MAKING ME MATTER.

To me, wealth is having all you need, to do all you want, to the degree that you want to, as at when you want to.

Wealth is not an end in itself but it is worth pursuing because it is a means to whatever end you choose. I believe that you can never truly be fulfilled in the absence of resources.

Steve Jobsstarted this blog to document my personal journey to financial freedom.

Over the next three years, I intend to:

  1. Grow my personal net worth to a minimum of $1,000,000.
  2. Develop a personal mentor/protege relationship with 30 self made millionaires, globally.
  3. Help 30 young people develop a personal net worth of $50, 000 each.

Audacious right?  To some, yes.  To others, no.

Well, via this blog, I will be sharing my thoughts as I pursue these goals.

Though measured in financial terms, these goals are not about money.

They are really about adding value, to myself and to others.

The money is merely a reward for going through the process.

My areas of interest include personal finance, proprietary trading (fx and equities), capital investing, entrepreneurship, business mentoring and networking.

These themes form the thread from which the fabric of this blog is woven.

Obviously, I will be focusing on my areas of interest and while I know that a few of my perspectives may change over the course of this project, I will try to ensure at every stage in my journey, that whatever I share per time will add value to whoever reads this blog.

As a millionaire in training, I will be sharing what I am doing, why I am doing it and how I am doing it, at least twice a week, hopefully in a manner that you will find helpful in your own unique journey.

I am making memories of my moments.

I am making my matters memorable.

I am making myself matter.

You only live once, you might as well live a life that leaves a legacy.

Selah.

Olufukeji Adegbeye CWM

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THE JANUARY EFFECT RALLY OF THE NIGERIAN STOCK MARKET: HOW DOES THAT CONCERN YOU?

Nigerian equities started the year 2013 on an upbeat note. Even unloved stocks rallied inexplicably and many investors rushed to buy stocks as the general sentiment is that a good number of Nigerian stocks are currently undervalued and so the market has been correcting itself.

Many investors (offshore and local) keep asking for a fundamental backing to explain the current rally. And I concur, because for every effect, there is an underlying cause, especially in the financial markets. So I decided to find out why, because if I can understand a particular market behavior as a historically repeated phenomenon, then I can exploit in future with a greater degree of certainty and profitability.

In my opinion, when trading the financial markets, be it equities, currencies, or whatever the security, you do not need to know the why of a market to be profitable, all you really need to know is what is happening and how it is happening, but a truly professional trader/investor knows that going the extra mile to understand why it is happening will give you an authoritative edge over other traders/investors.

And personally, having been burnt in the past by blind trading/investing,  I, as a trader and investor, always like to know why a security or asset is appreciating or depreciating, so I have decided to explore further and so far, my findings have been quite eye-opening, as I have attempted to investigate, understand and explain the rally from both fundamental-value and technical-momentum perspectives.

I will be sharing my conclusions, in more technical terms, as time goes by and as the markets prove or discount them but for now, all I can say is, in the light of sentiment analysis and behavioral finance (increased offshore risk appetite/January effect) as well as technical analysis (Darvas Box Momentum Breakout Trading), the rally was due to:

– the resolution of the fiscal cliff gridlock in USA at the end of the Q4 2012 loosened up risk capital for institutional investors to redistribute risk  into EMEA economies, on a rolling quarterly basis. As such, I expected that at least for the Q1 2013, the market momentum would rally unhindered and stall by March in anticipation of fundamentals shown in earnings by blue chip stock, as well as the leading stocks in the banking, brewery and fmcg sectors.

– the NSE AllShare Index retesting  its previous October resistance level and breaking it upwards in December, thus further continuing and accumulating its momentum rally. I personally see it targeting an all time high psychological level of 38,000 and who knows 40,000, if the nation’s macro-economic fundamentals as well as the individual stock earnings are encouraging.

– the spotlight on Africa as the last frontier, as constantly emphasised in Davos 2013, is enticing foreign investors.

