Home ECONOMY Investing In Stocks: The Power of Visionary Leadership

Investing In Stocks: The Power of Visionary Leadership

by biasharadigest

One of my favourite movies is Christmas Story and it has this favorite line, “they looked at me as if I had lobsters crawling out of my ears”. Visionary leaders can take businesses to heights never dreamt of before. Safaricom became profitable in only 3 years of operations, thanks to the vision of Michael Joseph, the company’s first-ever CEO. He took mobile services to the masses with per-second billing, something that we now take for granted.

Visionary leaders can go against all odds and create incredible businesses. When you invest in a business, you are partnering with its leadership and investing in its CEO. It is therefore important to do some research about the company’s CEO and the top management before committing your hard-earned money to the company’s shares.

So much of investing is about the numbers and patterns, comparative analysis and historical patterns. Visionary leaders break the patterns. In Just 2 years after becoming a full-fledged bank, Equity Bank had its 1 millionth customer. Two years before this customer would probably not have been able to open a bank account in the Kenyan financial services sector. Venture capitalists like to think in multiples of 10X. Equity Bank and now Equity Group Holdings, has seen its assets grow more than 65 times since 2004. That is what the vision of Dr. James Mwangi and the bank’s top management and the board has yielded. Those who bought Equity Bank stocks during its listing at the NSE have made gains of over 10X in share price appreciation and dividends.

Dr. James Mworia is only 42 year’s old and he has been Centum’s CEO for 12 years. During this period, the company’s assets have grown more than 12-fold to KES 101 billion as at the end of the 2019 financial year. When you invest in a company you are making an assumption that the people in charge are going to grow your investments not just above the inflation rate but with significant margins.

Bob Collymore and Joshua Oigara both shared a similar challenge of taking CEO roles from CEOs who had made great strides with Safaricom and KCB respectively and they both embraced the challenge and create new levels for the two companies. When Joshua Oigara became KCB CEO in 2012, the bank had only 1.28 million customers. This has since grown to 17.4 million as at 2018. The bank lent KES 159 billion on mobile in the first 9 months of 2019, more than the rest of the over 40 commercial banks combined. During Bob Collymore tenure at Safaricom, revenue grew 2.6 times while profits grew by approximately 5 times. The share price grew more 10X to KES 30.

Steve Jobs brought music to the consumers using the iPod. Apple’s stock grew by 2500% during his second stint as the company’s CEO. Visionary exists everywhere. Try selling something online and your moment of truth will come when trust issues start to crop up. Jeff Bezos, the founder of Amazon, started by selling books online. He now sells virtually everything on Amazon including computing services. He created a company centred on customer service and innovation. I recently ordered an item on Amazon and my previous experience with e-commerce was turned from an ‘order and pray’ situation to a delightful one.

The 3 tenets of growing wealth as has been illustrated in many great books on wealth creation such as the 1926 Masterpiece, The Richest Man in Babylon by George Clason, are earning an income, limiting expenditure and investing. All our bills don’t come from one place so shouldn’t our income. Investing in companies with visionary leaders can make our dreams of growing our income become realities.

Some of the best companies in Kenya have been led and run by great thinkers and visionaries. “Those who are crazy enough to think they can change the world usually do.” Steve Jobs

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