines be nothing more than pastime for investors, as kids enjoy drawing sketches and figures on their play time?  

In any case the most optimist among us should be happy that chartists should be joining the buying today since there appears to be an upward channel that formed early this year (see the two short parallel lines on the far right of the chart below). 

Speaking if channels, TEL is supposed to be on an upward channel Oct 2012 to near July, but it was turned into a 'confirmed' downward channel since June 2013 to February 2014. But an upward channel can also be simultaneously from last November 2013 to present. So even with channels, there are multiple readings possible. 

Anyway, there's no use becoming snobbish of methods. I would agree that the best compromise is to choose a 'pet' based on present value and fundamentals (or 1 to 5 above), and then use TA to decide on the moment when to bet high. In short, choose a company that you will trust and then read some chicken intestines to reinforce the decision when to make big bets or... cut loss for that matter. 

No pick of the week for the shortened wk 17

I sold all my long-held PNX for a hefty 7.5%+ profit. Unloaded most of SGI (also long-time hold) at considerable profit, and let a minimal position caught in that sell-down. Yes, not all big upward trends come in threes. 

In all probability, I thought SGI will rake in at least +30% again today, because SGI went ceiling very early yesterday. But no, it tumbled down hard! Anyway, if nothing happened tomorrow, this only means that many retail investors was taken for a bad ride again by manipulators (who has zero chance of getting caught, gven our ineffective SEC).

There is no pick of the week this week, partly because the past few days seem to be the season of bazurs. I have disciplined myself not to invest too much in bazurs since mid last year (the initial bet in SGI was done early 2013... there were cut losses and average downs only until August and then I just let this dividend-paying stock stay in my port). So, if the attention of local traders are into bazur, I admit that that those trading days will not be for me.   

However--previous picks of the week are still showing strength. You can still look at how strong the foreign buying in TA, MBT... this could turn up to something big after we go back from the long weekend. It's only me--I just  wont be buying into anything significantly, because of work. (I missed the +50% and sudden -20% the next day of SGI because of meetings and reports). 

Heniweey, enjoy your vacation! Power up!

Bakit nagkikisame ang mga Bazurs (o kahit anong istak)???

(mahabang iskaleytor hanggang kisame)

Biruin mo, apat na istak ang nagkisame ngayong araw.

Kapag kisame ang usapan, karaniwan isa o kumbinasyon ng mga ito ang dahilan. Wala nang paki kung tsismis na peyk o totoo ang balita, basta ito ang mga ginagamit na mitsa ng mga mamimili (hinete man, mandarambong, o wagas na nakatunog ng tunay na balita):
1) may malaki at kaaya-ayang joint venture,
2) ibebenta ang isang subsidiary, buong kumpanya, isang malaking asset (halimbawa: isang malawak na lupain).
3) bagong may-ari,
4) gagamitin ang shell ng listed company para sa backdoor listing
5) nakahukay o nakadiskubre ng sumisirit at umaapaw na deposito ng langis,
6) nakadiskubre ng yamashita treasure ang kumpanya,
7) nakamina ng isang bundok na ginto instantly,
8) nakaimbento ng cold fusion o perpertual-making machine
9) o basta may earth-shaking na bagong source ng income bigla--halimbawa biglang pinayagan magtayo ng toll-gate at mangulekta ng toll sa gitna ng EDSA
10) ang majority shareholder para ay isang prinsipe o duke
11) si jesus h christ pala ang lumabas na pangunahing may-ari ng kumpanya.
12) may matinding hineteng gigil na gigil pataasin (jerkily) at sumugal para goyoin ang mga technical analysis believers na kala super-duper-breakout na.
13) magkakaroon ng tender offer na sobrang taas dahil biglang may bumili ng isang malaking bloke ng float
14) bibili si Warren Buffet ng shares (buhos ang fan nya na tiyak na susunod)
15) may inanawns na pelikula ang nakalistang media company, kung saan mag-bo-bold, full-frontal, penetration, in an orgy sila Ellen Adarna, Anne Curtis, Angel Locsin, et al.

Salamat, Manny! Berde tayo bukas, mga katoto!

