GSE WEEK FROM 09-03-20 TO 13-03-20 AND CORONA VIRUS

 

GSE WEEK FROM 09-03-20 TO 13-03-20 AND CORONA VIRUS WAS SOMEWHAT BORING AGAIN.MOVEMENTS WERE WITHIN A RATHER NARROW RANGE. BUT THAT CAN CHANGE IN THE NEXT FEW WEEKS, AS THE FIRST CORONA VIRUS CASES APPEARED IN GHANA. WILL IT CHANGE?

EXPERIENCE FROM OTHER STOCK MARKETS HAVE SHOWN THAT MANY FINANCIAL MARKETS REACT ON THE VIRUS WITH MUCH VOLATILITY. REMEMBER, VOLATILITY IS DEFINED AS FOLLOWS.

Volatility is a statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security. Volatility is often measured as either the standard deviation or variance between returns from that same security or market index.

In the securities markets, volatility is (we)often associate volatility with big swings in either direction. For example, when the stock market rises and falls more than one percent over a sustained period of time, it is called a “volatile” market. An asset’s volatility is a key factor when pricing options contracts.

https://www.investopedia.com/terms/v/volatility.asp

THAT SIMPLY MEANS THAT VOLATILITY TS A FAST AND UNPREDICTABLE CHANGE, MOSTLY IN THE NEGATIVE. OFTEN, THE ECONOMIC EFFECTS OF THE VIRUS ONLY MULTIPLY TRENDS WHICH ARE ALREADY PREVALENT IN THE GIVEN COUNTRY. THIS IS THE CASE, E.G., IN THE UNITED STATES, WHERE THE EARNINGS OF LISTED COMPANIES WERE ALREADY ON THE DOWNTURN.

OF COURSE, THE VIRUS WILL PROBABLY ALSO AFFECT THE GHANAIAN FINANCIAL MARKETS IN ONE WAY OR THE OTHER. THIS IS ESPECIALLY TRUE AS GOVERNMENT ANNOUNCED VARIOUS RESTRICTIONS. BY ALL MEANS, THESE RESTRICTIONS WILL AFFECT THE PROFITS OF GHANAIAN FIRMS.

ECONOMIC DEVELOPMENTS HAVE ALREADY AFFECTED OUR ECONOMY NEGATIVELY. OIL PRICES HAVE GONE DOWN BECAUSE OR QUARRELS WITHIN THE OPEC+ RUSSIA AND OTYTHERS. EVEN THE GOLD PRICE WENT DOWN SOMEWHAT. IN A WAY, THAT WAS SURPRISING, AS USUALLY GOLD IS A “SAFE HAVEN”. BUT, IN THIS CASE FIRMS AND GOVERNMENTS WENT OUT OF GOLD AND WENT INTO CASH. THIS IS BECAUSE MANY OF THEM WANT TO COMPENSATE POSSIBLE LOSSES DUE TO THE VIRUS.

NEVERTHELESS, I DON’T SEE ANY REASON FOR A FINANCIAL PANIC, AS I DON’T SEE A REASON FOR A HEALTH PANIC. FIRST OF ALL, OUR CONSUMPTION SHOULD GO ON AS USUAL, ALTHOUGH WITH SOME RESTRICTIONS. WE MUST LIVE WITH ECONOMIC RESTRICTIONS FOR SOME TIME, AS WE MUST LIVE WITH HEALTH RESTRICTIONS.

ON THE OTHER HAND, ANY HEALTH CRISIS IN A COUNTRY GIVES THE OPPORTUNITY FOR A NEW BEGINNING. WE WILL HAVE NEW DEVELPMENTS WHEN THE CORONA CRISIS IS OVER. THESE NEW DEVELOPMENTS WILL GIVE NEW INVESTMENT OPPORTUNITIES. AS GHANA IS ONE OF THE COUNTRIES IN AFRICA INVESTORS PREFER, NEW MONIES WILL FLOW INTO THE COUNTRY. AFTER THE DARKNESS OF THE CORONA VIRUS CRISIS, SUNSHINE WILL COME AGAIN OVER THE GHANAIAN ECONOMY, AND THEREFORE, OVER THE GHANAIAN PEOPLE.

