The Best Possible thing which We can do with the Current Market

MarketResearch

MarketResearch

Assistant Vice President - Equity Analytics

Posts : 602
Equity Stars : 5852
Reputation : 110
Join date : 2011-01-30
Location : Colombo

Dear Friends,

If anyone ask me what should i do with the current market situation:

Do panic with conditions.Probably this is temporally market correction or retailers are withdrawing their funds for profit or some people sell at low price to cover up the Credits.

There are no any issues to collapse the market since the country political background is stable.
The economic policies are friendly.
Budget proposals are ok.
Duties and Taxes are no issues.
The government is always encourage for the investments.
Bank interest is low.
A lot investors (Retailers/Big fish and foreigners) are attracting to the market.
The country is developing and there is a big market in North and East.
I do not see any other bad signals to the market.
After the 30 years war the country is emerging with energetic.
The tourism sector is developing.Food and Beverage is developing.Constructions are OK.Telecommunication and Engineering are doing well.Diversified fields earning high profits.

Do not sell you valuable stocks panicky and do not make any loss.
Try to collect valuable stocks at low price.
I think these comments would be helpful for the investors.Not for retailers.

For Example: Recently One of friends brother ask that he has got Rs.900,000/= upon the maturity of his Fixed Deposit and he does not like to re-deposit as a Fixed Deposit since the bank pay 5 to 7 % interest.He asked from me that he realized that if invest in CSE and get a good return.Also I realized that he is willing to keep the money at CSE for at least for one year period.

I asked him to do:
Buy some blue chip companies shares and do not go for Credits.After One year time at least you can get your original invested amount.
Like this, there are a lot of common public is entering to the market.Some of them have long term expectation while some people have short term expectation.Ultimately the funds are circulating at the CSE.
Also the CSE/SEC are giving a effort to attract more people to the CSE.

Please do you analysis yourself and make a wise decision.

Thanks.

ShareShares

ShareShares

Assistant Vice President - Equity Analytics

Posts : 679
Equity Stars : 5668
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Join date : 2011-02-02

I think best possible thing I can do is to stay with fundamentally strong shares which were yet to perform.

wis

wis

Manager - Equity Analytics

Posts : 253
Equity Stars : 5240
Reputation : 103
Join date : 2011-02-01

Small correction. Government and big banks pay around 8-9% for six month or year. Finance companies pay around 12%.

smallville

smallville

Associate Director - Equity Analytics

Posts : 4119
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Join date : 2011-02-03
Location : Back on Earth

Long term investments are merrier.. sound blue chips are going at a good discount these days.. I wish if I could invest in some of the best shares now and forget the investment to come back in a year and see how it has done...
Seems to me the market is put up on test for big players to collect.. any1 with a higher holding power can wait couple of months to see the return when these are eventually pushed up.. so this is retailers selling for big players gain..;-)

Academic

Academic

Senior Manager - Equity Analytics

Posts : 454
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Reputation : 103
Join date : 2011-01-23

I really wanted to write on this topic since last couple of weeks. But time didn't permit me. Anyway for benefit of retailers I put my thoughts in short as follows.

1. I expect market to go down till end march (see justification here http://forum.srilankaequity.com/t341-market-behaviour-of-next-week-up-or-down)

2. If someone expect your holding's (portfolio's ) price/value may decline by at least 2.5% (that is 1% to sell and another 1% to buy-back and 0.5 for being conservative), it is better to sell now and collect latter.

3. This is true even if your portfolio is red now.For example if someone purchased two share 2*Rs100=Rs.200. If current price is 90 your portfolio is red (loss). Say you expect it to go down further to 60 (as you think market would go down, so as other stocks follow the trend), better sell two shares at 90 now (with a loss), that is, realizing Rs. 180.

While keeping this amount in your account and if price dropped to 60 , you can purchase 3 shares of the same company with 180. If price increase to 75 latter you can realize profit of 3*75-200=25 (deduct transaction cost of both selling and buying to arrive at net profit).

If you held shares unsold, you can realize only 2*75=150-200. That is a loss of 50.

If price go up after selling at 90, God may bless you!!! . So this strategy is RISKY.

This example is just to say HOLDING is not the best strategy for every situation of the market.

