මූල්‍ය වෙළඳපොලේ විශ්මිත පෙරලියක් කල තනි ඇහැක් ඇති අපේ කාලේ මිනිසා - Dr. Michael Burry

කොටස් වෙළදපොල හෝ මූල්‍ය වෙලදපොල ගැන අපි පොත් පත්, ලිපි web posts බලලා කියවලා තියෙනවා. අපිට නිතරම අහන්න ගැටෙන්න ලැබුන Warren Buffet, Dhammika Perera, Bill Gates වගේ ප්‍රකෝටි පතියන් ගෙන් ගොඩක් පාඩම් අපි ඉගෙන ගෙන තියනවා ඇති. ඒත් මේ photo එකේ ඉන්න කෙනා ගැන එච්චර ඔයාගෙ ඇස ගැටිලා නැතිව ඇති. The Big Short කියන movie එකේ මෙයා ගැන අපි දකිනවා. සමහරු ඒ movie එක දැකලත් ඇති.

ඒ කොයිහැටි වෙතත් මේ වෛද්‍ය වරයා කුඩා කාලයෙදීම එක ඇහැක් අහිමි වුන කෙනෙක්. ඒ පිලිකාවක් නිසයි. ඔහුට එක ඇහැක් තිබිලත් වෛද්‍ය විද්‍යාලයට ගිහිල්ලා වෛද්‍ය වරයෙක් වෙන්න තරම් දක්ෂයෙක්. 

වර්ෂ 2003 වගේ ඉඳලා හැම රටකම වාගේ බැංකු ණයට දෙන්න මාර ආසාවක් තිබුනා. ආපෙ රටෙ ඒක එච්චර ලොකුවට දැනුනේ නැති වුනත්, සමහර බැංකු අනිත් බැංකු වලටා වඩා ණයට දීමට යුහුසුළු වුනා මමත් අත් දැක්ක. අපේ රටේ මූල්‍ය වෙළදපොල තවම දියුණු වෙමින් පවතින තැනක් නිසා එහෙම වුනෙ අපේ වාසනාවකට වෙන්න ඇති.

ඇමෙරිකාවෙ බැංකු වල වැඩ්ඩොන්ට මේ කාලේ පුදුම කාලයක්. ඒ වාගෙම ණයට ගන්න ඒ ර⁣⁣ටෙ අයටත් සුන්දර කාලයක් වුනා. විෂෙශයෙන් ගෙවල් ණය වෙලා ගන්න අයට මේ කාලෙ අදහගන්න බැරිවුණා. එකම ගෙදරට සමහර අය බැංකු හතර පහකින් ණයට ගත්ත.. සමහරුන්ට රස්සාවක් වත් නැතුව අතේ පිච්චයක්වත් නැති අයටත් මේ බැංකු ණයට දෙන්න තරම් මොලේ කචල් වුනා. සමහර අය ගෙදර ඉන්න බල්ලා ගේ නම පාවිච්චි කරලා ණය ඇරං.. ඔයාට පුඳුම ද? ඇත්තටම ඇමෙරිකාවෙ මේ වැඩේ වුනා.

2005 කියන අවුරුද්දේ මෙ මම කතා කරන වෛද්‍ය Michael Burry ඇස් දෙකෙන්ම බල බල නොපෙනෙන මිනිස්සු, ඒ කියන්නෙ බැංකු වල සහ වෙනත් විෂෙශිත මුල්‍ය වෙළදපොලේ ආයත්න වල වැඩ කරපු ඉහල පුටු වල ඉන්න ⁣අය, ඇමෙරිකාවෙ දේශපාලනෙ කරන අය, ආර්ථික විෂේෂඥයින් වාගේම රටේ ජීවත් වන අය මේ තනි ඇහේ මිනිසා දැක්ක දේ ඇස් දෙකෙන් දැක්කේ නැහැ.

