Local Inflation Update Inflation at 3.8% - lowest since March 2021 (3.5 years ago) Well below SARB's target range midpoint of 4.5% Q3 year-on-year inflation at 4.3% (vs SARB's expected 4.4%) SA CPI YonY September 2024 November MPC Meeting Outlook Rate cut expected, but size uncertain Possibility of 25bps vs 50bps cut Factors affecting decision: Rand weakness Rising oil prices Global economic conditions Important titbit about today's SA headline CPI print. It meant that CPI rose by 4.3% y/y in Q3 2024. In Sept, SARB expected 4.4% for Q3, implying Sept print largely in line with their expectations. Therefore, today's number will not change SARB's thinking. Folks should calm down. — Hugo Pienaar (@hugopien) October 23, 2024   Currency Markets US Dollar showing significant strength DXY moved from 100.42 to 104.33 (≈4% increase in one month) Strong capital flows into US Rand trading at R17.73 Potential to move above R18 Long-term targets of R16.80 and R15.50 looking less likely short-term US Election Impact Potential implications of different outcomes Trump's proposed policies could be inflationary: Planned tariffs Immigration restrictions Impact on labor markets and prices Famous Brands Results Analysis Using AI Demonstration of AI analysis using Google Notebook LM Key findings: Leading Brands: Operating margin >50% Signature Brands: Operating margin -6.7% Manufacturing: Improved margins due to diesel savings Geographic performance varies: South Africa: 1.8% margin UK operations showing significant decline Cash generation at R498 million (7% decrease) Plans for 89 new stores Chapters 00:00 Local Inflation and Economic Outlook 06:01 Using AI for Investment Analysis 12:06 Famous Brands Results Analysis 18:05 Comparative Analysis with SPUR Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order

  Strong Retail Sales and the Two-Pot System: Retail sales show a positive trend, rising 3.2% in August, exceeding expectations of 2.1%. The Two-Pot System has already released R20 billion in six weeks, with the money used mainly for paying down debt, saving, and spending. Retail sales recovery, though from a low base, is a strong indicator of improved consumer health due to factors like slightly lower interest rates and inflation. South African retail sales | YonY Tribute to Tito Mboweni: Simon reflects on the passing of Tito Mboweni, former Finance Minister and Reserve Bank Governor. Mboweni’s contributions include institutionalising the Reserve Bank’s MPC meetings and implementing key labor reforms during his tenure as Labor Minister. His lasting impact on the country’s economy and financial sectors was highlighted, along with his personality as a Twitter chef and self-styled "Duke of Magoebaskloof." Johnson & Johnson – A Smooth Dividend Play: Simon shares his reasons for holding Johnson & Johnson: consistent dividend growth (around 3% yield) and a steady 8% annual share price growth in US dollars. Despite some issues, the company offers reliable long-term returns in a competitive health and consumer space. Johnson & Johnson quarterly dividend payments Bytes Technology Group and Investment Opportunity: Bytes operates in the UK, offering hardware, software, and services. The stock showed mixed market reactions but has strong support around certain levels. With a forward P/E of 20 and a dividend yield of 3.6%, Simon sees it as an interesting opportunity for long-term investors in the tech space. Quilter Trading Update: Quilter’s strong Q3 results follow a good first half of the year, with significant inflows supporting future earnings. A solid financial services player with a dividend yield near 4% and a forward P/E of 15, Quilter is performing well and trading at all-time highs since its 2018 listing. Sasol – A Weak Chart: Simon discusses Sasol’s ongoing struggles, with a weak chart suggesting possible further declines. Investors should wait for technical indicators before making any moves. Brent Oil Price and Rand Volatility: Brent crude oil hit highs recently but is now retreating to $70 per barrel, with potential for further declines due to global oversupply. The rand, affected by dollar strength, is volatile but could see a return to 16.80 against the dollar in the coming months. Chapters 00:00 Retail Sales Recovery and Economic Outlook 04:29 Tribute to Tito Mboweni 08:32 Johnson & Johnson: A Steady Investment 09:52 Bytes Technology Group: Market Reactions 12:32 Quilter's Strong Performance 14:29 Cecil's Ongoing Struggles 15:56 Brent Oil Prices and Global Economy 17:48 Volatility of the Rand and Market Predictions Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order

