Do Go On - Earnings Season: Episode 16 - Forex and Other Stories w/ Kwame and Kerry

Episode Date: November 28, 2019

This week @RTRowe & @HDanhai have a long, deep chat with two people from $JMMBGL.ja, Kerry-ann Stimpson, Group Chief Marketing Officer (http://bit.ly/2qAgaXM) and market expert Kwame Brooks (http://bit.ly/2XRThvA). We originally intended to speak about Forex but Kwame really brought a strong industry view to this episode so we touched on LOTS of investing matters...and also Forex. Kwame did a great job explaining pretty much everything he mentions & even delves into different trading strategies he uses. As we usually do for our guests at the end, we asked and Kwame gave his personal stock picks (and explains why, of course). Kerry dropped a few more she liked and @RTRowe throws in a current recent 1 pick of his also. Newer investors will learn a lot from this episode, the more advanced investors will love it (and still learn something, hopefully). Enjoy! Definitions, Links and Shoutouts are below...👇🏾👇🏾👇🏾 Forex Market - http://bit.ly/34tQ8EJ Managing Emotions in Forex (or any) Trading - http://bit.ly/33n4zt3 Forex Hedging Definition - http://bit.ly/2qRu5cC The Barbados Story - http://bit.ly/2sq5AUn Forex Reality (This is the mentioned article) - http://bit.ly/33opITp Interesting Forex Story - https://dailym.ai/34y8vZq The Original Gleaner Article - http://bit.ly/2Dp7dnu The BoJ Correction Tweets (USD/JMD Rate Spike Explained) - http://bit.ly/2OrX8fW Shout Outs Small list this week, shout-out to legends like @5Solae and much respect to @JMMB for sharing their team's knowledge with us and all the listeners. ★ Support this podcast ★

all right uh hi guys this is randy at rt row and i'm here of course with danai at h danai and this is earning season like you guys know and love and this week again we have i guess two guests actually two wonderful guests and as always always make people introduce themselves i don't ever get the names or the titles wrong but i start with the two first names things about kerry and and kwame both from jmmb and kerry they do know and love yeah people ask me a lot about you kerry and kwame i suspect yeah man they really do uh so we also have bam productions as always guiding us big up the jamaica podcast network and bam production studios and i will allow my guests again to introduce themselves right off the bat

So Kerry, I'll make you go first and we'll hear from Kwame Okay, hey guys, Kerry Ann Stimpson And I'm the Group Chief Marketing Officer A.K.A. Group CMO at JMMB And I'm Kwame Brooks General Manager for Trading and Treasury In JMMB That's it, just trade and treasury General Manager for Trading and Treasury in JMNB.

That's it? Just trade and treasury? The big box, right? The big box, yeah. Not much people may understand. So, trading managers, what we call the proprietary book for the company. We invest all funds on behalf of the group. Who are, like you say, is where the money happens. Essentially all investments for JMM? Yes. So whatever tradable assets that the company participates in would fall in my department. So stocks, bonds, currencies,

real estate vehicles, such as REITs, mutual funds. So any tradable instrument. Really fast on the ears. Yes. And then Treasury basically manages the pool of funds to ensure that the adequate amount of funds are deployed. And that when you come for your money on any given day, then you can get it.

There we go. So basically, the two departments combine to ensure that, one, whenever you need your money, you can get it. And two,

your funds that you place with us are invested in the best vehicle to ensure the best returns for you. That I like. Sounds good. Yeah, it sounds very, very good. It sounds like heavy pay now forgive them happy you know i call me you are well experienced i say from now you

used to be or still are head of no used to be i'm a past president of the cambia association okay and so anybody listening know exactly why we have him on because this is somebody who understands forex yes and i'm also a vice president of the um security dealers okay man really annoyed all right all right so somebody it's like for me i don't very often get to meet people who understand the market heavily and the market when i said the market here are speaking about stocks because that's that's mainly heavily what i do yeah so i don't get to meet people who understand that heavily are the core of a company in terms of how companies really really make money so i get that you know that for jma you have a good amount of experience with it so you've been trading i mean

do you trade on your own i don't know if you have like restrictions because of your role and all i try not to do anything that would put you yes against your rules okay i won't ask you so if i trade and i on my own yes i manage my own portfolio oh perfect stocks are everything it's a portfolio it's a combination of things yeah yeah you hear the money that i have so much money you can win the stocks only yeah well that's a real thing locally that's a real thing i realize um so a real thing locally. I realize it. So that's good. I like that.

You like the local stock market. We usually press people at the end of it. You heard Kerry's last episode. Well, I mean, for two or three years, Jamaica has been the number one performing stock market in the world. So obviously it presents a whole lot of opportunities. A whole heap of opportunities. Yeah, man.

I like that. Kerry, you prep your questions for later. You told him what to ask at the end of all of these episodes. A whole heap of opportunities. Yeah, man. I like that. Kerry, you prep your questions for later. You told him what to ask at the end of all of these episodes. No, I made it to be a surprise. That's all I'm saying.

No, you know what I mean. It's all right. So, one of the reasons I have you here is because you have, like I said, a wealth of experience

in investing. You say assets. I like it's assets across the board. So, most people listen to this for stocks. And one question I get asked a lot,

especially anybody who's been to my grow-up classes know this. I get asked about what we call in Jamaica Forex. Ah, holy.

Everybody and them cousins do it. They do classes and they say you can get rich quickly off of the market. It's the biggest marketing world.

It's like 80 trillion or something is traded every day. It really is. It really is a big market. But I have tasted off of that market to know that for me as great as I am with stocks trillion or something is traded every day it really is it really is a big market but i have tasted off of that market to know that for me as great as i am with stocks and i understand business and flow i know what's for me and what's not for me and that market requires a level of dedication

that i mean i don't think you can help me here so i'll tell you the one thing i've never gotten is hard numbers on what we call in j forex so every time I get asked through a class or something or somebody say hey you love stocks you should come into forex I ask them the same question I say an average average person trading forex what's the average money they make every year I have never been able to get that answer from anybody from that so if you take it from that perspective right and you go by average if you look on your top traders on Wall Street or your top portfolio managers, ETF managers, on an average, if a portfolio

manager is making 5% to 7% return, he's doing very good. For a year? Wow. 5% to 7% per annum. If you do make that, it's very good. And that's portfolio, currency, bonds, stocks, whatever.

Wow. In the context. So it depends now. So in markets with lower credit qualities are what we would call emerging markets. So like for bonds, you have emerging markets, which are your weaker economies. Then you'd have developing economies and developed economies. So

the higher up the scale, the higher the credit quality, the lower the return that you would get in terms of interest rate. Because the lower your risk, obviously the lower your reward. So if you take bigger risk down the spectrum for bonds, then you will get higher interest rate return.

True. But sometimes you're in an environment like globally now, interest rates, the spreads are so thin because typically how you price an instrument, it's benchmarked to what we call a risk-free return. So globally, US treasuries is seen as risk-free. Yes, because it requires America to fail in order to fight tonight. If America fails, we have bigger problems.

Yes, I'll give you an example now. We are 10-year Treasuries trade at around 1.6 thereabouts. Currently, yeah. Percent. Yeah. So Jamaica typically trades at around 200 basis points or 2%, 1.5% to 2% above Treasuries. So the 10-year Treasuries yields would be 1.6%,

and your Jamaica 2028 bonds yields about 3.6% or 3.4%. So it's about 2%. Oh, yeah. Jamaica to them, yes. In terms of risk. Correct. Now, Jamaica is B, single B.

We are close to the bottom or the floor of the spectrum. But we've gotten better. Yes, we have been improving. We've got the carpet, but we've gotten better. Yeah.

So, Jamaica, which is a single B and the top of the scale would be triple A. We are like about seven notches below. A notch below. Yeah.

Wow. Yeah. Wow, wow, wow, wow. But we would be considered risky in the scheme of things. True. But you only get compensated 2% extra for taking that risk. Yeah. So, if you think of a person who manages a portfolio right

it means you have to go and take some extreme risk to be generating returns of seven percent right now this is returns you know because when you buy an investment that yield 3.6 the funding costs you something. You have to pay your client's cost, wherever you source that money from, to go into that investment. You have an interest cost associated. Correct.

So your return is really the profit that you make from the transaction. Profit. Yeah. So you have to look at it from that perspective. Boy, I feel like we should have you on the podcast for a long time. Because you're saying all of the things that we say about stuff. Right. So if you think about it really and truly,

then if you can generate upwards of 10% consistently, then you have a place on Wall Street. Yeah. You probably get your own place on Wall Street. You have a place out there. And I should set for context for anybody listening, these guys are trading huge portfolios. So 10% on 10 billion, that sort of thing.

So if you're trading... 100 billion. At $1,000 or $5,000. Different bargain. It's easier for you to say, Oh, I'm making 10% return. Because you may make one trade for the year. And that's it. And that's it. Yep. Now, when

you are given 5 million or 5 billion, that's a different thing. Yeah. It's a different ballgame. Right? Because guess what? Risk you take with $5,000, if I lose it it i'll build back

for some people do you sleep the same way when you invest five billion i want if you lose it if you lose it do you build back no you don't build back you don't build back yeah so so the smaller the portfolio you manage the more likely likely it is for you to make a higher return. That is true. Because opportunities are not just scale level. You can't just say, oh, on $1,000, I'm making $1,000. Give me $100 million, I'll make you $100 million. 100% true. One thing for sure is your emotion changes.

100% true. The fact that the emotions changes and the opportunities are also exhausting. If you think about it, I mean, you could go out there now and buy. So you're buying and selling cars.

You could go out there in Jamaica and buy 10 cars and make $100,000 each. But if I give you a billion dollars to buy a car can you buy the same amount of cars and sell it in Jamaica and make a hundred no because the population constrains you that is true so there are other things the income of the people you are selling to are people the pool of funds that they have for investment is also exhaustible so the opportunities doesn't really scale

without constraints that's correct that's a live example because you remember yeah exactly all right so think about the stock market you could easily on a given day sell a hundred thousand units of a stock yeah so let's say um depending, um, the last one that was listed, um, week done. Yeah. Yes. Okay. A hundred thousand,

not approximately a dollar. It's a hundred thousand dollar. Any little man can put in a stock order. A hundred thousand units. Yep. A hundred thousand dollars. If you were to be selling a hundred thousand units of say NCB. Harder, Much harder.

It becomes much more difficult because that's a bigger amount of money required. Yeah. Right? And if you scale up week 10 to a million, easy. You can sell a million units. It's only a million dollars. Can you just run in and sell a million NCB easily? Good luck.

No, you're talking about 200 and something million dollars. Exactly. But therefore, it's different, you know, in terms of what you're dealing with versus what you have and what's available to you.

Right. So the price of the stock, you're easier to make a higher return on the cheaper stock. Yes. That's one. Rule of thumb, people.

I don't want anybody to comment and say the wrong thing. Rule of thumb. It's easier to make a return. Just just the same you're easier to lose it true true at a five cents move down is a five percent five percent move yes yes correct it requires a ten dollar move to give you five percent on ncb because it's 200 and then somebody starts thinking, boy, maybe I said $200. People think $200 and they think $2 or $2. They will not think $2.10.

But they think $1.05 versus the $2.10 part for NCB. You're right. So when you look at it in those contexts, it's kind of different. And then when you're managing the small portfolio, like I said, the emotions. The emotions. Because as a person who I've traded for years,

your biggest enemy are the emotions. Speak on it. How many years? Give us some background. How many years have you traded now? I've been in finance for 20 years. If you think about it, people tend to have one habit. You're in a trade and you're losing.

And you're losing and you say, you know what? It's soon turn. It's soon turn. And it keep going down and it keep going down. It's soon turn. Yeah. And it pulls you in deeper and deeper.

You're probably buying more. And sometimes it chokes you and you lose everything. Yep. If the trade turns, you could go down. You say, okay, set percentages. deeper you'll probably buy more and sometimes it chokes you and you lose everything yeah yeah if the trade turns you could go down you say okay set percentages you're down 10 percent it's soon turn 20 percent it's soon turn 30 percent man this thing will turn yeah you're holding on 40 50 You're holding on. 40%, 50%. That's rough though. You're still hoping.

Yeah. It goes back to 100 if you're lucky. As soon as it reaches 105, you jump out. Yes. What that tells you about emotion. Yeah. Emotion is what guided you through that entire thing. You were just willing to lose 50% just to make 5%.

Yeah. That's a bad trade. Yup. Yup. A good trade is typically when a person, the upside should be at least two and a half to three times the downside. Okay. That's a,

that's considered a good trade. I like that heavy kind of trade. I know some people lost. I'll break it. Okay. So I'll break it for you. You should be, when you're going into trade,

what you're expecting to make should be around three times of what you're willing to lose. I like that. That's one of the rules. I like that because what I hear rules usually

in stocks is things like only trade what you're willing to lose. I'm not telling nobody that. And that's not quantifying properly. Exactly. That is quantifying properly. That's a nice rule. All right. I'm willing to lose. I'm not telling nobody that. And that's not quantifying properly. Exactly. That is quantifying properly. That's a nice rule. All right.

I'm willing to lose X. How much am I willing to gain? You're not in there to lose. So you should be thinking about what you're willing to gain. Right. And another rule is when you are trading, you don't risk more than a certain percentage of your capital on any single trade. So you have a hundred thousand.

You take it and you buy one stock. single trade. So you have 100,000. You take it and you buy one stock. Bad trade. I don't want to call it a bad trade, but you're speaking here from the perspective of... Bad decision. From the perspective of who though? From the perspective of you managing a portfolio of funds? Even from your own money.

