Millenials Investment 101: Gamuchirai Tsokota
On Tuesday afternoon my editor came into the newsroom holding a newspaper specifically pointing at the Zimbabwe Stock Exchange price sheet. “Pick five counters,” she said.
You can can imagine the confusion that l was going through. I just had to pick counters and I did not know why.
I obediently picked the requested five counters which are Simbisa Brands, Masimba holdings, Ariston holdings ,British American Tobacco Zimbabwe (BAT) and First Mutual holdings .
My colleague, Blessing, also had to make a pick and he went for OK Zimbabwe, Econet Wireless, Fidelity , CBZ Holdings and Zimpapers.
With us picking five counters each, she then explained that we had virtual $10 000 each and have to invest $ 2000 in each company and this was a competition between the two of us.
When l heard the word competition it hit me that I had made the wrong move. Although l had picked big and well established companies I realised that the shares of these companies are not that liquid.
The competitive girl in me really wanted to change counters so l asked for the opportunity to do so. Unfortunately that opportunity was not availed to me.
So here l am working with five of Zimbabwe`s best and well established companies that are mostly sitting ducks in terms of share potential.
You may ask what was going through my mind when l was picking these companies. I plainly focused on the names not once did my eyes move to check the share prices I was just interested in the big names .
The reason l chose Simbisa was mainly necessitated by my love for food. There is a saying once a foodie always a foodie so at that time l was totally thinking of all the Nandos , Chicken inn and the sea food l can get and it was almost lunch time after all.
For Ariston holdings it was mainly because of my interest in their products. If you have seen the recent prices of apples in the supermarket you would agree with me that this was a win right?
With First Mutual Holdings the pick was influenced by their big fancy and flashy buildings not to mention their nice uniforms. The First Mutual people just seem to have everything under control.
BAT Zimbabwe? For this one it was all about the money; the golden leaf ranks second on the foreign currency earners and now with value addition the company seems to be sitting on a money bank so in short my love for money made me make the pick.
I had to save the best pick for last. I picked Masimba because I like the name and that is all l am going to say here.
Now that you all know the reasons why l picked those counters, we can all agree that at the time l was not thinking of investment at all. This now leads me to the next part of my story which is the realisation that l made unwise and uninformed decisions.
Simbisa shares were going for 125,24 cent , with my $ 2000 investment I acquired 1596 shares. Masimba share were at 13cents /share and l accumulated 15 384 shares. Ariston shares were at 5.64cents and I accrued 35 460 shares .First Mutual shares were being sold at 18 cents and l attained 11’111.I got the least number of shares from BAT where shares were going for $35 and l got 57 shares.
So now that I am an investor in five big companies I have decided to share with you a brief history of my investment experiences.
At the young age of 24, I did not start my investment career this week. It all started when I was 11. Although this investment is quite different to me it qualifies as an investment. Back then I was a weakling who had a very sharp mouth so I invested all my money and food into protection. My experience from this kind of investment was not good because I always went home with a good beating; they always waited for the moments when I was alone.
Moving on to serious business. Last year, l made an investment towards a tailoring and design business and so far my experiences are good because it is a way of earning a second income without having to stress myself as there are other people responsible for the day to today running of the business.
In this article l am sharing six easy steps that will help beginners to make informed investment choices.
- Will the industry grow in the future– when making a choice one must take time to study the growth pattern of the company they wish to invest in. Companies with high growth potential are to be considered for investment.
- The company with the best performance –although it is hard to pin point the best company one must know at least the top three companies in terms of performance and make a pick after evaluating the company using all of the 6 ways provided.
- Quality of the products or services– the better the products the better the investment.
- Check if the business model and balance sheet is sound – this will help you to find the best company to invest in.
- Do a background check on the company`s stock history– For this one it is key to choose stocks that have a history of having stable upwards trend .
- Personal experience with the company – this also helps for example l like buying food at restaurants that are under Simbisa and l have a good experience with them thus l chose to invest in the company. However ,it is key to point out this should come at the last because having a good personal experience alone does not cut it if the company does not check out with at least four of the above ways to pick a stock
It is however, important not to undermine the economic recession that the country is experiencing with foreign currency shortages and high inflation. Now the stock market is one of the investment options that will preserve value for investors in times like this. And its no wonder that it is currently trading in record territories with the Industrials Index having surpassed its all-time high this week when it traded past the 700 level. The majority of the counters have now reached record highs and some investors have made returns, which are well above inflation.
This column will mostly focus on investments with particular emphasis on what millennials my age can invest in. Until next time, happy investing!
