THE RESPONSIBLE TRADER – TRADING LESSONS – STOCK CLASSIFICATIONS – PART 3 PROPOSED CLASSIFICATIONS FOR PHILIPPINE STOCKS BASED ON MARKET CAPITALIZATION
THE RESPONSIBLE TRADER – TRADING LESSONS – STOCK CLASSIFICATIONS – PART 3
PROPOSED CLASSIFICATIONS FOR PHILIPPINE STOCKS BASED ON MARKET CAPITALIZATION
Based on the ranges indicated in Part 2 and converting Dollars to Pesos at the rate of P50.00 to US1.00 gives us an initial basis for classifying Philippine companies based on market capitalization as indicated in Table 14 below.
If we apply this table to Philippine companies, not a single one would even qualify for the PhP 10 Trillion level. Based on BPI Data as of Sept. 30, 2018 in terms of market capitalization the highest in the PSE are Manulife Financial Corporation (MFC) with PhP 1.549 Trillion, SM Investments Corporation (SM) with PhP1.119 Trillion, Sun Life Financial, Inc. (SLF) with PhP 1.082 Trillion and SM Prime Holdings
Considering that the PSE has only about 270 plus listed companies, compared to more than 4,000 in the United States, I am proposing a more practical approach by not using the Mega Cap Classification while adopting the rest. We have to adjust the cut-off for the Nano Cap by including companies with market capitalizations below PhP 1 Billion for a more even distribution as indicated in Table 15.
The Market Capitalization of a stock is usually provided in the Stock Quotation of your online broker. If not provided, you can always go to PSE EDGE (www.edge.pse.com.ph) to get your data.
Table 16 shows the Philippine stocks listed in the PSE classified accordingly based on the proposed Market Capitalization.
My reason for the proposed Market Capitalization is to properly classify the Micro Cap and the Nano Cap. Basically, these are the companies whose trends are relatively flat but go parabolic when they breakout. It will be our hunting ground and the subject of my next book: “Momentum Trading with TRT – A Definitive Guide for Daytrading and Scalping the Philippine Stock Market.”
Good luck on all your trades.
NOTE: No change in numbering of Figure is made so that those who have my books, “The Responsible Trader – a Thinking Person’s Guide for Trading the Philippine Stock Market” and “Swing Trading with TRT – a Definitive Guide for Swing Trading the Philippine Stock Market” can refer to them easily.
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In line with our VISION, A RESPONSIBLE TRADER IN EVERY FILIPINOS HOME, we aim to continue promoting financial literacy on the area of stock market trading and investing to our countrymen both here and abroad through the following:
1. We have successfully launched “Swing Trading with TRT – a Definitive Guide for Swing Trading the Philippine Stock Market” last September 2, 2019. This book is the second in our Responsible Trader Education Series.
You can download Chapter 1 and see the Table of Contents here: https://drive.google.com/file/d/1NZEABnQMiQ_zenEMs0lPFWweX4WBxBHg/view?usp=sharing
The first book, “The Responsible Trader – a Thinking Person’s Guide for Trading the Philippine Stock Market” provided all the basic knowledge that a trader needs to know in order to trade the Philippine Stock Market effectively and efficiently. The first book is about the basics. This second book is about the specifics.
2. The Book: “The Responsible Trader – a Thinking Person’s Guide for Trading the Philippine Stock Market” now earned the name “The Bible of Philippine Trading.” You can download Chapter 1, Section 1 of the book here: http://theresponsibletrader.com/the-responsible-trader-hope-for-trading-knowledge-test/. For those interested in the hard copy, please send email to: ninjatrader919@gmail.com Subject: The Responsible Trader – Hard Copy.
As requested by those abroad and those who want the book in digital form, we have produced an eBook version. For those interested please send email to: ninjatrader19@gmail.com Subject: The Responsible Trader – eBook Version.
The book can also be ordered online through our publisher, Central Book Supply. Just go to: http://central.com.ph/bookstoreplus then click Search – The Responsible Trader.
3. The Website: :http://www.theresponsibletrader.com where we publish our daily newsletter Top Ten Smart Money Moves, Stock Trading Lessons, and Inspirational Materials. (FREE)
4. The YouTube Channel: https://www.youtube.com/theresponsibletrader – where you can learn the course “Master’s Certificate in Technical Analysis” which was simplified in an easily understood manner. You can download these videos and learn them at your own convenient time. (FREE)
5. My Slideshare: http://www.slideshare.net/TheResponsibleTrader – where you can view and download copy of the Powerpoint Presentation of my TRT-POV (The Responsible Trader’s Point of View) of the videos posted in our Youtube Channel. (FREE)
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DISCLAIMER There is a very high degree of risk involved in TRADING. Past results are not indicative of future returns. Nothing contained in this newsletter constitutes a solicitation, recommendation, PROMOTION or endorsement of any security. In accordance with the Responsible TRADER’s Creed: I will never tell and you take full responsibility for all your TRADING results