Can't tell me that. That is saying, if you wake up tomorrow and this company, there's some bad news about this one company. Everything is gone. That's true. That's true. What we do know is that you have things that

are oppositely correlated. So when something go bad, something go good. Alright, you think about this. I have a million dollars. I buy 10 bonds, 100,000 each. All right. I buy 10 stocks,

100,000 each. Three of them goes down 10% each. It means I'm down $30, 10% of them. On each of them, correct. I'm down 30 total. Right?

I have $7. Even if those $7 is up 5%, you'd be up $70. Yeah, right? On that, in terms of dollar figures. Right. So if those $7 go up 5%, right? $5, $5, $5 across the 7,

that's $35 you're up. And the $3 goes on $10, right? You're still that's 35 you're up and the three goes on 10 right you're still up five percent you're up five percent yeah you hedged your risk okay if you go through a year and nine of your stock is up 10 you're up 90 and if one goes totally belly up and you don't get back any of the hundred thousand look at what happened you only lose ten thousand i'm with you but let's look at the other side now is strong no man it's an amazing tool important i think this is a proper case of diversification i usually hear it in the terms of it's just done for doing it yeah doing it done for

doing it saying if you're doing it you're hedging your risk then sure do it so you can hedge in a whole lot of different ways yes but on diversification there are different levels of diversification right so you can

diversify by region so let's say you're an expertise in you're an expertise in, you're an expert in hardware business. You can stick to hardware. That's your core. But do you buy hardware companies in Jamaica, in the US, in the Caribbean, wherever?

And yes, you're not diversified by the core area of the business you're focused on, but you're diversified by the core area of the business you focus on, but you're diversified by region. So when one economy is not doing well and the other one is doing well, you balance out. Then you can choose to diversify not only by region, you can diversify by industry. So am I going to be only in construction?

Am I going to go in manufacturing? Am I going to go in transportation and distribution? Am I going to go in finance? Am I going to go in IT? And you pick your companies based on that. You can also diversify by type, security type. So you can diversify by

security type. You can choose the company you like. You can choose the company you like. You can buy the credit, which is the bond. You can buy the stock. You can say, okay, there is a real estate company that leases to this company and gets revenue from them. You can buy into a REIT, which is a real estate trust fund that depends on this business so you know that this REIT

income is fairly secure. You know where that is coming from. So as I give you an example who you can look at, JPS and Jamaica Energy. Jamaica Energy partners sells 100% of their

supply to JPS. You can choose whether or not you want to buy into this company that sells only to JPS or you can choose whether when JPS is going to list next year. You heard it here first, guys. You did not hear it

here first, but I know you should have known. You can choose whether you take the exposure to the parent company that has the entire market or to the subsidy subcompany correct so you can kind of pick how you invest yeah i like to give people live examples i like that um i think another example of that is like the gk proven. Right. You can pick subsidiaries. You can. So for example, JMNB buying into Sajikor. So JMNB doesn't profess to be insurance experts,

but we like the industry. So therefore what we do. You trust Sajikor to do the time buying too. You trust the experts to run their business and you take an equity position in it. Agreed. Right? So therefore, you get exposure to different areas through different avenues.

It could be an equity stake. It could be a bond. It could be into a real estate fund that owns assets in this company or something. There's different ways. There's really... That you get exposure. There really are.

I like that. But why I said initially no is because, not that you're wrong, you're 100% right. It's I think by no, I'm notorious for saying to people that they shouldn't diversify because they're proud to do it. They should diversify deliberately. And so I start

people off whenever they ask me, I start them off with what their goal is. Anybody that know me know I start with what their goal is, right? And people usually have these audacious goals because they hear about IPO 100% in a week i tell them listen not saying it doesn't happen but you're not going to invest and get it in a minute you're not going to invest and get in a week and if you don't know what you're getting into that's the most dangerous trade that's a bad trade but the reason i said no that you're again you're wrong i know you're right it's just i have this thing i say all the time that if you have less money you have to work

harder right so you are 100% correct yeah man exactly so I do tell people that I will I don't do it anymore because I can't do it anymore but I will and I did a lot when I had smaller money put everything in one thing however not blindly I watch that thing a hundred times

I pay attention to it I go through the financials and I still there is still risk the risk is still there information asymmetry there's somebody out there that knows something that i don't know how i see it is i know where i'm okay with not knowing yes so i know up to a point and if this is the risk i'm willing to take the information that i don't know that's the risk i'm willing to take if i if i get if i get to that's the risk I'm willing to take. If I get to that point, then I'm invested. No, well, you see, alright, so let me tell you the difference between an average

guy and a trader. Go through. Hold that. The difference between a trader and my trading philosophy, some traders are different. I make a decision typically on about 60% of information. Right?

So the average person waits until they have probably about 80, 75 to 80% to make a decision. That's why we say the market is slow. Because they have to wait until they see the profit before they actually move on it. So I make a decision on around 60%. Whenever around

80% of the information is available, I am exit. Yes. So you jump when everybody is jumping. I can look to make 20 over 60. That's a 30% return. 33% return, right? So that's a different dynamic from when a man going in at 80 and if he goes in to exit at say 90, he's making

10 over 8, right? Look at the return, how it has shrunken. And when you're going in at 90 to the risk of you getting out up near the 100 or below the 100 before it turns if possible, then you are now a high risk trade.

So you should deploy less if you're getting in so close to when you think it's the peak this is high level trading so it depends on the risk tolerance it depends on the entry it depends on your ability to dissect information and make a decision

and your risk appetite so if I give you my own risk tolerance like I am high risk, like I am high risk, obviously. Personally, I am high risk. Do you personally think of yourself truly, like for yourself as a person, do you truly think of yourself as being high risk? Yes. Personally, I am a high risk.

Okay. At work, my decisions are within a framework because you make decisions within a framework. But am I the average high-risk trader no because for me for every time i win i increase my safety base ah well yeah yeah yeah some more money yeah i'll give you what if i start with 100 and I make 20% return, I say 10 or 5. Goes into the safety. Safety.

You're not for risking anymore. Okay. So you throw that into like a safe bond. Each time I go and that safety base gets bigger and bigger, I can start to say instead of putting away 50% of what I make, I can now put away 5%, 10%. Yeah, this is it. Because my safety net has become so big.

So when one stock is out there, I can put a million dollars under one stock. And you're fine. Why? Maybe because I have a house, I have certain things covered already or whatever, and I don't have to worry. If I lose that million dollars, I'm good to go elsewhere in my same wallet and start again. The average guy with $1 million, only $1 million, he should not take that type of risk. I am with you 100% on that. So it's important to assess.

That's why it's a portfolio approach. Yes. That's why it's a portfolio approach. Yes. You making a decision with your cash, which is your only asset, should make a different decision from the guy who have some land, house, some bonds, some equity, elsewhere, and all of that.

The rich man game. It is a different thing. You must always look at what percent of your portfolio or of your net worth are you currently investing. Yes. It's important right there. I am with you 100% on that. So we have this thing, two things. One, so privately we've talked it that night, I think

we're coming for this theory. Well, I know it's not a new theory. I call it the Keystone Strategy. And I said it to him, said essentially it's the same thing. DCA into dollar cost average into one specific stock that you believe in in the long term yeah

and you use that in the same way you call a safety net do the same thing in terms of safe stock that we trust so maybe you know

something will be around for a while JMNB for example something you know will be around for a while and then you use a percentage of that money to play

yeah so you can let's say if you had a million dollars in JMNB and you have 200,000 outside you can play in something with it you can risk's say if you had a million dollars in jmnb and you have a 200 000 outside you can play in something with it you can risk it highly because at the end of the day you still have the million yeah and then the gains from it will drop a little bit of the

gains into the dc it's not every single month anyway to build it up you're right it's a great thing to do and you look at it as well you know So we have what we call buying a return at a reasonable cost. I think it is scalable. It means it has a very good opportunity for growth. Its exposure to political risk and other risk is limited. This is a company that should be here in the long run. Then the exposure you take to that company is different from a speculative stock. Correct.

Right? A speculative stock is just, listen, everybody's going to run into this thing. I run in, the aim is to get in and out first.

Okay? If I go in and it moves 15% in that day, I'm out. Oh, wow. You really are high risk. What?

That's it. So you have to understand what is your objective. Don't forget the objective. 100% proof. My name is Groy. Have you been to one of my classes? No. But some people, when they get in the trade, the decision changes.

Yes. A key thing about trading is to stick to your decision. Yes. That's what kills most people. Really so like it. I say, as always, remember your decision. That's what kills most people. I say, as always, remember your goal. Because you need that when the emotions are high.

The fact that it's going up, up, up. You went in for your 20%. Your 20% was the reason you went in. Yes, preach. If you have a system where you can put in trailing stops then it's different yeah now everybody's going to be asking what that is trading stops is where you went in at 100 and you said okay i am going in to make 30 so it goes up to 130 your exit but I'm willing to risk 10 or 15%. If it goes

to 85, I'm out. I don't care if it will go to 70 and come back up. I don't care if 80 is going to turn and I'm up. My decision was that I was only willing to risk 15%. I'm sticking to it. That's done. One bad trade,

let's figure out how to carry that later on. If it goes up to 130, I'm out. Even if you don't have a trailing stop. Trailing stop now says that, okay, when it was at 100, I was willing to go down to 85 and up to 130. Trailing stop says, now that it's at 130, I was willing to lose 15% I'm going to put my stop at 1.15 now And I'm going to move up my

My take profit Up to 1.50 or 1.60 And stick with it And if it comes down It's back 1.50 It's out That works in the currency market

like forex market it works in stocks also and some stocks but over time not immediately it works in a stock market which is very liquid yes

many buyers and sellers yes like in a stock market it doesn't work you don't know it doesn't work at all we're talking to two people

who use it every day so I hear you in a stock market right you can say I'm willing to sell here or buy here doesn't work at all. We're talking to two people who use it every day. So I hear you. No, but it's the market. Right? You can say, I'm willing to sell here or buy here and if it doesn't execute there,

then leave it alone. But when you own the stock at $100, if there is no buyer at 80, you have to hold it. True, true, true. Liquidity is necessary. There you go.

So even if you get to it, true, true, true. So we don't consider our market as liquid. No, not in comparison to an advanced market. Because on an average day, the market doesn't trade more than about 10% of the market cap. Agreed. And it's at its highest now and still not very much. So if you're only trading 10% of the market cap, and the market cap means the total value of all the stocks in the market.

There we go. Right. So if you're only trading 10% of the market cap and the market cap means the total value of all the stocks in the market there we go right so if you're only trading 10 of the market cap or less then you don't really have it and that 10 is also concentrated in a couple of big companies it's because of the probably five key yeah or four key companies yeah you're looking at ncb so maybe some separate little careers every day not separate no separate does have high liquidity actually fear sorry or what level of liquidity not not a company's level of scotia's yeah the financial stuff surprisingly yeah right the bigger stuff but so it depends on the liquidity of the stock That's one thing you have to be mindful of. Because, say, for example, although our market does well, three years I had one, 49%. I think one year it was 37% and last year it was 29%.

That's your returns? No, the market index itself. Tell us about your return if you don't mind. No, the change is the index, right? It's that, how much it grows by yes so you would have

portfolios that have stocks where you might have unrealized gains where you're up 30% easily yeah

but if you should try to liquidate that stock problems problems you may even end up with your last trade being a loss yes

yeah yeah yeah oftentimes oftentimes when we have to come out of a stock and say boy how can I do this now You may even end up with your last trade being a loss. Yes. Yeah, yeah, yeah. Oftentimes, Dan and I talk about it. Oftentimes, when we have to come out of a stock. And say, boy, how can I do this now? Yeah, you have to clear the queue. You have to clear the queue, yeah. To benchmark unrealized gains, that's one thing.

To exit a trade and monetize that gain is another story. So it depends. When you're looking at people saying they're making a return of X, well, I'd ask you, is it realized or unrealized? True. True. That is strong to pay attention to. Because for Edwell, I was talking a lot about myself.

You can't tell the problems you have to deny. But yeah, you're right. After a certain point of money in the local market, you have those problems. You almost have to either just be used to leveraging the portfolio you borrow against it or you plan so you do heavily is you know usually i tell people actual person but what we do heavily is that we plan for that so you plan you know that if i start 100 we exit on the next rise of hype so usually if it goes up like 100 profit so you pick something

and you know it's going to have good results you say all right i think that might give me a rise of 50% based on usually we could be possibly going to what the actual profit is how the market usually pays attention to that kind of profit blah blah so on so forth then you know okay i'm expecting 50 or 60% growth in it when financial gleaner writes the article and in a week after that you might start seeing it fly up and people realize you're flying up and then it really,

really flies and you can get 60, 70. We know that if you jump 100% in something to get out with that cash, you're either going to have to wait and do it piece-by-piece or 100% growth

might actually mean 60, 70% realized. Yeah, but another thing, you know, is that remember it's a market. Yes. So the difference about single or individuality when in a market, all things are correlated.

Meaning what? I'll give you an example now. If your child is in a class, he or she gets 85 in an exam. Is that good or bad? Ah, depends on the curve. curve depends on everybody else in the class correct yeah yeah if 85 is the top grade and she comes first then you say well done well yeah of course okay my daughter must be a star and if you get 85 and you come 25th or 30th do you say well done to my daughter who I love, yes.

I don't have a daughter by the way. But yeah, I get what you mean. So it's relative. It is relative. Yes, yes, yes. How well does a stock perform relative to the other stocks? Correct. So you could grow one year and this could be your highest growth. And you could grow 25%.

And that's good. But everybody else grew by 30 and 40%. What were you doing? What were you doing? Exactly. Hence, again, another reason why you don't focus on individual stocks. Correct. Because relative value analysis is how we use to determine where do I extract value. We could say all things here are reasonable price good.

