Caribbean stocks were dragged down by losses on financial stocks and ended the week of November 9, 2012 in negative territory.

In a week of very light trading, 7,075,268 shares valued at $1,092,267 crossed the floors of the six stock exchanges across CARICOM, with 34 stocks advancing, 43 declining and 47 remaining unchanged.

Lime Jamaica was the volume leader with 1,111,781 shares being traded. Palace Amusement posted the largest gain for the week (19.92 per cent), while on the losing end Ciboney fell 23.68 per cent.

For the week, 14 of the CSX 30 stocks advanced, 10 declined and six were unchanged. The CSX 30 lost 3.74 points to close the week at 1,406.44, up 6.95 per cent year to date.

In the CSX 30 there were gains for Mayberry (5.26 per cent), Desnoes & Geddes (3.67 per cent), Careeras (3.07 per cent), Finance Corporation Bahamas (1.92 per cent) and Scotia Group Jamaica (1.62 per cent).

On the negative side, Lime Jamaica fell 13.77 per cent, Carib Cement 13.24 per cent, Lascelles 4.95 per cent, Bank of Trade & Industry 3.76 per cent, National Enterprises 2.92 per cent, Grace Kennedy 2.12 per cent, Banks DIH 2.02 per cent and NCB Jamaica 1.11 per cent.

The Junior Market ended the week in negative territory with five stocks advancing and seven declining. The CJSX lost 17.96 points to close the week at 1,531.72, down 15.70 per cent for the year. Caribbean Producers gained 2.69 per cent, but there were losses for Lasco Financial (8.12 per cent), Honey Bun (7.13 per cent) and Lasco Distributors (4.28 per cent).

Table 1: Broad Market Indices November 5-9, 2012

Table 2: Sector Indices November 5-9, 2012

Stocks On The Move

Tables three and four provide some widely used financial metrics on the biggest movers for the week. Readers should note that prices are in US dollars.

Table 3: Advancing Stocks: November 5-9, 2012

Table 4: Declining Stocks: November 5-9, 2012

Investing School (Investing Principles)

1. Prepare for the situation to proceed faster than you thinkMost deteriorating businesses will do so faster than you anticipate. Be very wary of value traps, or companies that look cheap but are generating little or no economic value. On the other hand, strong businesses with solid competitive advantages will often exceed your expectations. Have a very wide margin of safety with a troubled business, but do not be afraid to have a much smaller margin of safety for a wonderful business with a shareholder-friendly management team.

2. Expect surprises to repeatThe first big positive surprise from a company is unlikely to be the last. Ditto the first big negative surprise. Remember the "cockroach theory." Namely, the first cockroach you see is probably not the only one around; there are likely scores more that you can't see.

3. Don't be stubbornDavid St. Hubbins memorably said in the movie This is Spinal Tap, "It's such a fine line between stupid and clever." In investing, the line between being patient and being stubborn is even finer, unfortunately. Patience comes from watching companies rather than stock prices, and letting your investment theses play out. If a stock you recently bought has fallen but nothing has changed with the company, patience will likely pay off. However, if you find yourself constantly discounting bad news or downplaying the importance of deteriorating financials, you might be crossing that fine line into stubborn territory. Being stubborn in investing can be expensive. Always ask yourself, "What is this business worth now? If I didn't already own it, would I buy it today?" Honestly and correctly answering these questions will not only help you be patient when patience is needed, but it will also greatly help you with your selling decisions.

Investment and Wealth Management Unit, Department of Management Studies, UWI Cave Hill. Please send queries and comments to Justin.Robinson@Cavehill.uwi.edu