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buy and never sell great businesses
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target1360
#31 Posted : Monday, September 22, 2014 11:16:06 PM
Rank: Member

Joined: 5/14/2014
Posts: 289
Location: nairobi
target1360 wrote:
After reading many books on investments,especially on munger and my own experience i now dont see the need for selling stocks of a business that has a relatively high ROE and expected continous high growth in EPS.
1. i bought centum at 13 then sold ar 20.bought at 24 sold at 35.then the other day i bought at 37.realy whats the point if paying all the transaction costs?
2.i have traded other stocks and paid unnecessary expenses not to mention market timing challenges.

bottom line is if you are able to identify a stock that compounds at a constitently high roe eg equity,centum,britam then theres no point in trading/watching the nse


Looking back at the first post on this thread on 1st June year an investor who bought the three noted stocks has made a tidy return in less than half an year.
britam was 17.55 now 36.5=107%profit
centum was 38.5 now 77& =100% profit
equity was 41.75 now 59 =41% profit.
simple average return of 82% in less than half a year.
Ignoring these short term results i expect the three stocks to compound wealth at an average of over 50% over the fore see able future.
Thank you.
I find satisfaction in owning great business,not trading them
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MaichBlack
#32 Posted : Tuesday, September 23, 2014 7:06:14 AM
Rank: Elder

Joined: 7/22/2009
Posts: 7,858
guru267 wrote:
jawgey wrote:
In view of this thread I'd love if we shared some of the currently undervalued companies with massive potential for growth. A good example to start with would be KPLC and KQ(I know this is debatable but I still believe there's great potential if project mawingu is something to go by)


1. Unaitas
2. C&G
3. Kenya re

@guru267 - Kindly break down the numbers on Unaitas.
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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icecube
#33 Posted : Tuesday, September 23, 2014 8:26:51 AM
Rank: Member

Joined: 1/2/2008
Posts: 268
Location: Nairobi
target1360 wrote:
target1360 wrote:
After reading many books on investments,especially on munger and my own experience i now dont see the need for selling stocks of a business that has a relatively high ROE and expected continous high growth in EPS.
1. i bought centum at 13 then sold ar 20.bought at 24 sold at 35.then the other day i bought at 37.realy whats the point if paying all the transaction costs?
2.i have traded other stocks and paid unnecessary expenses not to mention market timing challenges.

bottom line is if you are able to identify a stock that compounds at a constitently high roe eg equity,centum,britam then theres no point in trading/watching the nse


Looking back at the first post on this thread on 1st June year an investor who bought the three noted stocks has made a tidy return in less than half an year.
britam was 17.55 now 36.5=107%profit
centum was 38.5 now 77& =100% profit
equity was 41.75 now 59 =41% profit.
simple average return of 82% in less than half a year.
Ignoring these short term results i expect the three stocks to compound wealth at an average of over 50% over the fore see able future.
Thank you.


The above % profits are just on paper. You will only make that profit if you sell off the shares, otherwise, these values can easily go back to 0% and -% in no time.
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target1360
#34 Posted : Tuesday, September 23, 2014 5:59:23 PM
Rank: Member

Joined: 5/14/2014
Posts: 289
Location: nairobi
icecube wrote:
target1360 wrote:
target1360 wrote:
After reading many books on investments,especially on munger and my own experience i now dont see the need for selling stocks of a business that has a relatively high ROE and expected continous high growth in EPS.
1. i bought centum at 13 then sold ar 20.bought at 24 sold at 35.then the other day i bought at 37.realy whats the point if paying all the transaction costs?
2.i have traded other stocks and paid unnecessary expenses not to mention market timing challenges.

bottom line is if you are able to identify a stock that compounds at a constitently high roe eg equity,centum,britam then theres no point in trading/watching the nse


Looking back at the first post on this thread on 1st June year an investor who bought the three noted stocks has made a tidy return in less than half an year.
britam was 17.55 now 36.5=107%profit
centum was 38.5 now 77& =100% profit
equity was 41.75 now 59 =41% profit.
simple average return of 82% in less than half a year.
Ignoring these short term results i expect the three stocks to compound wealth at an average of over 50% over the fore see able future.
Thank you.


The above % profits are just on paper. You will only make that profit if you sell off the shares, otherwise, these values can easily go back to 0% and -% in no time.


