wazua Mon, Mar 23, 2026
Welcome Guest Search | Active Topics | Log In

2 Pages12>
Investing Questions from a newbie
RichVee
#1 Posted : Wednesday, January 27, 2010 8:40:10 AM
Rank: Member

Joined: 1/26/2010
Posts: 124
Hello there...
I have been visiting the forum as a guest but finally decided to dive in ...

Even though i have been investing in the NSE for a while, it was not with vigour. I did not apply any wisdom to my deals. Yet I was lucky in most cases. e.g. I bought Athi River at 15 bob, and still have them.

Long story short, i want to get educated and I promise to share any wisdom that i have along the way.

My first question is..What is the relationship btn the price of a share and the date a company announces results. I have noticed that the share price tends to go very high up just before results are announced followed by a sharp decline immediately after. Somebody pls shed some light.
Pls forgive any ignorance that my spew out of me.
Tired of mediocrity. Am going to the very top!
muganda
#2 Posted : Wednesday, January 27, 2010 9:45:04 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
Karibu @RichVee. In my opinion share price is determined by both emotions and fundamentals. As such, when a company is about to announce it's results:
--heightened emotion rears its head in the form of expectation of good results (dividend, bonus, rumours etc)
--looking at fundamentals good performance will show the company as being undervalued and hence reclassification as a good stock by analysts among us

Why the stock falls after announcement is because life can often be an anticlimax; or perhaps after announcement good news is already factored in.

On another note, I've often wondered whether one is a better trader if they are a better analyst or understand human emotions better? IQ vs EQ once again...
RichVee
#3 Posted : Wednesday, January 27, 2010 10:33:24 AM
Rank: Member

Joined: 1/26/2010
Posts: 124
Thanks Muganda.
Interesting, very interesting. I guess we all need a good doze of IQ and EQ. I have wondering when's the the best times to buy, then I realized there is no quick answer. A stock could fall in price due to poor performance, but if one is not aware(not following in press) and they go ahead and buy then they are kind of stuck for a (long)while...
Tired of mediocrity. Am going to the very top!
guru267
#4 Posted : Thursday, January 28, 2010 6:01:26 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
@rich vee i think the better advice would be to go with IQ rather than the EQ approach because its too hard anticipate where emotions will run to next but with proper and educated analysis on counters one can never go wrong one because the price is usually supported or undervalued(emotional counters tend to be overvalued) and the other is that all the emotional investors do still run to these at some point


My point... IQ investing is always one step ahead of EQ investing
Mark 12:29
Deuteronomy 4:16
RichVee
#5 Posted : Thursday, January 28, 2010 7:23:31 AM
Rank: Member

Joined: 1/26/2010
Posts: 124
@guru - i am the analystical type, but i must admit there are instances i have purchased based on EQ...
Tired of mediocrity. Am going to the very top!
VituVingiSana
#6 Posted : Thursday, January 28, 2010 7:44:01 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
What does world's greatest investor do?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
guru267
#7 Posted : Thursday, January 28, 2010 8:06:19 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
he uses IQ and focuses
Mark 12:29
Deuteronomy 4:16
VituVingiSana
#8 Posted : Thursday, January 28, 2010 8:41:28 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
IMHO...
EQ is for traders lakini IQ (numbers) is for buy & hold...

BTW, 'buy & hold' is not a 'buy & shut your eyes' game... It means you continue monitoring the health of the firm, economy/ies, sectors, trends... but the focus is on value (future value)...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
muganda
#9 Posted : Thursday, January 28, 2010 8:58:13 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
Indeed the world's greatest investor has an answer for many quagmires.

1. Answer to @RichVee on when to buy:
The only time to buy these is on a day with no "y" in it.


2. Answer to @guru267 on IQ:
To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.
Beware of geeks bearing formulas.


3. Suggestion to @VituVingi on how long to hold:
We believe that according the name 'investors' to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a 'romantic.'
Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years.

RichVee
#10 Posted : Thursday, January 28, 2010 9:02:52 AM
Rank: Member

Joined: 1/26/2010
Posts: 124
@VVS - does it mean that you never sell, you only buy and hold?

Isn't it more logical to buy - hold till price accelerates- sell some and hold some for later selling after price is up up again - wait for price to fall down then buy again and repeat the cycle?


Tired of mediocrity. Am going to the very top!
2 Pages12>
Forum Jump  
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.

Copyright © 2026 Wazua.co.ke. All Rights Reserved.