I’m back with some stock charts

A Byte of my 2.2-lb Brain

Stocks in Focus: DNL, FNI, VITA, BLOOM, LPZ

dnlDNL. Looking good. Stays above the trendline support and the MA’s. Volume profile (pink column bars at the right) looking good as well.

fniFNI. Also, resilient. Hope the 38.2% line holds. Also, volume profile’s encouraging, but risk-reward ratio not very encouraging… unless it convincingly breaks ₱1.10/sh and gains a new support there. I’m accumulating.

vitaVITA. We’re happy we got to ride VITA from around ₱1.80-ish per share all the way to ₱2.82/sh. It’s a good candidate for re-entry, IMO. Position traders, what do you think?

bloomBLOOM. I’ll wait until it forms a good support above 4.76/sh. There are two sets of parameters here. The first set are generated using the Fibonacci ratios. The second is more intuition/experience based, 🙂

lpzLPZ. LPZ is a particularly interesting stock. Look at those candlesticks! Long lower shadows! Quite inspiring really…

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Investment Funds

PSEi YTD-Performance

Many amateur (and probably professional) traders who are invested in the Philippine market are presently at a loss on where to put their money. Just take a look at the PSEi YTD-chart above and you’ll understand why.

I have been following a few communities of traders and market speculators online, and I am learning a lot about the different perspectives and sentiments of PSE market participants (who are mostly retail investors). Many seem to have given up or are about to give up on stock trading, especially the “newbies“. Just reading their posts and comments online about their plight can be so saddening—not because of the losses they’ve incurred, but mainly because of how they are handling the situation. It is quite evident that most are not used to the losses, and many can get very emotional. I am speculating that most have invested their hard-earned money—-and not in the amount they can afford to lose.

I stumbled upon a few posts asking about investing in bonds/funds instead, because they’re “tired and frustrated.” So, I thought I should check out the performance of the different investment funds: stock funds, balanced funds, bond funds, money market funds; and make them available here. As I have mentioned before in my previous posts, if you just want equity exposure and don’t wanna be bothered with day trading or religiously monitoring the market, maybe investing in mutual funds is for you.

stockfunds Balanced Funds Bond Funds Money Market Funds

Is PNB:PM a buy below ₱60/sh?

Last Friday, 29 May 2015, PNB closed at ₱62.00/sh (-13.41%).

PNB drops by as much as 13.41%.
PNB drops by as much as 13.41%.

I am surprised because just last 26 May 2015, the company issued a press release to the Exchange with the subject “Moody’s Upgrades Credit Rating of PNB“. They even provided the Exchange with a copy of the press release.

PNB Press Release on Upgrade
PNB issues press release on credit rating upgrade.

2014 in review

The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 9,400 times in 2014. If it were a concert at Sydney Opera House, it would take about 3 sold-out performances for that many people to see it.

There were 49 pictures uploaded, taking up a total of 8 MB. That’s about 4 pictures per month.

The busiest day of the year was May 12th with 2,611 views. The most popular post that day was The “development” of the Metro Manila MRT/LRT.

Here’s an excerpt:

The concert hall at the Sydney Opera House holds 2,700 people. This blog was viewed about 9,400 times in 2014. If it were a concert at Sydney Opera House, it would take about 3 sold-out performances for that many people to see it.

Click here to see the complete report.

Blue Chips or Basura

My friend and I had a chat earlier today. He was asking how one can earn in the PSE if the basuras are off-season? Adrenaline junkie! 😉

“What if we’re all just holding blue chips? Wouldn’t that be boring? Who, among “retail” traders, earns from buying blue chips? What are blue chips?”

