Views on Life & on Equity Investing

Wonder, Wealth & Abundance

10 for long 30 for short, term

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This one is a 3 – 4 year old portfolio in another ASX Australia 🇦🇺 personal account of 8 stocks roughly equal weighted stocks. In this account the CAGR has been only ~10%. 

It is my opinion, and with my skin in the game that I find ASX small caps as the cheapest globally with high quality at this time. Some of my Indian small cap holdings are down 50% from their top tick, but I am not buying more of them at this time. 

My experiment with a 10 stock portfolio and a 30 stock portfolio proved that I am personally better at managing a 30 stock portfolio with fast churns and being relatively lax on some metric or quality whereas a 10 stock portfolio is suited for the long term with no or less churn and high quality. I own now three type of stocks,

A) I will flip in 1-4 quarters

B) I will flip in 1-5 years

C) I will bequeath and not likely to flip in my lifetime. 

The best results have come from A and B above. 

10 stock portfolio does not work for me in terms of delivering the consistency I am after for the institutional imperative. 
C) is like a single decision stock, buy it forget it, other two require more active participation. Not sure what beats in the long term. 

Written by amitdipsite

May 22, 2018 at 6:47 am

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Six in 10 – time for the ASX Dog to Bark

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I was checking an account of my personal portfolio solely for Australia. I have ~15 positions in Australia at this time, in this account there are 10 positions built over the previous 12-15 months.

Remember how Peter Lynch said 6 in 10 is the dream record that he prays for. Well for long term I have found that even 4 out of 10 is also a wonderful record. If six bets can go wrong and the other 4 can make a lot of money, end results can be wholesome.

My 4th biggest position in Australia is up 370% in the previous 12 months. Resulting in average portfolio growth of 27% over the previous 12 months.

Australia

 

Australia/ASX small caps have been dogs in the past two years and I am expecting a come back in a whole lot of small caps at 10-15 PE multiple.  Its now time for the ASX dog to bark or so I believe. London UK stocks on the contrary been dream performers like the Indian small caps were in 2017.

Its  always a bull market somewhere.

Written by amitdipsite

May 22, 2018 at 6:00 am

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How Disruptive tech. is welcomed in society

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Such welcome may apply to robot doctors, nurses, surgeons, teachers, drivers, accountants during our time.

Written by amitdipsite

May 20, 2018 at 1:29 am

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5 years later, success and mistake

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I wrote about a number of emerging market countries/companies in 2013 here https://lifeandequities.wordpress.com/2013/12/24/20-year-investment-as-envisaged-in-2013/ including Unilever Nepal, Presscorp Malawi, GSK, Nestle in Nigeria etc and a few others. The only one I am holding since 2013 is Unilever Nepal now. Unilever Nepal is up 5 times.  I did not buy Malawi Presscorp which is a conglomerate and up 4 times since.

Presscorp

 

 

Mistake: There are only 13 companies listed (http://mse.co.mw/index.php?route=counter/main/listed) on the Malawi Stock Exchange, so I should not have missed another market leader in tourism segment, Sunbird Tourism Limited Malawi. The company is very well managed and up 15 times since. Although in capital intensive sector like Hotels, it has no debt and a 15%+ ROE. I like the tourism sector because when your salary/income goes up 4 times, the tourism expense goes up 20 times.

WHY DID I MISS THIS STOCK ? : Because I had pre-conceived notions of Hotel companies as being capital intensive.

 

sunbird2015

You would think that after the stock is up 200%, you have missed the bus.

The company talks about EPS Growth and not a pie in the sky metric spoken these days in IPOs like committed revenues, annuity income, customer growth.

 

 

Sunbird0

 

The companies bought asset light business such as catering.

sunbird2015_2

The company competes on quality, not price.

sunbird2015_3

Very few companies can claim to have reserves 1,500 times their share capital, eg: MRF India.

sunbird2015_4

Profit of 2.5 Billion is same as Cash Flow of 2.5 Billion, and re-invested into the business.

sunbird2015_5

sunbird2015_6

 

Till date the only company that I have made some money in Africa is Crown Berger Paints Kenya.

Disclosure: Vested interest in positions discussed. Views are personal notions and do not represent any organisation or company. Investment in stock market can (and many a times do) result in loss of principal capital.

http://www.elevendimension-funds.com

 

Written by amitdipsite

May 19, 2018 at 10:13 pm

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NSE Kenya – Govt keen to make shareholders rich

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Government concerned over the lack of IPOs on the NSE Kenya

The short version is that the current executive management has no skin in the game and no shareholding, and the stated signed in blood plan of 2015-2019 CAGR of 40% growth in value  of equity trading ended up being 4% CAGR growth. Honorable CEO should resign.

Another news from today, 18th May 2018. Biggest bank of Rwanda to list on NSE Kenya.

https://www.cnbcafrica.com/videos/2018/05/18/bank-of-kigali-to-list-at-the-nairobi-securities-exchange/

Note in the above video at 33 seconds, how the equity trading in Rwanda Stock Exchange is so 18th century, achieved by pen and white board even today.

rwanda2rwanda

 

 

Written by amitdipsite

May 19, 2018 at 6:45 am

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Nigeria Stock Exchange is dying

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Image of swindlers first comes to mind at the mention of Nigeria. The GDP of the country however, is actually up tenfold since the turn of millennium. 80 companies have delisted in the recent decade leaving the listed to 160.

https://newtelegraphonline.com/2018/05/nse-disquiet-over-spate-of-delisting/

Below is the bar graph of companies listed on the stock exchanges by country in 2016 followed by a table as at 2017 year end.

