Invest And Grow Rich In Stocks Now!

HEARTY NOTE FROM AN INVESTOR TO FELLOW INVESTORS: COME! LET’S CONFRONT OUR STOCK INVESTING WILDERNESS!

2010-07-26T19:42:00.000+01:00

INVEST AND GROW RICH IN STOCKS NOW™!

"If you believe you or anyone else has a system that can predict the future of the stock market, the joke is on you!"
-Ralph Wanger.

“The stock market is neither your friend nor your foe. It exist to serve both the seller and buyer of securities...you fix or determines your interface”
-Okoye Pius

Fellow investor/Potential wealth creator,

There is no doubt that we’ve just passed or is still ruminating through agonizing times with our recent individual experiences on the Nigerian stock market. The Nigerian stock exchange has indeed gone through a turbulent period of its existence in recent years...regulatory policies somersaults, market caps, all-share index (ASI) nose-diving and dipping to an all time low, investors funds diminished, individual social status dislocated and disjointed as a direct consequence of invested-capital meltdown in the market.

Majority of us- investors had stories of woes to tell, burnt hands in the market, lost everything – retirement fund, everything we‘ve labored all our life, ran into debt, have priced buildings/properties foreclosed by the Banks as a result of margin trading account with the bank. Though many collapsed, had running high blood pressures, many died, flown abroad for stroke shock therapy, many money managers has being threatened with court action by non-knowledge clients, etc.

Indeed we have reacted indifferently to the situation individually and this can be surmised as market/investment apathy by our sulking investing colleagues. They may be right because naturally that is the very immediate step to take...quit!

But a word from the sage! “...before success comes in any man’s life he is sure to meet with much temporary defeat, and, perhaps, some failure. When defeat overtakes a man, the easiest and most logical thing to do is to quit. That is exactly what the majority of men do.” - Think And Grow Rich, Napoleon Hill.

To me I looked at the situation differently as I seek to probe, evaluate and unearth the reasons that led to the mess that majority...close to 95% of our colleagues suffered. Quitting was not on the card for me as I am too involved to do so because I was not only investing for myself but also overseeing some accounts for family friends and clients alike. I refused to stop three feet from gold...refused to accept defeat or to give-in because of my understanding that ‘all that goes around comes around’.

I stayed-put, dug deeper to find out some home truths on the Nigerian stock market and our investors. These amongst which are that:

“Risk comes from not knowing what you're doing.”
...Warren Buffet

“The stock market is neither your friend nor your foe. It exist to serve both the seller and buyer of securities... ...you fix or determines your interface “
...Okoye Pius.

"If you believe you or anyone else has a system that can predict the future of the stock market, the joke is on you!"
...Ralph Wanger.

"You get out of an investment what you put into it, so the first decision you have to make is how much time you are prepared to devote to the initial task of acquiring a basic knowledge of investment.
...Jim Slatter.

These thought lines led me to a right diagnosis of the core problems that investors encountered in the unforgettable joyous-times of pre-2007 (boom peak) era to the challenging times of 2007(burble burst) through to the present moment (recovery transition). These are highlighted as follows:

1. Majority of Nigerian investors (classified as retail or average investors) are not responsible for their investments. Little or no investor participation in what happens to their money once it has been staked in the market. A further elaboration is given below:

Just like in the world of marketing, there is indeed a very clear need for the customer to contribute not only information, but to perform some of the actual work in procuring or using the product or service. These processes provide useful insights into the investment process, particularly on the selling side. But investors buying equities can also learn how to integrate themselves into the process to their own advantage.

Ideally, all investors should get involved in the money management process. Given the conflicts of interest inherent in the investment industry, as well as the rampant mismanagement and scandals, the more you know and do yourself, the better. This knowledge should be converted into a sensible degree of active participation, instead of leaving things totally to brokers and firms. This is really dangerous.

2. Majority of us cannot locate where they stand in the ‘true picture’ of the stock market and seldom knows who they are too. We need to understand how the stock market works in order to profits from its working. When you don’t have the manual of a product, there is no way you can be able to operate such and effectively at that too.

3. Most investors don’t have a definite purpose and so lack a definite plan to be in the market and to play the market. They tend to drift too soon and follow the crowd because they lack courage to make definiteness of decision on any given situation-buy/sale/hold on their trade.

Dear fellow investor/potential wealth creator,

Becoming a successful investor takes education, patience and maybe even a little luck but my experience has shown that you create your own luck by what you do with the information available or ably assembled by you. My resolve to profit from the calamities of our recent experience led me to a thrilling discovery of a proprietary system that will stem the tide of colossal loss of capital by investors and make us responsible for our faith in the market.

My radar reveals that there are endless possibilities of opportunities for a zero-to-hero status change on the Nigerian stock market or any market worldwide, if one is versed or savvy enough to apply the right tool over the right information and be patient enough to watch/monitor his investment/trade to achieve the desired result. There are so many ways to achieve this but the most effective and result-oriented approach is what I conceptualized, developed and calls the “Maverick Value Strike System” MVSS™. A truly Nigerian home-grown strategy that is designed to be a global brand as stock investing is universal in language and application.

The MVSS™ is a maverick investment strategy, the hallmark of the maverick revolutionary wealth compounding prowess whose catch-word is “maximize the harvest…minimize the loss…then compound wealth over time!”

The import of this new investment/trading strategy is an integration of the investment philosophies and strategies of the three most legendary investment icons- Benjamin Graham, Warren Buffett and Carl Icahn.

It brings to birth the MAVERICK INVESTMENT PARADIGM of freedom, independence of thought of purpose to live life to its fullest using uncommon sense approach to wealth creation and retention.

The maverick investor is a qualified investor because he is endowed with vast financial intelligence and knowledge.

He applies both fundamental and technical skills in analyzing a company before making a buy decision as he understands that he is operating from outside of the company- thus he is a buying shareholder.

He also understood he is investing in business developed and run by others, he also knows that for him to achieve success in this chosen endeavor, that he must have sound financial education to enable him make informed decisions as per analyzing a company from her financial statements.

Dear investor,

Permit me to spill my sweet secrets...discovery...my ‘market advantage’ to you as I invite you to my seminar to unfold a ‘completely new way of approaching stock market investing and compounding wealth’. Some early birds called it a new "recipe for success in a market melt-down but I call it “an investing insurance” that shield you from huge losses in an up and down market. It is your magic wand in a market crisis...value entry locator…a manager in times of great uncertainty!

Though you may have your reservation on the stock market which is clouded in fears- your only imaginary limitation to initiatives, success and ultimately comfort of wealth. You might have sworn ‘No, not again!’ with the stock market; but like every pregnant woman in the labor room, detests her husband-source of her pain, usually (101%) have a re-think after safe delivery. You will...I know you’d be back in no distant time... that time is right NOW!!!

My optimism of your return is based on the time tested fact that no asset class - bond market, real estate, gold etc, can give you the kind of returns on your investment than the stock market especially the Nigerian stock market, being an evolving market rightly because there are lots of ignorant, ambitious market players, market fools or greater fools with easy, idle funds- corrupt government officials who stole or will still steal public funds to pump-up the market when full enthusiasm returns to the market. The market thrives on ignorance and petty emotional greed but the better prepared, positioned savvy investor will profit from the folly of such people and cause a wealth transfer to their self

Grab this once-in –a-life-time opportunity to discover how to recover your lost capital in the stock market with interest on your terms- guaranteed!

I invite and welcome us to this all important revealing, maverick investment wealth empowerment revolutionary seminar titled:

INVEST AND GROW RICH IN STOCKS NOW:
Become a Maverick Investor and Compound Wealth Effortlessly Using The MVSS™ Investing/Trading Strategy.

Highlights of what to learn at this seminar are:

1. Introduction to the Maverick investment paradigm- a new concept in investment success.

Investing like the sages- Warren Buffett, Benjamin Graham, and Carl Icahn.

2. How to start participating in your investment- taking responsibility by fixing your unique interface with the market.

How to analyze and buy top, but best companies on the Nigerian stock exchange for peanuts and harvest a windfall using the ‘MVSS™’ stock investing/trading strategy!

Industry/market sectoral cross-comparative analysis using MVSS™ to pick best value stocks.

Tools for stock investing task: practical application session of the ‘MVSS Ultimate Wealth Codes™’

Websites to help you conduct stock market research and investment monitoring.

3. Understanding how the stock market works. The need to truly locate where you stand on the ‘TRUE PICTURE’ of the market at every point in time.

How to understand and play market emotions and intrigues to increase your bank accounts digit

FAQ:

Why am I sharing this knowledge with you?

ANSWER: This is due to my understanding that we exist as a solution to somebody else problem that informed my personal vision in life which is expressed thus:

"To eradicate poverty on a global scale by helping people become masters of their own wealth and achievement through education and entrepreneurship, and by researching and teaching the most advanced mindset, strategies, skills and systems that produce real world results in a forum designed to provide educational access to as many people as possible (regardless of situation or circumstance). I believe that all people should have the opportunity to create the wealth and fulfillment they most desire and truly deserve."

Why you must heed this call to attend this all-important seminar?

ANSWER: I don’t think you would like to remain a life member of the ‘stock market donors club’. A club dedicated to transfer wealth to the prepared, knowledge-based investors, year-in, year-out. They pump-up the market and create the momentum that pushes or accelerates reward for the savvy investors.

Why am I giving out so much for such a low fee?

ANSWER: This is the pilot insemination of the MVSS™ investing/trading strategy ideas to the public. I need only 50 Nigerians for this pilot-test seedling. It is also my contribution to financial and investing literacy as called by Nigerian CBN governor, Mallam Sanusi Sanusi when he indicted Nigerian investor’s ignorance of investment skills as being responsible for the crash of the equity market in Nigeria. The next seminar will not come so cheap when those who attends now will come up with their testimonies.

