signs of an ever shrinking world

Cheaper gas = higher stock prices. The oil price has been falling due largely to shrinking demand. Much of the slash in demand is stateside in origin. Americans are reacting to the rising prices by driving less.

CNBC reports that "U.S. drivers have turned to public transportation and shortened trips in response to high gasoline prices, a major factor in oil's drop of more than $31 a barrel since hitting a record over $147 per barrel last month."

I thank the American citizenry for reducing their time behind the wheels of their gas guzzlers. Not really because it boosts stock prices but mostly because its better for the environment. But yeah, it has a nice effect on our stock prices and I like that too.

ALI buying back shares is a good old common sense buy indicator

Ayala started a buy back program today to repurchase around Php3billion worth of ALI's shares. I like to piggy back on behavior like this. When a company buys back its own shares it sends a clear message. First, that in their opinion, their long term outlook is good. Second, that they are willing to put their money where their mouth is.

Of course a devil's advocate will argue that maybe that's exactly what they want investors to think... But if we think that way, we'll go around in circles. I like to keep it simple.

Besides, ALI has been around for a long time and based on their track record, they aren't the type of company to do that kind of thing. But then again even if they did, I'm sure they can wing it and make it work well for the shareholders. :)

why the boost in stocks?

I'm wondering why we've seen a few rallies at the PSE lately. I've been looking at the news and haven't seen anything noteworthy that would boost stocks. Our basic fundamentals don't seem to have changed much except of course that the oil price has been falling in the world market.

Is oil that big a factor? What about inflation. Doesn't it look like its here to stay?

Ron Nathan seems to be of the opinion that things are still bad. He even quoted someone saying that 2009 may be worse than 2008 for the global economy. Ron soberly reminded us about the housing problem in the U.S.

While I don't want to concede quite yet that 2009 will be worse for the Philippines, I would agree with Ron's point in that we haven't seen the end of the credit and housing crisis which really was what started the jitters mid to late 2007. Since then our stocks (and sadly our portfolio's) have been steadily going down. Why the boost now?

Tsupitero hasn't updated his website so I don't really know what's going on with the number crunching. :p However, since foreign selling is still going on we have to look within our shores for the reason. My guess is still that the bottom hunters and the like have been making bets. What their reasons are elude me. So with that in mind, it all sounds like a house of cards.

I'll wait till the PSEi falls below 2500 before I go shopping again.