₦airaland Forum

kodewrita: How do you determine the worth of a stock?

1. Determine how much you would reasonably pay for the entire company if you had enough money to buy it.
2. Divide this by the number of shares issued by the company. That gives you the true value of the stock.

shigidi: Exactly how does one define an exit point? For instance, i purchased skye a6 5.50 and did not pull the trigger at 7.05. Now it lingers at 5.80. Do you have a percentage appreciation at which you call it quits with the hope of re-entering?

The correct exit point is when a stock is selling for more than what it's worth. When a stock worth 10 naira is selling for 12 naira, you sell. Whether you bought that stock at 8 naira or 15 naira does not matter: your purchase price doesn't matter. That's a sunk cost in Economics. It's completely irrelevant. What matters is whether or not the stock is selling for significantly more than what you think it's truly worth based on expected future profits.. If it is, you sell. If not, you hold or you buy.

Born 2be Rich: @seun, if you search through history of the Nigerian stock exchange, the stocks that performs well are the dividend paying stock...You tend to benefit from the dividend and capital appreciation.

Correlation does not imply causation. Certainly, healthy companies are more likely to be able to afford to pay dividends, but that doesn't mean shareholders who don't need the money at the moment would not be better off if those dividend paying companies decided to retain their earnings and reinvest for more growth. I don't think we disagree at all; we're just talking about different things.

However, not all stocks that pay dividend are healthy, so it is important for one to do his home work

Yep.

manie: Even if I dont need the money, I will still prefer a dividend paying company. I can reinvest the dividend into the same stock, another stock or diversify into another asset class..

There are costs involved in reinvesting dividends manually. Fees you have to pay to your broker as well as the NSE and your bank. And taxes, as well. These costs can reduce or eliminate the benefits of having the option of reinvesting the dividend in a different stock, which is probably the only benefit of getting dividends when you don't need the money.

If you need the money, dividend stocks are better for you. If not, growth stocks are probably betters or you.

pappilo: But I read that CBN ordered banks to reduce COT to 0.3% i.e. N3 on every N1,000. Have the banks failed to implement this?

Some banks started the implementation on the 1st of April. You should experience a lower COT at the end of this month.

It may mean that people will be willing to accept slightly lower rates, assuming the figure is real.

Fixed deposit accounts are a waste of your time.
Treasury Bills have better rates and are also less risky.
https://www.nairaland.com/878880/treasury-bills-nigeria

Source?

giftbox: I am interested in treasury bills, could u see me through its processes or link me to someone who could help. thanks a lot

Just contact your bank. They will give you a form to fill, and process everything for you.

They will refund you if they can't get the domain for you. Relax!

Brand_new: They are simply making too much profit and unwilling to share.

Companies in the developed world don't go public to "share" their profits.. They go public for two reasons:
1. To raise capital for the business.
2. To make the founders and early investors stinkingly rich - at least on paper.

Good afternoon!