AskJaycee # 8: Impact of Novel Coronavirus to the Philippine Stock Market

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Impact of Novel Coronavirus to the Philippine Stock Market

What’s the impact of the Novel Coronavirus to the Philippine stock market?

Actually, that’s not the question that you really, really, really, really, really want to ask.

What you really want to ask is this: “Sir, stock code naman dyan oh. Alin ang mga babagsak na stocks, hanggang saan sila babagsak, at saang price ako bibili? Alin ang mga hindi affected na stocks, at saang price ako dapat magbebenta? Sir, yung pinakasagad ha, up to the last centavo para simu’t-sarap ang trade ko. Ito username and password ko sa stockbroker’s account ko. Pwedeng ikaw na lang ang pumindot sa buy and sell buttons, Sir?”

My name is Jaycee De Guzman, not Michel de Nostredame or Nostradamus.

Stop the unnecessary stress that you cause to yourself every time you squeeze your brain with your desire to know the probable impact of the coronavirus to the stock market.

Why?

You cannot quantify its direct or indirect impact.

You can only do so much but put these speculations at the back of your head:

  1. It might affect the stocks that are in the consumer business, such as JFC and URC, because some people may opt to stay indoors.
  2. It might affect the stocks that are in the travel and leisure business, such as CEB and PAL, since some people may opt not to travel that much even if summer is around the corner already.
  3. It might affect companies that are in the financial business, such as BPI, MBT, BDO, and SECB, because some businesses may opt to postpone their expansion plans until such time that the economic aura becomes more welcoming to businesses and consumers.
  4. It might affect companies that are in the services sector, such as PGOLD and RRHI, because some people may not frequent stores as much as they did before the confirmation of the coronavirus in the Philippines.

The list of speculations goes on and on to the moon and back.

Do you think you can pinpoint one speculation as the ultimate reason why the stock moves to a certain direction? Do you think you can identify the percentage of contribution of each speculation to the overall statistical impact of the coronavirus to the stock market?

At the end of the day, your guiding principle, whether in short-term trading or long-term investing, should be this: I will only do a test-buy or top up when the ascent in price is more likely to continue. I won’t waste my buying power if the downtrend is still more likely to continue.

I recommend that you look for numbers that are “in the now” and not unquantifiable speculations birthed by a nosy and panicky mind.

Here are a few things you should ask yourself instead:

  1. How do I create a diversified watchlist of stocks that have no volume related issues?
  2. From that watchlist, how do I know which ones are poised to rally and which ones are more likely to continue to move up?
  3. If there’s a buy signal confirmation but I’m torn between holding (not buying) and topping up, which of the present data that I have can I use to replace my hesitation with a high-conviction decision?
  4. What selling strategy I should have so I can sell more logically and less emotionally?

Those are the questions that are worth asking to yourself.

I have already found and mastered the answers to those questions a long time ago.

You will know my 6-step trading and investing processes when you watch my Evergreen Strategy in Trading and Investing in the Philippine Stock Market.

The good news is that nobody has the monopoly of a profitable trading strategy.

You can start searching for answers right now.

Align your strategy with your financial DNA (financial goals, investment horizon, and risk tolerance).

Do this so that when the zombie attacks, you won’t ask this anymore, “Sir, stock code naman dyan! Pakibilisan! Nasa harapan na ng gate namin yung mga zombie! Oo nga pala, natatandaan mo, Sir, noong nagka-Coronavirus sa Philippines? Ibinigay ko yung username and password ko sa online stockbroker’s account ko sa iyo. Bilisan mo, Sir, pakihanap mo yung username and password ko at ikaw na ang mag-buy and sell on my behalf. Para mo ng awa. May nakapasok ng isang zombie dito sa bahay ko!”

Trivia: Zombies only eat brain. They will leave you alone if that’s how you still ask by the time of their attack.

Jaycee De Guzman

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