When to invest in shares

ice4083 · 1 When to invest in shares Sat Mar 12, 2016 11:01 pm

ice4083

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T:@: i am a fairly experienced investor in shares, I have a feeling that most people that come to this forum are young people, with lot of potential. Few lessons I have learned during my years would be useful for all. Firstly think about the reason for being in shares than anything else whether it is for value or for trading. A market like the CSE is a very volatile market and I would be very careful when trading. Trading needs 101% dicipline and a commitment, if trading. I have run two portfolios one for my clients who are value investor and my personal portfolio which was trading. My personal portfolio has not done well because very few people can do these two roles simultaneously, and successfully for a long time. Traders work on rumors and end up burninout sooner than later.There are two kind of value investors the strategic value investors and passive ones, strategic value investors look to get more than dividends and capital gains from the companies they invest, lsuch as board seats, some control, related avenues for other investments. Companies that have value investors have less volatile shares what ever halpens to economic indicators, strategic value investors want to strengthen their grip in the company affairs. Contrary to the popular belief very few foreign investors are value investors, most are fly by nights.
So knowing what type of investor you are and sticking to to it is important when investing in a share market. Value investors are also not for every one, ineeds a lots of patience, lot of reading, and a very long time horizon, and confidence, for most people who invest otero people's money who have targets to achieve this will not work even if they start as value investor s when redemptions time comes they will be thinking like traders. Knowing what sort of an investor mentality before investingi iwould be a step in right direction.
Excuse the types, good luck.

VALUEPICK · 2 Re: When to invest in shares Sun Mar 13, 2016 2:26 am

VALUEPICK

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Thank you for your valuable posting.

At different time different investors, traders and fund mangers will outperform others. In the mid and long run intelligent value investors and contrarian value investors will outperform others.

Following could be useful for any type of market.

Peter Lynch kept up his knowledge of the companies he owned. He kept them as long as the story hadn't changed and he didn't sell. He also did not try to time the market or predict the direction of the overall economy.

VALUEPICK · 3 Re: When to invest in shares Sun Mar 13, 2016 6:32 am

VALUEPICK

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When to invest in shares and when to sell shares?

It depends on the type of person, strategy he or she has, experience and knowledge in the industry and some other factors which include valuation etc.

We are going to see following opportunities in the CSE.

Beaten down opportunities
Value opportunities
Growth opportunities
Future turnaround opportunities
Contrarian opportunities
Coming cash cows, emerging companies and fast growers compared to peers in the group
Small caps and mid caps opportunities

If we pick five stocks one can have mega return, three can perform according to the market situation and one can make losses sometimes more than 50%. We have to identity few winning stocks to minimize risk in stock markets. Even in bull markets there can be bear stocks.

ranferdi · 4 Re: When to invest in shares Sun Mar 13, 2016 7:26 am

ranferdi

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@Value pick. Thank u for u r contribution above.

If possible can u pls give us an ezample for each type of opportunity above with valid reasons...thanks.

VALUEPICK · 5 Re: When to invest in shares Sun Mar 13, 2016 8:09 am

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Ranferdi

Some plantation stocks are badly beaten down but we cannot expect strong recovery for sometime.

However, not every badly beaten down stocks will have similar growth or turnaround in the future.

I don’t want to mention value stocks here. Because we have many value stocks in the market now.

On cash cow, emerging or fast grower when compare with peers in the group

For example I will compare companies in each group. We have to study their cash position, debt level, assets and liabilities etc for number of quarters and years and then we can identify them.

Growth opportunities

Tourism sector is one of the growth areas in the economy. We have to find out companies which going to benefit from this trend. We should identify real growing companies and well managed companies in this area. There could be growth companies in other sectors as well. Those companies in maturity age will have less growth. How about identifying small or mid company?

Contrarian opportunities

You are going against the crowd. But we have to have good knowledge to identity otherwise we may make mistakes. For examples when there were gold noises in the market many didn’t want to buy banking and financial stocks. Those who became contrarians and bought those banking and finance stocks made attractive capital gain later.

I prefer value companies which are going to generate more cash in the future. If they are going to have less debt in the future then I will be more keen on that. It is time to study listed companies in the CSE to find out real winners in the short, mid and long term.

Some emerging and frontier markets such as Kenya, Sri-Lanka, the UAE and Qatar all suffered in 2015. Markets will not suffer for ever.