₦airaland Forum

Capitas7:
My longest term subsector is investment banking. My thoughts are simple -

1. pensions are becoming more responsibilities for employees than employers.
2. the younger generations tend towards high risk high reward investments/trades (crypto etc.). When age catches up, less riskier investments will become their lifesaver.
3. ravaging inflation, currency devaluation, unemployment concerns are growing at unprecedented rates all over the world.
4. the level of japa means a lot of foreign funds will be injected into third and second world countries as "homecoming investments" in the coming decades.
5. the consciousness of financial planning/education is growing at unprecedented rates due to the internet revolution.
6. these firms know how to earn in both local and foreign currencies.

All these reasons present huge potentials for investment banks that are built on solid foundations. With UCAP trying to reach every socioeconomic strata (expanding clientele from streets to organizations), there's a bright future ahead.

Concern: how much of UCAP's growth and success stories can be attributed to efficient/stellar management? For how long is the stellar management promised, or what happens if management changes dramatically?

Microfinance is a good way of entering the streets - reaching small, medium scale businesses et al.
Could Access ever spin off an investment bank as a listed entity in the future? What future potentials does unrepentant acquisition of banks hold for Access under good management?

Think essentials, thing agriculture/agro-biz, think healthcare, think investment banking. The new essentials!

emmanuelewumi:
Keep an eye on United Capital. I just opened an account with their Microfinance Bank

I saw the advert 3 days ago and was wowed!
My longest term subsector is investment banking. My thoughts are simple -

1. pensions are becoming more responsibilities for employees than employers.
2. the younger generations tend towards high risk high reward investments/trades (crypto etc.). When age catches up, less riskier investments will become their lifesaver.
3. ravaging inflation, currency devaluation, unemployment concerns are growing at unprecedented rates all over the world.
4. the level of japa means a lot of foreign funds will be injected into third and second world countries as "homecoming investments" in the coming decades.
5. the consciousness of financial planning/education is growing at unprecedented rates due to the internet revolution.
6. these firms know how to earn in both local and foreign currencies.

All these reasons present huge potentials for investment banks that are built on solid foundations. With UCAP trying to reach every socioeconomic strata (expanding clientele from streets to organizations), there's a bright future ahead.

Concern: how much of UCAP's growth and success stories can be attributed to efficient/stellar management? For how long is the stellar management promised, or what happens if management changes dramatically?

I think any company with asset management, investment banking and credit services as core business areas will be a rewarding enterprise in the current generation and the ones to come. With unrepentant global inflation, ever higher cost of living and increasing desires to live unaffordable lifestyles, many more people are beginning to see the importance of investing and financial education. This promises increasing client base for one such as UCAP. And the fact that they are able to focus their research on their core business services gives them an advantage over commercial banks which on the other hand, are exposed to strict regulations and high risks. Good management and great track records make the investment even more worth it.
#A subsector to watch in any economy.

Mankind2024:
Remember these companies are posed to replace human with humanoid robots. Some of the workers in battery production plants have been replaced by humanoid.

https://fortune.com/2024/07/03/elon-musk-tesla-bill-gates-obliterate-short-sellers-ai-robots-autonomy/

https://cleantechnica.com/2024/07/02/tesla-tremors-in-the-q2-force-make-us-wonder-whats-next/

I think these future projections have all been factored into the current prices. I would not advise anyone not to have those stocks in their portfolio, and I respect your investment theory on this.

To avoid too much foreign market discussion on this thread, I'll not go into how these companies overspent during and after COVID, over-hired, $40k-70k sign-on bonus, only to fire after 2-4yrs of service. It will take some years of recovery from the current inflation and economic troubles before these tech innovations can be affordable and in general use. Na everywhere dry this season including America, so when a company not producing necessities is growing in stock price,
long term might be too much optimisim.

For those asking how to start trading US stocks, visit the "US stock picks alert" thread on Nairaland. Although there are no critical analyses or arguments over there as we see here; usually people mentioning stocks to buy or what just doubled their money. Chances of learning is low on such a thread, but one can get some info there. For real learning and growth in knowledge/skills together with valuable information, NSEMPA is the best I've seen!

