3 Unusual Market Indicators that I Came Across

I almost could not fall asleep when I started thinking about the chances of losing money in the Stock Market. Deciding to become an investor comes naturally with the new role as a Creative in a Wealth Management Company.

Bowale’s words echoed in my head as I contemplated investing some funds I had stashed for paying off debts.

“The useless MTN I bought for 100,000 has now turned to 75 thousand something”.

MTN stocks had massive potentials until the Central Bank of Nigeria hit them with an $8bn fine as well as the xenophobic attacks that followed. You see what I’m getting at; one minute you have one of the best performing stocks the next thing “gbas gbos” from whence nothing was.

On the other hand is news that the Nigerian Stock Exchange has been the best performing in 2020. The realist knows that wouldn’t last for too long but the optimist wishes to ride the rally. Wetin man go do?

Anyway, I’ll keep you updated as my debacle goes. In the meantime, these are the interesting things I found when I started researching market indicators. I found some historically backed indicators that have delivered over the years and I found some to be bare preposterous. These 3 are weird but fairly reliable.

The Jollof Index

How do you know when the economy is hard? It’s basically when the average Yoruba woman says “nnkan ti won l’oja” — things are expensive in the market (she’s actually talking about foodstuff). In 2015, SBM Intelligence started tracking the prices of key household items across major markets in Nigeria. The goal of SBM was to communicate the price trend to Nigerians in a simple and clear manner. SBM began publishing the Jollof Index, a composite index which tracks the prices of the main ingredients for a nationally accepted staple food, Jollof rice. They publish, on a quarterly basis, how these prices have moved and how much a rich pot of Jollof rice with attendant proteins will cost a Nigerian across the country.

Basically, a high Jollof rice index indicates high inflation rates and vice versa.

Cardboard Box Indicator

The cardboard box indicator is based on the fact that just about everything in the world is shipped in a cardboard box. This means that the more demand for boxes, the faster the economy is growing. because factories are shipping goods.

The opposite is also holds; the less demand, the slower the economy. Look no further than the performance of giant box makers like WAHUM and NAMPAK when considering this indicator.

This is not fool-proof but it is fairly rational

Wall Street Job Indicator

This is more of an American thing. It goes that the more attractive jobs on Wall Street are, the more likely the economy is in a bubble i.e. rising prices of assets.

This indicator is usually measured by the ratio of Harvard graduates that accept jobs in investment banking, private equity, and securities trading on Wall Street. When more than 30% of graduates go into these jobs, the indicator is to exit the market.

So, that’s it! Tell me about it something random you came across recently…

This article was first published on Wealth Corner without the introductory debacle.