Monday, 6 May 2013

Quote for the day

"When people are in doubt, they tend to look to others to confirm their behavior. Some people would rather adopt others’ opinions rather than form their own."- Jon C. Sundt

LSL Market Review 6th May 2013

Change in ownership of Lanka Ceramic was the highlight of the day. The counter gained a maximum 50%. The capital gain of the selling party, CT Holdings amounts to ~Rs. 2.0bn. Royal Ceramic was the buying party to the transaction (76.1% stake of the Lanka Ceramic). The market gained helped by blue chips. John Keells and Nestle led the heaviest gainers list. Retail activity was seen on a mix of blue chips and speculative counters.

ASI gained 107.99 points (1.80%) to close at 6,121.17 and the S&P SL20 index gained 55.13 points (1.62%) to close at 3,461.12. Turnover was Rs. 4.1Bn.

Top contributors to turnover were Lanka Ceramic with Rs. 3.2Bn, Royal Ceramics 65.2Mn and John Keells Holdings with Rs. 42.5Mn. Most active counters for the day were Vallibel One, nation Lanka Finance and Lanka Ceramics.

Notable gainers for the day were Lanka Ceramic up by 50.0% to close at Rs. 120.00, John Keells up by 13.3% to close at Rs. 80.00 and Ceylon cold Stores up by 13.3% to close at Rs. 168.00. Notable losers for the day were Environmental Resource Investments down by 6.7% to close at Rs. 2.80, Beruwala Resorts down by 4.2% to close at Rs. 2.30 and Lanka Orix Finance down by 2.9% to close at Rs. 3.40.

Further, Blue-chip stocks such as Nestle, John Keells, Dialog Axiata, Chevron Lubricants and National Development Bank reached 52week high prices today and supported mainly to the positive performances. All the stocks in S&P SL 20 Index saw price appreciations excluding Hatton National Bank, which drop only by Rs. 0.50.

Foreign participation was minimal compare to the last few days and it accounted for 3% of the total market turnover. At the end of the trading foreign investors were net buyers with net inflow of LKR 28.2mn. Cash map was 82.23% for the day.

Quote for the day

“After all, the money doesn’t just disappear. It simply flows into another account – an account that utilizes setups that specifically take advantage of human nature.”- John F. Carter

7 Deadly Sins Of Investing

Which sins are you committing right now?

As an investor, who is your biggest enemy? You. Why? Because you're a sinner. You are too easily led into temptation.

There are seven deadly investment sins, and you have probably committed all of them.
But you're good at heart, aren't you? You want to do the right thing. Now is the time to repent your sinful ways, and become a better investor in the process. Here's what you need to resist.

Emotion clouds the judgement, and few emotions cast more clouds than wrath. When that red mist descends, you lose sight of everything else.

There are plenty of reasons why investors become wrathful. You might have just made your worst investment ever, been through a costly divorce or been rocked by Britain's £750bn 'pension bombshell'.
You get angry. To recover your losses, you decide to get more aggressive.
So you do crazy things, like shorting the FTSE, oil and silver, desperately chasing ten-baggers, or gambling your pot on some high-risk emerging market biotech start-up.
There is a time and place for aggressive investing, but it needs to be done with a cool head.

Getting greedy costs investors more than any other sin. Greed is what makes people dive into stock market and property bubbles too late. Greed is what makes you ditch a long-term hold with a decent yield for some flighty growth stock. Greed racks up your portfolio charges as you lurch between different sectors and stocks.

Greed has been a constant through investment history. It allowed tulip mania to flower. It blew up the South Sea Bubble. It triggered the technology boom.
To be a sound, long-term Foolish investor, you need to curb this particularly base instinct. Greed isn't good, and you're not Gordon Gekko.

I always thought sloth was one of the lesser sins, and that's the case with investing. The slothful investor has some advantages. They save on dealing fees and bid/offer spreads. They avoid making rash judgements, such as buying a growth stock on a whim or selling a recovery stock too soon.

You have to give your portfolio time. Slow investing, I call it. You might call it 'buy and hold'.
But slothful investing isn't so clever if you can't summon the energy to research your investments properly before buying them, or are too lazy to ditch that high-charging, underperforming pension or fund.
Sloth or growth. It's your call.

Everybody knows what pride comes before. If you think your run of good fortune is down to your innate genius, if you think you hold the secret to making vast fortunes from penny shares, or if you think you can beat those slickers in the City year after year, you are heading for a fall.

The stock market is a tough taskmaster, and it has no time for bigheads. Nobody knows anything, so what makes you so special?

You've just got to have it, haven't you? That go-go gold miner. That trend-setting tech stock. That 10% yield. That fund that just doubled in value. That frontier market that is set to shoot the lights out, er, after the locals have stopped shooting the lights out.
This isn't Foolish investing. It's just lust.

So what if you know somebody who made a mint on emerging markets? Or shorted the banks in 2008 (then went long in early 2009)? Or bought gold at $600 an ounce?

Somebody has to make money out of investing. This time, it wasn't you. Don't be envious. Don't turn green. And don't do anything daft, like trying to follow their strategy, one year too late.
Your turn will come. Be patient.

The stock market is full of tempting treats. Investors are spoilt for choice. A quick run through the Motley Fool menus throws up juicy high-yielders, exotic oils, luxury goodies, big beer, pancakes and pizza and a tasty Apple.

You can't dig into all of them. You have to choose carefully. Work out which ones suit your investment palate and focus your efforts on them. Nobody likes a glutton.

Wrath, greed, sloth, pride, lust, envy, gluttony. Any of them could destroy your investment strategy. Now that really would be a sin.

By Harvey Jones