Wazua
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Value Investing doesn't work anymore
Rank: Elder Joined: 9/20/2015 Posts: 2,811 Location: Mombasa
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obiero wrote:Monk wrote: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?
@sqft If I'm not mistaken, Obiero is a self-declared trader and not a dividend hunter on the NSE. His amount of investment here is not representative. Some Wazuans here like @Stocksmaster have proved repeatedly that combining dividend investing and trading volatile stocks can earn you much more than the 10% you used as a reference. Some Income investors too earn much higher DYs than 10%, based on their ABPs and duration of holding. Think of those who've held Safaricom from when it was ranging at Ksh 3-5, and accumulated large quantities. Today they make at least 30% annually. Only 5% of my total investment rests at the NSE at any given time.. Sometimes it dips below 3%.. I would never invest more than the said percentage as stock trading carries possibility of sudden total loss at worst or severe erosion of capital at best, but during good times you can also make a killing. I am a trader through and through for the capital gains. The dividends I drink with @maka @obiero you drink na unasema umeokoka?: John 5:17 But Jesus replied, “My Father is always working, and so am I.”
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Rank: Veteran Joined: 1/10/2015 Posts: 961 Location: Kenya
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obiero wrote:Monk wrote: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?
@sqft If I'm not mistaken, Obiero is a self-declared trader and not a dividend hunter on the NSE. His amount of investment here is not representative. Some Wazuans here like @Stocksmaster have proved repeatedly that combining dividend investing and trading volatile stocks can earn you much more than the 10% you used as a reference. Some Income investors too earn much higher DYs than 10%, based on their ABPs and duration of holding. Think of those who've held Safaricom from when it was ranging at Ksh 3-5, and accumulated large quantities. Today they make at least 30% annually. Only 5% of my total investment rests at the NSE at any given time.. Sometimes it dips below 3%.. I would never invest more than the said percentage as stock trading carries possibility of sudden total loss at worst or severe erosion of capital at best, but during good times you can also make a killing. I am a trader through and through for the capital gains. The dividends I drink with @maka Seems @mugundaman was right that the NSE is a casino.  Proverbs 13:11 Dishonest money dwindles away, but whoever gathers money little by little makes it grow.
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Rank: Elder Joined: 6/23/2009 Posts: 14,213 Location: nairobi
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Spikes wrote:obiero wrote:Monk wrote: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?
@sqft If I'm not mistaken, Obiero is a self-declared trader and not a dividend hunter on the NSE. His amount of investment here is not representative. Some Wazuans here like @Stocksmaster have proved repeatedly that combining dividend investing and trading volatile stocks can earn you much more than the 10% you used as a reference. Some Income investors too earn much higher DYs than 10%, based on their ABPs and duration of holding. Think of those who've held Safaricom from when it was ranging at Ksh 3-5, and accumulated large quantities. Today they make at least 30% annually. Only 5% of my total investment rests at the NSE at any given time.. Sometimes it dips below 3%.. I would never invest more than the said percentage as stock trading carries possibility of sudden total loss at worst or severe erosion of capital at best, but during good times you can also make a killing. I am a trader through and through for the capital gains. The dividends I drink with @maka @obiero you drink na unasema umeokoka?: Only aged whiskey.. Share the link where I said nimeokoka.. Im interested..
KQ ABP 4.26
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Rank: Elder Joined: 6/23/2009 Posts: 14,213 Location: nairobi
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sqft wrote:obiero wrote:Monk wrote: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?
@sqft If I'm not mistaken, Obiero is a self-declared trader and not a dividend hunter on the NSE. His amount of investment here is not representative. Some Wazuans here like @Stocksmaster have proved repeatedly that combining dividend investing and trading volatile stocks can earn you much more than the 10% you used as a reference. Some Income investors too earn much higher DYs than 10%, based on their ABPs and duration of holding. Think of those who've held Safaricom from when it was ranging at Ksh 3-5, and accumulated large quantities. Today they make at least 30% annually. Only 5% of my total investment rests at the NSE at any given time.. Sometimes it dips below 3%.. I would never invest more than the said percentage as stock trading carries possibility of sudden total loss at worst or severe erosion of capital at best, but during good times you can also make a killing. I am a trader through and through for the capital gains. The dividends I drink with @maka Seems @mugundaman was right that the NSE is a casino. Nothing can be more false..
