Opinion is supposed to be “opinionated.” That is a person expressing his viewpoint, which may or may not be supported by accurate data, and may reflect an agenda. It is by definition biased and, on the best day, may be for the purpose of getting the listener to think about a particular topic. We cannot always expect an opinion to present the whole truth and nothing but the truth. No problem.
Analysis, on the other hand, is expected to be founded on accurate and complete data. Then an educated—meaning the person knows the subject matter—conclusion is drawn from the data. The conclusion may be rightfully challenged. Was the data accurate and complete? Is the person making the conclusion adequately “educated”? Does the conclusion logically and reasonably follow the data?
We can have a fiery debate about whether chocolate or vanilla ice cream tastes better. We can add the data that vanilla is the best selling although the “most loved” is choco mint chip. Yet, it all comes down to personal bias. And note also that with the super premium brands, vanilla is the most profitable for the ice-cream store. So you cannot even “trust” the ice-cream industry to not be opinionated.
However, we can talk about which ice-cream flavor can make you gain weight faster based on facts. The US Department of Agriculture’s National Nutrient Database reports the following: One cup of vanilla ice cream contains about 274 calories, one cup of strawberry provides about 254 calories and one cup of chocolate contains about 286 calories. The conclusion: If you are calorie-conscious, you should eat strawberry. That is analysis.
The headline reads: “Duterte’s Bull Market in the Philippines May Not End Well.”
First off, the more than 10-year “bull market” should probably be called “Gloria’s” since it began during the Arroyo administration. Second, the recent rise in local stock price is no more “Duterte’s” than the market drop in 2015 was “Aquino’s bear market.”
Then comes the “analysis”: “A few theories for why inflation cooled to a 2.7 percent annualized rate. The peso is no longer cascading lower. Trouble is, much of the change to which investors are responding is happening beyond Philippine borders. Inflation, for example, is easing virtually everywhere.”
That may be true in general—if not virtually—but absolutely no mention is made of the Tax Reform for Acceleration and Inclusion law’s impact on 2018 inflation. Many other countries are seeing lower inflation because their economies are not growing. Further, both Singapore and Germany, for example, saw the inflation rate increase month-on-month in June. And Singapore’s GDP just went negative by 3.4 percent.
Therefore, an “educated analysis” should probably include the inflation “why” and also put the inflation rate in context with economic growth.
Then the author moves into: “The Philippines, remember, is still stuck with the same political uncertainty and policy drift that slammed both stocks and the peso in 2018.” The presidential approval rating is not mentioned that would sort of belie the political uncertainty. Further, an authentic stock market analysis would have put 2018 against the inflation rate since he already said the 2019 bull market was, at least, in part fueled by low inflation.
The author concludes: “In the longer term, the optimism coursing through Philippine stocks confront a sobering reality: there’s little going on in Manila to justify a rally based more on spin than reality.” How about this? Get out of Tokyo and come to the Philippines and I will show you the reality. My treat.
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E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.