Yes. And they will all grow. But which one do I pick? Yes. And why do i pick one all the time i always have to use a relative value analysis to assess there we go i said to people all the time and say this is a good if xyz is a good stock i said listen almost everything on the exchange is good almost everything on the exchange is going to it's so hard to get on the exchange that they've already usually passed a certain level of past a certain level of muster to get there so very few things on the exchange that they've already usually passed a certain level of of past a certain level of muster to get there so very few things on the exchange are bad because you guys are here i won't

say what i usually say i usually name two companies in fact i don't mean one no but it's fine um however i am with you in you saying that you know you have to watch relative market i want to know however you can tell me maybe since you have industry, why don't more people watch more of the market? Meaning... Well, the truth is you know, because interest rate is so low now, more people have become interested in the stock market. Yeah, true. There is usually an

indirect correlation. Interest rate is high, stock market is down. Vice versa. Stock markets are up people move their investments away from interest bearing instruments

into stock market right so there is that inverse correlation so as you see now interest rates are low here in Jamaica

it's low globally yes so globally the stock markets are doing well yeah if you look a couple years ago

if you use jamaica when interest rate was 20 something and why do i need to take risk in a stock when i can collect 20 interest on my money without doing anything i don't need to do that right so you have variables like that that will impact the performance or how much funds are channeled into. Because really and truly, why does the stock market move like this? It moves because the market is liquid and cash. People have monies that need to be invested

and... They have to have a place to put it. So one, those are portfolio managers. Speak about individuals or corporates, right? People looking for an option. What do I need? I can't keep looking for an option what do I need I can't keep

this money idle what do I need to do if you're in an economy

where your money supply is growing faster than the pace at which value is created

in that society what it means is that more money chasing same amount of value then the price of those assets

must go up correct right correct sometimes it goes up to the extent it becomes above yeah so in speculation and let's say that when speculation drives it past its um the intrinsic values so if you find like company earnings generally are going up to the tune of 20%, but the entire market is going 400%. Yeah, then you know something's not there yet. The intrinsic value isn't there. So we're on the same page. Right. So, I mean, so you have to look at it, you know, the outlook.

So, for example, I like the Optimistica Jamaica Stock Exchange, right? But at the same time, you have one other thing which you bear in mind. You have an economy which is growing at 1%. If the companies which sells mainly locally

is selling to a population whose income base is growing at 1% per year. Do you think that these people will have the capacity to consume products from these companies to allow them to grow at 20, 25, 30% per year? Nope. And some of these companies require growth rates like that to maintain the multiples.

Correct. companies require growth rates like that to maintain the multiples correct correct so they refer that in itself says to you that this is not a sustained momentum yeah you need to see the economy grow with it in order to do yeah which is why there's so much pressure to get above that one percent bubble right we need three four or five percent yeah so i mean some people may say okay this one percent doesn't capture the underground economy and certain things. And it depends, right? Do you believe that? Yeah.

Speculation in Jamaica is that the underground economy is somewhere around 40 to 50%. But economists have a way to measure the unknown. It's estimated. Yeah. True, but still, after a certain amount, because they have to spend it. If you want to double it, then so we're going at two percent yeah oh well it's hard to grow two percent and maintain companies in the industry growing at 20 30 percent overall yeah some sectors may grow like that but when you look on the overall picture there is no way that these company revenues can be growing by so much our profitability can be

growing by so much when the income capacity of the population is not growing where are you going to get the money to consume you may borrow for a period but after a while there is no more credit because exactly your debt service ratio messed up right yeah and the market the local market especially we know runs on profit so if you can't repeat that profit performance the market isn't going to wait very wait very long right right so one of the things i was saying is that um the benchmark because interest rate is so low you find that yes the market had the stock market had to grow. Our prices of stocks had to go.

Yes. Because that benchmark, that hurdle, your opportunity costs. Now, if you look like in the past, rental yields in Jamaica and real estate, say apartment rentals, residential rental yields were somewhere in the region of 7-9%. That's when interest rates were up at 7-9%. So you benchmark, why would you buy an apartment and yield less than a paper instrument? So you think about it.

Now that paper instruments are down in the region of 1.5, 2, 3, what you realize is that more people run into apartment buying because, 2, 3. What you realize is that now more people run into apartment buying because, hey, why am I going to take this interest rate over here? I'm moving my portfolio to real estate and I'm going for the better return. And as more money chase real estate, the return goes down.

Because price goes up, the inverse relationship. So you'll find that rental yields came down to 5% to 7% and now in the reach of mainly 4% to 6%. Right? It's the same thing in the US. It's the same thing anywhere. As interest rates get lower, other asset class monies are diverted.

And it's what we call smart money. People move their money for the highest return, for the reasonableness. So you'll find that all the other areas that you would allocate money from a portfolio perspective comes down. Real estate is down after a while. People will chase equities so much so that

when you look at the dividend yield, because you buy a stock for two reasons, right? You buy it for capital gains. Or dividends. Which is a change in the price over time. And you buy it for dividends. Which is the payout. Right.

And the dividends would have been, the dividend yield would have been the cash dividend that you get over the price that you pay for the stock. Right? So if you're paying higher and higher price for the stock, the dividend goes down. Right?

So I remember when our stock German B stock our dividend yield was above 3% your stocks paid 4-5% dividend yield but the market

has been up now we are you're lucky to get 2 or 3% 2% yeah generally our dividend yield

is about 1.7 so what you find is that the stock prices go up up up so much. The yield's up. So that dividend yield doesn't impress you anymore. So all that's left for you now is capital gains.

Right? And that's a little. How far do you chase the stock? If you think that the company, intrinsic value, the company just cannot go past a point. company intrinsic value the company just cannot grow passify so is it that because you want it you just put some money in even though you know the company not going to grow you're willing to just keep paying more and more and more and more and more right so at some point in time the market will deem the prices to be too high and therefore you will see correction we have seen corrections before across the board yeah we're still seeing corrections with some stuff i think one the most to be too high and therefore you will see correction and we have seen corrections before

across the board yeah we're still seeing corrections with some stuff i think one the most famous one as well is kingston warves kingston warves been high yeah been high been high for years i've always watched that it's the one suck i've never bought because it was always at a on a pe multiple basis oh he's very high recently this year 2019 as he corrected still high but what 30 something no yeah but and again perception is what oh yeah perception itself why was kingston o'hara multiple so high we perception yes we perception is the poor no from jamaica our trust was our own logistic hub yes so if the bulk of your growth was supposed to be coming from the logistics hub,

of the 2016, who benefits most here? Kingston. The transportation, the Kingston WAPs, and so forth. Right? Those are the areas

where you expect. And if you're building out, just like now, where the economy is building out capacity and we're growing, who benefits? Construction. There we go.

So companies in construction, the cements, the hardwares, you expect them to do well. If a company has equipment, rental, something like that, then you expect them to do well because of building capacity. But as soon as that

dwindles, then it's the same thing for Kingston. So you think like, okay, we're putting in a certain amount of capacity and this company will do well. So I'm willing to pay more, willing to pay more, willing to pay more.

But when you don't see the revenue growing past a certain point, then you will see correction. And those who are in the money will start to sell. Yes.

And when the heavy money people sell, they move the price. So if you have an asset and you're up 30 40 50 percent and it seems as if it has stopped out it's no question in your head is what's my next opportunity i mean i already have this 30 or 40 percent on the table shouldn't i take it and go and look for another trade that's it so when you sell and i'm thinking the same and somebody else thinking the same and then other people trade based upon trends of influencers so okay i see ncb selling

some stock the man must know something i must let me sell as well right all the time right so other people start to follow the influencers and so forth and then you get the herd mentality bigger qw yeah you always get the herd mentality markets so i i say to you know call me that i like that you you bring this up because a lot of the things that you have been saying then i say it a lot but we don't necessarily say it in the same way. But I'm recognizing in the principle of what you do, the same principles that we do, especially the same thing, diversity. No, we're different in some things. Because I started with 10 grand years ago, so I had to put everything in one. I couldn't split 10 grand between five things, right? And

I rode that 10 grand up into the millions. And as it got larger, I realized there are things I just can't do. I literally cannot invest my portfolio the way I invested it when it was at 10 grand. The way I invested it when it was even at one mil. Now I can do like what you do. I can put a million into something, but I can't put all of it into one. Or if I do that, that's it. Yeah, you can't move easily in and out of that company. I always say that, listen, for the guy who has a small amount,

you can get diversification in many ways. So maybe 10,000 is not enough to split up into different shares. But you can buy into a fund. So I might manage a fund for 100 million, but it may consist of several persons with 10,000 each. So me managing that portfolio into several stocks and you buying units in that gives you diversification. And exposure to everything.

And exposure. And your expertise. Right, and expertise as well. But the issue comes when i don't want your expertise right so if you don't want my expertise then it's it's an amount where in the scheme of things you can afford to risk it you know you can afford for some people because we have a lot of listeners some listeners is them only 100 grand yeah there are some people if you lose 100 grand it's another 5 years before you get back

there are some people I can take it out of my salary and I can put it back there you understand as I say like your net worth will determine a lot of your decisions and people need to know that so you have to assess your net worth

and know what percentage of your network is in your investable format. Right? That's another thing, you know. The guy who, I remember in the crisis, 2008.

Yeah. There's one guy who says to me, I want to buy some Venezuela bonds. And I said to him, like, really? He said, yes, I want to buy some Venezuela bonds. I said, why are you buying Venezuela bonds? I said, well, it's my duty to walk you through the risk.

So I walk you through the risk and everything. You're clear. And you will sign that. You did. I did not solicit the business from you to sell you this money. Yeah. Right?

You're buying your own risk. Okay. And then one of my questions was, what's this money for? He says, I have my businesses. I have good income. This money is some money

that I have for when I die. It's for the grandkids play around money so therefore he can afford to play with it that worked out for him yeah in terms of the Venezuela bonds if he bought it back then

it worked out handsomely for him so he doubled that money but it was risky he could have lost it all but if he had lost it all he would if he had lost it all, he would still be good because he's solid base or he's safe base. And this invest,

money he's investing represented less than 5% of what he's worth. So what? So he can take all of that cash and throw it in one bond. And there's another client who invested in Irish bonds. And that one,

I had to take up to the level of my compliance officer to get signed off. Because everybody is like, we are not selling this asset. I sat down with him when that bond

was trading at like 23% was the return. And when he says, I'm good with this. I'm good with it. I can take the risk. And we walked through and everything and we bought the bond

and it traded right to the point where in Ireland, interest rates became negative. Yes. When they were just allowing you to keep some of your money safe. Yeah. So when you trade an asset that's yielding 20 something percent till you have to pay a bank to keep your money. Yes.

That's a handsome, handsome return. Understand? That's really some serious return that's strong he's making so then way way way more than doubling his money so here let me let me bring it to some real talk so the last time i carry on i admit so people know i i'm one i started trading with jm and me with him just to start money line years ago that's when i started forever ago 20 years at this point but it wasn't serious trade my serious trading started maybe 10 or so years and then as the market has grown I have grown really because I know this won't last forever so eat while it's while the food is on the table um one of the things I used to be you guys

about is just capacity whatever and JMNB to the credit I mean they're doing this so I like that JMNB is always open to listening. People really like that, by the way. People really like that you guys are listening. And you know what I'm saying? It's perfect. Because in this space, lots of people try to pretend that they're perfect. They're not.

So I like that JMNB does some of that. So I think the thing I should know, since I've come here to beat you up with, because you're touching some good points. You made two examples of, I guess, somebody with money, recognizing that there's something valuable there but there's high risk and so jmb has to do their due diligence and carry people through i'm not saying no but let me show you the risk that's great right but why not do you not think that maybe the the general level of aggressiveness i wouldn't put on jmb alone i'll say the industry

you don't think it could raise? Not into stratospheric crazy levels. Yes, I know. Because I tell you what. From my experience over time, I've seen people making money and all happy. And the moment they start to lose, it's not that nobody knew anything. Right?

And I tell you something about when you explain risk to people. You explain risk to the T. And they say, yes, they understand. And they're making money from it and they're all good. The day they lose a dollar, how come

nobody understood anything? They trusted JMB's expertise. And that's it. And it goes down. And it's because the law is funny. There's a case with Morgan Stanley in the US.

Morgan Stanley explained the risk of a trade to a client. The client signed to say they acknowledge. When the investment went haywire, the case went to court because the client didn't. Set them down, oh.

Yes. The judge ruled that even though Morgan Stanley got the client to sign, Morgan Stanley ought to have known from their expertise that this investment option was very wrong

for the client. Really? They kept the responsibility on him? So Morgan Stanley had to pay out. Morgan Stanley, so wait, that creates legal precedence because that then invalidates. So you have to be careful sometimes when you say, okay, yes, you explain to be careful sometimes you know when you say okay yes

you explain to a man and him say him understand and he's just saying he understands because he know what i look like yeah yeah and i'm saying yeah man i understand and i'm saying yeah yeah the real thing come to the matter man i said well why my iq is not something i would understand this you know you should know better And you should have known better. And you should have known better. Oh, wow. So you have to think about the spins to it. That is true. I get it now, but you know, if you make fear

alone control it, you almost won't ever do anything. Because I see often opportunities, right? So how I beat the industry up these days is around analysis, and mostly stocks, but around analysis and recommendations. Now, I don't expect the market to be crazy. I understand they have to be careful because you have to talk to everybody that they're risky and the very very risk covers. But you reach a point where I see people like like you look on things and you're like this is an obvious win or

or it's an obvious danger zone. What the market doesn't do, you have to be fair in that the market does credit analysis. Yeah, meaning can you get back this money that you're lending xyz? Yes. Yeah okay, viability. So it's not growth and businesses. And when you trade, there are two different trades. When you trade, there are two different trades. There is a strategic trade and there is a tactical trade. A strategic trade says, this company over the long run is expected to do well. And if you buy and hold over a certain time, based on the trajectory of the market and all the other things, taste preference, all that. The direction of this company should be well. A tactical trade

says you buy at 10, you sell at 15. You buy tomorrow versus you buy the next day and when you sell. So the tactical trade is what helps you to know when to jump in and out within a short period of time.

