Rumors also trigger buying and selling at KSE depending of course on the merit of rumors and/or source of rumors. Some rumors may not be harmful or at least not intended that way but some are total misinformation and the worst type are total disinformation.

Both Greed and Fear are fueled by these rumors.

Such rumor based buyings and sellings result in greater volatility… and more volumes

KSE members and agents like greater Volumes as these give them more commissions.

Long Term Investors usually sleep through most of these rumors.

Small investors also make mistakes reacting one way or other in response to some of the rumors. Best thing is to accept our mistakes as learning experience and write these down.

Some Swing Traders look at these situations as opportunities as long as the quantities are manageable and the entry and exit timing is right.

Weak holders with large quantities however loose money in panic selling. Remedy : Always have Manageable Quantities.

This good guidance of managing our investment quantities and writing down both our success and failures comes from my teacher and mentor Ahmed Irfan Shafqat.

Most successful Swing Traders and even Day Traders put buying and selling limits and trade only between the Support and Resistance Levels within this range of Low and High established in the last 90 days to about 120 days for about 80% profitable trades.

Of course there are successful traders who only study chart of only last 3 weeks and others who study the charts of last 52 weeks. It all depends a lot on your Comfort Zone and your personality and ability to make good decisions at the right time.

Good Luck

Taufiq

KSE is at present time performing worst than most other Stock Exchanges around the world. 

Most experts and informed persons are fearful that it may still go further down.

The general advise is:

Stay out of the KSE Market.  Do not buy anything.

At KSE among other valid reason for the continued Down Trend is the fact that a lot of shares are being offloaded as Distress Sale.   Banks and Financial Institutions and also some Brokerage Houses are selling Shares belonging to their clients who are behind on the payments.  A number of CFS Financiers and some Brokers are also in a difficult position and their shares are being sold to square the positions.  This is perhaps the main reason for this continued selling even at these very attractive rates.  Unfortunately it is causing a domino effect and as more selling comes, market moves further down and this creates problems for more weak holders.  Until this cycle stops, we may see the selling pressure.   It is also possible that a large number of share maybe changing hands without the consent of the seller as the Brokers do not seem to have any other choice. 

There are always some people somewhere who have extra money.  One thing that successful investors like Warren Buffett do is to wait very patiently and Buy Stocks when they are Down… Way Down.

KSE shares are at the present time…  Way Way Way Down.

We feel this is also a great opportunity for Smart Patient Buyers and Investors with lots of extra money sitting somewhere idle. to start their research and find some of these Buying Opportunities.

The Right and Intelligent way of Evaluating the shares for buying, when the market is Down Down like our KSE is to first pick about 10 Sharesof Companies that are in business without any issues and also have good products or services that people NEED.   They must have something to offer or sell that people really NEED.  This criteria works in all Economic Conditions but it is MUST in bad economy.  The company must have products that people NEED and not just some products that people want.  This is the First Criteria and most important.

The Next two are Technical Factors…

First is to look at the 52 Weeks Low of the Shares that we have selected.  Look for shares that are at or very near the 52 week low.  Now this is very difficult as at the present time, KSE is in a very difficult situation and most of the shares are at or near the 52 weeks low.  So really do not know how to improvize on this requirement.

The second technical is to look at the 200 Day Moving Average. Similar problem again at KSE…  Most, perhaps all shares are below the 200 Day Moving Average… Many are way below the 200 Day Moving Average.  So the improvized thing to do is to look at the shares that are Way Way below the 200 Day Moving Average Curve.   Remember the First Criteria is our selected companies are in business and have products that people NEED.

The above research and homework is good but not enough in these challenging times. 

We now need to look at the Company’s Books, Balance Sheets and Earning estimates and future Growth potentials.  Everyone is not good at understanding these complex accounts so please get some help from your Forum friends. Some of the friends including Hafeez Butt Saheb, Cdeeky Bhai, Zia Bhai, Alam Bhai, Salman Bhai, Aly B, Ahsan Bhai, Asif Now Bhai, Abdul Basit Bhai and Abdul Mateen Khan the Great have been known to guide and assist forum friends when requested.  And then there are many others

This will take a few days and eventually you will be able to finally select one or two Shares that you will feel comfortable Buying and Investing.

