Need an advice

Dear all

I have en-counted with losses form shares that I have brought.

I need your valuable comment on the method that I am going to do to recover my losses early as possible.

I will sell my shares(currently- no up trend) at a loss and buy share which has an uptrend or trend to move up.

Please advice.

Don't depend on others
Study company accounts. Read various reports
on stock market

This forum is also very useful If you read carefully you can get  an idea
about what to buy and what to sell

Specially do not buy on credit

prasadrmb wrote:Dear all

I have en-counted with losses form shares that I have brought.

I need your valuable comment on the method that I am going to do to recover my losses early as possible.

I will sell my shares(currently- no up trend) at a loss and buy share which has an uptrend or trend to move up.

Please advice.

Since u r mem from 2011- I guess u genuinely asking.
This is not da right time to sell. There s a good uptrend near by..If u could tell ur shares along with % and the bought price, I can suggest few- if u wish..

It is a genuine request and not about any share that I have asked. I need a general comment that what should do with situations like I have faced.

I have many types of shares that I brought without a knowledge. Loss is about 50%. Shares that I have brought, are not moving with the uptrend of the market, but they goes down further.

So what to do? Should I sell them at a loss and buy shares that are move with the uptrend of the market.

@ prasadrmb

your situation and what to do may depend on what shares you have and what is your cost ? how much did you initially invest and what is your total portfolio value now ?
if you give this information, someone may be able to help you.

Basic adice from my experience as follows,
1. If you have more fund to invest then buy uptrending shares now.
2. Regarding existing portfolio sell the losers and keep the stock which can move in medium term. Averaging or waiting with the existing lose making shares won't help you in near future.
3. The past lost take it as a tuition fees paid for the investment course, bitter but need to accept.

prasadrmb wrote:It is a genuine request and not about any share that I have asked. I need a general comment that what should do with situations like I have faced.

I have many types of shares that I brought without a knowledge. Loss is about 50%. Shares that I have brought, are not moving with the uptrend of the market, but they goes down further.

So what to do? Should I sell them at a loss and buy shares that are move with the uptrend of the market.

When you say 50% loss, I can imagine what shares you are in. Those small shares gone down by huge margins now and may bounce back. Why, those are in "Opportunity" category now. ie; PCH, PCHH, PCP, CIFL, TESS, PAP, TWOD (I don't hold any at the moment, except some CIFL but considering to enter in near future). I believe they carry a good opportunity to a risk taker now. Any moment a new investor can get in to these now, as they are fairly valued now.

Take PCP as an example. By investing 50 M you can get the control of the shell company. For an investor to start a company and obtain a listing is costing more and time consuming. This is true for PCH, PCHH and CIFL, TWOD. Only problem with CIFL is with the deposit liability, which Central Bank is thinking the new investor should take over. But at some point they may remove this condition.

PAP and TESS, I think fairly valued now with businesses of going concern.

So my advice is to hold. But I cannot say till when. Meanwhile do some value investing to diversify your portfolio. There are some mid-caps with attractive valuations and good dividend ratios. When market starts the down trend, "Cut Losses" theory may work. But at the near bottom situations, it only provides regrets.

Have a habit of investing a certain amount, in every month and for value shares. Wish you good luck and patience.

These are the shares

This is an old story and my answer remains same. Portfolio is much better than I thougt.

But if you had the habit of continuous investing, by now you may have recovered more than 50% of the loss. The companies with plantation exposure may not reach the previous glory quickly. But this is not the time for selling.

hariesha wrote:This is an old story and my answer remains same. Portfolio is much better than I thougt.

But if you had the habit of continuous investing, by now you may have recovered more than 50% of the loss. The companies with plantation exposure may not reach the previous glory quickly. But this is not the time for selling.

yea I too agree with you.

Buy some at current levels and average your cost (eg. LGL , UBC, NTB ... )

@prasadrmb

I think you have too many (number) of shares for your portfolio size. 19. reviewing your cost in hindsight, your cost prices are above their intrinsic values for most of these shares except for perhaps NTB & LGL.

your options are as follows -

1. Do nothing. when & if the "Bull" returns, a rising tide will lift all ships and hopefully you will minimize your 43 % current portfolio loss to 10-15 %. only problem is cannot tell the timeframe, maybe next week, next month, next year or 2015. As buffet said, time is a friend of good businesses (company's) and a enemy of mediocre ones.
btw - This is not an attractive option to me.    

2. Sell everything and cut your losses and invest in an FD and live happily ever after.

3. Sell everything and identify & invest in 2-3 super shares in order to recoup / recover your losses. This is an attractive option to me but only problem is what shares to invest ? thats the Rs 242,000 question !

For pt 3, you have the following options -

1. Avoid Plantations, Hotels, Retail, Manufacturing (only select)  and Banking sector stocks.

2. In Banking, Finance & Insurance sector, some possible good options are Comm Bank, NTB, CFIN, ALLI, CDB, JINS, & CINS (x).

