₦airaland Forum

Streetinvestor2:
Haba bro would u have preferred he said invest in a bet.Abi investment in olosho
Infact have you seen whr anymore is advised to invest in a gamble if the person no be devil..lol

You may personally prefer fundamental investing, and that is fine, but once you start labeling every other approach as gambling, you stop making sense. Not every non-fundamental play is automatically “olosho investment” or gambling.

HesInMe:
Dis man... Relax.

Blunt used metaphorically means limited in effectiveness and utility. For example, if you use position sizing, you have to limit you investment size and profit potential. By contrast, if you could hedge, your possibilities are theoretically limitless.

But that is the idea. Wherever you find yourself, whether in Nigeria or the U.S. stock market, position sizing is a fundamental part of risk management.

There are always uncertainties, and position sizing is one way to manage them. Why does that seem “blunt” to you? Do you go all in on your fundamentally sound stocks? Why do you guys maintain portfolios of multiple stocks?

pluto09:
I don't think anyone has ever said we can only make money with one strategy.
I just feel traders don't like their stock picks to be discussed and analyzed.
If you are an FA person , you will gladly welcome a detailed analysis of the company of your interest.

What exactly is the meaning of this post and the big mocking banner that follows it? What is the writer trying to imply? I’m not attacking you ooo, I’m just trying to understand the point being made.

emmanuelewumi:
Don't eat your future, invest in fundamentally sound stocks

Streetinvestor2:
ok I know but no one dead or alive has beaten buffet using different approach is what I wanted to confirm

Lol, but you agree now that you can make billions of dollars from trading? If you do, then give traders some respect. I don’t need to be the richest guy in the world to become stupidly wealthy.

HesInMe:
Calm down nah. I'm not criticizing any approach. I genuinely wanted to learn about trading strategies.

And yes, sometimes I've invested in -- and profited from -- stocks that don't have a particularly great underlying business. I bought REDSTAREX in late Dec last year at N8 and by early Feb it was N32. I just don't think that approach is reliably repeatable.

You want to genuinely learn, yet you’re still low-key criticizing, and I knew that was coming. What do “blunt tools” mean to you? I also mentioned a whole lot of approaches that you chose to ignore before reaching your conclusion.

Be sincere, if you can.

Streetinvestor2:
I went beyond u talk with the guy because it no even understand the English you guy whr talking. That is why I said on a different note.I was only interested in FA matter and other approach whether in naija or the world

Ok sir, but please Google Jim Simons. He made billions through trading. Billions are billions, whether you make $80 billion and I make $35 billion, once you reach billionaire status, you’ve done something exceptional. The guy was richer than Dangote through trading stocks and derivatives, although he has passed away now. He was a mathematician.

Streetinvestor2:
I On serious note has anyone been able to beat buffet record using other tools as he uses fundamentals.

I don’t know if you read what he wrote, the guy I replied to. He said that in Nigeria, risk mitigation tools for traders are blunt. Now you’re bringing Buffett into the discussion.

Why are Nigerian fundamentalists like this? You argue one way, then when you get schooled, you switch to another argument.

Please go and read about Jim Simons. There are many others too.

HesInMe:
Why so combative nah? It was a neutral question.

Anyway, I asked Gemini. Practically speaking, retail investors in Naija have blunt tools to avoid catastrophic losses (not buying too much of the risky stock and not borrowing to buy it). More elegant trade-execution tools (stop-loss) or risk-minimization (hedging) are not yet widely available:

Regular retail investors manage risk on a long stock by setting automatic stop-loss orders to cap downside, position sizing to avoid catastrophic losses, buying put options as "insurance," and avoiding margin to prevent debt if the trade goes wrong.

And your tools are sharp, lol. Dey play. For every money you made fundamentally, there are people on this thread who have matched it, and even made more through trading. Do you doubt that fact?

So why don’t you stick to your own approach and let others play their own game? Why must you all criticize a different approach?

HesInMe:
Abeg how do regular retail investors "manage risk" when they are long a risky stock?

Very good question, but I know I have answered this question before.

There are so many ways nah: position sizing, adjusting your position in proportion to your bankroll as well as your maximum expected loss. You can use RSI to know when a trend has entered overbought territory, then start reducing your position from there.

You can also have a target exit and respect it. You can track the order book flow for imbalance by monitoring bid and ask-side quantities. If you see a lot of sell intent, you can bale or start reducing your position. So many ways.

You can argue about the time involved and the difficulty, but even you fundamentalists invest a lot of effort in determining fair value and tracking it to know when your stock exceeds fair value.