SEMINAR INFORMATION:

Date: September 4th, 2010

Time: Registration starts 9.am prompt. First session 10am- 12.30pm, Break12.30-1.00pm, Second session commence 1.00-4.30pm.

Venue: Mission Support International, Hall (MSI) 33 Airport rd., beside Old Airport, Warri.

FEE: N5, 500.00 FLAT AT BANK ONLY, WHILE PAYMENT @ SEMINAR VENUE/DATE is N7, 500.00 ONLY.

PAYMENT DETAILS: You can pay into any of these bank accounts nationwide:

PISKOYE NIGERIA LIMITED
OCEANIC BANK - 0481101008773
FIRST BANK - 5152030002233
UBA. PLC - 01150030003401

AFTER PAYMENT: Send text or call 07069545121 or 08078682111(Pius) with “your name, teller number and “I have paid to become a maverick investor”

Please endeavor to come to seminar venue with bank payment teller to confirm and facilitate your registration into the hall.

EARLY BIRDS BONUS:

First 10 respondents to send payment text “I have paid to become a maverick investor” will automatically be recipient of my paying online newsletter ‘ultimate investors edge” subscription for three 3 months free. Annual subscription fee for this newsletter is N24, 000.00 while monthly it is N2000.00 only.

Free mentorship and guidance to profit from the market for the remaining days of this year, 2010 (31-12-2010).

ATTENDANCE BENFITS AND BONUS:

New investors who are desirous to start their investment career immediately will have their CSCS account opened for them under The Bridge Securities Ltd.

You will be entitled to 25% discount on my upcoming book - INVEST AND GROW RICH IN STOCKS NOW™ (...secret...)

Special mentorship program to assist attendees between seminar date and last day of the year 2010.

Dear Fellow investor and potential wealth creator,

I thank you for giving me your busy time by your reading this note of mine though lengthy but worth the stress because it sure is going to change your destiny by showing you how to catch fish and not giving you fish as most seminars speakers used to give hot stock tips that ultimately fail before you enter the trade as the stock market is time strung.

Finally “if we are related” according to Emerson, “we shall meet” at the seminar venue and together we can change our destinies and move our nation and the world forward.

Okoye Okechukwu Pius,
A maverick investor, founder and promoter of the MAVERICK INVESTMENT PARADIGM, conceived and developed the MVSS™ investment/trading strategy.

5 foreign, 6 local banks scramble for sick bank

2010-07-12T11:20:00.000+01:00

Written by Odidison Omankhanlen, Lagos
Monday, 12 July 2010

THE race to acquire the troubled banks in the country has assumed a frightening and unhealthy dimension, as both international and local banks are scrambling and jostling to be part of the exercise.

As of the weekend, the Nigerian Tribune gathered that five foreign financial institutions and six local banks were in the queue to acquire some of the banks.

The bidders’ renewed interest might not be unconnected with the apex bank’s effort to clean the balance sheets of the banks through the Asset Management Company (AMC); impressive first quarter financials posted by the affected banks; ongoing holistic reforms in the sector, and re-assuring message from the Minister of Finance, Mr Olusegun Aganga, that local banks should join the acquisition race.

Nigerian Tribune gathered that while the foreign banks had indicated preferred interest in Intercontinental Bank, Oceanic Bank and Union Bank, local banks, including Fidelity Bank and Ecobank, wanted Afribank.

Governor, Central Bank of Nigeria (CBN), Mallam Lamido Sanusi, had maintained that securing the future of the above-named banks was his priority, as they were the most systematically important.

A competent source at the CBN, who pleaded anonymity, told the Nigerian Tribune that they were taking their time to carry out a detail scrutiny of the documents submitted by the bidders, in order not to sell the banks to wrong organisations.

Barring any unforeseen circumstance, the source said the apex bank would soon hand over five of the 10 banks to new owners earlier than scheduled, following sustained pressures from the bidders.

The CBN governor had said the banks would be handed over to new owners by September or October.

Standard Bank Group Limited, FirstRand Limited and Old Mutual Plc, three of the largest financial institutions in South Africa, in January, said they might be interested in buying stakes in Nigerian banks, while local banks like Fidelity Bank Plc, Ecobank Nigeria, First Bank and Skye Bank were also said to be in the race.

The planned sale of the banks has divided the shareholders’ group in the country.

While some see the plan as part of the current reforms in the industry, others are opposed to the move.

Meanwhile, an Abuja high court will, today, be hearing a suit filed by the Proactive Shareholders Association of Nigeria (PSAN) against the apex bank, to determine the latter’s competence to sell any of the banks.

In a telephone interview, the legal adviser to the association, Mr Nnodi Okeke, said his clients were in court to stop the sale process as CBN could not sell what it did not own.

He said before any bank was sold, shareholders should be consulted, adding that the interest of the shareholders had not been taken into consideration by the CBN.

“In fact, this is against reasoning. How can you sell what you don’t own? CBN is never the owner of these banks. The directors of the affected banks and their shareholders should be allowed to recapitalise their banks. If the banks are now declaring profit, what is the yardstick for selling them?” He queried.

However, the chairman of Nigeria Professional Shareholders Association, Godwin Anono, enjoined the apex bank to go ahead with the sale, advising stakeholders to avoid litigation but join hands with the CBN governor in his effort at revamping the sector.

He noted that the sale of the banks would be beneficial to the shareholders in the long run, as the banks would be handed over to organisations that could better manage them.

As a boost to the proposed sale plan, the National Assembly, last week, sent the harmonised Asset Management Company of Nigeria (AMCON) bill to President Goodluck Jonathan for assent.

When signed, it is expected to give birth to Asset Management Company (AMC), which will soak up bad debts in the banking sector, thereby cleaning the banks’ balance sheets and enable them to resume lending to other sectors of the economy.

http://www.tribune.com.ng/index.php/front-page-news/8101-5-foreign-6-local-banks-scramble-for-sick-banks

5 foreign, 6 local banks scramble for sick banks

2010-07-12T11:06:00.000+01:00

5 foreign, 6 local banks scramble for sick banks

NIGERIAN STOCK EXCHANGE: Daily Market Summary, New Awaited Corporate Actions And Latest News Update.

2010-07-10T15:35:00.000+01:00

NSE Daily Market Report Of 08/07/2010.

The equities market closed lower at the end of today’s trading session. The NSE ASI depreciated by 1.19% to close at 24,776.04 points, compared to the depreciation of 0.38% recorded 07/07/2010. The return on the NSE ASI year-to-date (YTD) is 18.96%. The NSE ASI depreciated because of the losses recorded in the share prices of Dangote Flour, Dangote Sugar, U A C N, Skye Bank and UBA. The market capitalization also depreciated by 0.76% to close at N6.06trn (US$40.80bn), compared to the depreciation of 0.38% recorded yesterday to close at N6.11trn (US$41.13bn). The difference between the ASI and the Market Capitalization was due to supplementary listings.

All share Indices depreciated, except the Petroleum Marketing Index which closed unchanged, at the end of today’s trading session. The total value traded on the NSE today was N2.92bn, a decrease from N3.64bn recorded yesterday, while the total volume traded was 266.18mn in 5,916 deals. The three most actively traded stocks for the day are GT Bank (29.91mn), UBA (26.31mn) and Access Bank (25.74mn), while the three most actively traded sectors are Banking (153.92mn), Insurance (29.13mn) and The Foreign Listings (20.04mn).

Expected Corporate Actions @ full year result, Dec. 2009:

GOLDLINK INSURANCE PLC: Dividend per share of N0.02, closure of register date of 12th July 2010 while payment date is 26th July 2010.

MRS OIL NIGERIA PLC: Dividend per share of N1.25, closure of register date of 12th July, 2010 while payment date is 28th July 9, 2010.

FIRST CITY MONUMENT BANK PLC: Dividend per share of N0.05, closure of register date of 13th July, 2010 while payment date is 28th July 9, 2010.

DANGOTE SUGAR REFINERY: Dividend per share of N1.00, closure of register date of 14th July, 2010 while payment date is 30th July 2010.

PRESCO PLC: Dividend per share of N0.20, closure of register date of 19th July, 2010 while payment date is 16th August 2010.

PRESTIGE ASSURANCE CO. PLC: Dividend per share of N0.10, closure of register date of 20th July, 2010 while payment is 2nd August 2010.

LATEST MARKET NEWS!

The Nigerian Stock Exchange today listed a total of 6,661,876,000 ordinary shares of Ecobank Nigeria Plc being application for placing in favour of Ecobank Transnational Incorporated Plc. Also, the NSE listed a total of 189,499,295 ordinary shares of Interlinked Technologies Plc being successful Subscription of its Rights Issue and Placing.

Compiled By Okoye O. Pius- http://investtoprofitfromstocks.blogspot.com/

Nigerian Stock, Africa’s Second Best . . . DaMina

2010-07-10T14:27:00.001+01:00

By EMMA OKENYI
Nigeria’s main stock index, Africa’s second-best performer in the first half of this year, may gain a further 20 percent in 2010 as the government absorbs the bad debt of the country’s banks, DaMina Advisors said.

The 213-member Nigeria Stock Exchange whose 21 percent gain is second in the continent to the 28 percent advance of Kenya’s benchmark index, may reach 30,490 by year end from 25,409 on June 30 as the Asset Management Corporation. set up by government to buy toxic assets from lenders starts operating, said Sebastian Spio-Garbrah chief executive officer of DaMina.

If Amcon does “only half of its work well,” this will still trigger “a consolidation in the banking landscape, catalyze more foreign interest in the local market, and spur it to even higher values by year end,” New York-based Spio-Garbrah said by e-mail. Banks, which make up about 60 percent of the Nigerian equities market by weighting, will lead the resurgence, he said.

A debt crisis in 2009 left the country’s lenders with toxic assets of about $10 billion, Spio-Garbrah estimated a year ago while working as an Africa analyst at Eurasia Group. The central bank of Nigeria fired the top managers of eight of the 24 bank chief executives and gave the industry an injection of N620 billion ($4.1 billion) to stem the decline. Buying that debt will cost the central bank “roughly” $5 billion as commercial banks don’t have collateral to cover the bad loans, Central bank Governor Lamido Sanusi said last week.

