Some Thoughts on The Market

There has been some recent comments about Asia "decoupling" from the United States. Since our country, the Philippines is still a part of Asia, I can surmise that we should also benefit from this, er, decoupling. So far, we have been doing that. It's just that it's not in our favor.

For example, the times that the DOW was UP, we were down. When the DOW was down, we were down even worse. Talk about decoupling.

In any case, if my limited knowledge of PSE history is correct, the index at the onset, was primarily composed of mining and oil stocks, i.e. commodities. The PSE has gone a long way since that time, adding such junk companies as Lodestar, JOH, and a slew of other companies who did public offerings and just forgot about the (shareholder) public who shelled out money for their shares during their offer period years ago.

Cynicism aside, it is my belief that the local stock market has come full circle. What am I saying? This year's growth fulcrum for the stock market is linked to the Mining and Oil sector. Similar to the start of the index decades ago, we are starting a new base folks.

If you look at the big picture, yes there are volatilities involved in the stock market. But take heart, we won't see a repeat of the crash similar to that of the years following 1997. This of course, also goes without saying that the market has to find a very strong support before it takes off again. Add to that is the fact that mutual funds, variable life insurance products and UITFs have come to the fore, adding into the trading pits what we may call as institutional investors.

There is a light at the end of this dark tunnel my friends. Stay the course. Just ride through the volatility, be less greedy and you'll be happy by December 31st of this year. The strategy is this :

Short term bearish, but long term bullish. Be mindful once the market starts to find a bottom.


You don't have to emphasize it boys.