Saturday, October 4, 2008

My Opinion on the 700B Bailout Package

I just recently increased my portfolio by 20%, due to the bailout issue.
Just 2 days ago, the bailout bill was approved in the U.S. congress after it was rejected last week.
The reason the bailout package is important to my stock position is that it will make the money supply increase.

From my observation, when the money supply increases, loan approvals becomes easy, and there will be another boom in the business. Jobs will be created, people will have more purchasing power. And since, there are a lot of US companies with offices/plants in the Philippines, my speculation is that the Philippine economy will also feel the effect of the 700B bill.

So get the 25% of your saving and start investing. Check the financial statements of the company you wish to invest in and make sure that the company's P/E ratio is less than 15. That will tell you that the stock is not overpriced and is really making money.

And when the bull market comes, wait a couple of months, then be ready to sell all your stocks.

Current Portfolio:

(53.34% of portfolio) MEG +5.32%
(24% of portfolio) SMDC +2.67%
(6.4% of portfolio) DGTL -13%
(9.7% of portfolio) FLI +1.24%
(6.3% of portfolio) SMB -9.35%

Total Gain = 1.05%

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