₦airaland Forum

Let them sha suspend this stamp duty thing from next week as promised.

I'm looking forward to earning extra 250k monthly from that suspension.


I don't even understand what they've been stamping sef.

Mankind2024:

https://www.youtube.com/watch?v=JwC8Ox_Udkg?si=LNYOnqgN1ztiKOul

Valuable Investing Lessons from Pastor Matthew Ashimolowo's Experience in the Nigerian Stock Market

Pastor Matthew Ashimolowo, founder of Kingsway International Christian Centre (KICC), shared a candid and cautionary tale in a 2024 interview about losing approximately ₦200 million through investments in shares of Nigerian banks, including First Bank, Skye Bank (later Polaris), and Guaranty Trust Bank (GTB). This story, analyzed in detail in the linked YouTube video, offers profound lessons for investors, particularly in volatile markets like Nigeria's.

The Perils of Leverage: Why Borrowing to Invest Can Amplify Losses
One of the most striking aspects of Pastor Ashimolowo's experience was his decision to borrow ₦60 million from Sterling Bank around 2005–2006 to purchase Skye Bank shares. The shares, bought at prices around ₦14–₦18, plummeted to as low as ₦2–₦2.50. This sharp decline not only wiped out the investment's value but triggered margin calls and repayment demands. Sterling Bank reportedly sent representatives—with policemen—to his office and church to recover the loan within 2–3 months, forcing him to liquidate assets under duress.

This episode vividly illustrates why one should avoid borrowing (leverage) to invest in the stock market. Leverage magnifies gains in bull markets but devastates in downturns, turning paper losses into real financial crises. Without debt, investors can weather volatility; with it, forced selling locks in losses.

Staying Within Your Circle of Competence
Pastor Ashimolowo's core strengths lie in ministry (the pulpit) and real estate development, where he has built substantial wealth through strategic property investments in Lagos and beyond. Venturing into bank stocks—outside his deep expertise—led to significant setbacks during the 2008–2009 Nigerian banking crisis and global financial meltdown.

As Warren Buffett famously advises, investors should stick to their circle of competence: industries and assets they understand thoroughly. The pulpit and real estate are clearly Pastor Ashimolowo's areas of maximum competence, where he has consistently generated returns far outperforming his stock ventures.

The Importance of Continuous Investment in Knowledge
While Pastor Ashimolowo did not explicitly dwell on this in the interview, his regret underscores the need for ongoing education. Bank stocks in Nigeria during that era were influenced by regulatory changes, consolidation, and economic shocks—factors that require deep research. Investors must continuously invest in knowledge about markets, sectors, and risks to avoid costly mistakes.

Humility in the Face of Market Dictates
The pastor's story reflects a humbling encounter with market forces. Despite his success elsewhere, the stock market dictated terms he couldn't control. He now advises caution, stating he has "suffered" in the Nigerian shares space and "won't touch it" again. True investing wisdom involves remaining humble, accepting that no one can outsmart the market consistently, and bowing to its realities rather than ego-driven decisions.

The Cost of Panic Selling: What If He Had Held On?
A poignant "what if" emerges from the analysis: had Pastor Ashimolowo held through the crash without leverage pressure, outcomes might differ today (as of late 2025 prices):
- GTB shares (bought ~₦18, fell to ~₦3) have recovered strongly, trading around ₦₦88 in recent weeks—potentially turning a deep loss into profit, excluding dividends.
- First Bank shares showed partial recovery but still lagged.

However, the borrowed portion forced early exits, crystallizing losses. More strikingly, he noted that the ₦60 million used for Skye Bank shares could have bought a plot in Banana Island, now worth over ₦1 billion. If he had remained invested long-term without debt, the lost money could indeed have grown substantially—or been far better allocated to real estate, potentially turning into billions through appreciation.

In summary, Pastor Ashimolowo's experience is a masterclass in prudent investing: avoid leverage, know your strengths, learn relentlessly, stay humble, and consider the long-term horizon. His preference for real estate over stocks serves as a reminder that not all assets suit every investor. This story encourages us all to invest wisely, within our competence, and with patience.

You don't do leverage in a business that you know nothing about.