That's a tactical trade. And the shorter you're playing, the more tactical you have to be. Right. And the more risky it becomes. Yes, true. So the question is, our investors in our stock market,

are they tactical traders or are they strategic traders? Are you buying a company and say over the long run, this company

will do well because the industry in which it is will do well and it is a market leader in

its industry. Right? You have to look at it that way. Now, I'll give you an example.

I have a friend who has been buying NCB from it. It was around $3.50. Oh yeah, we have a couple of those friends. We have a friend who has been buying NCB from me. It was around $3.50. Oh, yeah.

We have a couple of those friends. We have a couple of those friends. Yes, we do. Wow. Very rich families now. His belief was that the economy has to be driven somewhat by the financial sector. Correct. And we've seen it.

And that this entity is an entity that will be a force to be reckoned with. So said, so done. Correct. And we've seen it. And that this entity is an entity that will be a force to be reckoned with. So said, so done. Right. So he has been building a portfolio from then. I like that. Shout out to that friend. There are people who I know would jump in and say, okay,

when Laska is going to list, we're going to buy it. Why? Because GDP low, people need an alternative maybe from the grace and the name brands per se. So there's a segment of the market that needs this offering. So the company should do at least reasonably well. Yes. So you buy in your IPO or whatever.

You say, yes. A supreme venture come and you take a perspective. And you say, okay. The poor country, some people are rid of hopes. What do you think they're going to do? They gamble. What's my option to become rich? I should buy the lotto.

I should go play some cash pad. I should do something. So therefore, you know there's a place for that. You take a fundamental outlook on the industry and the market leader in the industry you take that that's a strategic trade so when you take those perspectives you buy the stock and you go sleep you're not check tomorrow where to trade for next week you don't care what it is trading because you know it's funny you know like you ever really and truly when you

look on the line over 10 years and you see it look like this. That was not the market. When you zoom in it, yeah. Yeah. Zigzag and the fear, yeah man. So that thing is what kills a lot of people.

In that, you're not able to stick to the investment decision to say this company over the next three to five years will be a force to reckon with and i'm gonna buy this stock and i'm gonna forget about it i don't want to hear where it's trading next week i don't want to hear where it's trading next month yeah yeah yeah that's not why i bought it yeah that's a tactical trade. But that's hard for a lot of people, you know?

No, so that is why I'm saying the confusing thing is that some people takes a strategic decision but behaves in a tactical way. Yes. And therefore it gets them restless. Yes. You bought it because you believed in the company.

There we go. Not because of the behavior of the market over two, three months. Everybody that got grown on the list, you know not because of the behavior of the market over two three months everybody that got grown on the list you know because i'm saying exactly what i said what's happening with xyz i go what were you thinking when you bought it yeah yeah brendan messaged me two days after qw so when did it drop for the first day say yo i think i'll sell it oh yeah we spoke a week ago and you told me you were buying this with the outlook of a year it dropped in one what why are you worried but i realized really

it's a shift because qw i dropped one that i must be excited i'd be excited and the boy dropped the more excited to get and then somebody else i know is out there going no we drop it one little bit but in my view because you're right in my view i don't usually invest for dividends i'm a cat games and when i had the smaller money but where i know i have to look for it and in my view like you couldn't get qwi at 108 you couldn't get that 105 ipo that 125 a little bit and really and truly if you bought in at 125 chances are your average cost is 130 130 if you told me six months ago that qw would have listened i would have been able to buy it at a dollar eight i would have been excited right but that is a totally different shift card to somebody's

what about a 130 108 so you're right how people think about it has to shift that's why i try to get you to get the thinking yeah but somewhere in the line it goes back to the principle i'll tell you that the biggest killer in trading. Emotions. There we go. Yeah. Emotions is the single biggest killer. Not having the discipline to stick to your investment objective kills everything. Yep. Totally, totally, totally.

All the time. What, what, how do you handle it? Like as a human, because we know what the book says, but how do you handle it as a human? Because the biggest thing for people, they put it in and they want to buy it. Sell it. I think he bought it for two years. I said, that's great.

In two years, the financial space is going to grow naturally. JMNB is going to force it to grow just from that upcoming thing. Now, if you bought with that in mind, I understand you believe it and you're into it, but then your friend goes to you and says,

make 40% on X and Y. And suddenly you're starting. But it's human. I get it. Yeah. I'm not saying that I don't review my decisions. But I buy a stock. And you stick with it.

You stick with your decision. Right. So you have to first know, who are you? Are you a tactical trader? Are you a tactical trader? Are you a fundamental trader? Right? Am I in this because I'm looking at the quick pick?

So if you're in it looking at the quick pick, you monitor it over short periods for your best entry and best exit. If you're not in it for that and you're in it for the long term, chances are if the company grows so fast, are there some positive about the company in the short term

that makes the price spike? It could spike much more in the long term. Yep. What stops it from spiking more? Exactly. You have to always look and review your decisions, yes. Constantly. There can be two things at once.

You have to pick one or pick a larger weight to one. It never changes. It doesn't matter if it's currency. It doesn't matter if it's stocks. If it's real estate. Always the same thing. It doesn't matter where it is either.

Because the principles are in the American market, in the European market, in the Jamaican market, it's the same principle. principle can you hold it out can you stick to your decision and can you ignore what's going on next door because a lot of people lose money just on that shift i jump from this then i jump from this then i jump from this and it's like guess what happened you have this stock you bought it with a three-year horizon. A year and a half in the thing, the stock doesn't move at all. And you start to get impatient.

And you exit. Okay. Maybe slightly down, maybe flat, slightly up. You exit. Six months later, the stock went up 40 because in your three-year horizon which you originally had things are just coming through the pipeline of their missions and stuff just coming through guess what now you get antsy you have the emotion to say look how i was waiting on this all the time you know what you don't know

you're running back now you're buying 40 percent right and your risk is this much my friends who this exact story you're describing happened with Signal Stock. Because I said to them, I said, just wait, man. You know the Jamaican man, because when we move,

we move quick and then we stay there. Yeah. And we will stagnate for a year and a half, which is exactly what Signal did. It stagnated, stayed at $10, $11

and then it just flew to $20. And guess what? You have to understand the business. It's your duty to understand the business. You're going to invest in the business, you need to understand. And if you don't understand, then you need to have an investment

advisor that thoroughly understands. Say it again. So you have to have a good investment advisor. If you're not the expert, you need it. So say for example, Iace, their business

model can be complex. Could not blossom in six months. Exactly. Yes. Cannot. It's a startup. And they are investing in startups. Yes. And they are investing in startups. So therefore, there must be a period

of time which is these businesses have to be nurtured and so forth before you start to see the return. So I didn't expect it to move in the first year. I never expected that. Neither did I. And then the upsizing, the way they upsized, I believe. There's a threat of valuation.

So it never make sense so so if what i do know in my stock portfolio is it's in two tell us your stocks that i buy to hold and there are stocks that i buy to trade okay okay and there is the same stock that a portion of it is to hold and a portion is to trade okay all right so okay i buy a position say a million units maybe i decide that when the stock moves 25 i'm gonna exit 20 maybe when it moves 40 i'm gonna do another 20%. And tear it. So at least I start to take some gains going up the ladder. And each further up it goes is the more covered I become. Yeah, you're increasing the safety.

Right. So I'm increasing my safety position. I really like that. I'm finding a way to put that in. So you have to figure out how to manage your portfolio. Yep. That way. Yep. So you know that, okay, I'm waiting for the. So you have to figure out how to manage your portfolio that way. Yep. So you know that,

okay, I'm waiting for the top, but I'm not waiting with all of my position for the top. No. I would have taken off some gains off it already.

So if you take that approach, then yes, you can behave in that way and take some profit, take some profit, take some profit. Are you sure you consider yourself high risk? i'm high risk but i'm a sophisticated high risk investor okay i think it's

just that high risk doesn't it's different from stupid no no 100 yeah yeah because i'm described as high risk that i described as high risk means i'm high risk and sophisticated means I'm using information to make. It's just like when a man says, you make decisions and God feels it. There's God feeling, there's God feeling. There's God feeling ignorance and there's a hunch because of your experience. There we go. There we go. So because of your experience you understand

what are the tickers, what are the indicators that says it's time to do this, it's time to do that. And it plays on you and therefore you make a decision. There we go. That's different from a man who just runs in and says I'm not feeling this, this guy is moving and I'm going to bite.

So it's it's different in that context wow as Karen was reminding me earlier we're moving completely from Forex

so we're on the same page in terms of stocks though it's so funny but I I did I made my portfolio high risk but I knew it was high risk

and it's the same way when I say high risk there weren't sleepless nights. If it's sleepless nights, it's because I'm paying attention to the portfolio, right? But it wasn't stupid. Before you say you're high risk, what percentage of your net worth would you say is invested in stocks? Me, right now, currently? My net worth.

Yeah, your net worth. I don't actually count my net worth. I keep my money in stocks. Let's my net worth and i keep my money in stocks let's put almost a hundred percent of my money your money in stocks is not your portfolio in stocks true do you own a house or an apartment yeah there are things that i have does the apartment value more than your share portfolio at this point no my portfolio is kind of good i'm sorry no do you have like land or other investment no i get what you're saying no i am a business that adds up because 90 of my money is in stocks in the local stuff of your money are my networks of my network my asset

my network is in the jamaican stock market. Yeah. Then the other thing is the age group. Yeah. How much time do you have to rebound? To rebound? Yeah. You mean like if something goes wrong? If anything goes haywire. I may have some time.

I'm 33. You have 30 years of working life left. Oh, God forbid. But yeah. Yeah. Yeah. Yeah. Yeah.

Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah.

Put it in context. There are people graduating from university at 30 and they have nothing yet. True. So that says that you're in a position where you can do a whole lot. Oh yeah. So in the context of things,

you're not really truly high risk. If you were to reach 55 and 60 and you take that same 90% decision, that says you're high risk. Because guess what? Your recovery time. At 60?

Yeah. Well, I'm assuming at 60, I'm managing my risk because also I don't have any kids. Yeah, and I'm married. Even if it took a lot, just look at the recovery. I couldn't do it. Just look at the recovery. The recovery in real time.

The time that you have left to work about this money or make about this money in business is a lot true no true true true so therefore yes you're allocating a high percentage but it doesn't really make you a high risk person because you have a lot of time for recovery. True. And then on the tactical level, I mean, you think we're higher tactically than that? Tactically. In terms of how we trade. Yes, sir. You might have concentrations.

At times, okay, so you have 90% in one asset class. Fine. Within the asset class, you ever put 90% or 80% on one stock? I mean, in the past. Not anymore. I i can't anymore but in the past i have right yeah so that in itself shows that you appreciate diversification you might not diversify by asset class but you diversify by industry

within an asset class true so you're you're buying in banking you're buying in manufacturing you're buying in the distribution industry you're buying in hotel and tourism so you're buying in gaming so therefore you're saying hello this asset class is risky i'm gonna see how i can best manage the risk in this asset class yeah risk is a hallmark a reward so i don't you you catch me in transition here because i am moving i'm forced to move how i invest but i wouldn't tell you say if trans jamaica listing and it coming out like all your money today if it could take all my money and it's a great deal and i honestly think that at worst single 30 i put every dime in there if you think that yeah if i think that so i, if the single guy got 30%, I would put every dime in there. If you think that.

Yeah, if I think that. So I believe in the Buffett statement that people don't talk about which is put all your eggs in one basket. Watch that basket. Pay close attention to that basket. And when I was building up my portfolio, I had to do that. So those were the nights where Buffett doesn't do that approach.

Buffett money is very different. Even from the early stage, Buffett's philosophy has always been I look at a company, I value the company, I see growth opportunity, I buy it, I forget it. Yeah, but

that's not... Buffett never speculates on the stock market. He buys companies Buffett never speculates on the stock market he doesn't have to he buys companies with strong fundamentals that's not the thing that's not going against

what he said about put our eggs in one basket preserve the basket put our eggs in a good basket then you're good that's the same with us but we of course don't have Buffett money, so we couldn't do Buffett moves at the time. You still buy

companies that you believe are solid. Oh, undoubtedly. So we don't put money in things that we expect not to do anything other than grow. And we are also very event-based. I know I'm event-based, meaning when you're free,

you guys are timing so if you know timing is important to us so if i'm going to be in a stock and i say boy i know x time this event is going to happen that will drive demand in the stock so the price will go up say earnings or some some other events happening around the company then i see like six months down the line and nothing would happen for that stock in my view for that six months i probably wouldn't invest until near near to the event event so finally no so your approach is more the tactical approach very heavy yeah very heavy very heavy you're you're not looking on the fundamental side of the business to say over time long along i look at the fundamentals but not necessary for very long horizons yeah yeah so i'm saying once once you trade in the short space you're considered the

tactical you're not you're not you have to yeah sure and I understand from that perspective your ears have to be closer to the market the guy who takes the long term you buy it you forget it now and again you're checking but you buy it you forget the guy who's doing the tactical you have to follow the news you have to know what's happening in the industry

you have to know what's happening with the peers that's fine you have to be on top you have to know what's happening with the peers in the industry. You have to be on top of the information. You have to know what's happening globally. Is this a company that's exporting? You have to know what's happening with people's behavior. Is taste and preference moving? Look at Kodak.

