"Buy when there's blood in the streets, even if the blood is your own."
CSE is not an ideal stock exchange to reflect the sentiment of general investors. it is driven by few HNWIs apart from the foreign & Institutional Investors. The latter two investors are keen on growing businesses and blue chips. They are the backbone who held the CSE. they are strong, mostly not visible yet value investors who target mid to long term investments.
Most of retail investors generally follow the market sentiment and they want quick bucks. I have seen them blooming in optimistic mood when everything is green. but bull can't run forever, when it start to turn red, people see it as a discount in bull market, jump & buy with all they have. well, even with margins. hey will get panic when the bear is running & there is blood in the street. then panic selling starting and if you notice, in such cases market turnover & volume are small while number of transactions are significant.
This market sentiment is controlled by these few HNWIs. These individuals play the market according to various agendas. they can easily push the market up or down. you agree or not, Sri Lanka is currently undergoing a major political turmoil in last decay. Current Gov. favored these HNWIs and spontaneous revenue generations. But if you study carefully, you can see entrepreneurs faced hard time and their profits grow less time being. for development of a country is depends on its production industry. therefore, this Gov. is favored by HNWIs who liked to manipulate the market.
Well, Im not talking politics here, taking the facts at hand, say hypothetically Gov. regime change in upcoming election, then there are lot of uncertainties after that. Even if challenging alliance win the election, there will be whole lot of new chaos. Only thing for sure is, Lot of ifs make Political & Economical Uncertainty for few months, may be for a year.
Market correction will be followed by panic selling. HNWI might want to play the situation as well. Political chaos is there. Its blood on the street, for value investors this is time to collect. for traders, i wish you good luck, you better be one step ahead of manipulators. otherwise you might bleed like no recovery.
If someone ask me, be a value investor and pick growing stocks packet by packet. there is no hurry. and i would say it is good for your blood pressure as well.