(Having the two numbers interchanged would also be fine by me hahaha)
Welcome to a fresh new Guerilla Investing!
I hope this more streamlined look and well arranged labels will help my readers sift through the glut of posts I've made since the start of this blog.
I was heartened by a blog milestone - 5000 visitors since I started blogging. Regardless if it's 5000 unique visitors or not, I hope in my own little way I was able to impart some knowledge on your road to financial independence.
Coupled with my personal bullishness on my blog is the bullishness of expectations of the new administration. To quote the news piece -
"According to ING’s quarterly Investor Dashboard Survey, the country experienced an 18-percentage-point increase in investor sentiment to 157 in the second quarter of 2010 from 139 in the first quarter."
Well recently, our stock market hit a new high breaking the 3,400 level after four tries to hit this level if I'm not mistaken. Given this, I would think that from an amateur technical analyst's understanding, we are going to hit high notes by the end of the year. This is not to say that the road ahead is full of roses.
Against this backdrop is that the BSP is keeping interest rates at lows due to uncertainties as well as the manageable inflation rate. This means that credit is cheap and it should help businesses expand. When businesses expand, then it can create jobs and potentially enjoy higher revenues. Bodes well for the stock market. This also bodes well for the fixed income market (bonds) because interest rate is the same.
Of course, contrarian thinkers will always say that this may have already been "priced in". If you don't already know, stock prices are always ahead of actual performance. This means that the price may have rose already with the anticipation of a news, a new project, a new high in revenues, etc. such that when the announcement is made to the press, the stock price doesn't move anymore.
In fact, from personal experience, it shows that - at least locally - when profits are announced, stock prices suddenly drop. This is why there's this oft quoted cliche, "Buy the rumor, sell the news".
So far our stock market has been insulated from what is happening worldwide. The DOW recently fell triple digits (again) so I wonder if we'll keep on being insulated by next week.
But the following data should give us confidence the the Philippine economy is still above water.
Remittances reached record level of $1.58B in May
In this article, noteworthy is this fact -
"The main sources of remittances in May were the United States, Canada, Saudi Arabia, Japan, the United Kingdom, Singapore, UAE and Italy. Combined inflows from these countries accounted for 81.5 percent of total for the five months to May."
With the continued influx of remittances and strong consumer confidence -
Auto sales jump 37% in 1st half of 2010
Salient points -
Commercial vehicle sales went up 39.8% over the past six months comparative period while passenger sales went up 32.2%. This to me is good news because it means both businesses and consumers are spending.
In an old post, I've said that key indicators for the lay investor include OFW remittances and car sales. Screen out the rosy news you read and focus on these hard numbers. If the stock market doesn't perform at par with these indicators, it could be a chance for you to buy stocks at their lows.
However, now that the index is at 3,400, I anticipate the market to move sideways. It can go higher but I'd rather it going sideways so there's a strong base at 3,400 before we continue hiking. Most of the blue chips have risen so it could be the second liner's chance to shine. Most of the second liner stocks are those not part of the PSE index that have recorded blowout revenues.
Notwithstanding all these positive news of late, the trouble with the local economy is the anticipated huge budget deficit. Investors both foreign and local will be looking to P Noy's first SONA with high hopes. Wang wangs are symbolic but we also need strong economic programs that promote investor confidence and generate jobs.
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