Overview: In this episode of JSE Direct, Simon Brown breaks down the latest market updates, key stock analyses, and insights into the South African investment landscape. Episode highlights include discussions on property developers Calgro M3 and Balwin, Capitec’s strong performance, Purple Group’s rise, Afrimat’s challenging update, and Wilson Bailey’s long-term chart breakout. The show also covers upcoming events and Brown's views on Nvidia’s stock movement. Property Developers: Calgro M3* vs. Balwin Calgro M3: Delivered a strong trading update, attributed to its flexibility in targeting lower-income segments. Calgro’s ability to adapt and scale down offerings positions it well, with potential for significant price appreciation. Trading at a low PE of 3.5, Brown argues that in a normal market, it should command a 10x PE, suggesting a fair value of around R9. Balwin: Struggling with higher entry price points in its developments. Despite weaker performance, there may still be value. If results improve in the future, Balwin could present a solid opportunity. Brown speculates that a delisting could be on the cards if the stock remains undervalued. Calgro M3 weekly chart | Close 09 October 2024 Capitec: Expensive, but Resilient Capitec continues to outperform with robust growth, though it trades at a high PE of 27 and a price-to-book of 7.8. Despite concerns about its premium valuation, the company’s diverse ventures, from mobile services to expanding insurance offerings, make it a long-term core portfolio holding. Historical growth shows Capitec’s resilience and market leadership in the South African banking sector. Purple Group*: A Breakout Stock After months of a consistent seller at 80 cents, Purple Group’s stock broke higher, reaching 98 cents before pulling back. Brown remains optimistic, particularly as trading volumes in the JSE pick up, benefiting Purple’s core business. Although trading at a high PE of 45, Brown is bullish about its prospects in a rising market. Afrimat: A Tough Year, but Long-Term Potential Afrimat’s trading update indicated a sharp drop in earnings (down 75-85%), partly due to the acquisition of Lafarge, which is still loss-making. While the near-term outlook is challenging, Brown remains optimistic about Afrimat’s long-term potential, especially if South Africa enters a construction boom. He sees the stock as attractively priced for long-term investors. Wilson Bayly Holmes-Ovcon (WBHO): A 16-Year Breakout Brown discusses WBHO’s impressive 17-year chart, finally breaking out after a long consolidation period. He suggests the stock could benefit from renewed local construction activity, while Afrimat remains his preferred pick in the sector due to its diversification into industrial metals. A breakout after a 17-year consolidation is very bullish in TA. Add the fundamental underpin. I think this still has lots of room to run. pic.twitter.com/fBk5BCKtvk — Richard Thomason (@richytee) October 9, 2024   Nvidia: Breaking New Highs Nvidia, another stock Brown holds, is testing all-time highs after a series of consolidations. With Nvidia's historical pattern of doubling after breaking key resistance levels, Brown remains confident in the stock's potential for further growth despite its high valuation. Nvidia weekly chart | Close 09 October 2024 Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order Chapters 00:00 Market Overview and Calgro M3 vs Balwin 07:11 Capitec's Performance and Future Outlook 12:43 Exploring Other Stocks: Purple Group and Afrimat 18:15 Long-term Trends: Wilson Bailey and Nvidia

