Where's the bottom????

Hi guys...

It's after long distressful time thought of seeking your advice. I'm not a big time trader investing only 4 lacks in the mkt. but it's a big money for me. I used my hard earned all savings to make some extra money. But now failed in big time.
I stared with Softlogic and Crashed with YORK. (With unrealized loss of almost 40%)
SHL 1800 @ 29
VONE 1000 @ 28
ODEL 4700 @ 29.75
EXPO 9100 @ 8.88
YORK 5000 @ 15.50
Please advice me on above counters. Is it worthy to hold anymore or better to have a fresh start??? I don't want to give up this coz I have no any option other than my job.
Thanx....

@Leon: I have not researched any of your counters and cannot advise you specifically on these... In general, my advice would be based on your investment horizon and present market prices.

If you are willing to hold for more than a year, most shares are likely to yield more than what a bank fixed deposit does.
Even if I have a investment horizon shorter than 1 year, and do not need cash immediately, I would not sell yet. Prices might or might not decline, but - from these depressed levels - the probability of a 20% increase is greater than the probability of a 20% decline.

I do not hold any of the above.

But I would like to ask something. what do you mean u have no option other than your job?

I presume you have a job which gives you a steady income. In which case, after saving a sizeable amount, consider the market as a investment (not mentioning the above shares)

It's not advisable to consider this a fixed income earner.

Do the following changes

SHL 1800 @ 29 sell and buy RCL @ 99
VONE 1000 @ 28 dont sell
ODEL 4700 @ 29.75 sell and buy Vfin @ 32
EXPO 9100 @ 8.88 sell and buy CDB @ 34
YORK 5000 @ 15.50 sell and buy Mull @ 1.4

Whatever you do,don't sell york.

Antonym wrote:@Leon: I have not researched any of your counters and cannot advise you specifically on these... In general, my advice would be based on your investment horizon and present market prices.

If you are willing to hold for more than a year, most shares are likely to yield more than what a bank fixed deposit does.
Even if I have a investment horizon shorter than 1 year, and do not need cash immediately, I would not sell yet. Prices might or might not decline, but - from these depressed levels - the probability of a 20% increase is greater than the probability of a 20% decline.

While endorsing most of Antonym has said, I don't think changing stocks will be helpful, as we don't know what stocks will move next or what will fall or when market will bottom out, etc. As Anto said we are now closer to the bottom than the peak, in other words more chances for market to turn. But when?

My opinion is now time is right for the market to turn reacting to some trigger. But what market doesn't have is confidence and courage. Then we have lost TRUST also due to some shady deals. Regulators are tending to make rules to prevent similar incidence occurring again, rather than punishing the culprits (they don’t have courage). If you punish one guy others will fear. If you make a new rule, they will find new ways to creep in.

I would like to suggest you to two options.

1. Trade some of your holding, ie : if you have 4000 shares sell 1000 on a good day and wait for a bad day and buy what you sold. Gradually increase your trading quantities to about 25% of your portfolio.

2. Market is full of opportunities now. 75% of the shares can give impressive returns. And most of the stocks are now affordable and worth. Even a person who can set aside Rs.10, 000/- also do have very attractive options. Be innovative. Select a certain stock and start a fresh investment. Don't spend 10,000 on the same day. Go on slab basis. Place your next buying point fairly lower. If the share you invest has gone up with reasonable profit and without sustainable market momentum, book the profit.

Some people say they are waiting for the market bottom. Remember once it turned you can’t buy. Look at order books. Throughout last one month selling side is weak. But nobody goes up and buy. Once market got changed no one want to sell.

ie : Today afternoon. It was a rush. In the morning Reef.W0019 was available @ 2.50, but in evening no one is selling even at 3/-. Return is 20%. Greg.W3 from 3.50 to 4.10. Greg.N 11.40 to 12.00.

