TINY BUBBLES ANYONE?
August 28th 2009 03:14
Nope, sorry. I'm not talking about Hawaii and neither am I referring to the froth in your beer mugs. I'm talking about miniature bubbles as opposed to the gigantic housing bubble (otherwise known as the subprime mess) that brought about current world economic crisis.
And, yes, I am addressing my fellow newbies again.
Several months ago, a listed company in our local bourse (MER) went from PHP50 to PHP300 . I caught it at 53, held it for a while and, given the volatility that characterized the world markets in recent past, promptly sold the stock when it reached 75.
MER is an electric company that supplies power in several urban centers here in the Philippines and, with its price and the fact that it has a monopoly in areas where it operates, it was an attractive buy. The thing is, this was the time when all the doomsayers were painting the bleakest pictures of the investing world and, while this newbie had a slightly different opinion, I do not have the wherewithal to go against not only the tide but tidal waves after tidal waves of negative opinions.
And only a few and very far between are saying anything positive, if any, about the prospects of the economy in the foreseeable future.
The price of MER fell and bounced back and fell and bounced back again several times after I sold it. In as many times, I thought of buying it again but everytime I hesitated. I have a very small capital and, more than anything else, I hate the idea of losing it. Still, one day, I found the courage and bought it at 73. The price went to 95. I sold it again. Too much pressure from fear of losing the money.
Then, it happened! The price of the stock zoomed up into the sky! I couldn't buy it anymore. I was not sure where the sky ends. I thought it was at 129...The price would fall and climb again and fall again and... darn! I am a newbie and I have not seen the price of stocks move this way.
Sometimes its price goes in tandem with the rise and fall of the world markets. But it keeps coming back... and every time it comes back it goes higher and higher. I knew two giants were trying to wrest control of MER from its current holder... but these are the uncertain times and...
Well, I didn't touch it again and it reached 302! But, should I have? If I did, will I know where the sky actually ends? Will I be able to sell it a few ticks before it comes tumbling back down to earth?
Just a few days ago, one of the giants who were vying for the control of MER came out with a statement. He said they are still interested in gaining control of the power company but the price of its stocks have already gone way too high. Too overvalued.
That was all it took and it was like poof! The price of MER went down too fast you'd wonder if anyone who bought near 300 was able to sell any of it. I'm sure some were able to make a mountain of money hitching their wagon on that rocketship, but I can't hazard a guess on how many are left still floating in their tiny bubbles in the exosphere... Question is: had I bought it again, will I be one of them? Better safe than sorry?
I suppose I couldn't be a day trader, eh?
And, yes, I am addressing my fellow newbies again.
Several months ago, a listed company in our local bourse (MER) went from PHP50 to PHP300 . I caught it at 53, held it for a while and, given the volatility that characterized the world markets in recent past, promptly sold the stock when it reached 75.
MER is an electric company that supplies power in several urban centers here in the Philippines and, with its price and the fact that it has a monopoly in areas where it operates, it was an attractive buy. The thing is, this was the time when all the doomsayers were painting the bleakest pictures of the investing world and, while this newbie had a slightly different opinion, I do not have the wherewithal to go against not only the tide but tidal waves after tidal waves of negative opinions.
And only a few and very far between are saying anything positive, if any, about the prospects of the economy in the foreseeable future.
The price of MER fell and bounced back and fell and bounced back again several times after I sold it. In as many times, I thought of buying it again but everytime I hesitated. I have a very small capital and, more than anything else, I hate the idea of losing it. Still, one day, I found the courage and bought it at 73. The price went to 95. I sold it again. Too much pressure from fear of losing the money.
Then, it happened! The price of the stock zoomed up into the sky! I couldn't buy it anymore. I was not sure where the sky ends. I thought it was at 129...The price would fall and climb again and fall again and... darn! I am a newbie and I have not seen the price of stocks move this way.
Sometimes its price goes in tandem with the rise and fall of the world markets. But it keeps coming back... and every time it comes back it goes higher and higher. I knew two giants were trying to wrest control of MER from its current holder... but these are the uncertain times and...
Well, I didn't touch it again and it reached 302! But, should I have? If I did, will I know where the sky actually ends? Will I be able to sell it a few ticks before it comes tumbling back down to earth?
Just a few days ago, one of the giants who were vying for the control of MER came out with a statement. He said they are still interested in gaining control of the power company but the price of its stocks have already gone way too high. Too overvalued.
That was all it took and it was like poof! The price of MER went down too fast you'd wonder if anyone who bought near 300 was able to sell any of it. I'm sure some were able to make a mountain of money hitching their wagon on that rocketship, but I can't hazard a guess on how many are left still floating in their tiny bubbles in the exosphere... Question is: had I bought it again, will I be one of them? Better safe than sorry?
I suppose I couldn't be a day trader, eh?
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