  China's Market Rebound Stimulus Measures: The Chinese government has initiated a stimulus, which includes cutting reserve requirements and lowering interest rates. While spending has not picked up fully, the China 50 ETF (in US dollars) has wiped out losses dating back to July 2022. Hong Kong’s Hang Seng index shows a similar trend. Market Sentiment: Short squeezes have played a role in pushing the prices of big Chinese companies like Alibaba and Tencent higher. Despite concerns about China's long-term investability (raised by experts like Viv Govender of Rand Swiss), Simon remains optimistic about continued growth in the medium term. Shift in Hot Money: There's been a notable shift away from tech stocks like Apple and Nvidia, with more capital flowing towards China in recent days. Simon discusses the potential for short-term pullbacks, but he sees this as an opportunity. South African ETFs Performance Top Performers: Property ETFs have outperformed, with the CSPROP, Satrix Property, and 1nvest Property ETFs gaining between 30% and 31.7% over nine months ending in September 2023. Underperformers: ETFs linked to palladium, platinum, and tech innovation (e.g., Sygnia’s Fourth Industrial Revolution ETF and Satrix Healthcare Innovation ETF) have shown negative returns. Outlook for South African REITs Simon expects further growth in the property sector but at a more moderate pace than this year’s 30% returns. He highlights the potential impact of upcoming interest rate cuts, consumer spending at malls, and the demand for yield as government bond rates decrease. Some REITs, particularly those in rural and township retail spaces, are performing exceptionally well. The market tends to move ahead of the cuts based on expectations, but technically any cut is great for cheaper debt and more consumer spending at the underlying properties, plus a lower rate for the valuations which means a higher present value. So yes, they can keep going. — The Finance Ghost (@FinanceGhost) October 2, 2024   The South African Rand and Global Markets The Rand has seen fluctuations, dipping to as low as 17.02 against the US dollar and facing pressures from global events such as the Iranian attack on Israel and rising oil prices. Simon expects the Rand to strengthen and potentially break below 17, possibly reaching levels as low as 14. Oil Prices: OPEC is grappling with maintaining production discipline. Oil prices are likely to hover around $70 per barrel, which is positive news for South African consumers in terms of petrol prices. South African PMI and Vehicle Sales PMI: South Africa’s PMI for September was positive, indicating slight economic expansion. The absence of load shedding and lower interest rates have contributed to the improved outlook. Vehicle Sales: September saw better-than-average vehicle sales (44,000 units). Simon emphasizes the potential upside in companies like Combined Motor Holdings (CMH), which has started to perform after years of stagnation. Investment Strategy in a Bull Market September SA vehicle sales Simon reiterates his bullish stance, noting that while there will be pullbacks (up to 10% corrections), the overall trend remains upward. He advises staying long in the market, especially in a bull phase. Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order

Summary: In this episode of JSE Direct, Simon Brown delves into the latest developments in South African markets, focusing on the impact of China's major economic stimulus and the strengthening of the Rand. Key highlights include: Rand Strength: The Rand has seen notable appreciation, reaching levels of R17.12 to the US dollar. Simon discusses the drivers behind this, particularly US dollar weakness and foreign purchases of South African bonds. He explores possible future movements, with a target of R16.80 and potential for further strengthening. USDZAR | Weekly | 26 Sep 24 Global Stimulus: China's massive stimulus measures, including relaxed lending rules for banks and lower interest rates, are aimed at boosting consumer demand. This is the largest Chinese stimulus since 2008, with significant potential to impact global commodities and bolster the South African economy. Commodities & Bull Market: The commodities market is seeing positive movement, with Chinese demand driving up prices for industrial metals like copper, iron ore, and coal. Simon notes how the previous commodity bull run in 2021 significantly strengthened the Rand and discusses the potential for a similar scenario if China's economy continues to gain momentum. Market Performance: South Africa is outperforming other emerging markets, particularly Brazil and Mexico, over the past six months. Simon explains the drivers of this outperformance and highlights the continuing bull run in the JSE Top 40 and All-Share indices. SA Equities: Our fortunes have changed significantly since the GNU was formed in June. SA has dramatically outperformed (in US$) not only Emerging markets in general, but Brazil & Mexico. SA has tilted more centrist, with a focus on the economy. Brazil & Mexico both shifted left. pic.twitter.com/Zz6OOM4dCJ — Karin Richards (@Richards_Karin) September 23, 2024   Rate Cuts: South Africa and several other global economies, including the US and Europe, have entered a rate-cutting cycle. Simon emphasises the importance of this for markets, especially property stocks, which are benefiting from lower bond yields and improved investor sentiment. JSE Index Changes: Anglo Platinum has been removed from the JSE Top 40 index, replaced by Pepkor. Simon discusses why Pepkor’s entry is significant, given its position as a retailer and its attractive valuation compared to competitors. Key Discussion Points: Rand’s strengthening trajectory and foreign capital inflows. China's economic stimulus and its potential effects on global commodities. Outlook for South Africa’s bond and equity markets. Changes in the JSE Top 40 index with Pepkor replacing Anglo Platinum. Global rate-cutting trends and their impact on local property stocks. Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order    