Now comes the time for Action.  Your Desires and your Beliefs will be fulfilled with your Action.

There is no sense to Rush.  Calm Down.  You have already decided to Invest.  Now Watch…

Watch the market…   Watch the Trend… Watch the Movement in your selected Shares…  Watch the Volumes.. 

If the Trend is Down… Wait… Yes Wait… Remember you can always buy as you have made the research and comfortable.. 

Now the time will come to take the Action.  You will feel comfortable.  Listen to both your Head and also your Heart.  You will get the Green Signal. 

Go For it…   BUY about 25% of your target quantity…. wait a little..  an hour or a day or few days… increase your position in lots of 25% … and once you have Invested in your targetted amount or quantity… Relax… Do not worry about anything.   Just check back in a month or if you are strong in about 3 months.  Remember, it takes courage to Buy like the Truely Successful Investors.  Luck has the habit of favoring the Brave.  InshaaAllah things will get better and you will enjoy the rewards for your patience and reasearch and courage.

Good Luck

Taufiq

www.ksefun.com

In the first 100 Days, Obama and his Team will try to cover a lot of milestones.

Some of the first things Obama will do would be to Change, Modify or even Cancel the Orders and Directives of President Bush.

We already know some of Obama’s priorities

STEM CELL RESEARCH

GREEN TECHNOLOGY

COMMUNICATIONS

INTERNET

Some of these Companies may get the benifit from Obama’s Action in the first few days.

In the STEM CELL RESEARCH a very important development is taking place as some of the Japanese and American Scientists have claimed success in producing healthy cells for all parts of the human body from the Skin cells.  This means all ethical reservations regarding the Embryos will be removed and Stem Cell Development will get ful support from the Obama Government.

Focus on some of these companies

01. BTIM - Bio Times Inc

02. BDX - Becton - Dickenson

03. INVITROGEN

04. TMO - THERMO FISHER SCIENTIFIC

05. AMGN - AMGEN

06. DNA - GENENTECH

——————————-

In the Alternative Energy Field, Focus on the activities of Boone Pickens.  Obama has already pledged $150 Billion over 10 years to promote Green Technologies.  He wants 25% of USA Electricity to be produced from Renewable Sources by 2025 - - - Wind - Solar

Coal and Natural Gas are in abundance in the United States and will play a vital role in future.

Focus on

NALFX - New Alternative Fund

VWDRY - Vestes Wind Systems  - This is a Danish Company.

GE

ESLR - EVERGREEN SOLAR

CSIQ - CANADIAN SOLAR

FIRST SOLAR

———

As for Communications and Internet

Focus on

VR - VERIZON COMMUNICATIONS

Happy Investing

WBMD - WEBMD Health

In our educational institutions, we mostly start out with Religious and General Education.  

The start is basically in Academic Education.   

For a lot of people, this Acedemic Education is all they ever learn.   Just some General subjects… mostly Basic and Middle Level… 

Then a lot of them stop the persuit of Education and in the real world this does not really amount to much.

Then comes the Specialization…  Some people go for Specialized and Professional Education. 

This is more focused and one can get Professional Skils in a number of different area. 

Beside the Religion Education, we see a lot of people going into various fields persueing their Dreams into Medical and Engineering and other fields.  These people are lot more focused and they also have good footing and foundation established for their successful lives.

Then we have Vocational Education for peole to learn various Skills and Training in Specific areas primarily for good earning.

Among the professionals, we also see a lot more people now going towards the Business and Finance. 

This is however one of the weakest area in our cultures and most of the students getting education in the General Academic subjects do not have any concept of Money Management in this age when they should be prepared for becoming Financially Independent in the later years.

