I remember, the so-called days of future past. I am not talking about watching X-men as a kid, but watching the build up to the past Global financial meltdowns. I wasn't always a bear. In the mid-2000s like most newly self-proclaimed "students of the markets", you couldn't find anyone as bullish on the stock markets as I was. I could see a bright economic future for Nigeria and I thought with that, the stock market would follow suit. I was right, at least at first.
Back then, while we were out for an evening stroll, I was pitching a friend, whom would be my future boss, about the prospects of the Nigerian stock market. Following up to that, the stock market made me a millionaire, briefly on paper (and in Naira). And faster than one could ever imagine, my "networth" in the stock markets fell to around 10% of its peak. I waited for it to go up thinking it was a temporary crash. It looked like it would, but it went down to less than 5% of it's peak. There was it. My first lesson as an investor. What I am now just realising, it was the beginning of a long bear market.
It's very hard to guess the direction of stocks, based on sentiment, or even data. This isn't limited to investing in stocks alone, it includes forex and commodities like oil.
And speaking of Oil.....
Mistake by the Saudis?
With oil hovering between $26 and $32, I just hope the Saudis are sure of what they are doing, if not, it could sink the world. I hope they have the end planned out because the rivalry between the Saudis and the newly opened oil taps of Iran if not anticipated and calculated for by the Saudis could spell serious lost revenues for all OPEC nations and other oil producers. A competition between Iran and Saudi Arabia could make the oil glut last longer than most analysts expeced and may in the long run be bad for many growing economies.
India which just surpassed China's economic growth rate may stand to gain a lot from the above scenario. I should just move to Bangalore. ;)
Soros sees another 1930s
In the George Soros's World Economic forum interview that has been repeated lots of times on every business news TV channel and has lots of articles written about, he mentions similarities between todays economic uncertainties and the lead up to the great depression. Well, Soros is probably the only authority that can make such comparisons.
China
From an investment and infrastructure driven economy to one driven by consumption and services. Everyone claims this to be good, but where does it leave the commodity producers that are so reliant on China's production growth that is supposedly ending now.
China has been the engine of Global growth I believe not just because China has been growing 8% but because production and investment in China drives 6% and 7% economic growths elsewhere in the World. China drives the Global economy by buying from commodity producing EMs whom have been growing and now risk slowing with China's shift from production growth.
The Bears vs the Bulls
The bears think we are heading for a recession while the bulls think it's just a correction. Both sides make compelling arguments and back them up with data.
Nobody really knows, unless it's past then we look back at history and think "it was so obvious" like the dotcom crash. Many are worried about the slow down in China while others argue that after the recent economic data out of China, it's not that bad as Chinese economy shifts into a services and consumer driven one.
The Superstitious
Personally, I believe it's been 8 years since the 2008 meltdown and we are ripe for another one. Many look to history or some other indicators to suggest if we have the conditions ripe for a slowdown. This is just superstition because it's slightly always different every other time.
Nigeria's year
Hopefully, as the Nation kicks out corruption successfully, Whether oil is performing or not, we have to have other revenues sources to set up the foundation of a better economic future. Present administration's economic policy may be sound or otherwise, but the best thing to happen to Nigeria will be a "real" anti-corruption war.
The massive budget is probably an early sign of steroid shots to kick off a fast economic growth. Who knows?..
Back then, while we were out for an evening stroll, I was pitching a friend, whom would be my future boss, about the prospects of the Nigerian stock market. Following up to that, the stock market made me a millionaire, briefly on paper (and in Naira). And faster than one could ever imagine, my "networth" in the stock markets fell to around 10% of its peak. I waited for it to go up thinking it was a temporary crash. It looked like it would, but it went down to less than 5% of it's peak. There was it. My first lesson as an investor. What I am now just realising, it was the beginning of a long bear market.
 |
| only crooks win all the time in investments |
It's very hard to guess the direction of stocks, based on sentiment, or even data. This isn't limited to investing in stocks alone, it includes forex and commodities like oil.
And speaking of Oil.....
Mistake by the Saudis?
With oil hovering between $26 and $32, I just hope the Saudis are sure of what they are doing, if not, it could sink the world. I hope they have the end planned out because the rivalry between the Saudis and the newly opened oil taps of Iran if not anticipated and calculated for by the Saudis could spell serious lost revenues for all OPEC nations and other oil producers. A competition between Iran and Saudi Arabia could make the oil glut last longer than most analysts expeced and may in the long run be bad for many growing economies.
India which just surpassed China's economic growth rate may stand to gain a lot from the above scenario. I should just move to Bangalore. ;)
Soros sees another 1930s
In the George Soros's World Economic forum interview that has been repeated lots of times on every business news TV channel and has lots of articles written about, he mentions similarities between todays economic uncertainties and the lead up to the great depression. Well, Soros is probably the only authority that can make such comparisons.
China
From an investment and infrastructure driven economy to one driven by consumption and services. Everyone claims this to be good, but where does it leave the commodity producers that are so reliant on China's production growth that is supposedly ending now.
China has been the engine of Global growth I believe not just because China has been growing 8% but because production and investment in China drives 6% and 7% economic growths elsewhere in the World. China drives the Global economy by buying from commodity producing EMs whom have been growing and now risk slowing with China's shift from production growth.
The Bears vs the Bulls
The bears think we are heading for a recession while the bulls think it's just a correction. Both sides make compelling arguments and back them up with data.
Nobody really knows, unless it's past then we look back at history and think "it was so obvious" like the dotcom crash. Many are worried about the slow down in China while others argue that after the recent economic data out of China, it's not that bad as Chinese economy shifts into a services and consumer driven one.
The Superstitious
Personally, I believe it's been 8 years since the 2008 meltdown and we are ripe for another one. Many look to history or some other indicators to suggest if we have the conditions ripe for a slowdown. This is just superstition because it's slightly always different every other time.
Nigeria's year
Hopefully, as the Nation kicks out corruption successfully, Whether oil is performing or not, we have to have other revenues sources to set up the foundation of a better economic future. Present administration's economic policy may be sound or otherwise, but the best thing to happen to Nigeria will be a "real" anti-corruption war.
The massive budget is probably an early sign of steroid shots to kick off a fast economic growth. Who knows?..
2 comments:
Nicest information!!! I'll be enchanted to greatly help due to what I've learnt from here.Mr. Hugh
Superb way of explaining, and great blog to get wonderful information.Hugh
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