“Although the Amcon is itself initially capitalized by less than $100 million, it will have the authority to issue up to $5 billion in Nigeria sovereign-guaranteed bonds to buy the impaired assets from the banks,” Spio-Garbrah stated.

Some stocks that will benefit include First Bank of Nigeria Plc, the biggest bank by market value, United Bank for Africa Plc and Zenith Bank Plc, he said. These banks would want to “unload their difficult and bad debts in exchange for fresh cash,” he said.

Others that will increase are First City Monument Bank Plc, “which was just on the cusp of the crisis,” and bailed-out banks including Oceanic Bank Plc, Unity Bank Plc and Afribank Nigeria Plc.
The national assembly passed the Amcon bill on June 23, and the document now awaits assent by President Goodluck Jonathan before it becoming law.

CBN boss, Sanusi said last year that he expected the law creating the company to be passed by December 31, 2009, and that it would start operating in January this year. The central bank extended the recapitalization deadlines for two bailed-out banks, Wema Bank Plc and Unity Bank Plc, by three months, the central bank said last week.

Amcon “will face its toughest hurdles in pricing the impaired assets and in the choice of assets to buy,” Spio- Garbrah said. “If Amcon is successful, Nigeria will emerge with some of the best capitalized banks in Africa.” It will also “catalyze an expansion of money supply and unfreeze credit,” he said.

Three Critical Questions Any Beginner Must Answer On The Way To Extreme Stock Market Success

2010-07-08T15:45:00.000+01:00

The fact that there are so many stocks to choose from on the NSE or in other stock market around the world and the enormous data associated with them which you are expected to examine carefully and also the attendant fact that these stocks, data, keeps changing every minute of every business day makes the possibility of you having all the information to help you make the right decision very remote; or sometimes confusing and incomprehensible when you lay your hands on them.

My advice is that these should not bother or cause you to view investing in the stock market as too technical or cumbersome for the beginner or the newbie. It is going to be a thrilling experience when you get along if only you can concentrate or rather focus on these three simple jobs:

– Sifting out
– clocking in
– clocking out

These three undertakings represent the three Critical questions any beginner or newbie investor must answer on the way to extreme stock market Success.

How do I know which stock to buy? (Sifting out the bad ones)

How do I know when to buy? (Clocking in your purchases)

How do I know when to sell? (Clocking out your sales)

How Do I Know Which Stock To Buy? (Sifting Out the Bad Ones)

To make money in the stocks market requires first, an understanding of how the stock market works and a sound strategy for buying, selling or holding. A stock is more commonly known as a share which means a portion of ownership or equity in a company.

If you are looking to make some money in the stock market, then it is important that you know how the market works and have some kind of a plan for buying, selling, and holding.
One who holds stock in a company is basically one of the owners of the company who has specific rights and obligations. Companies list themselves on a stock market or a particular stock exchange in order to sell their company equity to the public.

This result in additional capital being gathered which can then be used to further grow the company. Once a company is listed on a stock exchange, its shares can be sold or traded on a regular basis by investors and traders alike.

Companies look forward to selling their stock to the public by listing on a stock exchange. Following their initial public offering of stock or "IPO", the shares of public companies can be traded on that exchange. There are many stock exchanges around the world and they all make up what we call the "stock market

Stock market trading involves placing orders to buy or sell stocks with a Stock broking house. Brokers are compensated by charging either a flat fee or a commission, which is based on the value of the trade. To be successful in stock market trading, the stock that is purchased must be sold at a higher price. In theory, the increase in the value of the stock is largely based on the increase in the value of the company and its financial performance.

Fundamental investors are individuals who do in fact take the view that, over time, stock prices reflect the value of a company. Investors charge value by studying a range of fundamental information that will allegedly give them a glimpse into the future prospects of the company. This ranges from the company's own financial health, to the health of the industry in which it functions, to the strength of the economy at large. After performing such fundamental analysis, such an investor chooses how to go about stock market trading they're interested in.

SIFTING OUT: HOW TO FIND HOT STOCKS TO WATCH

The issue of how to find hot stocks to watch really is the ultimate question. While nobody has discovered the magic formula for picking the hot stocks that will perform best, there are trusted and tested guideposts to go about tracking down hot stocks that have fairly good prospects

 Set your investing goals

Needless to say, chasing after hot stocks without a particular goal in mind isn’t a very sound financial strategy. Before you start looking around for hot stocks to watch, think about what you hope to get out of it. Consider how much money you want to make, how much you can stand to lose and how much you really need to get started.

 Chose an industry

If you already know a lot about an industry with great growth potential, you’re in luck. In fact, you probably already have some ideas of which company’s stock to buy. If you don’t know where to start, though, reading the business journals is the easiest way to pin-point industries that are picking up steam. Another approach is to list few industries that at least mildly interest you and check into their growth potential. Sometimes, simply noticing which new products are increasingly popular can lead you to a hot stock.

 Sought out quality companies

While you definitely want to make sure any company you invest in has its financial house in order and no major problems brewing, that won’t necessarily be enough to tell you its growth potential Look into companies currently leading their industries and to what they’re doing right in terms of things like prices, quality, and customer service. Then look for similar companies that are just starting to emerge as winners.

 Seek advice

There’s a lot of research and analysis that goes into finding companies with great potential. No one can do it all alone. That’s why so many financial newspapers, magazines and newsletters publish lists of hot stocks to watch that even professional investors read. Track down one that best suits your investment goals and strategy and keep up with the stocks they pick. Just be careful where you get your advice. While getting stock tips from spam emails is obviously a bad idea, there’s also some danger in listening to stock promotions. These promotions are really just advertisements and may exaggerate the potential of the stock.

 Be aware of scams

Promotions are one thing, but some of the tips out there on hot stocks to watch are outright scams designed to prey on inexperienced investors looking for quick profits.

Think twice about accepting any stock tips from someone who has any immediate gains to make if you buy and verify any claims made, even if those claims sound realistic.

Knowing where to look to find hot stocks to watch takes some experience, but by keeping tabs on growing industries and regularly reading the financial magazines and newsletters, you have a fairly good chance of finding a winner.

HOW TO ANALYSE AND BUY TOP, BUT BEST COMPANIES ON THE NIGERIAN STOCK EXCHANGE FOR PEANUTS AND HARVEST A WINDFALL USING THE ‘MVSS™’ TRADING STRATEGY! (1)

2010-07-08T14:11:00.000+01:00

“The greatest opportunities in the markets come at times when investors desert them in droves. The end of the biggest global stock market bull run in history at the beginning of the new millennium caused many investors to shun equities but this is the one investment class that has outperformed all others over time.”
- Steven Vine

There are endless possibilities of opportunities for a zero-to-hero status change on the Nigerian stock market if one is versed or savvy enough to apply the right tool over the right information and be patient enough to watch/monitor his investment/trade to achieve the desired result. There are so many ways to achieve this but the most effective and result-oriented approach is what I call the “Maverick Value Strike System” *(MVS SYSTEM) and is identified by this formula:

Locate intrinsic value – margin of safety = Entry Point (MVSS)

To locate the intrinsic value of any stock you have to calculate with this formula thus:

P/E (Price earning) ratio X EPS (Earning per share) = Total Obtained (intrinsic Value.)

Then compare the total obtained with the current market price/value to arrive at a destination scenario below:

*If the obtained result (intrinsic value) is lower than the current price, the stock is under-valued. But if the reverse is the case, when total is higher than the stock’s current priced, the stock is said to be over-valued.

This approach could be further used to get BEST VALUE STOCK by doing same over different sectors in the stock market, picking the best rated on each and then doing a comparative analyses on them by matching the best of the best of each competing sector begging for your money and casting your lot with only the best and keep the very top seeds of the better on your watch list.

Practical Session: Calculating the Intrinsic Values of Companies and Applying Margin of Safety to Determine Best Buys.

Applying the above formula over each stock in a given or selected sector, then doing comparative sectors analysis to determine the most-undervalued stocks and sectors and then applying the margin of safety rule will greatly enhance your stock picking skills and reduce the incidence of market panic that is associated with the spur-of-the- moment buys of stocks and its attendant seed capital losses.

TOOLS FOR THIS TASK:

I implore you to visit www.fsdhsecurities.com and subscribe to their daily stock market report- It is Free. You will be receiving daily report to your email box at the close of each trading day.

On this report at the first page which is the closing share price, at the heading bar you will find divided sub-data categories, about 24 in all (numbered in the sequence of alphabets B-Y). Each category is important but for the purpose of the task before us, we are to concern ourselves only with the following data categories which are the major mechanism on which the MVSS™ strategy thrives - the P/E, EPS, Current Price, Year Low, Year High, Market Caps, Outstanding Shares, YTD % Change and current year marked-down price @ closure date. I call these data categories the Ultimate Wealth Codes™

-continues on my next post.

ABOUT ME!
Written by OKOYE OKECHUKWU PIUS.
Mr Okoye Pius is a Maverick, Investment Consultant/Stock Market Analyst And Publisher ‘Ultimate Investors Edge’ Online Newsletter with a mission to:
“Help you make better investment decisions possible"
Developed and Originated the 'MVSS' Stock Trading Strategy.
An Author, Internet Marketer, Seminar Speaker and Host
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THE MAVERICK INVESTMENT PERSPECTIVE AND YOUR WEALTH TOOL

2010-07-04T17:11:00.000+01:00

The maverick investor is a qualified investor because he is endowed with vast financial intelligence and knowledge. He applies both fundamental and technical skills in analyzing a company before making a buy decision as he understands that he is operating from outside of the company- thus he is a buying shareholder. He also understood he is investing in business developed and run by others, he also knows that for him to achieve success in this chosen endeavor, that he must have sound financial education to enable him make informed decisions as per analyzing a company from her financial statements.

