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Why are you still in the stock market?
Rank: New-farer Joined: 10/19/2015 Posts: 21 Location: Everywhere
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From my experience, "Smart Money" in 2011 thought that T-bills and bonds were the best thing ever and left equities and bought bonds. Same rationale that bonds at 20% why on earth am I in equities. Let's do some math, some stocks such as KCB were selling at 16 bob and Safcom at 4 bob. Those who bought stocks made 2-3x their money and those who bought bonds only made their safe 20% of course less inflation. If they sold last year kept their money in banks earning 8% and get back slowly into equities, then by 2018 they will make again 2-3x their money. Point is that stocks always beat bonds in the long-run, and stocks always beat inflation in the long-run. But just don't buy any stock, it has to be a solid company with good ROE and a sustainable moat. instinct wrote:Impunity wrote:mawinder wrote:Impunity wrote:agile wrote:The rate hike is a monetary prescription to a fiscal problem the gobament is currently facing. the universal truth is that equities have always outperformed other investment vehicles. on the premise of being a long term horizon investor, yeah it makes truckloads of sense to be in equities......patience & foresight guys!!!! For guys like @Obiero who bough KQ in 2007 when its kes. 118 and now KQ is kes.5.30, how patient will they be?  The pain of NSE.Time to hold cash and around JUly next year unleash cash and if handled well you may graduate from Harrier to a 2016 Rangerover Push the hold period till end of November next year...stocks will be dirt cheap. I missed the 2008 gravy millionaire train, I will prepare well in advance to board this next one. ION: I saw with my own meager eyes a colleague becoming a dollar-millionaire overnight when Equity share reached the highest pick ever followed by a share split, around 2008/9. I always knew that a time would come when stock prices will fall to enable me buy and double my money after two years  what i dint know is that such a time would be surrounded by fear and hopelessness and limited access to credit that the only sensible thing to do is to sit back and do nothing 
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Rank: Member Joined: 1/3/2014 Posts: 257
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I think it boils down to risk appetite. Those who are cautious will park their money in bills (and bonds). They may then return to the stock market with those proceeds. Those who have thicker skin are loading up on stocks now. That is why it is important to evaluate the available information and then choose your course of action.
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Rank: Elder Joined: 8/16/2011 Posts: 2,297
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grahamsdisciple wrote:From my experience, "Smart Money" in 2011 thought that T-bills and bonds were the best thing ever and left equities and bought bonds. Same rationale that bonds at 20% why on earth am I in equities. Let's do some math, some stocks such as KCB were selling at 16 bob and Safcom at 4 bob. Those who bought stocks made 2-3x their money and those who bought bonds only made their safe 20% of course less inflation. If they sold last year kept their money in banks earning 8% and get back slowly into equities, then by 2018 they will make again 2-3x their money. Point is that stocks always beat bonds in the long-run, and stocks always beat inflation in the long-run. But just don't buy any stock, it has to be a solid company with good ROE and a sustainable moat. instinct wrote:Impunity wrote:mawinder wrote:Impunity wrote:agile wrote:The rate hike is a monetary prescription to a fiscal problem the gobament is currently facing. the universal truth is that equities have always outperformed other investment vehicles. on the premise of being a long term horizon investor, yeah it makes truckloads of sense to be in equities......patience & foresight guys!!!! For guys like @Obiero who bough KQ in 2007 when its kes. 118 and now KQ is kes.5.30, how patient will they be? The pain of NSE.Time to hold cash and around JUly next year unleash cash and if handled well you may graduate from Harrier to a 2016 Rangerover Push the hold period till end of November next year...stocks will be dirt cheap. I missed the 2008 gravy millionaire train, I will prepare well in advance to board this next one. ION: I saw with my own meager eyes a colleague becoming a dollar-millionaire overnight when Equity share reached the highest pick ever followed by a share split, around 2008/9. I always knew that a time would come when stock prices will fall to enable me buy and double my money after two years what i dint know is that such a time would be surrounded by fear and hopelessness and limited access to credit that the only sensible thing to do is to sit back and do nothing  and that is called business. Business is about Profit and Loss accounts. The Question you should ask is why Moths go towards the HEAT and get burned?
