If you are too young to figure out the Disney reference here, you need to do some Googling. “The Lion King” was around long before people paid ridiculous prices for shares in electric car manufacturers that are barely profitable. Dinosaur industry Unlike Tesla and other new-age companies, Kumba Iron Ore is an absolute dinosaur of a company. When Pumba was …
View PostIs there a more emotive topic for the South African middle class than emigration? We are staring down the barrel of the toughest economic times this country has faced since democracy. It makes the 2009 Global Financial Crisis look tame (the numbers don’t lie: real GDP fell -1.5% in 2009 and we are expecting worse than -7% in 2020). When …
View PostThe S&P500 is a stock index. An index is simply a weighted average of a bunch of underlying stocks, allowing investors to track how an overall market is doing. Every index has certain rules for inclusion. The starting point is usually (but not always) a specific stock market (e.g. the JSE) followed by a sorting system (by industry e.g. the …
View PostIllusions of grandeur. Hubris. These are fancy words for the root cause of much destruction of shareholder value across the JSE: corporate egos. Once upon a time, Taste Holdings operated a business called Scooters Pizza. It was a home-grown brand that proved to be successful. At a time when JSE companies were being used as acquisition machines, it maybe even …
View PostLet’s turn our attention away from listed companies for a day. Small and Medium Enterprises (SMEs) are the lifeblood of the South African economy and there is much to be concerned about. SMEs contribute 39% of South Africa’s GDP but they are hanging on by a thread. the_ad id=”3223″ Small boats in rough seas If listed companies are struggling to …
View PostYikes. What a day for news. The JSE is a great place, giving investors the option to invest in companies that operate anything from private schools through to restaurants and industrial equipment. Almost any sector you can imagine is represented. Challenging economic times lead to volatility. Companies take action, for better or for worse. The stronger companies flourish and the …
View PostRemember Karate Kid? Well, it had nothing to do with economics or finance, but the famous “wax-on, wax-off” scene always comes to mind for me when people talk about risk-on or risk-off. This concept tries to explain why the South African market moves for reasons that have nothing to do with South Africa. In times of crisis or when investors …
View PostOne of my key investment themes is gaming. I strongly believe that gaming over the next decade will be what smartphones were over the previous decade. People are more connected than ever before. Every day, more and more people get fast internet access. In a world of social distancing, gaming becomes a welcome escape and a source of entertainment. In …
View PostThis question was posed to me last week by a reader and makes perfect sense. Simply put, is it always true that a strong company with a great brand and solid products is also an attractive investment? Immediate logic dictates that the answer must be yes – after all, the world’s most famous companies are almost indestructible, aren’t they? Isn’t …
View PostThe attractiveness of a country to investors and corporates is rarely a simple assessment. For consumer-facing businesses in particular, much of the analysis depends on population demographics and wealth trends. A number of wealthy countries have little or no population growth and slow GDP growth. The absolute level of wealth is attractive for new market entrants, but the trend is …
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