Michael Burry ට තේරුනා මේ dollar බිලියන ගනන් සැරිසරන ගෙවල් නයට දෙන සුවිශාල ව්‍යාපාරය තව ටික කාලයකින් කඩා වැටනව කියලා. එයා බැංකු වලට ගිහිල්ලා මෙම housing market එක short කරන්න මුදල් ආයොජනය කරන්න ඕනෙ කියලා කිව්වා. සමහර බැංකු නිලදාරින් එයාට හිනා වුනා. පිස්සුද කිව්ව. එයාල කිව්වෙ ගෙවල් කියන්නෙ මිනිස්සුන්ට ඉතාමත් අත්‍යාවශ්‍ය නිසා කවම දාකවත් ඒක කඩා වැටෙන්නෙ නැහැ කියලා.

ඇත්තටම ඔහු අමුතු චරිතයක්. එයාටම කියලා company එකක් තිබ්බා. Dollar මිලියන ගනන් ආයොජන කරන දැවැන්ත ආයතනයක්. ඒත් එයා ලොක්කා වුනාට office එන්නෙ මේ photo එකේ ඉන්න විදිහට. Tie coat කලිසම් සපත්තු කිසිදෙයක් නැහැ. T shirt එකයි කොට කලිසමයි සෙරෙප්පු යි. එයා තමයි managing director. එයා බැංකු වලටත් ගියෙ මිලියන ගණන් බිලියන ගණන් investments ගැන බැංකු නිලදාරින් එක්ක  කතා කලේ ඒ විදිහට ඇඳගෙන ගිහින්.

2005යෙ ඔහු housing market එක short කලා. Dollar මිලියන සිය ගණනක් ආයොජනය කරා. ඔහු ඒ වගේ ආයොජනය කලේ ඔහුගෙ ආයතනයට ආයොජනය කල ආයොජකයින්ගේ මුදල්. එතකොට එම ආයෝජන ය ව්කුණනකන් අායොජනයෙ අගය දැනුම් දෙන්න ඕනේ. ඔහු දවස් පතා එම අගය ප්‍රතිශතයක් ලෙස white board එකක ලියුවා. ඒක තමයි ඔහුගේ company එකේ සිරිත. දවසින් දවස එම ආයොජනයේ අගය පහතට කඩාවැටුනා. මේ විදිහට එක දිගට අවුරුදු දෙකකට වඩා වටිනාකම රින අගයකින් දොලනය වුනා.

බහුතරයක් ආයොජකයින් ආයොජනයෙ අගය අඩුවෙනකොට බලන් ඉන්නැහැ. එ්ක ඇමෙරිකාවෙ කියල වෙනසක් නැහැ. ඔහුගෙ ආයොජකයින් ඔහුට බැන්නා, සාප කලා, දෙස් තිබ්බා, මුදලුත් ගත්තා. අන්තිමට ඔහුට ඇති බලය පාවිච්චි කරලා ඉතිරි ආයෝජකියින්ට මුදල් ගැනීමට තහන්චියක් දැම්ම. ඔහුට පීඩනය දැඩි වුනා. ඒ දවස් ගණන් නෙවෙයි, අවුරුදු ගණන්. 

මේකට හේතුව වුනේ මුල්‍ය වෙළඳපොලේ කට්ටිය housing market එක කඩාවැටෙන එක නවත්තන්න නොයෙකුත් උප්පරවැට්ටි දැම්ම නිසයි. ඔය අතරෙ නම්දරාපු ඉහල පැලැන්තියේ දහස් ගණන් අය housing market එක කවමදාකවත් කඩා වැටෙන්නෙ නැහැ කියලා ජන මාද්‍යයේ නොයෙකු ස්තාන වල දින පතා කියන්න පටන් ගත්තා. හැමෝම ඒ අයව විශ්වාස කලා, michael ව අවතක්⁣සේරු කලා. එයා කොන්වුනා. සාමාන්‍යයෙන් එයා නිහඬ කෙනෙක්. ඔහු ආයොජන විශ්ලේෂණය කරන්නෙ අනිත් අයගෙන් අහල, rumours වලට හෝ tips වලට නෙවෙයි. තනියෙන් තම දැනුම පාවච්චි කරල. එහේ ⁣සහ මෙහෙත් එහෙම අය හරි විරලයි. ඒ අය බොහොදුරට කොන් වෙනවා.

