Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post
Market Place

Add an ad

View all ads

Latest topics

» ගෝඨාභය නෙමෙයි පුටින් ආවත් market එක ගොඩ ගන්ඩ බෑ
by stockback Today at 5:46 pm

» Questionnaire on the stock market investor behavior in the Sri Lankan share market
by gayani2018 Today at 9:41 am

» AEL going up short term for gota coming is only chance for trading
by sanjulanka Today at 7:11 am

» Capital trust recommended to buy AEL ..Target Price Rs.24.50
by Eng Krishantha Today at 1:45 am

» NEST going to run?
by Bakka1988 Yesterday at 11:08 pm

» when you invest in a company call that company and ask some thing
by ThilinaM Yesterday at 3:47 pm

» Chevron will go down further in fundamentals
by ThilinaM Yesterday at 2:06 pm

» read this carefully - thease dumb investment advisors will advise when gsp received teejay operation would be better
by ThilinaM Yesterday at 1:21 pm

» Rocell undervalued
by ThilinaM Yesterday at 12:36 pm

» Friends I read a book traders are loosers
by ThilinaM Yesterday at 12:34 pm

» Central Bank Reduces Its Policy Interest Rates
by Miss-Sangeetha Yesterday at 10:46 am

» Scared of silence of MS and next 2 Fridays
by samaritan Yesterday at 9:11 am

» Positive News
by Capton KIng Cool Yesterday at 8:37 am

» The Central Bank of Sri Lanka Reduces its Policy Interest Rates
by TraderCSE Yesterday at 7:50 am

» AAIC - Profit over one billion!!!!!
by wisdom79 Yesterday at 7:44 am

» Why AAIC Should trade above RS.50/-
by wisdom79 Yesterday at 7:43 am

» CIND බලාගෙනයි
by ThilinaM Thu Aug 22, 2019 3:50 pm

» PAP (Pan Asia Power PLC) Dealings Directors
by Capton KIng Cool Thu Aug 22, 2019 8:54 am

» JKH will touch 175 very soon
by soileconomy Thu Aug 22, 2019 7:27 am

» EMER...?????
by roshan1039 Thu Aug 22, 2019 12:16 am

» What is your trading preference?
by biglivetrade Wed Aug 21, 2019 4:24 pm

» RENUKA HOLDINGS Target 50.00
by ThilinaM Wed Aug 21, 2019 1:34 pm

» CIND , 10% guaranteed return
by Bakka1988 Wed Aug 21, 2019 12:51 pm

» lOFC definitely will hit 6/-
by Winner123 Wed Aug 21, 2019 11:18 am

» ASHO අර්ජුන් මහේන්ද්‍රගේ බෑන විකුණනවද කොහෙද
by Bakka1988 Wed Aug 21, 2019 11:11 am

» PAP (Pan Asia Power PLC) Apointiment of Director Mr.Sangith Senaka Kakiriwargodage.
by samaritan Wed Aug 21, 2019 10:03 am

» SEC charges four stockbrokers over market manipulation
by player Wed Aug 21, 2019 9:40 am

» Sri Lankan Billionaire Dhammika Perera may Spend Rs. 10 Billion for a Presidential Campaign without any Risk! His Daily Casino Profits said to be over Rs. 50 Million
by nuwanmja Wed Aug 21, 2019 9:39 am

» MGT - Collect n keep
by samaritan Wed Aug 21, 2019 8:05 am

» Browns investments
by Winner123 Tue Aug 20, 2019 9:35 pm

» ASHO will hit moon. Deal with SLTB
by Bakka1988 Tue Aug 20, 2019 9:11 pm

» GLASS (piramal glass ceylon plc) from
by MarketWch Tue Aug 20, 2019 10:20 am

» Elcection Commisioner( MACO)
by Capton KIng Cool Tue Aug 20, 2019 8:59 am

» Presidential election will be held on 16 th of November to 7th of December
by rukshan1234 Mon Aug 19, 2019 11:30 pm

» Which Trading System Or Strategy Is The Most Profitable?
by Teller Mon Aug 19, 2019 8:13 pm

» NEST will touch Rs2000 soon
by Bakka1988 Mon Aug 19, 2019 5:41 pm

» Gotabaya Rajapaksha will named after 10th August. Aspi will move above 6500
by samaritan Mon Aug 19, 2019 11:59 am

» CFVF.N0000 - Target price Rs.60- Donnt sell
by Trader321 Mon Aug 19, 2019 10:06 am

» CFVF.N0000 - Really started Again ..........
by Trader321 Mon Aug 19, 2019 9:59 am

» LOLC Holding( LOLC N.0000)
by Capton KIng Cool Mon Aug 19, 2019 8:45 am

» LOLC Holding( LOLC N.0000) MICRO FINACE In Cambodia
by Capton KIng Cool Mon Aug 19, 2019 8:43 am

» PAN ASIA BANK
by samaritan Mon Aug 19, 2019 8:17 am

» CFVF.N0000 - Deal at What price?
by Winner123 Fri Aug 16, 2019 8:35 pm


You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Talk » Expert Chamber » Is our market behaving rationally now?