SO, GSE WEEK FROM 09-03-20 TO 13-03-20 AND CORONA VIRUS MIGHT HAVE A NEGATIVE EFFECT ON THE ECONOMY AND THE FINANCIAL MARKETS. BUT THAT WILL ONLY BE IN THE SHORT TERM. IN THE MEDIUM AND LONG TERM, A NEW BEGINNING WILL HAVE A POSITIVE EFFECT ON THE GHANAIAN ECONOMY AND THE FINANCIAL MARKETS HERE.

STAY TUNED FOR NEW DEVELOPMENTS!

 

 

GHANA STOCK EXCHANGE WEEK FROM 24-02-20 TO 28-02-20

THERE WAS STILL NOY MUCH GOING ON ON THE GHANA STOCK EXCHANGE DURING THE LAST WEEK.  GHANA STOCK EXCHANGE WEEK FROM 24-02-20 TO 28-02-20 WENT DOWN AND UP A LITTLE, BUT EVERYTHING WITHIN A TIGHT FRAME. REALLY, ONE CAN SAY IT WAS AGAIN BORING. THEREFORE, A PERSONAL ADVICE FOR YOUR OWN BUSINESS. WHY DON’T YOU TRY TO IMPROVE YOUR WEBSITE THROUGH A WEBSITE FROM GHANA RESEARCH? PERHAPS, YOUR BUSINESS WILL THEN ONE DAY ALSO LIST ON THE GHANA STOCK EXCHANGE. Continue reading “GHANA STOCK EXCHANGE WEEK FROM 24-02-20 TO 28-02-20”

CORONA VIRUS ALONE – OR IS THERE MORE?

THE THREE MAIN US-AMERICAN STOCK INDICES HAVE THE MOST TERRIBLE WEEK SINCE THE GREAT RECESSION 1929 FF. MANY PEOPLE THINK IT IS THE CORONA VIRUS THAT PUTS FEARS INTO INVESTORS’ MINDS. BUT IS IT ONLY THE CORONA VIRUS ALONE – OR IS THERE MORE?

NO DOUBT THE CORONA VIRUS PLAYS A BIG ROLE IN THE CRASH THAT HIT US-AMERICAN INDICES IN THIS WEEK. IF YOU LOOK AT INVESTING WEBSITES LIKE INVESTOPEDIA (https://www.investopedia.com/), YOU WILL SEE THAT MANY US-AMERICAN CONPANIES COMPLAIN. OBVIOUSLY, THE CORONA VIRUS INTERRUPTED THE SUPPLY CHAINS FOR PRODUCING THEIR MERCHANDISE AND SERVICES. MANY AMERICAN FIRMS GET THEIR SUPPLIES FROM CHINA AND OTHER EAST-ASIAN COUNTRIES. THEREFORE, IT IS NO MIRACLE THAT THEIR EARNINGS AND PROFIT FORECASTS FOR 2020 GO SOUTHWARD. ONE RESEARCH DEPARTMENT OF A GLOBAL BANK EVEN BELIEVES THAT THERE WON’T BE ANY POSITIVE EARNINGS RESULTS AT ALL IN 2020.

BUT IS IT ONLY THE CORONA VIRUS THAT CONTRIBUTES TO THIS OBVIOUS STOCK MARKET CRASH IN THE UNITED STATES? (BESIDES, OTHER STOCK MARKETS WORLDWIDE ALSO WENT DOWN SIGNIFICANTLY. HERE, OTHER FACTORS BESIDE THE VIRUS CONTRIBUTE TO THE DOWNFALLS. BUT, IN MY OPINION, THEY ARE DIFFERENT THAT IN THE U.S.A. IN THIS ARTICLE, I CONCENTRATE ON THE SITUATION IN THE U.S.A.)

