Lets talk about less risky shares in the current market situation

I will propose one share as always I do. It's your opportunity to proposed shares that you believe the risk is much less than others.

I hardly believe that there is a possibility that PLC (People's Leasing) share will do better in the coming few months due to many reasons.
#The IPO price is Rs. 18.00
#Current market price is Rs.14.50
#Largest and number one leasing company in Sri Lanka
#The major share holder is People's Bank and this is one of the foreign attraction
#The company is going to be converted to a Specialized finance company in the near future
#After the conversion as a finance company it will be the largest finance company in the country.
#Other major share holder's are companies like NSB,BOC,EPF,SANASA,SAMPATH, DIST & etc

Due to the above facts and many more it is one of the most safest shares in the current market situation. What's your opinion.........what are the other counters...talk about one share at a time

In my opinion PLC profitability may affect due to high tax on vechicles and high interest rates.. so I am not expecting good quarter result in october..

econ wrote:In my opinion PLC profitability may affect due to high tax on vechicles and high interest rates.. so I am not expecting good quarter result in october..

well said vehicle sales are dropped massively during last few months ..

It's true that the vehicle price increase at the beginning of this year. Despite the vehicle price increase the revenue of the company had been increase in the June Quarter by 27%. Since, PLC is the biggest leasing company they will manage to maintain the profitability of the company even there are negative market conditions.

News article on Ceylon Today..
http://www.ceylontoday.lk/24-11276-news-detail-peoples-leasing-company-revenues-up-27.html

I think slow moving shares with good fundamentals like CIND,CARE are less risky in too fast moving market with lots of credit.

If u want to be on the safe side always go for shares with high liquidity. PLC is comming under that belt.

Look @ their top 20 list. Lots of foreign funds are there. What is the message we can get from that????????????. This type of healthy investors (LOCALS + FOREIGN) in top 20 list can be seen only in blue chip companies like JKH, HNB, NDB, DFCC,etc etc....

What is the message we can get from that????????????/ will PLC become a blue chip company in CSE in future.?/ who knows ? But just check with their financials, leadership position, liquidity, management etc etc...... by now we should have a very clear idea where this company would be in five years time.

keep this in mind If you take today's top gunners like DIST, CFLB, GRAN, TALF,BFL, LCEY, KGAL, KOTA, NTB,HASU,SLT, etc...etc .. were traded below Rs 10/ levels and some were below Rs 20 levels very few years back ( Max 5 year history )?????????????????

What is the message we get from too many "?" ????????????

@Bandara, just kidding

econ wrote:In my opinion PLC profitability may affect due to high tax on vechicles and high interest rates.. so I am not expecting good quarter result in october..

But this is not the end of the world for a company which has a massive clientele.. Surely a reduction would see in new vehicles.

I.e. A person buy a vehicle on lease for 5 years for 2 mil. After 5 years he gets the ownership and he intends to sell it.. But he doesn't have much more money to add up to the 2Mil (say vehicle prices not appreciated) but he wanted to buy a good comfortable vehicle... He has 3 laks with him so that means total cash would be 2.3 mil after sales. He is looking for a new one found one at 3.1 Mil. And when his vehicle is sold, now again he has to go for a lease (or loan) to buy the new one regardless of whether is unregistered or second-hand

So the business can slow down but never ends..

bandara 123 wrote:
Look @ their top 20 list. Lots of foreign funds are there. What is the message we can get from that????????????. This type of healthy investors (LOCALS + FOREIGN) in top 20 list can be seen only in blue chip companies like JKH, HNB, NDB, DFCC,etc etc....

Mostly foreign funds will invest in shares that can rise up in a longer time span.. Say 3-5 years.. Apart from that the revenue and dividend factors are vital sings of a long term investments.
I.e if u have 1Mil shares of PLC, their div is 0.50 cents hence you get 0.5 mil as dividends every year.

bandara 123 wrote:
keep this in mind If you take today's top gunners like DIST, CFLB, GRAN, TALF,BFL, LCEY, KGAL, KOTA, NTB,HASU,SLT, etc...etc .. were traded below Rs 10/ levels and some were below Rs 20 levels very few years back ( Max 5 year history )?????????????????

