[Dexter on Custom Street] FCMB’s Coffee Cup

After the staggering rally from a 52-week low of NGN 1.93 pre-election to NGN 3.73 post-election, FCMB’s stock price behaviour started a correction that has lasted at least 35 trading days. A replication of the garrison that was formed at the NGN 2.00 defense line for the better part of February 2015 has been realized at the NGN 3.00 price level over recent weeks and price action has not printed below the 0.618 Fibonacci retracement line.

The rounding bottom formation of FCMB market sentiments from January into February 2015, the rally that ensued post-election and the May correction have played their roles in the formation of FCMB’s coffee cup, with the handle of the cup commencing from NGN 3.73 to NGN 2.99. The price action of last week which pierced the upside of the cup handle to close the week at NGN 3.07 has the seeds of an FCMB rally.

Zero investment advice. Zero prophecies. Do your own due diligence.

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–The Hedgehog and the Fox–

Oxford philosopher, Isaiah Berlin, wrote an essay which took on a life of its own after it was published in 1953. Title was “The Hedgehog and the Fox: An Essay on Tolstoy’s View of History”. His essay underpinned an aphorism credited to the ancient Greek poet, Archilochus; ‘the fox knows many things, but the hedgehog knows one big thing’. Of course Berlin went on to develop his work on the Russian essayist’s views along these lines, implying in one place that Plato and Dostoyevsky were hedgehogs while Aristotle and Shakespeare were foxes.

In terms of reasoning patterns, the hedgehog is thus, a linear, ‘tunneling’ thinker and applies a single body of knowledge (or idea) to all problems, the man-with-a-hammer style. The fox, on the other hand, is capable of highly non-linear thinking, has a fluid thought process and employs a diverse body of knowledge in reaching conclusions. In the financial markets, we can extend this dichotomy to market participants who buy companies on rigid, fundamentalist grounds and those who employ a concept of flexibility from Chinese philosophy known as ‘the balancing of chances’ without knowing it.

Interestingly, the hedgehog can also be likened to those who think that world can be separated into the hedgehog and the fox, and the fox who believes there are almost infinite variations of such animal-like personalities.

May the odds be ever in thy favour.