Some guys are waiting for big turnovers. Day before yesterday we had a considerable turnover. 673M, which equals to 1.8B if we value the stocks at 5 months back prices. So look at quantities also. Even big guys are poor than they were.

Why I expressed my views in bit detail? I WANT TO SALUTE FOR YOUR COURAGE, FOR HOLDING YOUR STOCKS THROUGH OUT THE MOST DIFFICULT PERIOD IN CSE AND FOR YOUR COMMITMENT TO BE IN THE MARKET IN THE FUTURE.

I am in CSE since 1996, In the long run stocks are giving considerable returns than the fixed income instruments. That’s proven even during war time!

Best of luck!

Hi Leon,
If you have holding power, this is not the time to sell..
Your losses are better than my losses.. I am in deep water but holding on..
Further, my personal view on selling and changing to other share, I dont think its advisable.. this is my personal view
All the best.. Dont rush.. think and take your decisions

Good comment, hariesha

I also agree the opinion posted by hariesha,

hareisha has ginen some good piece of advice, I'm scratchin my head to figure out whether there's anymore to say friend

Sellin n buy back lower is also a good method to cover up your cost... I've sent u a pm too, check ur inbox

I like what @hariesha has said.

Just to put my point of view as a medium term trader, I would like to have a plan when buying a share; I would expect the share to behave in a certain manner. If it doesn't, will leave it (sell) immediately even with a loss. This has been proven invaluable to me repeatedly by the market.

Hope I am giving you an idea to think about.

If you can hold EXPO,ODEL & YORK shares for another 1-6 months,you may get a chance to cover at least your cost.

But not sure about SHL & VONE.Get more ideas from experts in this forum & do what ever you feel best.

I personally dont love to any share.I always ready to switch from one share to another one even at a loss as hunter mentioed.Onetime I also brought VONE 31 by assuming that it would hit 50.but it didn't happened.another bullshit story from dammika.anyway managed to exit at 28.5L.

@harisha
good & timely needed advice from harisha..

I'm against the opinion of "never sell low". If you don't see a future, you should exit at the first chance you get.
To give you an example, General Electric was selling at $50 in 2000. After 12 years it is still going at $20.
What if a person who bought it in 2000 sticks to the hard and fast rule of never sell low?
You have two options,
1. If you have money, invest more to average the prices.
2. If you don't have cash to invest, sell some of you are holdings and invest on promising counters you already have.

You may be having some financial difficulties and may have to go for option 2.
In that case here are some facts and it is up to you to decide what to sell and what to average.

SHL : Current PE is 15. At the price you bought it, it was 44. So don't think that this comp will hit your purchase price within next few years.
VONE : Current PE is 32. This is sick!! Don't even think about averaging this.
ODEL : I'm holding 80,000 @ Rs.19/=. For this to hit your purchase price within next 3years, I have to be very lucky.
For a fact, I know that I'm not that lucky and that's my hint for you.
EXPO : Current PE is 9. At the price you bought it, it was 16. Comp recorded a 150% increase in gross profit this year. I advice you to take the chance of price decline to average this.
YORK : Current PE is 7. Asset value per share is 9.80. There was a 48% increase is gross profit this year. How ever keep in mind that for the past 4year gross profit of YORK was in the decline. They seems to be reducing taxable sales in order to avoid income tax payments. I'm not an expert in the field, there for I avoid commenting on future implications of this.

Dileepa wrote:I'm against the opinion of "never sell low". If you don't see a future, you should exit at the first chance you get.
To give you an example, General Electric was selling at $50 in 2000. After 12 years it is still going at $20.
What if a person who bought it in 2000 sticks to the hard and fast rule of never sell low?
You have two options,
1. If you have money, invest more to average the prices.
2. If you don't have cash to invest, sell some of you are holdings and invest on promising counters you already have.

You may be having some financial difficulties and may have to go for option 2.
In that case here are some facts and it is up to you to decide what to sell and what to average.

