SECB on the run

Two weeks ago, we wrote here:

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 for 3 among MACQ, CLSA, CSUISSE, JPMORGAN [meaning, foreign funds] to buy in bulk again. I'd also like to see WEALTH buying as well.

The two conditions were met today. 

1) WEALTH is buying again, significantly at that.
2) And it's not just three but five foreign funds--DEUTSCHE, CSUISSE, PEP, UBS, and ATR--are buying in bulk. 

The catalyst is the earnings announcement. 

Props for whoever prepared the the press release. It was perfect to emphasize the increase in interest income this year, as opposed to the huge trading gains that lifted SECB in 2012. This means that SECB indeed has its strong branch expansion bearing fruits. The bank has its eyes now competing in loans and deposits with the big three MBT, BDO, and MBT.

And then the chart:

Expect TA believers to buy more tomorrow, because SECB did important crosses yesterday. both long and short-term downtrends have been broken.

Looks like the core position that Ive kept and added to since July last year will bear fruit. Ive taken profit in some of the swings in SECB before, but here should come a bigger chunk. And I think I will buy (buy up!) one more tranche tomorrow until 121. (The only chartist concern should be short-term since RSI is now showing oversold).

Now, why did I stick it out with SECB? I think I mentioned elsewhere that this bank is a good value at current price and it is noticeably expanding branches everywhere.

It's apparent that the firm has a long term growth strategy. It knew it cannot stick by its income in just trading equities and bonds. It needs to expand its depositor base and loan customers, Now, whether SECB will indeed get close to the Big 3 in the next 5 years is another matter. I guess the way to know that is to become a customer of SECB. We'll look into this bank if indeed we decide to buy a house this year. A house? This deserves another blog post. 

Pick of the Week updates

I'll make it a practice to review my picks 4 weeks back always, since Ive made it a point since Q4 last year to stay with my picks normally at a month's horizon.

It's nearing harvest time for the picks of the weeks.
--in wk8 (GTCAP)... Im at 5% now, will be considering to sell at 8% tops.
--wks 9 and 10 (TEL)... on top of the hefty dividends in PLDT, we might get some cherry on top, probably +3% in the coming few days.
--wk 7's MBT, where I profited already (with MEG) substantially, I still have some position remaining in my nimbler port at +4%. We'll probably sell all at +5%. (My bigger port still has substantial MBT, remnants of last year, at -2%).
--Wk 11, the dividend-paying-company-nearing-exdate-announcement that I chose is MER. It is showing +1.97% for me today, but I placed only a small bet. I'll sell at +4 or 5%.

These target sell prices are based on the premise that PSEI will correct again once it reached 6650. As most retail investors, Im hoping that the PSEi will have momentum until 6800 in a few days; after all, it's rare to see a net foreign selling day since beginning Feb. But Im already willing to take some profit at 6600-6700.

Good luck with the possible jump up in the next few days.

GERI's big surprise

Im writing for posterity that I recently earned an unexpected five figures from my one my almost-a-year-old holdings... GERI.

I profited here when it jumped from 2.2ish to 2.6 in a short time-span last year. I remember it since jumped up further to almost 3 after I sold it all. When it was going down from that peak to 2, I started buying in tranches, until I had to cut losses with half-of-original position remaining. But then, I stupidly continued to average down after Dr. Tan announced he bought at 2+. And then the market, GERI included continued to tumble down hard.

When I finally stopped buying at 1.35, the total lot of GERI the I had had an AEP down to 1.5ish, and then the loss still saddled down to double figures. I stopped buying some time October and sold some lots at double-digit loss to raise some cash. (I since recovered some of those losses somewhere else). I thought GERI can not jump up back to near-3 until its original owners (Fil-estate) stopped selling. Also the company itself is not showing profit worth of its valuation at present... it has a high P/E of 50 (even higher than JFC) and is not paying a single cent of dividend.

So, it was a big surprise that my GTM sell was hit at 1.96. (All of my old holdings have GTM sells since I have a day job and cant monitor the market all the time. This is also my way to be emotionless in trading. I feel the profit on each particular holding is right to me at those specific levels). GERI was among the one the I least expect to profit from this soon. Whatever is the follow-on or special offering rumor that jacked this up, Im thankful for it. Even if it tempts 3 PhP again, I wont have regrets. I also I wont come back to GERI until 1) Fil-Estate has unloaded half of remaining shares it is holding today, and 2) construction of its supposed vineyard at Tagaytay and township at Pasig have broken ground.

