the long way down

The PSEi has made a long drawn retreat for about a year now. The levels we see were far from just 12 months before.

Many times I'd be watching the market and would feel like it was about to turn. It looks like we're still in the middle of a long way down. Nonetheless, the consensus seems to be that Philippine Stocks are largely oversold. The fact that bargain hunting is not too aggressive even at these levels speaks loudly of the attitude that prevails. The economy of the world is slowing and we are not sure of the extent that it will effect the Philippines.

Common sense tells us that it is possible for the oversold levels we see to be great bargains today but expensive tomorrow depending on how the economy may change the story.

However, I still think that these are the times the best investments can be made. I'm eyeing MWC (Manila Water Corp.) and FPH (First Philippine Holdings). MWC has a business that is fairly easy to understand and a sunny outlook even in a slowing world economy. FPH's fundamentals have changed little but the price has fallen ever so dramatically from its highs above 80 within the past fifty two weeks.