#FinanceTwitterJa jamaicaobserver.com/sunday-finance… Let's learn something new and see the power of investing over 20-25 years. We're going to digest this article to an extent, but look at the economic value derived over 20-25 years by holding those shares to present.
NE stated that they bought $JBG.ja 25-30 years ago, but for this analysis, we will cap it to January 4, 1995 (Point X) as the original date where data is available and January 3, 2000 (Point Y) as the starting point for buying the stock at the beginning of the millennium.
JBG was selling for $7 in 1995 (jamstockex.com/market-data/do…) and for $0.65 in 2000 (jamstockex.com/market-data/do…). As of Friday, JBG was selling for $34.59 (jamstockex.com/market-data/li…). Those shares originally valued at $36,000 (9000 units *$7) would be worth $311,310. For Point Y, $5,850.
Thus, over 25 years, the shares bought at Point X are now worth 765% more while those bought at Point Y would be worth 5,222% more in 20 years. Even when factoring in for double digit inflation, the $JBG.ja stock still retained real value compared to any savings account.
Something which wasn't mentioned in the article is the fact that there are thousands of dollars of unclaimed dividends she can possibly reclaim now. Due to most company's articles of incorporation having a 12 year cap on unclaimed dividends, NE would only be entitled to $2.885
per share. Thus, she would be entitled $25,650 in gross dividends. If she was claiming all those dividends from now until today, those dividends would be worth $35,595. For Point Y, it would accumulate to $3.51 per share and would be worth $31,590.
In effect, NE's dividends from Point X would be worth almost the same as the purchase price while Point Y's dividends would be worth 440% greater than the amount paid for the stock. Also, JBG issued bonus shares 3 times between 2001-2003 (jamstockex.com/market-data/do…).
As a result, this calculation is actually understated and is actually higher. Due to the unavailability of information on the JSE's or JBG's website, we can't confirm the true bonus for each year, but either way, any investor at Point X and Y would have benefited greatly.
Thus, NE's simple investment has born so much fruit that it must be quite hard to contain the joy when they learn of the additional shares. The point is that investing in solid companies or investing altogether can bring much higher rates of return than the traditional financial
instruments most of us are accustomed to such as a savings account. It should be noted that @SagicorJa Investments CEO Kevin Donaldson's first stock was $JBG.ja which his father bought for him. He surely must be reaping the benefits of investing from then.
For the other parts of the article, let's discuss those points. In regards to NE saying the brokerage firms only wanting $1 million or 6 figures and up, the firms she visited (including Scotia Investments) are really geared towards institutional and accredited investors.
There are several other brokers including @weareproven @BaritaLimited @SagicorJa @JMMBGROUP which require either no fixed opening amount or a small 5 figure opening amount. In regards to the documents such as 2 references and source of funds, this is due to our KYC requirements
written in our laws and set by @CentralBankJA (boj.org.jm/pdf/What_you_n…) who regulates certain financial institutions while the FSC governs other entities. One cannot go and curse the FI for the numerous documents as it is required by their regulators in order to carry out
business. The 2% proceeds mentioned in the article is the commission charged for the purchase or sale of any equity security traded on the JSE. The commission may vary between brokers, but that fee is a must.
In relation to the ease of transactions for stocks in the USA, one must understand things in context. In the past, you were issued share certificates when you bought a stock which had your name on it and the total number of units. In 2000, the JCSD moved to an electronic
book entry system which made processing orders much easier. As a result, all share certificates should have been surrendered and the shares added to the JCSD account of the individual who owned them. The USA had this process before in changing certificates to an electronic system
So, despite the US having much less difficulty in selling shares at times, this individual had share certificates which had to be processed first before they could be sold. Also, what was apparently not mentioned in the article which I highlighted earlier was the bonus shares and
dividends NE is entitled to receive. I have already informed Claudiene about this via email and sent the necessary links and information so that NE can collect on those extra shares and dividends. If you have a relative or know someone who bought shares before 2000, inquire
with them to see if they got their share certificates converted to a digital form at the JCSD. If anyone is wondering how they can reclaim an old dividend paid years ago, contact the company's registrar (firm which handles this stuff such as the JCSD, PWC, KPMG, Sagicor)
, provide them with a verified piece of ID (Passport, Voter's ID, Driver's License) and a letter requesting that they pay all retroactive dividends paid since you last collected one. They will check, reissue any cheques and you'll be on your merry way. Thanks for staying for this
extended talk. Check out my pinned tweet () to learn how to open a financial account with any financial entity in Jamaica. Some firms such as Scotia require a job letter, but for the other firms, most just require the docs listed in that tweet.
