Two years ago on January 8, 2020, the Philippine Stock Exchange Composite Index was at 7,736. We are about 8 percent lower today. We were four days away from the 2020 Taal eruption. My first editorial about the newly discovered virus in Wuhan, China was two weeks away.
These were the news headlines on that day. “Solon urges gov’t to adopt animals affected by Australian bushfires.” “Inflation jumps to 2.5 percent in December.” “PHL dollar reserves rise to all-time high.” “6-million devotees seen flocking to Traslacion.”
Seems like things were fairly calm and “normal.” Yet on that day I posted the following on Social Media.
“Thoughts for the Day
1. T.G.Y.F.
2. Blood in the Street creates more profit opportunities than unicorns and rainbows.
3. Don’t try to pick the bottom….let the bottom pick you.
4. Buy on pullbacks those issues that have recently been strong. BUT buy only when the price starts going up.
5. DO NOT buy issues that have broken support. See number 4.
6. T.G.Y.F”
Looking back, I do not have the slightest knowledge of why I said those things. Yet also looking back, that may have been the most “brilliant” if not the most prescient words I could have written. Three months later in the middle of March, the stock market went as low as 4,040 and closed the month down 30 percent. And I do not have a clue as to why I gave that “advice.”
But it applies “yesterday, today, and tomorrow” if you want to protect your cash and then make money. Note also that the stock market is not something that operates in its own unique cycle and rhythm. “Bad times” are always more profitable than good times no matter what your business. Joseph made the Pharaoh a very rich ruler during the famine.
A friend of mine in the US just bought a new car for his son, a Ford Bronco SUV. Tom Daniels lives in Florida but drove to New York State to make the purchase and had to pay a higher sales tax. Why? “Nothing available for a year anywhere you look and here is going for $20k over sticker price.”
Gasoline prices are 57 percent higher but US domestic auto production is down. The Washington Post reported that the automotive industry may produce one million fewer cars than usual in 2021, largely due to the supply chain issues and chip shortages.
You may want to note March 14/15, 2022. It marks Belarus Constitution Day, Hungary Revolution Day, Albania’s Summer Day, and Estonian Native language Day. It also marks a minor peak and then decline until April 2023 in the
Economic Confidence Cycle.
Do you remember the “Bubble Boy” Jesse Colombo who wrote in 2013, “Here’s Why The Philippines’ Economic Miracle Is Really A Bubble In Disguise”? Every prediction the guy made, including the demise of the Philippines and sub-$40 crude oil, was as accurate as if Nostradamus did it. Jesse disappeared for a while and then we find him back on SocMed with “2021 was a very dark year for me and I logged off social media in utter disgust. As someone who is deeply concerned about the direction that the world is heading, the past year was just too much to bear. I sunk into a deep state of despair and basically gave up on humanity and the future.”
I feel his pain. But if he had stayed around just long enough to read what I wrote on January 8, 2020, he might have turned a 42 percent stock market profit and built a new house in 2021. And maybe created jobs or given charity to the humanity he is so worried about. Making money is a great painkiller.
E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.