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Once upon a time there came across two investors in Sri Lanka and they had a nice chat about
their investments.Lets see how they share their experience about last year.
A: At the beginning of 2011, I have invested Rs 100M and I realized 20M of profit during the year
by trading and now Market value of my Portfolio (wealth) is 90M including realized gain.
So I think this was a very successful year for me since I have realized 20% of return but If I put
them in FD I receive only 10% of interest.
B: At the beginning of 2011 I have deposited Rs 100M in FD and I earned 10M as interest
and now My wealth is 110M. So I think this was a very successful year for me since If I
invested them in CSE my wealth wold be around 90M.
Above discussion shows that there is conflict in between Accountancy approach and Finance
approach. That is called Profit Vs Wealth. Simply in Accountancy approach their main
objective is to maximize profit where as in Finance approach their main objective is to
maximize wealth.
I have heard and read enough times following things..
* We have enough good counters in CSE whose PER is below 7 while some are with
even 4,5 level.
* Why don't foreigners come back to CSE and buy at dirty cheap prices.
* Why don't our big boys reinvest to buy at dirty cheap prices.
* Big fishes are secretly collecting so as soon as they have collected market will boost.
* Manipulators made this downtrend as they wanted to collect at lower level.
Actually in CSE as well their is above conflict. That means retailers try to maximize their profit
without thinking wealth where as HNWI (except manipulators) try to maximize their wealth.
That' s why they still don't come back and buy at highly discounted prices because they feel
that they can't still maximize their wealth here. So in my opinion they may not reenter to CSE
until they feel that they could maximize their wealth.
Comments are welcome..
their investments.Lets see how they share their experience about last year.
A: At the beginning of 2011, I have invested Rs 100M and I realized 20M of profit during the year
by trading and now Market value of my Portfolio (wealth) is 90M including realized gain.
So I think this was a very successful year for me since I have realized 20% of return but If I put
them in FD I receive only 10% of interest.
B: At the beginning of 2011 I have deposited Rs 100M in FD and I earned 10M as interest
and now My wealth is 110M. So I think this was a very successful year for me since If I
invested them in CSE my wealth wold be around 90M.
Above discussion shows that there is conflict in between Accountancy approach and Finance
approach. That is called Profit Vs Wealth. Simply in Accountancy approach their main
objective is to maximize profit where as in Finance approach their main objective is to
maximize wealth.
I have heard and read enough times following things..
* We have enough good counters in CSE whose PER is below 7 while some are with
even 4,5 level.
* Why don't foreigners come back to CSE and buy at dirty cheap prices.
* Why don't our big boys reinvest to buy at dirty cheap prices.
* Big fishes are secretly collecting so as soon as they have collected market will boost.
* Manipulators made this downtrend as they wanted to collect at lower level.
Actually in CSE as well their is above conflict. That means retailers try to maximize their profit
without thinking wealth where as HNWI (except manipulators) try to maximize their wealth.
That' s why they still don't come back and buy at highly discounted prices because they feel
that they can't still maximize their wealth here. So in my opinion they may not reenter to CSE
until they feel that they could maximize their wealth.
Comments are welcome..
true ..........