PRICE EARNING RATION (P/E)

The maverick investor understands that the price earning ratio (P/E) of a stock is an indispensable tool in his hand if he must be successful. It is essential when applying both fundamental and technical inputs in reaching a buy decision. The P/E ration is also called the market multiplier. It is calculated by dividing the current market price of a stock by the previous year’s earning per share (EPS). The result is that, a low P/E would mean that a stock is selling at a relatively low price compared to its earning; while on the reverse a high P/E would indicate that a stock’s price is high and may not be much of a bargain.

Market’s Price (Per Share)
P/E ration = ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬-------------------
Net Income or Earning Per Share (EPS)

The price earning ratio differs from company to company and from market sector to another. Some may be selling for higher prices but with little or no earnings. The high price reflects the market expectation for high earning in the future.

The maverick investor being an embodiment of knowledge and independence of attitude understands that the current P/E is not as important as the future P/E. He wants to invest in a company where the financial future of the company is strong. To fully maximize the P/E ratio he must seek much more information of the company he wants to buy into as a shareholder. He has to compare the company’s ratio for the current year with that of the previous years to determine the growth rate of the company. He will also do cross-comparative analysis of the company’s ratio with those of other companies in the industry or sector of the market.

Written by OKOYE OKECHUKWU PIUS.
Mr. Okoye O. Pius is a Maverick, Investment Consultant/Stock Market Analyst And Publisher ‘Ultimate Investors Edge’ Online Newsletter with a mission to:
“Help you make better investment decisions possible"
Developed and Originated the 'MVSS' Stock Trading Strategy.

Also an author, internet marketer, seminar speaker and host.
http://www.facebook.com/pages/Warfare-Against-Losses-On-The-Nigerian-Stock-Exchange-Initiative-WALONSEI/393528339697?ref=ts,
http://investtoprofitfromstocks.
blogspot.com/
http://tinyurl.com/2we99wq
Email:ultimatewealthmastermind@gmail.com
Contact number:+2347069545121

CROWD MENTALITY IN INVESTMENT PSYCHOLOGY: THE PRECURSOR TO MAVERICK INVESTMENT MINDSET

2010-07-04T16:43:00.000+01:00

Humankind has a propensity to have their individual thoughts sacrificed when it comes to buying stocks. Their ability to make individual decision is short-circuited by the overwhelming pressure of collective opinion.

Man by default think in a ‘crowd’ mentality and like every crowd or herds of animals like cows, swine in a flow of fit, they most of the time go mad and only return to their senses slowly but individually.

Gustave Le Bon writing on the characteristics of the crowd mentality sees it this way:

“…The turning in a fixed direction of the ideas and sentiments of
individuals composing such a crowd and the disappearance of
their Personality. The crowd is always dominated by consideration
of which It is unconscious. The disappearance of brain activity
and the predominance of medullar activity. The lowering of
intelligence and the complete transformation of sentiments
-the transformed sentiment may be better or worse than those
of the individual of which the crowd is composed.
A crowd is as easily heroic or criminal.”

Investors are drawn from a wide variety of background, have different level of intelligence and in many ways have little in common. The catch is that it is surprising how these diverse groups of people frequently cluster together to take a view on the market and the dept to which this view changes, and collectively changes too.

One assumed sensible season for crowd behavior is that following crowd is seen as a means of attaching the investor to the market momentum. For as long the momentum is flowing in one direction and money can be made by following that direction, there is little to suggest irrationality. The problems arise over this crowd mentality that can be deemed irrational. This is when the pressure of the crowd causes prices to rise or fall way beyond any basis that reflects the underlying business of companies listed on the stock exchange.

-Written by OKOYE OKECHUKWU PIUS.
Mr. Okoye O. Pius is a Maverick, Investment Consultant/Stock Market Analyst And Publisher ‘Ultimate Investors Edge’ Online Newsletter with a mission to:
“Help you make better investment decisions possible"
Developed and Originated the 'MVSS' Stock Trading Strategy.
Also an author, internet marketer, seminar speaker and host.

http://investtoprofitfromstocks.
blogspot.com/

Email:ultimatewealthmastermind@gmail.com
Contact number:+2347069545121

THE ‘ MAVERICK VALUE STRIKE SYSTEM- MVSS AND THE WEALTH CODES™'

2010-07-04T15:45:00.000+01:00

The MVS System™ is a maverick investment strategy, the hallmark of the maverick revolutionary wealth compounding prowess whose catch-word is “maximize the harvest…minimize the loss…then compound wealth over time!”

The “Maverick Values Strike System- MVSS™” and the “maverick wealth codes™” are ideas that are built on the rule ‘break all rules to hit a home run’. No sharp practice applied but the end justifies the means – compounding of wealth with minimal loss of capital but maximal harvest of profits.

The MVSS is an investment strategy that is hinged on five major key skills namely:

 Clear knowledge of how the stock market works with a slant for understanding how the four phases of market circles affects your fortunes, namely: accumulation phase, mark-up phase, distribution phase and mark-down phases.

 Have a flair for or acquire a fundamental investment skill and an in-depth understanding of technical skill with a slant for and application of the power of price earning ratio (P/E) to amass wealth.

 Be able to identify the intrinsic value of an intending investment entry. An investor must determine the intrinsic value of a company by analyzing a number of business fundamentals, including earnings, revenues and assets. And a company's intrinsic value is usually higher (and more complicated) than its liquidation value - what a company would be worth if it were broken up and sold today. The liquidation value doesn't include intangibles such as the value of a brand name, which is not directly stated on the financial statements.

 Application of a self-predetermined margin of safety on any entry point of investment. The margin of safety on any investment is the difference between its purchase price and its intrinsic value. The larger this difference is (purchase price below intrinsic), the more attractive the investment - both from a safety and return perspective.

 Be able to devise an exit strategy that promotes personal target for reasonable profits and limits for losses as it reflects personal tolerance of risk and loss. The biggest nightmare for those who hang on tenaciously to shares that are rapidly losing value is that the price will fall beyond the point of recovery. For that’s the worst case scenario, but well before it is reached investors have to think of their level of loss tolerance. Most investors are more tolerant of losses than they are of risk.

Written by OKOYE OKECHUKWU PIUS.

Mr Okoye Pius is a Maverick, Investment Consultant/Stock Market Analyst And Publisher ‘Ultimate Investors Edge’ Online Newsletter with a mission to:
“Help you make better investment decisions possible"
Developed and Originated the 'MVSS' Stock Trading Strategy.
An author, seminar speaker and host, internet marketer.
http://www.facebook.com/pages/Warfare-Against-Losses-On-The-Nigerian-Stock-Exchange-Initiative-WALONSEI/393528339697?ref=ts,
http://investtoprofitfromstocks.blogspot.com/
http://tinyurl.com/2we99wq
Email:ultimatewealthmastermind@gmail.com
Contact number:+2347069545121

Uncertainty dogs banks’ purchase

2010-07-02T10:04:00.000+01:00

Almost a year after the Central Bank started an audit of Nigerian banks and declared some banks open to investors due to eroded capital among other infractions, it has remained mute on the details of potential investors or reveal the names of any interested parties.

However, despite experts’ opinion that the banks are unable to attract potential investors due to their balance sheet state, the Central Bank is saying that an encouraging number of prospective buyers have been approaching it for inquiries on the banks.

On Thursday, Reuters reported that Sanusi Lamido Sanusi, the Central Bank governor, said four international banks were among the likely bidders for banks rescued last year in a $4 billion bailout. Mr. Sanusi also said that he expected bids to be in by the end of the month, but kept silent on the names of interested investors in the banks.

“We expect (the bids) by the end of July from local banks, foreign banks, and private equity firms. The bulk of them are local, there are four international banks,” Sanusi said. Reuters quoted him, adding that the bids results would be released by September or October.

Three options

A report by Merrill Lynch that was published recently says there are three options for entrants contemplating the Nigerian bank market. “We present three options for entrants contemplating the market. Buy one of the larger distressed banks in Nigeria. A transaction of this size would be in the US$150 to 300 million range for a 50+1 per cent majority stake or in the US$300 to 600 million for outright control (100 percent). This type of deal would make sense from the perspective that an entrant would pick up a bank that has a good market reputation, despite recent risk management oversight, a broad distribution network (average branch network size of these banks is 280+), and a universal banking model with a broad product offering (retail, investment banking).”

“The second alternative is to buy one of the smaller distressed banks. “For less than US$100 million one could buy these banks outright. The benefits of this type of transaction are that you buy a smaller bank with a modest branch network and less developed franchise but gradually get on the ground training in Nigeria, learning about the industry and the market.

“The risk of this approach is that the buyer is faced with some of the same problems as Standard Bank for instance, that is smaller player in the market who does not have a broad distribution network, which one has to build.”

The third option is to buy one of the existing mid cap banks. “In our opinion, buying a clean bank that has successfully come through the CBN’s special investigation would be the lowest risk option into entering the market,” the report stated. It added that the cost of buying a stake in one of these banks is likely to be higher, but it enables the acquirer to over time increase their stake and learn the market from successful operators with a sound market position.

Investigations reveal that the nine bailed out banks made provisions by the end of September of more than 2.2 trillion naira for loan losses. Potential investors are anxious to see how quickly an asset management company (AMC) can be set up to soak up bad debts and make the banks attractive.

According to the Central Bank, the AMC, will take impaired assets off the banks’ balance sheets and replace them with government guaranteed bonds, expected to provide liquidity to the entire Nigerian banking system and bolster the prospects for long term growth.

The Central Bank of Nigeria had asked for potential bidders to register their interest in the troubled banks by mid-December, to test the enthusiasm for acquisitions.

Investors’ Exit Depresses Market Performance

2010-07-01T17:52:00.000+01:00

nvestors’ exit depresses market performance
By Daniel Osunkoya
July 1, 2010 02:00AM
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A finance analyst has said that the exit of retail investors at the Nigerian Stock Exchange (NSE) contributed to the market’s wobbly performance.

