Some Thoughts About The Financial Crises
Capital Market, Economy, NewsSome interesting perspectives I thought to share with you. Please note these are not my thoughts, but culled
from different view points and they make a heck of a lot of sense.
For once, both optimists and pessimist agree on one thing: 2009 would probably be one of the most challenging times in living history for most people in Nigeria and the world.
Even those who predicted that Nigeria was too detached from the global economic crisis have all reversed
their positions. Warren Buffet (arguably the greatest investor of our time) says: The secret to making money is to be cautious when everyone is greedy and to be greedy when everyone is cautious. But a lot of questions are to be answered:
Has the Nigerian stock market reached its bottom? Should I average down by investing at these low prices? Is there a real estate bubble? Will Naira depreciate further? What else can I invest in? Will I keep my job in 2009?
Will there be a banking crisis or consolidation? How best can I survive in 2009? This is an attempt to answer all these questions and more.
Many experts on the Nigerian economy agree on the following predictions:
Foreign exchange rate will depreciate further to between N150 to N175 and maybe closer to N200 per US$1
by mid to year end 2009; Nigeria’s foreign reserves may have halved by 2009 ending, from about US$52billion in December 2008 ($63bn in September 08); Prime lending rates would range between 20% and 25% depending on CBN’s willingness to print money and the mode of financing our N1 trillion deficit budget;
Crude Oil prices would range between $25 to $55 per barrel depending on weather conditions and events in the Middle East; Real Estate prices would adjust downwards by between 10% to 50% (especially in Ikoyi, Lekki and Victoria Island); Nigeria ‘s cocoa exports would drop significantly;
There would be huge swings in share prices (upwards and downward) with an average slow trend upwards;
Unemployment would rise (especially amongst bankers); Consumer confidence would drop and crime rate would rise; and the Foreign exchange ‘black’ market would re-emerge and trade at a premium of between 5% to 10% above the official exchange rate.
Generally, all you need in 2009 are the 3 C’s: CASH, COURAGE and CALM.
CASH to survive and take advantage of all the golden opportunities which will arise.
COURAGE to aggressively implement all the highlighted recommendations/ Tips; and
CALM to remain steadfast.
What do you think? fill in your comments below.
You are right what we need now is Courage and Calm, but cash, well, that is the problem we are talking about, it goes futher to broaden the issue that the world and indeed Nigeria really need to do better than the old game they have playing.
My take about all this prediction is that most people are just programmed and controlled, some group of people sit somewhere play the finacial and economic game and then pass the result to the rest of the world. Why should every one panic because of prediction, a country like Nigeria has been in recession even before the global so called crisis, why do they pretend as if the economy has been good even before now.
Fuel price has been up before now, doing business in Nigeria has been very high before now, caused mainly by lack of infrastructure: power, security, bad roads and unfriendly policies.
I could write an article on this topic, but at this moment let Nigerians look inward, diversify and forget about the predictions, because others will recover and Nigeria will still lag behind, Now is the time to say we can do it for ourselves.
@ Ekene,
The big question is where did the cash go? I have noticed almost everyone’s complaining about the crunch but I also know that not everyone’s affected by this economic crisis (amongst which are salary earners outside the financial sector).
My conclusion therefore, is the that the cash exist but its the courage that’s lacking, this leads me to quote by Warren Buffet I read up somewhere ” Be cautious when others are aggressive, and be aggressive when others cautious” this is one quote about stock market investing that I have found to be very useful.