Well.. good stuf.. lessons to learn Add BFL too..

bandara 123 wrote:
keep this in mind If you take today's top gunners like DIST, CFLB, GRAN, TALF,BFL, LCEY, KGAL, KOTA, NTB,HASU,SLT, etc...etc .. were traded below Rs 10/ levels and some were below Rs 20 levels very few years back ( Max 5 year history )

That is why I do not preach or worship " Zero Sum " theory.
(Your gain is the amount others loose)

@ smallville I know u can smell something out their.

Two corrections -

01.They offered RS 1.0 for the FY 2011/12. Final dividend Rs0.5 cents paid on April 2012. If anyone owns 1.0m.n shares he or she will get Rs 1.0mn as dividends every year, not Rs 0.5mn.

02. BFL is already included in my list.

@ Chinwi - Not only in the share trading. every where it is same. Just think about our immediate environment and see. every where its same friend. your gain is a loss to the some other person.

PLC is not anyway only a leasing company. It has 5 subsidiaries under its belt from insurance business to property development. It is the only financial company after banks managed to secure an international rating.

Plans on the pipe line - to issue notes to the value of 150mn USD and to list them in singapore stock exchange.

bandara 123 wrote:
@ Chinwi - Not only in the share trading. every where it is same. Just think about our immediate environment and see. every where its same friend. your gain is a loss to the some other person.

Is this zero sum true if one sells and another buys companies with capital growth over years and patience?
Ex : You sell X at peak to me at Rs 200. Now it is Rs 120. I am at temporary loss buying it then. But what if the company grows and with time the share rises to Rs 300?

Ofcouse people can argue opportunity cost but what if this cycle continues so no one losses really ?

slstock wrote:

bandara 123 wrote:
@ Chinwi - Not only in the share trading. every where it is same. Just think about our immediate environment and see. every where its same friend. your gain is a loss to the some other person.

Is this zero sum true if one sells and another buys companies with capital growth over years and patience?
Ex : You sell X at peak to me at Rs 200. Now it is Rs 120. I am at temporary loss buying it then. But what if the company grows and with time the share rises to Rs 300?

Ofcouse people can argue opportunity cost but what if this cycle continues so no one losses really ?

But it is our money circulating among us.Even the company grows what circulate is our money among us.(Sometimes company earnings directly come as scrip dividend but it is very small amount.But again someone has to loose.)

Whitebull wrote:

slstock wrote:

bandara 123 wrote:
@ Chinwi - Not only in the share trading. every where it is same. Just think about our immediate environment and see. every where its same friend. your gain is a loss to the some other person.

Is this zero sum true if one sells and another buys companies with capital growth over years and patience?
Ex : You sell X at peak to me at Rs 200. Now it is Rs 120. I am at temporary loss buying it then. But what if the company grows and with time the share rises to Rs 300?

Ofcouse people can argue opportunity cost but what if this cycle continues so no one losses really ?

But it is our money circulating among us.Even the company grows what circulate is our money among us.(Sometimes company earnings directly come as scrip dividend but it is very small amount.But again someone has to loose.)

Are you sure? It is our money that circulates but does it stay the same? Loosers can become winners again if they hold what is good. Can a good company share capital and market share grow? And the cycle continues. Are temporary losses permanent. Just think again.

Dividends/Scripts are further bonus to increasing the wealth.

Ofcouse if the stock prices stay the same or goes below over the years it is then a different story.

Anyway zero sum or not, if we stay above the pack we can win. Do we plan to be bottom of the pack and always end up loosing. I mean no offence but some people deserve to loose as it might be the only way to learn a lesson make it a positive learning experience. If they correct it, great if not they deserve to loose more and eventually fall out. I am not mean, but that is the reality in the world.

slstock :-Are you sure? It is our money that circulates but does it stay the same?

Amount of money does not stay the same but it again comes from the investers/traders pocket....If that amount comes from company profit then there can be all win situation.

slstock:- Can a good company share capital and market share grow?