IN MY OPINION, THERE IS AT LEAST ONE MORE OTHER REASON BESIDE THE VIRUS CONTRIBUTING TO THE RECENT DOWNFALL. THE U.S.-AMERICAN STOCKS ARE OFTEN OVERPRICED. SIMPLY, WE SEE THAT, E.G., IN THE FACT THAT SINCE YEARS, WARREN BUFFET’S BERKSHIRE HATHAWAY DID NOT FIND ANY COMPANY TO BUY.

WARREN BUFFET PREFERS TO BUY COMPANIES WITH A HIGHER INTRINSIC VALUE THAN THEIR PRICE. WE DEFINE INTRINSIC VALUE AS:

Intrinsic value is a measure of what an asset is worth. This measure is arrived at by means of an objective calculation or complex financial model, rather than using the currently trading market price of that asset.

In financial analysis this term is used in conjunction with the work of identifying, as nearly as possible, the underlying value of a company and its cash flow. In options pricing it refers to the difference between the strike price of the option and the current price of the underlying asset.

https://www.investopedia.com/terms/i/

FOR BUFFETT, THE INTRINSIC VALUE OF A COMPANY MUST BE HIGHER THAN THE PRICE HE PAYS FOR IT.

AND INVESTORS OVERPRICED THE U.S.-AMERICAN STOCK MARKETS EXTENSIVELY. THESE ARE ESPECIALLY COMPANIES WITH RELATIONS TO THE DIGITAL AGE, THE SO-CALLED GROWTH COMPANIES. WE MUST SEE THIS IN OPPOSITE TO VALUE COMPANIES – COMPANIES BUFFETT WOULD BUY.

MANY COMPANIES ON THE US STOCK MARKETS DON’T EVEN MAKE A PROFIT. THEY GROW AND GROW AND GROW, BUT THEIR DEBTS ALSO GROW AND GROW AND GROW. IN MY EYES, THIS IS NOT HEALTHY. THIS IS ESPECIALLY THE CASE IF PROFIT DEPENDS MOSTLY ON ADVERTISEMENT SALES.

THEREFORE, I BELIEVE THAT THE AMERICAN STOCK MARKET DOES NOT ONLY SUFFER FROM THE CORONA VIRUS. SURELY, AN ADDITIONAL POINT IS AN ESCESSIVE OVERPRICING OF AMERICAN COMPANIES, NOT BACKED BY ENOUGH ASSETS.

CORONA VIRUS ALONE – OR IS THERE MORE? OBVIOUSLY THERE IS MORE THAN THE EYE CAN SEE.

 

 

IS GHANA TORN BETWEEN GOLD AND OIL?

THE “GOLDSTREET” BUSINESS NEWSPAPER TODAY REPORTS THAT GHANA BENEFITS FROM A SURGE IN THE PRICE OF GOLD. TO READ THE WHOLE ARTICLE, VISIT: https://goldstreetbusiness.com/business/ghana-set-to-benefit-from-gold-price-surge/ BUT ON THE OTHER HAND, OIK PRICES ARE GOING SOUTHWARDS. IS GHANA TORN BETWEEN GOLD AND OIL? Continue reading “IS GHANA TORN BETWEEN GOLD AND OIL?”

GHANA STOCK EXCHANGE WEEK FROM 17-02-20 TO 21-02-20

ROBERT SHILLER IRRATIONAL EXUBERANCE

GHANA STOCK EXCHANGE WEEK FROM 17-02-20 TO 21-02-20 WAS RATHER BORING. BOTH INDECES WENT UP AND DOWN, DURING THE WEEK, BUT ONLY WITHIN A NARROW FRAME. AS THERE IS NOTHING SPECIAL, I DECIDED TO TELL YOU SOMETHING ABOUT A BOOK I’M CURRENTLY READING. IT HAS THE TITLE “IRRATIONAL EXUBERANCE”, AND IS WRITTEN BY NOBEL PRIZE LAUREATE, PROFESSOR ROBERT SHILLER. YOU CAN DOWNLOAD THE BOOK FROM THE BEGINNING OF THIS ARTICLE. Continue reading “GHANA STOCK EXCHANGE WEEK FROM 17-02-20 TO 21-02-20”

