Monday, September 26, 2016

GSE Market Recap: CPC hits 0.02p (100% increase in price)

The stock market recorded its second sucessive win, following upward price changes in two stocks. The index climbed 7.79 points to close trading on at 1,782.91 points. The change implies a year-to-date return of -10.63%.

The GSE financial stocks index stayed flat as the market recorded no price changes in financial stocks.

The total of 2.79 million shares were exchanged for a value of GHS3.52 million. The figures recorded today compare favourably to the previous session as the trade volume and value were 18 folds and 6 folds respectively of the previous closing. GOIL led trading today with 93.88% and 99.14% of the traded volume and value respectively.

GOIL went up by GHS0.09 close to GHS1.25. CPC also gained a pesewa to close trading at GHS0.02. On the other other hand, BOPP and TOTAL recorded losses.

Tuesday, August 30, 2016

GSE-Composite Index lost points, following losses on ALW

The GSE-Composite Index lost 0.32 points, following losses on ALW, to close at 1,814.28 points. The year-to-date yield is -9.07%.

On the other hand, GSE financial stock index saw gains, as price appreciation in EGH drove the index to 1,726.07 points, up 0.74 points from the previous session.

The volume traded today was 0.09 million shares, a 37.74% decrease from yesterday's volume of 0.14 million. The corresponding value traded was GHS0.38 million. GCB was the dominant equity, accounting for more than 80% of both the volume and value traded in today's session.

EGH gained marginally from GHS6.87 to GHS6.88. On the other hand, ALW lost GHS0.02 to close at GHS0.12

Thursday, August 18, 2016

Losses on 7 stocks halted 12-day winning streak on GSE

Losses on 7 stocks halted the 12-day winning streak of the GSE Composite Index. The index closed trading at 1,824.42 points, down 8.23 points, from 1,832.65 points. This brings the year-to-date return to -8.55%.

The GSE financial stocks index also declined by 4.02 points to close trading at 1,733.67 points.

UTB and FML dominated trading with 41.62% of the traded volume and 68.29% of the value traded respectively. 0.70 millions shares were exchanged for GHS2.83 million. The traded volume and value were 2 folds and 8 folds respectivley, compared to the previous session.

EGH was the only gainer. CAL, EGL, ETI, GOIL, PZC, SIC and TOTAL saw their share prices decline.
Courtesy: CBL.

Wednesday, August 3, 2016

GCB recorded its 13th gain from start of the 3rd quarter on GSE

The GSE-Composite index closed mid-week's 1.99 points high, from 1,789.73 points to 1,791.72 points. The year-to-date currently stands at -10.19%.

The GSE financial stocks index closed at 1,686.52 points, up 2.87 points from 1,683.65 points.

A total volume of 0.15 million shares was traded for a sum of GHS0.03 million. The traded volume and value decline by 37.85% and 95.09% respectively. UTB and ETI were the dominant equities, accounting for 49.33% and 34.05% of traded volume and traded value respectively.

ALW bounced back from a GHS0.02 loss on Tuesday to close trading at GHS0.14. GCB recorded its 13th gain from start of the thrid quarter this year to date, to close trading at GHS3.34. PBC and UTB saw their share prices decline.

Monday, July 25, 2016

PBC & PZC saw their share prices decline leading market to fall

The GSE-Composite Index closed trading at 1,779.31 points, 1.14 points lower than the previous session. The downward movement was as a result of negative returns on two stocks. The year-to-date return on the stock market is -10.81%.

The GSE financial stock index stayed flat at 1,665.93 points.

A turnover of GHS0.73 million was recorded following the exchange of 0.13 million shares. The traded volume and value declined by 53.04% and 98.36% respectively. SIC emerged as the dominant equity, accounting for more than 70% of the trade volume and value.

PBC and PZC saw their share prices decline. No gains were recorded.

