13th, March 2020

To the inexperienced investor and speculator,

“Bulls make money,

Bears make money,

Pigs get slaughtered.”

- Wall Street Maxim

The financial market never fails to remind all those who always seem to think they know
it best that – “this is not my real face”. After the dot-com bubble burst and stock market
crash in 2000, the general public suddenly came to the realization that bear markets are
the best time to buy stocks and other financial securities. Now periods of national
recessions, global distress and crises such as the current Corona Virus pandemic have
become ‘The Hour’ for many market analysts and their investing counterparts.

It is true that these times present a great opportunity to acquire handsome bargains
especially in the stock market as many businesses with wonderful operations and great
underlying values become quite distressed due to the unfavorable market situation, but
the financial market participants have been known to do too much of everything,
including buying and selling. A skilled enterprising investor would do well to ascertain
the intrinsic value of these companies and purchase them at a good price discount, say
30-50% of their estimated intrinsic value.

My warning is to the inexperienced investor, who though has made a somewhat good
decision to subscribe to the trading technique of ‘buy low, sell high’, but does not
possess the necessary ability and temperament to make sound investment decisions.
The effect of the corona virus on global economies and business operations from
aviation, tourism and medical care to oil has caused falls and rises in the price of many

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stock issues and reduced the faith of many investors in the promise of bond issuers
such as our neighboring South African petrochemical giant Sasol. While it is possible to
purchase shares of wonderful businesses at low price, there is also a great risk of
purchasing terrible companies at low prices. These terrible companies who have been
selling at previously exorbitant prices may become cheap enough to appeal to the
unsuspecting investor who immediately buys it. The combined effect of unfavorable
economic condition and bad underlying business operation therefore presents the
perfect recipe for corporate disaster. History is filled with the tales of many giants who
fell on one knee and never rose again.

All the endless chanting of market speculators to buy naira, dollar, gold, bitcoin and so
on will definitely lead of lot of people into their own self orchestrated financial doom. It is
however not hard to keep your sanity in this whole turmoil, but it is difficult to discipline
yourself. You are neither right nor wrong because other people agree with you, you’re
right because your facts and reasoning are right – that’s the only thing that makes you
right, so sit back, take a deep breath, tune out the market noise and seek ye first
protection against permanent capital loss and all other profits shall be added unto you.
Warren Buffett’s two rules to investing never gets old – “(1) Never lose money; (2)
Never forget rule number one.”

“Those who cannot remember the past are condemned to repeat it.”

- George Santayana

Best Regards,

Kolawole Fasasi