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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grahamsdisciple wrote:From my experience, "Smart Money" in 2011 thought that T-bills and bonds were the best thing ever and left equities and bought bonds. Same rationale that bonds at 20% why on earth am I in equities. Let's do some math, some stocks such as KCB were selling at 16 bob and Safcom at 4 bob. Those who bought stocks made 2-3x their money and those who bought bonds only made their safe 20% of course less inflation. If they sold last year kept their money in banks earning 8% and get back slowly into equities, then by 2018 they will make again 2-3x their money. Point is that stocks always beat bonds in the long-run, and stocks always beat inflation in the long-run. But just don't buy any stock, it has to be a solid company with good ROE and a sustainable moat. instinct wrote:Impunity wrote:mawinder wrote:Impunity wrote:agile wrote:The rate hike is a monetary prescription to a fiscal problem the gobament is currently facing. the universal truth is that equities have always outperformed other investment vehicles. on the premise of being a long term horizon investor, yeah it makes truckloads of sense to be in equities......patience & foresight guys!!!! For guys like @Obiero who bough KQ in 2007 when its kes. 118 and now KQ is kes.5.30, how patient will they be? The pain of NSE.Time to hold cash and around JUly next year unleash cash and if handled well you may graduate from Harrier to a 2016 Rangerover Push the hold period till end of November next year...stocks will be dirt cheap. I missed the 2008 gravy millionaire train, I will prepare well in advance to board this next one. ION: I saw with my own meager eyes a colleague becoming a dollar-millionaire overnight when Equity share reached the highest pick ever followed by a share split, around 2008/9. I always knew that a time would come when stock prices will fall to enable me buy and double my money after two years what i dint know is that such a time would be surrounded by fear and hopelessness and limited access to credit that the only sensible thing to do is to sit back and do nothing LONG POST ALERT! It very clear to me after getting an average return last time out in 2011. The investors who make the most gains are always slightly ahead of the curve. let me explain. Stocks became over valued late last year, That's when the smart investors sold stocks. How did they Know? They didn't know it was the right time, they just knew it was time because of high valuations. It is only 1-2 year later that their moves now look smart..... Remember @ sparkly's thread Q1 2014 " too many hellos time to quit the stock market" read it if you haven't and see the harsh resistance it was met with. Remember @ hisah's golden handcuffs, that was exactly 1 year ago Q3 2014. That's when the smart investors sold stocks, They are not magicians or specially gifted. they just followed valuations and for @Hisah's case charts. At that same time, is when the general public was warming up to stocks. In fact selling stocks at that time felt foolish, because stocks we rising every day. Smart investors reduced they stocks holding and started buying T bills or money market slowly as they sold expensive stocks as the prices rose. And for a whole year it seemed like a wrong decision because stocks kept rising. Fast forward to today, Now everyone is selling stocks, buying stocks feels foolish, because everyday the prices are lower. Smart investors are now gearing up to buy stocks, as they reduce their T bills and money market fund holding. They are buying some stocks slowly, the ones that the valuation is now very low, or within their acceptable valuation. It doesn't feel like the clever thing to do, because stock prices are falling every day. Again they do not know if its the right "time" they are looking at valuations. This period may last 1-2 years, who knows. So for that entire time, they will endure that feeling of doing the wrong thing, just as it was when they were selling last year as prices rose everyday. Slowly by slowly whey will reduce T bills and Money market as they pick up cheap stocks over that 1-2 year period as the discounts come. You see the tide from bull market to bear or flat doesn't turn overnight, hence it is very risky to try to "time" the "top" of the bull,or the "bottom" of the bear, but by sticking to valuation targets they avoid that trap of trying to time. Because by the time you feel confident that we are at the "bottom" or we are at the "top", its normally too late. