”Corona who?”

This was the response from a friend when I asked how he was coping with working from home and everything else going on at the peak of the pandemic.

I replied, ‘’My sentiments, exactly’’

My response was not in ignorance of how serious this pandemic is, or the number of deaths worldwide. I am keenly aware of the health and economic impact on us all and I deeply empathize with those affected negatively this season.

However, with the rush to educate the general populace on how to stay safe was an out-pour of false information causing a lot of panic for most people. I had to deliberately tune off some media channels to protect my mind space. That’s because I know it is really easy to sink into depression when you let in the wrong thoughts.

No doubt, the world is experiencing a health phenomenon most of us alive today have not experienced 

Countries closing land borders and airports

Travel bans leaving people stuck and longing to be home

Major cities issuing strict stay-at-home instructions

Remote working is at its peak

Disrupted supply chains due to the shutdown in China’s economy

Volatility in crude oil prices

Fuel subsidy discarded overnight in Nigeria (Something we’ve been trying to achieve for decades)

Fuel pump price reduced in Nigeria.

No doubt, all of the events above are an interesting mix of events. Some events have had adverse effects. for instance, the Nigerian government had to cut its budget by N1.1trn and place a new benchmark for crude oil prices.

While some events have had what I would call a surprising positive effect, e.g. the drop in crude oil prices leading to a drop in fuel pump price in Nigeria

As an investor, my mantra this season has been the Warren Buffet quote – Be fearful when others are greedy and be greedy when others are fearful

Based on this quote, here are 3 key ways I am investing right now

1. Buying up great companies on the stock market at a discount

There are reports that Berkshire Hathaway, Warren Buffet’s investment company is sitting on a record level of cash estimated at $150bn 

Analysts believe the Oracle of Omaha was stock piling cash all through the greatest bull run of the US market for the last 10 years and waiting for the stock market to crash. The bull run in the stock market finally crashed and we await the next move by the Oracle.

This is what intelligent investors do. They buy the dip.

Thankfully, I had cash I could invest in long term investment opportunities (the stock market is a long-term investment in my books), so I could also sweep in to purchase some great companies on the Nigerian stock exchange at an incredible discount.

 

Some of these companies were trading at good discounts based on the 52 week high price and dividend pay-out history over the last 10 years. It was a no-brainer for me to buy up ownership interests in these companies.

And I’m not done yet. Based on the continued spread of the Corona virus and the power play on crude oil prices, I am patiently waiting for the stock prices of some additional companies on the Nigerian stock exchange to bottom out so I can sweep in to buy up more ownership interests. 

How do you recognise a good company to buy ownership interest? Key criteria for me include; financial track record, corporate governance and management structure of the company and when the current share price represents good value for money.

Long-term investors understand that given enough time, the value of the stocks they own depends on the success of the underlying businesses. If a company prospers, its stock will rise. If it fails, its stock will fall. Wait long enough, and those outcomes are almost guaranteed.(TMF)

2. Investing in companies taking advantage of the disrupted global supply chains

China is a major world player in global supply chains. Almost everything is made in China these days. so when China had to go on an economic lock-down due to the spread of the virus recently, the global supply chains took a major hit.

As a result of the China effect, some companies had to look for alternative companies who could meet their inventory needs at an international standard. This opened up opportunities for some Agro-processing companies in Nigeria who produce or aggregate these commodities and meet the international standards for export.

Some commodities sold at 10 times the previous price on the global market and guess who benefited from this price increase? Strategic Agro-processing companies in Nigeria.

I invested in some of these companies in the past week.

In fact, these companies reached out to us at TGIC HQ to share with the opportunity with members of the TGIC community to raise funds for them ASAP. We gladly did! We actually raised funds in multiples of 9 figures over 5 days to support these companies and as investors, we look forward to earning good returns on our investment.

3. Building up a portion of my family’s investment portfolio in a stable currency

The Naira got devalued and that makes it tricky for any investor investing actively with Naira right now. We stand the risk of a loss in  the value of our investment portfolio. As much as I would love for us to switch our family investment portfolio to a stable currency, the fact is we still have expenses in Naira and we need to meet those expenses. 

So the solution is to keep a good portion of our portfolio in a stable currency for balance.

The safest option for us was to invest in Euro-bonds. A Eurobond is a debt instrument that’s denominated in a currency other than the home currency of the country or market in which it is issued. Most (if not all) Euro-bonds are denominated in dollars.

The minimum requirement to invest in Euro-bonds is $100,000 – $200,000 in a typical financial institution in Nigeria, however we partnered with an institution to allow members of the Green Investment club invest a minimum of $5,000 or $20,000 at different rates. 

Thankfully, the members of the club locked in a 7% guaranteed annual return when they invested late last year. Investing in Euro-bonds is a long term investment (5-10 years) in a stable currency and it works for my family’s financial goal to preserve a good portion of our portfolio.

These are just three ways I am taking advantage of opportunities this season.  I also took advantage of opportunities in real estate for our family investment portfolio and plan to do a lot more in the coming months.

I am able to this because I practice what we teach in the Green Investment club. And also, because we build strategic relationships with our investment partners to ensure the members of the Green Investment club always get priority access to the best investment opportunities.

That said, I hope these 3 ways I’m personally taking action help you take some decisive action in the next few weeks. If you’re low on cash to invest right now, there’s no need to beat yourself up. Simply start making the right financial decisions to save more, earn additional streams of income and cut unnecessary spending.

Don’t forget to build up your emergency funds too, so you don’t get caught unawares with unforeseen circumstances this season.

and of course, stay safe, stay calm, take active measures as shared by the World Health Organization (WHO), self isolate, practice social distancing!

Ps. Did this blogpost resonate with you? Did you learn a tip or two? If you did please share a screenshot of this blogpost and tag me @tomiebalogun in your Instagram stories or on twitter. Let’s connect as the world continues to evolve into a virtual social space this season.

Until next week!

Warm regards
Tomie Balogun

 Ps. I’ll be sharing an update to this post with those on my email list. I have taken advantage of new opportunities in the US stock market, a US private equity fund and real estate since I wrote this blog post in March. Sign up to join my email list to read all about it!