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The Philippine economy is not doing good. Well, in fairness to our dear Mother Land, this is a global pandemonium.

Blame Uncle Sam, if you are looking for a escape goat. The overall mood of their economy is heading south. The Federal Bank is doing its best to avert a nosedive of local and foreign investments (by cutting down interest rates), but as we can see, it is inevitable. The Bush administration has passed the economic package/stimulus (US$168 billion) that could help jump start their economy. Again. This rescue package was passed by the US Congress a month or so ago — rebates for individuals (reaching thousands of dollars for some lucky Americans) and tax breaks for domestic businesses. The idea is to inject more funds to the public to encourage industries/businesses to invest in new plants and equipment; and more spending for the consuming public. Analysts believe that the effect of this will not be felt immediately. And they are right, we are still experiencing some problems. This week’s NYSE trading may have been better than previous weeks, but… well, still not good enough.

Uncle Sam’s problem is really affecting the investments worldwide. Europe. Asia. (Decouple my ar$e!) And of course, our beloved Philippines. The bad thing in the case of our country is that in addition to the global economic problems, we are experiencing political hullabaloos, exaggerating the already bad effects of the economic slowdown/downturn. Currently, the state of the P6 is going down in the short-term trend, but the long-term trend is still intact — not going up, but not going down. This week’s trading even showed consecutive green numbers on the trading floor.

I am still not comfortable with the current figures, I am hoping that after this political bickering between and among our ho[n]orable politicians, everything will be fine. It may not be next week, nor next month, but we all know that the natural way of things is to improve, and the government as well as all the companies that are still alive will be doing its best for their own good. (Darwin, you are my hero.) The PSE and some investment houses are positive that by second quarter of this year, the market and the overall economy will have a breather. Being a newbie, I don’t want to say I agree as if my opinion is of the same level as theirs. But based on the limited knowledge and experience that I have, I am positive — I am hoping and praying — that they are right.

I think this is one of those bumps that anyone’s economy experiences in its life cycle. For every action, there is an equal and opposite reaction. Expansion, then, recession.

Newton is such a killjoy.

(Image on the left is from Wikipedia.)

Are You Afraid of the Dark?

With the depreciating dollar, continued red charts in the market, and unstoppable migration of investments to other countries, US recession is not in the limbo anymore. I may be wrong in the strictest sense of the term, but the once great economic power that is America is in real trouble (you don’t need an economist to tell you that, right?). If that problem does not make you feel uncomfortable, or at the very least, concerned, try to read more below.

Any BPO company’s US$1M contract from the US, which was previously at PhP55M, is now worth PhP40M. In less than 1 year, they have lost more than 25% of their potential earnings–PhP15M per US$1M–and that is simply due to the exchange rate alone. (And I don’t think anyone would buy the government’s claim that the appreciation of peso translates to improving economy, do you?) These companies will not decrease your salary–DOLE is on your side. Good news? No, believe me, you are in bigger trouble. What if they set some unrealistic goals and you failed to meet them (which is actually the idea of setting unrealistic goals, by the way)? If after systematic discussions and you still failed to meet the goals, no one will stand by you if you get terminated. Some people will take advantage of the system for their own interest. Probably rational on an individual level, but undoubtedly not on a system-wide level.

Once US companies present negative earnings (which actually started last quarter) due to the general economic turmoil, their shareholders will definitely ask for implementation of cost-cutting measures. How do they do that in terms and concepts relevant to the outsourcing industry? (more…)

Brute Force

I don’t have have any formal background on financial analysis and I started trading in the stock market with only courage and a little capital at hand. It was a mistake, but a mistake I am not ashamed to admit. I realized that I cannot learn any trading skills by heart if I would only learn them in the book pages. I have to experience them… and more importantly, learn from them.

I have developed a very easy technique that gives me a fairly good batting average. This is applicable for short-term traders only.

Step 1: Look for active stocks and avoid those that are thinly traded.

