PMT Forum
How do you want to make money today?

'Sell in May and go away'. Is it applicable in the Philippines?

richpulubi · 26 · 6350

richpulubi

  • PMT Jedi 2500
  • ****
    • Posts: 2,864
    • Likes Received: +2/-0
There is a saying in the stock market in the US wherein you 'sell in May and go away'.  Meaning, you sell and take profits in May, and wait until I think November before buying again.  Values will be on a downward trend in the past few weeks and the next few months daw.  I think it is when the market is weakest in the US, considering it is the start of summer ata, and business slows down.

Because of globalization, how will this affect our market?  Will we also have a slow down, or will money flow to here, since foreign money will look to the Phil for more appreciation than the US?

Are the months of may, june, july, and august slow months for equities in the rp?

Thanks in advance guys!


TSO

  • PMT Idol 1500
  • ****
    • Posts: 1,639
    • Likes Received: +1/-0
Let's take a look at the PSE all-share index, shall we?

These are all beginning-of-month values, by the way

Nov 2010: 2760.02
Aug 2010: 2197.91
May 2010: 2038.57

Nov 2009: 1826.80
Aug 2009: 1786.06
May 2009: 1422.83

Nov 2008: 1313.46
Aug 2008: 1623.74
May 2008: 1723.94

Nov 2007: 2340.33
Aug 2007: 2163.03
May 2007: 2081.70

So... what does the data say? :D


bauer

  • VIP 4500
  • *****
    • Posts: 4,857
    • Likes Received: +12/-0
there is an average upside of 25% come november?..... excluding 2008 data of course


TSO

  • PMT Idol 1500
  • ****
    • Posts: 1,639
    • Likes Received: +1/-0
Yeah...

But then, if you look at August -- the midpoint between May and November -- it actually went UP on all but 2008 (which was when the financial crisis struck the Asia-Pacific region, if I recall correctly).

^^


richpulubi

  • PMT Jedi 2500
  • ****
    • Posts: 2,864
    • Likes Received: +2/-0
Cool!  I guess, it is good to buy...if history is a guide!

Post Merge: May 23, 2011, 02:01 PM
And yes, the crisis bottomed out at Sept. 2008.
« Last Edit: May 23, 2011, 02:01 PM by richpulubi »


bauer

  • VIP 4500
  • *****
    • Posts: 4,857
    • Likes Received: +12/-0
the data of the composite index is good BUT careful with the stock picks.  Most stocks does not move in the same direction as the composite index taken on an individual selection basis unless you will 'mimic' the stock composition of PSE index


ahock

  • Forum Champion 800
  • ****
    • Posts: 818
    • Likes Received: +0/-0
may data ba na 3 months before ng may para malaman natin if may sell off pag may sa Pinas?


rds

  • PMT Jedi 2000
  • ****
    • Posts: 2,048
    • Likes Received: +0/-0
meron ba talagang pattern ng sell-off???

may nagsasabi na october daw! yung panick selling kasi ay nangyayari ng biglaan at kusa, depende sa mode ng traders. kasi kung may pattern, say october, then lahat ng money managers, traders and analyst will sell their stocks on september pa lang di ba? then next year august pa lang...na break na yung pattern.

the only sure thing is that bear market will come at hindi namimili ng buwan.


TSO

  • PMT Idol 1500
  • ****
    • Posts: 1,639
    • Likes Received: +1/-0
Do you guys really want me to provide the month-end data for the Phil. all-share index?

Technically, I could give all the data of years 2006 to 2010 for your review, but that's a lot of work, even for me. Work better spent on analyzing companies.

I'm not even interested in the sell-off to begin with, because, as far as I saw, the All-Share index curve just keeps going up from May to Nov. Besides, you should be more interested on periods before the quarterlies or annuals are publicly disclosed, as that's usually when stocks go up or down.