Wednesday, July 20, 2016

Young means Equity &The Fallacy of time diversification


From my earlier post against diversification, let me take time to address the flawed logic people have about diversification which is captured well in Jordan, Miller and Dolvin book on Valuation and Management.
Has anyone ever told you “ You’re young, so you should have a large amount of equity in your portfolio?  I know some of the people I coached during my early days of the Investment Coaching would say, Yes Patrick, you told me that. Well, while this advice could be true, the argument frequently used to support the strategy is generally incorrect. People say, although stocks are more volatile in any given year, over time this volatility cancels itself out. Investment professionals say this is a flawed argument. And they refer to the phenomenon as time diversification fallacy.
Jordan, Miller and Dolvin helped with this line of reasoning. You might remember from your statistics class that we can add  variances together. The fact means that annual variance grows each year by multiplying annual variance by the number of years. Standard deviations (SD) cannot be added together because the SD is the square root of the variance, however, an annual SD grows each year by the square roots of the number of years.  This feature is very handy when we are describing the returns and risk of an investment.  For example, If  we take a randomly selected portfolio of large –cap stocks of standard deviation of about 20%, and hold this portfolio for 16 years, the SD would be about 80%, which is 20% multiplied by the square root of 16.

Bottom line: Volatility increases over time – Volatility does not “cancel out” over time.  Whiles investing in equity gives you a large chance of having a portfolio with extremely large value, it also increases the probability of ending with a really low value.
So, should younger investors put more money into equity?  Probably YES, but for a more logical reason other than the reasoning underlying the fallacy of time diversification.

It is advised by professionals that, if you are young and your portfolio suffers a steep decline in a particular year, you should make up for this loss by changing your work habits / job / source of income or getting a second source of income.  People approaching retirement have little future earning power hence a major loss will have larger impact on their wealth no wonder the young should rather consider more equity.

Monday, July 18, 2016

Why you should put all your eggs in one basket


Today I was reviewing my Investment Coaching notes and preparing for my next session and then I came across a quote from Will Rogers that says; 
“Don’t gamble! Take all your savings and buy some good stock and hold it till it goes up. If it won’t go up, don’t buy it.” 
 I think it is a very deep quote that will get you  to do more work on finding a good stock than you will expect. It seems as a good Investment policy to adopt but the questions that will follow are; how do you know it will go up? How do you get rid of some risk though diversification?

After thinking this through over and over again, I strongly agree that when the right work is done in finding the right and good stock / company, putting everything you’ve got in it is simple a smart move allowing yourself to achieve high long term growth even if that means accepting some significant short term swings in value.  I am very much aware of the squad at the other side of the room with the view that, it is unwise to put all your eggs in one basket.  My question to them is what if the basket is well protected and the eggs are so safe that nothing can go wrong?  
I see that form of investment as a way of building your wont small cap company and enjoying the returns. With you putting in more and more, you may even get to enjoy some degree of management control.  According to Rich Dad, Kiyosaki, this will require the Three E’s- Excessive cash, Education and Experience. He called it the Insider Investor.

Bottom Line: Spreading investment across a number of assets will eliminate risk but not all of the risk and hence you should rather Take all your savings and buy some good stock and hold it till it goes up. If it won’t go up, don’t buy it.

Wednesday, July 13, 2016

Appreciation in GCB share price drives index upwards

The GSE-Composite Index rose by 0.47 points to close the midweek's trading at 1,786.88 points, from 1,786.41 points. The change brings the market return to -10.43%, year-to-date.

The GSE-Financial Stock Index moved up 0.67 points to 1,674.44 points from 1,673.77 points.

A total volume of 0.19 million shares were traded at a value of about GHS 0.20 million. The trade value decreased by 44.79% and the turnover, 18.71% less than the previous session. GOIL led the market with 52.94% of the volume traded and 70.13% of the traded value.

GCB returned 0.32% today to close at GHS 3.10. No losses were recorded.
Courtesy -CBL

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