3. Look for Undervalued Value shares trading at steep discounts to their intrinsic valuations - GUAR, CINV, RENU, CABO, CIT, CFI, COLO, LMF etc

4. Good Diversified company's at current levels - DIST, HEMAS, CFLB.

5. Speculative Hot shares where the trend is your friend maybe ? JKH, LLUB, CTC, CINS (x), NEST. (btw - i am not recommending these just stating the current trend).    

6. Select manufacturing & constructions shares that should do well in the future - AEL, TILE, TJL (?) etc

7. Select Hydropower company's according to Chinwi's wet year with super rainfall theory.

8. Speculatives shares as per Hariesha's list.

Above is not a comprehensive list but some that came to mind. I think your current 19 share porfolio will even underform a potential Bull run in the future. so switching to 2-3 shares in above category of stocks which are at reasonable current valuations.

You have lost a lot of money in sri lankan terms.....

But hey I have lost more on cars  

I think if you look at that portfolio. If you had every thing you have now at the current trading price, you would be looking quite good.

So what you do, sell everything and buy it all back???

For your invested amount, I feel like you have too many counters.
Let me guess.. You did not monitor your PF for a long time right?
Other wise you could not have ended with a disaster like this.
Seriously with 95% loss, why are you holding PCH?
Just get rid of shares like this and concentrate on value counters.
From your list, I know only about NTB and ODEL. Both are good.
Sell some of loss making shares and average your quality holdings.

Dileepa wrote: Sell some of loss making shares and average your quality holdings.

Yes, this is what you should do now and I may add UBC too to the list.

It is true that I didn't look at the market for long time. I was not engage with the market.
Hence, dip of some shares were not noticed.

The Alchemist wrote:@prasadrmb

I think you have too many (number) of shares for your portfolio size. 19. reviewing your cost in hindsight, your cost prices are above their intrinsic values for most of these shares except for perhaps NTB & LGL.

your options are as follows -

1. Do nothing. when & if the "Bull" returns, a rising tide will lift all ships and hopefully you will minimize your 43 % current portfolio loss to 10-15 %. only problem is cannot tell the timeframe, maybe next week, next month, next year or 2015. As buffet said, time is a friend of good businesses (company's) and a enemy of mediocre ones.
btw - This is not an attractive option to me.    

2. Sell everything and cut your losses and invest in an FD and live happily ever after.

3. Sell everything and identify & invest in 2-3 super shares in order to recoup / recover your losses. This is an attractive option to me but only problem is what shares to invest ? thats the Rs 242,000 question !

For pt 3, you have the following options -

1. Avoid Plantations, Hotels, Retail, Manufacturing (only select)  and Banking sector stocks.

2. In Banking, Finance & Insurance sector, some possible good options are Comm Bank, NTB, CFIN, ALLI, CDB, JINS, & CINS (x).

3. Look for Undervalued Value shares trading at steep discounts to their intrinsic valuations - GUAR, CINV, RENU, CABO, CIT, CFI, COLO, LMF etc

4. Good Diversified company's at current levels - DIST, HEMAS, CFLB.

5. Speculative Hot shares where the trend is your friend maybe ? JKH, LLUB, CTC, CINS (x), NEST. (btw - i am not recommending these just stating the current trend).    

6. Select manufacturing & constructions shares that should do well in the future - AEL, TILE, TJL (?) etc

7. Select Hydropower company's according to Chinwi's wet year with super rainfall theory.

8. Speculatives shares as per Hariesha's list.

Above is not a comprehensive list but some that came to mind. I think your current 19 share porfolio will even underform a potential Bull run in the future. so switching to 2-3 shares in above category of stocks which are at reasonable current valuations.

The Alchemist, In point 2 Why HNB is not there ?? Any particular reason??

According to my ASPI data it is showing a up trend (atleast starting to show). If this were to continue then you can reduce your losses.
You need to keep monitoring....after all it is your money. I hope this is not on credit.

Like to know what the experts think.....

Leon wrote:

The Alchemist wrote:@prasadrmb


2. In Banking, Finance & Insurance sector, some possible good options are Comm Bank, NTB, CFIN, ALLI, CDB, JINS, & CINS (x).

.

The Alchemist, In point 2 Why HNB is not there ?? Any particular reason??

@ Leon - No particular reason. just trying to figure out the best. (Actually i should also omit NTB as CFIN gives good exposure to NTB anyways).  
Comm Bank is the best Commercial Bank in Sri-Lanka. Period. Preferred choice for all the best companies as clients too. Just following the Big Boys / Smart Money. Carsons Investment Companies (CINV & GUAR), JB Cocoshell, Captain, Ravi Thambiyah, etc. They are all buying Comm Bank.

Thanks all for your valuable comments.