FYI, I never work for cashcraft, so to you a stock that traded N320 and sold off @ N65 after 11 years after is a good trade? That buttress my point on loan that stocks investment is volatile that you guys should stop this your marketing strategy on loan before the gullible fall victim, since you guys are only after your business.
I repeat everyone that traded stock has burnt their hands one way or the other, you can not always get it right. All analysis are based on assumptions.

Remember below is the genesis of the debate:

Why do people take loans to buy shares?

Just asking experts in the house.

What are the advantages and disadvantages for those who do so?

I gave the guy the disadvantage, it is up to him to take his decision, if he think the benefits outway the cost.

Streetinvestor2:
Guy na now I sabi you know nothing about stock. I sold my forte oil at 290 which I bought at #30. So forte oil which was ote company traded at #300 plus.And ote latter sold off the business @ #65 means he burnt his finger.Are you for really. At what price was it listed or what price did he buy the company. .What was other benefits he made as the chairman of the company .I hope it was not cashcraft you worked in because those guys na minus when it comes to investment advice.
Oga ote did not get his hands burnt in forte rather him hammer for thr,lol

emmanuelewumi:
The All Share Index will definitely close for the year at about 75,000 as predicted.

The former All Time High of the ASI was 66,000 attained in 2006.

...most likely. Since May this year, NSE ASI has been phenomenal!

toyeoye:
I can smell maturity in @emmanuelewumi

He's in a class of his own. A lot to learn from him beyond financial strategies.

phadriz:
FYI, I never work for cashcraft, so to you a stock that traded N320 and sold off @ N65 after 11 years after is a good trade? That buttress my point on loan that stocks investment is volatile that you guys should stop this your marketing strategy on loan before the gullible fall victim, since you guys are only after your business.
I repeat everyone that traded stock has burnt their hands one way or the other, you can not always get it right. All analysis are based on assumptions.

Remember below is the genesis of the debate:

Why do people take loans to buy shares?

Just asking experts in the house.

What are the advantages and disadvantages for those who do so?

I gave the guy the disadvantage, it is up to him to take his decision, if he think the benefits outway the cost.

Oga, you are still arguing?

Before it got to N350, how much was it? How much did Otedola buy it? I remember that FO was N5 before it got to N350.




You are still not understanding the point Oga Emma is making. As you continue to argue to prove yourself right, you are loosing the opportunity of taking advantage of the wisdom he shared.

emmanuelewumi:
Should we be looking at another 20% gain in 2024, which will push the All Share Index to about 90,000.

It is very possible, our stocks are still cheap, with the current inflation and currency devaluation. Naia denominated assets will be repriced going forward.

The NSE All Share Index's potential 20% gain in 2024 will largely hinge on govt economic policies and international price of crude oil. IF the country continues to disseminate positive financial/economic news globally, that will attract international communities to bring in money for investment. There is much potential local positive news to boost the index already, and with the recent Moody's upgrades of Nigeria to positive, I believe reaching 90,000 or thereabout is achievable.

Oil seems to have found support at 66, and 2024 most likely to witness a surge in oil price too to boost Nigeria economic outlook.

Technically, however, I anticipate a pullback in the index, considering we've just rallied above the previous all-time high at 66K. The nature of the pullback dip will determine whether the index can reach 99K. I do not foresee a bear market in 2024 but rather a pullback.

yMcy56:



Oga Toluway compliment of the season sir.

Oh aunt Mercy! Same to you. Trust you're doing great as usual.
What a colourful yuletide season compliments from NSEM

phadriz:
FYI, I never work for cashcraft, so to you a stock that traded N320 and sold off @ N65 after 11 years after is a good trade? That buttress my point on loan that stocks investment is volatile that you guys should stop this your marketing strategy on loan before the gullible fall victim, since you guys are only after your business.
I repeat everyone that traded stock has burnt their hands one way or the other, you can not always get it right. All analysis are based on assumptions.

