People ask me how I can conclude and then say publicly that the global economic situation is marching towards falling off a high cliff and yet also advise T.G.Y.F.—Thank God you’re Filipino.
I am part of an “industry” that is genuinely by far the oldest profession. About 15 minutes after humans invented money, we invented “investing.” The traditional “oldest profession” was first about spending money and then earning, I suppose. But investing was and is about making money without hard work and sweating. Investing is about working smart.
Every business has its own necessary skillset from the chef who creates and executes food dishes, to the department store buyer who must anticipate what the next trends and buying fads will be. Those professions seem simple enough but so does playing golf, and I find golf an impossible skill to learn.
Being a doctor or a carpenter is not complicated in theory, although you must work diligently at those professions to be good at the task. But we understand exactly what people in those industries do every day. We also know that the doctor tries to keep his or her own family healthy, as the carpenter might work on his own house.
But my profession—investments —is seen as something different. There are some people who understand what we do for a living, even fewer who are willing to learn the necessary skills thereof, and most people do not have any idea how “investing” is part of the real world. That is why you hear the “Stock Market is a casino nonsense.”
Obviously, all that doctor stuff has a real-world application as it became intensified in the past two years. The chair you might be sitting on attests to 10-thousand years of woodworking. However, as with the doctor who provides for his family’s health and the carpenter who builds a roof over the family, the men and women in my business have skills that protect and provide for their families.
A doctor does not have to depend on someone else for his or her family’s medical treatment. A carpenter’s family does not have to depend on someone else for the family’s table and chairs. Certainly, I must employ a doctor and carpenter from time to time. But if I do not have the financial resources to give a doctor and carpenter a job, their families will probably suffer.
My investing skills, utilized properly to success, means that my family and I do not have to depend on someone else for our financial needs, as employees must do from their “boss,” and business owners must from their customers.
For example: My skills tell me which one and at what price I am going to buy cryptocurrencies to make money. There is no guarantee, of course, as there is none in any risk/reward endeavor. But I can manage risk like my oncologist did in the middle of the pandemic. He was wearing a “breathing helmet” that would have made Darth Vader jealous.
A good doctor knows the latest health information, and does not rely on “Doctor Google.” A carpenter knows when to use a power tool and when to do it by hand.
Another example: The consumer price of gasoline clearly trails the global price of crude oil. Therefore, the P80-85 for diesel and P75-80 price of unleaded gasoline is based on crude at some time in the past, not today. Crude briefly touched $140 (averaging $115) in the week of March 7th when local unleaded was about P72. Oil has been above $115 as gasoline is P85 and even higher.
But on a weekly basis, oil may have peaked and is headed to $103. The point is, would you bet that local unleaded gasoline will be back at P72 by the end of June? I am investing that the price of oil is headed back down.
Investing is not an intellectual exercise or a game any more than being a doctor or carpenter. It is about employing a particular set of learned skills to take advantage of the real world. Doctors would be unnecessary if there was not any sickness. Carpenters would not be needed if we lived in caves.
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.