WARREN BUFFETT’S INVESTMENT TENETS 2/MANAGEMENT TENETS

The Warren Buffett Way

WARREN BUFFETT’S INVESTMENT TENETS 2/MANAGEMENT TENETS DISCUSSES THE PRINCIPLES UNDER WHICH WARREN BUFFETT VIEWS THE QUALITY OF THE MANAGEMENT. THE MANAGEMENT OF THE COMPANIES HE INTENDS TO INVEST IN MUST HAVE CERTAIN ASPECTS TO CONVINCE BUFFETT. THESE ARE:

— IS THE MANAGEMENT RATIONAL?

— DOES THE MANAGEMENT HAVE A POSITIVE RELATION TO THE SHAREHOLDERS?

— CAN THE MANAGEMENT RESIST THE “INSTITUTIONAL IMPERATIVE”?

AS USUAL, YOU CAN DOWNLOAD “THE WARREN BUFFETT WAY” FROM THE BEGINNING OF THE ARTICLE. ENJOY READING! Continue reading “WARREN BUFFETT’S INVESTMENT TENETS 2/MANAGEMENT TENETS”

GHANA STOCK EXCHANGE WEEK FROM 10-02-20 TO 14-02-20

GHANA STOCK EXCHANGE WEEK FROM 10-02-20 TO 14-02-20 ENDED A LITTLE BIT LOWER THAN IT STARTED. (SEE https://gse.com.gh/#1537892250859-9ee02099-32e0)                        BUT SHOULD THAT CHANGE OUR OPINION ABOUT THE FUTURE DEVELOPMENT? Continue reading “GHANA STOCK EXCHANGE WEEK FROM 10-02-20 TO 14-02-20”

GHANA STOCK EXCHANGE WEEK FROM 03-02-20 TO 07-02-20

GHANA STOCK EXCHANGE WEEK FROM 03-02-20 TO 07-02-20 WILL THIS TIME INCLUDE MONDAY, 10TH OF FEBRUARY, 2020. OBVIOUSLY, THE OVERVIEW SHOWS THAT THE RECENT STABILISATION OF THE FINANCIAL MARKETS REMAINS ON COURSE. SEE: https://gse.com.gh/#1537892250859-9ee02099-32e0  Continue reading “GHANA STOCK EXCHANGE WEEK FROM 03-02-20 TO 07-02-20”

FINANCIAL AND ECONOMIC DATA GHANA JANUARY 2020 – 3

MPC-Press-Release-January-2020-4

Summary-of-Economic-Financial-Data-January-2020

FINANCIAL AND ECONOMIC DATA GHANA JANUARY 2020 – 3 DISCUSSES

— GOVERNMENT FISCAL OPERATIONS,

— MONETARY INDICATORS,

— BANKING SECTOR INDICATORS, AND

— STOCK MARKET PERFORMANCE.

ADDITIONAL, WE WILL TAKE A LOOK AT PAYMENT SYSTEM DATA.

AS USUAL, YOU CAN DOWNLOAD BOTH BANK OF GHANA DOCUMENTS FROM THE TOP OF THIS ARTICLE. Continue reading “FINANCIAL AND ECONOMIC DATA GHANA JANUARY 2020 – 3”

FINANCIAL AND ECONOMIC DATA GHANA JANUARY 2020 – 2

MPC-Press-Release-January-2020-4

Summary-of-Economic-Financial-Data-January-2020

FINANCIAL AND ECONOMIC DATA GHANA JANUARY 2020 – 2 DISCUSSES THE FOLLOWING SECTORS:

— FOREIGN EXCHANGE RATES,

— COMMODITY PRICES, AND

— EXTERNAL SECTOR DEVELOPMENTS. Continue reading “FINANCIAL AND ECONOMIC DATA GHANA JANUARY 2020 – 2”