BabsO2:
These PE's are scarily high. Any slippage in anticipated growth due to the so called 5th industrial revolution and there will be major price correction.

39 Microsoft Corp. (MSFT)
55 Amazon.com Inc. (AMZN):
34 Apple (AAPL):
29 Meta Platforms (formerly Facebook) (META)
71 NVIDIA (NVDA):
28 Alphabet (GOOGL)
53 Tesla (TSLA):

I always respect your objective views (I've been a follower of your NGX banking sector analyses for about 3yrs now).
Although I have GOOGL(A) and have been endlessly waiting for an opportunity to enter MICROSOFT, I agree with the concern that these stocks are trading at prices with their future earnings and growth factored in already. The future is what nobody can predict, and that's why moderate exposure to them would be advised. The NYSE market is diverse, and bubbles start when everyone starts talking about the same thing. Once it's discussed by everyone on the street, it is no longer a goldmine but a trap. These companies have been on layoff sprees for over two years. This implies that the companies over-hired when economy was booming and the unpredictable "future" proved to them that noone knows tomorrow. Early birds in NVIDIA have just completed a round of 10bagger earlier this year.
That said, the retirement funds of several millions of Americans are in funds that are heavily invested in these stocks (definitely purchased when trading at double digits).

KayOn1:
CMP range?

I think the range would be on a case-by-case basis.
Most of these stocks are trading at/near 1yr high if not ATH, so if I would be going for Blackrock for instance, it would be $360-390. For mid-long term, I like my entry price being at the lower half of the trading range at any given time frame. I sometimes have open buy orders that I renew after the 60-day order expiry.
Additional: Kindly share your thoughts if you are also interested in the sector

I'm developing interest in the financial sector, particularly in companies doing well in the investment banking subsector. I've not started any homework on this mission yet. I ultimately hope to find at leat two that may be underpriced and sitting on great value - fundamentals. Mid-long term in mind.
If anyone is looking into this sector currently, I wish us both, goodluck!

Congrats to those who have been holding on tight to their Nvidia. Those who booked profit early and got locked out are also winners. As long as he makes money, she makes money, they're both winners according to their goals.

Never trash another's strategy; open your mind to learning from any and everyone; stay positive, constructive and polite in educated arguments; read books carefully and critically; do not underestimate the power of news; read success and failure stories; spend more time on analyses than checking the fluctuating value of your portfolio, stick to your greatest tools - fundamentals, technicals or sentiments.

When you say you're holding for medium-long term, you'll be tagged a learner (or a blind follower of Buffett). Say you're buying the company fundamentals and not the stock price movement, you'll be advised to go learn the "way". So just stick to your approach.

Summary: Dear one, do not ignorantly suffocate yourself in your bubble. Facts and figures for fundamentals are publicly accessible just as charts for technicals are. The analysis, resulting predictions, and ultimate action/inaction remain an investor's/trader's business to make sense of.

I mentioned in the past about a friend who trades the cycles of Apple (AAPL) virtually every year. This year, I thought the trend was going to disappoint for once, but it held strong. Buying in March-ish, selling in August or thereabouts yields approximately 30% if lows and highs are well targeted for maximum entry-exit profits. 30% is not a little profit on substantial capital especially in the period of the year when market is dull (referencing the saying "sell in May and go away"). While people play safe by leaving to come back, some tuck their funds in cyclical trends and cash out 6 years worth of CD (certificate of deposit) yield within 6 months.
Keep on learning, keep on asking questions, keep on trying to answer your own questions, fall, rise up, remember the lessons, try again. Continue till you are confident in your strategies. That is the spirit of the market! Respect to the bosses who share their trades on this platform.

For anyone looking in the oil and gas subsector, if you are not doing do yet, please always check the price of crude oil. The cycles of crude oil price makes people money, and the cycles of the companies in that sector make people money too. I think short termers might have cashed out after the impressive earnings FY reports. I still think medium and long termers will be rewarded in some of them. XOM is my number one choice - cost efficiency and growth - for long term. This subsector responds to news quickly too, and so could be frustrating for medium termers.

aremso:
You are right one has been on my radar since, when it gets to my level I will strike.