නමුත් 2008 housing market එක කාඩා වැටුනා. ඇමෙරිකාවෙ ආර්ථිකයම කඩා වැටුනා. ලෝකයෙ අනිත් රටවල් සියල්ලේම ආර්ථික කඩා වැටුනා. මේ විනාශය ඉදිරියේ බොහෝ අය සහ ආයතන නැත්තට නැතිවුනා. Dr. Michael Burry ගේ ආයොජනය ඔහු විකුණන කොට එහි අගය සියයට 489 කින් වැඩි වී තිබුනා.

කොටස් වෙළදපොල සහ මුල්‍ය වෙළදපොල කියන තැන් වලින් සහ ආයොජනයන් වලින් හිතන්න බැරි තරම් ලාභ ලබන්න නම් රැලෙන් මිදෙන්න ඕනෙ. මිදිලා තමන් ට පෙනෙන දේ පසු පසු යන්න ඕ⁣න බව ඔහු අපිට දෙන වැදගත් පාඩමක්. ඒ වගේම ඉවසීම ප්‍රගුණ කරන හැටි හොඳටම කියලා දෙනවා. ඒ විතරක් නෙවෙයි ආයොජනයෙදි තමන්ට ආවේනික දේ වටහ ගෙන එය හොඳට ප්‍රගුණ කරගෙන එහි රැදී සිටීම ගැන මොහු අපිට කියාදෙනවා. ඒ වාගේම ආයොජනයේ අගය කොපමන අඩුවුනත් ඔහු එම ආයොජනය කරන්න හේතු සාදක වුන සත්‍යයෙන් අයින් වෙන්නැතුව ඒ ⁣ගැන මනා අවබොදයකින් අදාල කරුනු රැස් කරමින් ඒ දේවල් වලට විසඳුම් සොයාගෙන ආයොජනයෙ රැඳී සිටීම අපිට දෙන තවත් පනිවිඩයක්.

Dr. Michael Burry - mentally tortured for more than 2 years, but made 400%+ thereafter

Dr. Michael Burry is the ONE EYED Physician turned Fund Manager, who figured out that the Housing Market in the US is going to fall apart, as early as 2005. He went to several Banks, but many bankers laughed him off. They said that he's gone mad. Housing Mortgaging was the biggest money maker for the Banking Industry during those days. Even people used the names of their Dogs to take mortgages. Banks just dished out money for all. This Doctor was the first guy who wanted to short the housing market. With much insisting he managed to use an instrument called Credit Default Swap, and shorted the housing Market. That was in 2005. But his prediction did not realise until 2007 and 2008, when the Great Recession SANK the entire world down.
The mental agony he had to go through for such a long period is mind boggling. He invested Millions if not Billions of Dollars belonging to his investors. He told them that they can't take the money out through a Moratorium until his prediction comes right. This made many clients furious, and attacked him mercilessly. He had to write the daily fluctuations of the Instrument he used to short the Market on a White Board in Office. For more than 2 years he had to write the negative percentage fall every day. That percentage value was so huge in money terms. Yet he did not back off. Finally world experienced the pains whilst his investors experienced gains. His fund managed to make a whopping 489% for his investors. Best part was that it was against their wishes. But that didn't make the investors refuse the millions of dollars of Gains they received from that great prediction.

Investing and Trading in Financial Markets is not a cake walk or an easy ride. His life is a great lesson for those untiring die hard investors and traders. Are you one of them??? He knew exactly what was coming but it took many years to come into fruition. He is one of the best to show the mind power you need to hold on till your expectations are fulfilled. Many elites, respectable figures, eminent bankers, scholars, professors including rating agencies and watchdogs were on the opposite side. His investors believed the Big wigs more than him. He was such a reserved person, that he never moved around with crowds, but he knew and believed in what he was doing. He was sidelined and all alone!!!