SHL : Current PE is 15. At the price you bought it, it was 44. So don't think that this comp will hit your purchase price within next few years.
VONE : Current PE is 32. This is sick!! Don't even think about averaging this.
ODEL : I'm holding 80,000 @ Rs.19/=. For this to hit your purchase price within next 3years, I have to be very lucky.
For a fact, I know that I'm not that lucky and that's my hint for you.
EXPO : Current PE is 9. At the price you bought it, it was 16. Comp recorded a 150% increase in gross profit this year. I advice you to take the chance of price decline to average this.
YORK : Current PE is 7. Asset value per share is 9.80. There was a 48% increase is gross profit this year. How ever keep in mind that for the past 4year gross profit of YORK was in the decline. They seems to be reducing taxable sales in order to avoid income tax payments. I'm not an expert in the field, there for I avoid commenting on future implications of this.

Can you please explain PE ratios of VONE and SHL. I belive ratios u mentioned are grossly wrong!

hariesha wrote:

Dileepa wrote:I'm against the opinion of "never sell low". If you don't see a future, you should exit at the first chance you get.
To give you an example, General Electric was selling at $50 in 2000. After 12 years it is still going at $20.
What if a person who bought it in 2000 sticks to the hard and fast rule of never sell low?
You have two options,
1. If you have money, invest more to average the prices.
2. If you don't have cash to invest, sell some of you are holdings and invest on promising counters you already have.

You may be having some financial difficulties and may have to go for option 2.
In that case here are some facts and it is up to you to decide what to sell and what to average.

SHL : Current PE is 15. At the price you bought it, it was 44. So don't think that this comp will hit your purchase price within next few years.
VONE : Current PE is 32. This is sick!! Don't even think about averaging this.
ODEL : I'm holding 80,000 @ Rs.19/=. For this to hit your purchase price within next 3years, I have to be very lucky.
For a fact, I know that I'm not that lucky and that's my hint for you.
EXPO : Current PE is 9. At the price you bought it, it was 16. Comp recorded a 150% increase in gross profit this year. I advice you to take the chance of price decline to average this.
YORK : Current PE is 7. Asset value per share is 9.80. There was a 48% increase is gross profit this year. How ever keep in mind that for the past 4year gross profit of YORK was in the decline. They seems to be reducing taxable sales in order to avoid income tax payments. I'm not an expert in the field, there for I avoid commenting on future implications of this.

Can you please explain PE ratios of VONE and SHL. I belive ratios u mentioned are grossly wrong!

SHL is correct. EPS is 0.66. Therefore 9.7/0.66 = 14.7
On a different thread, Monster pointed out about VONE.

Monster wrote:

Dileepa wrote:

ccsentha wrote:Is VONE worth at these price levels?
But they EPS, P/E, PBv all seems to be good.

What is their P/E? If I'm not mistaken it is around 32.
EPS is 0.42, 13.6/0.42 = 32

Annual Group EPS is Rs 1.87. Therefore, current PE ratio is 13.60 / 1.87 = 7.27

However I'm confused about this. Company P/E is calculated using company EPS, not with the group
According to Bloomberg Last year VONEs EPS was,
Company : (0.14) ← Negative value
Group : 1.30
Therefore PE of VONE was not meaningful last year.
Bloomberg data for 2012 has not been updated yet.
I have reported to Bloomberg about this. Still waiting for data to be updated.

Dileepa,

PE ratios are calculated on Group Results attributable to the parent company shareholders, not on company results. If you calculate on company results, you can't value diversified holdings such as JKH. Because holding company is a shell company with no major operation. Same with VONE and SHL. So always report a loss as they only have expenses incurring to manage subsidiaries and no revenue.

Actually I am not holding VONE right now, but I was thinking about it on Friday. When I saw VONE PE ratio as 32 in your post, I was shocked and today in the morning I studied their financials.

Their PBV ratio is 0.56 and PE ratio is 8.28. When considering PBV it's highly attractive. On PE terms it's one of the lowest in the diversified sector. But you should not rely on these ratios alone.

