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1000% returns in 10 years... best stock picks
guru267
#1 Posted : Tuesday, March 23, 2010 7:46:09 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
hey wazuarians.. i've been trying to analyze at the best counters on the NSE over ten years (2020) to offer at least a possible 1000% return which means 100% return annualised...

these stocks have to be companies that have geared themselves well for exponential growth or are extremely undervalued...

wazuarians your thoughts and suggestions on your best picks will be welcome as i need them for comparative analysis...
Mark 12:29
Deuteronomy 4:16
TUPAC
#2 Posted : Tuesday, March 23, 2010 8:18:19 AM
Rank: Member

Joined: 12/8/2009
Posts: 274
Location: Ltktk
KPLC is sure to give you over 1000 per cent coz its undervalued and its growth potential is unimaginable! So is Kengen. Mumias Sugar, Kenya Re and probably Centum. Banks have reached saturation in my view.
...things fall apart...the centre cannot hold..mere anarchy is loosed upon the world...w b yeats
sheep
#3 Posted : Tuesday, March 23, 2010 8:51:00 AM
Rank: Veteran

Joined: 7/24/2008
Posts: 781
@guru,

Thats too much to expect from the NSE.If it were the Nasdaq we could say its possible coz of the many new startups and innovations available.Opportunities like that dont exist here.The most you can expect is 20% annual growth.Many companies qualify eg.Cement stocks(with reservations coz of the changing market environment),some financial stocks like DTB,JUBILEE seem almost certain of maintaining 20% growth in the future which means you might be doubling your money after every 3.5 yrs.

Ben Graham advised against expecting more than average results,the term growth stocks is a misnomer in that the growth is usually already factored in the price.
The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
guru267
#4 Posted : Tuesday, March 23, 2010 10:06:26 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
@sheep
your previous post is extremely contradictory with reality because of two reasons...

the first being because the Nasdaq has actually made losses to investors over the last ten years..

the second reason being that the NSE can produce such results in 10 years.. i would want you to check the stock perfomance section on the investor segment of this site... start with jan 2002 to date and you will see how wrong you are about the NSE'S perfomance in only 8 years...

the perfomance you will see arose from a crisis in 2001 much smaller than the recent financial crisis..
Mark 12:29
Deuteronomy 4:16
sheep
#5 Posted : Tuesday, March 23, 2010 10:52:52 AM
Rank: Veteran

Joined: 7/24/2008
Posts: 781
Most of the stocks on the Nasdaq had no earnings and the ones which had earnings were ridiculously overpriced.The p/e of nasdaq was 100
*!!!!.But some stocks bought before the madness like Dell,Microsoft and several biotechs made investors super-rich.

The results in the last 8yrs can only be duplicated by a massive bull which will defy all fundamentals.In 2006 some stocks like ARM,BAMBURI had p/es of 60+.
Unless the NSE touches say 10000pts,results like those cannot be repeated since the massive undervaluations of companies in 2002 did not occur even in the bear of 2008.My 2 cents
The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
guru267
#6 Posted : Tuesday, March 23, 2010 11:33:47 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
@sheep
during the bear market at the NSE 24 companies lost more than 50% of their value with 10 companies losing more than 80% of their value which is not much different than the 2001 crisis...

during that period most of these counters earnings have caught up with the share prices so even with some counters gaining 300+% since the NSE lows of march last year many still look grossly undervalued...

couple this with a possible improved political ground and the amount of gearing and investments many listed companies have carried out for growth in all the sectors be it banking, energy, aviation, food and beverages. it then becomes hard to see how stocks wont equate or surpass the previous decades perfomance...
Mark 12:29
Deuteronomy 4:16
mukiha
#7 Posted : Wednesday, March 24, 2010 6:28:46 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
guru267 wrote:
hey wazuarians.. i've been trying to analyze at the best counters on the NSE over ten years (2020) to offer at least a possible 1000% return which means 100% return annualised...

these stocks have to be companies that have geared themselves well for exponential growth or are extremely undervalued...

wazuarians your thoughts and suggestions on your best picks will be welcome as i need them for comparative analysis...


@guru: Check you math again

If you get 100% return per year for ten years, your final value will be over 100,000% [one hundred thousand per cent]!!!!!!

Think about it, 100% return means doubling you investment; thus you are looking to double your money every year for ten years. You will end up with sh1,024 for every shilling invested. That's 100,023% ---- a lot more than 1,000%!!!!!!!!!

1,000% means you want to get ten shillings for every shilling invested. Is this what you mean?

If that is the case [and I must say the former is unrealistic, unless you want to go into drug peddling!!], then the stocks you are looking for should be expected to give you about 26% per year on average.

Looking at historical data, it turns out that you are not being too optimistic; after all the following did give over 1,000% between 2000 and 2010:

EA Cables - 1,900%
ARM - 1,800%
NBK - 1,200%

The question is: will they continue the trend for another decade?
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
VituVingiSana
#8 Posted : Wednesday, March 24, 2010 9:49:18 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
@mukiha - The bar was very low for these firms in 2000 BUT point taken...

So which is this 1000% stock?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
mukiha
#9 Posted : Wednesday, March 24, 2010 9:54:12 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
I must add that in year 2000, I wouldn't have touched NBK with a ten-foot pole!!!! It was on the verge of collapse under the weight of politically-connected fellows who had refused to pay their loans.
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
guru267
#10 Posted : Wednesday, March 24, 2010 10:07:16 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
@mukiha maybe you misunderstood me.. i wasnt taking about annualised compound returns but rather i was talking about an annual 100% return on the initial investment to give a total return of 1000% over 10 years..

@VVS the 1000% stocks could/might be Mumias, Kenya re, NBK, ARM and KQ(at least 500%).., IMHO
Mark 12:29
Deuteronomy 4:16
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