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Kalu Aja

@FinPlanKaluAja1

Jun 22

Two points on Iran and the Strait of Hormuz

1. Crude oil accounts for about 85% of Iran's government revenue. Iran exports approximately 90% of its oil via the Strait of Hormuz

2. China is the largest purchaser of Iranian oil. Closing the Strait of Hormuz means China gets less oil than it needs from Iran; thus, China will go elsewhere, possibly to Russia. Not smart to lose a key export market to a swing exporter

Closing the Strait of Hormuz to 90% of your oil exports is like resigning from your high-paying job so you don't pay alimony to your ex-wife

Instead of typing one liners, do some research. You are seriously comparing the volume an oil tanker can carry with the volume a train can carry?

I asked Grok

“Approximately 90% of Iran’s oil exports are transported via sea. Iran produces around 3.2 million barrels per day (bpd) of crude oil, with about 2.6 million bpd exported. Of these exports, roughly 2.34 million bpd are shipped through maritime routes, primarily via the Strait of Hormuz from Persian Gulf terminals like Kharg Island. The remaining 10% (around 260,000 bpd) can potentially be exported via the Goreh-Jask pipeline to the Jask terminal on the Gulf of Oman, though actual usage of this route has been minimal, dropping to less than 70,000 bpd by September 2024 and ceasing thereafter. Non-maritime exports, such as via rail or land routes, are negligible for oil due to infrastructure limitations”

Slow down, do your research, then respond

You can't compare a ship carrying oil to a train carrying oil

“A standard oil tanker, specifically a Very Large Crude Carrier (VLCC), can carry about 2 million barrels of oil (approximately 280,000 metric tons). Other common tanker types, like Aframax or Suezmax, hold 500,000 to 1 million barrels (70,000–140,000 metric tons). Tanker sizes vary, but VLCCs are widely used for long-haul maritime oil exports, such as from Iran to China.

In contrast, a standard freight train configured for oil transport, using tank cars, can carry significantly less. A typical oil train in regions like North America or Eurasia has about 70–100 tank cars, each with a capacity of 700 barrels (100,000 liters). In the China-Iran rail corridor, trains may have fewer cars (e.g., 40–70) due to infrastructure constraints like rail gauge differences or locomotive power, translating to roughly 28,000–70,000 barrels per train.”

Read 4 tweets

Kalu Aja

@FinPlanKaluAja1

Apr 19

A Financial plan is a process

You go from A, to B then C

So whats Lets review the steps

1. Have a Plan

First and foremost, it's important to define your purpose for investing or delaying consumption.

Understanding the “why” behind your decisions informs the “how” you should proceed.

For example, if you're investing or postponing consumption today in order to spend during retirement in 20 years, your investment strategy will differ significantly from if you're saving to consume next year.

Being clear about your goals will help you create an effective investment strategy

2. Now that you have a plan, the first step is to build an Emergency Fund.

An Emergency Fund is a savings account where you set aside three to six months' worth of essential expenses, such as food and rent.

The process is straightforward:

1. List all your expenses and categorize them as “essential” or “non-essential.”
2. Determine the monthly cost of the non-essential items.
3. Save this amount in your emergency fund; it should be kept in cash or near-cash.

Why is this important?

If you invest without an emergency fund and an unexpected situation arises, such as a job loss or a damaged car, you may be forced to sell your investments to cover those expenses.

An emergency fund acts as your safety net.

Read 7 tweets

Kalu Aja

@FinPlanKaluAja1

Apr 9

Let's compare assets during these turbulent times.

I have picked five asset classes:

Gold, represented by GLD ETF
US Stocks, represented by VTI
US Property, represented by VNQ
Digital Assets, represented by Bitcoin BTC
US Bonds, represented by UCITS

Let's track performance for one week, one month, a Year, and Five years.

What if I bought 5 years ago?

One word, Bitcoin. It's not even close; BTC killed the competition, went to the moon and back.

It's risk on, so cash rotated from bonds to stocks and, curiously, gold.

Property posted anemic returns.

About a year ago?

Markets grew slightly nervous, reducing risk-taking.

Investors shifted from high-risk BTC and stocks to gold and bonds. Gold led, followed by Bitcoin.

Stocks and property lagged.

Read 7 tweets

Kalu Aja

@FinPlanKaluAja1

Mar 17

The US Markets are on a diet.

What makes the GDP rise or fall?
.
It's a combination of spending and net exports

1. Consumptuin rises, GDP rises
2. Investment rises, GDP rises
3. Government Spending rises, GDP rises
4. More Exports than Imports, GDP Rises

A recession, two negative quarters, happens when consumption or investment falls.

Take the US, for example. Personal consumption (buying cars, stoves, healthcare, etc.) is about 70% of the US GDP. If there is economic uncertainty or inflation, households stop spending, which causes a fall in consumption that fuels a recession.

The US economy shrank by 0.9% between April and June 2022, meaning a recession, because the earlier quarter was also negative. The Biden team denied there was a recession. Sec Yellen said "growth is slowing"
,

Thus, from April 2022, the US started spending $1t in debt every quarter to compensate for the fall in private consumption.

If you remove the government spending that created most government jobs, the US economy will not be in a recession but a depression.

What Donald Trump is doing is taking out the artificial. Debt-fueled growth from the markets

Read 5 tweets

Kalu Aja

@FinPlanKaluAja1

Feb 26

Let's review the recently published Q4 GDP numbers for Nigeria.

In summary, the headline figures look good

Quarter on Quarter, GDP growth posted 3.84%
Year on Year, GDP growth posted 3.40%

These are good trends, shows the economic resilience of the Nigerian economy in spite of persistent double digit inflation and falling consumption,

But.......the dangers show up when you dig deeper

First of, Nigeria's GDP growth is driven by the non oil sector.

The Non-Oil sector contributed 95.34% to the GDP growth for Q4 2024 in Nigeria

The Nigerian economy is not driven by crude oil, the Nigerian economy is diversified, the Nigeria FX revenue are not diversified.

...stay with me

So what sectors CONTRIBUTE to this Non Oil growth in Nigeria.?

I call them the big three; in real terms they contributed

1. Agriculture 25%
2. Trade 13%
3. IT/Telco 17%

These three sectors contribute more than 50% of GDP growth in Nigeria. These sectors, especially agriculture employ the highest number of Nigerians also.

This means, if these sectors boom, the Nigerian GDP booms

So are these sectors booming?

Read 9 tweets

Kalu Aja

@FinPlanKaluAja1

Nov 26, 2024

Lets review the Q3 2024 GDP report for Nigeria

In simple terms, GDP means Gross Domestic Product, look at it like output. If a bakery makes 100 Agege loaves of bread and each loaf costs N100, then the GDP of that bakery is N100,000.00

In Nigeria's case, the total amount of "output" this quarter is N71t, if we factor in inflation, it becomes N20t

good? next slide

If you compare the GDP growth in Q2 2024 to Q3 2024, the growth is just 0.27%. This is anemic

Nigeria needs to grow her GDP faster than population growth which we can estimate to be 3%. Thus to grow at 4% per annum, Nigeria has to post a growth GDP 1% GDP growth per quarter

Looking at annual GDP, Nigeria posted 2.74% for 2023 to compare Ethiopia grew by 7.9%, and Ivory Coast grew by 6.5% in 2023

What drives Nigeria's GDP?

Nigeria's GDP growth is driven by three key sectors
1. Agriculture
2. Trade
3. Telecoms

For Nigeria to grow her GDP, it must grow these sectors. so lets take a look at how these sectors performed in Q3 2024

Read 8 tweets

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