Yes of course but does that money come in to the market ? When those things increase share price gets appreciated but where does that money come from ? It is already existed money diverted to that price appreciation or new money from investers/traders pocket.

I do not know exactly but this is what I have understood.

We are now closing to the final quarter of the PLC parent company (major share holder) People's Bank. PLC so far did not pay a dividend for the FY 2012/13. They will pay a dividend before the end of the FY of People's Bank. It means that collecting some of these shares are won't be a bad idea in the current market situation.

Whitebull wrote:

slstock:- Can a good company share capital and market share grow?

Yes of course but does that money come in to the market ? When those things increase share price gets appreciated but where does that money come from ? It is already existed money diverted to that price appreciation or new money from investers/traders pocket.

I do not know exactly but this is what I have understood.

Company grows revenue and profits. They do not distribute to share holders as cash but retain in the reserves for equity appreciations.

Okay, just think simple ( let not worry buy trading) , if you bougth DIST at IPO and held until now without disposing, has your money grown or not. We can think the original money out of your pockets was invested by the company and grown it as part dividend and part increased share value.

slstock:- We can think the original money out of your pockets was invested by the company and grown it as part dividend and part increased share value.

Part increased from share value or the capital gain comes from the already existed money from the market----ofcourse from someone's pocket or new money from a new invester/trader.

I am not talking about growth in one line or one company.I am talking about overall equilibrium of the market/money in the market.

Think we are going in circles. Okay now think again..

You sold me a share of X company at Rs 200 ( with gain)
Now share is Rs 120 my loss.
I hold for 2 years and sell for Rs 300 ( with gain)

Some one else buy and looses temporary like me
Then with time share values appreciates and he sells with gain..

Cycle goes.

Where is the money growth coming from? Was it the we investors pumped new money totally or is it the company growth the money to create greater wealth.

Whitebull wrote:

slstock:- We can think the original money out of your pockets was invested by the company and grown it as part dividend and part increased share value.

Part increased from share value or the capital gain comes from the already existed money from the market----ofcourse from someone's pocket or new money from a new invester/trader.

I am not talking about growth in one line or one company.I am talking about overall equilibrium of the market/money in the market.

slstock wrote:Think we are going in circles. Okay now think again..

You sold me a share of X company at Rs 200 ( with gain)
Now share is Rs 120 my loss.
I hold for 2 years and sell for Rs 300 ( with gain)

Some one else buy and looses temporary like me
Then with time share values appreciates and he sells with gain..

Cycle goes.

Where is the money growth coming from? Was it the we investors pumped new money totally or is it the company growth the money to create greater wealth.

Whitebull wrote:

slstock:- We can think the original money out of your pockets was invested by the company and grown it as part dividend and part increased share value.

Part increased from share value or the capital gain comes from the already existed money from the market----ofcourse from someone's pocket or new money from a new invester/trader.

I am not talking about growth in one line or one company.I am talking about overall equilibrium of the market/money in the market.

How does/In which way company growth money come in to the market ?

Whitebull wrote:

slstock wrote:Think we are going in circles. Okay now think again..

You sold me a share of X company at Rs 200 ( with gain)
Now share is Rs 120 my loss.
I hold for 2 years and sell for Rs 300 ( with gain)

Some one else buy and looses temporary like me
Then with time share values appreciates and he sells with gain..

Cycle goes.

Where is the money growth coming from? Was it the we investors pumped new money totally or is it the company growth the money to create greater wealth.

Whitebull wrote:

slstock:- We can think the original money out of your pockets was invested by the company and grown it as part dividend and part increased share value.

Part increased from share value or the capital gain comes from the already existed money from the market----ofcourse from someone's pocket or new money from a new invester/trader.

I am not talking about growth in one line or one company.I am talking about overall equilibrium of the market/money in the market.

How does/In which way company growth money come in to the market ?

Already answered that before. They retain the profits in the reserves and make the share NAV and PE grow. Also they may give bonus shares . So all these share intrinsic values increase with time . Then buyer and sellers both benefit as the share value appreciates over time.