Remember below is the genesis of the debate:

Why do people take loans to buy shares?

Just asking experts in the house.

What are the advantages and disadvantages for those who do so?

I gave the guy the disadvantage, it is up to him to take his decision, if he think the benefits outway the cost.

Oga I am done with u on loan for investment After all nigerias prefer to collect loan for liabilities and banks are quick to give such loans
I only called your attention to the fact that oga Emma is very good at what he does with loan in such regards and i can not do it because I don't understand the mathematics yet.
Then on ote and forte oil.Ote hammered from the whole thing stating from his take over of Ap.Do you know the striping of assets he did with Ap as a company which continued to its new name forte oil.Then he finally sold just oil servicing company a part of the bigger company for #65 to the new mugu.

FO never traded 350, but AP does and it was around 2006

Dum20:


Oga, you are still arguing?

Before it got to N350, how much was it? How much did Otedola buy it? I remember that FO was N5 before it got to N350.




You are still not understanding the point Oga Emma is making. As you continue to argue to prove yourself right, you are loosing the opportunity of taking advantage of the wisdom he shared.

You own a 90 million stock A portfolio, but now that you believe stock B could yield a higher return, you believe it would be preferable to borrow 10 million to invest in stock B and profit from it. Since you are greedy, why not sell 10 million shares of stock A to fund your purchase of stock B? Investing in the stock market differs from building up stock in your offline business. You wish to take out a 22–25% interest loan to purchase shares in a nation where getting a loan is like climbing a mountain the lender might demand the head of your grandma as security.

Don’t take a loan to buy shares!

Don’t sell your property to buy shares!

Don’t invest with greed!

The marketers on this platform will offer advise that will improve your success at work, therefore novices should exercise caution when following it. Despite this, their research staff in the office provides sound technical and fundamental analysis to make excellent stock recommendations.
We experienced many of them in 2006, when they were opening small branches in various states and charming people. The market appreciation in 2023 is extremely unusual; the capital market is not MMM, so please don't get carried away. They might even advise you to sell your property to buy DaarComms for them to offload the dead stocks in their portfolio.

A word is enough for the wise.

phadriz:
FYI, I never work for cashcraft, so to you a stock that traded N320 and sold off @ N65 after 11 years after is a good trade? That buttress my point on loan that stocks investment is volatile that you guys should stop this your marketing strategy on loan before the gullible fall victim, since you guys are only after your business.
I repeat everyone that traded stock has burnt their hands one way or the other, you can not always get it right. All analysis are based on assumptions.

Remember below is the genesis of the debate:

Why do people take loans to buy shares?

Just asking experts in the house.

What are the advantages and disadvantages for those who do so?

I gave the guy the disadvantage, it is up to him to take his decision, if he think the benefits outway the cost.

stronglink:
Early/mid 2024 you mean to say right?

Mistake corrected. Thank you.

phadriz:
You own a 90 million stock A portfolio, but now that you believe stock B could yield a higher return, you believe it would be preferable to borrow 10 million to invest in stock B and profit from it. Since you are greedy, why not sell 10 million shares of stock A to fund your purchase of stock B? Investing in the stock market differs from building up stock in your offline business. You wish to take out a 22–25% interest loan to purchase shares in a nation where getting a loan is like climbing a mountain the lender might demand the head of your grandma as security.

Don’t take a loan to buy shares!

Don’t sell your property to buy shares!

Don’t invest with greed!

The marketers on this platform will offer advise that will improve your success at work, therefore novices should exercise caution when following it. Despite this, their research staff in the office provides sound technical and fundamental analysis to make excellent stock recommendations.
We experienced many of them in 2006, when they were opening small branches in various states and charming people. The market appreciation in 2023 is extremely unusual; the capital market is not MMM, so please don't get carried away. They might even advise you to sell your property to buy DaarComms for them to offload the dead stocks in their portfolio.

A word is enough for the wise.

