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sparkly
#21 Posted : Friday, June 18, 2010 9:47:19 PM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
Never buy price, buy value. As a novice investor i thought penny stocks were 'cheap' and any share above sh 50 was 'expensive'. Now i know better.
Life is short. Live passionately.
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sparkly
#22 Posted : Friday, June 18, 2010 10:12:38 PM
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Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
the deal wrote:
if one bought 500 KQ shares @ 56...and sold @ a loss price of 52.5...today if he gets in @ 48 and buys the same shares...

I will tell you what happens. Capital erosion sh 1,750 pesky commissions sh 1,800 not to mention opportunity cost!
Life is short. Live passionately.
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StatMeister
#23 Posted : Friday, June 18, 2010 10:18:46 PM
Rank: Veteran


Joined: 5/23/2010
Posts: 868
Location: La Islas Galápagos
@sparkly, are you running a loss strategy for managing this? most wazuans seem to rely on good buy strategy
A bad day fishing is better than a good day at work
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sparkly
#24 Posted : Saturday, June 19, 2010 1:23:17 PM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
StatMeister wrote:
@sparkly, are you running a loss strategy for managing this? most wazuans seem to rely on good buy strategy


@statMeister, i don't have any KQ.

These days i do give a thought before I buy.

If i buy a stock for fundamentals, even a 20% loss does not panic me if there is not drastic change in fundamentals. I look at it as an opportunity to buy more.

If i buy a stock because it is oversold (RSI of 30 or below) i sell when the RSI hits 70.

If i buy a stock because it is rising fast, i sell when the rise stops.



Life is short. Live passionately.
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VituVingiSana
#25 Posted : Monday, June 21, 2010 10:14:15 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,134
Location: Nairobi
For the most part... buying value is the way to go...

The QUESTION is what determines the 'value'???

You have to do your research... those who think CFCStanbic's NAV is 60+... read the Financial Statements & a HUGE chunk is 'goodwill'...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mukiha
#26 Posted : Monday, June 21, 2010 10:26:48 AM
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Joined: 6/27/2008
Posts: 4,114
VituVingiSana wrote:
For the most part... buying value is the way to go...

The QUESTION is what determines the 'value'???

You have to do your research... those who think CFCStanbic's NAV is 60+... read the Financial Statements & a HUGE chunk is 'goodwill'...

....and an even bigger chunk of "share premium" on the liabilities side....
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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StatMeister
#27 Posted : Monday, June 21, 2010 12:57:24 PM
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Joined: 5/23/2010
Posts: 868
Location: La Islas Galápagos
i couldn't make sense of their financials, but i was satisfied with the 60% share rise, so i sold off. i'll try to understand them if i decide to go in for the spin-off in september, or maybe in Jan 2011
A bad day fishing is better than a good day at work
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VituVingiSana
#28 Posted : Monday, June 21, 2010 1:35:13 PM
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Joined: 1/3/2007
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Location: Nairobi
mukiha wrote:
VituVingiSana wrote:
For the most part... buying value is the way to go...

The QUESTION is what determines the 'value'???

You have to do your research... those who think CFCStanbic's NAV is 60+... read the Financial Statements & a HUGE chunk is 'goodwill'...

....and an even bigger chunk of "share premium" on the liabilities side....


The share premium is not the worry coz not a liability... It's the 'asset' that is worrisome...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mukiha
#29 Posted : Tuesday, June 22, 2010 10:18:17 AM
Rank: Elder


Joined: 6/27/2008
Posts: 4,114
The premium shot up by 10b during the Stanbic buyout. The payment to Stanbic Africa Holdings Ltd [SAHL] for Stanbic Bank Kenya [SBK] was not in cash. CFC created new shares and handed them over to SAHL. The value was put at Sh115 per share at a time when the CFC NAV was about sh30. The PAR value remained sh5...hence the premium.

True, as @StatMeiser says, it's not easy to understand. Bottom line is that if knock off the intangible goodwill from the assets side, you have to knock off the intangible premium from the liability side as well.

Net effect is a 10b decrease in assets and a 13b decrease in liabilities.
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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sparkly
#30 Posted : Tuesday, June 22, 2010 4:44:13 PM
Rank: Elder


Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
mukiha wrote:


True, as @StatMeiser says, it's not easy to understand. Bottom line is that if knock off the intangible goodwill from the assets side, you have to knock off the intangible premium from the liability side as well.

