COURTESY

By Phoebe Achola

Mobile phones and computers are undoubtedly the best forms of communication
we have today. There is, however, a chance that you may be misinterpreted,
when sending a text, email or even making a call. How do you prevent this
from happening?

When making a phone call, it is courteous to offer greetings, then identify
yourself by name and reason for calling. Keep the conversation brief and
straight to the point. Be audible and speak slowly for the listener to
comprehend. If you choose to leave a message, be concise and choose your
words carefully. Before hanging up,politely say goodbye and thank the
person.

Send an email, if you do not require an immediate answer. If it is formal,
do not use acronyms. Your email or text should be short, easily understood
and lacking in unimportant content. Excessive use of punctuation or
uppercase should be avoided as it conveys a tone that may not be receptive
to others. Always proofread your text before sending it.

We would like to be polite and articulate, as we communicate. Having the
listeners or readers interests in mind will help facilitate that.

LONG-TERM INVESTMENT STRATEGY IN EQUITIES-A FUNDAMENTAL ANALYSIS

By Joseph Karumba:

Any investment one makes in equities should be based on concrete reasons. There are two kinds of equities investors namely: short term and long term traders. The former buy and then sell their shares within a short time span, usually ranging from 3 months to even a daily basis (known as day trading). Their gains are based mainly on share price variations due to cyclical events in a company’s fiscal year. What causes share price increase is fundamentally an increase in demand for that particular stock. This surge in demand may be attributed to company announcements such as an increase in profits, a run up to book closure for dividends payout, share splits and rights issues. That is a topic for another piece. The latter kind of investors, hold stock for much longer periods from 5 years onwards. I shall focus on the long term investment strategy in this piece.

The fundamental driver of stock value appreciation is a rise or prospective rise in company earnings. So what contributes to a sound stock pick as a long term investor?

·        A capable high performance management team and a board whose members have both good repute and a wealth of relevant experience. As for the management, one can check the performance of the company if they have been around for a while and if they are new, especially the CEO, one can look into their credentials and performance record prior to joining the firm. A list of these individuals is always available on the firm’s website. Case in point, under Linus Gitahi, the NMG has done tremendously well. The change of guard at the helm of this media company demanded a look into the record of his past performance. Indeed his record at the NMG is at par, if not better with his performance at the Glaxosmithkline, where he worked previously.

·        Current financial standings. The company should be profitable for the current and the past few years for in truth, it all comes down to the earnings. Its assets should be larger compared to previous years-this indicates growth. This information can be found in Q1, Q3, half-year and full year financial results which can be obtained from the company’s website.

·        Is the company’s name a brand within the market in which it plays? Many a times no research is necessary to know this. Their products are known by many and are common in many parts of their market region. Am sure you have heard people say, or said it yourself,: 'Mpesa ya Yu' 'Ile Omo mpya ya Ariel'...this is characteristic of brand products. You will not miss them on the shelves of any supermaket or even small shops countrywide.

·       Understand the business model and check whether the company has a competitive advantage so as to know whether it is sustainable in the long run. For instance, when along came Equity bank, whose model was to serve simply, the needs of the majority of the then unbanked population, many banks in existence then had to restructure their business model- in the long run they would not be sustainable in this Wanjiku economy.

·         Future prospects of the company are also vital. In this criterion you assess the firm’s expansion plans if any and the growth of the industry in which it operates in general. The former can be found in the annual reports of the company. The latter only demands elementary economic analysis. Let's look at the property and infrastructure development in Kenya. This means there will an increase in demand for capital to finance the construction and purchase of these sprouting projects. This means that mortgage service providers, eg S&L under KCB, Housing finance among other financial institutions stand to gain from this opportunity. The cement industry will also supply more cement in line with this demand indicating potential for growth.

The task at the hand of an investor is to find listed companies that have a good combination of the attributes mentioned and explored above. Though a bit taxing, the rewards are worth the effort. It truly is, never too early to start, for the least you can gain is a ton of experience to aid you later on to reap tons of profit.

GENERAL KNOWLEDGE:

Courtesy of Facebook

Lets salute his will power..!!! Please Share it!!

