IF we are going to look six months down the calendar, we are going to have to make two assumptions that are critical but not simple.
Understand that what the local stock market has been doing since—note the date—October 2021, is like watching a fat guy like me dancing. It’s not a pretty sight, it’s not going anywhere, and you keep waiting for it to stop.
We have been trading in a range between about PSEi 7,000 and 7,350 since the candidates signed up for the campaign. On April 4th, we were at almost exactly mid-range at 7,150. I posted then on the Facebook group that the market was targeting 6,850 and that is where we are headed. It is no big deal to move to that level.
The first assumption that we need to make is that the pandemic is over. China appears to be a disaster. But little if anything the Chinese government says is accurate and what they do say is that—unlike the Philippines and most of the world—their vaccination program was a joke.
I am totally convinced that the reason we did the best that we probably could under the circumstances was vaccinating seniors quickly and the five-month total lockdown at the start of the pandemic.
Nonetheless, the Western governments have moved on to ‘WAR’ as the new headline-of-the-day to keep the people’s minds occupied. I am told that the Philippines is not doing any testing because of the coming election and that is why our case numbers are low. Maybe so. I am the lowest person on the information ladder.
However, I would think that with thousands crowded together at these political rallies, it would be hard to hide the truth. My wife and I went to a club the night before our son’s wedding and if anyone had transmittable Covid, we all would be sick having been packed like chickens in a coop on the dance floor. I was the old fat guy.
The second assumption is that just prior to, during, and particularly after the election on May 9, everyone is going to behave like responsible adults. All right. I know that is a lot to ask for when the future of the battle between Good and Evil, which started under the apple tree in the Garden of Eden, is at stake.
But if people want to act like “Little Brown Americans,” what can we do?
We can be like the US has since November 2020 with Trump and his supporters going crazy. The choice is up to you no matter who you want to be president.
There are basically three types of listed companies on the PSE now. One I call “sashimi” that, like the fish delicacy, has been out of stock. But the sashimi companies are coming back with their business interests fresh, intact, and having weathered the storm with slight—or some with even serious—damage that has been repaired.
Another group is the “sushi,” which is re-purposed sashimi when you take the raw fish, add several ingredients, and make something that is familiar but new in both form and substance. These are companies that had to significantly change their business models and were successful. I would include the REITS and most IPOs on the sushi menu.
I love crab. I hate “crab stick,” which is made from taking crushed cheap white fish, shaped to resemble snow crab leg meat and mixing it with artificial crab flavoring—whatever that is. Don’t tell me.
The Crab Stick companies were not much before 2020 and are about the same now. They weathered the Covid storm because they had almost nothing to lose because there was not much to them before. Their business interests were limited to begin with, and now selling an asset or signing a MOU or two will not make them either sashimi or sushi.
If Covid stays away and the country stays sensible after the election, the stock market is going to boom with the prices of sashimi, sushi and even crab stick going much higher. Be ready.
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.