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Fintech CEO: No, You Really Shouldn’t Invest Based on Your Hamster’s Advice

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Last week, CNN featured an article about a hamster that has made it big on Reddit and Twitch. The hamster, Mr. Goxx, made decisions based on which cryptocurrency his wheel landed on. Subsequently, whether the hamster ran through the buy or sell tunnel determined the action regarding the previously selected cryptocurrency.

According to the hamster’s human, the pet’s portfolio was up over 16% since June. In the same time period, Bitcoin was up by 14% and the S&P 500 was up 5%. It’s worth noting that Berkshire Hathaway B shares are down 2% over the same period of time.

“This is something we shouldn’t have to say. It really isn’t. But, it probably isn’t a great idea to get your investment advice from your pets’ habits, regardless of what tunnels they explore,” remarked Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges. “On the one hand, it’s clear that it’s in the news because of its rarity and absurdity. On the other, it isn’t clear to everybody. In fact, those who probably can least afford the losses are the most likely to give their pets a shot at playing financial advisor.”

“The real problem with this article, though, is that it again paints cryptocurrency investors in a negative light. Sure, the hamster was only playing around with a few hundred euros, not make or break for most investors. But, cryptocurrency has been constantly harangued by regulators and commentators as something with no value that shouldn’t be considered an investment for serious investors. Shenanigans like these only reinforce that myth,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“That, in fact, is poppycock. Value is assigned by whether or not somebody is willing to pay for it. Many of those who say that cryptocurrency is worthless and valueless – well, one Bitcoin is worth more than many of them paid for their child’s wedding. That’s an awful lot of value for something that’s worthless. It’s nonsense. Cryptocurrency has value, and it will continue to have value. It’s unfortunate that these PR spectacles continue to plague the segment’s legitimacy among some in the mainstream,” opined Gardner.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigerian VIPs Pour Nearly N1.49 Trillion into Dubai Property Market

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General Images Of Residential Property

It has been uncovered that Nigerian politicians, security officials, and their families have collectively invested close to N1.49 trillion in the Dubai property market over the past two decades.

This massive investment spree spans 1,600 properties located in some of Dubai’s most exclusive and sought-after neighborhoods.

The investigation, named ‘Dubai Unlocked,’ conducted over six months by the Organized Crime and Corruption Reporting Project (OCCRP) in collaboration with Economy Post and other international media partners, has shed light on the extent of Nigerian elites’ financial footprint in the UAE’s commercial capital.

The investigation outlined the property holdings of these individuals, revealing an estimated total value approaching $1 billion.

As of 2020, Nigerian politically exposed persons (PEPs) and their associates owned around 800 properties valued at $400 million.

However, recent findings indicate a significant surge, with the number of properties doubling and their collective value nearing the N1.49 trillion mark.

The vast majority of these properties, amounting to 88%, are reportedly owned by individuals with ties to Nigeria’s government and security apparatus.

Prominent figures implicated in this expansive real estate portfolio include former Vice President Atiku Abubakar, whose family owns multiple high-end apartments and villas across prestigious locations such as Palm Jumeirah and Burj Khalifa.

Similarly, other former governors, senators, and high-ranking civil servants have been linked to luxury residences in Dubai, raising questions about the source of funds used for these acquisitions.

Critics argue that while there may be legitimate reasons for acquiring property abroad, such vast investments raise concerns about capital flight and the origins of the funds involved.

Emmanuel Okeke, a legal expert, highlighted the distinction between lawful investments and potential financial misconduct, emphasizing the need for transparency and accountability in wealth acquisition by public officials.

The Dubai property market, renowned for its growth and stability, continues to attract global investors, with residential property prices rising by over 20% in the first quarter of 2024 alone.

Despite international scrutiny and calls for regulatory reforms to curb illicit financial flows, Dubai remains a favored destination for wealthy individuals seeking to diversify their assets.

Authorities in Nigeria and international organizations such as C4ADS have underscored the importance of ensuring that investments in foreign real estate are conducted ethically and in compliance with anti-money laundering regulations.

The spotlight on Nigerian VIPs’ extensive property holdings in Dubai serves as a stark reminder of the challenges posed by globalized financial activities and the imperative to safeguard against corruption and illicit wealth accumulation.

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Investors Scramble as Nvidia’s Sales Defy Projections in AI Surge

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Nvidia Corp., the renowned chipmaker, defies sales projections driven by an unprecedented boom in artificial intelligence (AI).

This surge has propelled Nvidia to become the most expensive stock in the S&P 500 Index, with shares trading at roughly 23 times the company’s projected sales over the next 12 months.

For more than a year, Nvidia has experienced a meteoric rise in demand for its chips, fueled by the frenzy surrounding AI advancements.

This demand has rendered traditional financial estimates obsolete, leaving even Nvidia’s executives struggling to accurately predict the company’s future revenue.

Since the chipmaker’s sales began skyrocketing in the fiscal quarter ending April 2023, revenue has consistently exceeded company forecasts by an average of 13%, a figure more than double the average over the past decade.