@phadriz, could I find out the following from you, if you don't mind:
1. Are you a trader, investor, or even both?
2. Do you welcome divergent opinions, even when you don't agree with them?

My brother, Stocks are meant to be traded if you don't have significant holdings to influence decision of the company. What you called trader is also known as short term investors, and the other is long term investor, I prefer the short term focusing on price appreciation because of the antecedents of business owners in Nigeria and government policies.
I welcome divergent opinions in as much it is not misleading or insulting. I have accepted so many people's points here in the past. I come in peace. I don't have any shares to market here neither do I work work for any stockbroking company in Nigeria. If you notice I'm a silent member here, I rarely comment. I really appreciate all those that make this platform lively.
God bless everyone here

BullBearMkt:

@phadriz, could I find out the following from you, if you don't mind:
1. Are you a trader, investor, or even both?
2. Do you welcome divergent opinions, even when you don't agree with them?

Ogas in the house, please advice on Wapco and Aiico over the next 60 days?

@emmanuelewumi your input is required sir

phadriz:
You own a 90 million stock A portfolio, but now that you believe stock B could yield a higher return, you believe it would be preferable to borrow 10 million to invest in stock B and profit from it. Since you are greedy, why not sell 10 million shares of stock A to fund your purchase of stock B? Investing in the stock market differs from building up stock in your offline business. You wish to take out a 22–25% interest loan to purchase shares in a nation where getting a loan is like climbing a mountain the lender might demand the head of your grandma as security.

Don’t take a loan to buy shares!

Don’t sell your property to buy shares!

Don’t invest with greed!

The marketers on this platform will offer advise that will improve your success at work, therefore novices should exercise caution when following it. Despite this, their research staff in the office provides sound technical and fundamental analysis to make excellent stock recommendations.
We experienced many of them in 2006, when they were opening small branches in various states and charming people. The market appreciation in 2023 is extremely unusual; the capital market is not MMM, so please don't get carried away. They might even advise you to sell your property to buy DaarComms for them to offload the dead stocks in their portfolio.

A word is enough for the wise.

Invest in quality stocks that are appropriately priced. A quality stock is a compounding machine whose Return On Invested Capital is greater than the Weighted Average Cost of Capital thereby creating Economic Profit and not just Accounting Profit.

A quality stock will have a Cash Flow Return On Investment that is higher than the Weighted Average Cost of Capital thereby creating a Cash Value Added.


That is the only way to build long term wealth, the lower such stocks fall the better provided you are investing with patient capital and not using a short term fund for a long term investment leading to a funding mismatch, reason why I suggest debt funding that can be liquidated through the Investment income generated by the portfolio over a period of 3 years and below.


People need to stop seeing their stock positions as a gambling ticket but as a wealth creation asset that can continue to mint predictable cash flow.

The guy with 3 million units of GTB shares commands more respect than the guy with a block of 6 units of 3 bedroom apartments at Ikorodu.

The guy with the GTB shares is sure of a predictable dividend of N9 million per annum while the landlord at Ikorodu will struggle to earn a rental income of N3 million per annum

phadriz:
My brother, Stocks are meant to be traded if you don't have significant holdings to influence decision of the company. What you called trader is also known as short term investors, and the other is long term investor, I prefer the short term focusing on price appreciation because of the antecedents of business owners in Nigeria and government policies.
I welcome divergent opinions in as much it is not misleading or insulting. I have accepted so many people's points here in the past. I come in peace. I don't have any shares to market here neither do I work work for any stockbroking company in Nigeria. If you notice I'm a silent member here, I rarely comment. I really appreciate all those that make this platform lively.
God bless everyone here

I think it is an anomaly after trading and investing consistently for 20 years and above, yet one does not have a substantial holding.

That means the trader or investor is yet to make a good use of the 8th wonder of the world which is compound interest.

