War profiteering
War is hell unless you are a spectator. The first major battle of the american civil war took place on July 21, 1861, just north of the city of Manassas, Virginia, and about 25 miles from Washington, D.C. When the fighting ended, Union casualties were 460 killed, 1,124 wounded, and 1,312 missing or captured; Confederate casualties were 387 killed, 1,582 wounded and 13 missing.
In anticipation that the war would be brief, both politicians and ordinary citizens—mostly men—took the seven-hour carriage ride from Washington to observe the battle. The newspapers, doing what they have always done well, focused a great deal of attention on the spectators and called it the “Picnic Battle.” It is true that food was brought by the visitors. Contemporary accounts by those that were there described a crowd of men and a few enterprising saleswomen brought “pies and other edibles” to sell to those watching the battle. Were those vendors “war profiteers?”
The comments on local social media about the situation in Iraq borders on hysteria as is normal in the age we live. While it is true that there are some 4,000 Filipinos in Iraq (mostly all “undocumented” or “irregular migrants”) and some 1,200 in Iran, the media statement that “The lives of millions of Filipinos are also put at risk” is way over the top. Of course there is an economic risk to all Filipino workers in the Middle East.
However, perhaps the author of that sentence is too young to remember that there were 100,000 Filipinos working in Kuwait when Iraq invaded in 1990 and that the United Nations Compensation Commission approved claims by some 40,000 OFWs from the Philippines for financial losses during the Gulf War.
Empathy, compassion, and charity are critically important human characteristics and I have the Philippine Red Cross on “speed-dial ” for my PayPal account when tragedy strikes. However, my hierarchy of priorities is my family, my community and the Philippines. All others are far behind and I will profit as much as possible from any situation if I am able and without any apology.
Therefore, if you are investing on the Philippine stock market, here are my thoughts.
As I said on social media, “Blood in the Street” creates more profit opportunities than rainbows. The current situation has created volatility in prices and increased action, which are both necessary to make money in the financial and asset markets. Note that the same thing would happen if a cure for cancer was announced. Life is not fair.
Markets will sometimes react violently to news such as we have now. The standard rule applies; do not let prices go below support levels because you never know how low is low. Further, do not try to pick the bottom. When the bottom comes, you will be informed because, as usual, the price will start going up. Buy issues that have been going up when they pull back but not if they have broken support. Let the price go back above support to go in.
This is important. More than being “hell,” war is unpredictable and as in a genuine armed battle, the tide can turn instantly. If this situation in Iraq continues and you cannot monitor the market frequently, get out and wait. “He who fights and runs away lives to fight another day.”
Finally, pray for peace. It is good for the world and it is good for your own state of mind.
E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stockmarket information and technical analysis tools provided by the COL Financial Group Inc.