Legislating the wealthy out of freedom
"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for,that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it."
That quote was by Dr. Adrian Rogers in 1931. A few case studies are out there for your read.
Glorious Investing
Bulls ‘n Bears (BnB) does a lot of reading, particularly after the Sunday church service. Today's investor has a lot to deal with: constant media hype, talking-heads, pundit prognostications, bloggers, and misleading or misconstrued data etc.
The sheer amount of available information produced by the financial media each day is more than most can manage, let alone hope to emerge with a sound investment strategy.
Going through the financial info maze, a Christian financial ezine did catch the eye.
How does “Christian investing” differ from investing generally?
Is it a matter of avoiding all risk? Of refusing to invest in certain companies like BAT, Delta, Afdis? Of seeking out only “Christian” investments?
Actually, a Christian approach to investing begins with an attitude — an attitude of seeking God’s glory.
The interesting lesson from the literature was the conviction that it is ultimately impossible to self-destruct financially if your decision-making is pointed in the direction of God’s glory.
BnB wishes all Chiadzwa’s Mbadas, Zisco, Air Zim and their investments amongst many will be for the greater glory of the Most High.
Don't Blow This Next Opportunity
Chances are you aren't happy with your investment returns this year. That's bad, but there is a bright side. If you know your stock market history, then you know that just as periods of outperformance are often followed by periods of underperformance, periods of underperformance are often followed by periods of outperformance.
That's the tailwind that will benefit our returns for the next few weeks. And if we play our cards right adding new money to the market, capitalizing on the relatively lower transaction costs, reinvesting capital gains, and focusing on superior companies generally, we should be able to look back at the end of June 2010 and say that we had a pretty good half year, investing-wise.
But -- and this is important -- if you want to make the next 6 months one of the best investing half years of your life, you might consider a minor strategic shift…be an active trader.
Buy stocks with a comfort price for taking profit. For example, buy into Zimpapers @1c and set 1.5c as your exit price. A 50% return in US$ terms is just irresistible to lock in. By now the oscillations should be clear in your mind across the bourse.
What Are You Waiting For?
This is an uncertain time in the stock market. The market is always up and down. History has shown that the best times to invest are when uncertainty reigns, or even just after it has quieted down a bit. Students of Fischer Black and Myron Scholes will confirm volatility enhances value of an investment!
Many times, though, you'll run across the following: "If you had invested $10,000 into Innscor or Delta back then, you would have X today." Of course, X is always a large number like $200,000 or $500,000.
BnB don't know about you, but whenever BnB sees one of those claims, he always get depressed. Why? Because he doesn't have $10,000 to invest all at once!
Like a lot of you, BnB makes a modest salary, pays bills and rent, and save for the future. BnB thinks he’s getting ahead when he manages to save a few hundred dollars each month. Then he reads a statement like the one above and he despairs at ever making it.
So what to do?
Maybe you are in the same position, able to save what seems like just a little bit each month. Is it worth investing that little bit? You tell me. A friend of mine turned a measly $520 investment in CBZH into $5,720 in 2009. Granted, it can take years going forward, but what an X that would be!
That's the way to riches -- starting with just a few hundred dollars and combining it with time. Anyone can do that. If you're a student on internship, now is the time to start. If you've been working for a few years, even many years, now is the time to start. Forget the disappointment of Z$ investments. If you've just retired, given the longer life expectancies today, it certainly can't hurt to start. In other words, get started.
The trick, of course, is knowing which stocks to pick. Analyzing stocks takes time. You have to read the annual and quarterly reports, AGM updates, look at margins and returns on equity or assets, and evaluate management. It's a big commitment, and it can be difficult to fit in between work, family, and watching Chelsea thump Arsenal boys’ brigade.
You might need to visit your Fund Manager today!
Will they ever regain the ART of making money?
In a Q1 2010 trading update, ART revenues amounted to $8m split as follows: paper 16%, converting 34%, batteries 20% and the region 30%. Gross margins declined to 25% from 29% while capacity utilization improved with the tissue manufacturing at 79%, stationary 34%, batteries 22% and pens 62%. Guess everyone knows the $10 for 50 nameless tissue pack at the traffic lights in Harare.
However there was no money made in the quarter following losses due to the closure of Mutare Board and Paper Mills (MBPB). The ever so high cost borrowings amounted to $6m at an average cost of 18%. Some ops were mothballed as well. Recapitalisation plans are under way but will this company ever make any meaningful money going forward?
The market is now tired of labeling stocks recovery plays and worse still going on to lose money as the turnaround never comes.
Why not put your c$$$sh where the money can be made right now and still switch into the recovery plays when they indeed do recover?
Reporting season around the corner: Where is the cash at?
BnB would like to remind all investors and the would-be that that "while earnings are an accountant's opinion, cash is fact."
Technology Investment: Hail the MacBook?
Apple Inc. products have always looked funky.
Two weeks back, the world was awed by the IPad, the tablet between IPhone and MacBook.
It is the MacBook that is the subject of this column. Admittedly the ivory colour or white at times is funky and girls scream at the sight of a white MacBook. All motivational speakers and movie stars own MacBooks.
BnB is looking at replacing the HP Compaq and is torn between three laptops and a mini laptop.
The obvious choice would have been an HP 8730w with all the latest communication accessories to fit a virtual company. The alternative would have been Lenovo Thinkpad or a netbook of sorts.
Then MacBook crossed the mind. This is one sort of investment where you can’t use discounted cashflows, maintainable earnings approach etc. At-a-glance we are talking 13.3-inch LED-backlit glossy widescreen display, 2.26GHz Intel Core 2 Duo processor, 4.7 pounds; 1.08 inch thin, NVIDIA GeForce 9400M integrated graphics and Built-in battery.
The price for a MacBook Air is $1499 before any other costs. Wow!
BnB is used to Bill Gates packages and can’t imagine goal-seeking in Lotus 1-2-3 or in Macntosh!
Can someone tell us why BnB’s next laptop should be a MacBook?
Be free to distribute this report so long it is for legally bullish purposes!
Cell: 091 344 1674
Email: bulls@bulls.co.zw
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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report.
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