In the CSE we see almost every one is disgruntled and dejected at present. Sentiments are so weak. Almost all would not believe that it will go up any time soon. But just like Dr. Michael Burry there are a few who see outside the heard. There are many influential eminent figures in the heard. Those who are in the opposite are not prominent yet they are confident that the gains they are anticipating will happen sooner or later....... Which side you are in???

BASL III - Some of the Basics

Please Note. - This is not for those who are highly learned of the subject matter. This is a very basic idea of the subject, and I'm no expert of it. What I am jotting out here are what I gathered from the Web, since I'm no expert at all on this subject. As I got more information and a bit of increased understanding, I thought of placing them here for who ever would want to know about it and perhaps understand more. 

BASEL is actually a City in Switzerland. The Institution called Bank for International Settlements (BIS) is located in this city. BIS hosts and supports a number of International Institutions engaged in Standard Setting and Financial Stability. One of which is BCBS.

BCBS is the acronym for Basel Committee on Banking Supervision. In other wards the committee in Basel on Banking Supervision is BCBS. BCBS had been established in 1974, by the Central Bank Governors of Group of Ten Countries. Since 2009 all of the G-20 Major Economies are represented as well as Hong Kong and Singapore.

This Committee have introduced 2 accords before the BASL III. Namely BASL I in 1988 and BASL II in 2004.

BASL III was introduced after the Subprime Crisis in 2007, and the Global Financial Crisis in 2008 - 2009. Primary objective of it was to reduce the ability of Banks to damage the Economy.

Basel III regulations contain several important changes for banks capital structures. First of all the minimum amount of equity as a percentage of assets will be increased.

A brief yet comprehensive Sri Lankan explanation had been carried in the Echelon Magazine sometime ago. Which can be read here: https://echelon.lk/home/what-you-need-to-know-about-basel-iii-and-sri-lankan-banks/ .

As far as the Banking Industry is concerned, we will have to know from now onwards that in order to minimise risk and improve the quality and stability the Banks will need to set aside capital which otherwise would have been used for various activities in the Economy. This quantum of Capital to be disbursed in their normal course of business will have to be kept under check within these % requirements always. As this is something that the Banks need to accommodate and live with from now to the future it will need time for all players to understand the Status quo and invent strategies accordingly.

As a result there will be a state of confusion and disarray in the short term. But regulations to increase  risk handling has been happening in the Banking Industry World wide for many decades, as such this regulatory shift also will get absorbed into the day to day activities of the Banks. 

Increasing the Standards to reduce risk will certainly increase the stability of the Banks, which will increase the confidence level of the Investors. As far as Local Banks are concerned, They were adequately capitalised with over 10% Capital Adequacy Ratios. The new requirements will increase it higher, which will make them even more safer. 

Regulations of this type will reduce the risk of Banks, but it will be at the cost of reducing the growth of Economic Expansion. This is because the Banks Lending and the provision of Credit are among the primary drivers of an Economy. Therefore regulations to reduce the provision of credit can hinder the Economic growth to a certain level. But due to the extent of damage that would cause have made many Institutions and Individuals to accept a slower Economic Growth for a greater stability and a decrease of events such as what happened in 2008-2009. 

As an Economy that had to face many damages due to the 30 year Ethnic War, having to tighten the regulations due to crises that took place elsewhere in the World who did not go through what Sri Lanka went through is an important factor to keep in mind, especially when the Country is resurrecting in terms of Infrastructure, Re-Settlement in the War Torn regions, and introduction of various Economic activities in a Post War Sri Lanka. 

In addition to the Basel III requirements, our Banks are hit by various Taxes and SLRFS 9 provisioning. These have significantly crippled the ability of the growth of shareholder funds. 
However the negative effects of these developments have and will bring the Market Prices of Banks down further, which in turn will determine the future of the PE, ROE and PBV. Which indicators will help the Investors to decide whether to get in or stay out.

