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Sri Lanka Equity Forum » Stock Market Talk » Now is a time for true Investors to profit from panic!

Now is a time for true Investors to profit from panic!

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VALUEPICK

VALUEPICK
Expert
Expert
Stocks are the best place to be right now. There are beaten-down areas of the stock market. There will be good demand for consumer staples, industrial stocks and banking and financial firms globally including Sri-Lanka.
 
Global market participants overreacted to some important news and they did panic and emotional selling during last couple of days. It was more than expected. I see at least 13% upside for global indexes including All share index in Sri-Lanka.I prefer stocks to bonds now. S & P 500 can break its 2000 again.
 
We cannot see global situation like in 2008/2009.  Globally especially in the USA and Europe weak sisters in banking world have gone now. Other banks have established in the banking world and their balance sheets are much stronger than 2008 now. Sri-Lankan banks also more stable when compare with some other banks in the world.
 
We don’t see a recession coming either. China has slowed down mainly due to slow activity in infrastructure but they are not contracting. South Asia including Sri-lanka has one of the fastest growth rates in the world despite having some short term issues. Each country has some growth areas in their economy.
 
Germany, the euro area’s biggest economy, is benefiting more from unprecedented stimulus by the European Central Bank. With unemployment at a record low, wages rising and oil cheaper, domestic spending has become the driver of economic growth.  They have export to both emerging and developed world too. Performance of the U.S. economy and Japan is actually quite good too when compare with five years back.
 
There will be great demand for consumer staples, banking and finance and health care stocks globally specially in Europe, the USA and Asia.
 
In Sri-Lankan market, there are very attractive consumer staples stocks now. 
 
Still we haven’t seen peak in the global markets.
 
In short it is time to prepare for intelligent buying not panic buying.
 
Please do your home work before buying and selling stocks specially period like today.

karuna


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
VP saying rata katha  I said option for you friends

http://forum.srilankaequity.com/t48890-the-chronicle-of-cse#299781

Teller

Teller
Moderator
Moderator
I am going to invest another 5.8 Mn in this year .

real threat

real threat
Manager - Equity Analytics
Manager - Equity Analytics
After 09 days back on Thursday Foreign Purchases (LKR) was 314,948,142

& Foreign Sales (LKR) 258,348,063 also Vol. of Foreign Turnover  40.0% I think they are going to buy current market level 

VALUEPICK

VALUEPICK
Expert
Expert
There are different types of investors and traders. Different market participants buy and sell stocks according to their strategy. Everybody make mistakes including foreign investors. Some sell stocks too early and they miss the life time opportunity in the market. Some sell winning golden eggs and keep under-performing bad eggs in their portfolio.
 
Some buy during selloff like this (for example some bought COMB around Rs.170 -180 and now some are buying around Rs.130/- Good bargain price for long term investment. Isn’t it? They didn’t buy it around Rs.180?)
Some sell during selloff like this.
We cannot do bottom fishing for big quantity.
Some have a plan and they know the business and they have specific reasons to buy stocks. They will also have valid reasons to sell stocks.
Some will buy on valuation.
Some will do panic buying and selling.
Some like technical charts.
There are specific types of long term investors. They don’t worry about these types of volatility because they have bought their stocks for very long term from 10 years to 30 years. Some bought CINS around Rs.25 and after 10 years it is trading around Rs.1400/-
Some buy during market crashes.
Some buy stocks irrespective of bull or bear market as long as they see future value and growth.
Some take advantage from other peoples’ mistakes.
Some become greedy when others become fearful
Why don’t we find some value gems and hidden gems in this market?
 
Time to time market participants over speculated on short term issues such as euro crisis, Greece crisis, banking crisis, end of bond purchasing and currency fluctuations, and gold prices etc. The latest one is China.  Some investors and traders avoided buying stocks due to above crises.  Those who bought during those periods made fortune in stock markets.
 
One year in stock market is very short period.



Last edited by VALUEPICK on Fri Jan 15, 2016 5:11 pm; edited 2 times in total

wisdom78


Manager - Equity Analytics
Manager - Equity Analytics
@Teller wrote:I am going to invest another 5.8 Mn in this year .
wow  Rolling Eyes u can invest to sfl now its cheep price  

VALUEPICK

VALUEPICK
Expert
Expert
Please study the market and crowd psychology now. By studying their behaviour you can get better investment decisions.
 