Oga Aremso, please share the name when the time comes and you are comfortable to do so. Some of us can learn from your pick, and even make money from it.

Capitas7:
Earlier statements of the quotes were trimmed to avoid length.

The bolded statement may not be necessary. Everyone has a strategy aligning with their goals, capital size, risk-reward cutoff. To some, the stock market is just a store of value and avenue for growth. A good job enables you pay mortgage, enroll in 529 and trust funds for you children, sponsor your education advancement and certifications, throw savings into your retirement account, build some investment portfolios, and lead a comfortable life. After 20-30years, that career has taken you places, sent your kids to top schools, provided for your needs and wants, and leaves you with a high value estate and steady pension. Another person's route might be business. The fact that making 400% gains in your investment vehicles is not your goal does not necessarily mean you are not getting to your destination. If trading of securities, forex, debt instruments, etc is your path to achieving your life goals, invest all your resources in it and stay focused; it will be worth it in the end. Let's foxus on ourselves and always avoid the urge to throw stones- it might come back to hit us.

People who are successful in their careers or businesses have come here to humbly ask questions in the past e.g. someone shared how AI guided him to grow a 25k portfolio to 36k within a few months; he shared on another platform, how he has grown the same NYSE portfolio to 100k, all within Q1 2024. He did not come back here to mention the 100k current value nor to mention the business he bought late last year that has returned over 100% of cost of purchase. Why? The answer is simple: to him, US stocks is just one of multiple investments, just one of many fronts of growing wealth, and not an avenue to be talking down on others on a public forum.
Based on my own growth expectations, someone who starts a business of stocks trading advisory services for subscription income should be close to owning a funds management business (either small or large scale) after 5 years of growing the advisory business. That's my own standards, and it does not mean I'd go out there to say anyone who hasn't grown like that is not doing well.

yok:
LET US BE READY FOR A TOUGHER MARKET
The unexpected has happened, inflation has won the fight against rate cut expectation.

https://www.investing.com/news/economy/powell-says-recent-inflation-data-point-to-need-to-keep-rates-higher-for-longer-3380757

Now we need to add some shorting to our strategies......
......
At a time like this quality of our stocks matter. It is very unfortunate that we will see more people being washed out of the market. So expect some people to become quiet, some people that you see that have made comments may not be able to make comment aga, due to dicipation of their trading capital

Earlier statements of the quotes were trimmed to avoid length.

The bolded statement may not be necessary. Everyone has a strategy aligning with their goals, capital size, risk-reward cutoff. To some, the stock market is just a store of value and avenue for growth. A good job enables you pay mortgage, enroll in 529 and trust funds for you children, sponsor your education advancement and certifications, throw savings into your retirement account, build some investment portfolios, and lead a comfortable life. After 20-30years, that career has taken you places, sent your kids to top schools, provided for your needs and wants, and leaves you with a high value estate and steady pension. Another person's route might be business. The fact that making 400% gains in your investment vehicles is not your goal does not necessarily mean you are not getting to your destination. If trading of securities, forex, debt instruments, etc is your path to achieving your life goals, invest all your resources in it and stay focused; it will be worth it in the end. Let's foxus on ourselves and always avoid the urge to throw stones- it might come back to hit us.

Companies in the Agribusiness subsector might be one to be added to the radar (hold , not buy for now) of a value or dividends portfolio. I was attracted to this sector because of the products category and their dividends generosity. A few negatives:

1. The sector performs poorly when there's nationwide/global supply chain problems.
2. There's constant threat to products - disasters, transportation, storage, etc.
3. Cost of sales is very elastic, and net income fluctuates with inflation and other factors.
4. Growth in stock value rapidly follows growth in earnings, shutting out investors who want to buy on book improvements - rumors are the deal, not news.

Bunge is one to watch - globally large, Canadian NTR is another.

unite4real:
imagine if most companies behave like UCAP, the banks shares would have hit the moon.