ASI - Weekly Report as at 22.02.2019

As mentioned in my report on the ASI ( You can view it here ), the market is bearish in the short term, which will trade within a zone between 5831 and 5869. Failure to hold within the zone will expose the market to move in to the 26th of October 2018 territory between 5768 and 5831. Coming week will make it clear to us whether we are going to see a swing low, or a trend failure.

Despite the scepticism with only 12,474 trades happened for the week against 14,677 over the previous week, there had been some interesting price action that is taking place in some of the Counters. SFL.N.0000, AEL.N.0000, JKH.N.0000, OSEA.N.0000 and TKYO.N.0000 are the counters that stood out within the gloomy environment that has made traders loos all hope. The value investors are few and far between, yet some of them are accumulating in millions, and billions at times. They are the winners, whilst the majority are loitering not knowing what to do. Market PE is diving down weekly. It stood at 9.13 against 9.24 times during the previous week. The Counters with over 100 trades were 26 being the lowest for the year, whilst it was 35 during the previous week. There are many Fundamentally attractive counters, but their prices are falling by the day, making them more valuable in the process.

Let's look at the counters that are worth adding to a Traders watch list as follows:

TKYO Weekly Chart
For any counter to show direction either up or down needs volume and volume is what we saw in TKYO.N.0000. I am not talking of the normal board volume only. It had some large trades moving around through out the week. Image below gives you the Large Trades that happened during the week, and can see that there had been many such trades on TKYO taking place during the week.

In addition to these large transactions we saw 1.243Mn shares changing hands in the normal board as well. This is the largest since the last week of October 2018.

We can see a bullish divergence in the weekly chart, but due to the negative Fundamentals in the Reported Results many are not taking this counter seriously. As long as 22/00 is supported it could gather steam. Although we do not need to enter immediately, it's worth watching.

SFL Weekly Chart

This counter got traders' attention due to a disclosure published by the company, with regard to the ongoing exploring of possibilities to get a new investor for the future strength of the Company. In that backdrop Price Action could take it up to test the present Net Asset Value of 14/86. But the Price will not move up to that level in one line. The news mentioned made the traders to over-react which made the prices to retrace back to the price range of 8/30 to 10/30, which is the previous weeks' price range. Counter needs to stay above 8/30 to see a trend continuation in the short term. Any trade must be initiated based on the swing low formation. Watch till then.

OSEA Weekly Chart

With an NAV of over 30/00, and a commendable 12 months Results, this counter brought in fresh interest with above average volumes changing hands, but needs to break out of 17/10 for a major rally to take place. Till then worth watching.

JKH Weekly Chart

Being the most important counter in terms of Volumes and Price JKH must stay above 150/00, any breakdown will not be good for the stock and the market. If we were to see a breakout of 160/00, then it could re-test the 166/00 area, which will be very good for the market.

AEL Weekly Chart

This must hold 13/50 else will be very bearish. We saw a strong support base between 13/50 and 13/80 for the counter during the last week. This support must be there for a strong uptrend. As the counter is trying to defend this area, the out look is fragile. Breakout above 14/00 with volumes is the only time you could trade. Till then watch. The earlier trade idea to enter at 14/00, with a stop at 13/50 is hanging on the line. Any time it closes below 13/50, please stop the trade.

I earnestly hope that the new week ahead will be adventurous for those who dare!!!

What's up with the ASI chart?

I expected the bulls to support the ASI around 5869 which is the open on the 29th of October 2018. But the bears didn't care. The area between 5831 and 5869 is the zone of push and pull that occurred during the Great Coup in October 2018. 5831 being the close of the 26th of October, and as mentioned 5869 being the open of the 29th. In-between these to values we can see the high of the 26th of 5846 and the low of the 29th which was 5831 are placed. This area is very important to be defended. If that happens, then we will see the pivot line being tested around 5888 points. Thereafter there can be another breakdown to test the zone, and if the sentiments are bullish we may see a double bottom recovery, and trend up to test new highs. Else the index will break down below 5831 and drop towards the 26th October 2018 values, between 5768 and 5831.