Peng Shuilin had half of his body amputated after being run over by a truck. But he never gave up! His recovery has amazed surgeons after almost two years undergoing a series of operations. The vice-president of the hospital where this 37-year old Chinese man has been treated said: “He is amazing and the only person in the world to survive having so much of his body amputated.” He’s doing well now and has opened his own bargain supermarket - called the Half Man-Half Price Store. That’s incredible.
We should not give up, whatever the situations are. If he can do this, everybody can!

Share it with your friends. We need as much shares as possible for this man and his spirit. Press share button now if you have a human heart.
Remember guys, everything is possible if you set your mind on it...the power of positivity.

GOOD DEBT VERSUS BAD DEBT

By Peter Owaga

Riches: we all want to be rich; we all wake up every morning with one thought in mind concerning our future, “I wanna be a billionaire so freaking bad.” JI like to refer to this as the commercialisation of the human race; where one’s worth is measured by their bank balance. Where we are inundated by archetypes of the power of wealth; from fast and loose cars and women-in that order of course. Then comes the question, how do we get there?

                 

Robert Kiyosaki and many more wealthy people like him who write many books about how they want to make you rich will tell you about the power of debt. In fact, they go as far as to tell you how to distinguish between bad debt and good debt: bad debt is the loan you take to buy a Range Rover sport yet you live in a rented house that is barely furnished; whilst good debt is the loan you take to build high-rise apartments (hopefully there is no one who will come and pull a Syokimau on them. J What they all forget to intimate to the populace is that debt has to be eventually repaid. Be it a loan from Paul taken to pay Simon; a loan taken from a bank to develop flats that will be later be demolished; or even a loan taken from a local Shylock whose interest rates are more exaggerated than Kim Kardashian’s assets.

Repayment of loans is what drove the United States of America to a recession that caused ripples all across the globe. This was a perfect depiction of the saying that goes ‘when a giant sneezes, even the flies get a cold.’ So, how did this Goliath fall? Simply put debt.

The CMA is in the process of putting across a bill that will see the transfer of loan default risks from the banker to the securities holder. This will see the banking sector receive a much needed boost; by enabling a highly charged asset backed securities market. This means that if a bank has outstanding mortgages, which initially would mean that before it issues any other loans it had to ask for more deposits (that means no more “mtaani agents” so as to woe customers, no more “look at me, now look at you” advertisements to make you feel bad about yourself). But as is often the case, never look a Trojan horse in its mouth.

While this is a really revolutionary move, what happens in case there is default in payment? This is the exact question that the US had answered in the worst possible ways. It was akin to a baptismal by fire.

In 2008, the various mortgage takers realised that they couldn’t repay their mortgages due to a rise in unemployment. This then led the banks to repossess their homes in an attempt to resell them at a lower price so as to recover at least a portion of their debt. The only problem is that no one wanted to buy the homes. As a ripple effect, people began selling off their homes as banks raised the lending rates for existing and new loans. Before long, the homes became worthless and the banks were left with nothing but a large hole in their pockets.

So, what lessons can we take from this? Quite elementary really. In as much as debt is required to grow an economy, it is like a double edged sword that will swiftly and harshly run through both the creditor and the debtor. With the CBK raising its base lending rates, and in essence causing other commercial banks to elevate their own; most citizens are left wondering whether it is astute to take up that loan. That means that you won’t feel like getting that Subaru Impreza (or is it impress her?) as soon as you get your first job.

What does this then mean for banks? Back to square one. This is the point where banks go back to treating you like royalty as soon as your account reads a certain amount; this means that they come up with some really attention grabbing advertisement. As one wise man once said, if you borrow 50,000 from a bank and can't pay it back, you have a problem, but if you borrow a million and can't repay, they have a problem.

Good day folks!

ART OF INVESTMENT: FASTLANE TO THE BAHAMAS

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By Yvonne Nduhi.

Ever thought of taking that luxurious and exquisite trip to that wonderful destination in the world that you are always dreaming about just to spoil yourself for once? I’m only guessing that like me before my intriguing discovery you would definitely say that the notion was just a fantasy. Not exactly………They can become realizations by just a single word. Investing!

Understanding these fundamentals of investment can instantly tap into a source of profit returns, hence the reason for Kenya’s recent exploitation in this field. The booming development in GDP and further access of the nation’s resources is creating market for investors as well as carefully defined asset allocation criterion that allows for each person to invest in the category best fitted for any investor based on their age bracket, available assets and savings, as well as preference in ease of asset liquidity in case of withdrawals from a certain investment product.