In the last one month, the NSE has recorded over N260 billion losses on its market capitalisation.

Olufemi Awoyemi, managing director and chief executive officer of Proshare Nigeria Limited, an investment advisory firm, in a report, said, “Retail investors are out of the game.” Mr. Awoyemi said the retail market disappeared as a consequence of the illiquid status of investors who are still smarting from the huge wipe-out suffered from the market crash. On why investors have refused to buy stocks, Mr. Awoyemi said, “The access to non-savings leverage (margin loans) hitherto available from banks and brokerage firms is no longer available to all and sundry for obviously risk-based reasons.”

He said the estimated market is now about 80 per cent dominated by institutional investors with foreign investor influence. “Local market participation is dominated by pension fund managers who have the liquidity to continue to play in the market on a short term basis, leading to necessary book balancing adjustments,” he said. He added that the lack of commitment from investors is apparent in “the way stocks are bought and sold on short term basis -as investors are no longer keen about holding stocks for long term, at least for now.”

Asset management

Commenting on the possibility of the Asset Management Company of Nigeria (AMCON) solving most of the fund problems in the market, Mr. Awoyemi said, “It seems investors simply do not buy the argument of regulators that the asset company would ensure that their funds in the stock market are not lost -or their losses will be significantly mitigated. They point to the statements from the Central Bank governor that shareholders in the affected banks have lost their shares just as they deal with debt overhang arising from the leverages obtained through margin loans from brokers -a fate yet to be clarified.”

He said those who have any desire to still engage the market are simply not buying the argument that this is the best time to go in and mop up stocks which are low priced. “The long drawn out delay in executing the AMCON does not suggest to some that the regulators and managers of the economy get it. This view may be a bit far stretched and perhaps presumptuous but its impact is deafening.” Mr. Awoyemi, however, said the AMCON represents one of the solutions to address the economic condition in which the market is operating and not ‘the solution.’ According to him, a greater component of the solution required will have to come from the harmonization of the fiscal and monetary policies Nigerian economy is in dire need of.

Waiting for AMCON to prop up the market? - latest news, breaking news, business, finance analysis, comments and views from Nigeria :: Businessday

2010-07-01T16:54:00.000+01:00

Waiting for AMCON to prop up the market? - latest news, breaking news, business, finance analysis, comments and views from Nigeria :: Businessday

INVEST AND GROW RICH IN STOCKS NOW! SEIZE THE MOMENT.

2010-02-12T20:47:00.000+01:00

Dear fellow investor,

Did you lose ‘ALL’ to the market melt-down?

Are you contemplating re-entering the market but still bearish?

Or has the sad experiences of burnt fingers in the market made you develop or market-phobia or complexes?

The above questions might make you sad again because it might seem or
rather succeed to re-open old wounds that you must have prayed so hard
to forget down-played. BUT NO! This is not my intention here but rather
to show you the way to hit back at the source that gave you so much
pain and dejections- NSE.

I want you to enlist into a special ‘warfare against loss of capital on
the Nigeria capital market’ by investors. Though in actual sense it is
unthinkable to stop losses on any stock/capital market anywhere in the
world because without losers there will be profits to be made by the
masters. This is so because the market will lose its attraction or appeal. There
will always be fools and greater fools in the market for the market to thrive!

There will always too be momentum investors who derive joy pumping-up the market...when they should not!

Come join me in WALONSE (war against losses on Nigeria stock exchange)
now! The battle is not for the others (crowd) but for you ONLY...to liberate
yourself from the doom-stricken, impoverished, perennial market donors club
membership.

You can start this change of fortune and status NOW! By joining an
evolving Market Savvy Elite Investors/Traders applying the art and
science of compounding profits and garnering wealth through a novel
Proprietary stock trading system “MVSS™” embedded in my Best seller,
Stock Market- Home Study Course package?

Permit me to introduce the antidote to market losses and ‘random walking’!

INVEST AND GROW RICH IN STOCKS NOW!
(Learn How To Take Advantage Of The Greatest
Forced Wealth Transfer In Nigeria And Move From Poor Nigeria To Rich
Nigeria Using My ‘MVS System™’)

To join these elite class of investors is to take action NOW by doing the following:
Just download the accompanying e-books to get more details and to
understand who I truly am.

To your success in the market through right diagnosis and right remedies!

OKOYE O. PIUS
“The Maverick Stock Market Investment Doctor™”
CEO, Ultimate wealth Empowerment Seminars Series and Piskoye Nigeria Ltd.

Dangote versus Otedola: mutually assured destruction

2009-04-04T16:42:00.000+01:00

Written by Dele Sobowale
Saturday, 04 April 2009

The two acclaimed richest Nigerians are now at war. And if you think that the rift between Alhaji Aliko Dangote and Mr Femi Otedola is no concern of yours; then you must be living in that blissful state of ignorance which the rest of the nation can ill-afford. And, if you are happy about it; then rest assured that your joy shall be short-lived as the consequences of this supposedly private disagreement becoming a national issue.
It is in the national interest to bring this war to an end before it escalates and consumes all of us - including the

Mr Femi Otedolacombatants. Already the seeds of Mutually Assured Destruction, MAD, had been sown by the adverts in the newspapers by AP Plc controlled by Otedola. It is perhaps too late to recap the can of worms that the publication had opened. I pray that will be the last revelation because the consequences are extremely grave for Nigeria at any time but more disastrous at this time.

Like most media practitioners, I have heard rumours of a rift between Otedola and the man he addressed as “My Oga” - Dangote —at the launching of Dangote Sugar Plc, IPO. He went on to demonstrate the depth of their friendship by committing his group of companies to the purchase of three billion naira worth of the Dangote Sugar shares. That disclosure almost brought down the roof as some people with poor listening or semantic habits thought he said three billion shares.

Dangote had to step in to reassure the audience that his friend will not alone mop up the entire offer, especially when it came with a one naira dividend paid up front. While others around me grumbled, I inwardly applauded. Envy has never been part of my make up and I have long accepted that we can’t all be billionaires. What thrilled me was the fact that a northerner and a Lagos state indigene could be so close as to invest so much in each others enterprises. I prayed for more of those; not only between Dangote and Otedola but between other Nigerians.

Thus for me it was a painful experience to learn that this great friendship was crumbling for reasons not yet sufficiently disclosed. I prayed that some mutual friends of the two would step in and mediate the conflict and restore the relationship to what it was before.

Alhaji Aliko Dangote (left)I have never met Otedola -one on one - despite the fact that we are both from Epe Local Government of Lagos State, but I was always happy that a Lagos boy is showing to the world that Eko is not just “for show”; that in fact, the “good men she (Lagos) breeds are the best of their kind” - to borrow a sentence from Plutarch, AD 46-120, one of the greatest historians the world has produced. Dangote, I had met once and I was deeply touched by his humility and knowledge of media personalities despite his busy schedule.

Since, it is generally assumed that birds of the same feathers fly together, I have no reason to doubt that Otedola would be just as nice in private. Anyone who is fortunate to have a good friend will readily agree with me that that is the most precious possession anybody can have; it is the “all-purpose medicine” which makes it possible at times to maintain one’s sanity in a world which seeks to separate us from our senses. Conversely, the loss of a good friend, irrespective of how it came about, is often very devastating because the impact is immeasurable.

I was still thinking of ways to get in touch with both of them when I saw the advert by AP Plc, alleging grievous infractions of the Nigerian Stock Exchange, NSE, regulations, and impliedly, that of the Securities and Exchange Commission, SEC, by Alhaji Dangote and Nova Finance and Securities Plc, resulting in steep decline of the price of AP Plc shares.

I was alarmed for two reasons. First, this step, by AP Plc, which could not have been taken without the approval of Otedola, was capable of escalating this conflict beyond any peaceful settlements -if it has not done so already. Second, it will, unquestionably, damage the capital market further by undermining the confidence of investors at a time when doubts regarding the integrity of the market can be ill-afforded.

As it turned out, I started writing this article on Thursday, March 26, 2009 at nine o’clock at night; but I did not finish it. The next morning, virtually all the newspapers had reports about the suspension of Nova Finance and the fine imposed. One of the papers also reported about shareholders of AP Plc asking what the NSE and SEC would do to Dangote -who incidentally seats on the Board of the NSE.

No one needs to be a prophet or jujuman to predict what would happen next. Those who were old enough to remember the “If you Tarka me, I’ll Daboh you” incident of the 1970s must expect not only a retaliatory response from Dangote and Nova but an expansion of the revelations that will involve other shares on the capital market demonstrating, or seeking to do so, that Otedola and some stockbroker have also been involved in share price manipulation.

When that happens, Nigerians will witness the destruction of two reputations that the two men have laboured over the years to build. I have mentioned reputation because I consider integrity as the most valuable possession any human being can have. And, despite the rumours that always swirl around the names of wealthy people about the sources of their wealth, nobody has been able to establish any criminal activity on their part -until now.

The fine and suspension of Nova has changed all that; it has also opened several avenues of inquiry which have the potential of doing further damage. From information available to me, the knives are already being brought out from several quarters which will bring to the lime light many things that the two combatants will eventually wish had not been uncovered.

“Crossing” which was the vehicle allegedly used to bring down the price of AP Plc shares has now come under the searchlight. And the issues involved are too numerous to discuss in this short piece. But, let me draw the attention of our readers to a few.
First, if “crossing” can be used to artificially devalue the shares of a firm, why can’t it be used to artificially inflate it? A call to a retired stockbroker friend confirmed to me that it has been used and abused widely in the NSE in the past and perhaps it is still in use and still being abused even now.

He went on to state that the use is most prevalent when firms already listed on the exchange want to go to the capital market for additional funds.

