I have been investing in securities for the last 2 years on a moderate level and I have learnt so much from this forum.

However, some of the logic advocated by some of the distinguished members seems to make absolutely no sense especially from self proclaimed Warren Buffet adherents, case in point Obiero.

On this post, http://wazua.co.ke/forum...990&p=4#post788100, the esteemed member points us to invest in Sanlam based on a previous bull run of the stock that saw it rise from 19 to Kshs 90. This goes directly against Warren's rule book, that past performance is not an indicator of future performance. Even then, the member goes ahead to point out that his basis of opinion is ...waiiit for it...'Projections.. I pick the bottom'. I mean the main point of The Intelligent Investor is that the speculation and investment part of your brains should totally be kept apart.

Sure, I may miss out on this gem just like KQ, but for me even if the price was to shoot upto Kshs 90, for sure it would not be because I made an investment option but rather it would be out of sheer luck.

The only 2 meaningful insurance companies seem to be

1. Jubilee
2. CIC

Britam was a good choice but the debt levels at Kshs 9bn are too staggering for me.


Anyway, comes to my summary.

I never invest in government stocks that are run as 'government parastatals'. This is because even if they have the cushioning of government bailouts in case of f***-ups, you must agree that they are way more susceptible to corruption etc. So I am very sad to have missed on KNRE, KCB, Kengen and Kenya Power.

I would love to hear the opinion of the elders here on the following plays that I am looking forward to making as we commence on the upcoming bull which may already be with us.

I love diversifying my portfolio across a number of sectors.

1. Centum - I have never been a DJ believer especially based on his past record at Uchumi and HACO but I have to admit that this company is really pushing it.

- They have a stake in 2 rivers development, the private school at Kiambu they are planning to setup, Vipingo ridge mini city, Amu coal Power plant etc not to mention their investments out of Kenya..notably Uganda

My only fear is that they are over-leveraged but I like the risk the company is taking.

At the current price of Kshs 39.75 they are trading at a discounted P/E of 3.38 and at a P/B of 0.6.

I was hoping to hold this for so long but for now I will only hold upto Kshs 65 which I think will be achieved.

2. CFC Stanbic - I like the DivYld of about 8.3% at the PE of 5.64. I also like the fact that they seem to have ousted NIC bank and Chase Bank as the choice of deposit for upcoming millionaires. Target exit = above Kshs 100

I would prefer EQTY especially due to the consistency the management has presented us in over 2 decades. I mean the fact that such a big bank is embracing tech is the level EQTY is should be applauded.

I am yet to make a decision here.

3. SCAN - I am collecting this at 18.60. Target exit price Kshs 40.

4. For insurance I would prefer to go with Jubilee but I am not sure they can pull a lot of capital gains in the short term. It may be another BAT which I am loosing out on of the purview of being 'too expensive' but anyway, that's that. I will be wetting my feet with CIC. Target exit is Kshs 7

5. Lastly, I am collecting NSE. I am collecting at Kshs 13 with a targeted exit price of Kshs 25.

6. For agriculture, I am accumulating KAPC at Kshs =< 76


I would love to hear what the community has to say.

I agree. Isn't Sanlam already at KES 25. Does @obiero mean that the share will first slide down to 19. This makes no sense.. Atleast @checkyoursix states boldly that Centum will move from 39 to 65 and Scangroup from 18.60 to 40. Watch out, @obiero could easily mislead @wazua investors http://www.businessdaily...937656-clvs10/index.html

@maka like fine wine, we get better with time. it's important to let these young clowns use our names in vain once in a while.. that's how they gain some credibility over time. opinions are like assholes everyone must have one

NSE is cyclical because it follows the index. In a bull market charged by voluminous trades, the revenues sour and inverse is also true in a bear market. PE is at 20 and dividend yield at 1.93. What an investor needs to ascertain is whether the potential earnings in a bull period can bring down the PE to a single digit and in the process raise the DY. In my view this is possible.

There are a number of reasons but I will stick to two.

1. NSE was ranked the worst performing market in the world by Bloomberg: https://www.bloomberg.co...-fall-further-ceo-says.

- As the old adage goes, it does make sense to 'Buy cheap and sell dear'. Therefore, in that respect, we can surmise that this may be one of the best markets to invest in presently especially in the timing of the tides is correct(...which it currently is)

2. I am Kenyan. Makes sense to invest primarily in companies that I know especially since I come into contact with news about 'the listed' companies everyday on television, forums and social media.

I see no sense in investing in the same industry many times while I expect similar projections in the same industry. For example, in banking, I already have CFC and I am picking small bits of Equity to hold over the long term. I don't see any sense in adding KCB.

With regards to NMG, their market share in their core competence(hardcopy newspapers and broadcasting keeps dwindling). I believe a decline in share price of most news publishers throughout the world has been inevitable and that can be seen by just going through foreign listings. Lots of competition with upcoming news blogs, on demand news on social networks and they have not yet been able to attain the same level of success online that they have offline. I don't think this stock can clock the Kshs 200 mark in the near future.

Kengen - I must say I prefer service businesses to manufacturers and industries. Kengen is so capital intensive that I fear a rights issue or two are always in the offing if you hold long term. Now this may not find you at a good financial spot which may lead to dilution. Coupled with the fact that it is GOK run, it is not my cup of tea. I think it's easier for NSE to clock kshs 25 from the current circa 14 than it is for Kengen to clock kshs 15. Kengen has far too many retail investors while NSE has a minimal number of shares that are changing hands hence making it easier for people to hold. Less than 54m compared to 588m from Kengen.

Bamburi - This presents the best alternative for all the listed companies you have mentioned. The DivYld is also quite enticing but the fact that Dangote is busy slaying cement companies in Ethiopia and Tz shows that in a short while he will be here in Kenya to do the same. I think it is a good one to hold for 2yrs but I really doubt it can clock kshs 250.



KAPC was a long holding position for me and more an opportunity to divest. I prefer WTK but KAPC is more discounted and coupled that it is run by WTK it is one and the same thing. I trust the management and I believe they will weather the present drought so for now I am just buying for the DivYld.

Even with the listings I have placed, I seek to trim some of the obviously because money is a limiting factor and I prefer having sizeable chunks rather than small pieces scattered everywhere. This also reduces my brokerage costs

With this in mind, I am dividing my portfolio into high risk and low risk profile

Low Risk - 60% of portfolio

1. CFC Stanbic
2. NSE

High Risk - 40% of portfolio

1. SCAN
2. CARBACID - I can honestly say that here I am just speculating and hoping for the best based on past performance of the share. I believe that this can easily triple my net-worth but at the same time slice it into half. Resistance seems to have held at >12 so I will be taking a swing.


My logic may be flawed as well but ooh well, there is a lot to learn.


The rest, e.g. Centum, CIC I can watch closely from a far and play with as time goes. I am currently holding some KAPC(75) and some WTK(173) which I had bought a while back so I am not looking to add any more presently.

Noted.

I meant why pick small illiquid stocks while blue chips are available on the cheap?

On May 23, 2017 some clown looked down on Sanlam as a stock pick.. Well here is the latest chart. Exchange bar information should seldom be doubted http://live.mystocks.co.ke/m/stock=PAFR