So when did the bull market start?
I think we can safely say ( unless there is a catastrophe) that 4700 was the bottom and the turn around.
I posted below when ASi around 4700-4900
What will happen in the short term now that we are at asi 6000?
a) If buying momentum continues the market can be pushed much higher maybe to 6300 in the first go.
b) Overall market is in the overbought region. So we are in the dangerous territory. A correction can happen and I really hope it stays above 5800. else big worry
I am a new comer and what share should I pick now?
1) Stock market is not a gambler den ( it was at one point but I doubt it will repeat at that level again like in 2010-2011). It is a place for investment. Investment takes time to realize. when you plant your seeds it takes time to harvest.
Know the difference in Investment and Short term trading. It is okay to have short term well as long term shares in your portfolio. but have a balance. When you invest atleast look at 2 year horizon ( or much more). When you trade it can be days or just months.
Greed is the mother of evil. We want to make quickest profit as possible. You can follow others to blindly buy speculatives. You might win some but also you might loose bigger if you do not know what you are doing. Do not but at peak of a run. Example if you buy TWOD at Rs 20 and CIFL at RS 6 and GREG.W at Rs 15 you will have to wait a long time till next big run happens . This is the danger of speculatives. Also for them to reach those prices again will take considerable time or maybe never.
2) Know the different between fundamentals adn speculatives
Fundamentals companies have intrinsic value due to earning growth, dividend policy , assets good management. Even if they fall in short term they will bounce back and go higher in long term. ( Example JKH,DFCC, SAMP, NTB etc ) .
For speculatives we cannot guarantee the same. That is why some people have lost 90% due to greed. GREG.W I can say with 95% of probability that it will not hit Rs 100 again. Some people would have lost 90% of their investment in trading GREG,PCH etc. Do you know once GREG was at Rs 250+. PCH at Rs 30+ . I am not saying they can never reach those levels. But how long will it take?
For investments try to identify stocks that are trading below Market PE and NAV. Look at the history of the company. Have they been treating their share holders well with dividends, share bonuses etc? Do they have reputable management. You will have peace of mind with them.
I have lost 90% as I bought at peak in 2011. How do I recover?
If you hold the wrong shares you will never. Example I mentioned before. So best thing is to invest in something else and compound gains. Example :
Invest in share X. Say it run 40% and you think it has reached peak fundamental value. At that time you can sell. There is no rule to say investment have to be held forever ( contrary to Mr Buffet).
Next invest in share Y: It runs for 50%.
Do you see you investment has now doubled ? What if you invest and that run 50% again. Now you have tripled.
Okay if you patiently repeat this cycle , I just told you a secret to recover most of what you lost or make profit even.
I know it is easier said than done. Some times my greed has got the better of me also , but knowledge and experience is a weapon.
I think this is enough for now.
I normally posted a topic every 1000th post.
http://forum.srilankaequity.com/t3932-message-to-new-comers-on-the-occasion-of-my-celebrating-4-months-1000-posts-at-the-forum?highlight=on the occasion of my
http://forum.srilankaequity.com/t13740-on-the-occasion-of-my-2000th-post?highlight=on the occasion
Finally as always
"Learn the basics, Invest not gamble, know your investment period, have Patience , have lesser Greed , know your entry and exit points and you will be a victor on the longer run at CSE"
Be ahead of the pack. Luck will favour the brave most times. All the best.
Last edited by slstock on Sat May 04, 2013 5:01 pm; edited 1 time in total