Just when I thought that the economy is on it's way to a new bull market, the Dow Jones Industrial Average dropped to 8100-8200 level. US Job losses is at 9.5%. And personally, the company I'm working for just CUT 5% jobs.
When the DOW dropped to 8400, I've already sold all my stock, because I was expecting the PSEi to take the same route. However, this was not the case. PSEi just dropped slightly and now it is moving slightly upward.
I can conclude that the US economy might now have a lesser influence on our market. My theory is that, Filipinos were always frugal with their spending. Maybe because in the Philippines the unemployemnt rate is always constant at 7-10%, thus people are forced to save.
Further, it is very difficult to get approval for a credit card or loans. Bank usually do not approve of loan application when there is no collateral. Thus, banks might not make really good profit, but it is unlikely for a banking meltdown in the Philippines.
As I said before and I'm saying again (April 2009 Stock Picks), I'm putting my money on these stocks, since AC and SM has a diversified portfolio and I feel safe. Also, I picked SMC for the same reason, but still waiting for the next good news to go all in.
Ayala Corporation (AC)
P/E Ratio: 17.70
Current Price: 270
San Miguel Corporation (SMC)
P/E Ratio: 13.60
Current Price: 60
SM Investments Corporation (SM)
P/E Ratio: 13.30
Current Price: 305
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