Investors were most optimistic about the future for the economy and stock market in 1987. In the USA It ended up with famous 1000 drop. New Zealand was one of the worst affected countries from that selling.  Further they said honeymoon in the stock from 1982 to 1987 over and going to have bear market and world wide depression. Instead it ended up with a slight gain in 1987 over 1986.
 
Top famous industry experts, market shorters and traders ran the alarm bell saying impending collapse of stock market in 1988. Groups of influential people managing billions of funds also said we are facing an imminent global depression.
 
Again in 1989 they said this is the year of snake and predicted depression. Instead Dow climbed back to 2500 points. Still they said coming collapse of real estate and to avoid stocks. Even in 1987 despite the great correction market ended with a slight gain over 1986.
 
They didn’t stop. In 1990 they were more bearish. Even barbers bought put options to short the market. Headlines such on the media was also very bearish. Top of that there was a war in the desert to fight. Then industry experts forecasted gloomy outlook again and bigger fall in stock markets. 1991 became the best year in two decades.
 
Small caps gained over 60%, DOW over 25% and S & P 500 over 30% in 1991. Similar or more gain reported in other global stock markets as well.
 
In short disciplined stock picker had great opportunities in almost every year from 1986 to 1991 despite market volatility and sell off.
 
A successful investor does not let weekend worries to dictate his strategy. Current global selloff is repeating in a different way to the past sell offs in global markets.  We are going to see seesaw pattern for stock market in the short run. Smart and disciplined stocks pickers will become winners again.
 
When some intelligent investors see fire sales, they will grab from their both hands these days globally. Some will have life time opportunity as well.
 
Too many bears and few bulls! What a world? We saw this in the past as well.
 
There is difference between panic buying and intelligent buying. Similarly, there is difference between smart and intelligent selling and panic selling.
 
We should avoid panic selling and panic buying in this type of market. Now there are plenty of times to accumulate quality stocks in the market.

Chanuque

Chanuque
Manager - Equity Analytics
Manager - Equity Analytics
The market conditions are ideal for long term ( Warren Buffet typed ) investments as the Global indexes fall further Friday due to the China and Oil factors. The problem with CSE is that the continuous margin call waves, creates unnecessary panic among LK retail investors and that causes these nose dives. Just remember a collective fear related mind game brings the indexes down. For the PLCs, the going concern as usual ..

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
Hi Chanuque after a long time.


Margin calls and deteriorating personal financial strengths catering essential commitments may harm our market . This is a good time for long term as you said.

But, we cannot judge everything. In 1994 after goddess Chandrika arrived from Paris to save the land destroyed by 'UNP Robbers' the market glided continuously for 3-4 years and I lost over 50% of earnings achieved 6-7 years before that.
My fear re-started at the end of 2014 when I leant that the goddess is coming back to save us from 'Rajapaksa Robbers'. Unfortunately so far the same story is repeating.

Chanuque

Chanuque
Manager - Equity Analytics
Manager - Equity Analytics
! Hello There .. Chinwi ..
Robing from the idiotic mass, has become an art of politics. MY3 led pink coalition is taking Sri Lanka for a ride to remember. Anyway, Chinwi I am a free thinker who hates politics ( all sort of ) .. !! See you around ..

Gainer

Gainer
Associate Director - Equity Analytics
Associate Director - Equity Analytics
December Quarter Financial reports coming with good profits

KFP Good profits

Quibit

Quibit
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Crash is due to local economic mismanagement and shift of global investment strategy to a defense mode due to many factors including crude oil price, fed rate prediction, China meltdown and ISIS. Summaries why ASI is heading towards 6000.

VALUEPICK

VALUEPICK
Expert
Expert
Quibit
 
I think it should stop around 6300/6400 level. Sometimes tomorrow market can go up due to rise in few shares that I am following. We are paying too much attention to index in forums. We should apply our strategy to find some winning stocks in the market now.  If market goes up strongly by going up few shares it doesn’t reflect strong uptrend. In a strong uptrend we should see strong uptrend in many stocks. What we saw mainly in the market during last three years was individual stock, group and sector oriented uptrend.   
 
It is time to separate individual winning stocks from the market. Long term investors will have calm mind. Others will worry during depressed market. One year is very short period for stock market.