I will not answer this question for you again; it is free on Google.

I’m beginning to think fundamentalists and jihadists have one or two things in common.

Na joke ooo.

ghm:
With due respect Sir, what is your own?

People asked a free question and someone generously answered and give a practical guide.

BTW, I believe everyone here may not be perfect but we cannot say we do not know what we are doing sufficiently enough to take full responsibility.

The opposition camp is strong gidigba.

Afromentalist:
Even some people investing in MMM made wonderful returns. This is no argument.

Yeah, that is correct. In the stock market, momentum is real. If you spot it early, you can ride it even when a stock is already overvalued.

Some people make money by riding momentum, while people like you and Pa Ema focus on fundamental investing and dividends. Both are legitimate ways of making money on the NGX.

So why should fundamental investors mock others for using a different strategy? That’s what I’m arguing against, respect people’s choices.

NSEstudent:
Loans

Learn to decipher things, man. I brought up loans to point out that he is also promoting risky ventures.

Streetinvestor2:
Bring another gist. If you are informed you will know I ever entered below this price in my first buy.It was second that was within this range. Na third stage when it cast

Then show any evidence whr your have countered Emma with superior numbers on any arguments on a stock so I can learn something .I am not taking about the TA arguments because I have said it severally I don't believe in it.I see it as probability that works only when you can pull crowd to believe it.FA is a constant fact you can't change in company audited results if it is not doctored

I don’t understand. So if you entered earlier than that, what exactly is your argument? I’m telling you that you can enter a fundamentally weak stock, if the news flow and other factors are favorable, and still make money. Oando was the example.

People who entered around ₦10–₦15 and exited around ₦60, when it was moving up and down, made more than ten years’ worth of dividends from so-called fundamentally sound stocks.

You can simply tell your fellow fundamentalists, “This stock is not fundamentally sound ooo,” but that does not mean people cannot make money from it if they manage risk properly.

I’m sure many people are here to make money, maybe not you, but a lot of people are. Respect their hustle.

NSEstudent:
Unrelated whataboutery.

That specific convo started as an expository post.

Lol, why is it “whataboutery”? Isn’t this discussion about Zichis, the current non-fundamental stock? It’s like you’re now learning argumentation. What exactly was the original argument about? Let me see where you’re coming from ooo.

Streetinvestor2:
I am his supporter but will not collect loan to buy stocks because I think with my brain and not his
I won't collect because I may not have cash flow plan to service or payback from another source. After Tinubu keep collecting even as we say stop. Tony collected to buy Seplat because he has a plan on how to service and payback.

So you think people entering speculative plays don’t have a plan? Yet you are here trying to talk people out of it, not as if they must follow you or don’t have brain.

emmanuelewumi:
Fundamentally sound stocks will.psy dividends na. You can even use the dividends to buy more when the market crashes

People who entered Oando early at ₦10–₦15, when you were attacking it nonstop, also multiplied their money. In fact, they did far better than five years of dividend collection from the so-called fundamentally sound stocks. It all comes down to how you manage risk.

NSEstudent:
Pa Emma has always stated conditions for borrowing and offsetting the loans. If one meets those conditions, it's very unlikely to run into troubles.

I know you know that but...

Same as the people who promote “fundamentally weak stocks”, they also give their own conditions for entering. Yet Pa Emma has launched more than 20 posts countering them from his fundamental perspective.

I know you saw that too.

Agbalowomeri:
Osita is it a crime to share strategies here or isn't that what we are here for? How would anyone hold another responsible for his other own choice biko

So you don’t know you can influence people, especially when you have a strong support group?

Plus, I’m doing the same thing he is doing, warning people that not everything that shines is gold.

emmanuelewumi:
Don't eat your future, invest in fundamentally sound stocks

You are now glamorizing borrowing and making loans sound attractive. The moment people get burned, and it is almost certain that some will, you will find a way to distance yourself from it, and your supporters will still show up to defend you.

Let people make their own choices. Some may find success in speculation, others in trading, while the more risk-averse ones may prefer fundamental investing.

I am all about freedom of choice.

deathwing:
Another day another dumping.

Don’t worry, they’ll pump it again. The dumping can continue down to ₦5–₦15, and then they’ll start pushing it back up. Till today, different versions of MMM-style schemes are still running.

It’s when you don’t understand why you’re entering a trade that you end up getting trapped.

yMcy56:
Where's the guy making long speech that it's not Oga Emma that caused the problem?
Hope you can read the bolded by yourself....Afromentalist or so..