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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Aguytrying wrote:grahamsdisciple wrote:From my experience, "Smart Money" in 2011 thought that T-bills and bonds were the best thing ever and left equities and bought bonds. Same rationale that bonds at 20% why on earth am I in equities. Let's do some math, some stocks such as KCB were selling at 16 bob and Safcom at 4 bob. Those who bought stocks made 2-3x their money and those who bought bonds only made their safe 20% of course less inflation. If they sold last year kept their money in banks earning 8% and get back slowly into equities, then by 2018 they will make again 2-3x their money. Point is that stocks always beat bonds in the long-run, and stocks always beat inflation in the long-run. But just don't buy any stock, it has to be a solid company with good ROE and a sustainable moat. instinct wrote:Impunity wrote:mawinder wrote:Impunity wrote:agile wrote:The rate hike is a monetary prescription to a fiscal problem the gobament is currently facing. the universal truth is that equities have always outperformed other investment vehicles. on the premise of being a long term horizon investor, yeah it makes truckloads of sense to be in equities......patience & foresight guys!!!! For guys like @Obiero who bough KQ in 2007 when its kes. 118 and now KQ is kes.5.30, how patient will they be? The pain of NSE.Time to hold cash and around JUly next year unleash cash and if handled well you may graduate from Harrier to a 2016 Rangerover Push the hold period till end of November next year...stocks will be dirt cheap. I missed the 2008 gravy millionaire train, I will prepare well in advance to board this next one. ION: I saw with my own meager eyes a colleague becoming a dollar-millionaire overnight when Equity share reached the highest pick ever followed by a share split, around 2008/9. I always knew that a time would come when stock prices will fall to enable me buy and double my money after two years what i dint know is that such a time would be surrounded by fear and hopelessness and limited access to credit that the only sensible thing to do is to sit back and do nothing LONG POST ALERT! It very clear to me after getting an average return last time out in 2011. The investors who make the most gains are always slightly ahead of the curve. let me explain. Stocks became over valued late last year, That's when the smart investors sold stocks. How did they Know? They didn't know it was the right time, they just knew it was time because of high valuations. It is only 1-2 year later that their moves now look smart..... Remember @ sparkly's thread Q1 2014 " too many hellos time to quit the stock market" read it if you haven't and see the harsh resistance it was met with. Remember @ hisah's golden handcuffs, that was exactly 1 year ago Q3 2014. That's when the smart investors sold stocks, They are not magicians or specially gifted. they just followed valuations and for @Hisah's case charts. At that same time, is when the general public was warming up to stocks. In fact selling stocks at that time felt foolish, because stocks we rising every day. Smart investors reduced they stocks holding and started buying T bills or money market slowly as they sold expensive stocks as the prices rose. And for a whole year it seemed like a wrong decision because stocks kept rising. Fast forward to today, Now everyone is selling stocks, buying stocks feels foolish, because everyday the prices are lower. Smart investors are now gearing up to buy stocks, as they reduce their T bills and money market fund holding. They are buying some stocks slowly, the ones that the valuation is now very low, or within their acceptable valuation. It doesn't feel like the clever thing to do, because stock prices are falling every day. Again they do not know if its the right "time" they are looking at valuations. This period may last 1-2 years, who knows. So for that entire time, they will endure that feeling of doing the wrong thing, just as it was when they were selling last year as prices rose everyday. Slowly by slowly whey will reduce T bills and Money market as they pick up cheap stocks over that 1-2 year period as the discounts come. You see the tide from bull market to bear or flat doesn't turn overnight, hence it is very risky to try to "time" the "top" of the bull,or the "bottom" of the bear, but by sticking to valuation targets they avoid that trap of trying to time. Because by the time you feel confident that we are at the "bottom" or we are at the "top", its normally too late. Nuff said. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Elder Joined: 3/2/2009 Posts: 26,328 Location: Masada
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Aguytrying wrote:grahamsdisciple wrote:From my experience, "Smart Money" in 2011 thought that T-bills and bonds were the best thing ever and left equities and bought bonds. Same rationale that bonds at 20% why on earth am I in equities. Let's do some math, some stocks such as KCB were selling at 16 bob and Safcom at 4 bob. Those who bought stocks made 2-3x their money and those who bought bonds only made their safe 20% of course less inflation. If they sold last year kept their money in banks earning 8% and get back slowly into equities, then by 2018 they will make again 2-3x their money. Point is that stocks always beat bonds in the long-run, and stocks always beat inflation in the long-run. But just don't buy any stock, it has to be a solid company with good ROE and a sustainable moat. instinct wrote:Impunity wrote:mawinder wrote:Impunity wrote:agile wrote:The rate hike is a monetary prescription to a fiscal problem the gobament is currently facing. the universal truth is that equities have always outperformed other investment vehicles. on the premise of being a long term horizon investor, yeah it makes truckloads of sense to be in equities......patience & foresight guys!!!! For guys like @Obiero who bough KQ in 2007 when its kes. 118 and now KQ is kes.5.30, how patient will they be? The pain of NSE.Time to hold cash and around JUly next year unleash cash and if handled well you may graduate from Harrier to a 2016 Rangerover Push the hold period till end of November next year...stocks will be dirt cheap. I missed the 2008 gravy millionaire train, I will prepare well in advance to board this next one. ION: I saw with my own meager eyes a colleague becoming a dollar-millionaire overnight when Equity share reached the highest pick ever followed by a share split, around 2008/9. I always knew that a time would come when stock prices will fall to enable me buy and double my money after two years what i dint know is that such a time would be surrounded by fear and hopelessness and limited access to credit that the only sensible thing to do is to sit back and do nothing LONG POST ALERT! It very clear to me after getting an average return last time out in 2011. The investors who make the most gains are always slightly ahead of the curve. let me explain. Stocks became over valued late last year, That's when the smart investors sold stocks. How did they Know? They didn't know it was the right time, they just knew it was time because of high valuations. It is only 1-2 year later that their moves now look smart..... Remember @ sparkly's thread Q1 2014 " too many hellos time to quit the stock market" read it if you haven't and see the harsh resistance it was met with. Remember @ hisah's golden handcuffs, that was exactly 1 year ago Q3 2014. That's when the smart investors sold stocks, They are not magicians or specially gifted. they just followed valuations and for @Hisah's case charts. At that same time, is when the general public was warming up to stocks. In fact selling stocks at that time felt foolish, because stocks we rising every day. Smart investors reduced they stocks holding and started buying T bills or money market slowly as they sold expensive stocks as the prices rose. And for a whole year it seemed like a wrong decision because stocks kept rising. Fast forward to today, Now everyone is selling stocks, buying stocks feels foolish, because everyday the prices are lower. Smart investors are now gearing up to buy stocks, as they reduce their T bills and money market fund holding. They are buying some stocks slowly, the ones that the valuation is now very low, or within their acceptable valuation. It doesn't feel like the clever thing to do, because stock prices are falling every day. Again they do not know if its the right "time" they are looking at valuations. This period may last 1-2 years, who knows. So for that entire time, they will endure that feeling of doing the wrong thing, just as it was when they were selling last year as prices rose everyday. Slowly by slowly whey will reduce T bills and Money market as they pick up cheap stocks over that 1-2 year period as the discounts come. You see the tide from bull market to bear or flat doesn't turn overnight, hence it is very risky to try to "time" the "top" of the bull,or the "bottom" of the bear, but by sticking to valuation targets they avoid that trap of trying to time. Because by the time you feel confident that we are at the "bottom" or we are at the "top", its normally too late. Nuff said. Portfolio: Sold
You know you've made it when you get a parking space for your yatcht.
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Rank: Member Joined: 1/15/2010 Posts: 625
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Impunity wrote:Aguytrying wrote:grahamsdisciple wrote:From my experience, "Smart Money" in 2011 thought that T-bills and bonds were the best thing ever and left equities and bought bonds. Same rationale that bonds at 20% why on earth am I in equities. Let's do some math, some stocks such as KCB were selling at 16 bob and Safcom at 4 bob. Those who bought stocks made 2-3x their money and those who bought bonds only made their safe 20% of course less inflation. If they sold last year kept their money in banks earning 8% and get back slowly into equities, then by 2018 they will make again 2-3x their money. Point is that stocks always beat bonds in the long-run, and stocks always beat inflation in the long-run. But just don't buy any stock, it has to be a solid company with good ROE and a sustainable moat. instinct wrote:Impunity wrote:mawinder wrote:Impunity wrote:agile wrote:The rate hike is a monetary prescription to a fiscal problem the gobament is currently facing. the universal truth is that equities have always outperformed other investment vehicles. on the premise of being a long term horizon investor, yeah it makes truckloads of sense to be in equities......patience & foresight guys!!!! For guys like @Obiero who bough KQ in 2007 when its kes. 118 and now KQ is kes.5.30, how patient will they be? The pain of NSE.Time to hold cash and around JUly next year unleash cash and if handled well you may graduate from Harrier to a 2016 Rangerover Push the hold period till end of November next year...stocks will be dirt cheap. I missed the 2008 gravy millionaire train, I will prepare well in advance to board this next one. ION: I saw with my own meager eyes a colleague becoming a dollar-millionaire overnight when Equity share