Quote: “Never invest purely because it’s going up.” — Howard Marks

[kasugha]

Quote: “Never invest purely because it’s going up.” — Howard Marks
Explanation:
This quote is a caution against momentum chasing—buying a stock just because its price has been rising. Prices can surge due to hype, speculation, or short-term trends, but that doesn’t necessarily reflect the company’s underlying value. Investors who buy solely based on rising prices often enter at peak valuations, exposing themselves to sharp corrections.
NGX Examples:
Presco Plc (NGX: PRESCO) – There have been periods where Presco’s price climbed sharply due to positive sentiment around palm oil prices. Investors who bought at peaks without considering earnings growth, margins, or debt levels risked seeing significant drawdowns when production costs rose or earnings slowed.
MTN Nigeria (NGX: MTNN) – MTN’s stock sometimes rallies on telecom sector hype or dividend expectations. Investors buying purely because the stock was trending upwards faced risks during regulatory shocks or currency depreciation, which temporarily pressured the stock despite long-term fundamentals remaining strong.
Japaul Oil & Maritime (NGX: JAPAULOIL) – Often experienced short-term spikes on speculative news. Buying purely on price movement without analyzing the company’s liquidity or market position led to steep losses for momentum traders.
Lessons to Learn:
Fundamentals first: Look at earnings, P/E ratio, debt levels, and cash flow before buying.
Avoid FOMO: Price increases don’t guarantee continued growth; psychological biases can mislead.
Have an entry strategy: Identify fair value, not just a rising trend, and stick to it.
Diversify: Even strong momentum stocks can drop; spreading risk across sectors helps mitigate losses.
Bottom Line:
Rising prices are signals to investigate, not reasons to buy blindly. Smart investing focuses on value, sustainability, and risk management, not just popularity.

 

[Crystal]

Quote: “Never invest purely because it’s going up.” — Howard Marks
Explanation:
This quote is a caution against momentum chasing—buying a stock just because its price has been rising. Prices can surge due to hype, speculation, or short-term trends, but that doesn’t necessarily reflect the company’s underlying value. Investors who buy solely based on rising prices often enter at peak valuations, exposing themselves to sharp corrections.
NGX Examples:
Presco Plc (NGX: PRESCO) – There have been periods where Presco’s price climbed sharply due to positive sentiment around palm oil prices. Investors who bought at peaks without considering earnings growth, margins, or debt levels risked seeing significant drawdowns when production costs rose or earnings slowed.
MTN Nigeria (NGX: MTNN) – MTN’s stock sometimes rallies on telecom sector hype or dividend expectations. Investors buying purely because the stock was trending upwards faced risks during regulatory shocks or currency depreciation, which temporarily pressured the stock despite long-term fundamentals remaining strong.
Japaul Oil & Maritime (NGX: JAPAULOIL) – Often experienced short-term spikes on speculative news. Buying purely on price movement without analyzing the company’s liquidity or market position led to steep losses for momentum traders.
Lessons to Learn:
Fundamentals first: Look at earnings, P/E ratio, debt levels, and cash flow before buying.
Avoid FOMO: Price increases don’t guarantee continued growth; psychological biases can mislead.
Have an entry strategy: Identify fair value, not just a rising trend, and stick to it.
Diversify: Even strong momentum stocks can drop; spreading risk across sectors helps mitigate losses.
Bottom Line:
Rising prices are signals to investigate, not reasons to buy blindly. Smart investing focuses on value, sustainability, and risk management, not just popularity.

I love This. Thank you for this teaching!

 

[Benjamin E Housel]

Quote: “Never invest purely because it’s going up.” — Howard Marks
Explanation:
This quote is a caution against momentum chasing—buying a stock just because its price has been rising. Prices can surge due to hype, speculation, or short-term trends, but that doesn’t necessarily reflect the company’s underlying value. Investors who buy solely based on rising prices often enter at peak valuations, exposing themselves to sharp corrections.
NGX Examples:
Presco Plc (NGX: PRESCO) – There have been periods where Presco’s price climbed sharply due to positive sentiment around palm oil prices. Investors who bought at peaks without considering earnings growth, margins, or debt levels risked seeing significant drawdowns when production costs rose or earnings slowed.
MTN Nigeria (NGX: MTNN) – MTN’s stock sometimes rallies on telecom sector hype or dividend expectations. Investors buying purely because the stock was trending upwards faced risks during regulatory shocks or currency depreciation, which temporarily pressured the stock despite long-term fundamentals remaining strong.
Japaul Oil & Maritime (NGX: JAPAULOIL) – Often experienced short-term spikes on speculative news. Buying purely on price movement without analyzing the company’s liquidity or market position led to steep losses for momentum traders.
Lessons to Learn:
Fundamentals first: Look at earnings, P/E ratio, debt levels, and cash flow before buying.
Avoid FOMO: Price increases don’t guarantee continued growth; psychological biases can mislead.
Have an entry strategy: Identify fair value, not just a rising trend, and stick to it.
Diversify: Even strong momentum stocks can drop; spreading risk across sectors helps mitigate losses.
Bottom Line:
Rising prices are signals to investigate, not reasons to buy blindly. Smart investing focuses on value, sustainability, and risk management, not just popularity.