The marketplace, after all, is about perception of value, and nothing says more about value than "increased earnings".
« Last Edit: May 24, 2011, 11:59 PM by TSO »


DonT

  • PMT Idol 1000
  • ****
    • Posts: 1,477
    • Likes Received: +0/-0
For me..Buy in May..then go away.


arnel

  • Forum Master 400
  • ***
    • Posts: 441
    • Likes Received: +0/-0
@TSO, that would be great sir! At least somehow we will have an idea which month is the best time to buy - applicable I guess for thos who wants to buy in the long term like me,,,


TSO

  • PMT Idol 1500
  • ****
    • Posts: 1,639
    • Likes Received: +1/-0
@TSO, that would be great sir! At least somehow we will have an idea which month is the best time to buy - applicable I guess for thos who wants to buy in the long term like me,,,

Okay, bud, here. I logged on COL and keyed in closing values for the All-Share Index from 2000 to May 2011.

In those 136 months, 48 of them were negatives, representing 35% of the sample population. The average level of decline for the falls in a given year ranged from 0.25% to 6%, with significant levels of variation.

Empirical laws of statistics state that 68% of all declines should fall between 1% and 5% losses.

Now, a majority of these declines are concentrated on the months of August (7 out of 11), February (6 out of 12), September (5 out of 11), and December (5 out of 11). May, June, and July fell simply at the average number of declines per month over the past 136 months. Gains are normally produced in January, April, October, and November.

Median for declines in August was 2.42%, 4.59% in February, 3.13% in September (there were two outliers of 21% and 15%, resulting from macroeconomic forces beyond the scope of reasonable predictability), and 2.58% in December. These values fall within the aforementioned range of 1% to 5%.

Before you even think this means that companies get cheaper during those four months (Feb, Aug, Sep, Dec), be warned that the stock market has been rising at an 11Y CAGR of 15.26%, with May 2011 4.77x higher than what it was on May 2000. The financial crisis of 2008, which caused the market to contract from 1668.75 on July-end to 1194.84 on Dec-end (a 28% fall!) was still 1.44x higher than prices on December 2000 and was actually comparable to prices seen on 2004.

To further accentuate that companies can actually get more expensive despite the declines, let's compare August close versus May close.

2000   12.21%
2001   3.78%
2002   -16.71%
2003   12.05%
2004   4.20%
2005   0.01%
2006   0.77%
2007   -3.46%
2008   3.22%
2009   16.73%
2010   9.32%

ON AVERAGE, the market is 3.8% higher on August compared to May. The same thing occurs if you use September instead, coming up with a median of 8%. Obviously there is no point to timing the market over the long run.

If there's one thing we could all learn from this, well, it's the notion that all purchases on the months of February, August, September, and December should be done on month-end.

By the way...

Quote
the data of the composite index is good BUT careful with the stock picks.  Most stocks does not move in the same direction as the composite index taken on an individual selection basis unless you will 'mimic' the stock composition of PSE index

Agree completely.



Post Merge: May 25, 2011, 01:18 PM
Oh and yes, here is the raw data:

   2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   2011
January   667.48   816.56   727.05   627.98   937.92   1158.49   1308.87   2012.55   1921.16   1194.84   1885.49   3033.13
February   586.5   781.61   744.67   638.86   941.58   1197.86   1300.04   1983.3   1827.11   1211.02   1928.34   2853.74
March   625.93   716.7   746.58   650.09   936.1   1186.96   1344.97   2046.76   1715.57   1283.9   1979.42   3005.85
April   628.4   727.22   746.92   672.77   971.24   1137.27   1408.43   2078.72   1741.79   1359.78   2043.97   3057.64
May   620.71   747.12   757.58   685.42   969.47   1174.54   1434.77   2222.59   1571.68   1567.87   2065.03   2960.45
June   655.65   781.16   700.78   730.29   1013.22   1173.99   1369.89   2361.15   1619.43   1566.47   2145.51   
July   629.75   810.58   646.64   769.2   1006.83   1201.32   1471.44   2268.96   1668.75   1768.16   2182.79   
August   696.5   775.39   630.98   768.04   1010.2   1174.65   1445.81   2145.62   1622.25   1830.18   2257.48   
September   682.96   656.31   611.22   791.49   1092.63   1182.49   1552.59   2226.71   1272.57   1787.09   2575.38   
October   701.01   643.01   612.94   839.31   1134.11   1191.02   1664.01   2340.33   1242.08   1828.37   2725.89   
November   708.75   700.92   642.84   836.35   1164.25   1271.35   1744.28   2216.75   1196.99   1891.51   2742.53   
December   829.93   682.87   608.78   874.78   1154.39   1273.14   1860.34   1973.96   1194.84   1918.64   3006.42   
« Last Edit: May 25, 2011, 01:29 PM by TSO »


