To start with, some ppl may be smart enuf to understand that this was a bear market, but majority didnt.. Its just the lack of experience, knowledge to identify these things in advance.. So u cannot call ppl fools just for not being smart enuf.. Nor u can blame SEC and others.
One important thing anyone could do was to sell their shares when they see the signs of a breakeven point or stop loss..
But if anyone didn’t sell thinking that the market would turn up anytime, only possible chance was bear market rallies we saw here n there..
The only lesson we gotta take is; at least we witnessed a bear market and now wait till it bottomed out to buy back.. Nobody should get discouraged that they lost this much in CSE so they could tell they will never invest again...markets wont behave strangely for so long.. At one point it could show us signs of a recovery.. But not now...
When we compared losses, yours could be none, mine could be few laks, somebody else's could be a victim of 10 millions.. so???? Have we lost that much??
However, this is not money earned by killing dogs.. its our hard earned money, we sweated a lot to earn these, or this money could be your parents', they struggle a lot for earning this for you..
So a loss is anyway a LOSS.. u can’t compensate anything for it, but keep on blaming is only a mind dressor..
Technically, whats up now?
Looks like ASI is on a falling wedge pattern which is a bullish reversal one, but the reversal point is the place which is again difficult to plot. It could fall to 5400-5600 range sometimes..
Previously I thought ASI can even pass 6500. But huge resistance came up over 6100 so the market started falling. Seems like it'll be hard to beat the Neckline Resistance point around 6500 going forward.
What I'm thinking is; even for long term investors, still there’s time to collect lower.. The market could see a recovery near 5600 or if falls from 4800.. due to some technical points such as 50 day SMA, 50%, 38% Fibonacci retracements, etc.. Sometimes it can even start up between 5600-5800 due to previous resistance/support/psychological levels.
So the support I look at is; 5600, 5000, 4800.
What if we can find some good counters in a down market or a market with little volatility?Things to try;
01) Rotate stocks to different sectors – This is important; while every sector can have good results, some sectors will outperform others and will be promising in coming years. I think Tourism, infrastructure will be the best short to long term sectors that would perform well in coming years.. tourist arrivals are expected to increase at least by 20%.
02) Country’s growth is expected to be a little over 8% now, so banks are giving u 9-11% FD returns, put some money in bank for 1-3-6 months. For you to have a good return, the market return should exceed 11%. Come back to the market when it shows positive signs with improved TO, volumes, investor sentiments..
03) Calculate the earnings of companies (EPS) and if possible, forecast the future earnings.. If results and the business look promising, move into those counters. Mostly we should follow businesses we can understand and have some idea about..
04) Avoid speculative counters unless you are a trader.. But expose only 10-20% of your total portfolio for these. Best thing for traders is to go for swing trading rather than day trading..
05) Stop listening to your broker unless they have a proven track record of being successful at least at a ratio over 70%. Learn the art of investing, trading by reading books written by successful investors / traders.
06) Look for other investment opportunities besides CSE – Lands, Gold, Buying and selling business, etc..
07) Stop averaging down your favourite counters – you’re up for an opportunity loss by doing so.. Put your money on a 1 month FD and buy some valuable counters when u see the market bottom.
Keep in mind; Don’t let your investment be a burden or a hindrance to you..
Last edited by smallville on Sat Jan 07, 2012 8:22 pm; edited 1 time in total