Episode Overview: In this episode, Simon Brown dives into the current economic landscape with a focus on interest rates, inflation, and the state of the South African Rand (ZAR). He also explores asset-light businesses and why they make great investments, followed by a breakdown of the latest market activity and local company results. Rate Cuts & Inflation Outlook: South African CPI (August): 4.4%. A possible drop to 3.5% in October discussed with Johan Els, Chief Economist at Old Mutual. The need for rate cuts to stimulate the economy, with experts debating between 0.25% and 0.5% cuts. Fed decision and its potential market impact. SA Prime and CPI September 2024 ZAR Strength & Market Trends: Rand showing strength, potentially reaching sub-17 levels. Global market highs: S&P 500, NASDAQ, and JSE Top 40. Consumer confidence in the US and South Africa rising but still negative. Platinum Group Metals (PGMs) & Palladium: A strong bounce in PGM stocks, driven by oversold positions and palladium production cuts. Palladium’s recent performance and its potential future breakouts. Palladium weekly chart | 18 September 2024 Asset-Light Businesses & Their Investment Potential: Definition and benefits of asset-light businesses (e.g., Santova, Nvidia). Simon breaks down why businesses with fewer physical assets can provide higher returns on equity and efficiency. Comparison to asset-heavy businesses like banks and retailers. A deep dive into asset-light models like Shein, Temu, and logistics firms. Company Updates & Local Results: Outsurance: Strong financial results and special dividends; analysis of the short-term insurance industry’s ability to reprice premiums annually. Altvest IPO: Simon discusses the upcoming Altvest IPO on the JSE and why he's not taking part in it, despite its interesting SME funding model. Finbond: A look at the excitement surrounding Finbond’s potential delisting and the company’s moves in the US market. Noteworthy Quotes: "Rate cuts are coming, and I think we'll see a short-term sell-off as markets react." "Asset-light businesses like Santova and Shein are great investment opportunities because they don't carry the heavy burden of owning physical assets." "Outsurance continues to impress with strong numbers and dividends, proving the strength of short-term insurers." Chapters 00:00 Economic Landscape and Rate Decisions 03:09 Understanding Asset-Light Businesses 05:54 Market Psychology and Upcoming Events 09:11 Local Results and Investment Insights 11:52 Exploring New Investment Opportunities 15:10 Finbond and Market Speculations 17:59 Larry Ellison and Oracle's Rise Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order  

Summary In this episode of JSE Direct, Simon Brown discusses various topics including the troubles faced by Anglo Platinum, the performance of leisure stocks, Anglo Gold Ashanti's* acquisition of an Egyptian gold miner, and the impact of two pot withdrawals. He also touches on the future of PGMs, the growth of electric vehicles, and the psychology of markets.  Takeaways Anglo Platinum is facing challenges as Anglo American wants to get rid of their stake, causing a sell-off in the market. Anglo Platinum weekly chart The PGMs market is uncertain, with palladium and platinum prices experiencing fluctuations. The World Platinum Council projects a second year of meaningful platinum deficits, with jewelry demand expected to rise. The growth of electric vehicles is impacting the demand for PGMs, but the market is still uncertain. Investors should wait for positive price action before considering investments in PGMs. Anglo Gold Ashanti's acquisition of an Egyptian gold miner raises questions about the use of equity and the future of gold prices. Two pot withdrawals have resulted in over 4 billion rand being withdrawn from the market. Leisure stocks, such as City Lodge and Sun International, have mixed performance, with City Lodge experiencing lower occupancy rates. The growth of sports betting raises concerns about its impact on poorer individuals and the fairness of the industry. Sound Bites "Anglo Platinum has a problem which is perhaps a little more unique than just the PGMs." "There is that initial overhang. A whole lot of people will get Anglo-Platinum shares and say, 'I don't want these' and sell it." "The World Platinum Council is saying we're gonna have deficit again, that's the important point." Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order Chapters 00:00 Challenges for Anglo Platinum and the PGMs Market 02:22 The Future of PGMs and the Impact of Electric Vehicles 07:54 The World Platinum Council's Projections 09:16 The Diminishing Role of Internal Combustion Engines 11:09 The Impact of Low Prices on Production 14:55 Anglo Gold Ashanti's Acquisition and the Use of Equity 17:56 Pot Withdrawals and their Effect on the Market 19:18 Performance of Leisure Stocks: City Lodge and Sun International 19:42 Concerns about Sports Betting and its Impact 20:10 Upcoming Events: Investment Goals and the Psychology of Markets

