STRAIGHT TALK
MARK BARNES: Investing is easier than you think — the herd is visible now
‘Buy the shares of the brands you love and in the places you shop’
These markets are impossible! Equity and currency markets have become very difficult to predict from one day to the next, but that doesn’t really matter. The first shares I bought were OK Bazaars, more than 35 years ago (it was delisted 23 years ago). Besides having worked there during my school holidays as a check-out teller, I noticed that OK was trading at a discount to net asset value. I saw it as a value trade, easy stuff. How wrong I was proven to be. OK lost a lot more money, until it was bought out by Shoprite for R1 and the assumption of various liabilities, another turnaround to follow its success with Checkers. I lost money, but it was a cheap lesson – I’d only bought 100 shares. Fundamental analysis didn’t help me then and I’m not sure it will help you now. The well-established valuation benchmarks of those days have become less relevant.Net asset value, price:earnings multiples, weighted average cost of capital, discounted cash-flow analysis are all still used, but at b...
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