Pinrey-ober ba naman ni Mommy D sa locker room, habang naka-baro't saya. Yan ang anting-anting! Nagarintaya ang bilis ng mga suntok!

Sa buong laban ang hinahanap lang ni Bradley ay isang swerteng suntok na tatama sa panga (tulad nang ipinangpanalo ni Marquez). Kasa lang nang kasa at buwelo nang buwelo sa lahat ng suntok. Hindi nya nakita iyon, hindi siya nakatama, kaya talo siya. 

Nanduon pa ang bilis ni Manny. Maski humina na nang bahagya ang mga bato, nanduon pa rin naman talas at mataas na porsyento ng mga tama. 

Samahan mo pa ng orasyon at pamamakyu ni Mommy D, Mayweather susunod ka na... isa ka pang madaldal na duwag ka. 

Maraming salamat din, Mommy D. 

May siyentipikong pag-aaral na yan. Pag nanalo si Manny, pasitib ang indeks kinabukasan

Kailangang makahanap nang maagang tatayaan bukas. Mga requirements: kailangan malakihan ang bolyum na tinetreyd, hangga't maaari indeks istak siya. Pwede benta agad kapag malapit na sa +1%. AC, MPI, at AGI ang tinitignan ko. Si TEL pwede rin, basta hindi pigilan nang mga lokal.

Mabuhay ka, Emmanuel!

Wag ka mapapagod, mag-train! Oks lang may tsiks on da side (nakakanak-awt ka noon pag may ganito), basta di kalimutang mag-ensayo!

Looking Good but (but with -->caveats)

My port is going up, cash position is healthy.

News reports say that inflation is still within acceptable range and the BSP is sending indicators that it will not be increasing interest rates soon.
-->Although inflation in itself still worries me. Because of my day job, I know that pork prices is increasing steeply because of factors overseas. The boom in construction is ongoing, while the new cement plants of LRI, et al are still not yet on line. These will continue to have a natural inflationary effect on local prices.

Previously sleeping stocks in my main port have awakened with a bang. FLI, perhaps because of its well-crafted press release, was again noticed by both foreign and local funds. I liked how FLI included these sentences in the release:



Lot prices at Filinvest City have hit a high of Php186,000 per square meter, significantly above the previous highest price achieved during the height of the property boom in 1997, right before the Asian Financial Crisis, and the price of Php115,000 Php per square meter in 2012.

I like how they highlighted that lot prices in Alabang has nowhere to go but up. And that no one has the better land bank (still for sale) in that part of Manila than FLI. 

-->But I still dont like Filinvest's project locations in Metro Manila. Their Oasis condo compound in Pasig is an Oasis of because if becomes a sea of floodwater when it rains. Im still ambivalent over FLI as a long-term holding. 

TA is also showing some vigor again.
-->but some locals just wanted to exit, impeding its upsurge.

The banks are showing strength at last. Im green again in BPI (entered just last week) and MBT (old holding + returns). I still have some SECB also. 

-->But again, any policy change by the BSP will zap even a 10% gain in any one bank. 

So, bottom line, I might sell big in May and/or June. And I still intend to sell at 6800 as earlier set and declared in this blog. 

Why I did not buy me some Double Dragon

First off, congratulations to those who placed reservations early and got some DD's. Enjoy the big profit.

Because of my day job, Ive been aware of Double Dragon early. About two years ago, when I first saw their newly-built office in Ortigas, I thought the company's name is tacky and un-creative. I've played with the famous Nintendo game in the 80's--

I thought it was not right to name buildings after two musclemen punching, kicking, and wielding knives in low pixel.

There's also a chance that DD is just Injap's half-hearted attempt to find a place to put some of his windfall from the sale of Mang Inasal to Jollibee. He needs a company to spend his time on as well, since Jollibee executives have already taken over the day-to-day of Mang Inasal.  It is also hard to think of a newcomer properties company catching-up with the supreme landbanks already established by ALI, MEG, SMPH, and even the second liners like FLI and DMC.

It was late last year, during the time when DD applied for its intended IPO, that I discovered that Tony Tancaktiong was the 2nd dragon. One November to December, we also saw Tony disposing some Jollibee stocks, possibly to add to the war chest of DD, and emphasize his seriousness to support this co-venture.