Buying a stock just because it’s rising is betting on other people’s decisions, not the underlying economics of the business.

You are essentially trading sentiment, not value.

And sentiment is inherently fragile. It can reverse in a heartbeat, triggered by events no one could fully predict: regulatory changes, currency shocks, production issues, or even macro headlines

 

[Benjamin E Housel]

I love This. Thank you for this teaching!

Yeah... it's a great one.

 

[Mr.Simon]

I keep on advising my loved ones not to buy out of fomo cause at the end they might burnt their own hands

Quote: “Never invest purely because it’s going up.” — Howard Marks
Explanation:
This quote is a caution against momentum chasing—buying a stock just because its price has been rising. Prices can surge due to hype, speculation, or short-term trends, but that doesn’t necessarily reflect the company’s underlying value. Investors who buy solely based on rising prices often enter at peak valuations, exposing themselves to sharp corrections.
NGX Examples:
Presco Plc (NGX: PRESCO) – There have been periods where Presco’s price climbed sharply due to positive sentiment around palm oil prices. Investors who bought at peaks without considering earnings growth, margins, or debt levels risked seeing significant drawdowns when production costs rose or earnings slowed.
MTN Nigeria (NGX: MTNN) – MTN’s stock sometimes rallies on telecom sector hype or dividend expectations. Investors buying purely because the stock was trending upwards faced risks during regulatory shocks or currency depreciation, which temporarily pressured the stock despite long-term fundamentals remaining strong.
Japaul Oil & Maritime (NGX: JAPAULOIL) – Often experienced short-term spikes on speculative news. Buying purely on price movement without analyzing the company’s liquidity or market position led to steep losses for momentum traders.
Lessons to Learn:
Fundamentals first: Look at earnings, P/E ratio, debt levels, and cash flow before buying.
Avoid FOMO: Price increases don’t guarantee continued growth; psychological biases can mislead.
Have an entry strategy: Identify fair value, not just a rising trend, and stick to it.
Diversify: Even strong momentum stocks can drop; spreading risk across sectors helps mitigate losses.
Bottom Line:
Rising prices are signals to investigate, not reasons to buy blindly. Smart investing focuses on value, sustainability, and risk management, not just popularity.

 

[Crystal]

Fantastic. You are right sir

Buying a stock just because it’s rising is betting on other people’s decisions, not the underlying economics of the business.

You are essentially trading sentiment, not value.

And sentiment is inherently fragile. It can reverse in a heartbeat, triggered by events no one could fully predict: regulatory changes, currency shocks, production issues, or even macro headlines.

 

[Crystal]

Yeah... it's a great one.

Yeah!

 

[Crystal]

I keep on advising my loved ones not to buy out of fomo cause at the end they might burnt their own hands

You are right! But people still find themselves in it

 

[Mr.Simon]

That's the fomo we talked about, most are scared of missing out on what they thought is a lifetime change

You are right! But people still find themselves in it

 

[Crystal]

That's the fomo we talked about, most are scared of missing out on what they thought is a lifetime change

lol! And they get caught in the web

 

[Chinyere]