rds

  • PMT Jedi 2000
  • ****
    • Posts: 2,048
    • Likes Received: +0/-0
@ TSO,

just want to clarify, kasi mukhang hindi tumutugma yung data mo sa pagkakaintindi ko sa data ng FMIC.

iba ba yung "All Share Index" sa "PSEI Stock Index"?

kasi PSE Index ngayun ay umaabot na sa ~4,200, while your data is only ~3,000.



TSO

  • PMT Idol 1500
  • ****
    • Posts: 1,639
    • Likes Received: +1/-0
Yep.

PSEi only tracks a certain number of companies. The all-share ibdex LITERALLY tracks all companies within the Phil market.

The code for the all-share index is PASHR. i chose this since we're talking about the market as a whole.


bauer

  • VIP 4500
  • *****
    • Posts: 4,857
    • Likes Received: +12/-0
to make the comparison meaningful & relevant, use the ALL STOCK INDEX data and not the PSE index data because the stock composition CHANGES from time to time unlike the ALL STOCK.


 


PMT Shoutbox

Refresh History
  • Post only questions or comments here. Advertisements NOT ALLOWED.
  • oragon: :applause:
    May 20, 2019, 03:53 PM
  • FutureGizmo: Thank you for reporting those spam posts, oragon! Spam posts now deleted.
    May 20, 2019, 01:59 PM
  • oragon: Admin kindly monitor some peps! posting and sharing inappropriate nude photos and website links
    May 20, 2019, 01:52 PM
  • @culinary10: Hello I am new here! Regarding sa bdo life insurance for 8 years, pwede pa kaya ma refund yung binayad ko na 50k last year? Gusto ko sana icancel kasi lack of financial na, last may 15 2018 po un nag start ako ng life insurance, pinili ko annually kaso etong may 15 2019 wala nako ma ipay so gusto ko sana icash out, may alam ba kayo kung pano marerefund?
    May 17, 2019, 07:56 PM
  • FutureGizmo: Hi Sonny, the posting issue is now resolved. Thanks for informing us! We're currently testing a new, mobile-ready theme so let us us know kung may problema pa sa Forum. :)
    Apr 04, 2019, 10:40 AM
  • sonny.wapak: Nakaka receive din ba kayo nito pag gawa ng new post? "Please try again. If you come back to this error screen, report the error to an administrator."
    Apr 03, 2019, 10:56 PM
  • leonine_zafiro: what product nun?
    Apr 01, 2019, 10:25 PM
  • dhondiex27: hi
    Mar 30, 2019, 10:55 PM
  • lusart: jayrob i agree 200%. hulog ng langit organico. legit na legit
    Mar 29, 2019, 09:08 AM
  • palemelch: Hi
    Mar 28, 2019, 04:08 PM
  • O.C.W._AK: Magandang Araw sa Lahat! Blessings! (",)
    Mar 28, 2019, 08:42 AM
  • thor15: hello everyone, newbie here
    Mar 25, 2019, 01:47 AM
  • captjaylo: present newbie here
    Mar 22, 2019, 10:06 AM
  • balboagilbert26: hello Guys .. Newbie here
    Mar 21, 2019, 10:55 PM
  • businesswoman2019: @jefsanity nag inquire na po ako pero di sila nagdidisclose. Yung branch po kasi na target ko, currently building pa.
    Mar 21, 2019, 04:27 PM
  • jefsanity: @businesswoman2019, much better inquire ka na lang sa admin nila.
    Mar 21, 2019, 01:51 PM
