November 7, 2007 Report

STOCK

Lucky 7 today? Maybe. I was lucky enough to day trade Dizon Mines (Ticker: DIZ) today. So am I all smiles? Not really. I feel a tinge of regret because the greed in me wished I had bought more hehe.

Wow, I just looked at the closing of the market and saw that we were actually up by +14.63 points today. 14 is a multiple of 7. Hehe. I've heard that some people actually look to Astrology as a guide to trade the markets. I have yet to meet one though.

We can thank ALI, which closed at 16 (+3.23%), and TEL at 3,045 (+0.50%) with the boost to the market. However, at one point we were actually up by 28 points (still a number divisible by 7!). I was actually disappointed, what with the US closing up with 100 points, and an expectation of a rate cut by the BSP and a tame October inflation (which could provide room for the BSP to do just that).

Mining stocks. They are still the ones to look at. Philex is slowly losing steam. Atlas still sucks. Apex Mining (Ticker: APX/B), now there's something. Apex supposedly has a lot of gold reserves. Lepanto has been stuck in a range as well. Gold is above $800 already. With the dollar falling, expect commodities like black gold (oil) and gold to go up further.

Globe declared a special dividend. I'm no expert at computing dividend yields but for smart traders, this could be a chance to ride Globe. Whenever there is an announced dividend, the stock moves up prior to its ex-date.

Let's monitor our Week's pick, details are: closing price, +/-% vs previous day's, top 2 buyers. I've added comments.

ZIP is now officially known as SLI. Well a change in name didn't make a change in its performance. I'm removing this from my radar for now. So no more details.

I am also removing OV & TBGI from my monitor for now. So with APO and AT.

PA 0.22/ Flat / F_Yap Citisec (For a relatively basura stock, it's amazing there's still activity here. Not only that it's still closing above 0.21.)
FGEN 60.50 / Flat / Citisec JPMorgan (Actually went to Php 62 apiece, before being sold down by ATR and CLSA)

I wasn't able to attend the CAF (Chart Analysis Forum) of Absolute Traders last night, but a friend of mine said these stocks were talked about as potential buys -

PA
AT
COL
IPVG
ALI
PCOR

STUCK

Still Atlas Mining. Oh dear Atlas, when thou art moving?

SUCK

My broker told me that there was news last night about mall hours being asked to close early due to our looming power crisis. I wasn't able to see the news, but from the looks of it, it could've weighed sentiments on SMPH, closing at 11.50 or down by -2.13% from the 6th. Top sellers were Deutsche, CLSA and ATR. I haven't been tracking this stock so I don't know if they have actually been selling since Monday. I looked at the chart and it seems it's made a new low today in two weeks' time.

Oil made a new high, however, most of our oil stocks PERC - OPM and OV suck big time. Even PCOR. Sometimes it's not so much as fundamental news as it is on just plain chart trading or pure trading tactic. OPM, OV and PERC are stocks that traders can 'play around' with because one fluctuation = profit already.

Based on my estimates, there is still (again) NFS (Net Foreign Selling).

Good luck tomorrow!

Call of the Bandwagontrader **Occasionally I want to comment on something**
People say that when you overtrade you actually make the broker richer. I dispute that. Maybe in the US that is the case, but in the local scene, try to look at these computations. I won't be exact with the prices, but let's take Ayala Land (Ticker: ALI) as an example. ALI is a good stock, so I won't hear criticisms like this being a volatile stock.

Let's hypothetically say that you trade millions of pesos worth. You bought 70,000 shares of ALI. I won't show you anymore how the fees were computed to provide brevity. To dispel arguments, we are talking of a single person transaction. Of course, when the volume of a broker's clients is taken into account, that would be a different story, and a different argument altogether.

Scenario A: The Buy and Hold Person.
If you bought ALI sometime April, you might have gotten it at 14. And since this person believes in "if you trade too much, you'll make your broker rich", he holds until today November the 7th (a lucky day) and sells it at 16. He'd have earned approximately in excess of Php 120,000 (net of broker fees, et al.). His broker probably earned about Php 11,000 or so. So who got rich in these scenario? Not the broker of course, so the axiom is proven here.

Scenario B: The Trader
Here's a person who was able to read his charts well. Obviously there's no hard and fast rules with regards to cutting losses or 'timing the market', but if you have a background in technical analysis, and also have the composure to cut your losses (or protect your profits, whichever way you see it), let's say the same person bought at 14 also, then seeing ALI fall from 18 to 16, he eats his pride and decides to sell, and thereby protect his profits, at 15.75 a piece. He makes a profit of about Php 105,000. His broker makes Php 10,412.50. So axiom busted once. (I purposely make the person sell lower than 16 to prove a point that Person B will still earn more money)

Next, this guy, sees ALI falling back to 14 during the August nightmare, there are people who think that stocks that have went back to their lows are bargains, whether or not he is a chartist. So let's say this guy is not a chartist, and he figures, "Hey, I have an opportunity to buy ALI again at 14." And so he does. He keeps it until today, the lucky 7th day of November, and sells it at 16. He sells it so we can make an example out of him hehe. He makes another cool Php 120,000. His broker? Just another Php 10,000 or so. So axiom is asskicked the second time around!

Now here's the kicker, who made more money? Person A or Person B?

To close. I am not a broker. Just a person with a brain in between his ears. Don't believe everything that you read. If you don't believe what I say it's alright, but all I can say is that these are based on personal experience (except the part about trading in millions ok hehe). We must understand that there will always be volatility in the stock market. Smart people will tell you that it is in volatility that you may lose, or in my opinion EARN money. Not only that, even on day trading, at a certain percentage, you actually earn more than your broker.

Ciao for now.