Episode Summary: In this episode of JSE Direct, Simon Brown delves into the impact of anticipated interest rate cuts and how they may affect various sectors and stocks. He shares his thoughts on potential beneficiaries like consumer stocks, REITs, and companies with high levels of debt. The episode also covers key updates on Nvidia's earnings, Nike's stock valuation, and a new ETF listing by ETFSA. Interest Rate Cuts and Market Impact: Jerome Powell's Jackson Hole Speech: The anticipation of rate cuts as early as September, with an expected reduction of around 75 basis points by the end of the year. Benefiting Sectors: Companies with significant debt, consumer stocks (Mr Price, Foschini, Shoprite), and REITs are likely to benefit from lower interest rates. Sector-Specific Insights: REITs: Discusses the potential for real estate investment trusts like Storage, Spear, and the concerns around office spaces with high vacancy rates. Consumer Stocks: Simon reiterates his positive outlook on consumer-focused companies and the strong performance of used and new car sales, highlighting stocks like CMH and Motus. Stock Analysis: Nvidia: With results due, Simon highlights the market's expectations and the potential for significant movement based on the earnings report. Nvidia | Close 27 aug 24 | Weekly chart Nike: Simon discusses Nike’s current valuation, seeing it as a strong buy at its multi-decade support levels, despite its challenges. Nike | Close 27 aug 24 | Weekly chart ETF Updates: ETFSA's New Actively Managed ETF: Introduction of the Balanced Foundation ETF, which is actively managed due to the lack of a specific index and includes a mix of local and foreign equities, bonds, and property. Satrix Nasdaq ETF: The transition from a feeder fund to a standard fund, reducing total expense ratios and offering cost benefits to investors. Housekeeping: No Show Next Week: Simon will be on vacation and the podcast will resume on 12 September. Money Summit: Scheduled for 10 September in Johannesburg with free tickets available using the code "MONEYWEBGEST" at MoneySummit.co.za. Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order

ETFSA is listing an Actively Managed ETF, The ETFSA Balanced Foundation Prescient AMETF (JSE code: ETFSAB).  Simon spoke with Gareth Stobie from ETFSA about the ETF, the listing process, where it fits in a portfolio and what it will be holding. IPO opens: 26 August 2024 Listing date: 02 September 2024 JSE code: ETFSAB TER: 0.52% ETFSAB

In this landmark 600th episode of JSE Direct, Simon Brown reflects on the podcast's journey from its beginnings as a radio show in 2008 to becoming a leading podcast for market insights. The episode covers a range of topics, from South Africa's local CPI and a strengthening Rand to the surprising twists in the gold market and a mixed bag of corporate earnings. Local Inflation Data: South Africa's CPI has come in better than expected at 4.6%, fueling speculation on whether the next rate cut by the MPC might be more aggressive than anticipated. South Africa CPI | July 2024 Rand Strengthens: The Rand has shown significant strength, dropping below 18 to the dollar, with Simon analyzing the contributing factors, including foreign investment in bonds and a weakening US dollar. Bull Market Sentiment: Simon reaffirms the current bull market, highlighting the JSE's all-time highs and advising listeners to stay invested while cautioning against the risks of sitting on the sidelines. Top40 20 August 2024 | Weekly chart Gold Market Rally: Gold prices have surged above $2,500, driven by central banks' increased purchases and concerns about the US dollar's stability. Simon discusses the potential for further gains in the gold market. Corporate Earnings Recap: Coronation Fund Managers: Special dividend announced but falls short of expectations. CMH*: Despite low liquidity, the stock continues to climb, reflecting the breadth of the bull market. Sasol: Disappointing results with no dividend payout, a situation Simon had previously predicted. Spur Corporation: Strong earnings, signaling improving economic conditions. Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order    