VALUEPICK

VALUEPICK
Expert
Expert
http://www.safehaven.com/article/27822/the-panic-investing-cycle-how-to-make-money-in-the-stock-market
 
The Panic Investing Cycle - How to Make Money in the Stock Market
 The Panic Investment Cycle
 
We have often repeated some basic principles of investing, including advising readers to recognize that every stock varies in price more as a result of emotion and other factors, than as a result of the company's real business activities. The most important factor in buying or selling a security, is the timing. If you buy when the price is cheap, you will make money. If you buy when the price is high, the next fall in price will hurt you.
 
If you buy when the stock is priced low, and sell when exuberance is at its height, you look like a very savvy investor. All it takes is patience.
 
There is now a new name for this phenomenon. It is now called "The Panic Investment Cycle". It details how the same security will vary in price dramatically due to emotions having little to do with the underlying value of the stock itself.
 
Doug Fabian, editor of the Successful Investing and High Monthly Income newsletters, describes thiscycle as follows:
 
"The panic investment cycle is a migration in emotion from optimism to excitement, then thrill, and then virtual euphoria about how well things are going. Unfortunately, in the absence of the proper risk management tools, this emotion usually morphs into anxiety once an investment begins to break down. That anxiety then becomes denial, and it is at this point that the fear factor invades. Soon after the fear comes the panic selling, and it is at this capitulation point, when nearly everyone is despondent, that the real opportunity for income investors presents itself."


The Stock Market Cycle

We have always advised our readers to invest in this manner, as it is an easy way to make excellent returns on your investments, cycles, but we are happy to agree with this new name, for a very old adage. Something like The Black Swan event, which description became popular some years ago, and it also described a re-occurring event that has been a truism for as long as investing has been around.


Buy Low, Sell High

You often hear this truism, and yet people miss opportunity after opportunity to follow this basic and simple way to invest. People are always jealous of others who have either bought at an opportune moment, or sold at an opportune moment. Yet investors fail to follow this very simple and basic rule of investing.
Why don't people buy low and sell high - because people have a basic instinct to follow the crowd. When there is fear in the land, history is ignored and fear takes over.
 
Fear that the debt crisis in Europe will destroy the economy. Yet the restaurants, hotels, trains and planes in Europe are packed - in the prosperous north at any rate. Northern Europe is a modern, vibrant economy that ebbs and flows as does every prosperous economy.
 
Fear that the fiscal cliff in the USA will destroy the economy. Let me give you a simple truth. No stupid and self serving politician is able to destroy the US economic powerhouse in so simple a fashion. There could be a bump, and a serious bump, in the economy. But retail sales are booming. Black Friday is projected to provide record sales. House sales are at the highest level in 4 years. Auto sales are setting records, and much more. There is suffering, but the economy will continue.
 
Fear that China is slowing down. A friend just returned from China. There are people crowding the restaurants and shopping areas. A new middle class has been created and it wants goods and services. Car sales are booming. Demand for high end goods has never been higher. Will there be bumps in the economy - for sure there will, just as there are bumps in every economy. As Baron Rothschild said centuries ago - "Buy When There is Blood in the Streets".
 
Fear that Japan will collapse under the weight of its enormous debt. Could be. Maybe they won't be able to continue their profligate borrowing. But this is a society that until this year was second only to the US in economic production. It may flounder somewhat, but it won't disappear. The millions of middle class consumers will still exist. The massive car production will still exist.
 
Fear that war will erupt in the Middle East. Let me remind the reader, that the Great Depression was ended by borrowing and using that borrowing to dramatically increase production facilities. Heaven forbid that we have a war, but if we do, it will be good for the economy.


How to Make Money in this Tidal Wave of Fear

Ignore the experts. Ignore the media. Remember the truism that has stood the test of time over hundreds of years. Buy Low, Sell High.
 
Stocks are depressed currently. They are at low points. Multiples of p/e are low. Companies are increasing cash reserves rather than investing. This is when stocks are low. Buy now. Sell when the frenzy of the next cycle hits its height.
 

The bargains that are available now, come around once in a decade. If you miss this opportunity, the next one wont come for many years.

Gainer

Gainer
Associate Director - Equity Analytics
Associate Director - Equity Analytics
if you thinking to buy at 6000 then you will miss this opportunity and never can't buy at this levels.

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