@dayandacool wrote:Best time to determine what sort of an investor / trader you are. Banks, while trading at dirt cheap and discounted prices, it also means you will need to hold on to them for the long run. Major banks have all recorded dismal performances for the 2nd quarter and I see no real reason for them to come to the past glory they once were in next 2 quarters as well.
While the opportunity cost is massive and the risk of running in to most probable RI's, I don't think Banks are a good choice for the MT.
Having said that, If someone is willing to take the hit and stay put for the long term, They are in for a very good return as we all know that banks will rise gradually and it'll be next to impossible to collect banking shares at the same discounted prices again..
DISC: Sold all Banking shares during last 2 weeks.
Just to Add One Thing,
Banks having Absolute decimal performance in 2020.
SAMP Operating Profit Down 40%
COMM Operating Profit Down 12%
HNB Operating Profit Down 30%
All banks face was Saved by VAT reduction to 8% and abolish of NBT and DRL.
Further, Most bank losing Commissions and Fees due to Import Restriction and reduced Consumer activities.
As a Investor, i wont touch Bank & Fin Shares till following happens,
- Some interest of Foreign Investors
- CBSL revers Cash Dividend restriction
- End of Debt relief.
However there is an opportunity present for Medium Term Investors.
- Now Market is back to 6,000 level without Banking shares. So that means some others shares are bit over bought. So potential of Bank and Finance is very high. There can be min 20% increase in MT.
- Most of Bank P/L are filled with Impairment charges. May be due to Debt Relief. (expert Advise required). Check LOLC Finance, Abnormal Impairment. So if these can be reversed, they will have super profit in 1Q in 2021.
DISC - Had HNB X but sold at Small Profit. Opportunity cost was too much