I believe you are thinking on the mind set that people need to spend money to buy the share . So money comes in by buyers.


Okay think like this. You buy an antique at Rs 100 now. You sell it to someone at Rs 200. The the antique value come down temporary in a bad market and the buyer was a looser. But the intrinsic value of Antique will grow over time. So seller and buyer both will benefit over time as whoever buys it will gain from the initial investment.

Company like PLC will not retain profit like other companies because it is owned by People's Bank and PB will try to get more profits from the leasing company. Therefore the director board will ask them to pay dividend when they are capable of doing it.

slstock wrote:

Already answered that before. They retain the profits in the reserves and make the share NAV and PE grow. Also they may give bonus shares . So all these share intrinsic values increase with time . Then buyer and sellers both benefit as the share value appreciates over time.

As I have mentioned earlier I am not talking about growth in one company.If you talk about one company yes it is true both buyer and seller can be benifitted but I am talking about overall money equilibrium in the market.

Yes company retains their profit but if someone pockets out the money from capital gain then it has to come from someone else--not from that retained profit of the company.

Hi all,
Yes, that argument is there, the total amount of cash remains same.

For me it is detrimental to think like that. Even if you invest 10 rupees in 2000 and get 350 now after a real growth of a company that means you are drawing money loose by someone else. How can I be happy about my success?
I think I have fair right to get the return from genuine growth, not from some less-fortunate looser.
Unfortunately in reality it happens as per the formula.

That is why I wrote I do not "talk or worship" it and I have the right at-least to think the other way.
Same as SLSwrote:

It is our money that circulates but does it stay the same? Losers can become winners again if they hold what is good. Can a good company share capital and market share grow? And the cycle continues. Are temporary losses permanent. Just think again.

I think you got it.

Ponzi or Pyramid schemes are better and clear examples.

Chinwi wrote:Hi all,
Yes, that argument is there, the total amount of cash remains same.

For me it is detrimental to think like that. Even if you invest 10 rupees in 2000 and get 350 now after a real growth of a company that means you are drawing money loose by someone else. How can I be happy about my success?
I think I have fair right to get the return from genuine growth, not from some less-fortunate looser.
Unfortunately in reality it happens as per the formula.

That is why I wrote I do not "talk or worship" it and I have the right at-least to think the other way.
Same as SLSwrote:

It is our money that circulates but does it stay the same? Losers can become winners again if they hold what is good. Can a good company share capital and market share grow? And the cycle continues. Are temporary losses permanent. Just think again.

I think you got it.

Ponzi or Pyramid schemes are better and clear examples.

You have exactly written what I wanted to write.I DO hate this reality also but it is what realy happens.

Given a moment some one withdraws money and someone buys by loosing money.Winners and loosers to make sum zero. If this is the issue just think loosers can be winners later. Just think about wnners with time and no loosers. ( if one invests . Can't say same if you gamble with crap). Someone loose money temporary as an investment.
We deposit our money in a bank. We loose temporarily and bank gains. Are we a looser? We in 1 year withdraw money with interest. We win . Does bank loose . If the bank is good everyone is a winner.

Chinwi,

The quote owner of your except is yours truly

Whitebull wrote:

Chinwi wrote:Hi all,
Yes, that argument is there, the total amount of cash remains same.

For me it is detrimental to think like that. Even if you invest 10 rupees in 2000 and get 350 now after a real growth of a company that means you are drawing money loose by someone else. How can I be happy about my success?
I think I have fair right to get the return from genuine growth, not from some less-fortunate looser.
Unfortunately in reality it happens as per the formula.

That is why I wrote I do not "talk or worship" it and I have the right at-least to think the other way.
Same as SLSwrote:

It is our money that circulates but does it stay the same? Losers can become winners again if they hold what is good. Can a good company share capital and market share grow? And the cycle continues. Are temporary losses permanent. Just think again.

I think you got it.

Ponzi or Pyramid schemes are better and clear examples.

You have exactly written what I wanted to write.I DO hate this reality also but it is what realy happens.