N100,000 compounded at 10% for 20 years would have grown to a substantial amount

Substantial holdings in your context is different from having significant holdings to influence decision in the company, someone with 10 million units of Transcorp can not influence decision because the holdings is significant for that.

Even when you believe in a particular stock and one want to hold it till eternity, it is wisdom when you trade the stocks during ups and downs in order to have more units with the same cost invested. I'm sure you will be trading stocks you hold for several years because I know you vast knowledge in analysis.

emmanuelewumi:



I think it is an anomaly after trading and investing consistently for 20 years and above, yet one does not have a substantial holding.

That means the trader or investor is yet to make a good use of the 8th wonder of the world which is compound interest.

N100,000 compounded at 10% for 20 years would have grown to a substantial amount

phadriz:
Substantial holdings in your context is different from having significant holdings to influence decision in the company, someone with 10 million units of Transcorp can not influence decision because the holdings is significant for that.

Even when you believe in a particular stock and one want to hold it till eternity, it is wisdom when you trade the stocks during ups and downs in order to have more units with the same cost invested. I'm sure you will be trading stocks you hold for several years because I know you vast knowledge in analysis.

Bros e don do na.

Every mallam with his kettle

phadriz:
Substantial holdings in your context is different from having significant holdings to influence decision in the company, someone with 10 million units of Transcorp can not influence decision because the holdings is significant for that.

Even when you believe in a particular stock and one want to hold it till eternity, it is wisdom when you trade the stocks during ups and downs in order to have more units with the same cost invested. I'm sure you will be trading stocks you hold for several years because I know you vast knowledge in analysis.

With your aversion to loans, how can you imagine trading forex?

They trade with leverage as standard, often borrowing twenty times for every unit they put in their own capital.

This is because making money in forex often requires leverage, as the market movements can be measured in very small increments (pips).

phadriz:
My brother, Stocks are meant to be traded if you don't have significant holdings to influence decision of the company. What you called trader is also known as short term investors, and the other is long term investor, I prefer the short term focusing on price appreciation because of the antecedents of business owners in Nigeria and government policies.
I welcome divergent opinions in as much it is not misleading or insulting. I have accepted so many people's points here in the past. I come in peace. I don't have any shares to market here neither do I work work for any stockbroking company in Nigeria. If you notice I'm a silent member here, I rarely comment. I really appreciate all those that make this platform lively.
God bless everyone here

@Phadriz, I appreciate your perspective as a trader, and it's great that your methods work for you.

However, it's crucial to acknowledge that various successful investors, like @emmanuelewumi, have found success through fundamental analysis, even employing loans to boost their investments. If this strategy has consistently worked for Emmanuelewumi over the years, it deserves to be respected.

We can share our views without attacking each other. Everyone's journey in the financial markets is unique, and what works for one may not work for another.

Feel free to share your thoughts, but let's keep the discussion constructive. We're all here to grow and learn from one another.

Cheers!

sboga:


See am quoting 2006 as if himself was around …anyone fit check dat out and make predictions.


Hin wan prove na veteran hin b

See when he made the initial prediction and the analysis involved(July)
Almost 6Months Ago.

emmanuelewumi:





Based on the latest market update sent to me by United Capital the average

Price Book ratio on NGX is 2.2

Average Price Earning ratio is 11.1


Based on Graham's model, at a price book ratio of 2.2 the average return on equity should be 16%.

Based on an average return on equity of 16% the justified average Price Earning ratio on NGX should be 13.75.


With the current average PE of 11.1 the ASI will need to increase by 24% to have an average Price Earning ratio of 13.75 or ASI of 78,000.

Considering the current yield in the bond market, the expected increase of 24% will be discounted to 20.5% by using the average yield on a 10 year bond and the current yield on a 10 year bond.

So we should be looking at ASI of 75,000 for the NGX to actualize its intrinsic value.






I will advise people to look into stocks whose unleveraged return on equity is more than 16% although 20% and above is preferable and currently have a Price Earning ratio of 12 and below.




