• All companies are not created equal.

    By June 22, 2020Uncategorized

    So far we have seen a V-shaped recovery in the US and SA since the Covid collapse at the end of March. The S&P500 as well as the JSE Top40 are almost back to where they were beginning of the year but the European indices are still down by up to -17%.

    Then there is the tech-heavy Nasdaq index in the US standing at +11%. So if you chose to invest in the UK instead of the newer generation technology shares, you would be experiencing a -28% swing in performance.

    There is a disconnect between investors’ confidence in our shares and their confidence in our country, which can be seen in the -23% devaluation of the rand since January. There are many very bright people in SA and I am sure many of them are on the advisory panels for government, but as we have seen in the handling of our economy over the last few years and the Covid-19 crises more recently, the political will or even capacity is just not there.

    We have to get used to the roller coaster environment we are living in at the moment, mostly because of the availability of information on social media. You can choose to be influenced by the rumours of a “second wave” of the disease, or the discovery of an “effective drug”, all of which will throw the investment markets in different directions on a daily basis, but just do not act on them as regards your investment portfolio. What we will also have to understand is that there will be more and more people who have lost their jobs and/or other assets, and who will turn to crime out of desperation.

    Personally, I can truly say that the worst thing during this pandemic has been the curtailment of my freedom of movement. I am lucky to be in a position where I have not suffered financially; and so far I have escaped ill health; but now that freedom of movement is greatly restored, I realize how much I did suffer subconsciously.

    I hope that your worst experience has also been as negligible as mine and that you will not suffer any permanent damage personally.