So called financial experts always want to remain so complicated and they have been busy telling yours truly that he knows nothing about business and finance. Well, what do you expect from insecure folks?
That is okay and I have no problem with it. Although the truth is that I was once editor of a very successful financial and business monthly for over 2 years (but do I say?)
Let me indulge my "ignorance" on complex this-is-not-a-fish-market-stock-market-issues for a minute, if you will allow me.
If you want to be a successful investor the first golden rule is never invest money that you cannot afford to lose. NEVER. And that is precisely why it is not a good idea to take out a loan to buy shares.
Most of the people who are going to invest in Safaricom will completely ignore this golden rule for investors, that is if they have heard it.
Let us be blunt here folks this thing is being driven by greed, the same greed that has brought Kenya to its' knees. If I was president the first item in my agenda would have been how to resettle IDPs, not a huge IPO that puts money into the pockets of my backers. But then this is Kenya.
But my point here is quite simple. Shares prices can go up... and they can also go down. Everybody seems to have forgotten what happened to the Kenya Airways shares when they were first floated to the public some years back. The same greed that I see now was there then. It put people into a lot of trouble with loans that they couldn't pay and yet the share prices could not cover the loans because prices had gone down from Kshs 11 up to kshs 7 at one point.
Now I am aware that Safaricom is an extremely profitable company... for now. But there is nothing to stop those shares slipping in price, especially because everybody seems to want to do the same thing (except the fatcats who have some elaborate scheme that is heavily dependent on the public going crazy over the shares).
Now that many Kenyans have chosen to ignore the moral issues about this share issue and have instead chosen to quote "stock experts" some of whom were once called Nyaga Stock brokers, my advice to them is purely financial; don't spend money you don't have.
P.S. If only people knew who Mobitelea are and the characters who are really pushing the Safaricom IPO, they would throw up, I guarantee. Just to give you a hint some of the characters behind the scenes have been responsible for the collapse of once prosperous public companies, sending thousands of Kenyans to the streets while their own accounts have fattened by double digit million figures. Kweli Kenyans never learn. Keep it Kumekucha and you will gradually get to know a lot of fascinating stuff. Even Kumekucha is scared sometimes to reveal some things.