I,PObot

I was reading on some news when I spotted this one from the online inquirer website:

Anchor Land to launch IPO on July 27.

iRemit plans IPO last qtr of 2007.

This is in addition to the list of IPOs/Secondary Offers/Etc mentioned by Mr. Bearbull
(http://business.inquirer.net/money/columns/view_article.php?article_id=75711)

• Aboitiz Power - July

• Cebu Pacific Air - July

• Philippine National Bank - July

• Vista Land - 3rd quarter

• RFM Corp. - 3rd quarter

• GMA Network - 3rd quarter

• San Miguel Beer - 2nd half

• Rockwell Land - 2nd half

Shares in companies being sold by the government:

• PNOC-EDC - July

• San Miguel Corp. - 2nd half

• Manila Electric Co. - 2nd half

Now I'm no expert in fundamentals, but a finance guy mentioned that when there's a lot of IPOs, it's when the market valuation is at a very high premium. When that happens, it usually signals a correction coming soon. Based on chart analysis of the PSEi, it does point to a correction soon. When fundamentals and technicals say the same thing, be wary!

There's talk that our year-end PHISIX target has been upgraded to 4,000 from 3,800. But did people take into account the IPOs? Like other things in life, too much of something causes people to become disinterested. Not only that, when there is the power of choice, it means not all IPOs will be successful, as can be seen with Aboitiz Power. Some people say it's because of the price. I think it's because of the proximity of Aboitiz Power's IPO to GMA. Wouldn't you choose GMA over AP? Then there's Vista Land and PNB, also timed very closely to the GMA IPO. I hope these two will fare better than AP.

There are so many market dynamics to dissect, but I think the supply glut of IPO is also one reason why our PHISIX hasn't been making any new highs recently. It's treading onwards on a sideways movement (now this is better than a major correction). Money is either still tied up with AP, or is being held to buy some major IPO's like GMA.

The market might drift a bit higher once GMA lists as most people will have liquidated their holdings by flipping it on the listing date. And I do hope that happens.

Then there's the timing of the IPOs. Most experienced traders say that during the ghost month, it's a lean month for stock trading. As the ghost month approaches and we have a multitude of IPOs, will that make this year's lean month better vs. last year? Abangan!

The good thing in all of this is that there will now be a wider choice of stocks to choose from. I just hope that the increase in number of investors also go up so that liquidity is increased and spread over more people than over the same number of traders.

Good luck to all the IPOs!

How I Trade

This has been a bad week for me. I lost dineros on IS and PCP. Ironically, I day traded the two this Friday to recover some of the losses I cut on the two hehe. I want to share with readers how I trade.

I trade using a program installed by Technistock. It's a good, albeit expensive, program that I've been using for some time. It has many features that I find useful for a trader -

Ticker
Time and Sales
Volume Review
Intra Day Charts
Technical Analysis / Charts
Who's buying and selling

These are the options I usually use. I think they offer 7-day trials so you can call them up. By using Technistock, you can trade in the comforts of your home and still feel as if you're on the trading floor or at the investor's lounge of your broker.

The good thing about it is that it's fast compared to the same features offered by an online account. I think the program is almost similar to what a broker typically uses. Whether you are an investor or trader, this program will certainly be of help to you. However, the benefits are more pronounced if you are a trader, and more so if you are a day trader.

I still trade through a broker although I have an online account. Recently, the online account wasn't working. So I'm happy to have two avenues for trading.

I'm more of a trader than an investor although I must admit I usually have two positions. I have both a buy and hold position and a trading position on some stocks. It really depends on your style. Some people don't want to tie up their money so they only have a trading position. This is particularly true and advisable during bear markets.

I've been participating in the local stock market for the past three years, although I've become more active only this year. I didn't want the bull run, er, to run away from me like it did last year, when the growth was phenomenal and I was still in the corporate world.

I buy stocks based on charts, although at times, with the help of Technistock I just go in for a tasty dose of tsupita. :-) With Technistock, you see how fast and bullish people are on an issue because there's heavy buying. Moreover, you know which brokers are buying. This is the stock I go into. So it's wise to always be in the market. I personally believe that everyday is an opportunity to make money whether the market is up or down. Just don't be greedy.

As you can see, I'm really sold on Technistock. Best investment I've made to date. :-)

I'm still fine tuning my overall stock market strategy, and plan to finish up reading on Market Wizards soon.

Happy trading next week folks! And I hope I have more time to update my blog hehehe.

My Ode to Basura Stocks

Since the market has been boring as of late, I thought of a song that I can relate to basura stocks. This song is sung by Fool's Garden, and I think once it was also sung by Sting. The title is Lemon Tree. I am changing it to Lemon Company :-D

Halata bang wala na akong magawa???

Lemon Company

Im sitting here in the boring room
It's just another boring trading marathon
I'm wasting my time
I got nothing to do
I'm hanging around
I'm waiting for you
But nothing ever happens and I wonder (I hear in the background, because PSE is running
after speculators)

I'm driving around in my car
I'm driving too fast
I'm driving too far
I'd like to change my point of view
I feel so lonely
I'm waiting for you
But nothing ever happens and I wonder

I wonder how
I wonder why
Yesterday you told me 'bout the rumor buy
And all that I can see is just a lemon company
I'm turning my head up and down
I'm turning turning turning turning turning around
And all that I can see is just another lemon company

I'm sitting here
I miss the power
I'd like to go out taking a shower
But there's a heavy cloud inside my head
I feel so tired
Put myself into bed
Well, nothing ever happens and I wonder (Bakit nga ba??)