Is taste and preference changing? You understand? Yep. What do I see happening for this company down the road because of political factors? Venezuela, you can't trade with Venezuela anymore. You have stuff with Cuba. You have whatever. You understand?

Things with China. Growth rates slowing down because of two superpowers' egos at each other. Right? So what does it mean? Look, with Yahweh and all these other people, there is stuff where you look at it impacts them correct what can impact them on a larger scale just outside of their economy because you're exporting what percentage of your revenues comes from the domestic market versus the local market

and what are the drivers of each of those drivers for you? Yes, and what are the drivers of each of those markets and so forth. And then you get into company specific info. What is the management quality of this company? What is the investment horizon? What is the philosophy of the company? What are their stated plans? Because sometimes they just straight out tell you and people ignore. The local market ignores stated plans all the time.

Exactly. What is the construct of the board? What's corporate governance like in the company? So yes, they say they're going to do something. Who will hold them accountable? You know?

When you start to get into all of that now, then you're on top of the information around. Your risk becomes much less. Your risk becomes less. So that's why i don't think of myself as high risk because i have to do that i have to look out my i have to manage my risk to a certain point and then i'm fine yeah otherwise if i do it then i can't invest based on just what

ran if randy said then i look at this i have to look at it more than just randy said same thing he said something to me what well we say we say things we use to use and prove. Because if I say something, I show you it and you still go dig through it and still, yeah. I almost call myself risk averse but I know within the industry

I wouldn't be considered risk averse. But I don't like risk at all. Yeah, well, one of the things, you know, as your portfolio gets larger, your risk appetite changes. Yeah.

Your risk appetite. True. Definitely. And as you grow in age and responsibility, your risk appetite changes. Your risk appetite definitely changes. As you grow in age and responsibility, your risk appetite definitely changes. And what you're able to do, thankfully. If you did it right, what you're able to do

does change. A lot of things will impact the behavior of an investor. The key thing is to know your... From my perspective as a portfolio manager i have to know my customers i have to know their philosophies i have to be in their world i have to literally know when you're making a decision that is not even in your own interest big point because everybody hear the big money and then come to say no mama want it you're right

and i tell you what let me tell you just like. Nobody knows when a man tries a hundred times and failed 99 and he gets one that bus him big. A wedding bus. Everybody see the one bus and say, boy, them are the lucky. Overnight. Nobody knew the 99.

It's just the same way when a man trade. Guess what? When him do a bad trade, him not run come tell him. Him not talk about it. That's true. He only tell you the good trade. So he tells you a bad trade him nah run come tell you him nah talk about it that's true him only tell you the good trade

so he tells you the good trade and he says boy you know I make some money and this and that and him don't tell you when something go wrong

when him lose him hug it up and him say boy I'm sorry I forgot about this but guess what him don't tell you

so one of the things that people ask us a lot is to tell them generally like what what have you ever gotten wrong like what are the have you ever gotten around like the bad trades yeah what are your bad trades i i'm not too risk for saying that i've never lost i started

my first trade my first year was a bad bad trade yeah randy said randy mentioned just in conversation in a conversation i wasn't i wasn't even contributing because i was on look up and he said cwj was talking about the company and i took it as oh yeah man go buy cwj bad move this is before the deal is this is was when you know that time when they're below a dollar and they're up and then he comes and say you hear me talking up here and him right and funny enough because i would have sold and then when it hit below a dollar i started to buy again yeah so he was doing that so him talking at the top say man money makes him buy so when when he's talking

about buying again now looking at the way we're buying buying what i mean buying this thing just but to me i'm saying i can't see these guys staying listed this was about a year or two before they even delisted so i said i don't see these guys listening if they're going to deal with them we have to offer some money and on the local market the second money is offered for a company the stock flies on anticipation yes so it was me thinking of that two years before looking at the fundamentals and seeing it and jumping in and out that date and that's how he learned it was a rough lesson for him he was making an uninformed decision. But he didn't even have a perspective. None.

And that's what kills a lot of people. They hear somebody else saying, boy, my stock portfolio is doing this. And guess what? I need to be able to talk about my stock portfolio when I'm around other people. So I just run and put some money in the stock market. I don't care too much what I buy because I now have a stock portfolio. How do you deal with that? Because you must get the same thing. How do you deal with that? Because you must get

the same thing. How do you deal with it? Because for me, I'm almost afraid to talk about stocks because like I can't, I talk to Danai when we're doing the podcast

or when we're driving to the podcast. That's why we talk privately because if me and him sit down somewhere, we're some people that knows and we talk, any stock we mention

people about. I get DMs all the time. Am I sickness because you talk about sickness? I say no, but I said don't do it because I'm doing it. Yeah, but. I advise people based on risk tolerance that I know them to. So I tell my peers. No, man, I'm talking work. I know you're good at work. You're, my friends, you're young, buy growth stocks. Okay. Buy growth stocks when you're young. Yes. Right. So take the risk while

you can take the risk. Yeah. Buy the growth stocks. If you're young. Yes. Right? So take the risk while you can take the risk. Yeah. Buy the growth stocks. If you're getting older, buy mature companies. Buy established companies, the returns will be less, the dividend yield might be decent because they know their shareholders need the cash flow. Versus a huge gap game. Right.

So therefore, your stage of life dictates the segment in which you have the higher concentration so how do you handle the the people who could not even do it you know i'm telling you afterwards i only hear two things i hear one make a bag of money you know you're really good at this thing i say you make a bag of money what i've never told you anything and i've said no you never did mention pulse said two years ago yeah so but as just talking about it well it work as opposed to i also hear then how come you tell me if i buy xyz and it dropped because you only hear after the fact guess what because you are a tactical trader timing is important 100 so you said buy a stock today i didn't get to buy it till next week Wednesday.

The market could have moved 15% a day. Yeah. Is it still a good trade next week Wednesday? No. No, it's still not a good trade. You understand? Yeah, yeah, yeah.

But in my mind, as a rookie, boy, the man's a boy. NCB. But it's just four days or five days later, I'm still buying that's what the price move up 50 is it still a good trade maybe not yeah that's boys so i get the responsibility that you

have you know yeah so you have a responsibility to understand where i go to your advisor so that we can educate them so you know that listen time in and you speak i would say loosely because you say buy ncb you didn't say at 210 ncb is a good buy or between 200 to 220 is a good buy for an exit of 250 to 260. well let me pause and say i don't ever say that because I'm not a licensed financial advisor. I am not. No, but you talk to your friends. So when I talk to my friends, what I do know

is anybody asks me, close to me, asks me what stocks is all the same because I say, what's your goal? That's the first thing I always ask them.

What's your goal? Yeah, always, what's your goal? Always need to focus on your goal. Bring me back to the beat of it. Carry it on, carry it on.

Because people, people love JMNB and they're in for that but like i went to jmmb two weeks ago oh no the office is packed now which is good because i am a jmmb shareholder as of today yesterday's the 20th i am a jmmb shareholder but again but what are you doing and it's just an operational point because i know it's hard but what are you doing about that because people want to come in and move everybody go expect to talk to a kwame when they're coming to jmnb they're going to want that and i know that that's physically impossible because one you're not an advisor you're handling

a huge part right so in in in finance there's what we call chinese war right ah okay guy that manages the proprietary book doesn't deal with clients. None at all. Say it again for the people to hear. So they will not see you because of your role. So I do not advise clients. I get that. Actually

if I can still tell me if I'm right or I'm wrong. You actually can't do it because you may be in your role privy to things that it would be unethical for you to speak to clients about. Perfect. I may be taking a decision contrary. So what

the advice is? Yes. So we keep separate handles. Completely. We have what we call a client investment committee that makes decisions on behalf of client. And there is my team, the trading team which makes decisions on behalf of the company um ah so you handle mr jmmb versus the jmmb clan yeah so you're about to highlight that embassies over to your side again in a career

so how are you going to handle the press carry because people want these are the experience that he comes with i know that's the first thing i learned when i saw the experience comes you know but they want that when they walk in the door no but you get the experience because what happened is that we have discussions the research team the trading team have ongoing discussions and research is a team that covers the credit quality and software and recommendations.

So, on a daily basis, trading, I speak to guys in New York, you name it, wherever, all across the Caribbean,

London, wherever. London especially. Right. So, I'm the ears on the ground. Yeah? So,

they've come to you all the time. Yeah. So, I'll be saying to them, you know, today the ears on the ground. Yeah. So they've come to you all the time. Yeah. So we, I'll be saying to them, you know, today, based upon the reaction of such and such,

I'm getting this feeling, I'm getting this reaction. There might be some information which we haven't uncovered yet, or so forth. Or, Trump said this, and this is the impact it's having, and so forth.

And then they will say, well, okay, on a fundamental basis, this is how we expect this decision to impact an economy, a country, a company, a region, and so forth. And we tie them together to say, this is behavior

on the ground, this is the expectation of the bigger picture. You tie that together and then you provide an outlook which research uses to advise the clients the clients i mean because the same information research use is the same information that you use that you get because i want that fundamental perspective as well to help me to understand what is happening on the ground. Ah, yes. I mean, just to go back to your question, Randy.

So the first thing, I mean, when you come into a GMMB, and I mean, this is our philosophy and every company is different. One of the first questions we ask you, apart from, of course, understanding your goal and your level of risk tolerance, is first of all, how much discretion do you want to have over your portfolio do you want to maintain full discretion as the client meaning you make every decision of every asset you want to buy and sell and when and how much or do you want jmmb to manage that to have total discretion in that regard do you want jmmb to make recommendations approved by you exactly exactly there's that middle ground where we make our recommendations but you have to sanction it exactly there is the one where you just give us outright authority and do what you want to do and generate returns okay over x time

so you give them the goal and whatever correct so the most popular route incidentally are those people who actually give us the discretion. Because the reality is the majority of our population, with all due respect, it is what it is based perhaps on our economy. They're not very investor savvy. They're not sophisticated. And so they say, look, Jeremy, you are the pros. You have the Germans and the bright people like Kwame working and doing the thing. You guys just take it and run with it. And you open a wealth builder or

you're going to a unit trust and we will manage it for you for those people now who want that level of control the challenge you have again is is the volume because you have the number of clients to deal with who want to maintain that full discretion order 50 50 but then now within that it is the strategic investors versus the tactical ones so what we do, go back to Kwame's point, is that we empower you with the information. So for us now, on our website, there is an inside section where we have all of our research. Sovereigns and the different sovereigns, our countries, the publicly listed companies. There is a weekly market caller newsletter that you can sign up by email. You get it every Friday.

But the market caller looks weak. I'm going to stop your recommendations. I don't know why. You give market info but no recommendations. It's a legal matter. When you make a recommendation as compared to when you do a relative value analysis. I may say to you,

relative value says, if you're looking bonds with credit quality B, these are the B credits. Of the B credits, Jamaica looks the best. You can choose what you want to do. Okay.

Rather than me saying, buy Jamaica. Okay. See the difference? Yeah, I get you. Stock, same thing. You might say, the outlook of this company is pretty decent based upon fundamental one, two, three, four. Right? Based upon fundamental.

One, two, three, four. Right? And so therefore. It's up to you. If those are the things that you value. To make a decision. As well as. We may be so compelled.

And we say okay. We think this is a buy. We think this is a sell. We think this is underweight. Or whatever. But guess what? It still doesn't say. Sell at 10.

Buy at 5. So you have to look back on the report as well and know at what point in time, how dated is our report. Yeah. True. Because guess what? It was at that point in time. That market color come out on a Friday

and suppose we had said NCBs are buy. You not read your email till the following week Wednesday. Is it still a bye? You have a responsibility because the key thing about information, it must be timely. It must be relevant. Yes. You have to know that.

If it's not timely and relevant, then you've lost the goal. But then I got lost. We've gone so far from Forex. I tried to talk about it. Let me touch a little on the Forex. Yes, please. Explain. So in the Forex market, you have two aspects.

You have what we call a spot market. You have a forward market. You have a spot market and a forward market. And then you have what we call margin trading. Okay. Yes. And that's the popular one in Jamaica. Not from an institution, but just people that's one of people do if you go back to the whole holy yeah yeah good so the spot market is we are a guy who really needs the actual delivery of the currency. And he needs it T plus two. Within from T to T plus two. T today.

Transaction date plus two days. That's a maximum of two days. That's a spot transaction. Beyond two days is referred to as a forward contract. So you're saying I will buy for a future date or I will sell for a future date a fixed amount of currency at a fixed price. Still actual delivery of currency. Okay, but it's a lot more futures so that's the delivery of the currency you can trade a currency market using futures difference now is that there is no delivery or option there is no delivery of it yeah

chris yeah you just it's just the contract itself that you're moving around. You can say on such date you have the option to do and you may exercise the option or not. If you don't exercise and it is out of the money. So let's say I say one year from now

I want to have the option to buy US at 150. One year from now it could be at 140 and I don't exercise the option. So, you don't make a coupon. And it passes. But there is a fee for the option. Right? So, you pay the option price and you get that option to buy at the price or sell at the price.

There is also where you can do what we call a non-deliverment forward. There is also where you can do what we call a non-deliverment forward. Where you say, sometime down the road, I want to be benchmarked against the current rate. My bet or my price will be 150. And whatever the market rate is, you will be benchmarked against the market rate on that time. So if I'm buying at 150 and the market rate is at 155, you pay me $5 times the amount of currency. And that's mine.

And go about my business. There's no delivery of the currency. You just get the spread. You just get the spread. Just the spread. If it's down, I pay you. Go about my business. That's it.

I should pause here because I know you were explaining the three markets. I should pause there because especially the first one, the forward contract, I know that's a big deal these days with the movement of the... The local...