KQ ABP 4.26
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Rank: Veteran Joined: 7/3/2007 Posts: 1,635
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While I don't deny that one can make a decent income investing in the NSE, I think it takes special talent to do so. I am a good example of this. When I joined Wazua (or SK as it was called then) I had big ideas about creating a balanced portfolio that would earn me 300K per month, which is what I estimated would guarantee me a comfortable retirement one day. I was an attentive observer of many of the investors here. However it took me a very short time to realise that investing required at least two sets of talent, which I did not have: attention to pattern, for momentum investing and attention to detail, for value investing. And patience. After making many mistakes and losing quite a bit on the NSE, I had to admit I was simply not good at this game and I should try something that I could at least partially understand. I moved my attention to real estate investing. Despite its problems, and there are many, real estate is something straight forward and I have made some progress, to the point where I am gradually approaching that 300K monthly income that I initially envisioned. It has taken me 10 years and a base of about 30M in (mostly borrowed) capital invested (so that 10% yield is not too far off). Could I have made better returns investing that 30M in the stock market? Maybe, but for me, it would have taken luck or market manipulation and I am not sure either is a good strategy. In any case I didn't have that 30M to start with and if there is one lesson I have learned from Wazua it is this: don't invest in the stock market using borrowed funds. As for the NSE, I now use it like a bank account. I buy shares expecting to sell them when I need the money (whether they are up or down) but hoping to get a better return than from a fixed deposit. "The opposite of a correct statement is a false statement. But the opposite of a profound truth may well be another profound truth." (Niels Bohr)
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Rank: Elder Joined: 12/7/2012 Posts: 11,935
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With time you learn alot as pertains all investments (which includes NSE). We have moved from going to a brokers office and being told to buy 'whatever'  , to buying/selling recommendations done by others to currently doing your own research and making your own decisions. At a point, i was holding 23 different shares in all sectors including PAKA mwenyewe!!!! but this has been trimmed down to 3 long term (BAT, Stanchart and ABSA (starting to exit this one because of recent changes) and 3 entry and exit positions (Equity, KCB and Kenya Re//Safaricom). (I have a substantial holding of Coop Bank which i got as a labourer inside priced at less than 1 bob which i forgot about/don't even count them as investment_including the bonus issues which have made them X1.6 //). Nowadays am very strong on what i do that am not easily swayed by herd mentality. I bank on volumes with certainty than running around chasing a share - we did lots of that during Kibaki era. I would rather an opportunity passes me if i didn't research on it. Another thing is that i exit when my target is reached, at least partially, regardless of the market sentiments. Of course once in a while the devil comes in and brings temptations and you burn to recognition - ARM . I swore that was the last. Lastly i don't watch my shares every day but then again i dont go to sleep_ keep update with information and general happening. However, i undertake periodic reviews of positions. People also hold other forms of investment, sio NSE pekee, including tuplots but we don't shout about it. 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: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Angelica _ann wrote:With time you learn alot as pertains all investments (which includes NSE). We have moved from going to a brokers office and being told to buy 'whatever' , to buying/selling recommendations done by others to currently doing your own research and making your own decisions. At a point, i was holding 23 different shares in all sectors including PAKA mwenyewe!!!! but this has been trimmed down to 3 long term (BAT, Stanchart and ABSA (starting to exit this one because of recent changes) and 3 entry and exit positions (Equity, KCB and Kenya Re//Safaricom). (I have a substantial holding of Coop Bank which i got as a labourer inside priced at less than 1 bob which i forgot about/don't even count them as investment_including the bonus issues which have made them X1.6 //). Nowadays am very strong on what i do that am not easily swayed by herd mentality. I bank on volumes with certainty than running around chasing a share - we did lots of that during Kibaki era. I would rather an opportunity passes me if i didn't research on it. Another thing is that i exit when my target is reached, at least partially, regardless of the market sentiments. Of course once in a while the devil comes in and brings temptations and you burn to recognition - ARM . I swore that was the last. Lastly i don't watch my shares every day but then again i dont go to sleep_ keep update with information and general happening. However, i undertake periodic reviews of positions. People also hold other forms of investment, sio NSE pekee, including tuplots but we don't shout about it. My approach is similar though i combine with technical analysis to gauge entry/ exit levels. Life is short. Live passionately.
