Friday, May 06, 2011

San Miguel Corporation New Listing: A Punter’s Regret

So my suspicion seems to have been proven right.

Since SMC’s offering was all about fund raising. or more importantly, a fast break deal for the exiting group, the perception of shortage appears to have been a great marketing strategy—a hype!

And such perceptions have drawn in many covetous short term players in the expectations of a free lunch trade.


Yet SMC closed slightly below the listing price, post offering. Trading for the issue resumed yesterday.

If everyone thinks the same, then who stands at the opposite side of the trade?

So goes the tale of the punter’s regret. Now these gamesters would have to wait for a breakeven or cut losses or long the stock, which essentially defeats expectations of a successful ‘scalp’.

Nevertheless as said before, SMC’s prices will be subject to the overall conditions of the market.

Since I believe that the general trend is up, then SMC should go up overtime. But fast break bets belong mostly to the operators more than us....unless we get to be lucky enough.

Bottom line: Short term trades are mostly a high risk-low return proposition.

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