In the local market. We are now... We have a floating currency as we should. And of course, it's demand driven. So it moves up and down as demand requires

our state. Of course, the business people, I have a friend who who um that's her thing she beat her back because of a month she buy from us blah blah blah i don't know if you're preempting jm maybe coming to some with something to help these people so for the forward market one both from an industrial perspective as well as from jm b perspective we are looking to offer forward contracts soon and and very soon. Yes. And the industry, there is a trust by the central bank as well for the industry to provide an avenue or some suggestions around how this will work.

Because what we are trying to do is to smooth market flows there are times when there is so much u.s selling in the market and nobody wants it to buy yes and then there is a time when so much people want to buy and nobody's selling and therefore you get spikes in either direction right and seasonal flows so some of this is caused by what we call, well, like the Christmas season, when people are shopping for goods. Yeah, generally people buy them, yeah. You get it in August or so, you know, back to school. You have insurance, you have dividend of foreign companies, right? So, just to touch on a point where Jamaica over the last couple of years has been growing from a trust of FDI flows.

We go overseas, we get people to come here and build. These foreign people, we build hotels, we build businesses through their support. Yeah, foreign direct investments. Foreign direct investments. Now, when you have foreign direct investments, what it means is that the investor either borrowed money overseas to invest here or is using their own capital. If they're using their own capital, they will need dividends. So therefore, at some point in time, they'll have to buy currency and pay out dividends. Or if you're making loan payments, you have to buy currency to make loan payments.

So that's one demand. As well as when you're growing, you're building out, you're using material imported from overseas. So when you hear our countries and our trust to grow, what it means is that your current account, which is your export minus import, will widen because you're going to be importing more. At least in the interim, you're going to be importing more. At least in the interim, you're going to be importing more

to build capacity. Later on, you hope to export more and narrows back that gap. So what happens is that when there's a growth trust, there's higher demand for goods and material from overseas that uses foreign exchange flows.

Which usually causes a spike. There's another reason. When interest rates become low, you have the flip of a coin. In the past, local companies funded their debt in US dollars.

Yes, heavily. Right, because US interest rates were lower than Jamaican dollar interest rates. their debt in US dollars. Yes. Heavily. Right. Because US interest rates were lower than Jamaican dollar interest rates. Now you get a flip. Jamaican dollar interest rates is lower or on par with the US. Now what you

want to do now is to refinance. You're bringing down your interest costs. So you are now borrowing in jamaica now you earn revenues in jamaica and so you want to have your revenues that you're financing in the same currency so there is no currency exposure correct right because we've seen in the past where companies have lost money in the financials just because yes their loans are in us right so now what you do is you borrow Jamaican you use the Jamaican

to buy US and use this US to pay out the US loans so the fact that any country significantly lower interest rates

it must put pressure on the currency especially if it's done over a short period of time yes and you can look at the Dominican Republic

you can look at Trinidad you can look at a number of countries and you'll see it right now if you will see it right now if you think about it if you have two countries a strong a weak the weaker one currency is expected to depreciate you use interest rate to compensate for that yes the weaker economy has higher interest rates and the stronger economy compensate so you get back purchasing power party

right in jamaica our interest rate is on par to that in the u.s for the first thing forever yeah guess what then if you have the strong economy paying similar interest rates as the weak economy then it says the weak economic currency must depreciate. Why? Because smart monies will say, why will I take a worse credit quality for a similar return? Shouldn't I move my money to a stronger credit quality and get the same return? So therefore

people will buy dollars and buy investments from overseas. Or the buyers of Jamaican dollar debt overseas, your global bonds, they don't care about what's happening locally. They want to know that

if the US is risk-free and I'm going to buy Jamaica, Jamaica must give me a premium. Yes. Therefore, Jamaica's global bonds, yields and these, have to be higher. To make up for the poorer ranking of our economy. Right.

So what happened is that, you think about it now, locally in Jamaica, the US dollar interest rate is lower than the interest rate on the Jamaica global bonds in US. Okay. Here comes an arbitrage

opportunity. Exactly. For the same credit, I might want to put my money in the global bonds. Right? What you find is that the dollar depreciated around 10%

in about six months. Right? find is that the dollar depreciated around 10% in about six months. The prices of Jamaica global bond appreciated about 10% in the same period. Why? Because the bonds are attractive.

So why not buy it up? How do you buy it up? You take Jamaican dollar, buy US and tell the US, buy up the bond. For a Jamaican asset. Yeah. So what you're finding is that, okay, I go after the global bonds

to get better return. And guess what? The currency is depreciating and I'm benefiting. So I'm getting the currency depreciation and I'm getting the return on the bond. That's what happens when a weak

economy doesn't have high enough compensation in its interest rate as compared to a stronger economy. There's no two ways around it. So you're warning us then our interest rate has to go up, that's what you're saying? If the interest rate doesn't go

up, you get one simple thing. The simple thing. The simple thing is the reserves. We'll have to get used. You have to use the reserves to support the currency. Defend your pig. Now, this can be dangerous. It has led

Barbados down the road of default and restructuring. It caused Black Monday, I think, in the UK. It is causing pressure in the Dominican Republic where their currency rapidly moving and they're trying to say, okay, we're not moving interest rates.

Well, we're using a reserve. So it bleeds through some amount of reserve. The most evident one, Trinidad. Trinidad had a reserve of 12 billion US. It's now down to eight wow because why you have a pegged currency yeah and they're not moving into space oh wow that's definitely dangerous but yeah well they have oil let's hope it lasts for them yeah so what happens is that as long as

the country doesn't increase its earning power to be bringing in significant more flows of us in order to keep that defense yeah this is going to be pressure on the currency and it will bleed through the nir wow so long what what what we try to do here what we're trying to do is to say okay people let's not cause any panic. Because if you think about it, your friend who you mentioned, it is only because she's not consulting with a financial advisor or have a proper treasurer why she would have been impacted.

If the currency moves 10% in a period and it's impacting your ability to price your goods, did she also know that she could have gotten a loan at around 6% a year? I think not. I'm going to link her to you guys. She could have borrowed Jamaican dollar and buy US when there was more than enough supply. You could say that I can't figure out by name. I don't want to figure out by name what I'm doing now. She could have borrowed 6% loans or 7% loans, right?

Buy the US, invest the US from an early stage. And her cost then would have been down to maybe 3% or 4%. And that's easier to manage in the scheme of budgeting. Yes. If you're doing your projections. You can put a percentage in there. And that's the same thing to her. Right. Yeah. So you can deal with it that way or you didn't have to borrow but you

could not do a forward contract which is what i want to know if because here's the thing right so i get it then i get it and you get it but she isn't so i want to cut it because she and a bunch of people are not listening in business and they're lost and not gonna get it so the first question which i think it kind of touches you guys can bring a simplified product for them yes yes i like that first yes you can there is also not only the person who is buying us suffers you know what about the company who exports yes yeah and the you bought goods at when the dollar was $100 to $1 you pay $100 right? and you decide, okay, I can sell it for $1

because the cost is $100 you get your $1 and when you come back, right? how much does it value now? think about it so you can get burned both ways right? so the guy who is earning us

also needs to know that they can lock in an agreement to sell us down the road not just the person who is buying burning yeah spending i'm not saying burning spending in us correct because the currency could have appreciated and maybe when you get the one US and ready to sell it back you only get $90 think about it so you would have been losing $10 yeah so it requires participation

from both sides of the market for it to work those who earn US have to be willing to sell US forward so that there is enough forward supply in order to supply our market locally yes it requires a whole heap of organization yes it requires you to say okay I am earning and I want to be able

to price with a reasonable level of certainty down the road so if you're earning and you will need us you buy So if you're earning and you will need US, you buy forward. If you're earning US and you will need Jamaican dollars, you sell forward. Sell forward. And that will get it balanced out. So we have that hurdle to overcome, to educate people

so that they understand that it requires participation. Of two parties. The only way it can work outside of that is if the central bank is going to agree to participate in that hedging ah which they can do they want at the same time remember you also want a free float so you want a little intervention as possible as possible because it costs for them to intervene. It does.

It does. Yes. They have required benchmarks that they must meet, you know, for your economic credit quality to change. So when, when you do a credit rating for a country, the reserve has to be at a certain level,

the debt to GDP have to be at a certain level and so forth. There are a number of indicators that you look at and the better your credit rating obviously is the cheaper you can borrow money on the international market yes obviously your companies that are doing business here can get better credit lines from their suppliers overseas and so forth so it filters down in a number of areas. And JVMB is, I like pressing for the date. I know you're not going to give me an idea of when. No, so we're working with the central bank

because you really need a medium to do this. And a forward market requires a number of things. One is an industry approved forward contract agreement that everybody yeah everybody has to be on the same page like you have this means just like in the repo market where we borrow with clients and the reverse repo you have a

master repurchase agreement which the entire industry says yes yeah we agree to these terms okay because a forward contract is a legally binding contract yes it's something that you may go to court for if you don't yeah yeah i tell people say as much as for the people who trade the contracts even though you might never touch the money if you truly hold it until its date it becomes yours and that's not just for money that's anything any any commodity right so the reality is that you need one that contract two we're looking to have a platform through which we can do so and three we're looking for a common medium of pricing

so you know like when you buy a bond you typically say we use what we call an industry yield curve it's where the players in an industry typically indicate a price or a yield at which they are willing to buy an investment so there is consensus. Right now, because we don't have all the participants at the table, you don't have that yet. I get you. So a couple people, whoever they see, you need to join them at the table. I'll give you an example. In

a month ago, I offered a client. I offered to sell a client a couple million US at 135. They refused it. Too high. A month ago. No, a month ago that was,

well, that was about market. So they thought there was no deal there. That same client called me when it was at 141. Well, that thing you called me about last month. They should say that. So you think about it now. That client,

from $135 to $145, which is $6, which is about 4%. You could have borrowed money for one year at $6. Which means the carrying cost of one month is less than a half a percent. So you could have borne the less than a half a percent so you could have

borne the cost of a half a percent but no you're down four percent well i mean hopefully that's what the following contract would have abated or if you understand treasury because it's not just forwards you know there are other things that companies do to raise money and to hedge FX risk. You have what we call factoring. So you know that you sold on credit and you have receivables. You're to get paid 60, 90 days down the road. You can say to us, look at these credit quality. Are these companies that you are approved? And will you buy this debt from me at a price?

Yes. Yeah. And give me the cash flow. Immediately. Yes. You then now have the cash flow to buy currencies and do whatever you want to do and plan your affairs now. And you do it on the flip side also. Right.

And there is also a reverse factor, is where i owe you yes i can go to a financial institution and say i owe this guy some money would you pay this debt for me and i pay back you at a certain time at a particular rate. Yeah? So you can do it both ways and people can save tremendously from it. I don't know why. It's about trade union management. There's a number of tools

that you can use. It's just that you need to reach out to get educated about them or get somebody who is educated about it to help you make the decision all right welcome bj and say you guys should push the market to it but i know you are i know you are we are at the table now we are at the table with other players and with the central bank working through um something quickly so i i am going to say this is nobody but me talking next year the market itself and the platform itself

doesn't solve the problem if the players are not educated like you seriously need the participation of people and I'll give you a reason why I tell you so many moons ago when I was working somewhere else

I was one of the first persons to do a forward contract buying currencies from banks. Wow. Yeah. I wasn't in banking then. Yeah, you had to explain to them what you were going to do.

So, when the currency was at 47, I did forward contracts buying the currency at like 53, 54, 55. People thought I was crazy. Michael Burr of Jamaica. Michael Burr.

Crazy. The currency went up to 70s. 80s, 90s. And I was smiling all the way. I am surprised that you were allowed to do that. As a treasurer, I was smiling all the way. I am surprised that you were allowed to do that. As a treasurer, I was smiling. Oh, wow. I knew that based upon the level of commitments I have down the road,

at 47, if I can factor in anywhere near 5, even 7%, because at that time the currency was depreciating at like 10, 12%. So if I can factor in anything reasonable so that my financial controller can project with 5% accuracy or something, that's good. And that's insurance

premium. I pay for it. That's fine. So I did. And it worked out that we saved hundreds of millions of dollars from it. Yeah. So, but it's not a lot of people since then were utilizing it for a lot of years. Then more recently, more people started utilizing. The drawback is that I think for 2018, the market did, I think it was 105 forward contracts.

the market did I think it was 105 forward contracts where I think it was two or three were on the sell side and the other 100 was like on the buy side. Meaning people or 100

people or businesses wanted to buy money in the future from banks. But only two or three were willing to money in the future from banks, but only two or three banks were willing to sell to the banks down the road. Then and there, you end up with a problem

because under the current guidelines in the market, we have a guideline that we call the NOP. It's a net home position. A bank can only take from a client's funds to sell. And this is now balance sheet management.

Because when you deposit money with a bank in the US, the bank can choose to convert it to Jamaican dollars. But only to the extent of 20% of capital or 8 billion, whichever is lower.

8 billion is roughly 65 million US. Yes. So it is saying that I could take 65 million US of client funds and sell it to a company when there is a shortage of US. Or when there is excess US, I could buy 65 million and hold it on my book. But that's the maximum I can go to. Yeah, that need to move. No, before that guideline came into place, there were other guidelines, but those allowed much more larger holdings that helps to smooth the market.

Because what a bank would do is, okay, there's excess supply. We'll buy it up. We'll invest it in instruments we'll do whatever we hold it and then when there's a shortage we may sell those instruments get the us care liquidity and then we sell those to companies so we helped to smooth the process from the banking sector but with this guideline, it constrains. So, BOJ is aware and they are looking at

reviewing. What it is that they're doing. Because I don't think initially the limitation was anticipated as much. I think they didn't expect as much local activity so quickly, I think. Yeah. And I mean, in all

fairness, I think. Yeah, and I mean, in all fairness, I think it's kind of shocking the extent of refinancing that was done as well as new capital market transactions that were done to raise financing to grow. Because once you put companies on a growth path,

you need new money to finance those activities. And the old ones that were financed, now that you can get because once you put companies on a growth path you need new money to finance those activities and the old ones that were financed now that you can get cheaper funding you're going to refinance immediately yeah man right so you're refinancing and you're raising new finance for expansion and that is in itself puts pressure on the currency yeah and so they have to smooth it out smoothly well yes so you have to look at the full picture to get an understanding. So you say, okay, we're importing more than we're exporting. And the gap is widening.

