Whenever companies publish their annual financials, I always look to the notes on the income section to know (1) how much they made and (2) what exactly they engaged in. Additional detail into the state of the company’s affairs is usually found in the directors report where some entities try to provide information that is more palatable for its shareholders. I recently came across Coca-Cola’s 2014 report and here are some highlights that caught my attention:
- Coca-Cola Life: a lower calorie version of Coca-Cola was introduced to additional markets. I don’t fancy the packaging much but it is definitely a good product for an increasingly health conscious populous
- Fairlife: Through its Minute Maid division, the company introduced an ultra-filtered milk to a couple of cities of United Stated. Talk about bring new meaning to soft drinks!
- Monster Beverage Corporation: Coca-Cola acquired a 17% stake in this +USD 2 Billion business. Explains all the (Monster Energy) cans I have seen displayed in most of Nairobi’s supermarkets
- Share a Coke: Psychologists say that the first thing people write with a new pen is their name. Now you understand the frustration of people not finding their names
- World Cup: Brazil may have not won Bola 2014 but she definitely helped Coca-Cola solidify its presence in the 175 markets it operates in. I am still looking for my name!
Coca Cola’s 2014 highlights took me back to my very 1st entrepreneurship class where our lecturer asked us to write down 50 business ideas we can get from the object ‘knife’. Butchery, slaughter house, knives sharpener, cutlery set, knives holder and that is about it for me. But if you asked me to write down 50 business ideas in areas of passion (art or accounting), I am sure I will come up with much more. I guess that’s how it starts 🙂
if I had a well balanced portfolio, the loss would simply have been absorbed
A couple of years back I bought some shares that were going for $0.75 per share. And boy didn’t the price come tumbling dow
Rule of thumb: buy low, sell high (if I had a well balanced portfolio, the loss would simply have been absorbed)
A year back I took another chance at the stock market after dealing with my previous $0.70 loss. This time though, I asked for advice from a brokering agency. I also sifted through the company’s history and got first hand information on its management and performance. And it wasn’t about being able to prestigiously nod to the sometimes asked question of “do you invest in shares?” It was to genuinely seek ways of getting a return on my ‘surplus’. The shares are still trading at the same about I bought them. No regrets 🙂
Rule of thumb: invest based on values, not emotions
2016! I haven’t put down any money neither do I feel like I have the capacity to do so. BUT I have found so many resources online, on YouTube and on media that are challenging me to positively engage in the business. Whatever business. This stuff has encouraged me to move from the paralysis of analysis and make decisions so as to make the most of the present. And even to understand that it is the nature of markets to take indecent hits.
Rule of thumb: do not invest in what you do not know – George Clason from ‘The Richest Man in Babylon’
Calculating corporate bond returns
Picking up from my previous article, I must say that I have lost count of the number of corporate bonds that have been available in the Kenyan market in the last +12 months and took a form that was somewhat like this:
“13.5% 5 year corporate bond with KES 100,000 minimum to invest”
13.5% x 100,000 = 13,500 is the interest payable annually
This is usually paid out semiannually and so that means 6,750 every half year.
There are 2 deductions to consider in the 6,750 though…
- Withholding tax at 5% * 6,750 = 337.50
- Underwriting charges (because the bond is offered by the bank on behalf of a corporate organization with a capital intensive project e.g. real estate). I don’t know how much it is but it must be around 1% which would be 67.50
Therefore the net amount that would hit ones account would be 63,450 (i.e. 12,690 each year over a period of 5 years)
O yeah and you would get back 100,000 in the final year
If corporate bonds were up for grabs each year… And that an entity (individual or company) invested at least once annually… In deed there would be an endless cycle of positive cash flows!!!