Wazua
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PLAYING THE MARKET-A NEW YEAR RESOLUTION
Rank: Veteran Joined: 1/7/2010 Posts: 1,279 Location: nbi
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A change is as good as rest. As long as you enjoy the sport, play it. The Governor of Nyeri - 2017
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Rank: Elder Joined: 12/6/2008 Posts: 3,548
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When to exit? we are already in some good profit( in case some are running copy cat portfolio). A New Kenya
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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@stocksmaster, the time is nigh. You documented your purchase into Mumias Sugar at 6.90 average on Jan 04th.
Looking at your criteria, you should have made sufficient margin of 15% by today for the month of January. Will you wait longer or exit now? Pray share
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Rank: Member Joined: 9/26/2006 Posts: 410 Location: CENTRAL PROVINCE
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@ Muganda:
In my opinion, the Mumias sugar share still has more upside. Demand is still strong when compared to supply. The real spike will occur when the first half results for 2009/2010 are announced in the next 2-3 weeks. The current P/E of about 7.2 is still a good buy. This is a buyers market for the next few weeks.
Happy hunting
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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@stocksmaster, by today you've made 33% on your first play. If your purely margin trading, isn't this margin sufficient? According to your strategy, wouldn't you need to make another play in 2 weeks time? Good stuff so far though... stocksmaster wrote:I have always wondered wether a trader driven purely by margin trading can make money in the NSE (Without wiping all the gains in transaction fees!)
METHODOLOGY: The principal amount will be actively and aggressively traded throughout the year with at least one trade per month. Purchases will be limited to between 1 to 3 companies to ensure large share volumes. The investment design will be highly speculative.
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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@stocksmaster - At what return/price do you plan to exit? @muganda - There is something called riding the momentum. At 9.40 (last price I saw) he was up 36% before expenses... Makes me wonder what was the point of me buying the so-called 'longer-term' shares with decent (or better) fundamentals like low PE, high NAV, etc... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 11/20/2008 Posts: 367
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So good people in the spirit of unbridled audacity amid weariness whwre can a brother put down just a bit of cash, not worried by the amount Mugunda, my reason is that at some point you have to start somewhere.
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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@the sage, go through the STOCKS TO WATCH IN 2010 thread, and pick a company you like (not stock). Everything is on the up and up so it's difficult to be very wrong.
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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@thesage: If we knew... we would all be millionaires... nay, billionaires! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 11/20/2008 Posts: 367
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@VituVingiSana, point well noted and accordingly taken.
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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@stocksmaster is already up 36% before expenses... well, it could be 50% within the month (let alone the entire year) if the Mumias price continues upwards... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 9/26/2006 Posts: 410 Location: CENTRAL PROVINCE
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Mumias sugar is currently trading at a p/e of about 9. This is based on the 2008/2009 results that were below par.Assuming a modest 20% rise in profits (courtesy of electricity sales and more sugar production ), the forward P/E at todays price of Ksh 9.40 becomes about 7.
The NSE market seems headed for an average forward p/e of about 14-15. This places the mumias share at a price of about Ksh 16-18 by the end of the year. My estimate is that the share still has a 25% upside in the next one month.The share is still trading at a discount.
Safaricom is the share that seems to have attaIned its peak. Currently trading at about Ksh 6.00, this places the share at a P/E of 22! After factoring an anticipated 20-25% rise in profits based on improved data and MPESA revenue, this places the share at a forward P/E of 17-18. If it feels generous to its shareholders, a doubling of dividends could be in the offing (Ksh 0.20 per share), bringing the dividend yield to 3.3% at current prices.This would be about the average dividend yield for most companies in the NSE. As such, in my opinion, Safaricom is already trading at its fair value for 2010 with little upside anticipated.
Happy hunting.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Never short a trend...mumias is on an upswing it might not be a primary trend but yes the demand is higher than the supply...so i'm still riding with the momentum from 6.80...
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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I am also holding onto my Mumias for now... but I will not hesitate to bail... well, I hope I don't hesitate... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 9/26/2006 Posts: 410 Location: CENTRAL PROVINCE
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DATE: 20TH January 2010
ACTIVITY 2: Sale of 40% of Mumias shares at Ksh 9.65 per share.
RATIONALE: The share was experiencing resistance at the Ksh 10 with about 450,000 shares being offered at this price alone. Supply increased dramatically and the momentum shifted towards a price decline.
The principal target remains the Half year results hence i will make a reentry (with the 40% sale money)next week after the temporary price correction bottoms out.
Why not sell all the mumias shares?
Reason is, the rebound (upward momentum) may occur suddenly and hence i could miss out on the next upward swing. By leaving 60% of my money in the share, i am able to enjoy any sudden upward thrust while preserving some gains with the sale of the 40%.
The money from the 40% sale will enable me to pick up more Mumias shares than i sold should the price fall by more than 4%(Any price below Ksh 9.25 will create an opportunity for a strategic reentry).
This activity creates a scenario were i stand to benefit should the price go up (the remaining 60% appreciates) or should the price fall (the money from the 40% enables a purchase of a larger volume of shares than previously held).
Happy hunting.
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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Mumias is now 8.80 so @stocksmaster is doing well for himself... Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 1/11/2008 Posts: 121
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@stocksmaster,what volumes are you talking about? Less is more....for Architects only!!
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Rank: Veteran Joined: 3/16/2009 Posts: 1,464
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@VVS,
Who was selling all these shares.............Paul Ndungu?
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Rank: Chief Joined: 1/3/2007 Posts: 18,124 Location: Nairobi
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@pierce - No idea... And which stock are you talking of??? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 9/26/2006 Posts: 410 Location: CENTRAL PROVINCE
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I have been avoiding to post the volumes but to make accounting sense, i can no longer avoid it.
ACTIVITY 1: Consisted of purchase of 75,000 Mumias shares at Ksh 6.90 = Ksh 517,500 (Add 2% transactions costs=Ksh 10,350)
Total Investment=Ksh 527,850
ACTIVITY 2: Consisted of sale of 30,000 Mumias shares at Ksh 9.65 = Ksh 289,500 (Deduct 2% transactions cost=Ksh 5800)
ACTIVITY 3: 26th January 2010
Purchase of 20,000 Mumias shares at Ksh 9.10= Ksh 182,000 (Add transaction costs of Ksh 3700)
Rationale of activity 3: Price on the ascendancy; half year results around the corner.
Current status of portfolio:
Initial investment(Capital outlay)= Ksh 527,850
Current status: Share value = 65,000 Mumias shares at Ksh 9.25 = Ksh 601,250
Cash at hand(Yet to be re-invested after activity 2 ) = Ksh 98,000
Total Value of speculative activity = Ksh 699,250
Growth in value = 32.4%
Happy hunting
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Wazua
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PLAYING THE MARKET-A NEW YEAR RESOLUTION
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