‘Winter is coming!’ That was Ned Stark’s cry throughout the first season of Game of Thrones and this theme carried through to the end of season 5. Now we are in season 7, indeed winter has come and it came first for House Frey. Don’t worry, I will spoil no further.
‘2008 is coming again!’ was our collective cry since the day VaMangudya announced bond notes early last year and this theme carried through the hesitation to introduce the ‘innovation’ until the notes of bondage finally came in November last year. This cry persisted through the false stability weeks, we all knew the shoe was gonna drop. Just about eight months later, 2008 has indeed come again and it came first to yours and my house. Don’t worry I will speak doom no further.
So then what? The biggest question on our minds must be how to preserve value within the confines of the law. There must be a way to hack this system somehow mustn’t there? I believe there is always a way. I will issue the disclaimer now: I am not an expert, I am just one opinionated guy who is also looking to hack my way into securing a future for my family in these turbulent times and here I will present what could be an option.
I think investing on the capital markets could be a good way to store your hard earned 2008 rebirth hustle money. I shared here how I fared just prior to 2008 and how I then panicked in 2008 and sold my little portfolio because I thought 2008 would erode my assets and burning would preserve them. Turns out I was totally wrong, attempting to burn when everything had already been burnt and dusted eroded my little treasure and had I stayed on the ZSE I would still have value even now.
Hear me clearly, I am not speaking evil of burning. I actually don’t see any moral argument against burning money, it’s economics actually. However, there is a legal position on the practice and therefore tread carefully. But say you are burning and you say to me, ‘man this is #MyZimbabweHustle.’ I will respect your hustle but I will be keen for that hustle to ultimately result into some medium to long term value for you and your family. I think the capital markets could be the place for that to happen.
Right now stocks are grossly underpriced on the Zimbabwe Stock Exchange and that is why there are a lot of side deals and often involving outside investors. Right now on the exchange, the total market capitalisation is less than the total value of net assets. What does it mean? It means if you have the money to buy any one company basically (on the stock exchange that is – Techzim ain’t for sale baba) and you sell all that the company owns you will make money, lots of it actually. The price of the stocks does not even come close to reflecting the real value of the business.
As Kiyosaki says, you make money when you buy not when you sell. When you see that companies are underpriced it shows you that there is great opportunity and potential that those prices will rise again. The catch is that you can’t certainly know when the prices will rise again and also you don’t know certainly which company is a good buy in the first place. No matter how cheap, a heap of garbage is not worth your bond notes.
How do you circumvent this? I will repeat what I said the last time – invest in knowledge. Study as much as you can and you will know how to spot these things. A good study of Buffetology (Warren Buffet strategies) is a good place to start. Analyse the landscape for yourself and determine what you consider to be the time frame till the crazy settles down and craft up a strategy.
These articles and videos will only explain some of the terms and provoke you to think about what you could do. The decisions remain yours and of course you must also seek out trustworthy experts and advisors. Be careful about their incentives though, remember brokers make money when you move your money around but you don’t necessarily. I have not talked much about treasury bills and other types of bonds – this is a long series so stay glued on. I gat ya!
Now that winter is finally here in season 7 let’s see who will survive RR Martin’s blood thirsty pen – that guy kills off characters without conscience. The Zimbabwe economy can be just as brutal, ask the thousands that had money in Time Bank or the millions that woke up and could not take their money out of the bank. When the stakes are against you at such levels you have no choice but to hack it. Good luck.
7 comments
You do not secure your future by drinking sweet poison, it will quench your thirst quickly but other complications will not be far behind.
People have money in their accounts which they can’t access and they can’t take it outside the country. Should they just leave it there under the assumption that the Zim markets are sweet poison? Meanwhile foreign institutional investors are investing on these same markets…
It’s a catch 22 man, and this could be one of the ways out, though admittedly not fool proof
Please also cover news like this from a more technical angle: http://source.co.zw/2017/08/old-mutual-commissions-57-mln-power-plant/
Buffet buys when everyone is selling but believe you me the gentlemen is clever. He buys apple amazon and tesla. In zimbabwe techstocks,multimedia and telecoms,are ok. Their smoke belching counterparts are a risk unless if you are a huge buy hold and control type of investor. The equipment in zim is old z,they have huge overheads because of limited ops and sadly they are accumulating debt especially associated with labour and debt servicing. Its a fix difficult to get out off. Finance is ok ,its struggling but recovers quickly and good for medium term to long term investors.
I still don’t get how you assume there’s value in these stocks…. Yes if you can’t get money out then the best thing is park in stocks… But that’s only as a last resort…. And as more people catch on to it the prices will naturally rise and the bubble will burst… The value bring derived from not getting your money out…. Not actual value… Outside investers are using their investment managers to just park their excess…. The reality is this they are converting their hard earned USD to bond and who knows what rate that will be sitting at…. While I admire the writers optimism people know what happened in 2008 and this time they won’t get that artificial value…
One last point of we a real investers then we should look into farming… All that land lying idle is just as good as the stock market… But required actual work… Hence zimbos will always be hustling…. Seriously 300 per tone of maize what more do you want
The question is 300 what per tonne? Its not USD300 unless you can export at that price and get paid offshore. The reality is that the country has become insolvent and there is nothing any one person can do about it. It is a sinking ship that no individual can save. The best anyone can do is to get out.
Rather why not invest in real estates at least it’s viable, other than the ZSE because honestly it is not feasible when it comes a time to sale your shares or get a payout the money will just depreciate in your bank account and its the same Bond notes that you will be sitting on.