Again is N60m in 2005 not worth more than N1B today? Would there really have been any profit if he bought the land? Real estate PRESERVES value not necessarily making profits

Which stocks will deliver like vitafoam or Nahco by 2030 is the big question on my mind
The search has begun

Streetinvestor2:
Which stocks will deliver like vitafoam or Nahco by 2030 is the big question on my mind
The search has begun

Ironically, the clearer answer is still either Nahco or Vitafoam

Not if it keeps growing topline at 30+% at constant gross margins.

This indicates pure volume expansion and true scaling of the business. I don't get how it's doing this and how sustainable the growth is, so I'm not buying now. But I imagine people don't buy mattresses and pillows on the spur of the moment. There's something fundamental about this business that we're missing.

nosa2:
I am not saying the company is bad but the stock price reflects all that has been said. Buying at these levels is unwise

HesInMe:
Not if it keeps growing topline at 30+% at constant gross margins.

This indicates pure volume expansion and true scaling of the business. I don't get how it's doing this and how sustainable the growth is, so I'm not buying now. But I imagine people don't buy mattresses and pillows on the spur of the moment. There's something fundamental about this business that we're missing.

Constant gross margins doesn't imply volume growth. Do you mind elaborating on why you think it is?


I I bought something at 700k and sold for 1m, I would have sold with a 30% gross margin.


If that same thing now costs me 1.4m, and I sell for 2m. I would have had higher revenue and constant margin, but the higher revenue would be due to price hike wouldn't it?


There must be a different perspective you have to this. Please share.

chimex38:
Ironically, the clearer answer is still either Nahco or Vitafoam

Nop.i beg to disagree. They have little to offer going forward

Streetinvestor2:
Which stocks will deliver like vitafoam or Nahco by 2030 is the big question on my mind
The search has begun

I’m still trying to accumulating at an average low SP

emmanuelewumi:
Dividend is N3 from an Earning Per Share of about N10.

The stock currently has a sustainable earning growth of about 20%

Major growth happens this year.
Assuming,we did the compounding last year the growth rate for 2019-2024 would present a different story.
Vitafoam is a good company that is well managed no doubt but there is no guarantee that the next five years will be good as this year.

HesInMe:
Not if it keeps growing topline at 30+% at constant gross margins.

This indicates pure volume expansion and true scaling of the business. I don't get how it's doing this and how sustainable the growth is, so I'm not buying now. But I imagine people don't buy mattresses and pillows on the spur of the moment. There's something fundamental about this business that we're missing.

let me help out.Thr foam is mostly selling for upholstery fabrication and not really the one used for sleeping. Thr is high demand of local made ones as importated version has gone beyond the reach of Middle class. And that class are in large numbers trying to settle into fmly status

HesInMe:
Not if it keeps growing topline at 30+% at constant gross margins.

This indicates pure volume expansion and true scaling of the business. I don't get how it's doing this and how sustainable the growth is, so I'm not buying now. But I imagine people don't buy mattresses and pillows on the spur of the moment. There's something fundamental about this business that we're missing.

Not only mattresses, they also manufacture insulators, they have a furniture subsidiary, they have a plant in Ghana

pluto09:
Major growth happens this year.
Assuming,we did the compounding last year the growth rate for 2019-2024 would present a different story.
Vitafoam is a good company that is well managed no doubt but there is no guarantee that the next five years will be good as this year.

Revenue growth

2021 N35.4 billion

2022 N46.3 billion

2023 N52.9 billion

2024 N82.9 billion

2025 N111.3 billion

emmanuelewumi:
Revenue growth

2021 N35.4 billion

2022 N46.3 billion

2023 N52.9 billion

2024 N82.9 billion

2025 N111.3 billion

What of profit growth??

Yes.
Investing can feel excruciatingly boring during the long accumulation phase—quietly adding to your portfolio, month after month, with little visible progress.
But then comes the moment when takeoff velocity kicks in, and the god of compounding finally answers your call.
Suddenly, the growth accelerates in ways that seem almost miraculous.
Gamblers call this "luck."
You smile and correct them:
This is not luck.
It is the inevitable reward of discipline, patience, and time.

Itzlinda:
One of my mentors said investing should be boring not fun.

emmanuelewumi:
Decided to share this.

All the best in our investment journey in 2026 and beyond

If one did not see the Naira devaluation coming and you stayed in this market between 2012 and 2023 or you think bonus shares is a return then by all means do this. But if you know whats up then you know that this advise is nonsense and I don't need to advise you

Itzlinda:
One of my mentors said investing should be boring not fun.

