My Aunty's Boyfriend gave me Rs 1 billion and he wants me to invest this money in the Colombo Stock Market. He wants me to invest this money in good stocks that will give him 100% return within next 5 years. He wants me to invest money in good growth sector companies without downside risk with an opportunity to takeover. He say maximum he could lose is 20% of his investment. If I lose more than 20% then I lose my job!Answer
So I took up the challenge to invest my Aunt's Boyfriend's Money in the following manner. I will reveal how am I going to invest his money. Meanwhile, please feel free to give your answer?
Simple way to win this with your VSTOX game. Can't do in real world but can do in Vstock world.
Solution 1- With 1 billion buy 3.5 million shares of RENU at 280. This will give you 51% and control of the company. As the controller you make the auty CEO and the aunties boyfriend can be made CFO. You make the current CEO stingiah as the tea boy.
Since you have control you start selling the liquid assets RENU has 1.6 billion in investments. You sell that and turn it to cash and with the 1.4 billion in cash on the balance sheet RENU will now have 3 billion total cash.
You declare a special dividend of 3 billion (since you own 51% you get 1.5 billion in cash). Turn RENU into a brothel and make some money for abt 3 months. Afterwards the 3.5 million shares you dump in the market at 100 rupees each. You now have total 1.85 billion in cash. This you invest in a 10% FD and at the end of one year you get 2 billion.
So 1 billion profit in 1 year.
Solution 2- With 1 billion buy 3.5 million shares of SHAW at 280. This will give you 70% and control of the company. As the controller you make the auty CEO and the aunties boyfriend can be made CFO. You make the current CEO as the gardner.
Since you have control teh company you start selling the liquid assets SHAW has 2.4 billion in bank deposits. You turn it to cash and you sell the 770 million in inventories (all ready the company has done it in April). Then sell the investment property of 660 million and pay off the liabilities of 400 million. You can cancel the MOI with UDA for the 10 million USD property project. SHAW will now have around 3 billion total cash.
You declare a special dividend of 3 billion (since you own 70% you get 2.1 billion in cash).
You now have total 2.1 billion in cash. This you invest in a 10% FD and at the end of one year you get 2.3 billion.
So 1.3 billion profit in 1 year.
Two ways to get more than 1 billion profit but only workable in VStock world. Above methods can be used in other low PBV stocks but RENU and SHAW are the best since they have liqid asses.
In real world get the aunty to marry the boyfriend and then feed him to death. Then you marry the aunty and take the 1 billion.