Isolation is not good for me
Isolation I don't want to see my lemon company

I'm steppin' around in the desert of joy
Baby anyhow I'll get another toy
And everything will happen and you wonder

I wonder how
I wonder why
Yesterday you told me 'bout the rumor buy
And all that I can see is just a lemon company
I'm turning my head up and down
I'm turning turning turning turning turning around
And all that I can see is just another lemon company
And I wonder, wonder

I wonder how
I wonder why
Yesterday you told me 'bout the rumor buy
And all that I can see, and all that I can see, and all that I can see
Is just a lemon company

Stuck

Every morning I wake up at 9:00
Looking at my Tehnistock screen
I feel so fine...

When it hits 9:30
My net conks out on me
I feel so shitty...

What's with PLDT?
I call their help desk
They are a pity...

They say there's a network problem
I say it has been that since Thursday!
What's wrong with them?!

Their stock price is 2,675
But because they outsource everything
Service takes a dive!

So what can I do but scream over at 171
They have nothing to say
I wish them no goodbyes...only that they be gone!

Good thing the market today was a bore. Hope tomorrow's a better day. Sigh.

Hard to trade when technology bogs down. I'm so dependent on tech these days. Grrr!!!!

* Circa July 9, 2007, 10:56 PM

Photo-finish Losing: The 3R's to pull you through

There are 52 weeks in a year. At its maximum, there are 5 trading days in each week. If we compute that, we have about 260 days of trading, give or take. Given a margin of error of about 10%, we narrow the trading days to about 234 days in a year.

When you live your stock market investing life as a trader, there are about 234 days of profit making, or worse, loss making opportunities. It would be great if we could make a profit EVERY trading day. But alas, we are humans -- to err is human, to forgive oneself, divinely important.

During the times that we are on a winning streak, we get blinded from reality.

We feel over-confident, as if we're the bull of the bulls. "Everything will go up", we tell ourselves.

We become riskier traders. "On to the next basura stock!", we shout haughtily.

We let our greed and pride take over. "How can I have made a mistake? I was supposed to make a ceiling price profit today!"

And then soon enough, reality checks in like an impatient tourist at a hotel.

Your three day winning streak snaps and the gains you had, lost to Mr. Losses.

Sounds familiar?

I've been in that same situation before. Oftentimes, due to greed.

If the need for speed is for cars, it's the need for greed in the stock market.

Money doesn't grow on trees, but it grows (and disappears) in the stock market. And when that happens, it's so easy to forget that most things are temporal - profits, winning streaks, and most important - losing streaks.

Alfred Pennyworth told Bruce Wayne in the movie "Batman Begins" - "Why do we fall, sir? So that we might better learn to pick ourselves up. "

You can look at losing in so many ways, but the best thing to look at is this - it's a learning, and very humbling experience. And in my experience as a trader, I've learned that it's not easy to recover your losses, and more importantly, recovering yourself.

Imagine yourself as a stock gaining selling momentum, you just don't know how low you're going to get. And you know funny and corny as it may sound, you'll find your support eventually. In the company of friends, and most especially fellow traders. But that's not enough. They're not with you always.

When you're left alone, and starting to feel unsure about yourself, you begin to realize that your emotions have already started to shake your once formidable confidence. Fear and uncertainty creeps in. You start to doubt yourself - what to buy, reading the charts right, nerve wracking decision making.

When that happens, I would advise you to do my 3 R's to start gaining confidence, and momentum for yourself -

Retreat

Mr. Danny Go, one of our technical analysis instructors from Absolute Traders, said it best. "When you're on a losing streak, stop whatever it is you're doing!"

Sometimes the obvious things aren't so obvious. When we're on a losing streak, it's best to stop the bleeding by stopping the trading.

It pays to retreat from the market. Give time to analyze your recent trading mistakes. No one knows you better than yourself.

Take a breather. It could span from a few days to weeks, maybe even months!

A successful trader in the US (name to follow) had to stop trading when he realized the emotional burden of his divorce settlement was hurting his trading decision.

Let your pride, and greed, take a back seat. In the long run, you'll fare better.

Recharge

To do that, you have to sanitize yourself.

Stay away from reading, seeing or hearing any news about the market.

There's no better way to do that than to go on a vacation. Do the things that you have forgotten to do because you've invested too much time in the stock market.

When you've feel rested, and know that you've regained your form, you can do the next step.

Re-enter

Now, when you re-enter the market, you carry with you a fresh perspective. Your mind becomes sharper, your eyes become keen to area patterns and indicators. Your gut feel kicks into full gear. A rush of trading adrenalin pumps into your veins. And before you know it, you'll be having your win streak again.

So remember, the next time you fall into that losing streak, hit the brakes. You can't charge through a brick wall without figuring out how.

Good luck traders!