@icecube. you are right.Am not planning to sell, i hold on and see what the future holds for these businesses.
I find satisfaction in owning great business,not trading them
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its2013
#35 Posted : Wednesday, September 24, 2014 6:30:33 AM
Rank: Member

Joined: 1/4/2013
Posts: 255
The problem with the "buy and never sell" doctrine is that unless the dividend yield is really really good (or it's average but you invested really big capital to base it on) the paper profit doesn't help you much. You can only advance yourself by realising profit and reinvesting it. Even the great man that the quote is attributed to has bought and sold/traded shares. It's his own company stock that he doesnt sell. I think the better doctrine would be "buy and don't be in a hurry to sell". The 'secret' is the TIMING.
Pretty hurts
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  | | Edit by user: Wednesday, September 24, 2014 7:55 AM | Reason: Not specified
target1360
#36 Posted : Wednesday, September 24, 2014 10:20:32 AM
Rank: Member

Joined: 5/14/2014
Posts: 289
Location: nairobi
its2013 wrote:
The problem with the "buy and never sell" doctrine is that unless the dividend yield is really really good (or it's average but you invested really big capital to base it on) the paper profit doesn't help you much. You can only advance yourself by realising profit and reinvesting it. Even the great man that the quote is attributed to has bought and sold/traded shares. It's his own company stock that he doesnt sell. I think the better doctrine would be "buy and don't be in a hurry to sell". The 'secret' is the TIMING.


i agree.
I find satisfaction in owning great business,not trading them
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target1360
#37 Posted : Thursday, September 25, 2014 7:06:58 PM
Rank: Member

Joined: 5/14/2014
Posts: 289
Location: nairobi
target1360 wrote:
its2013 wrote:
The problem with the "buy and never sell" doctrine is that unless the dividend yield is really really good (or it's average but you invested really big capital to base it on) the paper profit doesn't help you much. You can only advance yourself by realising profit and reinvesting it. Even the great man that the quote is attributed to has bought and sold/traded shares. It's his own company stock that he doesnt sell. I think the better doctrine would be "buy and don't be in a hurry to sell". The 'secret' is the TIMING.


i agree.


i have today broken my rules and booked my profits.i expect to be completly exit tommorow
.
This thread is therefore expired
I will be back when mr.market regains sanity.
I find satisfaction in owning great business,not trading them
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  | | Edit by user: Thursday, September 25, 2014 7:09 PM | Reason: Not specified
its2013
#38 Posted : Thursday, September 25, 2014 8:36:30 PM
Rank: Member

Joined: 1/4/2013
Posts: 255
target1360 wrote:
target1360 wrote:
its2013 wrote:
The problem with the "buy and never sell" doctrine is that unless the dividend yield is really really good (or it's average but you invested really big capital to base it on) the paper profit doesn't help you much. You can only advance yourself by realising profit and reinvesting it. Even the great man that the quote is attributed to has bought and sold/traded shares. It's his own company stock that he doesnt sell. I think the better doctrine would be "buy and don't be in a hurry to sell". The 'secret' is the TIMING.


i agree.


i have today broken my rules and booked my profits.i expect to be completly exit tommorow
.
This thread is therefore expired
I will be back when mr.market regains sanity.


Good for you. I'm still in. My counters haven't joined in the rally as such.
Pretty hurts
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icecube
#39 Posted : Thursday, September 25, 2014 11:45:42 PM
Rank: Member

Joined: 1/2/2008
Posts: 268
Location: Nairobi
its2013 wrote:
The problem with the "buy and never sell" doctrine is that unless the dividend yield is really really good (or it's average but you invested really big capital to base it on) the paper profit doesn't help you much. You can only advance yourself by realising profit and reinvesting it. Even the great man that the quote is attributed to has bought and sold/traded shares. It's his own company stock that he doesnt sell. I think the better doctrine would be "buy and don't be in a hurry to sell". The 'secret' is the TIMING.


I agree. This "buy and never sell" chorus can be misleading. You only make the profit by buying low and selling high, just like in any other trading. The key thing is TIMING as you have said. Holding just gives the consolation that my shares have increased in value, but until you sell the shares, that increase in value doesn't mean much.
For example, an investor who bought CIC insurance shares at 8/= and sold at 11/90 would have made a profit of more than 48% before transaction charges. Very few investments can give you such a return in a few months, apart from shylocking. If he/she did not sell the shares, he makes nothing and remains with the shares. The shares can still go back to 8/= or even less..my opinion.
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Aguytrying
#40 Posted : Friday, September 26, 2014 6:46:00 AM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
@its2013, icecube. what if the same investor bought cic at equivalent of 1.00 shs before it listed. the company is doing well and will do so for the foreseeable future. is there really any need for him to sell at 11.00?

you see his capital has already grown 8 fold,
If he sells, do you think he will ever buy cic at 1.00 shs again?

The investor's chief problem - and even his worst enemy - is likely to be himself
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