Forced Selling amidst the selling by foreigners have resulted in the bears bringing down the market forcefully. This is why STOP LOSS is so very critical for Traders. If Traders trade on leverage without knowing how to cut loss They are not Smart Traders at all. IF YOU ARE ONE OF THEM GET OUT OF THAT FOOLISH STRATEGY IMMEDIATELY.  Many say you can't stop loss in this illiquid market, IF SO please keep your money in a Bank Deposit, or do some other venture, as you are not having the knowledge to come out with smart strategies.

ASI Weekly Report - 15.02.2019

ASI is under pressure, and the trend failed to hold the triple bottom at 5921 points. It is now exposing the index to break below 5900, and test 5869 points. Any break there would test 5831 points. It is fair to see how the index line is behaving between this zone of 5831 and 5869 points. At present there is 1 thing that would help the bulls. That is the descending line in green that had acted as a pivot for more than 14 times. If it is going to help the ASI, then its pivot point is around 5909. That is the present level. Based on the overall bearish momentum in the Market it is hard to defend that level, but worth keeping that in mind.

There was a major change in the weekly turnover with 5.8Bn reported during the week against 1.9Bn of the previous week. Mostly Locals Collecting what the Foreigners sold, largest been JKH. Number of Trades was 14,677 against 13,248 of the previous week. Most common and clear sign that was visible was Selling amidst Large volumes, in the normal board as well as in Crossings. This is not Bullish at all. The counters with more than 100 trades were 35, slightly higher over the 31 of last week. 6 of those were over 300 trades, and 2 were over 600 trades.  Those 2 were AAIC and KAPI.

KAPI gave the traders another loud warning of how to trade with a discipline than rumours and stories. But will the traders learn? History has shown that some will never ever learn. Are you one of those traders who doesn't want to learn? Why? KAPI is halted until the company clarifies what the CSE is asking them.

If you aren't a Market Maker, then you must learn to handle your trades.

MBSL Weekly Chart

We gave a trade idea on MBSL in our last Weekly Report. But the counter looked bearish throughout this week, triggering the upper point of the stop loss level of 9/90. This closed at 10/00 which is a psychological price level, but vulnerable to be bearish. Hence we may have to stop if we see 9/90 and 9/80 on a closing basis. We are now watching the low of the previous week which was 9/60.

We are moving to a new week with a bearish bias. Therefore we need to wait with the trades that we have already entered into. Let's watch how the market is going to behave during the week.

Nevertheless I wish that you will gather strength to face the challenges within the week and come out on top.

STOP LOSS, and How Much to Buy to STOP LOSS

Many of the short term Traders are still going behind Rumours and Tips. They do not want to think of the negative side of a trade.Traders love to talk of take overs at Present. They think that taking a company over is why the Prices are shooting up. Many want various types of information to float around, for them to trade. Despite the fact that this approach on relying on other people's stories are not right, Traders want to do their trading based on rumours, tips and information.

Trading be it with Charts, Rumours, Tips or information needs to be done with knowing that a trade can go against you. The moment we talk of Stop Loss many think it's to do with Technical Analysis. Which is far from the truth. Stop Loss is Stopping Your Loss. Hence it is not only for Chartists, it applies to every one who are Trading.

The most difficult part that applies to Stop Loss is the number of shares you need to buy in order to sell out easily. You should not buy a sizable number of shares expecting to stop loss. You must be smart in knowing the volume in order to exit without getting stuck.

It is also wise to recognize a Price Range to Stop Loss. that will help you to prepare yourself to exit without a struggle.

The idea of the stop loss is to take your emotions out of your trading. This is very important. The biggest enemy of your trading success will be your emotions. Have a predefined Stop Loss Range before you think of your entry. Give yourself some time to design your trade, for which you need to have patience. Else you are not suitable for trading.

Finally let me reiterate that the Stop Loss is not only for Technical Analysts. It must be followed by All Traders.