In any case, I thought Injap, his consistent flat top, and persistence would still be the prime mover of the company. Everyone is saying that Injap can do to DD what he did with Mang Inasal.

I know that Mang Inasal became successful because Injap and MI--
1) found a niche (grilled chicken) and pushed it
2) he maintained the gross profit for his commissary so low to maintain the low selling price to end customers. Believe me when I say that the cost of operations and quirks in preparing Mang Inasal's chicken (with barbecue sticks and all) is more complicated compared to Chickenjoy. The risk on lapsing (the chicken is not shipped frozen, only chilled) is also high, and the suppliers limited (of chilled and dressed chicken in general). But all these considered, he stuck to pricing that's competitive against Cjoy. Mang Inasal commissary was not earning much from store operations.
3) Given the ruling objective to expand fast, he also maintained the franchise cost of MI very low. Any OFW can establish a store, and celebrities bought multiples as well. When Jollibee acquired Mang Inasal, many JFC managers are surprised to see a 95/5 franchise/company owned ratio. It got this way because of almost dirt-cheap franchise cost.
4) He is a marketer of his brand, and even of his own personality. There was a time that Injap accepted all invites for interviews and features in TV shows and magazines, however small. He espoused both Mang Inasal and his upbringing and wok ethic in these same venues. All franchise expos, he was also always present.
5) He's hands-on and wants to understand the ins-and-out of the operations of his company. Injap deep-dives on a particular aspect (like studies on store locations) if that's what's needed.

There was speculation (and there are reasons to believe this) that, early on when he was jumpstarting Mang Inasal's expansion, Injap's mother end-in-mind with Mang Inasal was to sell it to JFC. So the aim was to make Inasal very attractive for buyout, rather than to make it very profitable as his own business for long term. When JFC took over the books, annual operating income is not very attractive compared to other business units that the conglomerate already have (Chowking, Red Ribbon, Greenwich, et al).

Now the questions are: would selling again be the end-in-mind of Injap for DD? And how can he possibly apply these same strategies to properties? I thought that he will implement #1 (low cost) first. The apparent niche is probably condos in emerging provincial cities and lower-cost parts of Metro Manila. As is clear, Injap is willing to gamble very low margin for fast expansion. Small City Malls appear on the right track. But what about housing?

Of course we cannot personally visit their projects in Iloilo to confirm anything, so the best thing to check their first project in the Metro. This is the condo beside La Salle Taft. DD bought this from RFM.

I actually inquired at their sales office. I was presented with a 90% pre-sold units, 100% sold parking slots... these are expected since this project is already standing 7 years. The main thing though that I was interested in is the price. Considering #2 strategy and add to the consideration that the place is not in Ortigas or Makati, I was expecting the pricing at at least 20% off the going rate in business districts. But no, the place is still selling at 105 - 120 K PhP per sq. m., same with the pre-selling rates of RLC's projects in Ortigas (at same turnover dates!) Now, this might be because Injap wanted to recoup whatever purchase cost that he handed to RFM early. Even then, this is still one factor that dissuaded me.

I had the opportunity to buy as much as 50000 shares through channels available to me, because of my day job. But I gave it up also because of the 2 PhP pricing. I thought that P/B was too aggressive at that level. And during the time of offer, our market is just moving sideways with bias towards bearish.

Now, the pros that I shouldn't have ignored are the following:
1) the float being offered became very small especially after other members of the Tan family bought up chunks to support their kuya. The supply in this case became very small. Any up tick in demand will surely jack-up the price.
2) There's a chismis that Tony was 'encouraged' to let go of the CEO reins to his brother because of an extramarital affair with the Korean owner of Caffe Ti Amo, a company that JFC acquired. There might be doubt expressed by the board that his judgment on acquisitions is being mired by women at this time. And that Tony just wants to have something to be busy with after relinquishing his role as JFC's CEO. But in the end, I should have put more weight on the belief that Tony will not bet his money without having a say and having his own friends and confidante (who helped grow JFC). He wont get in to DD without confidence, and I should have entered DD with the same confidence.
3) And that Tony's own brand name is immediately a big attraction ( a 'brand' by this time) around the market.
4) That Injap's plan from the very start, this time around, is to have a listed, solid, and stable company under his name. And he will use his marketing savvy towards this goal, not in the same track as Mang Inasal. And that he have to show profit upfront; cant use the low-cost strategy at IPO (the PSE is not NASDAQ where technology companies can show losses yearly in exchange for growth prospects).

