A Gem In a Bear Market

According to Robert Kiyosaki, 'When Pessimism Prevails, It's Time To Get Rich!'. When bad news are lingering all around, the best time to invest is when optimists become pessimists.

Definitely, our stock market is no doubt a Bear Market as of now as the fear of an impending global recession heightens.

There were a lot of pessimism going around most especially in the stock market to the point that even companies with sound valuation were affected.

One way of earning is to take advantage of these stocks. But as a stock market investor, I would definitely be on a defensive stance and would go as a short-term investor.


My first experience in stock market gave me some gains. The different news on the development of the credit crunch crisis in the US economy gave such advantage as buying a stock too low and selling it at a modest profit in just a short span of time.

It was widely accepted that for investors to maximize profits in the stock market, one has to do 'long-term' investing. But with the present situation as of now of a bear market, I think that 'right timing' prevails. After all there is always one golden rule in any kind of market- 'BUY' LOW and 'SELL' HIGH.

This is the tactic that I am using as of now as I risked my hard earned savings in the stock market. Higher risks mean higher rewards. True enough, I found a gem in the bear stock market. I constantly monitor the news regarding the credit crunch crisis in US and see the effects of it in a smaller stock market like here in the Philippines.

I would like to share my stock trading history worksheet to all my readers. Open it on another window.

This is just on a 3-week period from Sept. 12 - Oct. 3.

I strictly monitor my net gains. For BPI Trade, which is the platform that I'm using, it will take three days after the sales proceeds of a stock to be credited back in my cash position. Even before the credit, with the worksheet that I prepared, I knew how much will be the NET proceeds.

These were some of the notable findings:

1. MEG was one of my most favorite stocks. It was a very volatile stock and definitely I would buy it if the price reached below 1.40. It was one of the actively traded stocks and definitely buying it will surely be a hit. Furthermore, the company recently declared a P2 Billion buy back of their shares over an 18-month period claiming that the current valuation of their stock does not reflect their current standing. In fact, this stock gave the highest absolute net income of P2,925.
   
   
2. AGI, the sister company of MEG, was also one of my favorite shares. It was not very active though compared to MEG. But there was a time the stock went up to as high as 22% in one day. It was also the stock that gave me the largest net profit of P814.03 after only just 1 day! Additionally, together with MEG, the company disclosed a P3 Billion stock buy back over an 18-month period.
   
   
3. Selling my PX shares at my acquisition price was definitely a wrong decision. I was monitoring the stock daily and the stock went to 7.40 after just two days of selling it. Good thing though that I did not lose that much.
   
   
4. Early disposal of JFC shares somewhat annoyed me when I saw that the stock went up as high as 52 after just a few days of disposal. I bought the shares at 38 when the pessimistic news about Lehman's bankruptcy and AIG's bail out lingered the market and disposed it at 43. The stock went up that high because the company's acquisition of a restaurant in China was completed. My net gain of 9.46% could have been much higher then.
   
   
5. MBT was one of the most battered stock among the banks. It all started when the bank disclosed a P2.4 Billion unsecured exposure to the bankrupt Lehman Brothers. This was followed by the bank's disclosure of a creditor-initiated corporate rehabilitation against the two Lehman-affiliated Philippine companies who had the said exposure.
   
   
6. Surpisingly, the PSE did not fall that much compared to the Dow Jones and NASDAQ of the US. Just recently, the DOW Jones registered one of the largest drop of 777 points making it the largest single day drop ever since 1987. This was due to the initial rejection of the US Congress of the Bail Out Plan proposed by the Bush Administration. During that time, I was excited to view the opening of the stock market. Initially, in just 5 minutes, the market already fell 158 points to mirror the 6% to 8% drop in the US stocks. But as time goes, the market eventually recovered to close at just a drop of 37 points. Whoa!
   
   
7. Recently, I bought another 2,000 shares of ALI at a cheaper price to do the so-called 'cost averaging'. This means adding more shares acquired at a cheaper price and disposing it at a modest price so that the cost will eventually average out with the profit leaving a break even or a little income. This was a strategy to lessen losses.
   

As of now, I have ALI, GEO, MBT and MEG shares. That's it for now.

Come back for more of my stock trading adventure.