• Chickens coming home to roost.

    By | Latest news

    We are seeing some consolidation happening in big listed companies. Shoprite is disinvesting from Nigeria; MTN is pulling out of the Middle East to focus on Africa; and SAB abandons R5 billion of capital investment in SA. It is clear that doing business in Africa and the Middle East is just too difficult. Although it is a market where millions of customers can be targeted, the political situation is just not conducive to business. Corruption, sanctions and volatile currencies make it impossible to generate a steady profit, resulting in the whole company being dragged down. Read More

    FAAG stocks impress in Q2

    By | Investments

    I was watching the after hours release of the second quarter results for the FAANG stocks, excluding the N (Netflix), on Bloomberg at 22:30 on Thursday. These results covered the period during which Covid-19 caused most of its damage and a lot of businesses suffered permanent damage. But FAAG beat all the expectations, resulting in their share prices going up by as much as 6%. It is clear that their lofty valuations are supported by growing customer numbers and earnings. Read More

    Hope for the best but prepare for the worst.

    By | Economy

    During a webinar last week, two senior investment professionals at Coronation, Karl Leinberger and Neville Chester, debated their different views about the future of South Africa. Karl was more negative about our future and predicted a 0% GDP growth for the next ten years and a 70% chance of us succumbing to a debt trap in the next five years, where the government debt is so out of control that it passes the point of no return. In emerging economies a debt trap is triggered when the debt-to-GDP ratio passes 60%. In developed economies that trigger sits at 100%. Read More

    Investing for 2030

    By | Investments

    We all know the world is changing and our children and grandchildren will live in a world completely different from the one we grew up in. We all know that technology companies have replaced the old oil and resources companies as the most valuable in the world and names like Apple, Amazon, Google, Netflix and Facebook dominate the way we live today. But there are many companies currently still flying somewhat under the radar which will have a profound impact on our lives in the years to come. Read More

    After six months of 2020.

    By | The Market

    We have been waging a global war against something we cannot see. In the 1897 novel “War of the Worlds” by H.G. Wells, it is a similar invisible bacteria that eventually stops the Martians from destroying humankind. Read More

    Revised Budget and living in SA.

    By | Economy

    Wednesday last week Tito Mboweni delivered the revised 2020 Budget and it was not pretty. In the February 2020 Budget, government had forecast a GDP growth rate of 0,9% in 2020, now Treasury expects  GDP growth to be -7,2% in 2020. Read More

    Uncertainty 2020.

    By | The Market

    We have now seen markets recover to almost the levels before the Covid crash. This recovery has taken only two months and the people who bought the market end of March, have made a lot of money. Sasol is up almost 500% from its low in March; City Lodge is up 116%; Growthpoint is up 55%; Satrix Resi is up 78%; and Satrix40 is up 47%. Read More

    Understanding the rand.

    By | Economy

    Wow, the rand is something to behold. As South African investors we are fascinated by and intimately linked to the volatility of our currency. Just look at the graph below, borrowed from a recent Anchor Capital newsletter: Read More