My opinion though.



Please do your due diligence

phadriz:
Substantial holdings in your context is different from having significant holdings to influence decision in the company, someone with 10 million units of Transcorp can not influence decision because the holdings is significant for that.

Even when you believe in a particular stock and one want to hold it till eternity, it is wisdom when you trade the stocks during ups and downs in order to have more units with the same cost invested. I'm sure you will be trading stocks you hold for several years because I know you vast knowledge in analysis.

Substantial is quite relative.


Ability to pay rent in Nigeria is a major headache or problem for most of us

So if your Investment income is 4 times of your rent, then you have substantial holdings. My opinion though.

If your rent is N1 per annum and you are earning N4 million and above as dividends, I think you have substantial holdings

Thank you very much, it is an healthy discussion among us. I appreciate everyone view the aim of everyone that comment on the topic of discussion is to make more money and protect our investment. I just got pissed off when someone called me a poor man, even if I am, I never begged from the person. Apologies to anyone that might think my views offended him or her.

Regards.

BullBearMkt:

@Phadriz, I appreciate your perspective as a trader, and it's great that your methods work for you.

However, it's crucial to acknowledge that various successful investors, like @emmanuelewumi, have found success through fundamental analysis, even employing loans to boost their investments. If this strategy has consistently worked for Emmanuelewumi over the years, it deserves to be respected.

We can share our views without attacking each other. Everyone's journey in the financial markets is unique, and what works for one may not work for another.

Feel free to share your thoughts, but let's keep the discussion constructive. We're all here to grow and learn from one another.

Cheers!

emmanuelewumi:




You don't trade Eurobond, you invest in it. It is good for diversification,


The Investment returns between 6% to 10% per annum in dollars and also hedges currency devaluation risk. Meaning your $1000 valued at less than 500k in January 2023 is now between $1050 $1100 valued at between N1.3 million to N1.35 million

You can access 85% of the official exchange rate equivalent as a Naira loan at 20% per annum from UC Plus Advance Ltd a subsidiary of United Capital

Thank you Sir. Yeah, invest is the word O should have used. I will look at UC Plus as suggested. Thanks.

ositadima1:


With your aversion to loans, how can you imagine trading forex?

They trade with leverage as standard, often borrowing twenty times for every unit they put in their own capital.

This is because making money in forex often requires leverage, as the market movements can be measured in very small increments (pips).

That is crazy, 20 times leverage. No wonder they get seriously burnt.

Brokers do give 100% margin loan. Meaning a portfolio of N10 million can get an additional loan of N10 million.


But the problem is the margin call, when the margin cover is below the approved level due to a fall in the value of the portfolio.

Reason why using dividends as the basis is better, a stock can't fall below 3 times of the dividend declared

Total Asset is the sum of Capital plus liability ( or leverage or loan). All the companies on the exchange have liabilities on their balance sheet. Leverage isn't all bad.
What's bad in my opinion is excessive leverage. If I have N20m in my portfolio and the opportunity of dangsugar or Gsk comes out, why won't I take 5M in margin loan to key into an opportunity that will likely materialise in months while the loan interest is per annum. For me, it all comes down to comparing the possible downside to the potential upside.
Selah

Kreos44:
Total Asset is the sum of Capital plus liability ( or leverage or loan). All the companies on the exchange have liabilities on their balance sheet. Leverage isn't all bad.
What's bad in my opinion is excessive leverage. If I have N20m in my portfolio and the opportunity of dangsugar or Gsk comes out, why won't I take 5M in margin loan to key into an opportunity that will likely materialise in months while the loan interest is per annum. For me, it all comes down to comparing the possible downside to the potential upside.
Selah

To determine if a company has excesss leverage, I use

Net Debt/ Earnings Before Interest and Taxes .

Should not be more than 3 years.



With the N20 million portfolio above, assuming the dividend was N2 million. A loan of N5 million to N6 million can accessed.


But if na Omatek or other non dividend paying stocks that gave the N20 million portfolio value, it will be better to rebalance the portfolio in order to avoid a margin call in the future

A N20 million non dividend paying portfolio can turn to a N5 million portfolio

Ogbeni stfu
Wetin Dey yan assume dis assume dat
Na u B d hero fo dis place abi?
Still pushing folks into ellah lakes and omatek
Telling dey shud take loan entr sef…
Imagine some folk gon take dis jiga seriously

emmanuelewumi:




To determine if a company has excesss leverage, I use

Net Debt/ Earnings Before Interest and Taxes .

Should not be more than 3 years.



With the N20 million portfolio above, assuming the dividend was N2 million. A loan of N5 million to N6 million can accessed.


But if na Omatek or other non dividend paying stocks that gave the N20 million portfolio value, it will be better to rebalance the portfolio in order to avoid a margin call in the future

A N20 million non dividend paying portfolio can turn to a N5 million portfolio

I perfect explanation.....

Compliments of the season

phadriz:
You own a 90 million stock A portfolio, but now that you believe stock B could yield a higher return, you believe it would be preferable to borrow 10 million to invest in stock B and profit from it. Since you are greedy, why not sell 10 million shares of stock A to fund your purchase of stock B? Investing in the stock market differs from building up stock in your offline business. You wish to take out a 22–25% interest loan to purchase shares in a nation where getting a loan is like climbing a mountain the lender might demand the head of your grandma as security.

Don’t take a loan to buy shares!

Don’t sell your property to buy shares!

Don’t invest with greed!

The marketers on this platform will offer advise that will improve your success at work, therefore novices should exercise caution when following it. Despite this, their research staff in the office provides sound technical and fundamental analysis to make excellent stock recommendations.
We experienced many of them in 2006, when they were opening small branches in various states and charming people. The market appreciation in 2023 is extremely unusual; the capital market is not MMM, so please don't get carried away. They might even advise you to sell your property to buy DaarComms for them to offload the dead stocks in their portfolio.

A word is enough for the wise.

Getting a loan for your business, Investment or personal use is very easy, provided you have acceptable collateral required by Financial Institutions.

Financial Institutions make money through the loans and advances given to customers.


The problem is that most people don't have acceptable collateral securities, more than 80% of the properties in Lagos don't have acceptable title records at the land registry. Perfecting a lien on a property can also take up to 2 months and above due to bureaucracy at the land registry and other legal compliances between the lender, borrower and land registry.

But with financial assets, it is quite easy. With email and confirmation about the genuineness of the security, you are good to go.


Someone on one of the platforms I belong to got a loan of N20 million in August 2023 using his financial assets as collateral, the loan was approved and fund disbursed in less than 12hours.



The loan was used to stock items that would be in demand during the festive period in December and must have made a net profit margin of 50%.

Although he might have made more if he invested in some stocks, but it is good he invested in his area of competence and can then reinvest the profit made into buying more stocks in January 2024

emmanuelewumi:




That is crazy, 20 times leverage. No wonder they get seriously burnt.

Brokers do give 100% margin loan. Meaning a portfolio of N10 million can get an additional loan of N10 million.


But the problem is the margin call, when the margin cover is below the approved level due to a fall in the value of the portfolio.

Reason why using dividends as the basis is better, a stock can't fall below 3 times of the dividend declared

Hmm, I get the picture.

It safer to take a loan using assets that are relatively stable (dividends, land) as collateral compare to using asset that fluctuate a lots (stocks, kryptò).

Prior to now, I was about taking some loans with my kryptò portfolio, if I have done that, I would have created a high, enormous probability of getting wiped out using loans. That kryptò of a thing fluctuate like leaves.

I will still be taking the loan but using usdt (virtual dollar) as collateral and not those leafy coïns.

I think there should be more education about using debt, the word goes deeper than it meaning.