It has been a couple of months since I last wrote anything in this blog. I even forgot how to write a new post.
Having a vision of investing solely in the Philippine Stock Market Exchange (PSE) and expecting great results definitely was a mistake. I am thankful that I was able to read Templeton's book "Investing the Templeton Way" some time in May 2014. Whereby the book opened my mind of possibly investing in other countries, especially investing in the United States and elsewhere. As Gordon Gekko said, "Money Never Sleeps."
This realization lead to my multiple attempts on opening brokerage accounts and understanding how to invest in the different major stock exchanges. Luckily, I was able to set up a "trading" account both in the U.S. and China. This event further opened the door for me to invest in different countries through American Depositary Receipt (ADRs).
For those who are interested, I have kept the following: A. SORIANO CORP, CHIB, FDC, MB, MER, and PSE for the Phil. speculative portfolio; and I have sold all of my holdings for the Phil. value-oriented portfolio. After seeking out the most cheap (PE ratio of <15) and financially sound listed companies in the exchange, the 170+ securities did not yield any potential investment (for heavy buying).
It may initially appear easy to rely on technical analysis (TA) in buying stocks for short term hoping for a sudden spike in price and selling it at the top, but there are only limited people who can do this consistently. I remember J. Montier and H. Marks providing the same idea that in general, it is difficult to time the market. That is why I depend now on my fundamental analysis of companies through their ratios, margins, competitors, and plans for contingencies to name a few. All of which can be found in their annual report and through different online providers (some through subscription).
A recent concern was the the >40% oil price drop. I can recall some news that stated from Summer 2014 to Winter 2014, oil drop from $110/barrel to $56/barrel. It does make a difference economically. People (consumers) now can spend more money elsewhere, however, exploration and production (E&Ps), midstream, and downstream companies definitely will experience a tougher time. Through this, all (may it be an international or a midstream) oil companies came into discount in the U.S. (XOM, CVX, MLP, WPZ, OXY, etc.).
Further geopolitical concern escalated when Europe sanctioned Russia with Crimea concerns. The Moscow Interbank Currency Exchange (MICEX) had an observable drop from 1578 (early December 2014) to 1477 ([January 2015]; Bloomberg chart) . Russia is rich in oil and relies on oil (other than potash-a fertilizer component, and metals) for it to grow its economy. As a result, Russian oil companies suffered most on this event.
In conclusion, many economists, traders, investors, and other professionals are already throwing darts where and when this oil plunge would end and how far it can have its effect in the global market. But, damage has already been done. As I go back to my initial point of this blog, it will be hard to predict and time the market. So I had to stick with my own analysis and buy financially sound oil companies (regardless of which country) with at least a concern to its shareholders (consistent dividends and repurchases) and hold it for long term (3-5 years) unless fundamental change within the company that is not favorable appears.
As the great John Maynard Keynes stated, "when the facts change, I change my mind."
Source:
1. Bloomberg. (n.d.). MICEX Index. Retrieved on January 3, 2015, from http://www.bloomberg.com/quote/INDEXCF:IND/chart
Having a vision of investing solely in the Philippine Stock Market Exchange (PSE) and expecting great results definitely was a mistake. I am thankful that I was able to read Templeton's book "Investing the Templeton Way" some time in May 2014. Whereby the book opened my mind of possibly investing in other countries, especially investing in the United States and elsewhere. As Gordon Gekko said, "Money Never Sleeps."
This realization lead to my multiple attempts on opening brokerage accounts and understanding how to invest in the different major stock exchanges. Luckily, I was able to set up a "trading" account both in the U.S. and China. This event further opened the door for me to invest in different countries through American Depositary Receipt (ADRs).
For those who are interested, I have kept the following: A. SORIANO CORP, CHIB, FDC, MB, MER, and PSE for the Phil. speculative portfolio; and I have sold all of my holdings for the Phil. value-oriented portfolio. After seeking out the most cheap (PE ratio of <15) and financially sound listed companies in the exchange, the 170+ securities did not yield any potential investment (for heavy buying).
It may initially appear easy to rely on technical analysis (TA) in buying stocks for short term hoping for a sudden spike in price and selling it at the top, but there are only limited people who can do this consistently. I remember J. Montier and H. Marks providing the same idea that in general, it is difficult to time the market. That is why I depend now on my fundamental analysis of companies through their ratios, margins, competitors, and plans for contingencies to name a few. All of which can be found in their annual report and through different online providers (some through subscription).
A recent concern was the the >40% oil price drop. I can recall some news that stated from Summer 2014 to Winter 2014, oil drop from $110/barrel to $56/barrel. It does make a difference economically. People (consumers) now can spend more money elsewhere, however, exploration and production (E&Ps), midstream, and downstream companies definitely will experience a tougher time. Through this, all (may it be an international or a midstream) oil companies came into discount in the U.S. (XOM, CVX, MLP, WPZ, OXY, etc.).
Further geopolitical concern escalated when Europe sanctioned Russia with Crimea concerns. The Moscow Interbank Currency Exchange (MICEX) had an observable drop from 1578 (early December 2014) to 1477 ([January 2015]; Bloomberg chart) . Russia is rich in oil and relies on oil (other than potash-a fertilizer component, and metals) for it to grow its economy. As a result, Russian oil companies suffered most on this event.
In conclusion, many economists, traders, investors, and other professionals are already throwing darts where and when this oil plunge would end and how far it can have its effect in the global market. But, damage has already been done. As I go back to my initial point of this blog, it will be hard to predict and time the market. So I had to stick with my own analysis and buy financially sound oil companies (regardless of which country) with at least a concern to its shareholders (consistent dividends and repurchases) and hold it for long term (3-5 years) unless fundamental change within the company that is not favorable appears.
As the great John Maynard Keynes stated, "when the facts change, I change my mind."
Source:
1. Bloomberg. (n.d.). MICEX Index. Retrieved on January 3, 2015, from http://www.bloomberg.com/quote/INDEXCF:IND/chart