We are seeing world equity markets rebounding from their precipitous fall towards the end of 2018. Some of our Blue Chips like Naspers (+23%), Bats (+22%), Anglos (+25%) and even Aspen (12% over the last week) are up. That brings the JSE to +10% and the S&P to +15% year to date.
Moody’s has decided to leave our domestic credit rating at investment grade and our rand has consequently strengthened from R14,70/$ to R14,20/$. Unfortunately we still have some way to go before we can start scooping off profits to supplement our cash reserves, owing to the lacklustre performance of our equity markets since mid-2017. Most of the recovery in equity prices is actually a recovery from oversold levels fuelled by the positive rumours coming out of the trade negotiations between China and the USA.
The Red Oak funds, managed for JWR by ABSA, are doing very well. As investors we should always look at the relationship between the risk we take and the return we get before we form an opinion of a specific investment. Spectacular returns do sometimes come with spectacular risks, like we saw with Bitcoin. Over time we should rather go for the slow and steady investments and avoid the shooting stars.