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Share consolidation-A case of companies on the Lusaka stock exchange

20 Apr

It was a very exciting friday for me. I had been watching the stock market but this friday was something special. For the first time since I began watching the figures, a particular company’s stock had risen from ZMW0.61 per share to ZMW 30.5 (An amazing 4900% rise!). I immediately picked up the phone and began dialling and texting friends who had shares in this company at the time. Everyone could not believe the price rise. It was an exciting weekend until something burst the bubble.

The about 4900% increase in share price was not really a real increase. It was a share consolidation.. In simple terms, a share consolidation works as follows:

Imagine you have 100 shares in company A at ZMW 5 (Approx $1) per share. The total value of your investment is 100 x ZMW5 = ZMW 500 (Approx $100). In a share consolidation, your 100 shares would be converted to say 20 shares at a price of ZMW 25 (Approx $5) per share. Therefore if you just wake up (like I did on that day) and see a price of ZMW25 instead of ZMW5, please confirm with your stock brocker if it was not a share consolidation. That is how my bubble got burst on that exciting weekend.

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2012 in review

24 Jan

The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

4,329 films were submitted to the 2012 Cannes Film Festival. This blog had 16,000 views in 2012. If each view were a film, this blog would power 4 Film Festivals

Click here to see the complete report.

Derivation of the formula for a permutation

21 May

I had a hard time trying to convince myself of the derivation of the formula
nPr = P(n, r) = n!/(n-r)!
After reading and re-reading the read work, here we are:

Since a permutation involves selecting r distinct items without replacement from n items and order is important,

P (n, r) = n.(n-1).(n-2). (n-3) …. (n-r+1)——————————– (1)

Notice the numbers reducing from n until they reach the number (n-r+1). This last term (n-r+1) avoids a zero in case n=r.

Since (n-r)! / (n-r)! = 1, multiplying the right hand side of
Equation (1) by (n-r)! / (n-r)! results in:

P (n, r) = [n.(n-1).(n-2).(n-3)…. (n-r+1)] X (n-r)! / (n-r)!———– (2)

Since (n-r)! = (n-r).(n-r-1)….(3)(2)(1)————————–(3)
Equation (2) becomes:

P (n, r)=[n .(n-1).(n-2)…. (n-r+1)] X [(n-r).(n-r-1)….(3)(2)(1) / (n-r).(n-r-1)….(3)(2)(1)]————————————(4)

A closer look at the numerator of Equation (4) shows that the numbers are reducing from n to 1. Here is the numerator again:
[n .(n-1).(n-2)…. (n-r+1)] X [(n-r).(n-r-1)….(3)(2)(1)

n-1 is 1 less than n and (n-r) is one less than (n-r+1) and so on until 1 which is less than 2 by one.

We can safely conclude therefore that the numerator = n! Since n! =n. (n-1).(n-2)…..(3).(2).(1)

Equation (4)’s denominator (n-r).(n-r-1)….(3)(2)(1) is in effect Equation (3) which equals (n-r)!.

Hence the numerator is n! and the denominator is (n-r)!
Meaning:

nPr = P(n, r) = n!/(n-r)!
Proved

Books I read to arrive at this:

Statistics for Business and Economics- Paul Newbold
Statistics for Business and Economics-Frank Tailoka

Protected: ZAMBIAN KWACHA: ADVANTAGES AND DISADVANTAGES OF KNOCKING OFF THE ZEROES.

24 Jan

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AGE: SECOND ERASER OF POVERTY

30 Dec

Here is another eraser of poverty. However; unlike other rubbers, humanity has little or no control over this one. It comes with the passing of time. It is called age. The older you grow the more people you meet and the more you learn. Consequently, at a certain age, you would have networked and learnt enough to walk your way through success and out of poverty.

A certain wise man once told me that at a particular age, it is better to learn as much as you can. Teach yourself as many skills as you can so that by the time your sputnik moment arrives, you know enough to excel. Being a jack of all trades but a master at none also doesn’t help. One should carefully select and try out different skills at a tender age so that by the time they are older, they have already learnt what they are best at.

