Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Law of diminishing marginal utility in India | Go Nigeria

with 6 comments

Most of the portfolios in India have returned 3x in the past two-three years, lulling us into a feeling as invincible as supermen.

It has become increasingly hard to find value stocks in India. One has to compromise on few important characteristics that are hallmark of a good investment. For me a good investment is one as good as first or second home buying decision. Overpay for 10% grower stock with survivorship traits (super abundance of names like Blue Dart etc.), or compromise on corporate governance, or perpetually live in hope with micro caps.

For the first time in life after 2009, I feel I am awfully short of money and super abundant with ideas to invest. An investment bank just gave us the opportunity to invest in 15 countries in Africa. There are at least 10 super strong heavy-duty companies in Nigeria alone. A couple of monopolies got listed in Africa including one in Kenya in the past one month.

I mean “blink” is the word. You blink once and you have spotted in investment in Africa with one days of effort in each country vs finding needle in a haystack in other countries including New Zealand and India.

Some companies offer compelling long term propositions in Nigeria without steep multiples such as:

CADBURY NIGERIA
7UP BOTTLING NIGERIA
UNILEVER NIGERIA
NESTLE NIGERIA
GlaxoSmithKline NIGERIA
MOBIL NIGERIA

Be gluttonus with these opportunities that are unlikely to cause indigestion. As always it is legal and allowed for anyone to invest in Nigeria if you are part of human race.

http://www.nairaland.com/73940/approved-list-nigerian-stock-brokers

http://en.wikipedia.org/wiki/Nigerian_Stock_Exchange

More detailed writeup on some of these opportunities sometime later.


Good to have a problem of plenty, not complaining.

http://www.elevendimension-funds.com/

Written by amitdipsite

September 20, 2014 at 11:10 am

Posted in Uncategorized

6 Responses

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  1. Hi Amit,
    Have you opened a bank account in Nigeria? I've found Meritrade a good option for broker ,however no luck yet for foreign currency account. Any help in this regard is appreciated. African Alliance is not responsive for any of my request.

    Thanks
    Prasad

    Prasad

    September 28, 2014 at 9:54 am

  2. Dear Prasad

    I have not yet tried opening a bank account in Nigeria, in most of african countries there is a 250 USD charge for a local foreign currency account.

    Regards

    Amit Arora

    October 2, 2014 at 2:36 am

  3. For Nigeria, It is not necessary to Open Bank account. All your money will be parked in Trading account and Even dividends are credited to Trading account. If you sell your holding and on demand basis, Amount will be wired to your India Account. Hence Risk on Our Money is extremely high. You can reach info@morgancapitalgroup.com for more details. they are providing account with less brokerage.

    Karthikraja K

    October 2, 2014 at 1:58 pm

  4. Dear Amit,
    Which one is compelling buy. GSK started exposrting to Ghana from last year. Total is very attractive in Dividend Distribution and PE than Mobil. Please share your views.
    PE Div Yield (%)
    GSK 20.5 2.08
    Nestle 37.4 2.43
    Total 11.5 6.11
    Cadbury 21.2 2.01
    7-up 14.7 1.61
    Unilever 37.8 2.6
    Mobil 17.9 3.47
    Guiness 30.8 3.58

    Karthikraja K

    October 4, 2014 at 12:52 pm

  5. Dear Karthik,

    you are ahead of me in Nigeria.

    Total looks awesome but has been stagnant for a decade – need to understand industry more before committing. GSK looks like no brainer to me.

    Will come back

    Amit Arora

    October 7, 2014 at 8:51 am

  6. Dear Amit,
    Put some valuable hours on reading Annual reports of few Nigerian companies. Total /Mobil both are into only down stream with partially regulated condition. hence Bottom line is not good though Big volume by total. But Both are getting good bottomline due to other business. But i dont understand the reason for Higher PE for Mobil, though they are small. Compare to Unilever and Nestle, I would say PZ cussons and UAC looks very good in valuation. Pl share your views.
    Thank you. I am just exploring what you have shown. I am also learning. Nestle is 1/10 th as per Population Marcap ratio. good room for growth is there. But Nigerians has different food habit which puts Honeywell flour mills in good place.

    Karthikraja K

    October 7, 2014 at 9:00 am


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