You simply cannot discuss Africa without mentioning Nigeria and right now, in my personal opinion, by reason of her sheer population size, emerging middle or something-like-that young upwardly mobile class and petrodollar economy, Nigeria has greater room for growth ( insecurity, lack of infrastructure and corruption, not withstanding) than the more established economies of South Africa (increased labour crises and local content participation), Egypt and Libya (nascent political stability) and similar growth economies as Kenya, Angola, Liberia, Mauritius and Ghana.

To put it quite simply, the offshore investors who control the major inflows into Africa, the continent of greatest risk and greatest reward right now,  seem to think Nigeria is the next stock market bubble and so they are pumping smart money into our economy.

Enough with the technical jargon. Simple Google research will explain these basic concepts better.

Suffice to say that to downplay the importance of acquiring basic financial intelligence and investment knowledge of stocks, shares, real estate, small business development, etcetera,  is at best naive and at worst reckless, especially if you are an African youth in an emerging economy because we are the custodians of this last and wealthiest frontier called Africa.

You may not have the skill set or  disposable income to start investing into your future, but you have time, and over time, you can learn anything!  Everything every successful man ever achieved in life was done over time, so take time out to learn today what will secure your tomorrow. Or wouldn’t you like to have a robust pension plan and retirement package one day?

Remember, a good man leaves an inheritance for his children’s children! Be good!

Selah.

Olufukeji Adegbeye CWM

MY FIRST TASTE OF SELF MADE MONEY.

MAKING MONEY FROM MONEY.

My fascination with investing, trading and compounding started in the first half of 2007 when a couple of stockbroker acquaintances of mine first introduced me to the concept of allowing money to work for you, i,e, making money from money.

As an undergraduate in my penultimate year, I vividly remember my first reaction I  when I saw people invest in the capital markets and reap returns –  Life is so not fair! I thought. This is because I saw firsthand that, in life, you really do not get rewarded for simply working hard, NO, you get rewarded for working hard at working smart.

That got me SO excited, so I invested! And unfortunately for me, I got lucky and made astonishing returns the first few times I invested.

Soon, like your typical newbie investor, I started to see the financial markets as a get rich quick scheme.

Immediately, I started a campus based investment club, and even hosted a massive campus wide seminar advocating financial freedom via stock market investing. But because all I was focusing on were the rewards, I never really saw the inherent risks.

I arrogantly and naively attributed the growth of my portfolio to my personal investment competence, not realizing that the  stock market was generally upbeat, with the Nigerian Stock Exchange All Share Index (NSE ASI) growing on increased FDIs, even in the absence of solid underlying economic fundamentals.

I see now that those were all warning signs of an impending bubble burst.  Alas, back then, I was mistaking beta for alpha ( don’t mind me, I like using technical words, makes me feel smart).

I never took time to really understand the risk management and profit producing process involved in capital investing and obviously I got my fingers badly burnt in a short while. Why? My expertise and knowledge base were very limited relative to the investment opportunities which I was pursuing.

What did I learn from all this?

Your amount of wealth is directly proportional to your amount of wisdom, ALWAYS.

If you have a $1,000,000 idea or mindset, your bank account will eventually grow to $1,000,000 as you deploy those inner resources and abilities. However, if you get a $ 1,000, 000 bank balance (say, from an inheritance, a stroke of luck, a gift or something)  yet your mindset and attitude remains at a $1000 benchmark, then, eventually your bank account will shrink to reflect your mindset.

Do not try to grow your bank balance. Rather, focus on growing your value as a person and then deploy that improved value in a structured environment and watch your networth grow also.

It is your responsibility to understand your investment edge, refine your investment edge and only then can you exploit your investment edge consistently. And on handing over your portfolio to someone else to manage, that is a matter for another day.

All I will say for now is know how your investment portfolio is being managed. This is because if things go bad, you have more to lose than the fund manager does.

Selah.