Monday, June 8, 2020

Why and how the PSE is rigged

Manipulation in Marketing: How It's Used, and How to Use It Ethically
Like I said, the Philippine Stocks Exchange is rigged. We have companies that do not file accurate financial statements (as they add a lot of accounting magic to them). Most are more involved in political activities than business, have cases of AMLA, links with shady organizations and violations where no one gets punished at all. But this is not the worst part. The worst is that these companies also play the market, something not allowed in 1st world countries that lands people in jail and companies being penalized in billion to total shut down. So lets break down how the big companies manipulate the market and how they victimize traders and investors.

811 Best Media Bias and Control images in 2020 | Media bias ...
This is already a given to most. An entity that promises to provide unbiased and up to date report on what is happening in the country or across the globe. Led by people of "high integrity" and is not affiliated with anyone nor protects anyone. Just pure integrity news source right? This is the biggest joke people still believe in. The NEWS Network just like any other programs rely on funding to operate. There is no such thing as charity and everything has a price. The NEWS networks are funded thru Advertisements, Sponsors (even foreign states) and business interest groups. If you are the news network and you are to be paid millions not to air a report exposing and damaging a company, rather they want you to promote them, then that will be the NEWS. This is how they turn victims into villains and the perpetrators into heroes. There is a saying that if the NEWS is spreading bad news, be on the hunt for opportunities. If they keep spreading good news, be on the lookout for dangers ahead.

Brokerage Firms
These are companies who provide platforms for people to trade their stocks which is great. Popular ones include FirstMetroSec and ColFinancial.  But you have to understand, having such control also means they would have an edge playing the markets. They can see thru trades being planned before and after market hours. They can time the market with ease compared to the average traders. The worst though which most traders and investors will encounter are intentional slowdowns and inaccessibility. If you have been trading for quite some time, you would encounter sudden slow downs where you either take so long to submit an order and unable to buy or sell on time, or you just cannot log-in at all. These are not one-offs and the local brokerages make different alibis and excuses but never fix them. Why fix something that is actually a feature than an issue right? because I tell you, this feature they have has existed since I started using them in 2007! Notice whenever this happens, the market drops, this is their way of "Shaking off the people"

Fake News, Fake Groups and Fake Accounts
Fake accounts, fake accounts.... Everywhere!!! - Toy Story Meme ...
This is similar to NEWS above but is more malicious. If you imagine them to be like some alien parasites, its their way of "blending in the crowd" and pretend to be down to earth. act like a human, talk like a human, mingle with humans, then talk about opportunities in their space. The Media uses it and Big corporations to get market sentiments and also stealing private data in a blanket wrap they call "know your customers" of KYC. Fake accounts have become so important as well nowadays as they use them to generate fake likes (illusion that something is popular) and fake reviews (to spam comment sections with comments praising or destroying specific people, group, company or product).

Insider Trading
Investor Juan: Geographical Diversification, Part 1: A Second Look ...
If you know someone on the inside, that would be great. This is because whether you like it or not, the market is definitely rigged from the inside. If companies play their stocks, then any trader or investor who are outsiders have already lost. It is the same as gambling with someone who has arranged the order of the cards. This is why one of the key decision factor of fundamental investors is to know which people are in the executives and board. A company with unethical and cunning leadership is not worth investing with. all they will be focusing is hyping and crashing the company's stocks while they reap people off. If the company is losing sales and not growing, but grows has lots of stock market activities, then products and services is not on their priority list nor is it their main source of income. Notice that no one has ever and can ever be punished for such in the Philippines.

Accounting Magic
8 Best Accounting Quotes images | Accounting, Accountability ...
Knowing how much window washing is done by companies in the country is enough for me to say "fundamentals" are "technically" dead. I would be happy to invest for example on RCBC and BLOOM (Solaire) due to how much they stole from the Bangladesh bank (Money laundering). However I believe such "profits" will not add to their Financial Reports for the benefit of the investors and are pocketed by the several people for the job well done. Like that, same to what I just said, no one actually gets punished in the Philippines so corrupt behavior is an acceptable norm.

My two cents
This is not to make you spooked from investing or trading in the PSE. But some things you need to be aware of than walk around it blindly. There may be other issues you have encountered that is not listed here but these are most of the major issues we see about the Philippine business environment that makes it one of the most dynamic and dangerous to put your money into. Until the government enforces the law correctly, the Philippines (and of course Filipinos as a whole) will be seen as one of the most corrupt, emotional and unpredictable in comparison with its neighboring countries who are stepping up and surpassing us in almost everything.

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