Then crossing had been used to boost the price of shares to lure investors. If that is true, the NSE has done a superficial job by just imposing a fine and suspension on Nova; it must go beyond that and carry out a forensic study of all the shares whose prices have appreciated astronomically from 2006 to 2008 May; and whose directors and management have sourced funds from the capital market during the period under review, to determine how many have been subjected to share price manipulations by a few people for their own benefits and to the detriment of the millions of investors who have been under the illusion that the NSE was operating a free market.

As a necessary corollary to that inquiry, the rest of us, because I am also involved, would want to know who, if anybody, were the people involved in these shady deals because we certainly have several dates in several courts with all of them.

I hope no bank is caught in the web of the conspiracy that fraudulent manipulation of crossing represents because millions of Nigerians invested in their securities based on the unprecedented appreciation of their share prices before each and every IPO. The invasion of Rome by the barbarians and the rapine and pillage that accompanied it will be child’s play compared to the wrath of investors who paid N45, N36, N30 for shares that are now tending towards N5, N4 or N3. If it turns out to be so, not only will the banks Boards and directors face violent uprising, they would have destroyed the Nigerian Stock Exchange beyond repair for years to come.

It goes without saying that not only would the NSE and the SEC Boards, Management and the Stockbroking firms will also come under scrutiny but they would also have lost the most important element in their operations - investor confidence. And they should expect it, because of what use is it for millions of people to be tricked into playing a game in which the deck is stacked in favour of a few and the stock brokers knew it all along?

However, while we must ascertain the truth; we must be very careful that we don’t, out of perhaps justified anger, destroy more than we should. Until another exchange is created, and a case can be made for the establishment of a rival exchange because of the known evils of any monopoly, we should not completely destroy this one in the interim. We should balance anger with reason.

These are some, but by all means not all, of some of the consequences of this private war between the two men. And that is the reason for calling on friends, relatives, advisers (especially lawyers) of the parties to mediate and prevent further escalation. Former President Obasanjo, as well as President Yar’Adua might even find the time to call the two to Aso Rock for a peace meeting.

The truth is; if they go down on account of deliberate or inadvertent self-destruction, they will take a lot of Nigeria’s economy down with them. War is hell. And hell is one more thing we don’t need in this country right now; at least not one between two people who hold some of the keys to our future advancement. If ever this nation needs experienced mediators, this is the time and this is the conflict requiring their services; for the sake of Nigeria.

Capital Market Crisis:SEC Seeks Tax Incentives As Bailout

2009-03-28T00:45:00.000+01:00

- Nigerian Tribune.

The Securities and Exchange Commission (SEC) is seeking tax incentives as a bailout option for the current crisis in the capital market.

Director General of SEC, Mr. Musa Al-Faki, disclosed this on Thursday in Abuja at a roundtable on Tax Incentives and Waivers in the Nigerian capital market.

According to him, tax incentive as a fiscal policy adopted by government was to grant individuals or corporations exemption from, or reduction in, their tax liabilities with a view to increasing savings and investments in particular markets or sectors of the economy.

Noting that various incentives were granted to the industrial, energy, tourism, telecommunications and export sectors, the SEC DG regretted that not much had been extended to the capital market in spite of its long recognised role of aiding economic growth and development.

Nigeria: SEC Seeks Partnership With Accountants on Repositioning

2009-03-28T00:35:00.000+01:00

Michael Eboh27 March 2009

The Securities and Exchange Commission (SEC) has announced its decision to partner with accountants and other professional body in the country in its drive towards repositioning and restructuring its operations.

According to a statement by the commission, its repositioning became necessary following the recent crisis rocking the capital and in order to brace it up for the enormous challenges ahead.

The Director-General of the commission, Musa Al-Faki, who was recently conferred with the award of a Fellow by the Association of National Accountants of Nigeria (ANAN), in Jos, Plateau State, was quoted as saying, "To position SEC for the task ahead as the capital market regains itself, accountants of repute, analysts and lawyers will be needed, to work alongside other professionals within and outside the Commission."

He called on accountants and other professionals in the financial sector to embrace integrity, making it their watchword as they go about their assignments in their respective organizations, or as external auditors, contracted to audit a company"s records.

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He disclosed that it becomes very imperative, especially at the point in time, to ensure the entrenchment of International Financial Reporting Standards, which have been accepted globally, to ensure that the current global financial meltdown is halted and reversed as soon as possible.

He expressed satisfaction at the fact that Nigeria has so many talented individuals, whose resourcefulness can be tapped into to restore the nation's economy.

Al Faki noted that the fellowship awarded him is a call to duty, as such recognition is meant to ginger recipients not to rest on their oars, but to become more committed to taking on greater challenges in the future.

AP shares finally make gainers' chart

2009-03-28T00:14:00.000+01:00

African Petroleum (AP) Plc's share that has been topping the Nigerian Stock Exchange (NSE) losers' chart for weeks finally appreciated on Wednesday.

The stock gained N2.44 on its N48.91 per share to close at N51.35 at Wednesday's trading.

The increase in the share price of AP came two days after the company alleged that Nova

Finance and Securities Limited, and Alhaji Aliko Dangote are influencing the rapid

decline in its share prices.

The company's share price that was worth N293 per share at the beginning of the year declined to N48.91 as at Tuesday, 24th March, 2009.

Sola Oni, Assistant General Manager, Corporatre Affairs Department of the Nigerian Stock Exchange, refused to comment on AP's allegation.

He said that the NSE will inform the public once their full scientific and technical investigations to determine the veracity of the claim are completed.

Meanwhile, stock market struggles to gain after Wednesday's trading.

The NSE's market capitalisation gained 0.01 per cent, or N528.52 million to close at N4.507 trillion.

The index of all the shares traded however lost 58.73 points, or 0.29 per cent, to close at 19,959.87 points from 20,018.60 points it opened the day.

A total of 206,417,892 quantities of stocks, valued at N1.187 billion were recorded in 5,888 deals. While 26 stocks appreciated in share price, 46 others record loses.

7UP Bottling Company Plc and Mobil Oil Nigeria Plc followed AP Plc in the price gainers' chart with an increase of N1.20 and 41 kobo respectively on their initial prices of N37.80 and N87.60 per share.

Oando Oil Plc led the price losers' chart with a loss of N2.90 to close at N62.10 per share.

Ecobank Transnational Incorporation Plc and Glaxo Smithkline Consumer Plc followed in the losers' chart declining by 73 kobo and 70 kobo respectively, to close at N13.89 and N15.50 per share.

The banking sub-sector maintained its lead on the most active sub-sectors' chart with 97,880,146 quantities of shares, valued at over N716.613 million in 3,566 transaction.

Trading in this sector was driven by activities in the shares of First Bank of Nigeria Plc, Bank PHB Plc, and Access Bank Plc.

The insurance sub-sector followed with 76,395,389 shares, worth N181.616 million in 443 deals.

Custodian and Allied Insurance Plc, N.E.M Insurance Company (Nig.) Plc, and Cornerstone

Insurance Company Plc drove the volume in this sub-sector.

The Information Communication sub-sector was third in the chart, with 7,602,905 shares worth N12.149 million in 86 deals.

The share value volume in this sub-sector was boosted by activity in the shares of Chams Plc, Starcomms Plc, and MTI Nigeria Plc.

NSE suspends stockbroking firm over AP's share price scam

2009-03-28T00:02:00.000+01:00

SEC commences own investigation
By Gbenga Agbana and Femi Adekoya

NIGERIAN Stock Exchange (NSE), yesterday, suspended Nova Finance and Securities Limited (NFSL), a stockbroking firm, over alleged manipulation of African Petroleum (AP) Plc's share price.

Beside, NSE imposed a fine of N500,000 per day on the stockbroking firm, effective from the date of suspension, over the share price manipulation, which has made investors to lose over N240 billion.

Also, the Exchange slammed a fine of N300,000 on AP, for contravening its post listing requirements.

Already, the Securities and Exchange Commission (SEC), the industry's apex regulatory body has commenced its own investigation into the saga.

In a chat with The Guardian on Tuesday, SEC's spokesman, Mr. Lanre Oloyi said the commission has set up a committee to look into the matter, after which appropriate action would be taken.

In a press release made available to The Guardian yesterday, the Council of the Exchange noted that its investigations into the allegation of price manipulation of AP's shares, revealed that the activities of Nova Finance and Securities Limited constitute a breach of Articles 103 and 107 of its rules and regulations.

According to the statement, "the Council of The Nigerian Stock Exchange has carefully examined the recent alleged manipulation of share prices of African Petroleum Plc through incessant buy and sell transactions by Nova Finance & Securities Limited (a dealing member firm).

"Our investigations and findings revealed that activities of Nova Finance & Securities Limited constitute a breach of Articles 103 and 107 of our Rules and Regulations, which preclude our dealing members from creating a false market on a specific security to effect a change in its price".

"Consequently, the council of the Exchange has suspended Nova Finance & Securities Limited from all capital market activities and a fine of N500,000 per day has been imposed on the firm from the effective date of suspension until the fine is paid."

The NSE lamented that AP's "avalanche of advertorials on the alleged manipulation is a breach of the Exchange's post listing requirements on information dissemination by quoted companies. The companies are obliged to inform the Exchange of any matter that affects their operations before going to the press.

"African Petroleum Plc has brought the integrity of information emanating from the Central Securities Clearing System (CSCS) Limited to ridicule by publishing what was purported to be CSCS document and we wish to assure the investing public of the confidentiality of their records at the CSCS.

"The published document by African Petroleum Plc is definitely not a CSCS document. Consequently, the Council of the Exchange has also imposed a fine of N300, 000 flat on African Petroleum Plc for contravening the post listing requirements."

Allaying the fears of the investing public, NSE reiterated its continued commitment to integrity of the market and enforcement of its rules, regulations, conventions and usages.

AP, in an advertorial in some national newspapers, alleged that NFSL, "acting under the instruction of and with active support and connivance of Alhaji Aliko Dangote," has been primarily responsible for the steep decline in the value of the shares of AP Plc, on the floor of the Nigerian Stock Exchange."

