When it comes to long-term position investing that does not demand frequent monitoring like trading, I prefer stocks that are heavily played by foreign investors. That is not to say that foreign flow is the only indicator I use in the selection process. It is one of the filters.
Why am I sharing the foreign flow charts of $AC, $BDO, $IS, $JFC, $MER, $TEL, $RRHI, $SMPH, $PSE, and $URC with you? For informational purposes only. Continue reading if you’d like to know the stance of foreign investors with these 10 stocks. Why did I pick these 10 stocks? There’s no major reason. It just so happens that they are the top 10 most active stocks by total turnover value today, April 26, 2016.
Am I implying that you should only buy stocks that foreign fundies are buying or selling? No.
Here’s how I incorporate foreign flow in my analysis.
If I am prepping up to add Stock XYZ in my long-term portfolio, first, I need to check if it has hit my preferred entry price range. If Stock XYZ is still priced a few fluctuations above my preferred entry price range and foreign investors are heavily selling it, then, that gives me the reason to wait some more as the price might be brought down due to the heavy outflow of foreign funds. That’s one scenario when it comes to buying.
How about when selling?
Let’s say Stock XYZ is drawing closer to my pre-determined target selling price. If foreign fundies are continuously registering heavy Net Foreign Buying amounts, then, it’s highly likely that my target selling price will be achieved due to the bullish influence coming from heavy Net Foreign Buying days. That’s just another scenario.
So, those are just two of the many scenarios as to when I incorporate foreign flow when I make decisions for my clients in the Stock Signals. How about you? What factors do you consider before you make a go or a no-go decision for yourself? Do you do the same or you embrace the “buy now, analyze later” approach? Ahahahay… Distance yourself from the “buy now, analyze later” psychology. Otherwise, your stock trading and investing experience will be more painful than profitable.
I encourage you to subscribe to the Stock Signals so we can continue having a no-nonsense discussion in my forum. No comedy. No beating around the bush. We’ll just talk about numbers, strategies, and trading psychology that you need to have a stress-free trading and investing experience. We realize losses if need be. At the end of the day, our gains are maximized and our losses are minimized. I hope you’re not experiencing the otherwise.
These charts were generated through my Foreign Flow calculator. My Plus and Unlimited Plan subscribers may download and use my calculators.
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Whether you’re buying food or subscribing to the Stock Signals, it is important to know WHAT you are paying for and not just HOW MUCH you’re paying. Do comparison in terms of value and results.
Here’s an analogy. An iPhone 6 and a Nokia 5110 are both mobile phones. If you are going to buy Nokia 5110 just because it’s cheaper than an iPhone 6 and you didn’t bother checking why the latter is more expensive than the former (e.g. features), something is wrong (either with the phone or with you).
Also, if you’re still depending on the analysis of random people on social media, it’s time to re-think your strategy. They may be good in analyzing stocks, but you can’t hold them in the neck and make them responsible to reply to you each time you ask. If you’re depending on random analyses, know that each person has a unique risk tolerance. Haven’t you noticed you’re only harvesting confusion and not clarity? Why not make me responsible to reply to you by subscribing to the Stock Signals? That way, there’s a follow-through and uniformity of thoughts in our conversation. Do yourself a favor especially if you’re just starting to learn the ropes all by yourself.
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