3 November 2011

PSEi 4,210.25. -50.16 points. -1.18%.

While the DJIA (+1.53%) and European stocks were up, Asian stocks were down on news the EU was now withholding the latest tranche of Greek bailout funds. Before this month, analysts were estimating Greece had just enough to tide it over until mid-November. With the decision of EU leaders to withhold the latest round of funding pending the Greek referendum, the latter has now been accelerated to 1st week of December. Hopefully, Greek leaders prove as adept at juggling their interim finances as they are at unilaterally surprising the world. I wouldn’t want the world to experience a financial tremor prior to the referendum.

It is quite possible all 3 of my current bets will turn out to be whipsaws. If the current sentiment keeps up, it would certainly happen. I’ll be checking my stops everyday to see if they are hit. It’s a rare occurrence for them to be hit in just a week’s time. More likely, a few more weeks of gloom would be required. Volatility has increased just a bit, so I’ll keep a close eye just in case.

I’ve stuffed about 2/3’s of my trading ammo back in a BSP SDA. For the remaining third, part are in my active bets and part are in cash, ready to jump in at the right opportunity.

It’s quite funny, and sad at the same time, how investment grade European bonds are now at risk of default. Philippine government bonds have always been “junk grade”. Can you imagine what people who sold local bonds and bought Euro bonds years ago must be thinking now? You’d think the rating agencies would do a better job of reflecting true default risk early on. I think investors should never relinquish their capacity and drive for independent thought and investment analysis.

If we, as investors, lose our money, it is not the fault of the analysts (who we may have listened to), or the fund managers (who may be focused on maximizing their commissions, not our returns), or the rating agencies (who may have no clue what’s going on). Ultimately, it’s our money, we are responsible for it. Gains are to our credit and benefit, and losses penalize us for our mistakes.

“Win or lose, everyone gets what they want out of the market.” – Ed Seykota

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