4. It all depends on next couple of weeks market behavior. If market go down above theory would work on average.

5. Keep in mind that this may not work for specific shares. However if applied to all "not sure" shares, it may give good results

6. Finally , current ASI is 7701, if dropped 2.5% at least ASI would be 7508. If market go down ASI 7500 someone would not lose by implementing sell and buy-back strategy.

7. In my humble opinion I EXPECT MARKET GO DOWN ASI 7500.

THIS IS NOT AN INVESTMENT ADVICE OR RECOMMENDATION. DO OWN HOME WORK OR CONSULT LICENSED INVESTMENT ADVISER BEFORE TAKING INVESTMENT DECISIONS

THIRU

THIRU

Senior Equity Analytic

Posts : 66
Equity Stars : 4923
Reputation : 7
Join date : 2011-02-07

MarketResearch wrote:Dear Friends,

If anyone ask me what should i do with the current market situation:

Do panic with conditions.Probably this is temporally market correction or retailers are withdrawing their funds for profit or some people sell at low price to cover up the Credits.

There are no any issues to collapse the market since the country political background is stable.
The economic policies are friendly.
Budget proposals are ok.
Duties and Taxes are no issues.
The government is always encourage for the investments.
Bank interest is low.
A lot investors (Retailers/Big fish and foreigners) are attracting to the market.
The country is developing and there is a big market in North and East.
I do not see any other bad signals to the market.
After the 30 years war the country is emerging with energetic.
The tourism sector is developing.Food and Beverage is developing.Constructions are OK.Telecommunication and Engineering are doing well.Diversified fields earning high profits.

Do not sell you valuable stocks panicky and do not make any loss.
Try to collect valuable stocks at low price.
I think these comments would be helpful for the investors.Not for retailers.

For Example: Recently One of friends brother ask that he has got Rs.900,000/= upon the maturity of his Fixed Deposit and he does not like to re-deposit as a Fixed Deposit since the bank pay 5 to 7 % interest.He asked from me that he realized that if invest in CSE and get a good return.Also I realized that he is willing to keep the money at CSE for at least for one year period.

I asked him to do:
Buy some blue chip companies shares and do not go for Credits.After One year time at least you can get your original invested amount.
Like this, there are a lot of common public is entering to the market.Some of them have long term expectation while some people have short term expectation.Ultimately the funds are circulating at the CSE.
Also the CSE/SEC are giving a effort to attract more people to the CSE.

Please do you analysis yourself and make a wise decision.

Thanks.

Most of ur validations are already factored in the market. now its companys' time to show their performance.
but i strongly believe that market will bounce back soon. this is the best time to buy the best stocks .

Academic · 7 The Big-Players Argument Thu Mar 03, 2011 12:00 am

Academic

Senior Manager - Equity Analytics

Posts : 454
Equity Stars : 5429
Reputation : 103
Join date : 2011-01-23

The big-players argument is a popular one in this forum as I observed.

However, to me, it seems point-less. This was apparent in pre and immediate post report discussions on LOLC. There, many argued LOLC may go up as big (institutional) investors deal (buy?) it.

Need not to say where LOLC is heading now. If you missed the discussion follow the link.

http://forum.srilankaequity.com/t827p20-lolc-interim-report-released

p.s.: I think this kind of retrospectives help us in learning lessons form past.

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The Best Possible thing which We can do with the Current Market

1 The Best Possible thing which We can do with the Current Market Wed Mar 02, 2011 7:12 am

MarketResearch

2 Re: The Best Possible thing which We can do with the Current Market Wed Mar 02, 2011 8:07 am

ShareShares

3 Re: The Best Possible thing which We can do with the Current Market Wed Mar 02, 2011 9:25 am

wis

4 Re: The Best Possible thing which We can do with the Current Market Wed Mar 02, 2011 10:22 am

smallville

5 Re: The Best Possible thing which We can do with the Current Market Wed Mar 02, 2011 4:44 pm

Academic

6 Re: The Best Possible thing which We can do with the Current Market Wed Mar 02, 2011 8:51 pm

THIRU

7 The Big-Players Argument Thu Mar 03, 2011 12:00 am

Academic

8 Re: The Best Possible thing which We can do with the Current Market

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