Always do your homework. Make sure to plan your trade, and stick to your plan like a robot — no emotions, please. At night, I would generate reports of the 10 most active stocks of the previous day. Any online broker provides this information. Looking for the Top 10 active stocks narrows down your research, considering that there are hundreds of publicly listed companies in any stocks exchange. I am almost sure that these actively traded stocks have high market capitalization, else, few investors would be trading them. It would also be a good idea to look at the Top Gainers of the previous day (taking into consideration the value traded). By making a match on the top gainers and most active stocks, you are even making your research easier. If you can spot a good match, I suggest that you focus on doing a research on that company. Now, chances are, you are already late with the news… the reason why there is a high volume of trading as well as the gains posted is that there are already some people in the loop.

Step 2: As soon as you have identified your top choices by using the above method, you should focus on doing your research on those companies.

In my short experience as a trader, I noticed that breakouts continue to happen in more than just 2 days. Hence, if you were able to identify a breakout right after that trading day, then, you still have two more days to profit from it. There are no scientific bases (well, none that I know of) on this claim. It is just that everytime I can identify a breakout, the rise in prices always contibue for at least two more days. Second day usually shows a gap up in prices, and third day usually shows continued increase but bo gap in the prices.

So, what to look for the charts of your picks? One, is this the first day of the breakout. If it is, then, you have more chances to ride the wave. If not, then, beware, but still continue the research. Two, check the volume. Is this unusually high, and higher than the previous day? If yes, you are still doing good. And finally, check for news. There are a number of online community that can offer you information (or should I say, speculations) even way ahead those information getting publicized. You can take your hint from there.

Step 3: Plan your trade.

By now, you should have decided if you will buy that stock or not. If yes, then, plan your trade. You should have a cut loss level, in case you are wrong. In my case, if the stock that I bought based on the above method drops to 5% on that day, then, I let go. Otherwise, I will hold on to that stock until I finally get the profit that I want.

Step 4: Make a last minute confirmation before you buy the stock. Then, BUY!

During the pre-opening of the market, buys and sells are posted in your online brokers system. If you can still feel the heat, post at a competitive price. This will allow you to get the cheapest, so to speak, sell amount. Monitor your trade as soon as the market opens.

Of course, this is a brute force system of short-term trading that may or may not give you large profits. I have gain a modest amount of profit from using this method. It is always best to study technical anaylsis to have a more solid basis.

I suggest that you try this, even with a small amount. This worked for me. And if it will work for you, why not try some more?

Note: Image taken from http://www.tradingsynergy.com.

First Post. Almost.

 Found this from my baul C:\Documents and Settings\ E[k]s\My Documents\CW\. This is a product of my creative writing class, and I officially submitted this with Obituary as title. How’s this for my first post?!

xxx

E[k]s, 20, died due to complications of the heart, for he could not express his true feelings to the woman whom he wish to spend the rest of his life with. Neither was he able to utter his remorse for his failure to do so. Thus, his heart was heavy and he could not bear its weight.

He was a diehard, hopeless romantic who had always believe in the magic of love… hoping that if they were meant for each other, then, they will be together in the end, no matter what comes between them.

His pathetic life, as he described it, ended right after failing to convey his feelings one perfect night to the woman he regarded as his best friend. It was a perfect night, yet nothing had happened, or so it seemed. his lips would not move to express the thoughts of love that he has for her, and struggle as he might, though his courage did not fail him, his lips refused to sing with the rhythm of his heart. And so nothing happened, but the effort was a great burden to his heart, as well as his mind. He thought later how stupid he had been. (He would still be stupid if he was still alive, anyway.)

He did not realize that he was divided in himself. Half of him wanted so much to tell the truth; half of him wanted to conceal it for fear of losing a good friend. Much to his remorse therefore, he could not loosen the words of his love. His lips refused to heed the command of his heart (and who says emotion always triumphs over the mind?), so that his will suffered altogether.

In the end, he succumbed to the sorrow and decided to end his agonizing plight. Now, E[k]s rests in his own neverland, where fantasy still comes true, and everyone is as hopelessly romantic as he is. 

E[k]s’ life has ceased to be. Before he perished in unrequited love, his heart was torn in two. Yet where he is, may his lovelorn heart beat more easily, and may his words flow from his lips more freely.