In the disclosure, AP stated that its investigations revealed that "in the last eight weeks, there has been a premeditated and orchestrated 'crossing' of AP Plc shares amongst similar entities owned and controlled by either of Alhaji Aliko Dangote or Nova Finance and Securities Limited."

AP, whose share was marked down at N273 from N300 during its public offer last year, has now had it whittled down to N51.48, as at yesterday causing the phenomenal loss of N240 billion to the shareholders.

NSE, in a swift reaction, said that "a scientific and technical investigation has commenced" on the alleged share price manipulation by NFSL.

But the National Co-ordinator of Independent Shareholders Association of Nigeria (ISAN), Mr. Sunny Nwosu, said NSE's action has come too late, saying that "a big chunk of ordinary Nigerians investments have already been sadly compromised through the negligence of regulatory authorities."

Nwosu pointed out that the AP's publication was an exposure of what has been happening to the common man in the nation's capital market.

"The association's concern is mainly for the common people whose contributions to the economy, through the stock market, have been wiped-off through unethical manipulations of their share prices, by a stockbroking firm, in alleged connivance with Alhaji Aliko Dangote.

"We are not happy that somebody who is aspiring to become the President of the Nigeria Stock Exchange should be involved in such unwholesome activity.

"We are equally unhappy that the manipulations were serially carried out right under the nose of the regulatory authorities, without being detected.

"We are however happy that AP management found the courage to make the exposure, without which investors would have continually been given the impression that market fundamentals were behind such phenomenal sharp drop in the share price.

"We are terribly worried that other prices of other shares could have suffered the same fate, moreso as other companies would have not had the courage or capacity to make the thorough investigation by AP management, which exposed the unethical market operators.

"Consequently, we are demanding for a comprehensive investigation into the operations of the capital market, which will go beyond the one which the exchange said it has now initiated," Nwosu added.

Another shareholder, who spoke to The Guardian on condition of anonymity, said he has lost over N38 million to the manipulated share price crash.

"Right now, I am on ground zero. With such colossal loss, which represents my total life savings, I may soon go below ground zero, as capacity to continue living has been totally eclipsed.

"The painful aspect of it all was that the whole thing was planned and executed by those who should have been contended with what they had already been endowed with. To say their action has now brought some other common men to their knees, financially, is most sinful," he said.

An AP official, who also spoke on condition of anonymity, said they did their home work very well to unravel the mystery behind the share price crash.

"What baffled us in the company was that the regulatory authorities were quick in querying us for price manipulation at a time, when the share price was going up. Why did they not observe the factors behind the sharp share price fall?", he asked.

He pointed out that the situation could impact negatively on investors' confidence in the market.

"The fact that the share crossing was undetected by the authorities for that long speaks volume about the sincerity or alertness of those that should regulate activities at the capital market," he said.

AP, in its statement, said the unethical practice of share crossing or round tripping, was perpetrated by NFSL, through transfer "and or purportedly selling a minimum of 50,000 units of AP Plc, which is required as the minimum to drop the price on a daily basis."

The statement added: "Shares from any of Alhaji Aliko Dangote and Nova Finance and Security Limited's owned and controlled company to another of their owned and controlled company are transferred amongst themselves, thus creating a false impression of activity on AP Plc stocks.

"This, having been done on a daily basis in the last eight weeks, has led to a drastic fall in the value of the AP stocks from over N293 to an all time low of N54.

"For the avoidance of doubt, the shares were not traded but merely crossed daily by two principals, working in concert with the sole aim of bringing down the stock. This, they have achieved from N293 to N54 in the last eight weeks."

Officials of Dangote Group declined to comment on the matter. One of the officials confirmed that Dangote had travelled out of the country and could not be reached on phone. "May be he was in a meeting over there. We shall however react to the allegation at the appropriate time," he said.

- NIGERIAN GUARDIAN NEWSPAPER ONLINE
http://www.ngrguardiannews.com/business/article01/indexn2_html?pdate=270309&ptitle=NSE%20suspends%20stockbroking%20firm%20over%20AP's%20share%20price%20scam

Can Buying And Trading In Penny Stocks Make Me a Millionaire?

2009-03-06T10:31:00.000+01:00

Buying penny stocks has really grown in popularity throughout the years. It used to be that traders only would look at the mid and large cap companies, whether it be for long term trades or even day trades. But with the emergence of traders penny stock trading, the stock market has changed. People would used to have to have a big time bank account in order to bring in a high income. Mostly because you needed at least a few thousand dollars in order to buy just 100 shares of some mid cap stock. With trading penny stock though, the doors have opened for the working class people.

Will you be millionaire buying penny stocks? Well it's pretty hard to become a millionaire trading any market. Everyone knows the statistics, however penny stocks gives you an advantage that you can't find in most trading instruments: leverage. With the kind of leverage that penny stocks give a trader, it means that the average Joe on the street can play the market. Also, many of them have grown to be extremely successful traders, and it all started with trading these dirt cheap stocks.

People that brush off penny stocks as disposable, forget the fact that many gigantic companies have started off on the bargain bins. Imagine if you were able to buy shares in those companies when they were 15 cents a share? It's the kind of thing that would not only make you rich, but it also gives you some bragging rights. That's what buying penny stocks can do.

Penny Stocks? Wisdom Path to Investing And Trading Profitably On Them!

2009-03-06T10:17:00.000+01:00

Investing in penny stocks is often seen as a cheaper alternative to buying regularly traded stock. While it’s true that it’s easier to enter this market, this doesn’t mean that the risk is lower, to the contrary, penny stocks are considered quite volatile.

A penny stock is also known as a microcap (or nano) stock which normally trades for under $5 per share. These smaller stocks are often offered by upstart and struggling companies as a way to obtain quick cash flow for their business. This is not Coca Cola or Microsoft you’re investing in. These companies have not yet proved they are stable enough to stick around for the long haul.

Because of their low cost, you may be tempted to invest in several microcap stocks that look like a good bet. Keep in mind that you cannot just randomly pick a winning stock by your gut feeling. Just like with larger stocks, penny stock investing requires lots of research on the investor side, before putting down any money.

Online, there are several companies that provide stock analysis and lists of their current picks that are formulated according current market trends. It is almost impossible for the average person who has a full-time job to do proper stock analysis by themselves. The speculative nature of small cap stocks is somewhat like riding a roller coaster. Companies you invest in will have their ups and downs.

While you can try winging it yourself, you’ll have better success if you use expert analysis that shows you what are the most promising picks, and whether or not you should keep the stock you already own or sell. Knowing when to buy and when to sell are the key ingredients of successful stock trading. This is especially true when it comes to smaller stocks.

Because these stocks are so much cheaper to buy, you could typically buy 1,000 shares of stock at fifty cents per share for a cool $500. Indeed, this is a lot of shares and if your pick is a good one, you’ll make a pretty profit. However, if it’s a bad one, you’ll lose all of your money. Therefore, choosing the right stock analysis system is really important.

No matter which stock system you choose, you should still plan on losing money, because no system is 100% accurate all of the time. There are just too many variables that can happen to a company that will be completely unpredictable. Being a successful investor, means you want to have more winners than losers.

Every successful investor also knows not to put all of their money into one stock. You will need to spread out your risk. This means investing minimal amounts of money in several stocks and watching them carefully. A wise investor will narrow their picks down to companies that offer the least risk. Finding these companies will take time and patience.

If you are new to penny stock trading, you will find it extremely beneficial to do paper trading before jumping into the market with real money. You can learn how to use a trading system by making fake trades based on real data, and then keeping score of how well you do. Paper trading is a great way to know whether a particular system is right for you without risking any money.

Once you know what to look for in a small cap company, it’s very possible to earn a nice living investing in the future of small businesses. Make sure that you have reliable resources and training tools by your side so that you have the best possible chance at making substantial profits.

Stocks: A Sure-fire Path to Impact On Your Life

2009-03-06T09:55:00.000+01:00

The concept of stocks, the things that grant us the right of ownership or vote within a corporation, have been around for a lot longer than we think. The Roman Empire contracted out a significant portion of its services to private groups. Even though the records for this are incomplete, a statement in Edward Chancellor’s book implies that the first speculative bubble occurred in those times.

Later on, in the 17th century, the Dutch East India Company was the first recorded company to issue what we call today stocks. This led to the birth of a new and innovative concept that would bring economic growth to Europe in the Middle Ages: joint ownership.

This brings us to the present day. Today there are lots of companies that enjoy great success even though they didn’t have the necessary funds to start with. Just about every huge corporation in the world has a number of shareholders behind it.

Buying and financing stocks is usually done through a broker. This is a person that arranges the stock transfer between the buyer and the seller in exchange for a commission. The process of selling stock is relatively the same with the one for purchase. Usually the broker that handles the transactions between the parties involved is listed with a stock exchange.

The stock market can bring a person great profits, but also great losses. This is due to the fluctuation of the price of stocks, which goes hand in hand with supply and demand. There are many factors that play a role in determining the price of stock and according to that price you can be either in profit or in debt. Your choices are the ones that play the most important role.

In order to be sure that you have the best results, you should make sure that you make the best choices. These choices should be made based on some criteria of analysis. The results of that analysis present the best option for you called stock picks.

Stock picks are the choices of stock you make that achieve their goals. The goals for any stock are to maximize the total return on the investment you have made, which means an increased appreciation and dividends, and also reducing the risk or limiting it to acceptable levels.

With some of the right stock picks you can rest assured that your future will be guaranteed. Some of the wealthiest men in the world have enjoyed great success with stock picks and you can be one of them. All it takes is patience and dedication.

Analyzing the potential of stocks is durable and somewhat complicated. If you are inexperienced, you should leave this task to people who know what they are doing and solicit their services when needed in order to make sure your investment is profitable.

