Wednesday, May 21, 2008

Share Portfolio: May 2008

treading water, pre-Safaricom

The Stable



Diamond Trust
Express
KCB
Scangroup
Sameer
Stanbic (UG)
Safaricom (?)
Total

What's changed?
In: Safaricom
Out: ICDCI (Centum)
Increase: none
Lightened: KCB
Dividends expected: Diamond trust, KCB, Express, Total, Scangroup, Stanbic
Unexpected gains/losses: none
Best Performer: Stanbic (Ug), then Scangroup
Worst Performer: Express

Looking forward to: Increasing Safaricom holdings after the expected ⅓ IPO allocation, then Kenya Pipeline, Co-Op Bank (though their service is poor) and whatever other IPO comes along.

Performance Summary: The Motley Fool advises that investors should beat the share index to consider their returns a success. The NSE 20 share index is where it was six months ago: 5,153 (-0.08%), while I’m down 0.44% even after taking some cash out (chucking Centum) to meet unexpected January/February 08 payments and am still waiting for all the afore-mentioned 2007 dividends half way into the year.

Earlier portfolio summaries: - ½ a year ago November 2007 and a year ago.

10 comments:

Jakarumba said...

Cheers once again for Stable Declaration.
How come Access is missing? Ama you attended the AGM as a proxy.
I thought Sameer would be your worst performer, at how much did you buy?
BTW, whats the percentage of each stock in your stable?

bankelele said...

Jakaruma: good question and I'm shocked at the answer (KCB 43%, Diamond Trust 26%, Stanbic 10%, Total 7%, Scangroup 6%, Express 5, Sameer 25) I never realised how dependent I am on the financial sector!
- As for Access Kenya, sometimes i get access to extra AGM's and try to attend as many as possible, time permitting.

Maishinski said...

Banks, don't wanna ruin your day but...

Did you beat inflation?

If not, then your portfolio's net worth has gone down despite the fact that the KSH amount looks relatively constant.

If you were to fully liquidate your stocks today - would you still have the same purchasing power as you had last year?

Add up all dividends to current market value of all your stocks then divide by the price of milk/petrol in 2007.

Now, do the same for 2008 - then compare the two amounts to get a rough indication of your real gains.

If 2008 is equal or less than 2007, then you probabkly took unnecessarily great risks for nothing.

:-)

Too much diversification screws people up. Wins and Losses cancel each other out. Stock diversification is for those who are either too busy or too lazy to keep current on their companies' and industries' performance.

You need to focus everything you have on 2-3 winners only.

Companies that you strongly believe in (i.e. based on long term fundamentals) after factoring in various risks e.g. the effect of kenyan politics (as long as the tibalist MPs are in power)..

Downsize your stock stable if you want spectacular returns.

Invest in other asset classes (property / businesses etc) to help you "forget" your winner shares for 5 years or more.

Keep in mind though, that the less you diversify, the higher the risk of even bigger losses. Hence the need for due diligence when picking stocks and careful periodic health-checks (industrywise and companywise)of your chosen winners.

Na kwa hayo machache, Good luck!

Anonymous said...

Bob Marley's message to ODM supporters:

"Emancipate yourselves from mental slavery. None but ourselves can free our minds."

Self-destruction never benefitted anyone.

bankelele said...

Maishinski: not factored in inflation or dividends, these are just based on price changes form six months ago, less Centum. Inflation has been staggering to say the least with food and fuel the main charges. I don’t intend to liquidate, I use the NSE like the HSX or monopoly money - If I sell, the goal is to buy other shares, rarely cashing out only when I need to (so does inflation factor?) That said I’d like to have more energy shares in my portfolio hence Kenya Pipeline though Government domicnate the entire energy sector, and also focus on four shares, not eight in future

adam cartwright said...

first.. i was in sandton in joburglast month... i think compared to other places in the world it is just plush.. but like someone pointed out to me that place is BUIKT ON THE BACK OF SOME OF THOSE ON THE RAMPAGE NOW MORE AT WWW. PANDEROSA.BLOGSPOT.COM

adam cartwright said...

THIS INFLATION STUFF.. DOES IT AFFECT TAXATION? KIMUNYA YESTERDAY SAID THAT APRIL COLLECTION WAS THE HIGHEST EVER IN HISTORY AND THAT THAT WAS AN INDICATOR OF A RECOVERING ECONOMY. TAXATION IS A FIGURE Based on turn over, because it is based on gross profit ama income meaning that if you charge more because of inflation on goods and service, then ua tax also goes up in tandem. so is he right ama am i wrong?

Maishinski said...

Hi Adam! Yes, I believe you are right.

The government is collecting more taxes - but, as you said, that is because prices of goods have gone up.

Govt cannot do more with its increased collection - because the purchasing power has decreased proportionately!

e.g. Government fuel budget has gone up by approx 25%. Allocating 25% more cash for fuel (due to better tax collection) does not enable it to buy more fuel.

Therefore the Tax revenues Kimunya is talking about are overstated - as they dont factor the STAGFLATION (i.e. effect of inflation + economic slowdown).

Generally stocks beat inflation over time - hence a well diversified portfolio (though not suited for high returns) is far better than keeping money in bonds or idle in the bank - but more riskier.

The real danger for NSE investors is stagflation.

We are currently experiencing some level of Stagflation thanks to our politicians and their fanatical followers.

Maishinski said...

..Banks,

Inflation is always a factor. We all invest so that we can exit at some point in future with some real returns.

Do you have an Exit strategy?

You will have to liquidate at some point if you want to lock in profits - so better plan for exit for each stock in your portfolio.

An exit strategy helps you keep your cool and think rationally in tough bear markets. It also helps prevent you from losing out on gains during bubbles, due to greed.

:-)

Nifty options tips said...

very informative article ..... thanks a lot , i will try to visit again here in the future

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