The most notable instance occurred in August, when Nvidia’s sales surpassed its projections by an astounding 23%, marking the biggest beat since at least 2013.

A representative for Nvidia declined to comment on the company’s revenue projections and the challenges in forecasting amidst the AI boom.

The challenge of modeling Nvidia’s future earnings lies largely in the unpredictability of supply amid surging demand.

Brian Colello, an analyst at Morningstar, highlighted this issue, noting that Nvidia’s situation is unique.

“Assuming steady improvement in Nvidia’s ability to increase supply, I add up to $4 billion to Nvidia’s quarterly revenue to ballpark the upcoming quarter’s sales,” Colello explained.

He recently raised his price target for Nvidia shares to $105 from $91, though they are currently trading around $127.

Colello is not alone in his optimistic adjustments. Ben Reitzes, an analyst at Melius, has raised his price target on Nvidia five times this year, most recently to $160, implying a 26% gain from recent closing prices.

The market’s enthusiasm is evident as Nvidia’s stock has surged 156% this year, briefly overtaking Microsoft Corp. to become the world’s most valuable company at $3.34 trillion.

This rally has contributed to a record $8.7 billion inflow into tech funds last week, according to Bank of America Corp.’s analysis of EPFR Global data.

However, Nvidia shares have since fallen 6.7%, erasing over $200 billion in market value.

For investors relying on discounted cash flow models, the gap between estimates and actual results has created a conundrum.

In the past five quarters, analyst estimates for Nvidia’s sales have deviated from actual results by an average of 12%, the third-highest among S&P 500 companies with average quarterly revenues exceeding $5 billion.

Despite the challenges in forecasting, Nvidia’s growth remains impressive. The company is projected to deliver a profit of $14.7 billion on sales of $28.4 billion in the current quarter, reflecting increases of 137% and 111%, respectively, from the same period a year ago.

Comparatively, Microsoft’s sales are expected to rise 15%, with Apple’s projections sitting around 3%.

While Nvidia’s valuation multiples are high, they appear more reasonable considering the company’s growth trajectory.

However, Michael O’Rourke, chief market strategist at Jonestrading, cautions that the extent of Nvidia’s outperformance may diminish due to its sheer size, potentially making it harder to justify the current stock price.

“That’s where the risk comes in,” O’Rourke said. “You’re paying a high price for a large market cap company where the beats have been trending lower, and that’s likely to continue.”

As Nvidia continues to navigate the unpredictable waters of the AI surge, investors and analysts alike are left grappling with the challenge of accurately predicting the company’s future in an era of unprecedented technological advancement.

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NNPC and TotalEnergies to Invest $550 Million in Rivers State Gas Facility

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Totalenergies

The Nigerian National Petroleum Corporation (NNPC) Ltd and TotalEnergies have announced a joint investment of $550 million in a new gas processing facility in Rivers State.

The project aims to enhance gas exports and boost domestic supplies, a source within NNPC revealed on Wednesday.

The planned investment encompasses the construction of a state-of-the-art gas processing plant and an extensive pipeline network.

The facility will be situated on the Ubeta onshore gas field, which is co-owned by TotalEnergies and NNPC.

The gas processed at this facility will be supplied to the Nigeria Liquefied Natural Gas (NLNG) plant, a consortium involving NNPC, Shell, TotalEnergies, and Italy’s Eni.

Upon completion, the Ubeta gas processing plant is expected to produce 350 million standard cubic feet of gas per day, alongside 10,000 barrels of associated liquids daily.

This development comes as Nigeria seeks to capitalize on its vast natural gas reserves, estimated at over 200 trillion cubic feet, which remain largely untapped due to inadequate processing infrastructure and capital limitations.

An official announcement regarding the investment is anticipated later this week. Although TotalEnergies has declined to comment, sources close to the agreement confirm that the project reflects a renewed effort by President Bola Tinubu’s administration to attract substantial investment into Nigeria’s energy sector.

“This investment is a clear indication of confidence in Nigeria’s resource potential and the government’s commitment to improving the ease of doing business,” commented Clementine Wallop, Director for Sub-Saharan Africa at political risk consultancy Horizon Engage.

The initiative also aligns with Nigeria’s strategic goals to increase its gas exports, especially to the European Union, which has been seeking alternative energy sources in the wake of reduced imports from Russia due to the ongoing conflict in Ukraine.

Domestically, the project is expected to alleviate some of the supply issues faced by Nigeria’s gas power plants, which are crucial for the country’s electricity generation.

Energy analysts highlight that this project could signify a turning point for Nigeria’s energy landscape, offering a much-needed boost to the country’s economic stability and energy security.

As Nigeria continues to grapple with the challenges of gas flaring and underutilization of its natural gas reserves, the NNPC and TotalEnergies’ investment in the Rivers State gas facility represents a strategic step forward in addressing these longstanding issues.

The successful implementation of this project could pave the way for further investments and advancements in Nigeria’s energy sector.

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