In the Philippines, blue chips are the companies that compose the PSEi. There are thirty (30) of them. In general, a blue chip is defined as:

A nationally recognized, well-established and financially sound company. Blue chips generally sell high-quality, widely accepted products and services. Blue chip companies are known to weather downturns and operate profitably in the face of adverse economic conditions, which helps to contribute to their long record of stable and reliable growth. – Investopedia.com

With that definition, for more conservative folks, it seems that the blue chips are the way to go. Anyway, the conversation got me thinking about the blues. What if, indeed, one just randomly picked five blue chips at the beginning of the year and just held on to them? How would her portfolio look now?

First, the thirty performed as follows:

   Min. 1st Qu.  Median    Mean 3rd Qu.    Max.
-72.070   2.177  15.700  18.610  31.360  84.740

with DMC being the biggest loser*** (-72.070%) and FGEN leading at 84.74% YTD. By the way,  super thanks to the guys behind Philippine Stock Exchange Composite Index RESTful API, I was able to automatically download the prices for the samples. Hopefully, there are no errors in the database. In any case, if you had bought all thirty, and distributed your capital equally among them, your portfolio would be ~18.61% up YTD.

Anyway, so, I wrote a super, super short code in [R] and did 20,000 in-silico experiments that samples 5 blue chips at a time.

Sample runs:

sample

Again, the scenario is this: what if I randomly chose five issues and equally divided my capital equally across them at the start of the year? What would be my YTD earnings? Here’s the result.

Rplot Min.     1st Qu.  Median    Mean    3rd Qu.    Max.
-31.870     9.269     17.970   17.640     26.480    64.720

Result says that, on the average, one would earn around 17.60%; maximum would be around 64.72%; and worst scenario, -31.87%. Of course, this may not be the case for other years; but, given how relatively healthy our market has been in the last four years, the blue chips really wouldn’t have been such a bad way to go, especially for those who couldn’t day trade.

*** Jitka Samak: “DMCI is up +44% YTD. You’ll have to adjust your data to account for the stock div they issued this year. 🙂 ”

Some related reading that was pointed to me after I raised this random question on Twitter earlier today: http://www.businessmirror.com.ph/selling-is-for-winners/

ETFs and FMETF

In December 2013, the country’s first exchange-traded fund (ETF), the First Metro Philippine Equity ETF Inc (FMETF), debuted on the Philippine Stock Exchange (PSE). What is this? What does this mean? What are ETFs? — These are just some of the questions I get with regard to FMETF, and I was hoping to briefly address those questions here. Also, I was prompted to write this post after realizing that most “young” Pinoy traders (newbies) are not aware of the FMETF. First, ETF. As the name implies, exchange traded funds are funds that can be traded on stock exchanges like the PSE. There are various types of ETFs — the Index ETFs, the Stock ETFs, and the Bond ETFs, among others. The one and only ETF that we have in the PSE, as of this writing, is the FMETF, which is an Index ETF. It is like a mutual fund that aims to track/replicate the trend of a particular index, in this case, the Philippines Stock Exchange Index or PSEi (PCOMP). You can think of FMETF as a “basket” of securities– specifically, of stocks that are included in the PSEi. Unlike mutual funds though, you yourself can trade FMETF via your chosen online trading platform (COL, BPITrade, MakeTrade, FirstMetroSec, etc.). fmetfandpse As mentioned, it reflects the performance of the PSEi. To illustrate, the figure below shows the YTD chart (rough sketch) for both FMETF and PSEi. FMETF-YTD What this means essentially is that if you want to invest in the PSEi (the index), instead of buying positions in most, if not all, of the 30 companies that compose the PSEi, you can just acquire some FMETF shares — it will definitely be much less costly.

The major benefits of buying ETFs include diversification, affordability. It is also cheaper to buy ETFs instead of mutual funds and unit investment trust funds which charge high levels of management fees. – April Lynn Tan, CFA (COLing the Shots, December 2013)
Edit: As suggested by fellow stock market enthusiasts, in my next posts, I intend to write something on the comparison between ETFs and Index Funds. Meanwhile, I point the reader to: http://www.investopedia.com/articles/mutualfund/05/etfindexfund.asp