Is our market behaving rationally now?

Go down  Message [Page 1 of 1]

1Is our market behaving rationally now?  Empty Is our market behaving rationally now? on Wed Nov 16, 2011 8:29 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

When ASI hit 7800 with most of the stocks being overvalued, there had to be a market correction if CSE was to sustain. It was needed and healthy. Some people in this forum predicted that too.

But fall is only a fall if it becomes a reality as markets can carry on positive momentum for months. But at some point the reality need to happen. In our case that is exactly what happened and it happened with a vengeance due to many factors with the overvalued market being a prime reason (which badly needed a correction). Other factors such as macroeconomic reasons and more importantly irrational/immoral speculative chasing by retailers (and getting money tied up in junk), immoral behaviors of the big boys to manipulate market , certain experiments conducted by authorities with no clear plan , bad investment practices with lesser basic knowledge by "investors" or should I call them gamblers etc etc .


Now the question is are we over-correcting as market has lost 1700 points from the Top and is trading around PE of 14-15( CSE says 15.66 yesterday, Arrenga broker repott says 14+). MPI is in a more terrible state. If we take out the overvalued junk , market must be even more attractive as we find 5-10 PE counters with attractive pegs. The Forward market PE is probably even more attractive . Some of the then overvalued market giants like JKH,SPEN,CARS group, HNB also have showed relatively better profits while loosing it market share value to narrow down to a better valuation comparatively. Speculative share with no fundamentals which went sky high like GREG group, REEF, EMER, EAST . LHCL had also come down drastically. Now we are loosing day by day due to negative momentum and investor confidence and other facts. Are we still in a natural correction or a overreacted one due to external behaviors and factors.

Ofcourse of there are still shares which have lot of room for downward correction . But why cannot they get corrected on their own? Do we need a whole market correction losing 1.5-2% a day until ASI hit 5500-5000.

In a good correction, over valued shares should get corrected while fundamentals should relatively hold it value. What was happening. Is it natural? More importantly why is it happening still? In any healthy market there should be sufficient green days along with the more red days. Green days are becoming harder to find now while drops are getting too severe. The only green days we saw recently are totally fake.


There is something "fundamentally" Wink wrong in our market behavior now.

In a natural market correction we need to be more worried if we held overvalued junk right? But CSE is not behaving that way. Most times fundamentals loose more value than the junk shares in a down fall. Question is why did this happen?

As far as I see, many hold junk going after the market trends and sell their fundamentals saying " what is the use of holding them". They started to sell non moving fundamentals to invest in more junk. One big reason for the further downfall is due to these irrational/immoral investment behaviors along with credit restrictions in place forcing them act even more drastically in crisis. Sometimes selling good shares at a loss is the only way out to get out of the mess they already in.



Maybe some made money with speculative, overvalued junk and never relied on fundamentals . Good for you and congratulations for outwitting the market.

Some condemned fundamentals saying they are the junk as they loose value and never move. Way to go is speculatives and speculative only. Some even showed the way to pick the "venerable" crap and discard the so called "junk" fundamentals.
Okay you had your time. Have you thought for a moment why fundamentals never moved? Have you thought why the market is behaving in this ruthless way now. I am not saying speculative are bad , as any good investor needs to keep, long,medium,short term shares with some speculatives but if you are keeping all specs you are treading on a volcano which will ruin not only you but your family and friends.

Side track : Why are the fundamentals ( non moving and so called now useless) good for medium to long term. When market goes down , fundamentals will also go down. Now also they are going down. As fundamentals have an intrinsic value attached to each share (based on current earning/valuations etc) even after a heavy down fall they willl always recover to their value at some point. Speculative and junk will dominate for a while they are at the top. But as they do have only a low intrinstic value , once they start going down they can break you much faster than fundamentals. Also their recovery? Your guess is good as mine.