Net effect is a 10b decrease in assets and a 13b decrease in liabilities.


@mukiha am another one who does not understand those accounts.

So what is the true NAV of this Bank and how does it compare to its peers?
Life is short. Live passionately.
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mukiha
#31 Posted : Wednesday, June 23, 2010 9:25:07 AM
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Joined: 6/27/2008
Posts: 4,114
Here is a comparison: You agree to buy a house for sh10m. You go to a bank and borrow the 10m on a 15-year mortgage at 15%pa interest. At the end of the 15yrs, what will be the value of the house in your books?

Is it the 10m selling price?

or

Is it the sh25m that you actually paid to the bank in installments?

That's the question regarding CFC. They paid sh9b more for Stanbic Kenya than its NAV. This is the bulk goodwill in the assets.
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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VituVingiSana
#32 Posted : Wednesday, June 23, 2010 9:36:08 AM
Rank: Chief


Joined: 1/3/2007
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Location: Nairobi
mukiha wrote:
Here is a comparison: You agree to buy a house for sh10m. You go to a bank and borrow the 10m on a 15-year mortgage at 15%pa interest. At the end of the 15yrs, what will be the value of the house in your books?

Is it the 10m selling price?

or

Is it the sh25m that you actually paid to the bank in installments?

That's the question regarding CFC. They paid sh9b more for Stanbic Kenya than its NAV. This is the bulk goodwill in the assets.


it is NEITHER of the above... The value is what the market/buyer will pay for the house...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mukiha
#33 Posted : Wednesday, June 23, 2010 11:33:30 AM
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@VVS; The one you are talking about is the "market value"; what I am talking about is the "value in your books", i.e., BOOK VALUE
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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VituVingiSana
#34 Posted : Wednesday, June 23, 2010 11:46:44 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,134
Location: Nairobi
mukiha wrote:
@VVS; The one you are talking about is the "market value"; what I am talking about is the "value in your books", i.e., BOOK VALUE


Unless you capitalize the interest payments (not advisable coz better to expense interest where possible for tax benefits) the BV will be KES 10mn...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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mukiha
#35 Posted : Wednesday, June 23, 2010 12:08:43 PM
Rank: Elder


Joined: 6/27/2008
Posts: 4,114
Interesting... what if you get finance from a sharia bank?
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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VituVingiSana
#36 Posted : Wednesday, June 23, 2010 12:29:40 PM
Rank: Chief


Joined: 1/3/2007
Posts: 18,134
Location: Nairobi
mukiha wrote:
Interesting... what if you get finance from a sharia bank?

No idea... LOL... I am not a mislamu! Lakini, others cud help us here...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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StatMeister
#37 Posted : Wednesday, June 23, 2010 12:44:04 PM
Rank: Veteran


Joined: 5/23/2010
Posts: 868
Location: La Islas Galápagos
The concept of return on investment is universal, but in sharia you call interest 'profit' but it is not amortised (interest income is not a simple function Interest rate*Balance) explaining why the product is not popular with lenders.
A bad day fishing is better than a good day at work
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mukiha
#38 Posted : Thursday, June 24, 2010 9:05:03 AM
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Joined: 6/27/2008
Posts: 4,114
..perhaps I chose a bad example; this might be better:

Suppose your are offered the house at sh10m; then you send in a QS to value the construction cost [including the land] and he comes up with sh6m.

You still buy the house at sh10m [in cash] even though you know it is "worth" sh6m. What will be its value in your books? 10m or 6m?
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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VituVingiSana
#39 Posted : Thursday, June 24, 2010 10:02:15 AM
Rank: Chief


Joined: 1/3/2007
Posts: 18,134
Location: Nairobi
mukiha wrote:
..perhaps I chose a bad example; this might be better:

Suppose your are offered the house at sh10m; then you send in a QS to value the construction cost [including the land] and he comes up with sh6m.

You still buy the house at sh10m [in cash] even though you know it is "worth" sh6m. What will be its value in your books? 10m or 6m?


Companies are supposed to use the 'lower of Cost or Net Realizable Value'....
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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