One golden rule of investing is that timing is everything.

And for Geoffrey Odundo, it was his sharp eye for an opportunity that turned a modest investment of Sh 3 million into a massive return, within a mere three months.

Odundo, who was recently appointed Group Managing Director and CEO of Nation Media Group, spent nearly a decade as the CEO of the Nairobi Securities Exchange (NSE).

However, perhaps one of his most iconic moments came not from his leadership at the NSE but from earlier days as an investment manager. 

On a rainy Friday afternoon in 2006, Odundo was in his office, broke and without a plan. 

“I was sitting there and asking myself, ‘I’m a skilled trader and investment manager. How come I am not making money for myself?” Odundo remembered while speaking during an interview on the Financially Incorrect podcast.

So, he decided to look at the NSE’s stock sheet, determined to find the stock that would make him a millionaire.

And then, he found it. There, staring back at him, was East African Cables, a seemingly docile company but one that he believed had immense potential.

“President Kibaki’s government was on the verge of assuming office for his second term, and there was this boon about construction. And I thought to myself that all these new houses would need electric cables, said Odundo.

Upon further investigation, he discovered that East African Cables had changed ownership, with a new company called Transcentury taking over. He put two and two together and decided that this was a stock to buy.

At the time, East African Cable’s stock was trading at Sh 30 per share.

So, Odundo gathered a group of friends and pooled together Sh 3 million, which bought them a sizeable chunk of shares in the company.

However, things didn’t go as planned immediately. Within two weeks, the stock price plummeted to Sh 11 per share. His friends were understandably nervous, questioning whether they had made a huge mistake.

But Odundo didn’t panic. “I urged them to hold tight and give it time,” he said.

True enough, the stock price began to recover. Within a month, it climbed back to Sh 30, and from there, a bull run began in the market. The stock rallied, and Odundo’s friends began to see their investment grow.

As the weeks went by, the stock surged. First, it reached Sh 90, then Sh 150, and eventually, it shot up to Sh 300 per share. At this point, Odundo’s friends were itching to cash out. But Odundo, ever the patient investor, urged them to hold on just a little longer.

And so they did.

Soon, the stock price soared to Sh 600 per share, and Odundo decided it was time to cash in. “We exited the market and ran for the hills. Some of us used the profits to invest in land and others bought apartments,” said Odundo.

In just three months, the investors had multiplied their investment 20-fold, with the stock price climbing by 10% a day. Had they held on, they would have made even more money, as the share price later reached a historic high of sh 1,000.

Looking back, Odundo admits that he has never seen anything like that again. “In my career, I haven’t seen anything like that. There were IPOs, and everyone seemed to have money to invest. We saw huge surges and extraordinary returns. But since then, it’s mostly been sporadic dips and spikes,” he said.

Despite the success of the East African Cables investment, Odundo now views risk differently. “I can’t stomach the risk today,” he confessed.

With age and experience, he now advises a more cautious approach. His current rule of thumb is to “cream off ” once a stock appreciates by 5%, to avoid the regret of missed profits if the price retracts.

And when the stock price hits 25%, he considers that a good exit point.