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Best long run investment
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muganda
#1 Posted : Tuesday, April 06, 2010 8:21:10 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
I need some help, pretty please.

Perhaps you've heard statement or claim that return from stocks beats all other asset classes (bonds, property) in the long run. Does this relate to the Kenyan context?

Someone from the NSE said they met a Barclays shareholder who purchased BBK at 0.50 cents. Any clue what prices shares were trading at in the NSE say in 1980/1990 to help compare with rates of return to property aquired in the same era?
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ProverB
#2 Posted : Tuesday, April 06, 2010 8:29:13 AM
Rank: Veteran

Joined: 3/12/2010
Posts: 1,199
Location: Eastlander
i know a couple who bought 200 BBK shares in 1986...never bought shares again after that..ate the dividends..
as of dec 2008 the 200 shares through splits and bonuses had grown to 3360 shares..or there about..
imagine instead if they had a culture of buying 200 shares periodically..monthly/even annually?
..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Fundaah
#3 Posted : Tuesday, April 06, 2010 8:30:21 AM
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Joined: 11/19/2008
Posts: 1,267
I met someone who bought a quarter acre in embakasi in 1993 at 68,000/= today the same plot is about 1.4m or more..and rising...thats why I've come to trust Land more than stocks...unlike stocks, land prices(in kenya) know only one direction ...UP ..
Isaiah 65:17-Look! I am creating new heavens and a new earth, and no one will even think about the old ones anymore
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muganda
#4 Posted : Tuesday, April 06, 2010 8:55:14 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
smile Thanks for your responses so far.
@ProverB around what price was BBK in 1986?
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guru267
#5 Posted : Tuesday, April 06, 2010 9:01:54 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
@muganda the best long run investments are either stocks or residential or commercial property not land because these tend to smash inflation in the long term whereas bonds tend to move at the same pace(or slower) than inflation...

but reader beware!!! stocks are very dependant on the type of inflation... demand pull inflation is wonderful for stocks whereas cost push inflation tends to slaughter stocks terribly in the long run
Mark 12:29
Deuteronomy 4:16
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guru267
#6 Posted : Tuesday, April 06, 2010 9:05:12 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
@muganda NSE stock prices dating to 1986 may be very hard to come by... but the wazua perfomance calculator can help you get stock prices from 1996
Mark 12:29
Deuteronomy 4:16
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ProverB
#7 Posted : Tuesday, April 06, 2010 9:06:11 AM
Rank: Veteran

Joined: 3/12/2010
Posts: 1,199
Location: Eastlander
muganda wrote:
smile Thanks for your responses so far.
@ProverB around what price was BBK in 1986?

i think it was during the IPO. will have to confirm. but about 10/-
..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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muganda
#8 Posted : Tuesday, April 06, 2010 9:07:29 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
@guru267, from the aforementioned...
Considering the challenge of stocks in cost-push inflation, in your books, does real estate then offer better long term return as compared to stocks?
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mkonomtupu
#9 Posted : Tuesday, April 06, 2010 9:08:28 AM
Rank: Veteran

Joined: 2/10/2010
Posts: 1,001
Location: River Road
Muganda, the BBK IPO price in 1986 was 16/- and they issued 5,000,000 shares. It was oversubscribed by 600% and they raised around 80million. A house in Buru was like 200-250,000/-. Hope this helps!
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guru267
#10 Posted : Tuesday, April 06, 2010 9:15:56 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
muganda wrote:
@guru267, from the aforementioned...
Considering the challenge of stocks in cost-push inflation, in your books, does real estate then offer better long term return as compared to stocks?


@muganda real estate (in emerging not developed markets) is very demand driven.. i'm very big on stocks but i cant deny that real estate in these markets does look poised to offer better long term returns than stocks but it locks out the smaller investors in terms of the amount of investment...
Mark 12:29
Deuteronomy 4:16
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