The above paragraphs are not a suggestion though that people should seat back and relax at certain ages. However, at every moment in time you have to fight off poverty using some right means. A teenager is most likely going to have to fight it by aiming to conquer ignorance. After nineteen, someone will want to earn as much experience as they can. If you are in a country with comparative advantage and are well placed yourself, you could even end up as successful as some billionaires of this century like Bill Gates and Mark Zuckerberg who by their mid twenties had made fortunes.

EDUCATION-ERASER OF THE POVERTY LINE.

28 Dec

About fifteen years ago, I used to see a six year old boy wake up early in the morning on each weekday, wear his safari suit which they called a uniform and walk a very long distance in the early morning breeze to reach school.

That sounds fine until you think hard about the design of the uniform, the harsh weather he used to endure and the distance to school. I can not describe the latter because I can not remember it well. However, no matter where you live or what season of the year it is, the weather at six in the morning is not anything you want to let a six year old walk through-especially in that outfit. The boy used to wear a short sleeved safari shirt. The pair of shorts were nothing short of perplexing. They could not even cover the little knees.

With the benefit of hindsight, I see him writing, reading, making complex calculations and teaching himself and others more. He is able to take advantage of the freedom to communicate because he has learnt how to do so in many different ways.

He has now been exposed to various topics in Mathematics, English, Commerce, Physics, Chemistry, Biology, Geography, History, Accounts, Finance and Economics just to mention a few.

With the people he meets through school, he has created networks of friends around the world. Many of these will end up as leaders in corporations and governments.

He is FREE to do as he wishes because he has LEARNT how to. Even when some people insult his achievement by telling him ‘education is nothing in this world’, he does not even bother because it is EDUCATION that has taught him that those people are trying to satisfy their empty egos.

It may and notice the use of the word MAY be true that education can not make you rich but it is also true that with all the benefits it comes with, it can make you avoid the poverty line.

You can help rub the thick poverty line by helping those close to you and beyond with EDUCATION. May heaven smile on you as you do so.

HERE IS AN ERASER:RUB THE POVERTY LINE.

27 Dec

“If tomorrow never comes” is a phrase that reminds me of the oblivion of an abandoned soul. It is not the fear of not seeing the light of the next day that is scary. It is rather the fear that despite the world having forgotten this poor soul, it lives with the hope that tomorrow will not come but it does. Those should be suprising thoughts,especially coming from a RELATIVELY well to do person who can cover the cost of writing an article.

Agony is being that poor fellow that statistics say lives below the poverty line. It is living on ‘less than a dollar a day’ while your next door neighbour is able to afford a full tank for his 318i Bavarian Motor Works (BMW) machine every single day. I think you are reading too fast. You need to slow down. Read the next three sentences slowly: Agony is living on less than a dollar a day. It is living on less than a dollar a day. I forgot one more thing-agony is living on less than a dollar a day. That is 30dollars a month. That is worth poping your eyes out in suprise.

How on earth can someone survive on less than 30dollars a month! Last time I checked, somebody could spend over 6dollars on lunch alone. Do not ask me who. Ask me where. Well, in the same country as that fellow who lives on less than a dollar a day. Actually, they are neighbours. I did not say they are in the same neighbourhood. I said they are neighbours. If teleportation could make it, move through the posh electric fence and you are in the better off fellow’s yard. Jump out and you are in a none fenced area planted with a shack the other fellow calls a house.

I am not here to tell you about the difference in the two styles of living. Otherwise I may be accused of ‘rumour mongering’. I am here to provide a list of some of the causes of such inequality:

1.Education levels.

2.Age.

3.Family background.

4.Marital status.

5.Discipline.

Watch this space for what roles these factors play in poverty alleviation and now that you know the erasers, the least you can do is rub that poverty line.