Challenging the popular belief

Challenging the popular belief

Now, Sept is over. What‘s up now. If so called credit was the problem, it is now over, why force selling?
This tells us we had no credit issue. Here, it’s a fundamental & valuation issue

salt wrote:Challenging the popular belief

Now, Sept is over. What‘s up now. If so called credit was the problem, it is now over, why force selling?
This tells us we had no credit issue. Here, it’s a fundamental & valuation issue

Salt ,

On forward PE our Overall market is bordering into non overvalued territory. On trailing PE it is overvalued due to some sectors having still PE highs as 50 to 100.

So there are gold mines and land mines as a Mix.

The main issue I see is that as the market is not believing in fundamentals so it cannot sustain. What goes up has to come down. Its just swinging on crap shares.

When fundamentals go up to assigned value, they can sustain their price unlike Crap shares. But our market is a gamblers den.
I think people sell fundamentals and buy speculatives thinking that is the way to survive the market. Why buy shares even if they are worth RS 1000 now trading at Rs 300 if they do not move. Lets buy moving shares. Who cares about fundamentals . We loose more with them.

This is the mentality.

So when market goes down, fundamentals as well as already overvalued Crap shares all are dragged down. When one sees panic selling , other follow . Good share , bad share they do not care. This is not a good sign. We have a very volatile market.

Also I think there maybe be some Margin account clearances. I am not sure.

For example look at RCL. Why on earth would they sell this share at Rs 132? With a trailing PE of 10 and forward of around 8. I do not understand when a share with Rs 1+ earning is trading over Rs 500 to 1000s. And a fundamental is with PE of 10 is at 132.

Magic of manipulation and illiquidity. Welcome to our CSE. We have a long way to go with matured mind set for a sustainable market.

SL stock, nicely said mate

+1 slstock

Sorry, can't figure out how to give reps. But you already have many

slstock,

Agree with you on the quality investors. You can see from the comments of the people here. I made this point so many time sin my posts. And, i am repeatedly saying No, this is not a problem of Credit.

Valuation issue if prominent. Investors look at relative attractiveness. If go by PE ( which is not the sole criteria), SL 15.3 TTM, India 14.0 TTM & China 12.5 TTM. Both are having higher growth rates than us , and more inconstantly for over a few decades.
Having some PE over 100 is common, thats why you talk about market PE which is an average figure., so no qualification is required.

Another big issue , which have pointed is fundamental- how many companies are reporting gains in net profits adjusted for one time- capital gain,savings from taxes & finance cost. So, the earning balloon is over. we have lots of talk after the war ended, but poor implementation record, on top of other bureaucratic failures.

salt wrote:slstock,

Agree with you on the quality investors. You can see from the comments of the people here. I made this point so many time sin my posts. And, i am repeatedly saying No, this is not a problem of Credit.

Valuation issue if prominent. Investors look at relative attractiveness. If go by PE ( which is not the sole criteria), SL 15.3 TTM, India 14.0 TTM & China 12.5 TTM. Both are having higher growth rates than us , and more inconstantly for over a few decades.
Having some PE over 100 is common, thats why you talk about market PE which is an average figure., so no qualification is required.

Another big issue , which have pointed is fundamental- how many companies are reporting gains in net profits adjusted for one time- capital gain,savings from taxes & finance cost. So, the earning balloon is over. we have lots of talk after the war ended, but poor implementation record, on top of other bureaucratic failures.

Sri Lanka has GDP growth rate is 8 % , ranked as a frontier market and you have nothing to cry about having a P/E ratio of 15, it was obviously made up with few craps which are trading at absurd high price earning ratios. even US market there are stocks trading at high P/E ratios, while having a GDP growth rate of less than 2%, eg: Now Google Inc trading at trailing P/E of around 18.

Besides few over valued craps, we can find plenty of attractive and very attractive solid counters currently at CSE as mentioned by Slstock.

So if you open your eyes without crying continuously saying CSE is overvalued bla,bla.. You will be able to find out really attractive stocks with good growth prospects if you are really interested in investing in stocks.

Only thing you need is to identify milk from water and be patient.

WildBear wrote:

salt wrote:slstock,

Agree with you on the quality investors. You can see from the comments of the people here. I made this point so many time sin my posts. And, i am repeatedly saying No, this is not a problem of Credit.

Valuation issue if prominent. Investors look at relative attractiveness. If go by PE ( which is not the sole criteria), SL 15.3 TTM, India 14.0 TTM & China 12.5 TTM. Both are having higher growth rates than us , and more inconstantly for over a few decades.
Having some PE over 100 is common, thats why you talk about market PE which is an average figure., so no qualification is required.

Another big issue , which have pointed is fundamental- how many companies are reporting gains in net profits adjusted for one time- capital gain,savings from taxes & finance cost. So, the earning balloon is over. we have lots of talk after the war ended, but poor implementation record, on top of other bureaucratic failures.

Sri Lanka has GDP growth rate is 8 % , ranked as a frontier market and you have nothing to cry about having a P/E ratio of 15, it was obviously made up with few craps which are trading at absurd high price earning ratios. even US market there are stocks trading at high P/E ratios, while having a GDP growth rate of less than 2%, eg: Now Google Inc trading at trailing P/E of around 18.