In the present time, when Economy plays such a vital role in the lives of all people no matter what their educational background is.  It is now all the more important that people from a very early age should learn about the money matters. 

For most of us who are in different ways involved in the Stock Exchange business, Financial Education is perhaps the mot important Education.

Some of us are very lucky to have a good education in Business and Finance and have greater confidence in understanding the Economy and the Ups and Downs of the Stock market.

For many others,  who are in the Stock business, it is never too late to learn as much as they can.   We have spend a lot of money and time in acquiring our education.  We all also know that Education is a life long persuit.  One cannot stop learning.  

We can all upgrade ourselves by getting Financial Education.  This will help us in working at KSE with lot more confidence and with proper understanding and Knowledge.

Financial Education will give the Knowledge to recognize the Opportunities and take advantage by taking Action at the right time.

Allah Kareem

Taufiq

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There are all kinds of Buyers in the stock market.  However at KSE there are TWO very prominent types of BUYERS. 

One is the traditional Speculator.  Satta Master…  The other is the Investor.

Mandee specially the kind of Crippling Mandee we saw in 2008 separates the Speculators from the True Investors.

Nothing really seem to make sense when the Mandee is so bad, but let’s discuss this anyway.  It is all part of the learning process.

A Speculator is most of the time only interested in the Price movement of the Share… and the looking for Profits from this Price Movement.

A True Investor is more interested in the Quality of the Company and its future growth potential and of course at Profits.

A True Investor go for Value Investing over very long termlike 5 years to even 30 years with review cycles and Profit Takings about every 10 years.  This way he is able to switch to better Companies and reinvest his Profits back in the market.  This is perhaps the Best way of compounding profits and creating Wealth.

A true investor avoid timing the market when it is falling and if possible invest more once it bounces back.  This way he does not feel the stress and is also prepared to expand his portfolio.  This is perhaps the reason a true investor enjoys the rewards in the long run.

Mandee at KSE hurts all kind of buyers including Speculators and True Investors.  Unfortunately, it is hardest on the Speculators and many are practically compelled to leave the market.

The true Investor is able to survive the Mandee with patience and determination and because he knows that more opportunities will come after the Mandee and greater Rewards will be his once the market improves.

Five of America’s Best Businesses with long history of Success went down along with thousands of other businesses.

These are

BERKSHIRE HATHAWAY     BRK-B                    Down  32%

FEDEX                               FDX                       Down  38%

IBM                                   IBM                        Down  38%

DISNEY                             DIS                        Down  37%

MICROSOFT                      MSFT                     Down 47%

These above mentioned companies are among the Best and will recover.  In fact all are set to recover 33% in the next 40 days.  And eventually will fair much better than many weaker companies.

The first company in the above list is BERKSHIRE HATHAWAY with symbol BRK-B and belongs to Warren Buffett perhaps greatest True Value Investor in the history of Stock Business anywhere in the world.  Warren Buffett has invested heavily in about 40 Companies in USA.   Imagine his loss as almost all the companies that he has invested have gone down double digit in this Mandee except perhaps Walmart that has gained 18%   This shows that Speculators are not the only one that suffer in Mandee….  A True Investor like Warren Buffett has lost about 18 Billion US Dollars in this Mandee…. 

But the amazing thing is he is not in any panic.   He feels it is a great opportunity and pumped in about $34 Billion Us Dollars buying shares of several companies knowing that the market will get better again.  One can imagine the Profit Potential of Warren Buffett’s Value Investing as he is buying Shares when most others are afraid to even come near the Stock market.

Yes,  This Mandee will produce tremendous opportunities.   Warren Buffett hs taken advantage of such Mandees before and he will do it again.  This is how the Mind of a True Investor works.

I am sure in the long run, this Kali Mandee at KSE will also produce many many opportunities but Caution is very important.  Most friends know that KSE is still in the Downtrend and Pakistan is not USA but the fact remains that sooner or later Bounce back will come and we must get ourselves prepared and willing to take calculated risks for selective Value Investing.

Good Luck and Great Hunting.

Taufiq

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