ositadima1:


You are right, shelf companies and overseas assets may be out of reach, but any substantial assets he owns in the USA, he would be forced to vomit.

In the event of a margin call, will the assets outside of the margin facility still be affected? For example if he owns a USD200 million property that was not used as a collateral?

Harvestock01:


In the event of a margin call, will the assets outside of the margin facility still be affected? For example if he owns a USD200 million property that was not used as a collateral?

The loan is based on the current value of his portfolio, although some financiers might need the personal guarantee of the investors.


The problem is with over leveraged position of the trader. Imagine using your personal equity of N10 million to control a portfolio of N50 million by getting an additional loan of N40 million

Harvestock01:


What was the total losses for those who granted the margin loan?

Very difficult for them to make a loss

rmx:


Nah , you are wrong , said net worth , simply means the value of the stocks he had was more than his liability to the banks , at one time by upto 20b $ , till disaster struck and the value of Viacom shares plummeted and the banks came calling on his margin loan

The lesson to learn is take profit and move to other asset class , don’t keep all your eggs in one basket, it clearly shows what other billionaires do . Each to his own , I don talk my own

You make a fair point. But without knowing all the details, it's difficult to say definitively.

It's possible that a portion of his own capital, perhaps $20 billion, was required to be invested alongside the loans in order to access that level of financing.

Harvestock01:


In the event of a margin call, will the assets outside of the margin facility still be affected? For example if he owns a USD200 million property that was not used as a collateral?

Technically, from my research, assets not used as collateral should not be affected by a margin call, but the lender may still pursue lawsuits...

ositadima1:


Technically, from my research, assets not used as collateral should not be affected by a margin call, but the lender may still pursue lawsuits...

It can only happen if the investor gave his personal guarantee, in that case they can go for his other assets and Investments

emmanuelewumi:



Networth is total Asset minus total debt.

Look at 2 people with a networth of $20 billion.


Investor A: Total Asset 45billion, Total liability 25 billion. Networth/Net Asset 20billion


Investor B: Total Asset 160 billion, Total liability 140 billion. Networth/Net Asset 20 billion..


Investor B is highly overleveraged. A 20% drop in the value of his total asset will bring him to bankruptcy.

Most times when the total liabilities is more twice of the networth or net asset, it is very easy to go bankrupt.


Investor A. Total liabilities is 1.25 times of the net asset or networth


Investor. Total liabilities is 7 times of the net asset or networth

emmanuelewumi:




Money Market Fund, cash and fixed income are also liquid, [/b] I guess his networth was tied to market value of his highly speculative stock positions [b]

I shared the story of the guy whose N30 million portfolio turned to N2.5 million at a time when Naira to dollar was about N120.

If he diversified into cash, real estate, personal business and other cash producing assets he would not have been badly hit.

Someone said networth is a lousy metric and cash flow is far better. I guess that contributed to why Warren Buffett is the longest member of the Forbes list. Being there for decades.

Networth fuels the ego, cash flow fuels the yatch, jet and living expenses

The Koko , you should have added that was doing very well initially , nah when the Tide comot him cloths , then the bank came for his unclothedness , I say a lot of times people don’t know banks or bankers till you owe them or default , you won’t see all those there fine fine marketers then

But wait o, 20 billi out of 100 billi, bank go just give you 80 billi do biz and u carry ur own billi go dey diversify for better property.

Haba, na u dey mary bank manager daughter?

ositadima1:
But wait o, 20 billi out of 100 billi, bank go just give you 80 billi do biz and u carry ur own billi go dey diversify for better property.

Haba, na u dey mary bank manager daughter?

Your total Asset is everything you have weather you have fully paid for it or not.

Eg assuming one has a house worth N50 million, cars worth N20 million, jewelry worth N10 million, financial assets worth N10 million, land worth N10 million. His total asset his N100 million.

Assuming he has outstanding mortgage of N30 million on his house, debt of N10 million on his car, outstanding debt of N3 million on his financial assets and yet to balance N2 million on the land he bought. His total liabilities is N45 million.

That means his networth is N55 million.


Meanwhile his total assets of N100 million is held by the bank.

In his case the total liabilities is almost 0.9 times of networths. Provided his sources income is guaranteed he should not have a problem servicing his loan provided he is earning reasonable income

Yoast:
I support loco 100%. You can't be talking of rainfall when the likes of Otedola are packing Dangote shares with bullion VAN. Pull backs here and there, yes. But market crash, NO.

..

Ote, no sabi TA naw

hmm

hayyawithme:
..

Ote, no sabi TA naw

Lol.The billionaires no get time for TA,that is if they even know what it means..They follow the money and political interest .If alhaji could sell fllour for #24 many moons ago even with bad results.I should believe TA that alhaji food will not sell above #100..Do you know how long I have waited for the cement to come to #200

TA na just man made graphics .It only becomes real if you could pull many to believe in it.Then they begin to take decisions with it in mind.After sometimes FA will neutralise its effect and reality will manifest again.

emmanuelewumi:



Your total Asset is everything you have weather you have fully paid for it or not.

Eg assuming one has a house worth N50 million, cars worth N20 million, jewelry worth N10 million, financial assets worth N10 million, land worth N10 million. His total asset his N100 million.

Assuming he has outstanding mortgage of N30 million on his house, debt of N10 million on his car, outstanding debt of N3 million on his financial assets and yet to balance N2 million on the land he bought. His total liabilities is N45 million.

That means his networth is N55 million.


Meanwhile his total assets of N100 million is held by the bank.