Let's see how far you can continue to use "I no go gree" and stubbornness to destroy anything you don't stamp or agree to.

To be honest, you have to differentiate the reasons for entering a stock. It could be for investing, in which case fundamentals are key; for trading, where technical analysis is more important; or for gambling/speculation, where whoever is putting in money should apply much stricter risk management.

The problem with Oga Ema is that he seems to think investing and fundamentals are the only ways to make money and doesn’t want to acknowledge that people also profit from the other two approaches.

You also have an issue, you don’t seem to clearly distinguish between these three categories. Three days ago, when you were promoting Zichi, you presented it as a value play, which apparently it is not. Some beginners may follow that narrative and get burned. At those prices, Zichi is a high-risk speculative play.

Na my opinion ooo.

KarlTom:
Make una no vex

I am not angry. We were collecting small subsidy when the hammer struck. Luckily, I pulled out.

Who has never collected subsidy from this Tinubu government should come out.

Streetinvestor2:
for now don't buy anything not like I don't know what to say buy.Just follow the thread for some months .if you equally have time read backwards...old pages

If you no collect, nah wetin you gain?

Streetinvestor2:
Kpakus has not escaped going the way of aso savings. The only difference is when will it happen if the management continues to be insincere
And for oando thr are things in the fundamentals to justify its present SP but for that farm thr is nothing to justify the SP
Madam just accumulate the shares.I do still buy afolabi units in oando so do same for the company. I don't even understand u.Did anyone here ever say don't buy the company share for ngx sake.Someone brought out numbers from thr financial. I brought out capacity as a business man who knows the sector and your flow changed..lol

But do you think most of those guys buying it at 40.35 even had any idea what business category Zichi is in? You dey reason farm, while those guys were only seeing price appreciation.

Petty hardworking Nigerians trying to get their own share of the government loot. You and Oga Ema have increased the hardship of hardworking Nigerians.

Streetinvestor2:
But he is doing same thing u asked him to do ..lol
He is sounding his warning like u asked
And equally asking people to accumulate as opportunity don dey.Are u not accumulating..lol
Madam I no come dey understand again your position. Abi u no sabi buy but you want people to keep buying. Have you joined apc government.

LOL, so you don’t understand how a Ponzi works? As long as it is moving up, people are willing to buy and clear the sellers. Do you know that on Monday, over ₦700 million exchanged hands, most of it at 40.35?

The moment the price stops moving up, everybody will try to exit. Yesterday, in the early hours, people were even bidding at 42/43 sef. The moment they saw the huge supply side, those guys immediately started pulling their bids. Before you know it, full offer, lol.

Do you think people buying at 40.35 wanted to hold it long term? I bet they only wanted to hold for a few percent gain and bale. Now they are trapped because of you and Oga Ema.

HesInMe:
Lol. But the next minute after you buy the one stock, I can buy it -- at a different price, because of liquidity, changes in investor outlook, corporate actions, etc. Is the stock price theoretical too?

Rest. Market cap is just stock price at scale. It can rise and fall for the same reasons.

Not much to add to what I’ve been explaining since yesterday.

HesInMe:
It's the same thing! Just like P/E is the same whether you use one share or the market cap.

Not really. Market cap is used to calculate the ASI index, and some people see it as the actual value of the business. My point is that it is not, and the ASI itself may be bloated by manipulated market caps.

While the price of a stock is what I can buy (or sell) it for right now based on available liquidity, market cap cannot be bought or sold immediately without liquidity taking a large portion of it away. It is theoretical, but the share price is real, as in, right now.

HesInMe:
TA-inspired confusion.

I don’t know. Do you check market cap, or do you first try to calculate fair value and then use it to enter a stock? Tell us your FA wisdom.

Streetinvestor2:
Madam of this thread is very passed now ...lol

Lol, we were basically putting in 2 to 3 million, watching the stock closely during the day for any weakness, and praying through the night for about 2 to 3 days, then collecting 20–30% and sneaking out fast. Subsidy money, fuel is ₦1,400 ooo.

Now Pa Ema has shut it down. We never once thought it was a long-term investment. You should have allowed us nah.

emmanuelewumi:
Market capitalization is not needed and does not make sense but a Price Book Value ratio of 71 for stock with a Return on Equity of 28% makes sense

As a value investor, "a price-to-book ratio of 71 for a stock with a return on equity of 28%" does not make sense. But then again, the people buying into Zechi before you crashed it were not doing so as investors; it was simply a trade , buy and sell higher. I know you understand this. We were just out there trying to collect some of the subsidy the current government was denying us, and now you have shut it down.

Bad belle.