listed

Number of listed companies
Exchange 2017
Total Domestic Foreign
companies companies
Americas
Bermuda Stock Exchange 55 13 42
B3 SA Brasil Bolsa Balcao 343 335 8
Bolsa de Comercio de Buenos Aires 102 96 6
Bolsa de Comercio de Santiago 293 212 81
Bolsa de Valores de Colombia 69 67 2
Bolsa de Valores de Lima 233 218 15
Bolsa Mexicana de Valores 148 141 7
NYSE 2,286 1,791 495
Nasdaq – US 2,949 2,545 404
TMX Group 3,328 3,278 50
Total region 9,806
Asia – Pacific
Australian Securities Exchange 2,147 2,013 134
BSE Limited 5,616 5,615 1
Bursa Malaysia 901 891 10
Colombo Stock Exchange 296 296 NA
Dhaka Stock Exchange 302 302 0
Hochiminh Stock Exchange 344 344 0
Hong Kong Exchanges and Clearing 2,118 1,987 131
Indonesia Stock Exchange 566 566 0
Japan Exchange Group 3,604 3,598 6
Korea Exchange 2,134 2,114 20
National Stock Exchange of India 1,897 1,896 1
NZX Limited 178 164 14
The Philippine Stock Exchange 267 264 3
Shanghai Stock Exchange 1,396 1,396 NA
Shenzhen Stock Exchange 2,089 2,089 NA
Singapore Exchange 750 483 267
The Stock Exchange of Thailand 688 688 NA
Taipei Exchange 744 711 33
Taiwan Stock Exchange 924 838 86
Total region 26,961
Europe – Middle East – Africa
Abu Dhabi Securities Exchange 69 66 3
Amman Stock Exchange 194 194 0
Athens Stock Exchange 200 196 4
Bahrain Bourse 43 42 1
BME Spanish Exchanges 3,136 3,110 26
Borsa Istanbul 375 374 1
Bourse de Casablanca 74 73 1
Cyprus Stock Exchange 74 74 0
Deutsche Börse AG 499 450 49
Dubai Financial Market 65 51 14
The Egyptian Exchange 254 252 2
Euronext 1,255 1,093 162
Irish Stock Exchange 52 41 11
Johannesburg Stock Exchange 366 294 72
Kazakhstan Stock Exchange 103 90 13
Luxembourg Stock Exchange 168 28 140
Malta Stock Exchange 23 23 0
Moscow Exchange 234 230 4
Muscat Securities Market 112 112 NA
Nasdaq Nordic Exchanges 984 944 40
Nigerian Stock Exchange 167 166 1
Oslo Børs 225 180 45
Palestine Exchange 48 48 0
Qatar Stock Exchange 45 45 NA
Saudi Stock Exchange (Tadawul) 188 188 NA
SIX Swiss Exchange 263 228 35
Stock Exchange of Mauritius 76 74 2
Tel-Aviv Stock Exchange 457 431 26
Total region 9,749
WFE total 46,583

 

Written by amitdipsite

May 18, 2018 at 5:06 am

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NSE Kenya – new listings

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I must have written 20 times on my blog about this Monopoly stock exchange in Kenya. https://lifeandequities.wordpress.com/?s=nse+kenya

The fact remains that majority of the stock exchanges in Africa lack the depth and trading  volume & value is dominated by 2-3-4 big companies, for example on NSE Kenya 3 out of the 62 listed companies account for 80% of trading value. Past attempts at GEM (Growth and Enterprise / SME) have failed in Kenya and this time CMA (Capital Markets Authority) is taking a 180 degree turns to ease listing requirements for multi billion dollar enterprises.

More listings of large companies will diffuse that risk, he said.

Muthaura said part of the explanation to companies is that it may be cheaper for them to raise capital by listing their shares than via traditional alternatives, such as financing from banks or private equity.

Public disclosures that will accompany a listing are another factor making some firms reluctant, he added, as they fear putting out such information risks revealing business secrets to their competitors.

Muthaura says the success of Safaricom shows such fears are misplaced.

“We have four mobile network operators, only one listed. And the one listed one is by far the most competitive and growing the most aggressively,” he said.

Muthaura did not name any companies that might be planning Kenyan listings but said an industry masterplan had set targets of at least three or four listings a year for the period to 2023.

Whilst CMA’s goal is to diffuse the risk of trading concentration in a few counters, make no mistake, my aim is simply to make money by increased volumes in trading activity.

https://www.businessdailyafrica.com/markets/capital/CMA-to-review-listing-requirements/4259442-4564542-sxdetiz/index.html

Stock exchanges are fascinating regulatory beasts that survive the march of technology. In Norway for example 50% of the trading value was in whaling companies (whale oil) from 1920-1936. NYSE also moved across industries like shipping, ports/bridges, industrials, technology. The NYSE exchange evolved from a meeting of 24 stockbrokers under a buttonwood tree in 1792 on what is now Wall Street. It took another 50 years when many investors suffered heavy losses, that NYSE began to demand that companies disclose to the public information about their finances as a condition of offering stock. And now? everybody wants to double their money in SME / IPO listing in 3 months 🙂

In short, I cannot find a single failed exchange business, all listed exchanges are making 10-20-30 year and lifetime highs from Australian Stock Exchange, London Stock Exchange to Johannesburg Stock Exchange. So long as they are a regulated monopoly, how could you NOT make money?

NSE Kenya will start trading in derivatives of the next six months.

https://www.capitalfm.co.ke/business/2018/05/nse-to-pilot-derivatives-market-in-six-months/

So far, since my investment in 2014-2015 in NSE Kenya has not paid off, but I am hoping I am at the bottom of the J curve and that in 20 years from now there will be 1000 companies listed once the momentum picks up. Small dream is a crime.

 

Written by amitdipsite

May 16, 2018 at 5:30 pm

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