On hind sight, I should have taken half of what was readily available to me, or at least grabbed some shares at opening. I bet the same amount anyway on speculations with worse companies from time to time. But no regrets, since I made my decision based on factors that I considered and thought of fully.

And moving forward, Im now part of the cheerers of Double Dragon. I know the Tan brothers as humble, pays right, rationale thinkers, relies on professionals, and not short-changers to their employees and customers. I also dont care about Tony's one affair; there are worse CEO's in this area. And Im willing to bet that in his case, the Caffe Ti Amo girl was the one who pursued him, he just relented. A man can only resist temptations to a degree :- ). If that inadvertently allowed him more time in his hands, then DD will benefit his focus.

Injap, on the other hand, is persistent and diligent enough with his pursuits. We all hope he's still as hungry to succeed with this 2nd venture.

I intend to place a long-term position in Dragon once the price becomes stable. I'm going to be interested as well on their next projects in Manila that they will start from scratch (not just bought from RFM). I'd like to see a niche that DD will try to find and position to.

Go Double Dragon!

Pick of the week for Wk 16 is to accumulate your favorites; give a special eye on banks

I was about to post yesterday LRI as the pick of the week because of the merger news, but because of an early morning meeting, I wasn't able to go online even to open brokerage and post a market opening buy (to add up early). LRI since flew away. Im selling current position--entered into months ago--in LRI at +20%..

I suggest you already position on other previously-good performing stocks. Check their upsurges during the bull run last year. These are my off-the-cuff suggestions:

--GTCAP still has a very probable +5% in short-term.

--then the banks BPI and MBT still have big room to increase, until before BSP announce an interest rate increase (you must watch out for news on this; we must exit some positions before they do the announcement and then just buy again below. bsp has no choice but to increase interest rates because the increase in inflation is also imminent at this time).

--BEL is a good stock to accumulate until Q4 when they open their casino and a surge will occur (if you wait that long, the price might already be too high). See the trend of BLOOM months before they opened Solaire in 2013.

--TA has room until it reaches another resistance at 2.18 - 2.23

But these are not strong recos at this point. I suggest you still look around. Look around on your own. Research. Check history, previous price movements of specific stocks, news, committed milestones. For power companies, for exampl, check when plants and increases in capacity are planned to happen.

For me--Im still maintaining a good cash position just in case AGI, MEG, SCC, or PGOLD temporarily goes on sale. I have already GTM buy points set for these stocks.

Entering gently

Trend followers recommend that we buy at big volume the moment the index started to break resistance at 6550, which happened convincingly yesterday.

However I opted to enter gently. I bought BEL at two tranches, and it promptly turned green same day. I added also to existing positions in FLI and ELI, and then BPI. The addition in BPI seems to be iffy since banks today seem unattractive and being exchanged around foreigners (instead of buy-and-stay-a-bit) for some reason.

Entering in small tranches is just a precaution. I feel that many countrymen are poised more to take profit than stay on for longer, so stocks will definitely not jump straight as they did last year. So better still to have some cash to be able to add on big and small dips.

The next two weeks, again, will be crucial for us to judge if we're on to finally a general market uptrend.

Break 6550?

I posted my pick of the week early yesterday saying that I will only buy again on two conditions: the market breaches 6550 or touches 6250. PSEi promptly goes above 6500 yesterday at a respectable volume of 8 B PhP, but net foreign buying of only 0.28 B. It's nice to see locals being a large part of the bulls group. 

Are we on a breakout now that will portend a general market uptrend?  

I missed this news, but would Yellen's commitment to prolong quantitative easing and continue zero interest rates bring us to 7 K once more?

Let's see. The next two weeks will be exciting. You must focus on your favorite, fundamentally-solid stocks. Ready with your watchlist. Buy with a bit more conviction if we further break into 6600 - 6800 range. (I will sell some though at 6800, but this is just me).