2007 Investments thoughts

As they say, in investments, the rear view mirror should be clearer than the front view screen. Looking back at 2006, I am able to view the future with some bit of clarity.

IPO’s
Though I made some little money in Kengen and Scan group IPO,s by and large, I feel that over involving myself in these IPO’s lost me opportunities by having my funds tied up only to end up being allocated paltry amounts of shares. Way forward would be to keep off the IPO’s and concentrate in counters being neglected by the crowds running for the IPO’s in the opening stages and after assessing the direction of the subscription levels to make my move in the closing days and apply for realistic amounts. This way I will avoid disappointments which were so rampant in 2006.

Fundamentals versus Speculation
Unbelievably I made more capital gains in counters with nothing to back them like Sameer, Express, Unga and HFCK than on those based on a solid rock foundation like EABL, BAT, Total, Kenol and KQ. However, in 2007, I will continue to make my money from the shells and hide it in the fundamentals backed companies even though their rise in prices is painfully slow.

Splits
I entered EA Cables at 220[22 post split] and hung on. It’s lowest post split price to date was 42 and it’s on it’s way up. Simply, this is a 100% + rise. I entered ICDCI at 180[18 post split], at the time of doing this post it is 39.25 and rapidly rising; another 100%+ rise. I missed the BBK boat because by the time I was noticing it, there was no supply in the market and in a short while it was too expensive. Point is, you must anticipate a split long before the crowds move in. Expecting to make a kill by buying into a stock at some crazy prices like the poor souls who bought ICDCI at 800 is being too optimistic and will unfortunately increase your chances to get strokes and such like conditions.

Elections
With the rise of political temperatures later in the year the bourse will definitely be affected. Towards the 3rd quarter I expect the activity to have slowed down. This is the time to grab that blue chip you have been craving for affordably because, either way elections shall be done any way and from past experience, other than politicians ego’s and their wallets which get bruised, Kenyans will always move on. 2008 will still see companies making their announcements and investors getting snapped back to the reality that elections were for a limited time and they must get on with their life. You will be greatly rewarded by selling them the stocks they neglected