“Ladies and Gentlemen, some of you have met Mr. Odusote before. He has a proposal for a trading collaboration he wishes to happen between his brokerage and our investment company.” Edward looked at the financial experts in the room. “I met with him last month and decided his plan may be interesting enough for us to consider. I don‘t have the best head for finance, so I wanted the opinion of those of you whose day job it is. What do you think?”
Mr. Odusote stood up and Edward waved him on. “I‘ll like to say a few words in summary and in addition to the points laid out in the proposal before we continue.”
“Stock trading is an upcoming business in Nigeria. I have been in the business for almost two decades and have more experience than most people. It is amazing to me the way investors are starting to include equity funds in their portfolio. However, many investors watch from the sidelines and are yet to take the plunge. A few small funds have emerged on the market but my product will rival the Discovery Fund which is the only one to have made any mark.”
“Now what I want to do is set up a mutual fund with a shorter than usual investment horizon. This quasi-hedge fund will be the most profitable vehicle ever traded in the history of the Nigeria Stock Exchange, in view of the openings in the market right now.”
“I‘m interested in your proposal, but not in the way you may like,” Mr. Okereke chipped in. “I manage Capital Investment Funds and we‘ve also observed the trends you mentioned. However, I disagree with your timelines.” The thin broker rolled his neck and a few joints popped in the process. “Our investment analysts have been tracking these things too. No broker will encourage their clients to buy new funds; remember that existing funds have a portfolio to ascertain the quality and the future prospects. We advise our new investors to begin with diversified funds based on a plan, but I can‘t see any here…”
“It may be different from yours but I have my trading plan of course…”
“So how will you refine your buy list? What price are you willing to pay? When will you wait for a better price or move to the next stock? I don‘t see any of that here…”
“I prefer more spontaneous trading. So most times I decide based on volume history. Shares with high volume mean high liquidity and are generally easier to sell. You guys may be happy making five hundred or five thousand naira per trade. My proposal set outs a minimum price goal of five thousand naira. I can assure you that if we follow the rules and tactics I‘ve proposed; we‘ll break even before you know it.”