I do not know when we will see a sustainable market again. But it cannot be too far ( in a few months hopefully). Maybe there will be a blood bath before it. The times look grim. Maybe we deserve it. One thing I can tell you now : go slow and steady and you will win the race. If one try to gamble , you will win at times , but when the losses come it will come out with a vengeance killing not only you your friends and CSE family. Do we see a sample?


If you are buying at some point in the future ( I am not asking you to buy), atleast try to concentrate on buying shares with value. If MANY THINK THIS WAY CSE WILL BE SUSTAINABLE FOR THE FUTURE AND OUR KIDS.




Learn the basics, Invest not gamble, know your investment period, have Patience , have lesser Greed , know your entry and exit points and you will be a victor on the longer run at CSE


Let us hope for the best.



Last edited by slstock on Wed Nov 16, 2011 9:00 am; edited 1 time in total

2Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 8:38 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics

Btw, I am hoping for a recovery rally soon. Maybe "they" will give us a carrot to munch to motive us for a temporary recovery rally.
I hope for sake of CSE there will be Green patch. No market can sustain straight going up or straith going down.


Many of us at CSE are extremists. We over joy at the slightest or panic much. Let us be moderate with slow and steady expectation and with mixure of red and green.

Viva CSE and us.

3Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 9:51 am

rijayasooriya

rijayasooriya
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Very good explanation by one of our best senior members.
Just see what has happened to fundamentalls also.Please note that there are some craps also for comparison.
http://forum.srilankaequity.com/viewimage.forum?u=http%3A%2F%2Fi40.servimg.com%2Fu%2Ff40%2F16%2F80%2F16%2F77%2Fscreen11.jpg



Last edited by rijayasooriya on Wed Nov 16, 2011 10:10 am; edited 1 time in total

4Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 10:01 am

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Thanks slstock for highlighting real scanario that happening in CSE now, as u said Fundamentals are move slow but steady.

In my portfolio 70% are fundamental stong counters, some of speculative counter i exited last month. No my investmet plan to hold my strong counters at least for other five years. I hope this would be best strategy to make substatial gain in current context.

5Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 10:20 am

Rapaport

Rapaport
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
The quality of stocks dominating todays volume so far - HVA, ASCO, BLUE, ECL, PAP.... etc etc

Shows the quality of today's players! When will some people learn! LOL!

Cheers....

6Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 11:00 am

Monster

Monster
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Excellent post slstock

@Rapaport wrote:The quality of stocks dominating todays volume so far - HVA, ASCO, BLUE, ECL, PAP.... etc etc

Shows the quality of today's players! When will some people learn! LOL!

Cheers....
Rapaport, let me add CLND too your list

7Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 5:11 pm

Angrybird

Angrybird
Stock Analytic
Stock Analytic
So many good points for thinking before come back to the CSE again...... Crying or Very sad

Thank you for sharing this post...

8Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 7:06 pm

Sudarshen


Manager - Equity Analytics
Manager - Equity Analytics
@slstock wrote:
When ASI hit 7800 with most of the stocks being overvalued, there had to be a market correction if CSE was to sustain. It was needed and healthy. Some people in this forum predicted that too.

But fall is only a fall if it becomes a reality as markets can carry on positive momentum for months. But at some point the reality need to happen. In our case that is exactly what happened and it happened with a vengeance due to many factors with the overvalued market being a prime reason (which badly needed a correction). Other factors such as macroeconomic reasons and more importantly irrational/immoral speculative chasing by retailers (and getting money tied up in junk), immoral behaviors of the big boys to manipulate market , certain experiments conducted by authorities with no clear plan , bad investment practices with lesser basic knowledge by "investors" or should I call them gamblers etc etc .


Now the question is are we over-correcting as market has lost 1700 points from the Top and is trading around PE of 14-15( CSE says 15.66 yesterday, Arrenga broker repott says 14+). MPI is in a more terrible state. If we take out the overvalued junk , market must be even more attractive as we find 5-10 PE counters with attractive pegs. The Forward market PE is probably even more attractive . Some of the then overvalued market giants like JKH,SPEN,CARS group, HNB also have showed relatively better profits while loosing it market share value to narrow down to a better valuation comparatively. Speculative share with no fundamentals which went sky high like GREG group, REEF, EMER, EAST . LHCL had also come down drastically. Now we are loosing day by day due to negative momentum and investor confidence and other facts. Are we still in a natural correction or a overreacted one due to external behaviors and factors.

Ofcourse of there are still shares which have lot of room for downward correction . But why cannot they get corrected on their own? Do we need a whole market correction losing 1.5-2% a day until ASI hit 5500-5000.