Besides few over valued craps, we can find plenty of attractive and very attractive solid counters currently at CSE as mentioned by Slstock.

So if you open your eyes without crying continuously saying CSE is overvalued bla,bla.. You will be able to find out really attractive stocks with good growth prospects if you are really interested in investing in stocks.

Only thing you need is to identify milk from water and be patient.

Well said WildBear. We can have plenty of opportunities at CSE with excellent growth prospects now, Of cause these crap rallies are unhealthy for a frontier market though.

salt wrote:slstock,



Another big issue , which have pointed is fundamental- how many companies are reporting gains in net profits adjusted for one time- capital gain,savings from taxes & finance cost. So, the earning balloon is over. we have lots of talk after the war ended, but poor implementation record, on top of other bureaucratic failures.

So you think Sri Lanka economy growth is stopped here or freezed. , I'm not an expert, but I think rapid and sustained growth of Sri Lanka economy yet to come with the rapid phase of infrastructure development being progressed now.

I think RCl is down because of the global recession fears.exports will be affected under the gloomy situation in west.
Market try to gain some momentum in the morning hours but when Europe and other global markets fall 3, 4, 5 percent on daily basis our market also get affected.
Credit issue is not over but at least the changes in the credit rule prevented the worst drop in September end.

lokuayya wrote:I think RCl is down because of the global recession fears.exports will be affected under the gloomy situation in west.
Market try to gain some momentum in the morning hours but when Europe and other global markets fall 3, 4, 5 percent on daily basis our market also get affected.
Credit issue is not over but at least the changes in the credit rule prevented the worst drop in September end.

Be greedy when others fearful

Yes the RCl price at 130 is very attractive. 4.50 rupees paid as dividend alone in last financial year.Mainly the revenue is from local sales therefore loss of exports revenue may not have much effect on bottom line.
will they get benefit from the low oil prices? i do not know whether they(industries) get the benefit or the cpc get the benefit of the the prevailing low oil prices.If they get the advantage of the low energy cost definitely it will reflect in the bottom line.

Market rallied all over the world because of EU's 3 trillion euro bailout. But again started falling after Greece announced that they won't be able to reduce their budget deficit as much need to qualify for the bailout.

Today markets are down everywhere

lokuayya wrote:Yes the RCl price at 130 is very attractive. 4.50 rupees paid as dividend alone in last financial year.Mainly the revenue is from local sales therefore loss of exports revenue may not have much effect on bottom line.
will they get benefit from the low oil prices? i do not know whether they(industries) get the benefit or the cpc get the benefit of the the prevailing low oil prices.If they get the advantage of the low energy cost definitely it will reflect in the bottom line.

Minister of Power and Energy pledged that Eelctricity Bill to be reduced from 2012, after functioning of Norochcholai and Upper Kothmali, But he is just another Minister, We' ll see

lokuayya wrote:Yes the RCl price at 130 is very attractive. 4.50 rupees paid as dividend alone in last financial year.Mainly the revenue is from local sales therefore loss of exports revenue may not have much effect on bottom line.
will they get benefit from the low oil prices? i do not know whether they(industries) get the benefit or the cpc get the benefit of the the prevailing low oil prices.If they get the advantage of the low energy cost definitely it will reflect in the bottom line.

As you correctly identified RCL is concentrating on local stales . If i recall their foreign sales are less than 6%. So if someone is selling due to fear... I will find it an opportunity.

The thing with energy costs are that they are set seperatly for businesses in Sri Lanka. Not sure each company can get an incentives or discount as it is fixed ( ofcourse leaving out pulling strings). So unless an overall rate reduction of energy costs or RCL finds a way like TKYO, energy costs are major component still to them.

Regarding growth am looking at not only their core now. What about other acquisitions? Think they will do more in the future.

slstock wrote:

salt wrote:Challenging the popular belief

Now, Sept is over. What‘s up now. If so called credit was the problem, it is now over, why force selling?
This tells us we had no credit issue. Here, it’s a fundamental & valuation issue

Salt ,

On forward PE our Overall market is bordering into non overvalued territory. On trailing PE it is overvalued due to some sectors having still PE highs as 50 to 100.

So there are gold mines and land mines as a Mix.

The main issue I see is that as the market is not believing in fundamentals so it cannot sustain. What goes up has to come down. Its just swinging on crap shares.

When fundamentals go up to assigned value, they can sustain their price unlike Crap shares. But our market is a gamblers den.
I think people sell fundamentals and buy speculatives thinking that is the way to survive the market. Why buy shares even if they are worth RS 1000 now trading at Rs 300 if they do not move. Lets buy moving shares. Who cares about fundamentals . We loose more with them.

This is the mentality.

So when market goes down, fundamentals as well as already overvalued Crap shares all are dragged down. When one sees panic selling , other follow . Good share , bad share they do not care. This is not a good sign. We have a very volatile market.

Also I think there maybe be some Margin account clearances. I am not sure.

