Wazua
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New Year Resolutions
Rank: Member Joined: 3/26/2012 Posts: 830
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Ever since I started investing,I have learnt the following lessons:- Predicting the direction of a stock is a futile exercise,so I always refer any investor to the allegory of Mr.Market by Benjamin Graham.Since my pessimism extends to the point of not trusting the books of a/c of all companies,I only buy companies that have a dividend yield of >8%...I am of the opinion that dividends can be used to measure the health of a company sice you cant give what you havent earned.As the yield increases,the price falls,meaning I automatically buy at low prices.I also know that it is necessary to take the guesswork out of investing,so I average down with my first batch bought at 8% dividend yield mostly after books close.I diversify to a maximum of four counters. A successful man is not he who gets the best, it is he who makes the best from what he gets.
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Rank: Elder Joined: 7/11/2012 Posts: 5,222
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Sufficiently Philanga....thropic wrote:My anthem all along in my years trading stocks from paper to electronic has been that long term is a summation of short terms and that a bird in hand is worth 2 in the bush.
I only do a max of 3 stocks often 2 which I always monitor every day. Here im talking about price,any changes in management of that coompany,action of competitors,macro economic environment etc. Truth is it's easier for you to know almost everything about something as opposed to something about everything.
These 2 stocks must be:
1) Growth stocks - Doing profits of 40% plus or have future potential.
2) Liquid - Very important coz of ease of entry & exit.
3) Darling of foreigners/Elicit foreign investor interest.
Im currently invested in Safaricom & KCB.
The picks keep changing depending on the fortunes of the company. For instance,i dumped Equity for KCB in October 2011 & I have been trading it since then(buying in dips & selling in surges). Waiting to see its Q1 2013 to know if it'l still be in my best 2. Equity bank kept me going from 2006-2011 due to its high growth rates then but clearly KCB has been able to come out strong since. Before that I had EABL,MSC, & KQ which I dumped in 2004,2005 & 2006. Safaricom also meets my above criteria & will still remain in my portfolio.
I have also learnt never to get emotional with stocks. If they cease to meet my criteria outlined above,i dump them like yesterday. Case in point is EABL, KQ,MSC & Equity & that todays winners are not necessary tomorrows,hence the need to constantly evaluate & revise your stock picks.
There is also the need for timing. To know the best time to get in & also out. Greed & fear are always at play. Managing these makes all the difference.
Happy investing @stocksguru. Hope 2013 works out for you investmentwise!
Be blessed!
I might just adopt this strategy! I'm selling my Safcom and KCB in this bull run and might re-stock incase of a dip. In search of new counters I've heard mention of JH, Kengen, HFCK and $$. What do you think?
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Rank: Elder Joined: 9/23/2010 Posts: 2,225 Location: Sundowner,Amboseli
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@Mukiri,the 3 other counters you've mentined are great particularly in the sectors that they are in. but jus make sure you dont over diversify. Focus is key. Also make sure your broker is not only reliable, but available to place your orders immediately. All the best in 2013! @SufficientlyP
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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@spt , mutaga . i was of the same school of thought about holding few counts less than 5. the i read intelligent investor by benjamin graham . there is a whole chapter explaining why one needs to diversify to at least around 10 companies if diversified sectors. its one of the pillars of the safety of a portfolio and goes hand in hand with his recommended value investing. the exception to this rule is if u are a brilliant investor where diversifying will just dilute your profits. i currently hold 5 companies but i want to add at least 3 more that meet his criteria they are hard to find at times. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 7/11/2012 Posts: 5,222
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Aguytrying wrote:@spt , mutaga .
i was of the same school of thought about holding few counts less than 5. the i read intelligent investor by benjamin graham . there is a whole chapter explaining why one needs to diversify to at least around 10 companies if diversified sectors. its one of the pillars of the safety of a portfolio and goes hand in hand with his recommended value investing. the exception to this rule is if u are a brilliant investor where diversifying will just dilute your profits. i currently hold 5 companies but i want to add at least 3 more that meet his criteria they are hard to find at times. Which 5 are these?