Your broker is one of the persons that can provide some tips regarding what you should buy or sell and when to do that. Other sources of inspiration can be found over the internet. Try visiting the website speculatingstocks.com and look at some of their stock picks.

How To Buy And Sell Stocks Below Market Prices

2009-03-06T09:43:00.000+01:00

Stock trading is like thousands of transactions that take place everyday in other venues just like the stock market with one common denominator, a buyer and a seller. Stock trading is not unlike the retail world, where supply and demand reflect the price of goods and services just like supply and demand determines the price of individual equities. Although there is a similarity with the example of supply and demand, a stock may be bought or sold at different prices.

Retail goods are usually sold for a static price, stocks however can be purchased at different prices with these prices reflected in the offer or ask price and the bid price.

For example, every stock has a current bid and offer. The bid price is reflected on the left side of the box and is usually what sellers can sell the stock for at the current market price. A seller can initiate a trade to sell their stock at the current bid price with the sale almost always taking place immediately once the trade is initiated. A buyer can also use the bid side to buy stock at a lower price than what is currently being displayed on the offer or right side of the box.

If a trader does not want to pay the offer price that buyers are willing to sell their stock for, he can place a stock trade and bid for the stock on the left side of the stock at a lower price than what is being offered on the ask or offer side.
Usually if the stock is liquid, a seller will eventually sell to the bidder at the price the trader has placed on the bid side to buy the stock.

The same works for the right side of the box, the offer or ask price. The offer side is where buyers can purchase the stock at the current market price and are paying the top price for the stock at this given time during the trading day. However, if a seller wishes to sell his stock at a higher price than what is currently showing on the bid side of the stock, the trader can initiate an order and offer his stock on the ask or offer side and wait for buyers to pay the current market or best offered price for the equity. With patience, traders can buy and sell stocks for lower than the current market price making more money than he would otherwise receive at the prevailing prices.

It should be noted that stock prices do fluctuate throughout the trading day as the ebb and flow of supply and demand dictate in the financial markets. Liquidity is very important in order to purchase and sell stocks below the prevailing market price. Stocks that have very little liquidity do not lend themselves to this practice since it is difficult for buyers and sellers to name their own price in illiquid stocks.

The practice of buying and selling below the current market price is usually the realm of the scalper who takes small profits in many transactions throughout the trading day and the day trader who may buy and sell just a few times during the day. However, this trading strategy is not only for these two types of traders, the swing trader and long term investor can also profit from buying and selling below the current bid and offer price if patience is exercised.

Stock Market Wisdom Fable - The Tortoise And The Hare

2009-03-06T09:19:00.000+01:00

Once upon a time, there was a young hare, a hotshot rabbit investor who would always brag to anyone that would listen and that he was the smartest, fastest, best performing investor in the world. He would constantly tease the old tortoise about his slow, solid investment style.

Then, one day, the annoyed tortoise answered back: "There is no denying that you are very aggressive in your investment strategy. You take very high risks and get high returns. But even you can be beaten."

The young hare squealed with laughter. "Beaten? By whom? Surely not by you. I bet there's nobody in the world that can win against me, because I'm so good. If you think that you can beat me, why don't you try?"

Provoked by such bragging, the tortoise accepted the challenge. Each of them put an equal amount of money into a new account and the race was on. The hare yawned sleepily as the meek tortoise trudged slowly off.

As might be expected, the tortoise invested in high quality blue chips, companies with household names.

The hare, as anticipated, invested his money in dotcom stocks and options.

You know the story. The aggressive hare jumped out to a big early lead. In a rising market, the highest risk stocks perform the best. This is called momentum investing. Money flows into the investments that are performing the best.

The hare, having jumped out to such a large early lead, stopped paying attention to the market environment. Basically, he fell asleep. He thought to himself, "I'll have 40 winks and still remain way ahead of that stupid old turtle."

The hare awoke from his sleep and gazed around looking for the tortoise, who was nowhere in sight. Unfortunately, while he was sleeping, dreaming about what he would do with his winnings, the market turned against him.

His very high-risk portfolio had taken a terrible beating and was now practically worthless.

The tortoise, a Warren Buffett style investor, had passed the sleeping rabbit long ago. He had been plodding forward, steadily, since the beginning of the contest. The Tortoise never for a moment stopped, but went on with a slow but steady pace straight to the end of the course.

The hare realized that the tortoise was way ahead of him, and away he dashed. He leaped and bounded while gasping for breath, but it was too late. The tortoise had beaten him.

There are two very important lessons to be learned here.

First - slow and steady wins the race.

Second - never confuse your own intelligence with a bull market.

WHERE'S THE MARKET HEADED NOW?

2009-02-21T15:32:00.000+01:00

When stock prices are falling, the question on most investors' minds is "when will it stop?" In the midst of a roaring bull market, investors are eventually forced to wonder how long it can last. Since trading began in lower Manhattan and in other major financial centers around the world, individuals have wondered about and attempted to analyze the factors that drive the stock market. What causes markets to move? While there is no one answer, there are factors that are known to have a positive or negative impact on the equity markets, both on a daily basis and over time.

Supply and Demand
Daily stock market movements are largely based on the laws of supply and demand. This means that stock prices will tend to appreciate in value as demand perks up and the supply of stocks for sale decreases. Conversely, if demand for a particular issue is low and the supply or volume of stocks for sale in the marketplace is high, prices will tend to decline.

Consider the following analogy:

During the summer months, when drivers are on the road traveling in large quantities, gasoline inventories are quickly used up and therefore the price at the pump usually increases. On the other hand, when it's colder, drivers tend to stay home, and the demand for fuel goes down. In turn this usually leads to lower prices at the pump. This is very similar to how the stock works as a whole: when a lot of people are buying, prices go up. (For more, see Economic Basics: Demand And Supply.)

The Overall Health of the Economy/Interest Rates

During flush economic times, investors of all stripes (retail and institutional) generally have lots of money to invest. As they put their money to work by investing in individual issues or mutual funds, which often hold positions in dozens and sometimes even hundreds of issues, equity prices tend to rise. On the flip side, during a recession or a period of slow economic growth, investors will be more reluctant or even unable to commit investment dollars. This can lead to a decrease in demand for equities and, by extension, a decrease in stock prices.

An example of what can happen to equities when the economy slows can be found in an analysis of the period after the terrorist attacks in New York and Washington on September 11, 2001. In fact, within a few months after the attacks many firms, particularly in the financial sector, fired swaths of employees and, as a result, the economy began to slow. This translated into less investing; the stock market responded by trending lower for the first three quarters of 2002. (For related reading, see Terrorism's Effects On Wall Street.)

Interest rates and their direction can also have a dramatic impact on the economy and the stock market. Lower interest rates stimulate borrowing by investors, individuals and companies. This in turn can lead to economic expansion, an environment in which saving and investing is common. Also, because consumers may have more cash, they will tend to spend more at retail locations, which drives up corporate profits and, by extension, stock prices.

Conversely, as interest rates rise, individuals and companies tend to borrow and expand their businesses less. This can translate into less saving and investing. It may also put a damper on consumer spending and force corporate profits to decline or level off. When this happens, stocks tend to decline.

Institutional Investors
Just like retail mom-and-pop type investors by or sell stocks, so do large institutions, such as brokerage firms and mutual funds. Only they don't purchase or sell securities in small quantities - they move large blocks. The large volumes that these institutions trade can often have an effect on daily, weekly and even monthly trading activity and price action.

In other words, if a large firm, such as Fidelity (NYSE:FNF) were to purchase 500,000 shares of XYZ stock over a period of two trading days, the price of the shares could increase rapidly as the supply of stock available for sale is soaked up. Conversely, if Fidelity is looking to unload a similarly-sized position within the same period of time, this would put a tremendous number of shares into the market all at once. If there are not enough buyers, the stock's price will fall.

Program Trading
Large institutions will sometimes use computers and computer programs to help manage portfolio risk and execute orders. The good news is that they can be used successfully. The bad news, however, is that these programs can be used to fire off mass orders to buy or sell an individual security or group of securities in a short period of time; this can have a huge impact on trading.

In fact, some say that the crash of 1987 and the many large point drops that the U.S. stock market experienced throughout the 1990s and early 2000s have been caused, or at least exacerbated, by program trading.

Psychological Issues
If individuals and institutions are upbeat about the future prospects for the economy and the markets, they will often purchase stock and drive prices up. On the flip side, if individuals and institutions are bearish about the future, they may sell some of their stock holdings. This can create a self fulfilling prophecy - in the markets, wide-scale pessimism can drive down stock prices.

In fact, psychological issues can have a tremendous effect on the markets. They can lead to both irrational exuberance and stock market bubbles, or sell-offs and short-term corrections in equity prices.

Effects of Commodity Prices
Commodity prices can have a positive or negative impact on the equity markets as well. When the price of oil goes up, the price of gasoline goes up, which means that fewer potential consumers will be on the road or shopping. Also, companies that ship their goods via truck or freighter will have to pay more for deliveries, which in turn may have an adverse impact on their margins.

For example, cotton is a large component in many of the things that we buy from clothes to furniture. If the price of cotton increases markedly, consumers will usually buy fewer of those items, which could drive profits (and stock prices) down for manufacturers who use cotton in their product.

Investors should keep commodity prices in mind because this is another factor that can impact stock prices.

Bottom Line
There are a number of factors that can impact equities trading, including supply and demand, interest rates, institutional investors and programs, market sentiment and psychology and commodity prices. Investors should be aware of these factors before getting into the market, and certainly monitor them after they've made an investment.

by Glenn Curtis, (Contact Author | Biography)

Glenn Curtis started his career as an equity analyst at Cantone Research, a New Jersey-based regional brokerage firm. He has since worked as an equity analyst and a financial writer at a number of print/web publications and brokerage firms including Registered Representative Magazine, Advanced Trading Magazine, Worldlyinvestor.com, RealMoney.com, TheStreet.com and Prudential Securities. Curtis has also held Series 6,7,24 and 63 securities licenses