That's one contributor to the currency. The refinancing activity wasn't anticipated as much. When we lower interest rates, everybody thinks that, okay, lower interest rates, cheaper, less interest expense so people have, companies have money to deploy into productive capacity. But I don't think it was anticipated as much as to the impact it would have on the currency. So that's one.

The stock of overseas investors and what the dividend payments and what the loan payments look like, I don't think that's being monitored as well. And that's a major area that needs monitoring. So we have nothing against capital market transactions

because this is really putting companies in a position to grow, to hire more people, to pay better wages, to increase GDP, to benefit the economy, to pay higher taxes so that the government can afford more amenities for society, for everybody.

You understand? But it's just that it has to be managed on a global scheme. Somebody has to see the big picture and manage that so that you don't get shocks. And the truth is, some aspects of it we may have to limit as well. Because

where you have large investors coming to Jamaica to build businesses and they're raising monies here to buy the material from overseas to build here. That's increasing the demand for the U.S. in a drastic scale.

So therefore, yes, we are happy to have investors coming in and build. But what's the implication of that building? Even in the initial stages. Because we're not saying it's bad enough. We're just saying it has to be managed. I like that.

We don't have an inexhaustible amount of US. That's true. We have to manage within the context of what we have. That's true. Things are better, but we are not anywhere near it. That's true. So I've had you guys here talking for a while.

I know. I'm going to get to the two last things. The forex. Because you mentioned forex in a big way. The good way. Talk about forex for people who don't know. So the margin trading is where you put up some funds on a platform and you

get leverage. The average platform does like between 50 to 1 and 100 to 1 in terms of you may put up a thousand dollars they allow you to trade 100,000 positions or 50,000 positions or whatever. Right? No, you are not actually trading the currency. You're actually betting on the currency peer. So it's not the actual currency. You're actually betting on the currency peer. So it's not the actual currency that you're trading.

It's the movement between the two. Right. So you're compensated based upon what your factor was in terms of the 10 to 100 to whatever that leverage factor is. Right. Now,

the currency market is the most universal market. Everything that happens in this world impacts the currency market. What it means is that you better be aware of everything that people do if you want to be successful like this, or at least the major

movers and shakers of the currency market. There are speculations about participants in this market from a speculative perspective because let me tell you, less than 10%

of currency activities are related to currency trades. Okay. Everything else is just natural movement. It is just business. I sell to the UK, I get pounds but I import my raw material

from the US. So I need US dollars. So when I get my pounds, I sell it to get US dollars. A guy sell to the US gets US but he buy raw material in Jamaica. So you have to do the conversion to carry out your business. It is not from

a speculative perspective. It's just straight up business. So the bulk of the activities in the currency market is as a result of normal people going about their business, carrying out their affairs. You are now taking a bet again that you can predict

what normal people do in their day-to-day affairs with a specific currency with a specific currency yeah and it touches multiple industries that's a lot to pay attention to wow that is actually the bit you're taking when you say you're a margin currency trader. So you don't believe that people can't be more soft on it? A few people are successful, but for people with proven chart record, and I think it was, if it's Yahoo Finance or Investopedia, one of them did a recent publication where they did like a three-year history and a number of traders and it showed that over 90 percent of traders were either losing or

just breaking even imagine all that that's in the currency trading yes wow you can give me another number what you think think is the average return? Not for a big person. And for those who were, I think the same report said, for those who were successful, they were making an average return of less than 5%. Wow. Wow.

Better buy local stocks while they're hot. So, I mean, a number of people have approached me over the years telling me of their success. I've never seen history. People say, but nobody has brought their accounts to say, here is my account with all my trades over the last two years or three years. But what I find is they don't really track it. No, but the platform has it. Every trade that you do is on the platform. So open your account up to me and show me your trading.

Show me some moves. Yeah, we had a guy that was pressing us about the same thing. He was trying to teach us and he couldn't break down. I made X return in X amount of time right and he had a method himself

he had an entire theory I went to a course once and unfortunately I wasted Jim and B's money oh

say it into the microphone so we show some unfortunately I wasted Mr. Duncan can hear because having gone in there, my first question for the tutor was, have you ever traded?

No. Wow. You can't teach me to trade. Wow. You've never traded? You can't teach me to trade. Facts. You don't know about the emotions of trading.

Facts. You have no clue. Facts. And the different emotions at the different levels and the different emotions that come with it you've never done it you can't teach me to do it like this is not a theoretical thing here right emotions are way deep i've been saying. Way deep. I've been saying, man. Very different. Shout out to Ryan, Strawn, Faisal,

Skin in the Game. Decide that you're going to do some what we call dummy trades. Mm-hmm. Track it. This is where I would enter. Mm-hmm. This is where I would exit

and you will log them. Mm-hmm. And you will track the performance. And then, after you do that for, say, three months, put some real money on an account

and do the same thing for three months. Yeah, man. If you get anywhere near that dummy account, I'll give you a job. You come. It's different. Because when it's not money, there's no emotion.

Yeah, man. When it is money, that's emotion. Yep. It's totally different. It's in the money, that's emotion. It's totally, totally. It makes a world of difference. So, there are a number of people. The other question I ask him,

if you can make so much money, why are you wasting time teaching me right here? I can't pay you enough as you would make. Why aren't you all your training? The class is where they make the money. You're making your money from the classroom. Because if you're this good at this thing,

you should be locked before a computer. Trading. Making money. All the time. You have time for this. Everybody wants to allocate their labor, their resource where it makes the best return. Why are you here

am i paying you more than you can trade and make here we go here we go in the wrong place so i decided that's my first day of the course like and that's my last how expensive was that course i can't remember how much it was no them expensive man i see one ready for 14 000 no that it was years ago that was back then. Yeah, but no, but I'm sure it was expensive then too. Yeah. So I just said, you know what?

No. And I've never, I've had people come to me and tell me, listen, you guys want somebody to trade? I do. I say, okay, listen,

you're not going to trade one or two months and come to me and tell me that you're a trader. You understand? You need history here. That's across the board. You need history here. That's across the board. You need history here.

That's across the board. You show me some sustained performance. And then I will say, okay, here's something that you can manage. Come here and show your degree here. You don't know. I've been through four or five crises. I'm coming from Russian crisis. As a matter of fact, come from Finzac,

come into the Russian crisis, come into the Argentina, you come into the meltdown of the world, you come into the Eurozone, the pigs and all, through all the crises. Listen, the emotions that come with trading, the stress that comes with trading, the stress

that comes with trading, it's a boy game. Serious thing. You cannot learn it in the books. There's no book. There's no book. There really is no book.

There is no nothing. I'll tell you, I'll give you my personal bloodbath to trading. Right? Yeah.

My bloodbath is that I was in a trade once. And I can't forget, I was making like, it was like about 60 or 70,000 US on the trade.

And I was closing the trade, but I needed my supervisor to sign. Keep going. And I went downstairs. To go find the supervisor? Yeah. And by the time I went downstairs and come back up, I was losing

$20,000. Shout out to my brethren. Not calling him but know himself. He got back room one time. Then and there, you realize how fast that market moves. yeah because that same bridging i'm mentioning he's the first person i've seen watch the president speak with him computer at the same time yeah and and and and yelling is no not the president the chairman of

the fed and as the chairman of the fed talk in trade immediately and say i mean at the time i didn't understand what he was doing like him waiting for the right word and it's something simple sometimes i say like you know softening or chinese exposure immediately immediately moving yes it's not a joke market i know it's not and i tell people if you know nothing at all about finance financial literacy anything like that right if your financial literacy is low you don't want to start with forex yeah that's not the place to start um so here's the article says new studies shows just how unprofitable day trading is oh lord you know what send me that it will be in the show notes guys check the show notes you will see the link i have some other stats i want to quote you yeah man say yeah man we're man we're not rushed

we can do it and then we can give you the fun part the hard part and then we're up let me see if I can pick it up for you because he was telling you he says the realities of day trading yeah he says of the long term day traders only 1% made

more than and this is for Brazil this is our country one only 1% made more than, and this is for Brazil. This is our country one. Only 1% made more than the Brazilian minimum wage of $16. Less than half of the group of people made more than $54 per day. The salary of an average Brazilian bank clerk. Wow. People check the show notes right now. It's going to be in there.

So I'll show you. But trust me, I sent this to a friend of mine who he was so excited. Excited. He's learning to trade and he's making money. And I said to him, bring up your account. And when I checked his account account he was doing like eight thousand us i was like you're really going to throw some more money right there boy yeah like really over a couple months you just throw

eight thousand us you don't want beers that go right yeah yeah really yeah but seriously i mean the average person all your friends won't tell you who they are trading. If they are making money on a sustained basis, I have a job for them. Well, the one guy who makes money from it doesn't do anything else. And he lives in front of his screens. All the time. Lives in front of him.

I don't know how much money he's making. Well, he takes care of his family. But he's not one of the people who tell me those classes are rubbish. That's what I'm telling you. He's one of the people who tell me those classes are rubbish. That's what I'm telling you. He's one of the people who say those classes are rubbish. And he said the same thing. He said if they could do the class, if they could make money here,

they would be doing the class because you don't have enough time. And the question is, is he making more than he could have made using his resource to do all that stuff? Is he even maximizing? I tease him all the time because I tell him I make more money in the stock market than he does yeah and him start paying attention to stocks now too yeah so the question is you know what's his opportunity cost yes yes major major thing i like that i like that you bring some reality to it and you bring a whole heap of knowledge and and you brought kerry i'm the bodyguard i just make sure i I read it. So, you look, this says,

the academics look at just under 20,000 new traders and found that over time, they lost more and more money. Of those that traded for a single day, roughly 30% turned a profit. Hear that? A single day. Conversely, only

3% of the people that traded for over 300 days made any money. Say that pass again. Of those that traded for a day, about 30% of them made money.

But for those that traded consistently over a 300 day period only three percent of them made any money wow wow three out of a hundred every hundred traders and the beauty of it is that that's a global market yes so that sample can be representative of everybody in the world now of course i'm not gonna say that i know the statisticians just go, no! So it's not quite how it works. However, that actually sounds pretty good to me. It's not easy.

If it was easy, everybody would be doing it. It's not what people make it to be. You can't do something for two, three, four months and say you're good at it. Say that again. Say that again. Seriously, put do something. Say that again. You can't.

You're like, seriously, put it in the context. Would you go to a doctor who has gone to med school for three months? Say he's a professional? Nope, nope, nope. Ask your doctor when have they done this before and when last time sleep. That's a major question.

You know, see one, people who have demonstrated a track record over time before you say they are good at it you know and even then yeah even then so it has changed how even i speak because people ask me now so which stock you can jump in and get 50 odd percent and i go all right two things one what's your goal two there's stocks you can jump in and get 50 odd percent but if you are asking me that question you don't have the level of knowledge for me to actually answer you Because it's dangerous And I won't remember to tell you when to sell it

I would almost bet you that Everybody Who teaches FX course Makes more money Oh, 100% Yeah, if they were making it from trading I don't want stocks course a month and every month

I ask myself why am I doing this because the money don't come from that, the money comes from trading and it takes away from my time in the market which bothers me so I don't have to trade every day imagine if you have a bean fronted computer because the market don't lock the market don't really lock

the market might lock in America, it's open somewhere else yeah the market never stops the time never stops The market don't really lock. The market might lock in America. It's open somewhere else. Yeah. The market overstops. There's time zones. Time never stops. So, you know, I thank you guys properly for coming, but I'm going to ask a hard question now.

Yeah. Kerry, you want me to ask you or you want me to ask him first? You can ask me first and then you can back me up. Give him some time. Give him some time. All right.

Well, the first rule of this day, I'll give the rule and then I can ask the question. The rule is simple. You can't say GMB. And these days you can't say Sajiko Finanza. I thought it was the $200 million question.

Oh, you know, I wasn't going to touch that. You can if you want, but I wasn't going to touch that in this one. It's fine. No, it's, well, I just raised it because Kwame earlier was talking about,

you know, capital market transactions and so on and how those transactions impact the FX market and ultimately the exchange rate. And what we've been actively trying to do is to clarify, I call it, you know, a rumor, quite honestly. A few weeks ago, there was an article in The Cleaner that spoke to, you know, everybody was concerned about where the dollar was. It had just hit 140 at the time.

Everybody was panicking. And there was an article with an interview apparently done with a senior representative of the Bank of Jamaica, BOJ. And the BOJ would have alluded to certain events that are driving the dollar, as it were. And the Bank of Jamaica representative, of course, did not state or comment on any particular event and said so. But unfortunately, the writer of the article chose to use whatever they thought was happening to say, oh, a known event. Or noise that you hear. Noise that you hear, yes. A known event is the pending conclusion of the GMMB transaction acquiring a percentage of Satyagor Financial Corp,

just over 200 million. And unfortunately, a lot of people took that, oh, well, GMMB coming to find 200 and a half million US for the finished transaction. I was guilty of that too. And it's not good. I mean, a lot of people feel that way. I was very guilty lot of people yeah and um well the good thing is is that the bank of jamaica ultimately threw an excellent twitter thread yes on what was happening in the fx market not only explained

what was happening but also clarified that that's not the case and the reality is you know we've publicly disclosed well of course this transaction was announced months ago which has it's yet to be concluded of course but of course at the time we would have had to demonstrate that we were able to to to be good on that so it's not like november nowhere russia exactly right so that's one so that's obvious evidence that it's a rumor and the other thing is we also had disclosed at the time that we are are financing the the transaction through a mixture of debt and equity. That's it. So it's not us. It's not a capital markets transaction. We're coming in to look for US dollar and thing. And unfortunately, that rumor drove a lot of speculation as well, which ended

up doing exactly what we did. Exactly what Kwame pointed out earlier. So you have to look at speculation, perception. In every market, in every trading market. If you hear that something big is coming, your first instinct is that, hmm, let me see how I can benefit from this. Correct. So even if

the transaction itself was not going to impact the market, the fact that you start to speculate on it, you have withhold your supply and therefore create a shortage in itself. So the fact that you have created a shortage, you have contributed. You have created a situation.