So I believe it do have huge potential when market starts moving up.

hariesha wrote:Dileepa,

PE ratios are calculated on Group Results attributable to the parent company shareholders, not on company results. If you calculate on company results, you can't value diversified holdings such as JKH. Because holding company is a shell company with no major operation. Same with VONE and SHL. So always report a loss as they only have expenses incurring to manage subsidiaries and no revenue.

Actually I am not holding VONE right now, but I was thinking about it on Friday. When I saw VONE PE ratio as 32 in your post, I was shocked and today in the morning I studied their financials.

Their PBV ratio is 0.56 and PE ratio is 8.28. When considering PBV it's highly attractive. On PE terms it's one of the lowest in the diversified sector. But you should not rely on these ratios alone.

So I believe it do have huge potential when market starts moving up.

hariesha, Thanks for the info.
It seems to be business-week is wrong here.
http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=VONE:SL
If you look at Ratios, it says PE is not meaningful.
They will update 2012 results withing next week.
VONE should have reported to them at the first place.

hariesha wrote:

Antonym wrote:@Leon: I have not researched any of your counters and cannot advise you specifically on these... In general, my advice would be based on your investment horizon and present market prices.

If you are willing to hold for more than a year, most shares are likely to yield more than what a bank fixed deposit does.
Even if I have a investment horizon shorter than 1 year, and do not need cash immediately, I would not sell yet. Prices might or might not decline, but - from these depressed levels - the probability of a 20% increase is greater than the probability of a 20% decline.

While endorsing most of Antonym has said, I don't think changing stocks will be helpful, as we don't know what stocks will move next or what will fall or when market will bottom out, etc. As Anto said we are now closer to the bottom than the peak, in other words more chances for market to turn. But when?




My opinion is now time is right for the market to turn reacting to some trigger. But what market doesn't have is confidence and courage. Then we have lost TRUST also due to some shady deals. Regulators are tending to make rules to prevent similar incidence occurring again, rather than punishing the culprits (they don’t have courage). If you punish one guy others will fear. If you make a new rule, they will find new ways to creep in.

I would like to suggest you to two options.

1. Trade some of your holding, ie : if you have 4000 shares sell 1000 on a good day and wait for a bad day and buy what you sold. Gradually increase your trading quantities to about 25% of your portfolio.

2. Market is full of opportunities now. 75% of the shares can give impressive returns. And most of the stocks are now affordable and worth. Even a person who can set aside Rs.10, 000/- also do have very attractive options. Be innovative. Select a certain stock and start a fresh investment. Don't spend 10,000 on the same day. Go on slab basis. Place your next buying point fairly lower. If the share you invest has gone up with reasonable profit and without sustainable market momentum, book the profit.

Some people say they are waiting for the market bottom. Remember once it turned you can’t buy. Look at order books. Throughout last one month selling side is weak. But nobody goes up and buy. Once market got changed no one want to sell.

ie : Today afternoon. It was a rush. In the morning Reef.W0019 was available @ 2.50, but in evening no one is selling even at 3/-. Return is 20%. Greg.W3 from 3.50 to 4.10. Greg.N 11.40 to 12.00.

Some guys are waiting for big turnovers. Day before yesterday we had a considerable turnover. 673M, which equals to 1.8B if we value the stocks at 5 months back prices. So look at quantities also. Even big guys are poor than they were.

Why I expressed my views in bit detail? I WANT TO SALUTE FOR YOUR COURAGE, FOR HOLDING YOUR STOCKS THROUGH OUT THE MOST DIFFICULT PERIOD IN CSE AND FOR YOUR COMMITMENT TO BE IN THE MARKET IN THE FUTURE.

I am in CSE since 1996, In the long run stocks are giving considerable returns than the fixed income instruments. That’s proven even during war time!

Best of luck!

Tanx a lot for your valuable thoughts. I would follow them and give the feedback in the future.