6:40pm  Wednesday   26 August 2009   Philippine Stock Market Index    2863.53   (+0.19%)

When you are trading the markets, everyday should be seen as a new day.  This is why all professional traders mark their positions to market daily.  When I was working in an international securities trading firm, our boss always said that he wanted to know the firm’s losses everyday.   That way, if it crossed his threshold, he kicks the position out.  Alternatively, if he is willing to take the position again, he lets it ride.

I agree totally with this concept.  Some people make the mistake of making a quick turn, thereby missing the long haul.  While I believe that no one loses money by taking a profit, a serious trader will always ride a winner but will cut a loss.

Today, trading was very volatile inside a 23 point range and changing direction around 6 times.   Index heavyweights TEL and Mer were down while SMPH. BPI, PX, AC & BDO were unchanged. Only MBT, SM, ALI &MWC were up among the blue chips.  The rest of the active gainers were second liners – MEG, FLI, VLL, EDC & BPC.

The reason I am making this litany of issues is to drive a point through that the large cap shares are running out of steam.  This is not unusual because they were the index drivers over the last few months since March this year.  Now the bullishness has spread to the mid-cap issues.  Indeed, the market is getting stronger because a large number of investors have tucked away their blue chips into bottom drawers, meaning, it will be some time before these stocks come out again in a big way.  Now, money is spreading deeper into theme plays.  This is good because even if the index dips, people will still be able to make money in the non-index shares.  Life is really becoming a lot more interesting.

What I would like to highlight today are PIP and AGI.  If you go back to previous posts, I’ve always mentioned these two stocks as beneficiaries of consumer plays.  PIP surged again today after a few days of consolidation.  I’ve followed this stock since April because I thought that it had good value.  It has doubled in price since and it would not be a bad idea to take some profits although I still see a little upside left.  The stock that I think would be the next shiner is AGI.  I learned that yesterday, a major international stockbroker brought 60 fund managers to the AGI property across NAIA Terminal 3 to brief them of the prospects of the company.  AGI had recently tied up with the Malaysian company which operates Star Cruises to develop an entertainment and gaming franchise in the country.  I heard that it got all the fund managers very excited.  I think such a development cannot be ignored.  Be sure to watch AGI; this stock has someway to go.

At the risk of sounding  repetitive, I’d like to say that we have just started the long climb to recovery.  Remember, we had a bull market that started in the beginning of 2005 and lasted till the end of 2007.  Rallies in this country usually have a 2 year life.  We’ve only gone for less tha half a year.  How much more do I reckon we can go?  For you who still remember the late Jimi Hendrix, the lyrics of one of his hits go: “Excuse me while I touch the sky.”

I cannot be more explicit.


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