First Metro Asset Management Inc

Peaks and troughs, by Gus Cosio

11:45  Wednesday  26 October 2011

I will be out all of Thursday to attend the Philippine Investment Summit at the Makati Shangrila.  This is an event that will be attended by around 70 investment professionals from foreign investment firms.  There will also be delegates from the large listed companies and total attendance should be over a hundred people.  The roster of speakers are high powered with tycoons Manny Pangilinan and Monchu Aboitiz leading the private sector.  NEDA Director General Dondon Paderanga and Secretaries Cesar Purisima and Mar Roxas will speak for the public sector.  Hopefully, the summit will encourage foreign investors to bring more long term investments to the Philippines. Read more

Nickleodeon, by Gus Cosio

11:13 am  Wednesday 26 October 2011

The strength of Philippine stock prices yesterday was not met with strong volume.  This leads me to think that in spite of traders and investors sitting on a pile of cash, they do not want to chase prices.  The decline in stock prices today gives us good opportunity to buy the stocks we like.  Normally, mining stocks are relatively risky; but in the current business environment, I think it poses the best opportunity for both capital preservation and appreciation particularly for mining stocks that are already in production. Read more

Greece is the word, by Gus Cosio

7:30 pm   Tuesday  18 October 2011

Most of the developed markets were down Monday and Philippine stocks have followed suit.  There is nothing new that caused the downturn which leads me to conlude that it is mere profit taking.  Looking at the S&P 500 Index chart as well as the DJIA, I sense a trading range to be the likely scenario –  1100 to 1225 on the S&P and 10,500 to 11,700 on the DJIA.  Corporate earnings among S&P 500 companies are not bad.   IBM reported 3Q-2011 EPS of 3.19 vs. 2.82 in 3Q-2010, but fell short of consensus of 3.22 and caused the price of Big Blue to slide by 2.07%.  For me such  a reaction in the U.S. merely reflects further edginess.  Over the weekend, I had read an analysis by James Paulsen, PhD. who is chief startegist at Wells Asset Management.  He says recession fears are due less to worsening economic fundamentals than they are being driven by worsening financial market signals.  In the end, it will be economic fundamentals that will bring the U.S. into the next recession.  Fortunately, the Economy-Weighted U.S. Manufacturing & Service Sectors ISM Survey Composite Index is at 53 which is in slowdown but not in recesion.  The Johnson Redbook Same Store Retail Sales Index is firm at around 4%, and the 4-week Moving Average of Initial Weekly Unemployment Insurance Claims is in the low 400′s.  All of these do not indicate recession. Read more

Try to remember by Gus Cosio

11:45pm  Sunday  16 October 2011

It has been quite a busy week.  In Cagayan de Oro, I was quite surprised that a good number of people really get involved in the stock market.  My colleagues and I gave a presentation on the Philippine investment climate, i.e. stocks, bonds and mutual funds, and so many people stayed behind wanting to listen to my views on Philippine stocks.  I had a chance to share some of my favorites.  Obviously, ORE was one of the curiosities, and I was able to share the fundamentals behind the stock.  Anyway, the more contacts we have with the company (ORE), the more updates we get.  Consequently, the more confident we become with the company’s performance.  Needless to say, the share price will behave on its own and will be swayed by the over-all market sentiment.  This is why company funamentals are important, so that when the market gets edgy, you can feel secure staying with the stock.  Of course, nothing should prevent you from lightening up if negative sentiment is very strong.  Just be sure you rebalance when the risk gets smaller.  In my book, that is when prices fall significantly as they did in late September and early October. Read more

My favorite cat, by Gus Cosio

9:00am  Monday  10 October 2011

The Philippine Stock Exchange Index is back above 4,000 (4,009.26 to be exact) and it came at a time when people were extremely bearish.  Skeptics may term this recovery as a dead cat bounce, and that would be a good topic for discussion.  I would like to highlight, however, that the bounce had come for 2 trading days – one was a 1.76% bounce and the next was a 3.05% bounce.  On both occasions, the market closed at the highs of the day.  On both days as well, we saw net foreign selling; although on Friday, selling was significantly subdued with 69 million in contrast to 940 million the previous day.  Incidentally, the total net selling for last week was over 3 billion which similarly followed a huge level of foreign selling the previous week. Read more

To fear fear itself, by Gus Cosio

7:00 pm  Monday  3 October 2011

It is one of those occasions where it is difficult to make a comment on the equities market.  The sentiment in the market appears to be one sided.  Unfortunately, it comes from the side of the bears.  Even more unfortunately, it comes at a time when decent yields on investments are very hard to come by.

Market participants are overwhelmed with what is happening in Europe, and As I write, markets in Europe are down around 2%.  I would not want to venture a guess about where the market is going.  Most people in stocks are convinced that we are going south.  From an adage that I hold dear which says “the trend is your friend,” I would not want to buck whatever sentiment that is pervasive in the market right now.  Let me point out, nevertheless, that some stocks are very cheap especially from an earnings point of view and these are the stocks to watch when the market starts to turn. Read more

First Metro Asset Management Inc