Why real wealth lies beyond those billions

There is a need for society to change perspective on what constitutes success. FILE PHOTO | NMG
There is a need for society to change perspective on what constitutes success. FILE PHOTO | NMG 

There is no denying resurgent investors are having a royal ball at the bourse. Last week saw equities continue the surge—NSE 25, NSE 20 and NASI climbed 2, 1.6 and 1.4 per cent, respectively, bringing their year-to-date performance to 16.9, 16.1 and 16.5 per cent in that order.

Undoubtedly, the heartbreak of recent years seems to be steadily fading into the distant past. Indeed, no investor would like to remember how the markets haemorrhaged a total of Sh398 billion (Sh147 billion in 2016 and Sh250 billion in 2015) in paper wealth—for context, this figure is approximately the cost of the standard gauge railway project.

That said, as we embrace a new dawn, here’s one question I’d like us to ask: What’s true treasure?

Admittedly, though being philosophical in nature, the subject of finding the true meaning of treasure is also a practical one. Let me give it some background. Looking at market events in the past five years, the NSE comes full cycle – equities rise from their 2012 lows (3,200 points), peak at 5,200 points in early 2015 and cycle down to exactly where they began in a mere 12 months.

Blue chips such as KCB #ticker:KCB, Britam #ticker:BRIT and Barclays #ticker:BBK drop more than 50 per cent of their value in the fall. But what is striking was not just the magnitude of the decline, staggering as it were, but also its breadth. Almost every group in the 62-member market-cap weighted index posted losses in the two-year bear run. My point: markets are fickle, yes, but your sense of self-worth should not be.     

Still unclear. Let me break it down. Our contemporary society has some wrong-headed ideas about what constitutes success. We live in a society filled with dreams and aspirations of wealth, a society that likes to believe that money will bring with it happiness and success. Popular thinking holds that a person with a nine-figure portfolio is more important than someone with less; that an investor with a billionaire name-tag deserves more respect than the one without; and, that a man who lost money in the last bear market is less smart than the one who didn’t. This notion of success isn’t just myopic and elitist, but is utterly misguided.

Sadly, we continue down this path. An unforgettable scene in the Wall Street 2: Money never sleeps movie perfectly captures this obsession with numbers. A protagonists, a young investment banker (Shia LeBeouf) asks the chief villain, an old school banker and predator (Josh Brolin): “Everyone has a number and it’s usually an exact number.

What’s yours?  The unashamed protagonist answered “More”. 

Here’s my parting shot. Investors need to cultivate their sense of self-worth outside the figures of their brokers’ report. Markets will rise and fall, fortunes will come and go but your self-worth is worth more than gold. So, as we relish the new rally, let’s refocus on what’s truly treasure. Your life is much more important than a profit or loss.  

Mr Mwanyasi is MD, Canaan Capital Limited. email: [email protected]