reached the highest pick ever followed by a share split, around 2008/9. I always knew that a time would come when stock prices will fall to enable me buy and double my money after two years what i dint know is that such a time would be surrounded by fear and hopelessness and limited access to credit that the only sensible thing to do is to sit back and do nothing LONG POST ALERT! It very clear to me after getting an average return last time out in 2011. The investors who make the most gains are always slightly ahead of the curve. let me explain. Stocks became over valued late last year, That's when the smart investors sold stocks. How did they Know? They didn't know it was the right time, they just knew it was time because of high valuations. It is only 1-2 year later that their moves now look smart..... Remember @ sparkly's thread Q1 2014 " too many hellos time to quit the stock market" read it if you haven't and see the harsh resistance it was met with. Remember @ hisah's golden handcuffs, that was exactly 1 year ago Q3 2014. That's when the smart investors sold stocks, They are not magicians or specially gifted. they just followed valuations and for @Hisah's case charts. At that same time, is when the general public was warming up to stocks. In fact selling stocks at that time felt foolish, because stocks we rising every day. Smart investors reduced they stocks holding and started buying T bills or money market slowly as they sold expensive stocks as the prices rose. And for a whole year it seemed like a wrong decision because stocks kept rising. Fast forward to today, Now everyone is selling stocks, buying stocks feels foolish, because everyday the prices are lower. Smart investors are now gearing up to buy stocks, as they reduce their T bills and money market fund holding. They are buying some stocks slowly, the ones that the valuation is now very low, or within their acceptable valuation. It doesn't feel like the clever thing to do, because stock prices are falling every day. Again they do not know if its the right "time" they are looking at valuations. This period may last 1-2 years, who knows. So for that entire time, they will endure that feeling of doing the wrong thing, just as it was when they were selling last year as prices rose everyday. Slowly by slowly whey will reduce T bills and Money market as they pick up cheap stocks over that 1-2 year period as the discounts come. You see the tide from bull market to bear or flat doesn't turn overnight, hence it is very risky to try to "time" the "top" of the bull,or the "bottom" of the bear, but by sticking to valuation targets they avoid that trap of trying to time. Because by the time you feel confident that we are at the "bottom" or we are at the "top", its normally too late. Nuff said. Alas! If only things were so easy! The stock market can make the people that seem wise today, seem foolish tomorrow. who would have predicted that the UK government would be so clueless with managing the economy? people thought that we were still in the Kibaki era. the ability to forecast the future is not available to any of us. hence the best way is to limit your exposure in the stock market. don't put all your eggs in one basket. because in the end who knows what will happen tomorrow? -ve economic growth? 10% growth? keep some money in cash and some in t-bills. will another bank go bust? there's about 87 billion of customer deposits in Imperial Bank that are frozen for the time being. given Kenya's culture of corruption what other skeletons are hiding in the closet?
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Rank: User Joined: 1/20/2014 Posts: 3,528
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That closet includes ekwueti!!! Formal education will make you a living. Self-education will make you a fortune - Jim Rohn.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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mv_ufanisi wrote:Impunity wrote:Aguytrying wrote:grahamsdisciple wrote:From my experience, "Smart Money" in 2011 thought that T-bills and bonds were the best thing ever and left equities and bought bonds. Same rationale that bonds at 20% why on earth am I in equities. Let's do some math, some stocks such as KCB were selling at 16 bob and Safcom at 4 bob. Those who bought stocks made 2-3x their money and those who bought bonds only made their safe 20% of course less inflation. If they sold last year kept their money in banks earning 8% and get back slowly into equities, then by 2018 they will make again 2-3x their money. Point is that stocks always beat bonds in the long-run, and stocks always beat inflation in the long-run. But just don't buy any stock, it has to be a solid company with good ROE and a sustainable moat. instinct wrote:Impunity wrote:mawinder wrote:Impunity wrote:agile wrote:The rate hike is a monetary prescription to a fiscal problem the gobament is currently facing. the universal truth is that equities have always outperformed other investment vehicles. on the premise of being a long term horizon investor, yeah it makes truckloads of sense to be in equities......patience & foresight guys!!!! For guys like @Obiero who bough KQ in 2007 when its kes. 118 and now KQ is kes.5.30, how patient will they be? The pain of