Investing In Egypt Stock Market(EGX) 💸📉

My Goals

My goals from investing in stocks are:

Trying to prevent infflation and purshaing power loss by investing in stocks, Meanwhile the infflation rate was 100% the prices were almost doubled.
Get more experience in investing in stocks in order to invest in US market.

My Strategy

I will invest in stocks that have a good dividend yield and a good history of paying dividends.
I would stop losing at 5%-10%.

The First 2 Months (1th Jan to 1th March)

The first 3 months were for learning, exploring the market and getting to know the companies and the stocks. I have taken a 2 courses one for the basics and the fundamentals of investing in stocks and the other for technical analysis. Also I read a lot of articles and watched a lot of videos about investing in stocks.

So through the first 3 months I have learned a lot and I have made a lot of mistakes, However I didn't lose any money it was break even.

My portofolio was:

40% in Saving Mutual Fund(low risk)
15% in Mutual Fund (High risk)
45% in Stocks(Diversified sotocks in different sectors)

March (1th March to 1th April)

After the first 2 months, i got better insight about the market and companies and I have made some mistakes and gain some experience and profits. So I have decided to change my portofolio to be more aggressive and to have more stocks.

My portofolio was:

12% $SWDY ElSwedy Electric
20% $ABUK Abou Kir Fertilizers
15% $EKHOA Egyptian Kuwaiti Holding
10% ORHD Orascom Development Holding
5% ORWE Oriental Weavers
8% $SKPC Sidi Kerir Petrochemicals
15% in Mutual Fund (High risk)
15% in Mutual Fund (Low risk)

The Panic and market crash

That was going well until 15/3/2023 when the market crashed and the was a panic sell i was sticking to stop losing rule at 5%-10% then i started selling all my stocks and i lost 20% of my portofolio.

Catching the falling knife 🔪

They say that the market is like a knife that is falling and you are trying to catch it, you will get hurt, Neverthless I have tried to catch the falling knife becuase i would not how much would it take to recover. it may take weeks or months or years.

Change of Strategy (1th April to 1th July)

After the crash i have decided to change my strategy to be more conservative and trying to make up for the loss. So i decide to buy all of my money with EGX30 ETF. And that was a terrible mistake.

EGX30-ETF is an ETF that tracks the EGX30 index which is the top 30 companies in the market.

Terrible Mistake (Buying EGX30 ETF)

It turns out that the ETF is pre-mature with very low volume and it is not a good investment at all. And it did not move with the market!.

The problems with EGX

The Volaity of the market is very high i think in average 5~10%(+/-) monthly or weekly.
The Volume of the market is very low, the average daily volume is (0.8 ~ 1.5) Billion EGP which is very low. Which means any investor with 10 Milion USD would distrub the market.
There is just one ETF which is EGX30 and with very low volume.
There is a few mutual funds but they do not reveal their portofolio or the Holding companies so they may investing in companies that it does not match my critiria like (Banks and tobacco companies).

However, I still belive the are many chances in the market i did saw some stocjs that did go up 50-70% in 6 months.

Looking for chances and getting back to the fundamentals.

After two week at 1/4/2023 the market started to recover most of the stocks i had get back to the same price before the crash. So I have decided to sell the ETF and buy the stocks again. I started to look for the stocks that have a good numbers(EPS, P/E, P/B, Dividend Yield, Debt to Equity Ratio) and fair price and I have found 3 stocks that match my critiria.

$ORHD Orascom Development Holding (50%)
$ORAS Orascom Construction (25%) (Sold at 1% profit)
$ETRS Egyptian Transport (25%) (Sold at 1% profit)

The recovery and the profit 📈🚀

After 2 months the market started to recover and I have made a profit of 18% and I have sold $ETRS and$ ORAS and I have bought $EKHOA and$ AMOC.

So Now my position is:

ORHD 35% (at some point it was 50%)
EKHOA (-14% loss but i am holding it)
AMOC (-4% loss but i am holding it)

My Portofolio vs EGX30 vs Gold

After 6 months of investing in EGX stocks, my returns was 5.6%(I do belive it is totaly undervalued it should be over 10% at least) which is not bad for such bigger like me in developing marker, However the market was up 19% and the gold was up 50%!.

I did not expect that the gold would be up 50% in 6 months, I thought that it would be a good hedge against the infflation and the devaluation of the EGP, but it turns out that it was a very good investment.

Onward to US Market

I have decided to invest in US market since 1 April And indeed it was different i was more comfortable and matured i already know alot of technologies companies and i have a good understanding of the market.

Lessons Learned

Be patient and do not panic market goes up and down.
Stop losing strategy is very important.
The fundamentals analysis is very important and it is over the technical analysis by far.
It always there are chances in the market, So feel FOMO(Fear of missing out) is not good.
Be patient.
Zoom out and look stock change over bigger time span like weeks or months is more important than looking at the daily changes.
Investing in different time is important, I have invested all at once when the market was at the top.
20% of liquidity is very important to take advantage of the market crashes.
Diversity is very important, But not too much.
Lastlly be patient.

What's Next

I may keep patient and wait until i make profit up to 20% then i will sell and take some profits and adding 2 or 3 stocks to my portofolio for diversity with taking into consideration the companies that have low levels of debt and a good history of paying dividends.