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Rank: Chief Joined: 1/3/2007 Posts: 18,346 Location: Nairobi
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@wakanyugi - There is a book by Malcolm Gladwell https://en.wikipedia.org/wiki/Outliers_(book) worth reading which I believe explains your experience. Leveraging can provide outsized returns but also huge losses. https://www.cnbc.com/201...erage-is-the-worst.html
@AA - Our experiences are similar! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 6/23/2009 Posts: 14,213 Location: nairobi
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Angelica _ann wrote:With time you learn alot as pertains all investments (which includes NSE). We have moved from going to a brokers office and being told to buy 'whatever' , to buying/selling recommendations done by others to currently doing your own research and making your own decisions. At a point, i was holding 23 different shares in all sectors including PAKA mwenyewe!!!! but this has been trimmed down to 3 long term (BAT, Stanchart and ABSA (starting to exit this one because of recent changes) and 3 entry and exit positions (Equity, KCB and Kenya Re//Safaricom). (I have a substantial holding of Coop Bank which i got as a labourer inside priced at less than 1 bob which i forgot about/don't even count them as investment_including the bonus issues which have made them X1.6 //). Nowadays am very strong on what i do that am not easily swayed by herd mentality. I bank on volumes with certainty than running around chasing a share - we did lots of that during Kibaki era. I would rather an opportunity passes me if i didn't research on it. Another thing is that i exit when my target is reached, at least partially, regardless of the market sentiments. Of course once in a while the devil comes in and brings temptations and you burn to recognition - ARM . I swore that was the last. Lastly i don't watch my shares every day but then again i dont go to sleep_ keep update with information and general happening. However, i undertake periodic reviews of positions. People also hold other forms of investment, sio NSE pekee, including tuplots but we don't shout about it. This is good. But an undeveloped plot in Kathumaini isn't really a solid investment.. Best bet on real estate is in suburban areas
KQ ABP 4.26
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Rank: Veteran Joined: 1/10/2015 Posts: 961 Location: Kenya
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Wakanyugi wrote:While I don't deny that one can make a decent income investing in the NSE, I think it takes special talent to do so. I am a good example of this. When I joined Wazua (or SK as it was called then) I had big ideas about creating a balanced portfolio that would earn me 300K per month, which is what I estimated would guarantee me a comfortable retirement one day.
I was an attentive observer of many of the investors here. However it took me a very short time to realise that investing required at least two sets of talent, which I did not have: attention to pattern, for momentum investing and attention to detail, for value investing. And patience.
After making many mistakes and losing quite a bit on the NSE, I had to admit I was simply not good at this game and I should try something that I could at least partially understand. I moved my attention to real estate investing. Despite its problems, and there are many, real estate is something straight forward and I have made some progress, to the point where I am gradually approaching that 300K monthly income that I initially envisioned. It has taken me 10 years and a base of about 30M in (mostly borrowed) capital invested (so that 10% yield is not too far off).
Could I have made better returns investing that 30M in the stock market? Maybe, but for me, it would have taken luck or market manipulation and I am not sure either is a good strategy. In any case I didn't have that 30M to start with and if there is one lesson I have learned from Wazua it is this: don't invest in the stock market using borrowed funds.
As for the NSE, I now use it like a bank account. I buy shares expecting to sell them when I need the money (whether they are up or down) but hoping to get a better return than from a fixed deposit. I think you can't go wrong with real estate. I remember @matatamingi saying he's now retired at the coast but the house he bought in Lavington many years ago is giving him >300k per month in rental income. That is some nice pension as you soak in the sun and enjoy the breeze . Proverbs 13:11 Dishonest money dwindles away, but whoever gathers money little by little makes it grow.
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