Thank you, GERI.

It's your turn now, ELI. Whatever happened to your "Olivia, will you marry me" campaign? Announce some divs, ELI.

Clap! Clap! Clap! CPG

Maraming salamat CPG, maraming salamat Robbie da Pogi, maraming salamat Paris Hilton at sa iyong dedeng masyadong pinisa para magka-cleavage.

Tama na sa akon ang diyes porsyentong kita na naani pagkatapos lamang ng tatlong araw. Bakit hindi ko hinintay ma-abot ang rurok ng luwalhati bago ibenta? Hindi ko naman kasi masusubaybayan ang merkado; kailangang kumayod sa umaga. Hindi rin pangmatagalang hawak para sa kin sila Robbie; hindi ko arok ang kanyang Museo at di ko alam kung bakit pinapayagan at iniispoiled sya ng kanyang tatay sa mga kaululang pagkakagastusan.  Hindi rin tayo nag-aambisyon na makaganansya nang katulad ng kay SUN. Hindi rin ako fan ng pilit na cleavage. Atsaka, hindi rin ako kumbinsido pa na nasa "confirmed uptrend" na ang merkado, ika nga nila William O'Neill (bagamat isa ako syemps sa nananalangin na sana simula na nga ng pagsipa pataas ng indeks).

Ngayon, nag-post ako ng buy sa AC at BEL. Sana mabiyayayaan. Sisilip din ako sa galaw ni AP at JGS bukas nang alas-diyes. Hindi gano pabongga at napapansin ang dalwang ito, pero mga solido naman na kumpanya. Ang AP, di pa gano tumaas, malamang may sipa maski +5% hanggang biyernes.

Ang JGS, natalo lang sa forex kaya mababa ang ganansyang inulat. Pero kung wala ang pagtaas ng dolyares laban sa piso, buung-buo ang kita ng mga negosyo ng conglomerate na ito. Maganda pa ang kumbinasyon ng bisnes ng mga Gokongwei. May sinerhiya ang real estate, retail, food manufacturing, plastics processing, etc. Hindi katulad ng kay RSA na kalat-kalat, buhaghag. walang core, at tirada lang nang tirada hanggang sa malugi (Wi-tribe). Di pa mahuhusay ang mga middle managers ng SMC. Magagaling lang mag-follow-up at puros sigaw (pero walang diskarte).

Gudlak sa atin!

Update on pick of the week for Wk 32

Although it may just be random walk in the end, it is still better to study ahead, plan, and follow that plan.

Would like to write for posterity my own progress from when I posted my plan from last Monday. 

"MPI is also worth watching and betting small bets in if it flirts with 4.93 - 4.96 again." 

I entered MPI at 4.9 and 4.85, and sold all at 5.08 (posted yesterday, triggered today) for a good 4-digit gain. Not bad for 2 day's 'work.' Although, this stock might continue to go up (I should have stuck to my original sell post at 5.14), it's always good to profit in a market that is not in a clear uptrend.

"I was about to choose a pick of the week from SCC, MER, MBT, and MEG, betting that at least one will make a substantial bounce in the coming days,"

I bought MEG last week and sold early at 3.23 this week for a small coffee-budget gain, but MEG continued to go up to 3.26. Added MBT at a low 102.5 and then it recovered and now trading sideways at 106-107. Both are good moves, bottom-line.

Did not do anything with SCC and just retained my holdings in MER (although I should have added). SCC increased marginally and MER increased considerably. So all four 'pick candidates" practically did well.

My mistake was entering AEV at 46.1. This was not in the list but I thought that the conglomerate is too cheap at current price, regardless of the unimpressive  earnings report. Although price today is at 47, this will gap down on Monday. I'll closely observe AEV if I need to cut loss or cut at breakeven (damage is brokers fee). Either way no regrets, a bet's a bet. Do not enter in a market that is not in a confirmed uptrend if you want to have all your moves come out right (with greater probability).

In the end, Cash, as recommended, proved to be the safest and rightest bet. There's still a dangerous number of previous-favorites-but-now-diving-down this week. Also, imagine if one veered to a Sy stock , he/she could have lost more than 5% in a couple of days. It just happened that we intended to devote time on the market, and it's good to make picks (stocks that you studied ahead for a good entry price) and place small bets since we're focused any way. Let's just remember to continue to keep a big cash position, during a non-uptrend-market and in a ghost month at that!