Quote: “Never invest purely because it’s going up.” — Howard Marks
Explanation:
This quote is a caution against momentum chasing—buying a stock just because its price has been rising. Prices can surge due to hype, speculation, or short-term trends, but that doesn’t necessarily reflect the company’s underlying value. Investors who buy solely based on rising prices often enter at peak valuations, exposing themselves to sharp corrections.
NGX Examples:
Presco Plc (NGX: PRESCO) – There have been periods where Presco’s price climbed sharply due to positive sentiment around palm oil prices. Investors who bought at peaks without considering earnings growth, margins, or debt levels risked seeing significant drawdowns when production costs rose or earnings slowed.
MTN Nigeria (NGX: MTNN) – MTN’s stock sometimes rallies on telecom sector hype or dividend expectations. Investors buying purely because the stock was trending upwards faced risks during regulatory shocks or currency depreciation, which temporarily pressured the stock despite long-term fundamentals remaining strong.
Japaul Oil & Maritime (NGX: JAPAULOIL) – Often experienced short-term spikes on speculative news. Buying purely on price movement without analyzing the company’s liquidity or market position led to steep losses for momentum traders.
Lessons to Learn:
Fundamentals first: Look at earnings, P/E ratio, debt levels, and cash flow before buying.
Avoid FOMO: Price increases don’t guarantee continued growth; psychological biases can mislead.
Have an entry strategy: Identify fair value, not just a rising trend, and stick to it.
Diversify: Even strong momentum stocks can drop; spreading risk across sectors helps mitigate losses.
Bottom Line:
Rising prices are signals to investigate, not reasons to buy blindly. Smart investing focuses on value, sustainability, and risk management, not just popularity.

Exactly — this is a lesson in discipline over hype. Just because a stock is climbing doesn’t mean it’s a good buy. As your examples show:
Presco Plc – momentum doesn’t protect you from rising costs or slowing earnings.
MTN Nigeria – even strong fundamentals can’t shield you from regulatory or currency shocks.
Japaul Oil & Maritime – speculation without analysis can be painful.

Invest with context, not emotion. Look at fundamentals first, have a clear entry point, and avoid chasing FOMO. Rising prices are a reason to research, not to rush in.

 

[Chinyere]

Buying a stock just because it’s rising is betting on other people’s decisions, not the underlying economics of the business.

You are essentially trading sentiment, not value.

And sentiment is inherently fragile. It can reverse in a heartbeat, triggered by events no one could fully predict: regulatory changes, currency shocks, production issues, or even macro headlines

When you buy purely on price momentum, you’re gambling on the crowd’s behavior, not the company’s fundamentals. Sentiment can flip suddenly, and that’s where momentum traders get burned. True investing is about understanding the business, its cash flows, and its risks, so you’re prepared when the market mood shifts.

 

[Chinyere]

I keep on advising my loved ones not to buy out of fomo cause at the end they might burnt their own hands

But that is the truth

 

[Chinyere]

lol! And they get caught in the web

Smile

 

[Crystal]

Exactly — this is a lesson in discipline over hype. Just because a stock is climbing doesn’t mean it’s a good buy. As your examples show:
Presco Plc – momentum doesn’t protect you from rising costs or slowing earnings.
MTN Nigeria – even strong fundamentals can’t shield you from regulatory or currency shocks.
Japaul Oil & Maritime – speculation without analysis can be painful.

Invest with context, not emotion. Look at fundamentals first, have a clear entry point, and avoid chasing FOMO. Rising prices are a reason to research, not to rush in.

Very insightful breakdown. This really reinforces the importance of discipline and valuation over emotion. Momentum should prompt analysis, not automatic action, and the examples clearly show how chasing price without fundamentals can lead to avoidable losses.

 

[Crystal]

When you buy purely on price momentum, you’re gambling on the crowd’s behavior, not the company’s fundamentals. Sentiment can flip suddenly, and that’s where momentum traders get burned. True investing is about understanding the business, its cash flows, and its risks, so you’re prepared when the market mood shifts.

Exactly. Investing based on momentum alone shifts focus from intrinsic value to crowd behavior, which is unpredictable. A fundamentals-driven approach helps investors stay grounded and better prepared for reversals in sentiment.

 

[Crystal]

But that is the truth

That’s true. FOMO often leads to poor entry points and unnecessary losses. Encouraging patience and proper analysis is one of the best ways to help others protect their capital.

 

[Crystal]

Smile

Haha, exactly. That’s why having a clear strategy and sticking to fundamentals helps investors avoid getting “caught in the web” of hype and emotional decisions.

 

[Chinyere]

Very insightful breakdown. This really reinforces the importance of discipline and valuation over emotion. Momentum should prompt analysis, not automatic action, and the examples clearly show how chasing price without fundamentals can lead to avoidable losses.

Well said. Discipline and valuation are the anchor; momentum is just the wind. Chasing price without fundamentals is like sailing without a compass—direction becomes temporary, but losses can be very real.

 

[Chinyere]

Exactly. Investing based on momentum alone shifts focus from intrinsic value to crowd behavior, which is unpredictable. A fundamentals-driven approach helps investors stay grounded and better prepared for reversals in sentiment.

Spot on. Momentum can be a signal, but fundamentals are the filter. Staying anchored in intrinsic value keeps you from being swept along by the crowd—and far better positioned when sentiment eventually flips.