You have created a situation. What do they call it? Self-fulfilling prophecy. There we go. That's how it goes. So now the central bank came in for a couple of days. Why did you start to see? People come in and start to sell. Because what? The BOJ is going to...

It's going to hit that market hard. Yeah, yeah. You can't have more money than everybody else. You start and you say, well, everybody run in and sell. But the key for me is that the market has to be educated. Yes. And if people were educated on how things work they wouldn't make some of those bad decisions agreed agreed and that's the end of like i've

spoken to the central bank and they have been and trust that's why if you follow their twitter handle yeah man they're doing a good job getting over here saying hey public let us educate you let us work with you let us make you understand how things work so that you don't have to assume or you don't have to look at this guy over here who you think is a Mr. Noid but does really know here we go because we have some so-called experts hit them including me that's true it's true so-called experts who just go out there and talk. I have a thing where in Jamaica, everybody's an economist. I've never seen a country with so many economists.

If you're a doctor, you're an economist. If the matter is your career, you're an economist. And all of a sudden, everybody's speaking authoritatively. Yeah, I'm glad I am not an economist. It's all right, though, eh? It is something that people say. If you are more educated, then you get rid of the market nice. Let me try to play a nicer role since you've been a bad guy.

Usually, I'm the bad guy on the podcast. But I do know some people are pushing for education that's part of what i do too because that's the financial literacy make a world of difference a lot of people just don't know so i know people out there trying to raise literacy and i love that but you're right people need to one something i say all the time experts i speak and people think of me as an expert and i say i'm not an expert but if you think i'm an expert question everything i say test everything I say and no expert should have a problem with you questioning them

experts love being questioned because it shows that one I know what they're talking about two you have also learned and sometimes three your question forced me to almost revise my thoughts and we end up learning more yeah and sometimes people speak I say well show

me where you have expressed an opinion before and assess the aftermath against your opinion to say how did i do exactly every expert is supposed to measure what i'm saying and then measure after the fact and an expert shouldn't be afraid of making a guess you shouldn't be afraid of being wrong you should be able to say if it's that you know fx the jamaican dollar is going to be if you say it's going to be 150 dollars february february come back and say i was right or i was wrong shouldn't be afraid of that and it's a crossroads i like that which is what we're going to give you a chance to be right or wrong so thank you for that so the hard question we always ask everybody

is what stocks do you like so you can't say GMNB you can't say Sajikor either you can't say Sajikor either, thank you the thing is when it comes to stocks I tell you that I don't just like stock for like stock I have my

investment, my mentality that I use my mentality that I use, my philosophy that I use to invest. And for me, I look at first the economy. What is the likely direction of the economy in the next couple of years? I like that. So you look on, let's say you're looking on a two year time.

So I've asked people two years before, let's's go three so if you're looking at two years but what you see happening in the economy over the next two years no i don't want to talk economy building on certain capacities right you see we're marketing certain aspect of the economy then who are the key players in those years there we go so i start with the big picture and work your way first what's happening in the world how is the world influencing my country yep what's happening in my country what industries are benefiting and what industries will grow who are the key players in those industries there we go and therefore And therefore, I now look and say, these key players,

how does one industry rank to another industry? How should I weight my portfolio? Which industry is stronger? So therefore, I should have greater allocations to those industries and support

and come right down. If there are several players in an industry, I look for the key player and I'll pick maybe two of the players and i work with them so if i look at this in jamaica the financial sector has been one of the stronger ones what are your key players in the financial sector you know the top five no man you can't that's not how we do this thing you can't tear you out of the game two stocks that you call me let me be be careful, because you are an analyst.

So you've said that I can't say JMNB. No, you cannot. You cannot say Sajikor. I can't say Sajikor. And this is just Kwame. This is just Kwame, not Kwame from JMNB. Just Kwame's personal things that he likes. So I still like NCB stock.

They are an industry leader. They are the regional, probably the biggest financial institution regionally now. So they still have been diversifying their product offering and so forth. And they have a strong trust in IT. They do. And becoming a fintech type business. So that I like about them. So the stock itself, I like it for its market diversification where they are in Jamaica, Trinidad, Cayman, and so forth. So they are

under trust to look at how do I benefit from the region, how do I benefit from different areas you would have seen where they bought into guardian and so therefore they are looking to diversify the product offering as well as the regional diversification you'd have seen where they bought a bank was it in bermuda yeah right so you see where they're on that part their numbers their revenues have been on a heavy strong trajectory. Their profitability has maintained. They have strong management. And even just maintained, if you look a little deeper,

Q4 numbers, you know, them Q4 profit. Anyway, I'm sorry. Go, go, go. I said the numbers are a little different from you.

Yeah. But overall, the numbers are strong numbers and the company itself, decent. So, I like that as a stable company in your portfolio.

Okay. People always eat some food and beverage. It's always there. There are certain stocks like the Grace. Wisinco. Which are mature companies. The Wisinco. So I like Wisinco for diversification.

Right? It's a very diversified company. They are very innovative. So when you look at the plastic ban, and then when you look and see how they would have had plans in place to diversify. Yes.

I remember like a 2% conversation. I was so impressed. Right. And if you look at him taking a trust into dearies and agriculture and other stuff, linkage industries to support the business. If you look at strength of cash in the business as well. So one, they're in industries which are scalable. Two, they have cash to grab opportunities.

Three, they have a fairly decent management team and business continuity. They have second tier management planning in progress. And their trust on the international scene as well. They are looking for new markets, exploring new markets

to export to. So they are not just narrowing their activities to the jamaican economy and the caribbean they're actually launching wide into the wider universe as far as diversification and your revenue streams so i like that about them for that sector the long term long term sector iterm sector. I still like logistics. I still like logistics. Jamaica's position as a country, we can be a hub for a lot of other areas. This Western hemisphere.

We are just actually starting to tap into the whole logistics. True logistics. Yes. We can do packaging for a lot of big companies in the US, the rest of the Caribbean and so forth. And this just be a big hub where your Walmart brands, we could get in the bulk here and packaging into different store brands and all that. And sending it to South America. If you look at Marcus Garvey Drive, you see where there's a lot of cars are.

Cars from there goes to Cayman and other Caribbean islands. So that's like just a hub. So the whole logistics business is very big. If you look at Amazon, what is Amazon? It's a logistics business. It's a business that says preference has changed and people want to buy things from their living room

rather than go in a store. How do I facilitate this? so yep so logistics is still one of the newest and strongest areas of growth globally in china um 92 percent of all transactions are done via the mobile phone. In the US, it's around 65% thereabout. WeChat runs China. So when you look at it, it is still saying that generationally, people want to stay away from brick and mortar. I want the convenience of doing what I want to do on my phone or my iPad. And reach for us.

So in that area, I still like Kingston Wharfs for that because of how they are positioning themselves. I still like them there. Okay, that's one way to attack. I like how you attack it. So in Jamaica, construction is still strong. So you have to look

at who can benefit from construction. So you still have the hardware and lumber. You still have the hard as hard hardware and number um you still have lumbar people yeah people here this is not as a listed comic because this will definitely come out after the ipo you have um cement company where they're they have been retooling and partnering with uh pmx and other companies in their field. So they have been improving. They have been doing very well. So if you're looking over the long term,

those are some of the companies that you can base on. As I said, I could go sector by sector. I don't want you to do that. It's usually two or three picks. I don't want you to go the whole of your picks. It's alright. Signos is a nice new startup.

They are looking to do business differently. So it has been working for them. And I think they still have a lot of ability to grow. There are a lot of other companies that I could get into. But like I said, balance your portfolio with growth companies, mature companies. For the safety net, you try to keep those

in the mature companies. You'll get a smaller return. But you'll be safer. But you'll be safer. And then as you grow, you increase. And then for your riskier money now, you look to take on some growth companies for your bigger return. Still bigger risk, bigger return still bigger risk bigger return and so forth i like that that's anointing you know yeah so that's how i'd go about it i like

that i like that perspective my key to remember you know is portfolio don't forget allocate you need some real estate in a portfolio. You need some interest bearing instruments. You need some stocks. You need alternative investments. Some people take into private equity. So a guy have a business, he needs some funding. You go in as a partner.

You might be a silent partner where you just help to fund it or you might go in where you take active role in helping management to turn around a business and you can eventually list and you know maybe there's a lot of options so there are other options out there you know that you can explore so the key is to set your objective and set the path and stick to it yes yes remember why you started. Emotions is your biggest danger.

Remember? Your emotions is the biggest danger. I like that. It's the best friend, but it's the worst enemy. That is true. It's like fire. Kerry, you know you have to become very comprehensive now, right? A lot of mercy now.

Well, you know, because the thing is, I would have shared mine the last time, but I guess with Kwame's new knowledge, my basic thing is I'm more of a strategic investor than, a trade well trader investor than tactical when it comes to stocks and so for me it's just about um um ncb again as a big one for me i mean these stocks that i know have that potential to be bigger and better over time even more so than they are now and also dividend stocks are also something that i love love my career as you know it's controversial i know but you know loving my career as a dividend so yeah just those are a couple for me are the ones that i typically say to people you know are

good ones i like that depending on your objective well i press deny every week on it i wonder this week i'll just do one because people always press me for one. My nicest pick this week is, I don't want to say it because I don't put all the money I want to put in there yet, but I'll say it. Jamaica producers. I like Jamaica producers over the next two years, a year and two. Yeah, they're doing a lot of things. So the advantage of Jamaica producers is they're diversified. In multiple countries and multiple industries. So like I said, your logistics is a big area. So you may not want to go fully in an area, but you can get exposure to a company that has it

in their portfolio. Jamaica produces over 45%. I know you see what I'm doing. You get exposure to logistics through them. Correct. So it's just like what I'm doing you get exposure to logistics through them so it's just like how I said to you okay so don't recommend GMMB or Sajikor

I said buy Proven that's what you said that's smart Proven always the exposure so you look at it you know how do I take an exposure I take an exposure i take an exposure

in many different ways i think direct or indirect i can buy into a company that owns companies in those industry where i can buy directly into the company yep and some might say that proven at its size might get a bigger impact from the exposure that its associate company which you guys are know know about is about to get hit with. So yeah, I like that kind of tip. I like that kind of tip and that's how I think too, yeah. Yeah, you look at the exposure.

Yeah. So for me, it's Jamaica Productions. I'll try and make it a little more comprehensive. I know they have, I mean, they have one of the largest juice brands in, I won't say all of Europe, but it's in like a bunch of companies in countries in Europe.

And last year or the year before, they made steps to enter about four more new markets in europe with it is hugastan i can't pronounce it hugast something but the point is they have that there and i didn't buy it back when they're doing the retooling but i paid close attention and i know now that they're about to reap the rewards of being there and they're starting to reap the rewards of being there outside of that in j Jamaica, they do own, I could say, a heavy part of Kingston Wharves. And they also own St. Mary's Banana Chips. I'm not going to start the Chippies versus St. Mary's Wharves, but, you know, I own the company that is in St. Mary. And they are growing, and I believe in them personally for the rest of this year, 2019.

2020, I can't see them doing wrong. So that's my personal pick. I won't pressure Danai this week. He won't pressure Dan night because it pressures me i think kw um kw is better priced in in exposure you get to kw from jp it's better in better from from a buying jp perspective than oh definitely definitely definitely so but there is one company that i always like and we never really mentioned much about it but i'm always you can't you can't wrap with it jamaica brothers yeah we saw on the podcast too many times yeah my brothers

have an entire jamaica brothers in america no brothers guys yeah they're very innovative they're very innovative the management principle is strong up yeah it's staff morale up and that's a key thing for growth like when you have management and staff that is of high morale then you know it's good innovative you know i'll tell you that jay maybe in terms of the family structure they have they They strongly believe in culture. The staff rarely leave. That is true. As you can see, it's brave when you go to the US. And they're strong there.

Strong. So I like them for the diversification of markets and showing innovative. They're strong in Haiti as well. and we spoke about fdi in terms of yes companies from america reaching out into jamaica to jamaica for their region their market yeah yeah big of every company doing that including years oh yeah i was to mention that that you guys are pushing pushing yeah we're huge fans of that and i'm a huge fan of my company

doing that that's why i'm thankful for that uh don't be more up with anything but thank you thank you thank you carrie for being here i know i'm happy that you're reaching out like this to people i'm happy that you can come and give people heavy knowledge because that's what i wanted to hear very digestible i like the way you broke it down you gave the investment jargon but you still spoke you know what you can't understand sorry read it yeah you never lost nobody nobody lost so I will wrap it here guys thank you very much again this has been earning season I'm at RT row Randy row and I'm Dan I attached and I and this has been earning season thank you very much guys if you guys want to give you let me not any just

review if you want people to bother you feel free to give me a social media handles right now you don't want that oh that's so smart that's it that's it there we go big up jmb for this thank you guys we show the jm and b