NSE.Time to hold cash and around JUly next year unleash cash and if handled well you may graduate from Harrier to a 2016 Rangerover Push the hold period till end of November next year...stocks will be dirt cheap. I missed the 2008 gravy millionaire train, I will prepare well in advance to board this next one. ION: I saw with my own meager eyes a colleague becoming a dollar-millionaire overnight when Equity share reached the highest pick ever followed by a share split, around 2008/9. I always knew that a time would come when stock prices will fall to enable me buy and double my money after two years what i dint know is that such a time would be surrounded by fear and hopelessness and limited access to credit that the only sensible thing to do is to sit back and do nothing LONG POST ALERT! It very clear to me after getting an average return last time out in 2011. The investors who make the most gains are always slightly ahead of the curve. let me explain. Stocks became over valued late last year, That's when the smart investors sold stocks. How did they Know? They didn't know it was the right time, they just knew it was time because of high valuations. It is only 1-2 year later that their moves now look smart..... Remember @ sparkly's thread Q1 2014 " too many hellos time to quit the stock market" read it if you haven't and see the harsh resistance it was met with. Remember @ hisah's golden handcuffs, that was exactly 1 year ago Q3 2014. That's when the smart investors sold stocks, They are not magicians or specially gifted. they just followed valuations and for @Hisah's case charts. At that same time, is when the general public was warming up to stocks. In fact selling stocks at that time felt foolish, because stocks we rising every day. Smart investors reduced they stocks holding and started buying T bills or money market slowly as they sold expensive stocks as the prices rose. And for a whole year it seemed like a wrong decision because stocks kept rising. Fast forward to today, Now everyone is selling stocks, buying stocks feels foolish, because everyday the prices are lower. Smart investors are now gearing up to buy stocks, as they reduce their T bills and money market fund holding. They are buying some stocks slowly, the ones that the valuation is now very low, or within their acceptable valuation. It doesn't feel like the clever thing to do, because stock prices are falling every day. Again they do not know if its the right "time" they are looking at valuations. This period may last 1-2 years, who knows. So for that entire time, they will endure that feeling of doing the wrong thing, just as it was when they were selling last year as prices rose everyday. Slowly by slowly whey will reduce T bills and Money market as they pick up cheap stocks over that 1-2 year period as the discounts come. You see the tide from bull market to bear or flat doesn't turn overnight, hence it is very risky to try to "time" the "top" of the bull,or the "bottom" of the bear, but by sticking to valuation targets they avoid that trap of trying to time. Because by the time you feel confident that we are at the "bottom" or we are at the "top", its normally too late. Nuff said. Alas! If only things were so easy! The stock market can make the people that seem wise today, seem foolish tomorrow. who would have predicted that the UK government would be so clueless with managing the economy? people thought that we were still in the Kibaki era. the ability to forecast the future is not available to any of us. hence the best way is to limit your exposure in the stock market. don't put all your eggs in one basket. because in the end who knows what will happen tomorrow? -ve economic growth? 10% growth? keep some money in cash and some in t-bills. will another bank go bust? there's about 87 billion of customer deposits in Imperial Bank that are frozen for the time being. given Kenya's culture of corruption what other skeletons are hiding in the closet? At any one point maximum stocks holding in the portfolio should be 70%, with 30% in bonds. 50% stocks, 50% bonds is recommended. And for the very risk averse 30% stocks and 70% bonds. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Member Joined: 9/14/2011 Posts: 834 Location: nairobi
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Rank: Member Joined: 1/3/2014 Posts: 257
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Aguytrying wrote:mv_ufanisi wrote:Impunity wrote:Aguytrying wrote:grahamsdisciple wrote:From my experience, "Smart Money" in 2011 thought that T-bills and bonds were the best thing ever and left equities and bought bonds. Same rationale that bonds at 20% why on earth am I in equities. Let's do some math, some stocks such as KCB were selling at 16 bob and Safcom at 4 bob. Those who bought stocks made 2-3x their money and those who bought bonds only made their safe 20% of course less inflation. If they sold last year kept their money in banks earning 8% and get back slowly into equities, then by 2018 they will make again 2-3x their money. Point is that stocks always beat bonds in the long-run, and stocks always beat inflation in the long-run. But just don't buy any stock, it has to be a solid company with good ROE and a sustainable moat. instinct wrote:Impunity wrote:mawinder