In his case the total liabilities is almost 0.9 times of networths. Provided his sources income is guaranteed he should not have a problem servicing his loan provided he is earning reasonable income

He did not have a diverse range of investments and was exposed to a lot of risk. The large amount of borrowing he did made the risk even bigger. It also made him extremely vulnerable if the market went down.

But that is likely how he grew his wealth initially - it is not easy to make billions by playing it very safe. If u doubt am go get your own.

Maybe he should have stopped taking large risks after becoming wealthy, but the desire to be the next Warren Buffett was very strong.

Happy Sunday everyone. So many pages to read. Thank God for the Ogas here.

ositadima1:



He did not have a diverse range of investments and was exposed to a lot of risk. The large amount of borrowing he did made the risk even bigger. It also made him extremely vulnerable if the market went down.

But that is likely how he grew his wealth initially - it is not easy to make billions by playing it very safe. If u doubt am go get your own.

Maybe he should have stopped taking large risks after becoming wealthy, but the desire to be the next Warren Buffett was very strong.

You lose it big if you made it big via risky trading

Agbalowomeri:


You lose it big if you made it big via risky trading

Luck and Risk are co-equal in importance 😊

This is a bit wrong though for bonds....Your capital can fall or rise in relation to interest rates...If newer bonds are issued at higher yields, your capital falls if you demand an immediate sale, If issued at lesser yields than you bought, your capital increases.Investor is only immune if he waits till maturity of which, there are still inflationary pressures

ositadima1:


You bought a stock like UCAP 4 years ago. Last year it returned 57.6% in dividends. The stock kept moving up. Now you look at its current value and see that if you liquidate now and invest in government bonds at 14 to 13%, you stand to get about 128% annually(on initial stock investment).

You want to do it, but you consider that 13% is fixed and once you are invested, neither your capital nor dividends will appreciate (or fall). However, the dividends have no ceiling and if the stock has moved this far, it would likely outperform the fixed returns over time.

You also realize that you may never be able to buy that stock at that initial price again. What would you do?

CC Pa Emma, Mcy56, Agba

ositadima1:



He did not have a diverse range of investments and was exposed to a lot of risk. The large amount of borrowing he did made the risk even bigger. It also made him extremely vulnerable if the market went down.

But that is likely how he grew his wealth initially - it is not easy to make billions by playing it very safe. If u doubt am go get your own.

Maybe he should have stopped taking large risks after becoming wealthy, but the desire to be the next Warren Buffett was very strong.

The BitterTruth is that he was grossly greedy

MeezPat:
This is a bit wrong though for bonds....Your capital can fall or rise in relation to interest rates...If newer bonds are issued at higher yields, your capital falls if you demand an immediate sale, If issued at lesser yields than you bought, your capital increases.Investor is only immune if he waits till maturity of which, there are still inflationary pressures

You can't compare the volatility of bonds with that of equities.

Since the bond pays coupons twice in a year, you have the opportunity to buy more at a cheaper price and better yield

MeezPat:
This is a bit wrong though for bonds....Your capital can fall or rise in relation to interest rates...If newer bonds are issued at higher yields, your capital falls if you demand an immediate sale, If issued at lesser yields than you bought, your capital increases.Investor is only immune if he waits till maturity of which, there are still inflationary pressures

My sister, I was only trying to economize space and mention the most important parts. If I were to explain everything in full, posts would look more like final year thesis.

Good evening , pls what’s the meaning of OS ?

Streetinvestor2:
Do you think TP financial for the yr end will be better than chams.
I don't like companies with too little os.You remember oga oracle mentioning what he went through to sell beta glass even after the rise in price

LILBIMS:
Good evening , pls what’s the meaning of OS ?

OS - Outstanding Shares

LILBIMS:
Good evening , pls what’s the meaning of OS ?

Outstanding Shares, all the outstanding shares of a stock that can lay claim on the profit after tax (PAT). Hence, earnings per share (EPS) is calculated as PAT divided by the number of outstanding shares (OS).

chimex38:
hmm

Time for conoil manipulation will soon start. I like when billionaires fight financially. It makes the ground green

Watch out for conoil going forward

ekkywolex:
https://leadership.ng/odua-investment-moves-to-list-on-ngx/

WOW

emmanuelewumi:
But losing $20 billion in 2 days get as e be. I love NGX as in you can't gain or lose more than 10% in a day.

I wish they can play like the US stocks

ekkywolex:
https://leadership.ng/odua-investment-moves-to-list-on-ngx/

Time to socialise the inefficiency

chibaby1985:


I wish they can play like the US stocks

Extreme risk taking always ends in ruins

Harvestock01:


Extreme risk taking always ends in ruins

I like it very well... That's why I like cryptocurrency

ositadima1:


You bought a stock like UCAP 4 years ago. Last year it returned 57.6% in dividends. The stock kept moving up. Now you look at its current value and see that if you liquidate now and invest in government bonds at 14 to 13%, you stand to get about 128% annually(on initial stock investment).

You want to do it, but you consider that 13% is fixed and once you are invested, neither your capital nor dividends will appreciate (or fall). However, the dividends have no ceiling and if the stock has moved this far, it would likely outperform the fixed returns over time.

You also realize that you may never be able to buy that stock at that initial price again. What would you do?

CC Pa Emma, Mcy56, Agba

Good question! Typical question of whether or not to sell a cash cow. Do I sell the cow I bought for $100 that now yields me $120 annually through milk now that a buyer offers $700? Or do I keep it till its milk production drops significantly, which may happen after making me 10X the cost price through milk production?