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Rank: Elder Joined: 9/23/2010 Posts: 2,225 Location: Sundowner,Amboseli
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@Aguy,thanks for your input. I think it depends on the time you have to devote in your investments. Id say diversifying into like 10 counters is good when you have less time on you but if all you do is stock trading,you dont want to be all over! @SufficientlyP
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Rank: Member Joined: 4/19/2007 Posts: 68
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Thanks for the insight, how exactly will Access recover unless if it is bought off by Safaricom Jamii with their FIBA is busy eating away at Access's high end residential business, they have extended deeper into Karen, Runda, Loresho and Muthaiga. On the other hand Safaricom has has gone flat out with WiMax installations and the retail market. Another party taking away business from Access if their former partner now operating as Xtranet. An with Altech looking for a buyer to take over their stake in KDN it seems the fiber to the building/home business in Nairobi is over saturated. Almost forgot about FON who have the backing of Soliton are a formidable player who cannot be ignored. Bell has pulled another one from his hat with the 7 Billion investment to roll out triple play in the middle income areas of Nairobi of which Access blatantly ignored when they had the opportunity. Aguytrying wrote:@stocksguru.
Few have the courage to admit their mistakes, this is where growth in knowledge starts.
My honest view.
Kenya airways, eveready are hopeless companies. Divest from them. with eveready you even risk losing you principal- incase the company goes bankrupt. KQ will give you ulcers with current management and lose you more money( next time it rallies to 20's- sell and never look back, lets see how expansion will go-but im very sceptic). Im also a victim of KQ, i bought at around 46-50. I sold at a large loss. however then my investment was small so i recovered.
Mumias. Its a good company with a very uncertain future. You can bet with them if you believe they will thrive post comesa.
access to me is the best counter you are holding. I think it has hit its rock bottom like others have stated. I believe it could make you money.
There are gems to pick at the moment. HFCK, KENGEN. and others. If pain of selling at a loss is too much. do not average down, invest heavily in new counters.
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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Mukiri wrote:Aguytrying wrote:@spt , mutaga .
i was of the same school of thought about holding few counts less than 5. the i read intelligent investor by benjamin graham . there is a whole chapter explaining why one needs to diversify to at least around 10 companies if diversified sectors. its one of the pillars of the safety of a portfolio and goes hand in hand with his recommended value investing. the exception to this rule is if u are a brilliant investor where diversifying will just dilute your profits. i currently hold 5 companies but i want to add at least 3 more that meet his criteria they are hard to find at times. Which 5 are these? HFCK, KENGEN, WTK, KENO,KPLC my cross hairs are on. BERG, TPSE, KNRE, UNGA, REA, CFC but at the right prices. some like BERG, UNGA and REA have already taken off. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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stocksguru wrote:Thanks for the insight, how exactly will Access recover unless if it is bought off by Safaricom Jamii with their FIBA is busy eating away at Access's high end residential business, they have extended deeper into Karen, Runda, Loresho and Muthaiga. On the other hand Safaricom has has gone flat out with WiMax installations and the retail market. Another party taking away business from Access if their former partner now operating as Xtranet. An with Altech looking for a buyer to take over their stake in KDN it seems the fiber to the building/home business in Nairobi is over saturated. Almost forgot about FON who have the backing of Soliton are a formidable player who cannot be ignored. Bell has pulled another one from his hat with the 7 Billion investment to roll out triple play in the middle income areas of Nairobi of which Access blatantly ignored when they had the opportunity. Aguytrying wrote:@stocksguru.
Few have the courage to admit their mistakes, this is where growth in knowledge starts.
My honest view.
Kenya airways, eveready are hopeless companies. Divest from them. with eveready you even risk losing you principal- incase the company goes bankrupt. KQ will give you ulcers with current management and lose you more money( next time it rallies to 20's- sell and never look back, lets see how expansion will go-but im very sceptic). Im also a victim of KQ, i bought at around 46-50. I sold at a large loss. however then my investment was small so i recovered.
Mumias. Its a good company with a very uncertain future. You can bet with them if you believe they will thrive post comesa.
access to me is the best counter you are holding. I think it has hit its rock bottom like others have stated. I believe it could make you money.
There are gems to pick at the moment. HFCK, KENGEN. and others. If pain of selling at a loss is too much. do not average down, invest heavily in new counters.
I cant make a case for ACCESS, but of the shares you own, i think it has the better prospects share price wise. The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Member Joined: 4/19/2007 Posts: 68
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Thanks Quote:
I cant make a case for ACCESS, but of the shares you own, i think it has the better prospects share price wise.
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