Friday, October 10, 2008


All right, I'll give my portfolio details when the market opens again. But this week just crippled my stock position. I'm down by 20%!

I'm tempted to cut my losses and sell, but I'm sticking to my plan of buying and holding. $700B did not work?

Ok, I agree with Bush, the cure was injected to the system, the body just need a couple of weeks, months or even quarters to heal.

My Plan:
2. Cut back on luxury expenses to save cash
3. Hold that cash until the first ray of light show up.

Last February 2008, MEG currently is swinging at 2.10 - 2.45, I tried to buy at 2.08, unfortunately I was not able to. The next day MEG rallied at an average of 0.1 per trading day.

Come April 2008, MEG price went back to 2.08, that looked like a bargain to me, and I started buying in 2000 share increments per week. MEG price, declined consistently to 1.80, 1.60, 1.50, 1.40 ... until 1.14.

I steadily bought MEG at 2000 share increments as it went down, since

-MEG paid dividends,
-MEG was a bargain at P/E 8 to10, and I thought that
-MEG will dominate the Mid Level market in the condo business.

But, I was also saving a lot of cash thinking that when it hit 1.00 per share, I'll go ALL-IN on that stock. Thus, when the price hit 1.14, I bought a lot of it and made the average buying price per share @ 1.30. Meg rallied again on the next month and made me a whopping 30% gain.

That's why investors should not PANIC SELL. Just like in Poker, you'll never know until you see the cards.

If you bought 10 shares of ABC stock at PRICE = 10 per share (should be 52 week average of 10)

Thus, 10 shares @ Php 10 = Php 100.

In the next month, the price dropped from 10 per share to 1 per share.

Buy 1000 shares @ Php 1 = 1000

Your average stock price is Php (1000 + 100) / 1010 shares = 1.089 per share.

Now wait till the next BULL comes, price goes back to the average price and there's your X-folds of gain. But the key here, is that to have buffer cash to dig yourself out when you made a wrong stock pick. Just don't put in your kids college fund or rental money.

One more thing. You never really lost money in stocks until you sell at a loss.

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