A tale of ghosts in the year of the Sabbath

Image courtesy of Market Watch

(http://www.marketwatch.com/investing/index/psei?CountryCode=ph)
On August 24, 2015, the Philippine stock market fell as low as 6,791.01 from
a high of 8137 last April 10, 2015(see image). To which, some has speculated that
these slowdowns and selloff were due to the Chineses Ghost month or the jewishs
shemitah.
Many people have heard of this Ghost month superstition and what it
symbolizes. However, not many people know of the Shemitah and what it
symbolizes.
The Ghost Theory
In the Chinese Culture, ghosts comes out from on the fifteenth day of the
seventh lunar Month which is usually fall on August or September. This said, the
Chinese has a superstition on the Month of August which is an Auspicious Month.
Here, The Chinese usually do not move not repair their house, doesnt start new
business as well as invest on the stock market.
However, by looking at the historical data from the past years, last August
2014, the PSEI had hit new highs at 7096 while August 2013 proved to be
unfavorable as the PSEI fell through the 6500 range. As seen here, there was an
inconsistency with regards to August 2013.
The background on Shemitah
Shemitah is a Hebrew term which means Release. Accordingly, the
Shemitah is the seven year agricultural cycle mandate by the Torah from the land of
Israel. Here, all agricultural activities such as plowing, planting and harvesting are
prohibited. It was said that the land would be fruitful for six years, and the seventh
year was to rest.
Accordingly, to an article in http://www.marketoracle.co.uk, way back in 1987,
the stock markets crashed around the world. They called it the Black Monday of

October 1987. After 7 years, in 1994, the Bond Market crashed. While on the year
2001, if you were old enough to remember, the September 11 attack on the World
trade Center happened and Wall Street was closed for 5 days. Lastly, on 2008, the
Housing bubble burst in the U.S.A along with the bankruptcy of the Lehman
Brothers. The Dow lost about 777 points on Sept 29, 2008.
The 2015 Shemitah and Ghost Month
The next Year after 2008 would be this year, 2015. As we all know, the china
market had plunged this year especially last August 24 th in which the Chinese stock
market closed 8.5% down, as what followed was a collapse of the different equity
market all over the world.
Last September 1, The New York stock exchange even used rule 48 to stop
panic trading. The goal of Rule 48 is to ensure orderly trading amidst financial
turbulence and is only used when there is extremely high volatility. Rule 48 speeds
up the opening by suspending the requirement that stock prices need to be
announced at the market open.1
How to get the best of it
As Warren Buffet quoted, buy when others are fearful and sell when others are
greedy. Some people do get a chance to buy stocks at a bargain on ghost month
and the Shemitah cycle. Even myself, I bought UITF last 2009 and bought stocks
last month (August) ended up with a hefty gain.

1 http://www.cnbc.com/2015/08/24/rule-48-the-arcane-nyse-rule-to-tame-a-wild-market.html