UCAP eps N1.9 and they paid N1.8

ACCESS eps N17 and they paid N1.8

Very true!
But when the forward outlook of expense of growth, currency instability, and recapitalization are factored in, one might praise the banks for even the modest dividends that they will pay.

emmanuelewumi:
I have both of them, my average cost price is less than N5. 00
Sold 25% of my United Capital and 20% of my Nahco shares last week to buy fixed income investment at 20% guarantee return

What elders see while sitting,....

BHG:
UCAP to pay #1.80k dividend as well

Yield point in physics, diminishing returns in economics, stationary phase in biology, etc.
UCAP has blessed many portfolios for years; the time to recharge might be dawning.

Princkez:
ACCESS BANK to pay #1.80k dividend....

Very good results at a quick glance!

One might guess that with the usual (maybe often unconscious) price correction to 10% dividend yield, Access might settle at N21 after the initial back and forth trades following this news. But do dividend-aiming investors still consider 10% a fair deal after the recent events of rapid devaluation, unrepentant inflation, highly competitive fixed income rates, etc.?

ifeolu002:
You own the stock you buy actually.
I am still a a newbie in foreign stock investment .
Just learning the robes from the ogas on this thread.

Pls I am open to join WhatsApp groups I can also learn from .
Pls who can I DM to get this opportunity

Thank you for this information.
I am here to learn too just like you and many here.
I don't know of any group, so I can only advise care and caution when sending DMs or joining groups. A public forum like this is to encourages open, enlightening conversations and safety for members.

ifeolu002:
Optimus app by afrinvest is a good app to use

1.5% commission

Thank you for this info. Does one own the stocks they buy through Afrinvest or Afrinvest is just a middleman? Just for information purpose.
Thanks.

Penboy:
Really?
Can you share such platforms please? Just in case some of us use them to be weary.

Acorns, Stash. I think Robinhood was in this category in the past. These are not the apps discussed here, and I think access to these apps have been restricted for some time now (maybe that's why many of us don't use them). It is a good thing to know about how one's broker deals. Middlemen shares arrangement benefits the middleman and the broker, not the investors/traders.

Stan2330:
Have you looked at TSM? What are ur thoughts On it

I am not sure if you are just seeking a second opinion after you've seen a green light, or you are at a point of making a decision to buy or sell. I also do not know if you tend more towards investing or trading, but here are my thoughts:

Positives:
1. Good growth company.
2. Sector will continue to receive investors' and traders' attention for quite a long time.
3. Positive economic indicators (inflation, interest rates etc) boost sales within the sector. The gradual recovery is being seen already

Caution factors:
1. Political factors favor AMD, than TSM because of country of origin/founding. Sadly, this sentiment affects the stock prices of companies from Chinko countries.
2. Even INTC within the same space/subsector is often said to be receiving government backing (this is a very complicated statement, but I come across this information a lot even in conversations).
3. As many stocks within the tech space are releasing encouraging results and experiencing price increases, it is difficult to know which one has more room for capital appreciation in comparison to others.

Investing take: I just took a quick peep just to get an overview. A proper analysis might require digging further into financial statements, history, management and recent changes, most recent guidance, etc.

Trading: I know next to nothing in this domain, but I think there's good potentials of some gains.

Penboy:
Everyone has a lesson or two to learn from the US stock market bro. And learning from your experience is also what adds to our knowledge and sharpens our skill in the market.

Like it is commonly said, time in the market is greater than timing the market. In 2022, I also own NVIDIA and AMD in my portfolio. Got in AMD around lower than 80 and NVIDIA around 260 or so. Then the rate hikes killed the market.

Funny thing is INVIDA came to us around 90 USD and many of us were still scared to go in. Look at NVIDIA today.

Anyways, lesson learnt. If you identify a solid company and the dynamics of the company hasn't changed, please hold an average down for any dip. I bet you, the stock will rise again.

