With the PSEi on the edge of closing above 7,000 for the first time in 18 months, and with the inevitable slog of the BER months starting in just a few days, it feels like investors and analysts have got their minds on the bigger picture. They care about what’s happening now and the gems and turds to be found in the chaotic soup of the day, but more than usual, they are concerned with where we’re going. What will a PSEi look like with multiple rate cuts in 2024? How will the PSEi react to rate cuts in the US? How will the Peso react to changes in the US Dollar? How will central banks deal with the public relations challenge should inflation uptick amid the new rate cut regime? Lots of moving parts. Here’s what I have on the schedule for this week.
> PH: Nothing! The late start to the week thanks to a dubious 4-day weekend probably means that my inbox will get a healthy dose of out-of-office replies the second I hit “send” on this morning’s newsletter. I have a casual interest in seeing where the DigiPlus [PLUS 20.95, up 4.2%; 151% avgVol] pump peaks and in the investor response to the post-peak pullback. I’m watching International Container Terminal Services [ICT 417.20, up 1.5%; 95% avgVol] for a lot of the same reasons. ICT has doubled up since Q4/23, but the last chunk of that rise has been a near-vertical pump through the month of August.
> International: I’ve only got eyes for the Philippines this week!
MB bottom-line: I’m not a professional investor, I’m just a student of the psychological tire fire that is the market, so I like to observe how stocks react to developments that are full of emotion. Breaching (or failing to breach) the 7,000 mark is one of those developments. My main goal here is to see which of my stocks “participate” in the breach attempt and to observe how these stocks react to a failed breach or a sustained breach. This is the method that I use to adjust my portfolio. I like to get to know the ebb and flow of the market’s interest in my holdings, and use what I’ve observed to time any adding or trimming I might do to certain positions. This is something that feels like a natural offshoot of my long-term investing style, which is to concentrate on 3-6 significant holdings. Again, I’m not a broker or a fund manager. I’m not a professional. This is just how I’ve always done it, and it works for me. If you have success investing in companies led by CEOs who part their hair on the left, then more power to you and your system. To me, the important thing is that investors do what they do according to some system to guide the decision-making process.
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