BLOG: Tread Carefully

We are nearing the middle of May, yet what we’re hearing in the market right now are bullish macroeconomic forecasts and indexes hitting record highs.

This, despite the lingering subconscious nagging of “Sell in May and go away” mantra that most so-called seasoned investors and traders usually believe, or adhere to.

I tend to think of myself as a contrarian investor. I honestly abhor “recommendations” from these so-called “experts” in the market, and I always go based on my own analysis, because sometimes, these “expert” traders just make these noises to take advantage of the herd mentality that continue to persist among regular Pinoy investors, those who, until now, are still easily swayed with whatever hype there is in the market. Little did they know that these “tsupiteros” have millions of shares invested, such that the moment market psychology switched to their favor because of the above-mentioned herd mentality, the littlest of cents they could gain per share is more than enough work for the day, or moment.

What the eff, right? Sad but true.

So anyway, today, 15 May, the Philippine Stock Exchange index (PSEi) just dropped by 0.45% to 6,849.33 after hitting its best finish so far this year. Now, here’s the thing. Is this the start of the so-called “sell-in-May” bs?

Heck no. This is just profit taking.

Why? What the heck are you gonna do if you’ve seen your portfolio reaching its highs (provided you had indeed selected those good stocks)–driven by the continued influx of outside money into our stock market (and this despite the fact that the US Fed has reduced its bond-buying program significantly over the past few months –> but this is fodder for another post)? OF COURSE YOU WILL SELL. You just have to. What are you, nuts? (Crazy as it may sound, I am always long in my investments. But I still do sell every now and then.)

Remember the thing they keep on saying? The phrase “reinvesting your capital gains”? How the heck are you going to realize your gains if you are not going to sell your shares?

ALSO, the month of APRIL and the first few days, or first week, or up to the second week, of MAY are the periods that companies release their whole-year results. And guess what? Most publicly listed companies in the Philippines, especially the blue chips, have been reporting NET PROFIT growth. (Why? Because their sales are soaring because of local consumption because most Pinoys, especially in the middle class and upcoming-middleclass, ARE SPENDING. Also, the country is TEEMING with CASH from remittances from OFWs–yours truly included! )

See? So that’s just all there is to it. Profit taking. And tsupiteros hovering like vultures waiting and taking advantage of the sheep investors (easily herded mentality – all that is needed is an idea to be planted in their brains).

So what’s been happening, in my opinion (or rant, if you will).

So tread carefully. Set a target. If you feel you have achieved that target already, sell for now, and come again later. As soon as prices go down again.

Or HOLD! if you got balls like that of Alec Baldwin’s in Glengarry Glen Ross.

Either way, don’t be a victim to that Sell-in-May bs.

Violent reactions? Expert opinions? They are very much welcomed!

Send me an email here: richard[at]phstocks[dot]com