Notable examples of stocks I own that did that.
1. $OSCR
2. $DAKT

Very well said bro! I'm happy for you on those two winners too. You are sitting on a huge profit.
I enjoyed averaging down on some decent company stocks when I had accounts with brokers that allowed fractional shares. I had to close those accounts because the investors/traders never "owned" the shares. We were just custodians, if that's the right way to put it - and that does not align with my investment objectives.

Thank you for sharing your experience and views bro. Healthy conversations make us all better - nobody can flourish as an island.

emmaodet:
Thanks very much bro.
I will go through those books and read them thoroughly.
Thanks

You are welcome bro!
Please enjoy reading them.

The Berkshire shares being accummulated by Warren around $25 in 1969 are now traded at around $600,000 today. That is the kind of wealth that the US market offers. There are opportunities to make money, but even more opportunities to build wealth. We choose which one we want. Cars selling for $2500-4400 back then are now selling for $30,000-60,000, so the then $25 is arguably worth $400 today at worst.

I remember doing some homework on Micron towards the end of 2022 and sharing with a good friend how I wanted to accumulate the stocks between $58-65. I did buy in tranches till my BE was $62. Poor quaterly results doubled with the performance of the sector made me sell all, to buy in another sector. I needed little patience, more believe in my judgements. What I was also yet to learn were:
1. How to decipher when one-off bad results do not harm the prospects of a company

2. How flexibly undervalued companies can fluctuate in price to shake off impatient investors.

3. Even when cutting losses, one should continue to reevaluate the company. Never stay away from accompany you once saw as undervalued.

4. Selling one to buy another is not always a good call. One sometimes needs extra cash for new opportunities - as you build your portfolio, also build your "waiting cash".

Micron has been selling for $90+ until yesterday when it rose to $113. No serious regrets - I am happy I identified a good company, and I am happy I learnt a lot of lessons from my mistake.

emmaodet:
Thanks very very much for taking your time to explain this to me.
Really appreciate.
About the books, can you list some for me to go through?
Thanks

It is a pleasure boss, and I am glad you found it relevant.
1. Ordinary people, extraordinary wealth - Ric Edelman
2. The little book about value investing - Christopher Browne
3. The five rules of successful stock investing - Pat Dorsey

1 and 3 were recommended by DrAwo on the NGX thread, and I learnt a lot from both.

I like the connection between Graham's ideas and those of his "followers" and I think this connection forms the basis of why Warren Buffett and most of the authors of value investing books tend to have very similar approaches. Christopher Browne shared the details of how his father's co-owned firm was on the same block as Graham's on Wall street. He mentioned in some of his statements that he bought (as a broker) stocks for many of Graham's past students, and he observed their consistent pattern of buying undervalued stocks. He also mentioned about how he bought (again as a broker) Berkshire Herthaway shares for Warren Buffett in the late 60's.

Penboy:
I think the main reason is people do not know what platform to use and trade foreign stocks. Most interesting platforms don't even accept Nigerians anymore.

That's quite sad; you made a great point boss.

AMD had less than 5% of market share while Intel had our 90%, but AMD started closing in, till the ratio became 65:35. AMD had a fearless female CEO (political sentiments arguably favor female leadership), produced more appealing products than Intel's, etc. Over those years, Intel's cash flow was impressive, but AMD's advantages took a toll on the difference in stock performance of both companies over time. One would argue that Intel pays attractive dividends while AMD no dey send, but AMD has crafted a niche for itself - growth! An investor or trader would need to see through the poor performance of this sector during high inflation, pay attention to the details of the dynamics of market share, check consumer sentiments, and might need TA to reveal this growth potential plus value in AMD in the last decade.
It is arrogant to say that one person's tool is better than another's in this market.

emmaodet:
Hello bro
What strategy do you use in evaluating an undervalued stocks? When to enter and your exit strategy

First, I must say that I'm learning, so nothing unique about my strategy that might be new to you.

1. My strategy
I wish I could give a short and direct answer. I am more of an investor than a trader, so I go for value and growth stocks.
The pensions and life savings of hardworking Americans are in most of the ETFs, and if you check their charts, many of them have maintained higher highs perpetually breaking the ceiling regardless of the many cycles of bull or bear that the market has experienced. So these fund managers are doing something right, and one thing I found that they do right is objective fundamental analysis.
So basically, I check every metric that I know. I start with free cash flow, earnings growth, retained earnings, projected growth, among others.