wrote:Impunity wrote:agile wrote:The rate hike is a monetary prescription to a fiscal problem the gobament is currently facing. the universal truth is that equities have always outperformed other investment vehicles. on the premise of being a long term horizon investor, yeah it makes truckloads of sense to be in equities......patience & foresight guys!!!! For guys like @Obiero who bough KQ in 2007 when its kes. 118 and now KQ is kes.5.30, how patient will they be? The pain of NSE.Time to hold cash and around JUly next year unleash cash and if handled well you may graduate from Harrier to a 2016 Rangerover Push the hold period till end of November next year...stocks will be dirt cheap. I missed the 2008 gravy millionaire train, I will prepare well in advance to board this next one. ION: I saw with my own meager eyes a colleague becoming a dollar-millionaire overnight when Equity share reached the highest pick ever followed by a share split, around 2008/9. I always knew that a time would come when stock prices will fall to enable me buy and double my money after two years what i dint know is that such a time would be surrounded by fear and hopelessness and limited access to credit that the only sensible thing to do is to sit back and do nothing LONG POST ALERT! It very clear to me after getting an average return last time out in 2011. The investors who make the most gains are always slightly ahead of the curve. let me explain. Stocks became over valued late last year, That's when the smart investors sold stocks. How did they Know? They didn't know it was the right time, they just knew it was time because of high valuations. It is only 1-2 year later that their moves now look smart..... Remember @ sparkly's thread Q1 2014 " too many hellos time to quit the stock market" read it if you haven't and see the harsh resistance it was met with. Remember @ hisah's golden handcuffs, that was exactly 1 year ago Q3 2014. That's when the smart investors sold stocks, They are not magicians or specially gifted. they just followed valuations and for @Hisah's case charts. At that same time, is when the general public was warming up to stocks. In fact selling stocks at that time felt foolish, because stocks we rising every day. Smart investors reduced they stocks holding and started buying T bills or money market slowly as they sold expensive stocks as the prices rose. And for a whole year it seemed like a wrong decision because stocks kept rising. Fast forward to today, Now everyone is selling stocks, buying stocks feels foolish, because everyday the prices are lower. Smart investors are now gearing up to buy stocks, as they reduce their T bills and money market fund holding. They are buying some stocks slowly, the ones that the valuation is now very low, or within their acceptable valuation. It doesn't feel like the clever thing to do, because stock prices are falling every day. Again they do not know if its the right "time" they are looking at valuations. This period may last 1-2 years, who knows. So for that entire time, they will endure that feeling of doing the wrong thing, just as it was when they were selling last year as prices rose everyday. Slowly by slowly whey will reduce T bills and Money market as they pick up cheap stocks over that 1-2 year period as the discounts come. You see the tide from bull market to bear or flat doesn't turn overnight, hence it is very risky to try to "time" the "top" of the bull,or the "bottom" of the bear, but by sticking to valuation targets they avoid that trap of trying to time. Because by the time you feel confident that we are at the "bottom" or we are at the "top", its normally too late. Nuff said. Alas! If only things were so easy! The stock market can make the people that seem wise today, seem foolish tomorrow. who would have predicted that the UK government would be so clueless with managing the economy? people thought that we were still in the Kibaki era. the ability to forecast the future is not available to any of us. hence the best way is to limit your exposure in the stock market. don't put all your eggs in one basket. because in the end who knows what will happen tomorrow? -ve economic growth? 10% growth? keep some money in cash and some in t-bills. will another bank go bust? there's about 87 billion of customer deposits in Imperial Bank that are frozen for the time being. given Kenya's culture of corruption what other skeletons are hiding in the closet? At any one point maximum stocks holding in the portfolio should be 70%, with 30% in bonds. 50% stocks, 50% bonds is recommended. And for the very risk averse 30% stocks and 70% bonds. @aguy you have articulated this timing issue very well. One of my best signatures on wazua is yours...The investor's chief problem - and even his worst enemy - is likely to be himself. Without set targets one will keep second guessing themselves. Set target get in, set target get out.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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@snipermnoma. Thanks. It sounds too simple to be true , but its tried and tested by Benjamin graham and his disciples. The investor's chief problem - and even his worst enemy - is likely to be himself
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