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Value Investing doesn't work anymore
Rank: Elder Joined: 12/7/2012 Posts: 11,901
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Queen wrote:Receptor wrote:amorphous wrote:Receptor wrote:mnandii wrote:People are realizing that value investing does not work simply because the character of the market changed. Whereas in the past few years the major markets were in a strong bull trend, the turn to a bear market is finding people off-guard. Even the venerable Oracle of Omaha can not many any meaningful sense out of this.
The reason is that the bull market cushioned people with questionable investment strategies. In a major bull market almost any share price is likely to go up. So it is not rocket science to make money by buying just about anything.
In contrast, a bear market is more demanding strategy-wise. The strategies that worked so well in a bull market suddenly become ineffective to ward off losses. The reason is not that these strategies are suddenly not working. The important point is that the strategies were never effective from the onset, only that the raging bull blinded people to the truth. A bear market brings reality and sanity. Only the best of strategies work in both bear markets and bull markets i.e all the time as they should.
And in this bear market, Elliott Waves are even more better suited. Beacause in a bear market, the fear in people creates perfect Elliott Wave patterns that are even more clearly perceived.
This bear market will teach the discerning the very best strategies to forecast a market, any market, any time. The bear in the NSE casino has been with us for the past 5 years. (it did not start now with Corona). We have just about to bottom out. Cash is king for the so called "value investor". The problem with wazuans is that they want to play pata potea at the casino with kshs. 20000 and expect to make a kill or in worst case get burnt a little. My strategy is go hard or go home. e.g., why should i buy only 10,000 shares of Fahari i-reit at a kshs. 60000 bob yet i can purchase a 100,000 units by wekelea-ing 600 geez on this counter. A 60 cents(10%) rise is a whooping 60,000 bob. I can make 60 gees every other week/day at the NSE casino by merely betting kshs. 600,000. e.g., I buy 100000 shares of Fahari ireit today in the morning at 6 bob a share. I sell the same shares leo leo for ksh.6.60. That is a staggering 60 ngwanyes(before tax/commisions). Next week i wekelea my 650,000 bob and buy the NSE share at 7.20 bob and sell at 8 bob by lunch hour. I repeat this every other day and i will bid my evil employer goodbye. You are a good dreamer  If this was the case, Receptor would have traded his way from 600k to billions of shillings within a matter of months by scraping together his daily ngwanyes and compounding them through the above daily loss-free skilful trades into a croesus-like fortune in no time! Why has it not happened? Because it is a bag of smoke of course. The secret in this pata potea business lies in cash. You got to have atleast a minimum of 1 million shillings(and a back-up source of income) to trade/play at the casino. if you rake-in a conservative 4(four) 10%'s in a year that is kshs.400000 before tax/commissions. Easier said than done. What sort of calculations is this? You would be working for the brokerage and GoK transaction commissions. Then, when you go into loss territory, you are done. In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
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Rank: Member Joined: 2/20/2007 Posts: 767
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People are disillusioned. The markets are not working currently. We are too accustomed to quick returns. Relax peeps, markets go up and down. The harder the recession, the bouncier the rebound. So far I am 20% down without counting dividends. Fully wiped on some counters like FTGH, 40% down on others, but I will hold on unless forced to sell for unrelated issues. Infact, I am slowly averaging down on counters I consider promising. They must find it difficult....... those who have taken authority as the truth, rather than truth as the authority. -G. Massey.
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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tom_boy wrote:People are disillusioned. The markets are not working currently. We are too accustomed to quick returns. Relax peeps, markets go up and down. The harder the recession, the bouncier the rebound.
So far I am 20% down without counting dividends. Fully wiped on some counters like FTGH, 40% down on others, but I will hold on unless forced to sell for unrelated issues. Infact, I am slowly averaging down on counters I consider promising.
True. I’m down 10% before dividends. I only own KCB (39.35) and very few Power. (Cost 1.77)
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Rank: Elder Joined: 9/23/2010 Posts: 2,218 Location: Sundowner,Amboseli
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Very interesting thread this......made even more juicier by @Mugunda man's hilarious jokes. Looking back at the last 2 decades of my trading stocks, seems like we have gone full circle as in from sub 2k on the NSE20 to 6.166K and back to sub 2k....all within 2 decades.Wow At one point....in the Kibaki years i was looking down at employees(was employed during the Moi error) to looking up to employees...during the Uhuru Error.....well, if there are any still left in employment, with this corona horror. Moved form trading monkeys in the Kibaki years to trading only 3 stocks in the Uhuru Error(Mpesa Bank, member and Simba) and even with all my years of trading, i can still not rely on dividends and Capital gains alone to fend for my family. However i must admit, with a kibaki type of a leader, you can live off stocks....not the current one. But even then, one should diversify into other options particularly T/Bonds as you enter into your sunset years. One or 2 properties hapa na pale will keep you dreaming even in your 70s....something we should all strive to do....DREAM!!!!ALWAYS @SufficientlyP
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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After KK was bought out, I decided to stay out of the NSE until after 2022 election. In hindsight this is the best trading decision I ever made coz COVID-19 added fuel to the bear. The further the market falls the better coz now I'm spoiled for choice. Though picking the bottom is much harder than exiting at the top, I'm not going back in any time soon.
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Rank: Veteran Joined: 8/30/2007 Posts: 1,558 Location: Nairobi
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sqft wrote:I think that @amorphous (or whoever he may morph into) has raised a very important point which all investors must not ignore. And that is - can one live off investments at the NSE? To maintain a middle-class lifestyle in Nairobi you need some 300k each month. So it means that if you are lucky to get a 10% dividend (before tax) to maintain the lifestyle, you need to have an investment of KES 36m at the NSE. I don't want to bring in the issue of capital gains or capital losses. So how many wazuans have invested 36m at the NSE?
The only wazuan to have declared his portfolio at NSE is @obiero. All the other wazuans list some amorphous percentages of their holdings so one can never know the amount of their investment at the NSE.
So let's look at a typical wazuan's portfolio, in this case @obieros last known portfolio: 5500 COOP, 2000 HF, 7500 KCB, 100000 KENR, 392,100 KQ. At today's prices (3rd June 2020) COOP (12.40), HF (3.74), KCB (34.95), KNRE (2.30), KQ (1.99), his portfolio is worth about 1.35m. If a miracle happens and he gets a 10% dividend, that's 135k pa, or 11k a month before tax. So how would he survive on such an amount? Even a mama mboga makes more than that. Is the 11K worth the time and stress involved monitoring the stock market performance every day?
Ama if u have 1.3m put into the various Money Market Funds (best one is Cytonn’s which clocks in at 10.5% 😀😀) will give you 11k a month.
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Rank: New-farer Joined: 8/1/2019 Posts: 85
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Horton wrote:tom_boy wrote:People are disillusioned. The markets are not working currently. We are too accustomed to quick returns. Relax peeps, markets go up and down. The harder the recession, the bouncier the rebound.
So far I am 20% down without counting dividends. Fully wiped on some counters like FTGH, 40% down on others, but I will hold on unless forced to sell for unrelated issues. Infact, I am slowly averaging down on counters I consider promising.
True. I’m down 10% before dividends. I only own KCB (39.35) and very few Power. (Cost 1.77) Am 8% down. Most in Sanlam, then 20% in kcb and Britam. Not selling any time soon.
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Value Investing doesn't work anymore
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