3 Interesting Market Indicators we came Across
There are certainly things to look out for when making investment decisions. We have had historically backed indicators that deliver over the years and we have had those that are bare fallacious. We found these 3 to be weird but fairly reliable.
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, SBMIntel 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.