Watch out also for news and updates about FED stimulus in the coming week.

Range-trading during a period of uncertainty

As Im writing this, PSE index is only 4 points away from 6800. Many 'investors' that were left holding the bag at above-7000, those shell-shocked by the sell-down of foreign funds last month, are starting to smile again. Im partially one of those investors. I chose not to cut loss, or I did not cut clean on most positions, and was only able to 'save' about 20% of my cash. That obviously was a bad move.

But I elected to pool a smaller fund, open another account in another online broker (to sort of start in a clean slate), still trade actively during the uncertainty, and focus on a few securities only, with two criteria: no bazurs (no BHI, no CAL, no TSI, however hyped they are in forums) and no lightly-traded security (no ANS, no SGI).

I profited a good +6.3% (of capital) taking advantage of predicted range trend in MBT, GLO, TEL, DNL, SCC, and VLL and partially (small one-time impacts) in ABS, BDO, ALI.  For example, I was able to go back and trade TEL four times, in the span of 4 weeks. I bought in tranches at 2830 and prices below and then immediately sold whatever I accumulated at 2930ish--no questions asked.

I would like to think that Im an expert with these moves that are suitable in an environment of volatility, but in truth, as most transactions in the stock market, these are all just bets. There were some rational bases, but luck (more like winds going in your favor) still is the bigger factor.

Nevertheless, if you ask for the bases and rules that I used, . Here they are:
1) took on faith that TEL and others are solid companies that is undeservedly cheap at their prices at that time, especially because there's the backdrop of an unusual, severe sell-off. For TEL, below 2830 was my set price. MBT and AEV at one time went below 10 P/E. And the circumstances (caused by merciless sell-off) were abnormal; these should not be their prices as normalcy returns.
2) forecasted that big bulls and bears are going to fight during that time of uncertainty, so small-time investors can benefit from their tussle.
3) when you observe even the daily trade, volatility was apparent. you can place a bid on the perceived lowest before price jumps again and then return to same number (some call these levels true 'strong' supports) in these daily trades and aim to exit in 3 days.
4) for GLO and TEL, I also relied on the fact that these are high-dividend paying securities, and that this fact would also be in the mind of players foreign or locals alike. Remember that if dividend yield of a stock is 4% of its price, you can be comfortable easily a loss < 4%. We know that GLO, TEL, SCC, Aboitiz stocks, MER, are generous in giving out dividends.
5) also held on to our recent gdp announcement --  +7.8%. You dont see that gdp number brandished every day at any part of the world!
6) also disciplined myself to be at least 30% on cash at any given trading day. At one point, after a previously-set sell points on two big positions were hit while I was on a beach, I was only 26.66% invested.
7) buy in tranches, ready to average down if needed. If your revolving capital is 1 M PhP, buy in amounts of 20 K - 30 K PhP. If 500 K PhP, buy in 10 K - 20 K PhP tranches. This is also optimum to avoid inefficient transaction fees.
8) lastly, again... no bazurs , no lightly-traded stocks.

So there, the reasons for my big gains in just 5 weeks.

But, as a caveat, there were downsides and mistakes:
> VLL, TEL, DNL, GLO, have now increased significantly since I last unloaded them, so there are still that couldve-been shouldve-been imperfect calls, bottomline. No remorse from my side, but trend traders would surely fault my method for not taking full advantage of the trend.
> I also made a mistake in buying and averaging-down on GMA7. The media stalwart aligns with #1 and #4 conditions,  but not #8, GMA7 is a non-bazur but it is very lightly traded nowadays. So this bad move was caused by not following set rules completely. Matigas lang talaga ang ulo (inborn stubborn).  
> MER was also a mistake, but it was caused by extraordinary circumstances prodded by SMC.
>> BUT Im still holding Kapuso and Liwanag. The loss in both after averaging down is not even 4% at present. So obviously, these are not staggeringly as bad a move in terms of impact.

Although, again, on hindsight, these are gambles. 'Expert' traders (like CANSLIM practitioners) will tell you never to come in when there is no clear market uptrend. However good the individual stock is, it will get pulled down by negative sentiment. If the volatility had a downward bias on medium term, if Bernanke firmed-up on his decision to ease QE by end of the year and did not become sheepish on his most recent testimony to the US Capitol, I could have been holding another portfolio set showing nothing but paper losses.

Good luck with your trades. The battle continues.

