Manic Monday – Curro | Invicta | Spur | Tsogo Sun
Yikes. 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 …
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Risk-on, risk-off
Remember 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 …
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Is a good company always a good investment?
This 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 …
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GDP per capita – the economic pizza
- South Africa
- July 9, 2020
The 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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PBT: Big data, bigger accounting adjustments
The word “trading statement” is typically the intro line to a horror movie on the JSE at the moment. Companies need to release a trading statement when they have reasonable certainty that the results for the upcoming reporting period will differ by at least 20% (up or down) from the prior period. Think of it as either an early celebration …
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Capitec: be afraid of what you cannot see
Back in March, Capitec suffered a price drop so severe that management released a SENS announcement to try and stop the bleeding. They highlighted that earnings growth still looked reasonable and that only 9% of Capitec’s customers have credit from the bank, so it isn’t the high-risk lender that the market sees it as. They also noted that the bank’s …
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Become a realist, not an optimist
Close your eyes. Take yourself back a few months. The date is March 26th 2020. The country watches with bated breath as President Ramaphosa announces a landmark step: the country will shut down for three weeks. Just three weeks. That’s all that would be needed to flatten the curve, save lives and fight this together. R2bn in support is announced, …
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Wealth creation is a game of inches
Stock market investing / trading / speculating – all these concepts involve the purchase of shares, but the intentions and strategies vary enormously. The stock market has become appealing to thousands of new investors over the lockdown period. This is great news, because it means more people are recognizing the value of taking control of their financial futures. My worry …
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Who’s afraid of the Big Bad Bias?
Humans are a weird bunch. We oscillate between rationality and irrationality. We develop probability theories and then we don’t use them. We do odd things like differentiate between “fun money” and savings, as though there are two types of money in this world. We spend differently depending on where the money came from, even though money is perfectly fungible. We …
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Ghost (????????????????????????) busters – edition 4
In this edition, we focus on two concepts that are a core part of equity capital markets. It’s complicated to understand how listed companies work and what the benefits are, but with each term you learn and understand, you’re getting closer. Initial Public Offering (IPO) An IPO is a capital raise by a company as part of a new listing. …
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