2. Entry price
I used to estimate the intrinsic value and compare it to current price to see how much room the stock has to grow in price, but I have since stopped using that because there is usually a lot of divergence between intrinsic value add price that may never close up. The intrinsic value of growth stocks is difficultand subjective to calculate. The DCF approach also requires using future cash flows predicted by the sharks of Wall Street who have their own motives.
Once the basic and derived metrics check out for a company, I wait for cyclical lows for entry opportunities. A friend enters APPLE every year with huge capital, and makes roughly nothing less than 30% by just flowing with the cycle.

3. Exit strategy
I am poor at this. My kinds of stocks also make me not to worry too much about exit price. Intel was giving decent dividends when I exit it over a year ago partially bevause of the resons in my nect post. Warren Buffett has been keeping and increasing his position in APPLE, AMEX, BAC for decades, and has never lost his title.

Summary: I am learning just like most, but I have developed an approach to the market that insures the return of my money and still gives me comfortable return on my money.

The resources I value are: financial statement, earnings guidance, macroeconomic news, consumer sentiments and behavior, market appeal of the company of interest, etc. Great books discuss these in details.

emmaodet:
Agreed but it seems some here won't interact with you unless you subscribe to their paid subscription. I guess that is the reason for the low turn out here.
Also, most Nigerians are into local stocks and not foreign ones.
I am just also about diversifying into foreign stocks due to devaluation, so am very careful in treading this part

I agree with you on the likely reason for low turnout on this forum. Paid subscription tends to be a fair way if making money if it is not forced, or advertisements not made to sound like "you can never do well at this unless you pay us to teach you or do it for you".
I think you will do very fine trading foreign stocks. Your experience with the local stocks market and your kind of questions are the important ingredients.

I mentioned in a post that discussions rarely happen here. I said so because we stand to gain a lot from one another when we share thoughts, constructively criticize stock picks, analyze data (financial statements, valuation metrics and charts), and even discuss sentiments.

A fellow shared their thoughts on Lucid and two of us replied with an opposing opinion (politely and constructively too). I have been checking that stock not for the purpose of coming back to say "I told you so", or to check how the said person is killing it, but to evaluate their prediction alongside my divergent opinion and make myself better.

Many made a kill in the 2020 bull run, and another one is on us; we can make a kill too.
When I mentioned (in Nov, Dec, Jan) the upcoming bubble in the AI space and the growth visiting the mag 7, it was already happening and that is why many of such stocks are overvalued (bubbly) today waiting to be bought by latecomers before correction (burst). The kill is in buying the rumor and selling the news like smart monies do - me sef advise babe to buy NVIDIA at less than $140, and the rest na story.

Together we can identify the next rewarding sector/idea, but it starts with discussions, not only 4 or 5 persons sharing their picks or transactions without receiving opinions or criticism or supporting ideas in return.

We are here to learn and build wealth!

Capitas7:
For long term investors, I think Valero is a good stock. The the company's free cash flow per revenue, P/E of approximately 5, and an attractive ROE.

I don't know what a good entry price is, although I once made close to 50% on the stock in the past. I hope I get some in the $125-$135 range for long term. Exxon Mobil at less than $99 is another one on my radar.

"I make no effort to forecast the market - my efforts are devoted to finding undervalued securities." - Warren Buffett.
One of the secrets of being successful in the stock market is developing a strategy that works for you and using the experience of successful investors (or maybe traders) to refine yours as you grow.
I have since learnt to remain a long term investor searching for value and buying at discounts - it works for me, and I continue to share/mention such stocks here.

NB: I do not see the tendency of 200% increase in price when I pick a stock for monitoring or entry - I just want to identify an underpriced one, and remain in the bus before news and attention start shining light on it. In my strategy, 30-40% capital appreciation in value stocks is a fortune, and the merrier when it even does 100% or more!