In a good correction, over valued shares should get corrected while fundamentals should relatively hold it value. What was happening. Is it natural? More importantly why is it happening still? In any healthy market there should be sufficient green days along with the more red days. Green days are becoming harder to find now while drops are getting too severe. The only green days we saw recently are totally fake.


There is something "fundamentally" Wink wrong in our market behavior now.

In a natural market correction we need to be more worried if we held overvalued junk right? But CSE is not behaving that way. Most times fundamentals loose more value than the junk shares in a down fall. Question is why did this happen?

As far as I see, many hold junk going after the market trends and sell their fundamentals saying " what is the use of holding them". They started to sell non moving fundamentals to invest in more junk. One big reason for the further downfall is due to these irrational/immoral investment behaviors along with credit restrictions in place forcing them act even more drastically in crisis. Sometimes selling good shares at a loss is the only way out to get out of the mess they already in.



Maybe some made money with speculative, overvalued junk and never relied on fundamentals . Good for you and congratulations for outwitting the market.

Some condemned fundamentals saying they are the junk as they loose value and never move. Way to go is speculatives and speculative only. Some even showed the way to pick the "venerable" crap and discard the so called "junk" fundamentals.
Okay you had your time. Have you thought for a moment why fundamentals never moved? Have you thought why the market is behaving in this ruthless way now. I am not saying speculative are bad , as any good investor needs to keep, long,medium,short term shares with some speculatives but if you are keeping all specs you are treading on a volcano which will ruin not only you but your family and friends.

Side track : Why are the fundamentals ( non moving and so called now useless) good for medium to long term. When market goes down , fundamentals will also go down. Now also they are going down. As fundamentals have an intrinsic value attached to each share (based on current earning/valuations etc) even after a heavy down fall they willl always recover to their value at some point. Speculative and junk will dominate for a while they are at the top. But as they do have only a low intrinstic value , once they start going down they can break you much faster than fundamentals. Also their recovery? Your guess is good as mine.



I do not know when we will see a sustainable market again. But it cannot be too far ( in a few months hopefully). Maybe there will be a blood bath before it. The times look grim. Maybe we deserve it. One thing I can tell you now : go slow and steady and you will win the race. If one try to gamble , you will win at times , but when the losses come it will come out with a vengeance killing not only you your friends and CSE family. Do we see a sample?


If you are buying at some point in the future ( I am not asking you to buy), atleast try to concentrate on buying shares with value. If MANY THINK THIS WAY CSE WILL BE SUSTAINABLE FOR THE FUTURE AND OUR KIDS.




Learn the basics, Invest not gamble, know your investment period, have Patience , have lesser Greed , know your entry and exit points and you will be a victor on the longer run at CSE


Let us hope for the best.


Many thanks for the great advises

9Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 7:26 pm

Sudarshen


Manager - Equity Analytics
Manager - Equity Analytics
Shares like RICH, UBC, GLAS, KHL, ASIR Are they fundamentals Or speculative ?

What is the criteria for a fundamental ?

10Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 7:51 pm

ninja


Senior Equity Analytic
Senior Equity Analytic
I am breathing again.....This is my first experience in a heavy downfall. This is sickening at times. But I will leave it to the future. It will be do or die for me....Smile Let's hope we find oil/gas as our last option to be the next Singapore.

11Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 8:48 pm

Roboticfx

Roboticfx
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Great article slstock! Thank you very much for it.

Our professor who interviews investment advisers( I have forgotten his name) said market should have a little change everyday and shouldn't have a big downward or sudden upward. But now it was totally changed. I know in the market there should be downwards as well as upwards.(otherwise share prices will reach to multiples of lakhs) But now it is falling down and down alone. When will be the deadline of this? Anyone can't say it. Why cse don't do anything to stop this sudden fall? Why they are staying like phantoms? all are silent.

12Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Wed Nov 16, 2011 9:21 pm

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
investors also do not have more funds to average...... and margin calls..

13Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Mon Nov 21, 2011 9:18 am

webhoundx


Stock Analytic
Stock Analytic
Quality post. Keep it up slstock cheers

14Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Thu Mar 01, 2012 3:27 am

Redbulls

Redbulls
Director - Equity Analytics
Director - Equity Analytics
Good one to read.
Thanks slstock.

15Is our market behaving rationally now?  Empty Re: Is our market behaving rationally now? on Thu Mar 01, 2012 8:23 am

K.Haputantri

K.Haputantri
Co-Admin
Slstock your analysis is very good. Thanks.

Sponsored content


Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum