emmanuelewumi:


It will bring the yield on cost to 77% and dividend yield to less than 10%.

Yield on cost is based on the average cost price of the stock, dividend yield is based on the current market.

ositadima1:


I understand your perspective - once the optimists have finished buying, only pessimists and neutral investors will be left holding the inflated prices. At that point, prices will start correcting.

However, there are some issues with this idea: we don't know the extent of the optimists' resources, or why they have driven prices up so drastically. We also can't predict how much they will let prices correct before stabilizing again.

You speak with conviction based on the charts, just as Oga Rabbi was certain the US economy would crash based on his bond market analysis. Yet one and a half years later, the US is still doing well.

In OGG voice, the market has a way of humbling even the most confident experts. Me I don humble teh teh.

currentprice:
BULL Sweet sha. I smile when I over heard wife on phone planning to change dad car without asking me for support.

wonder what "Mercy" will be doing

Agbalowomeri:


Na only me love you o

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

emmanuelewumi:




You rebalance your portfolio, the market can't continue to rise forever, a sound stock delivery good financial performance can be stagnant for years or might even depreciate.


Some Personal Finance experts believe we should subtract our age from 120 whatever we get is what we should have in equities. Eg a 30 years investor will have 90% in equities while a 70 years investor will have 50% in equities.

We should be able to strike a balance between safety and hope.

I will advise the guy to sell some of his UCAP shares probably about half because there is a high probability that UCAP will drop to N20 and below after dividend declaration. Doubt if the company can pay a dividend of N2.00, it paid N1.50k last year


My opinion though

Agbalowomeri:


Bear will come
You could still get UCAP at half price

ositadima1:



I agree with you that the share price may drop later in the year, especially if better investment alternatives become available. An 8% dividend yield (2/23.9) may not be enough of an incentive for some investors.

Regarding whether 2 naira is possible, if we check UCAP's 2022 income statement, it lost 6 billion in credit losses, compared to just 450 million in 2021. I doubt the losses will be as high in 2023, and I feel 2023 was a better year overall than 2022.

So a share price of 2 naira or even higher seems possible.

Still, 2 naira would bring the dividend yield to 77%, which is well below the 128% from fixed income. Maybe that "person" will consider selling half their shares, as you suggested.

chibaby1985:
From Grace to Grass: Man Makes $20 Billion, Then Loses It All in 2 Days

https://www.legit.ng/1410834-bill-hwang-the-rise-fall-popular-trader-who-made-20-billion-then-lost-it-all-2-days.html?fbclid=IwAR2Oti1ASeDrTiqOENbBCTNxYjmnpRyz_5VpODXsSjkGTKnoW_hDmO9Dt94

rmx:


While other billionaires have their wealth mostly tied up in businesses, real estate, complex investments, sports teams, and artwork, Hwang’s $20 billion net worth was mostly liquid; that is, not tied to tangible businesses.

The summary of the story , diversification, diversification

1kinggy:


I've always valued your opinion and this was in line with my decision. May we see more wise elders like you in this market.

1kinggy:


What?!

rmx:


While other billionaires have their wealth mostly tied up in businesses, real estate, complex investments, sports teams, and artwork, Hwang’s $20 billion net worth was mostly liquid; that is, not tied to tangible businesses.

The summary of the story , diversification, diversification

ositadima1:


Wrong. Because his creditors would have still liquidated his assets to recover their money, regardless of diversification. I'm not saying diversification is bad oo.

rmx:


While other billionaires have their wealth mostly tied up in businesses, real estate, complex investments, sports teams, and artwork, Hwang’s $20 billion net worth was mostly liquid; that is, not tied to tangible businesses.

The summary of the story , diversification, diversification

chibaby1985:


Not possible...

Not all his assets... Ask Oba Otudeko

emmanuelewumi:




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

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

ositadima1:


Wrong. Because his creditors would have still liquidated his assets to recover their money, regardless of diversification. I'm not saying diversification is bad oo.

ositadima1:


But it is like you didn't read the story in full.

He was massively in debt, his positions were highly leveraged with several bank loans. Diversification would not have saved him, rather he should have eased on the loans.

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.

ositadima1:


However, in late March, after shares of ViacomCBS plummeted, banks demanded their money from Hwang's company, Archegos. As Archegos couldn’t pay, they seized its assets and sold them off, eventually wiping off Hwang's $20 billion net worth. -- Copied.



The whole story is in the link provided - are we afraid to follow links?

emmanuelewumi:



I read it, that was a margin call.

Part of what was used in the calculation of his total assets was the market value of his stock position, with a highly leveraged position a 10% drop in the portfolio value can lead to a margin call.

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.

ositadima1:


Wrong. Because his creditors would have still liquidated his assets to recover their money, regardless of diversification. I'm not saying diversification
is bad oo.

ositadima1:


However, in late March, after shares of ViacomCBS plummeted, banks demanded their money from Hwang's company, Archegos. As Archegos couldn’t pay, they seized its assets and sold them off, eventually wiping off Hwang's $20 billion net worth. -- Copied.

The whole story is in the link provided - are we afraid to follow links?