This is a follow up on my below posthttp://forum.srilankaequity.com/t19816-some-thoughts-on-cse-market-situation-at-present
Most seniors, fundamental analysts, tech analysts , pattern readers who where once active in the forum is staying away due to the great bear trend and micro/macro factors. We rarely see good discussions now a days. Most items are news related.
We know many would have got burnt to their skin specially those who where playing with speculative shares like GREG,REEF, HVA,EAST,PAP, RGEM etc etc. Some blue chips which were overvalued were not spared. A bitter experience coupled with more negative news is even keeping the strongest of the lot who survived so far to seek safer havens. Whoever has money left would have chosen to move what their remaining investments to FDs,treasury bills , high yielding savings with lesser risk and sure gain.
But let me draw your attention to another side. The once over blown and over heated ASI, MPI corrected from 7800 to 4700 and 4200 respectively. This is a massive drop. In the meantime many shares have corrected and over corrected their value. We see shares with PEs of lesser than 5 ,
below NAV, below IPO. Even the shares which were done at bargain private placement and offered at over priced IPO prices are nearing those placement targets. Speculative have blown their hot air out.
When the daily volumes started to dry up and the sellers are now selling their bargain priced shares with lesser tendency/volume it is a decent sign that the bear is slowly tiring. We recently hit the lowest turnover in 3 years! When the strongest of those survived the bear also starts leaving, it is another sign that the so called "dumb money" ( no offence) is leaving and the smart money starts coming in. I am not saying the bear trend has ended. NO.There can be sudden drops due to weak mentality . But I see no reason why ASI should drop below 4500 -4700. But IT CAN as none of us have a magic ball in our hands to predict. But all I can say is one's losses is this bear is going to be another's longer term gain. Some possibly by 50-200% with time. Easily it will beat the FD rates hand down when it happens. FD,Treasury rates cannot go up for ever. It has to start stabilizing and coming down at some point.
This forum is small representation of the CSE. The mentalities , the participation , the promotion type posts disappearing, the unnecessary arguments are all part of the frustration. The bear was/is still laughing. Bull is on vacation. The consolidation is what we should see now.
If we try to identify the market bottom we might miss the bus. At some point there will be a sudden few days of hikes and those people who expected it again to drop might not be so lucky.
See below http://forum.srilankaequity.com/t19797-it-is-really-much-better-than-few-weeks-back-level
All this time foriegner where slowly collecting. They only collected shares with higher caps like JKH,DIST,COMB,DFCC,CFIN etc. http://forum.srilankaequity.com/t19562-foreign-purchase-and-sales-june-2012
But note there are so many other shares which trade with much stronger fundamentals and also has hidden forces that can drive them sky high during a bull. What are those shares? What are the hidden asset shares?
For the Long term investors:
I invite the seniors, analysts and anybody with enthusiam to come join and post their share analysis. But please post with reasons. This is the time to analyse. Time to analyze is NOT when the bull starts and when the forum is flooded with promotional posts with 1 line target prices. Those posts will be useless to figure out what to buy as the speculative cycle will begin with them and the risk factor will be higher.
Those who stay away from market will miss trading opportunities at least. During june itself some share gained 30-40% from the bottom.
Also below will be good reads for the above discussion
3) http://forum.srilankaequity.com/t19808-double-bottom?highlight=double+bottom http://forum.srilankaequity.com/t19520-double-bottom?highlight=double+bottom
I/we welcome your posts and analysis. Loosen you shackles , open your eyes, try to be ahead of the pack!
All the best.