  • businesswoman2019: Hello! Any idea how much ang stall sa waltermart. 2m x 2m
    Mar 21, 2019, 08:28 AM
  • John Neil: Looking for an accredited iron foundry
    Mar 17, 2019, 03:19 PM
  • jayrob: Mark_Lee ung organico legit po yan..  Member din AQ..
    Mar 17, 2019, 12:57 AM
  • perlymelad: Hello po! Need advice, why my new MLM leaders failing?
    Mar 14, 2019, 08:51 PM
  • perlymelad: Present
    Mar 12, 2019, 07:53 PM
  • kennethmauricio: Hi saan po dito pwede mag post ng for sale properties?
    Mar 11, 2019, 07:58 PM
  • jefsanity: @mark_lee isipin mo anu passion mo at skills mo...
    Mar 11, 2019, 06:52 PM
  • sniperaj09: BAGO LANG
    Mar 10, 2019, 11:16 AM
  • mark_Lee: magandang investnent ngayon sa 30k suggest naman keo mga boss
    Mar 10, 2019, 03:07 AM
  • perlymelad: E-BOOK PO SIR @JEFSANITY
    Mar 09, 2019, 05:40 PM
  • perlymelad: @jefsanity Good Morning Po
    Mar 09, 2019, 05:39 PM
  • perlymelad: Good Day everyone
    Mar 04, 2019, 06:24 PM
  • jefsanity: anu ang small business na yan?
    Feb 28, 2019, 07:40 PM
  • perlymelad: Good Day Everyone
    Feb 28, 2019, 03:31 PM
  • perlymelad: Hello everyone, CAN ANYONE HELP ME SUGGEST ANY SIDE TOPIC  / PROBLEM OF  STARTING SMALL BUSINESS?
    Feb 28, 2019, 06:58 AM
  • perlymelad: Present, 1st time po
    Feb 25, 2019, 06:17 PM
  • jd2281: newbie po
    Feb 25, 2019, 12:26 PM
  • ejllantino: present... 1st time
    Feb 24, 2019, 07:14 PM
  • rheiel: present. first time
    Feb 24, 2019, 11:04 AM
  • MELVIE: thanks po
    Feb 24, 2019, 12:50 AM
  • steph123: hello po, ask lang po, ilang months po ba ang hihintayin after mo ma process ang mga documents para maitama ang mali sa NSO?
    Feb 11, 2019, 03:13 PM
  • Deborah: newbie here.thanks
    Feb 08, 2019, 02:17 PM
  • marj0503: hello im newbie here
    Jan 31, 2019, 10:53 AM
  • yan24: any one here planning to start a tesda skill training center
    Jan 26, 2019, 12:07 PM
  • manzjon: Forex trading forum
    Jan 25, 2019, 02:16 PM
  • Lizette Ramos: Pwede po bang patulong... Maganda po ba ang gasul retailing business?
    Jan 24, 2019, 09:14 PM
  • Imnobody: Hi sino naghahanap ng casino financer dito?
    Jan 16, 2019, 09:59 PM
  • Odlanyer22: Good day!
    Jan 16, 2019, 09:55 PM
  • maryen: at kung sakaling may somobra sa food na nailuto.. dapat po bang bayaran ng client un .. or ipapa take mo na sakanila?...
    Jan 16, 2019, 03:52 PM
  • maryen: HI! GOOD DAY! newbiz lang po... question lang po regarding sa catering.. if may 50pax po ako dapat lang po ba na sakto ang serving ng food?
    Jan 16, 2019, 03:50 PM
  • mark_Lee: cno na nag organico dito scam po ba yun or legit
    Jan 09, 2019, 03:04 AM
  • kuray08: Have a Prosperous New Year to all..
    Jan 06, 2019, 09:27 PM
  • ethan: Sino po may auto supply business dito? How profitable po ba ito in terms of monthly income? Lalo na kung meron na one or two na competition.
    Jan 04, 2019, 11:34 AM
  • Niel Jhacoubs: HAPPY NEW YEAR!
    Jan 02, 2019, 04:37 PM