Market Skim Through: July 23

A good green day today after President Noynoy's SONA, although I'm not sure whether or not investors, more so foreign investors, were really glued in front of their television (or laptop or monitor or tablet, etc), taking notes of that one speech. And if that speech really moved us to click buy today.

In any case, TA, soared on the disclosure of property and cash dividend. Take note that this cash dividend is on top of the 0.04 from just a few weeks ago. And this property dividend is not at the level of a rumor any more, since it was also disclosed weeks ago. (More on TA on another post). 

This rise gave my portfolio a big boost, glad to see my paper loss drastically reduced, and recovering.  

MPI was also a good ave down move for me; was correct to anticipate that the market will interpret positively MVP's move to strengthen foothold on MER (by buying some from SMC's). 

#	Stock Code	Last	Change	%Change	Value
1	SEVN	120.0000	19.0000	18.81%	297,243
2	AB	23.9000	3.4000	16.59%	1,018,855
3	ALPHA	46.5000	6.5000	16.25%	11,768,785
4	PERC	7.0000	0.9000	14.75%	700
5	SPC	5.5800	0.6800	13.88%	5,580
6	TA	2.7200	0.3200	13.33%	218,118,710
7	ATN	1.2600	0.1000	8.62%	269,000
8	UPM	0.0130	0.0010	8.33%	356,200
9	BCB	9.3000	0.6000	6.90%	6,360
10	SPM	1.7600	0.1100	6.67%	8,440
11	AAA	3.2000	0.1900	6.31%	226,340
12	SLI	0.7100	0.0400	5.97%	1,186,610
13	MIC	5.9200	0.3200	5.71%	504,755
14	LCB	0.6200	0.0300	5.08%	13,816,770
15	SUN	0.6200	0.0300	5.08%	1,664,060
16	MRC	0.1050	0.0050	5.00%	112,000
17	BKD	1.0800	0.0500	4.85%	608,910
18	MPI	5.3900	0.2300	4.46%	329,076,012
19	ACE	1.2000	0.0500	4.35%	132,900
20	PIP	5.8600	0.2400	4.27%	10,894,446

MBT, however, have a lukewarm performance. But I still believe in this pick of the week.We gave this stock two weeks.

SECB, traded at a very high volume, but at a loss! Some funds are obviously unloading. I averaged down at what I thought as the bottom (reading from the chart), but it went down one peso further that bottom. It's too late to cut loss for me here. Will just continue to average down, and hope that the ex-date announcement of its impending 20% cash dividend will jumpstart this stock. I just hope there is no negative insider news that is already circulating elsewhere in the financial houses' grapevine.

ROCK, also continuously being a disappointment. Probably the only second liner property issue that is still not showing any strength! Better to just stay dormant, ROCK, as you did for many weeks, rather than shed more of your value.

VUL, will not be a buy for me until late this year when the Ramoses get their act together, and concoct a solid plan on how National Bookstore will be infused in the security. More on VUL on a later post.

#	Stock Code	Last	Change	%Change	Value
1	MJC	2.0100	-0.1900	-8.64%	16,350
2	CA	55.0000	-4.9000	-8.18%	2,849
3	GREEN	0.0150	-0.0010	-6.25%	1,835,800
4	SHNG	3.1000	-0.2000	-6.06%	151,900
5	I	2.7900	-0.1500	-5.10%	2,790
6	2GO	1.7000	-0.0900	-5.03%	42,500
7	ALHI	23.4000	-1.1000	-4.49%	530,910
8	CLOUD	6.6000	-0.3000	-4.35%	26,400
9	PCKH	11.5000	-0.5000	-4.17%	57,500
10	IMI	2.5000	-0.1000	-3.85%	285,310
11	ION	0.5200	-0.0200	-3.70%	8,820
12	VITA	0.8200	-0.0300	-3.53%	255,420
13	ROCK	2.1000	-0.0600	-2.78%	9,185,970
14	AR	0.0036	-0.0001	-2.70%	36,000
15	SECB	139.3000	-3.7000	-2.59%	513,118,838
16	ZHI	0.4200	-0.0100	-2.33%	1,828,950
17	GMAP	8.8000	-0.1900	-2.11%	52,800
18	VUL	1.4300	-0.0300	-2.05%	294,470
19	PAL	5.6400	-0.1100	-1.91%	1,236,635
20	LMG	2.6000	-0.0500	-1.89%	79,680