Stock traders have no idea what is going to hit them soon. It might even start in few hours.
Let me at least paint you a picture of what had happened and what’s about to come.
First, our market triggered circuit breaker twice already then came this announcement:
Nice diba? Sobrang tiwala ng finance chief natin sa economy natin na handa siyang magsugal. Ang galing diba?
This was a stupid move. Let me give you some insights on the numbers to give you a clear view. The SSS’s investments in equities at end-September 2019 stood at P95.7 billion, or 18 percent, of its P542.4-billion total investment level. They already gambled that much September pa lang and they plan to gamble more of people’s money. Una sa lahat they are not single handedly lifting the market. They are just averaging down sa mga ipit nila na stock. They are adding to their losses. This is not creating new investment. Ipit na sila sa dati nilang stock bago pa ang Corona Virus. Now, they just added up losing positions. I find this move stupid but that is just my opinion. Let us move on to what happened next.
PSE decided to shorten trading hours. I kind of supported the move kasi It protects workers at the same time It still shows confidence sa market natin. I actually posted some thoughts about it on Traders Lounge na facebook group. Then this happened.
My sister and I was literally like “WTF.” This move is way to stupid. I don’t even know where to begin. Let me paint you a picture. Our country had 202 Corona Virus cases with 17 deaths. China Coronavirus: 80,894 Cases and 3,237 Deaths. Italy Coronavirus: 31,506 Cases and 2,503 Deaths.
China, Singapore, Italy and Iran did not close their markets at the height of the crisis in their countries. Why? Because they were smart.
Let me explain why they were smart. They know that the confidence of the foreign investment community will disappear instantly once they close their markets. When you close your market, this restricts the exit mechanism so it won’t be taken kindly by investors who don’t like their flow of funds constrained.
So wala eh nagclose na. Our hope was may konting plan man lang sila. Strategic plan ika nga. Tipong di muna bubuksan ang market until magkaroon vaccine o at least gumanda man lang ang status ng Pandemic. Then this happened:
PSE decided to resume trading. Of all the move you can make, this one is the worst.
Investor confidence is gone. Shutting down the market was locking up cash to a lot of people. Locking up cash from those who need to sell makes the situation worst. It also removes trust from investors. They would never invest in PSE again if they knew that their money could just randomly be stuck for months with no warning whatsoever.
This is such an idiotic move. Wala man lang nagreseacrh sa kanila. America’s stock market closed for almost a week after the 9/11 terrorist attacks in 2001, while Hong Kong halted trading in the wake of the Black Monday crash in 1987. Greece shut its stock market for about five weeks in 2015. A survey of international investors conducted by the Hong Kong stock exchange in December 1987 found unanimously that the closure had negatively affected the exchange’s international reputation and had eroded confidence in the Hong Kong market.
Maraming research at studies na available for them to know na closing our market is a very very bad move. They could have at least do what Sri Lanka did na may konting denial. Nagclose sila ng market at tinawag na Corona Virus holiday.
I know marami pa ring ignorant traders na naniniwala na pag open ng market ay tataas ang PSEi. Ignorance is bliss. How could they know what to expect eh wala naman maayos na nag eeducate sa kanila sa mga bagay bagay.
Here is what’s probably gonna happen sa pag resume. Stocks na related sa bank will go down hard. CEB at PAL will go down hard. PSEi will bleed.
Well, I could also be wrong since no one can predict the future. This is the only time I wish Im wrong though.
No matter what happens I’m prepared to earn/lose sa market. Lahat ng experience ko mula 2008 na crash prepared me for this kaya I was able to earn while karamihan are dealing with losses. Here are some examples of my trade when PSE triggered Circuit breakers.
Here is a video of it:
Here is a good progression of my trade bago mag shutdown ang market.
Here is the video:
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Bat ngayon ko lng to nabasa!! salamat po sa insights.
What’s up, just wanted to mention, I loved this article. It was funny. Keep on posting!
Thank you for your market insights. I really appreciate your advocacy in helping Filipinos about stock market.
your welcome po. Let’s help each other.