In this young prime of life, why not dare to be bold and invest in equities put up in the Nairobi Stock Exchange or even private equity from corporate organizations. The vast IT world has empowered investors to take up research on upcoming news by the minute and any financial decisions affecting the company. This in turn gives you an upper hand on knowing the worth of your acquired shares hence you are able to decide when to enter or exit any particular stock. Equities however demand a sense of tactfulness since share prices are bound to vary depending on the financial period of the related company. Periodic losses are thus understandable but can be cushioned when accurate and up-to-date information is achieved. After all; it is said that the riskier the venture, the higher the returns are likely to be.

Not too keen on risk? Or maybe you need your assets in a more liquid form where ease of withdrawal is definite. The money market product is the unit trust fund you ought to invest in. It comes about from multiple investors contributing money to form a cash flow fund that earns a daily yield and is compounded annually. Even better, returns are obtained according to one’s own contributions.

These returns are brought about from investment in treasury bonds and bills, fixed deposits; bank calls accounts and corporate bonds which constitutes the acquired money market yield. At this time of the treasury financial quarter, rates are rising especially now that the Central Bank rate is at its peak of 8.00% up over 300 beeps from the start of the year is conditioning the interest and yield rates to go up hence favoring money market fund. Pension schemes are thus encouraged to take up a larger percentage of its investment portfolios under this class as it is unexposed to losses and repurchases for retirement benefits are easily accessed.

Then of course we have the real estate property investment. The hard core of the investment world is what it’s said to be as maximum capital funding is of the utmost necessity since lack it on an oncoming project of its kind may lead to deferment in this investment class. It is without a doubt proven to be the crème de la crème of its asset allocation type with the highest return. Land being its greatest resource in this asset category makes it a natural product, shielding it from depreciation. This thus allows it to scoop the highest demand in the investor market. With the current economy and financial times, land supply is becoming less than its demand bringing about elevated land rates and rents making indulging in real estate worthwhile. Residential, commercial and hospitality property investment are really taking up Kenya’s investment portfolios up a notch as a result of their marketability. In addition, I honestly think property investment, if taken up intently as seen in South Africa and The United States (countries already in the know of its profound ability) can prove to be a rewarding investment for us too.

Laughing all the way to the bank yet? If the above mentioned trail of investments has captivated you enough to take up on action, I am definitely sure you are not just laughing but also stocking up your stacks for that dream expedition that we could only daydream about paragraphs ago. So I am almost sure courage to go big and take a bolder leap to offshore investment is showing up right about now….Voyage Investment seems like it gets better by the level doesn’t it?

We now encounter South Africa’s Hi-Alpha equity fund, interact with Standard & Poor‘s stocks in USA as well as Nikkei’s from Japan. Corporate bonds from Italy are also an option. Here nonetheless, one needs to get their facts straight and as they come pertaining to the desired offshore product as they are recorded to be the highest to succumb to risk volatility. Recent incident has demonstrated the need for this. Mishandling and insufficient funds in the Greece bond in the previous financial quarter resulted in Europe positioning them in a debt crisis whose impact was too much to handle; and in an effort to cushion the situation, it pulled the Euro currency down.

Other forms of investment that are hardly ever exploited in Kenya but can prove to be of promising and economically uplifting outcomes if only keenly looked into through constructive and innovative business strategies are viewed next. Commodities like gold ,oil and copper with  derivatives, a foreign exchange investment  approach  that deals with currency and bank rates negotiations is invested in by developed countries and  go a long way to raise them  economically allowing them to have empowering financially dynamic nations, but with the necessary concerned skills acquired for exact investment propositions involving these asset allocation kind.

Now that we have the bigger picture in mind, let’s put this initiative to practice. With the credit crunch going on, not just in Kenya but globally, it goes without saying that a hands-on participation to put together an investment portfolio best suited for your standard of living is necessary. This will in turn go a long way to help withstand recession and crises that are threatening to emerge. In this investor’s ‘playground’, the silent rule  that more often than not seeks to stand states that aggressiveness in this realm rewards BUT extensive research skills and an insightful way of thinking must go alongside it making it the yang and yang of asset allocation. Who knows, the next Warren Buffett is most certainly reading this ready to tap into ground breaking and unexploited investment propositions that this dynamic world has to offer. Still thinking the dream vacation is a fantasy? Not quite. See you in the Bahamas!