The act of buying and waiting for your thesis to play out is BORING

Researching and finding a new opportunity which few people are seeing is one of the most exciting thing you can do.

emmanuelewumi:
Money spinning stocks are also into boring businesses

For a country like Nigeria. When dealing with a well diversified economy/market exciting industry dey pay oh

Streetinvestor2:
Which stocks will deliver like vitafoam or Nahco by 2030 is the big question on my mind
The search has begun

The top 5 Nigerian banks would.

Vitafoam returns are not that special given what our market has done in that period

nosa2:
If one did not see the Naira devaluation coming and you stayed in this market between 2012 and 2023 or you think bonus shares is a return then by all means do this. But if you know whats up then you know that this advise is nonsense and I don't need to advise you

Stock price of Vitafoam in 2012 and 2013. The stock also gave bonus shares on 2 occasions before the current bonus shares

Can you see that the return beat inflation and currency devaluation

nosa2:
For a country like Nigeria. When dealing with a well diversified economy/market exciting industry dey pay oh

I am referring to consistency, quiet and smooth operators.

Not a one off thing

emmanuelewumi:
Stock price of Vitafoam in 2012 and 2013. The stock also gave bonus shares on 2 occasions before the current bonus shares

Can you see that the return beat inflation and currency devaluation

I have not said it is a bad company but given current market clime it is a bad stock to buy

chimex38:
Ironically, the clearer answer is still either Nahco or Vitafoam

I am voting for TIP, Ellah Lakes (if they put their house in order)

emmaodet:
I am voting for TIP, Ellah Lakes (if they put their house in order)

I agree with TIP

HesInMe:
Not if it keeps growing topline at 30+% at constant gross margins.

This indicates pure volume expansion and true scaling of the business. I don't get how it's doing this and how sustainable the growth is, so I'm not buying now. But I imagine people don't buy mattresses and pillows on the spur of the moment. There's something fundamental about this business that we're missing.

I think they are expanding to other West African countries like Gambia, guinea and more in Sierra Leone.
Also, they are expanding more into producing car filters, I think securing a car upholstery contract with a car manufacturing company.
Also expanding more into oil and gas - I don't know but I believe securing contracts to supply FPSOs, oil rigs in Nigeria with their beddings.
All in all. I think there is still more room to grow

I'm thinking uacn may, if their integration with chi is seamless, and can rein in their (chi) cost of doing business.

Streetinvestor2:
Which stocks will deliver like vitafoam or Nahco by 2030 is the big question on my mind
The search has begun

nosa2:
I have not said it is a bad company but given current market clime it is a bad stock to buy

I said that last year because I have booked over 1000% returns over the years.

But I was disappointed

Don't under rate how high a quality cum growth stock can fly.

Don't under rate how long a stock that is making Economic profit will continue to create value and wealth for the shareholders

Nothing beats the timeless melodic beauty of Orlando Owoh's highlife tunes as my perfect companion while poring over annual reports of companies.


https://www.youtube.com/watch?v=z-LUmhkzgfY?si=hR76fbYBjC3R28hp

You're right. I should've hedged a bit. It means either volume growth or inflation passthrough. Both still good, though, and indicate scaling, as bottom line is growing faster than top.

awesomeJ:
Constant gross margins doesn't imply volume growth. Do you mind elaborating on why you think it is?


I I bought something at 700k and sold for 1m, I would have sold with a 30% gross margin.

If that same thing now costs me 1.4m, and I sell for 2m. I would have had higher revenue and constant margin, but the higher revenue would be due to price hike wouldn't it?

There must be a different perspective you have to this. Please share.

emmaodet:
I am voting for TIP, Ellah Lakes (if they put their house in order)

yes. TIP is up there.
But they require government catalysts through laws and policies. At least from sub-national level.

HesInMe:
You're right. I should've hedged a bit. It means either volume growth or inflation passthrough. Both still good, though.

Yes sir.

Looks more like volume growth though. From what people are saying.

Streetinvestor2:
Nop.i beg to disagree. They have little to offer going forward

OK. we see.

Another is these Tax related revenue collectors.
Etranzact, Chams, CWG
If any is able to win a sizable market share with Firms and retail businesses.

There's a comment in the Notes that says other products have similar margins/risk profiles, so if they're growing into new lines at same margins, yes it'd mean volume expansion.

awesomeJ:
Yes sir.

Looks more like volume growth though. From what people are saying.