For example look at RCL. Why on earth would they sell this share at Rs 132? With a trailing PE of 10 and forward of around 8. I do not understand when a share with Rs 1+ earning is trading over Rs 500 to 1000s. And a fundamental is with PE of 10 is at 132.

Magic of manipulation and illiquidity. Welcome to our CSE. We have a long way to go with matured mind set for a sustainable market.

Well said slstock

Here's some reading for those who are believing that the Growth of SL economy and CSE is over.

http://www.ft.lk/2011/10/05/sri-lanka-the-star-in-asia-for-stocks-tourism/

http://www.ft.lk/2011/09/26/imf-impressed-by-sl-economic-growth/

WildBear wrote:Here's some reading for those who are believing that the Growth of SL economy and CSE is over.

http://www.ft.lk/2011/10/05/sri-lanka-the-star-in-asia-for-stocks-tourism/

http://www.ft.lk/2011/09/26/imf-impressed-by-sl-economic-growth/

No need to read this, watch ITN new if you want to see the miracle. If you can't understand what i said, its your fault. You saw, you will reap

Hi salt, So what you are saying is that the upward profits recorded during the past quarters is largely due to incentives in taxes etc and one time gains such as capital increase or sale of asstes and in the future the profits recorded by companies at an average will be lower than the past years. So the current PE of 15 will go up and will make the market overpriced or the stock price will come down to reflect a current PE of 15. Please elaborate as it is a good genuine comment by you for us to analyse further. If found correct i feel there will be opportunities to enter in the future and not now.

suja wrote:Hi salt, So what you are saying is that the upward profits recorded during the past quarters is largely due to incentives in taxes etc and one time gains such as capital increase or sale of asstes and in the future the profits recorded by companies at an average will be lower than the past years. So the current PE of 15 will go up and will make the market overpriced or the stock price will come down to reflect a current PE of 15. Please elaborate as it is a good genuine comment by you for us to analyse further. If found correct i feel there will be opportunities to enter in the future and not now.

Hi, no need to go far, take the RCL as an example as mentioned by slstock. Did they got any non-recurring income during last few financial statesment,Does RCL have a poor growth forecast, is it overvalued.Don't they have expansion plans,Doesn't RCL have a proven track record.
You can read some broker research reports at Equity research Web also on RCL. We do not need to hear baseless nonsense statements made by some people.


One can show you the water, but can't make you drink

salt wrote:

WildBear wrote:Here's some reading for those who are believing that the Growth of SL economy and CSE is over.

http://www.ft.lk/2011/10/05/sri-lanka-the-star-in-asia-for-stocks-tourism/

http://www.ft.lk/2011/09/26/imf-impressed-by-sl-economic-growth/

No need to read this, watch ITN new if you want to see the miracle. If you can't understand what i said, its your fault. You saw, you will reap

If you open your eyes and see, I was not talking about ITN news. I was talking about data backed by facts and figures.

slstock wrote:

salt wrote:Challenging the popular belief

Now, Sept is over. What‘s up now. If so called credit was the problem, it is now over, why force selling?
This tells us we had no credit issue. Here, it’s a fundamental & valuation issue

Salt ,

On forward PE our Overall market is bordering into non overvalued territory. On trailing PE it is overvalued due to some sectors having still PE highs as 50 to 100.

So there are gold mines and land mines as a Mix.

The main issue I see is that as the market is not believing in fundamentals so it cannot sustain. What goes up has to come down. Its just swinging on crap shares.

When fundamentals go up to assigned value, they can sustain their price unlike Crap shares. But our market is a gamblers den.
I think people sell fundamentals and buy speculatives thinking that is the way to survive the market. Why buy shares even if they are worth RS 1000 now trading at Rs 300 if they do not move. Lets buy moving shares. Who cares about fundamentals . We loose more with them.

This is the mentality.

So when market goes down, fundamentals as well as already overvalued Crap shares all are dragged down. When one sees panic selling , other follow . Good share , bad share they do not care. This is not a good sign. We have a very volatile market.

Also I think there maybe be some Margin account clearances. I am not sure.

For example look at RCL. Why on earth would they sell this share at Rs 132? With a trailing PE of 10 and forward of around 8. I do not understand when a share with Rs 1+ earning is trading over Rs 500 to 1000s. And a fundamental is with PE of 10 is at 132.

Magic of manipulation and illiquidity. Welcome to our CSE. We have a long way to go with matured mind set for a sustainable market.

well said. i think the biggest mistake the market did was to give massive returns during 2009 and 2010 125% and 96%. since 2009 came after a grave drop in the market ppl got the gambling taste of stock market. this is well highlighted in the record number of CSE a/cs opened in these years where more and more retailors entered the market with the hope of quick and large gains with very little capital in other words mostly in view of day-trading. as a result investors at large are not satisfied with the current market performance envious of what it used to generate in the last couple of years, which is impossible to repeat. i believe the preveiling slow performance on CSE is an eye opener forcing ppl to invest sensibly with a medium tern view rather than for daily living.

and investment advisors are also to take blame for their unprofessional conduct misleading the retailors to quick gains. this is one reason why so called junk counters are hot in demand.