When should I start investing again !

I have not invested in shares since last May. Instead I have withdrown 90% of my money.At the moment my protofolio worth only 500 thousand.
We had 2 -3 consecative bull market so this is the first year of bear market. I hope this will continue for another 1-2 years and then will pick up.

shaankh wrote:I have not invested in shares since last May. Instead I have withdrown 90% of my money.At the moment my protofolio worth only 500 thousand.
We had 2 -3 consecative bull market so this is the first year of bear market. I hope this will continue for another 1-2 years and then will pick up.

I think the answer is in your statement.
Good luck.

Redbulls wrote:

shaankh wrote:I have not invested in shares since last May. Instead I have withdrown 90% of my money.At the moment my protofolio worth only 500 thousand.
We had 2 -3 consecative bull market so this is the first year of bear market. I hope this will continue for another 1-2 years and then will pick up.

I think the answer is in your statement.
Good luck.

My dear friends! The time to invest is when the market is down under and not when it is over heated. Those who followed the latter are either trapped with over valued shares or have already incurred heavy losses while trying to cut losses. However, the million $ question (very difficult to answer) is when & in which shares to invest @ what prices? It is here that fundamantals and technicals will be handy to help you.Don't be guided by any one. You have to take the decisions. Let us get back to basics to get over this difficult period.

K.Haputantri wrote:

Redbulls wrote:

shaankh wrote:I have not invested in shares since last May. Instead I have withdrown 90% of my money.At the moment my protofolio worth only 500 thousand.
We had 2 -3 consecative bull market so this is the first year of bear market. I hope this will continue for another 1-2 years and then will pick up.

I think the answer is in your statement.
Good luck.

My dear friends! The time to invest is when the market is down under and not when it is over heated. Those who followed the latter are either trapped with over valued shares or have already incurred heavy losses while trying to cut losses. However, the million $ question (very difficult to answer) is when & in which shares to invest @ what prices? It is here that fundamantals and technicals will be handy to help you.Don't be guided by any one. You have to take the decisions. Let us get back to basics to get over this difficult period.

yes.. this is the time to invest.. but you have to hold for some years... to get good gain... if you have the holding power will be fine... other wise can play with some shares for day trading to get some quick gains ..or with the small bull runs as you mention...

It is very difficult to time the market in a consistent manner over the long term. This is due to Fear and Greed. When sentiment is low and conditions are bearish and prices are comming down, we will be overcome by Fear and sell at low prices. When the market turns and prices are going up Greed will overcome us and we will buy at high prices. I think the problem with the Colombo market is two fold, Firstly a lot of investors (especially the retailers and speculators) got into the market in 2010/2011 at high prices (high p/e’s), and have got caught with their pants down. Due to leverage, margin and trading in speculative shares at unrealistic prices, they are stuck or wiped out. Secondly, the macro-economic & socio-political situ started changing from mid-2011. Expropriation Bill, sudden budget devaluation, free float of rupee, rising interest rates, Geneva resolution, rising oil prices and resultant cost push inflation etc . This has obviously further dampened the spirit of the market. Nevertheless, instead of focusing on the timing of the market, we should focus on value of companies. The silver lining on the cloud is that some good stocks are cheap. We see good to great bluish chips at 5-10 times earnings. Some will argue that due to macro economic conditions prevailing, earnings will be weak looking forward, and thus current earnings multiples will deteriorate. i.e. stock trading at 6 times now will become 8-9 times in the future. It is our job to identify companies that will be relatively unaffected by current macro issues. Export oriented companies, service oriented companies, low debt companies, low p/e multiple companies, companies having subsidiaries overseas which are not affected by local macros issues but beaten down by sentiment and trading at low p/e etc.

If we have cash and on the sidelines or we sell now, opportunity cost is for eg an FD but problem with this is the real return due to soaring inflation is low. Then when its time convert to equities in the future, we may miss the bus due to fear or jump in and buy at high prices due to greed. If on the other hand, you can identify a low P/E, fundamentally sound, Bluish chip trading at say 6-10 times earnings, relatively unaffected by local macro issues, it means that that companies earnings are also growing at 10-15 % per annum. Rule of thumb – if you divide 100 by the FD interest rate, you get the P/E multiple where companies earnings grow at same rate as FD. If the company is trading below its intrinsic revalued book value, even better as you have a margin of safety and it hedges you against inflation. (I am not considering the risk premium to uncomplicated matters). So if you get 15 % FD rate, you should be indifferent in theory to invest in a company trading at 7 times earnings. If its trading below book value you hedge yourself against inflation which the FD cannot.

Quire a wise statement, Alchemist. Keep it up!

Dear Alchemist

Your sound will be shining in EF... I smell it

Around the end of the first week on May.,(first day when market open just after the vesak holidays)
Make sure you observe sill on Vesak Poya day and participate in festivities before you invest again.,

Alchemist, good explanation & advice to disgruntlled many. Keep it up.

dindon1 wrote:Around the end of the first week on May.,(first day when market open just after the vesak holidays)
Make sure you observe sill on Vesak Poya day and participate in festivities before you invest again.,

Ha Ha, nice way to begin. Not a bad idea.

I think it's December 21, 2012.

dindon1 wrote:Around the end of the first week on May.,(first day when market open just after the vesak holidays)
Make sure you observe sill on Vesak Poya day and participate in festivities before you invest again.,

its good day to buy!!!