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Stats: 3,083,999 members, 7,596,390 topics. Date: Saturday, 30 September 2023 at 10:55 PM
|Why Has The Nigerian Stock Exchange (NSE) underperformed over the last decade by Sailor1: 8:40pm On Feb 08, 2021|
Recent news on the low volumes traded on the NSE has made me look into it more carefully. That the volume of crypt0 traded by nigerians eclipsed trade in the NSE. With all that has been said about it of late, most of us remember folks who were burnt in the 2008 bubble. Sadly, they or the market has not recovered since.
The first thing I do before trading any asset is look at its performance over a long time and also that of its underlying market. This is because at least 64% of traders do not perform better than the average performance of the asset they're trading or market they're trading in.
I have attached 3 pictures to illustrate this:
1. The NSE all share index chart
2. The Nasdaq composite index
3. Gold price chart
Though they are not like for like comparisons, they can all be accurately used to guage the growth of their market.
Looking at the alltime NSE all share index it's obviously been stagnant over the last 10 years. If you then factor in inflation and depreciation of the naira e.g if the performance of the NSE is compared against the more stable dollar, it'd look abysmal. It'd be a continuous downtrend. I can easily say that 85-95% of people who traded on the NSE within the last 10years lost even with dividends included. That's a statistical fact.
People keep mentioning W. Buffet but forget that when he was talking on investment and buying for the long-term, he didn't base it on something like the NSE. My concern is why has the NSE been so underwhelming? Is it due to corruption and insider trading or the state of the economy.
Take away the 2008 bubble on the NSE, if in 2010 you held your money in dollars rather than invest in the NSE, its much more likely that you'd be much better off today. Buying gold would have even put you even in a better position. Most folks believe that agrotech rates are high and unsustainable (true), but I can tell you as someone who initially put some money there, that even their high rates did not beat devaluation.
When a market is performing well people believe in it and money flocks in. The US stock market is attractive for traders all over the world simply because it's been in a continuous uptrend for decades. People can blindly thrown in money on certain 'good' stocks and believe they'd be better off in 10years. The NSE doesn't even inspire the confidence of Nigerians. That the volume traded on the NSE is so abysmal even with pension funds propping it up. This says alot about investors confidence in that market. How I wish they traded futures so I can short it to the ground as that's seems the only sensible way to mke money there.
People will always be present in a profitable market.
In summary, I'd say with the ease of buying foriegn stocks or metals today, if you are under 40 today, and investing in the NSE with hopes of building a retirement pot, you're likely throwing your money down a drain except things change drastically in future.
|Re: Why Has The Nigerian Stock Exchange (NSE) underperformed over the last decade by Sailor1: 8:41pm On Feb 08, 2021|
I'd appreciate comments moreso from NSE investors who have invested in other assets
|Re: Why Has The Nigerian Stock Exchange (NSE) underperformed over the last decade by slimanyd: 8:54pm On Feb 08, 2021|
Watch as they blame PDP and cryptocurrency for the downward trend.
|Re: Why Has The Nigerian Stock Exchange (NSE) underperformed over the last decade by Sailor1: 1:01pm On Feb 09, 2021|
I purposely did not mention or attach the bitc0in price chart initially cos that looks like a bull on steroids. It's downright the beat performing asset of the last decade.
Will still appreciate comments from those who invest on the NSE successfully
|Re: Why Has The Nigerian Stock Exchange (NSE) underperformed over the last decade by Sailor1: 1:02pm On Feb 09, 2021|
Cc @dominique @Seun @lalasticlala FP needed
|Re: Why Has The Nigerian Stock Exchange (NSE) underperformed over the last decade by Nobody: 3:11pm On Feb 09, 2021|
The Nigerian Stock Exchange is real shit. I wonder who even invests in it. Lmao.
|Re: Why Has The Nigerian Stock Exchange (NSE) underperformed over the last decade by Sailor1: 8:36pm On Feb 09, 2021|
Some folks still do and swear by the profits they make using Warren Buffet as an example
|Re: Why Has The Nigerian Stock Exchange (NSE) underperformed over the last decade by Nobody: 8:48pm On Feb 09, 2021|
Sailor1:Warren Buffet doesn't invest in the Nigerian stock exchange. Foreign stocks are great to invest in but Naija own is story for another day.
|Re: Why Has The Nigerian Stock Exchange (NSE) underperformed over the last decade by Sailor1: 8:58am On Feb 10, 2021|
I agree... People are quick to quote him forgetting that he wasn't talking of the abyss called the NSE. Knowing when and how to apply his principles are also important
His trading principles are still true but not very practicable in a market that has been in a persistent downtrend for over a decade
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