Sasol's Struggles: Simon revisits Sasol's recent production and trading updates. Despite some positive news, the company's financials remain grim due to significant write-downs and a challenging pricing environment, especially in the chemical complex. With a forward PE ratio hovering around 3, Simon questions the actual value in Sasol and advises caution, emphasising the importance of waiting for a stock to show signs of recovery before investing. Sasol weekly chart | 13 August 2024 ADvTech's* Solid Performance: Simon provides insights into ADvTech's latest trading update. Despite a voluntary update (not mandated by a 20% variance), the company shows strong growth in earnings per share. He discusses the stock's valuation, historical performance, and why he remains optimistic about its future prospects, even as it trades at a PE ratio of around 15. ADvTech weekly chart | 13 August 2024 Combined Motor Holdings* (CMH): Simon shares his thoughts on CMH, a stock he has held for years. Despite a stagnant price movement over the past three years, the stock offers a solid dividend yield. He discusses the broader consumer environment, the potential impact of reduced interest rates, and why he continues to favour CMH over competitors like Motus. CMH weekly chart | 13 August 2024 Renegen's* Milestone: After a year and a half of delays, Renergen finally starts producing helium. While the stock has seen a recent uptick, Simon highlights the challenges that still lie ahead, including scaling up production and the company's upcoming NASDAQ listing. He also reflects on the broader sentiment in the junior mining sector. Coronation's Active ETFs: Coronation has launched six actively managed ETFs on the JSE, a significant development in the local ETF market. Simon explains the concept of actively managed ETFs and why this move could be a game-changer for both Coronation and the JSE, even if he personally isn't planning to invest in them. Find details here. US Inflation Update: The latest US CPI data shows a slight decrease to 2.9% for July, but core inflation remains elevated. Simon discusses the implications for future interest rate cuts by the Federal Reserve and the potential impact on South African monetary policy. Tribute to Brett Duncan: Simon pays tribute to Brett Duncan, a former stockbroker and warrants market leader at Standard Bank, who recently passed away. Brett was a key figure in Simon's early career and played a significant role in the South African warrants market. His passing is a significant loss. Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order  

Apple's Financial Performance and Buffett's Decision: Apple's recent financial results showed steady revenue growth across various segments including iPhone, MacBooks, and iPads. Warren Buffett's Berkshire Hathaway reduced its stake in Apple by half, sparking market speculation. The implications of Apple's valuation and Buffett's strategy in maintaining a significant yet reduced position in Apple were discussed. Market Movements in Japan: The dramatic drop in Japan's Nikkei 225 index, which fell nearly 27% from its recent highs, was analyzed. Possible reasons behind the sell-off included the unwinding of the Japanese carry trade and broader market concerns about global economic stability. The role of low liquidity in exacerbating the market decline was highlighted. Nikkei 225 Nedbank's Financial Results: Nedbank reported solid financial results with HEP's up 11% and a near 15% return on equity. Improvements in impairments and concerns over the cost-to-income ratio were noted. The banking index's performance and its implications for Nedbank's stock were discussed. Anglogold Ashanti's* Performance: Anglogold Ashanti's strong production and profitability metrics were reviewed. The importance of holding gold miners and gold ETFs in the current market environment was emphasized. Launch of Ethereum ETFs: The approval of Ethereum ETFs by the US SEC was announced, with eight new ETFs available for trading in New York. The differences between Ethereum's proof-of-stake blockchain and Bitcoin's proof-of-work blockchain were explained. Potential implications for investors and the broader crypto market were discussed. Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order  

Jerome Powell's Statement: Rates left unchanged in the US. Possible rate cuts on the table for September. US MPC meeting on 19 September. Data needed: improving inflation and higher unemployment. Oil and Gold Market Update: Brent Crude: Under pressure, signaling weak global demand. Lower highs trend since June 2022. Support at $72.50 and resistance around $88. Brent Oil | 01 August 2024  Gold: Trading near all-time highs. Strong central bank buying. Uncertain targets, but bullish sentiment persists. Gold | 01 August 2024 Potential JSE Delistings: Criteria: Dividend yield > 0, market cap 100, P/E Initial search yielded 53 stocks, refined criteria (dividend yield > 5%) narrowed it down to 25. Top candidates: African Media Entertainment, Argent, Combined Motor Holdings*, eMedia, Frontier Transport, Home Choice, Mustek, PrimeServe, Transpaco. Shoprite*: Trading at all-time highs. 12% revenue increase, 6.3% like-for-like growth, 5.8% inflation. Successful new store formats (PetScience, Checkers Outdoor, UNIQ Clothing, Little Me). Woolies: Disappointing trading statement. Comparable store sales up 6.9%, inflation at 7%, volume decline. Heps down 14-19%, market expectation miss. RSA Retail Bonds Update: New Rates: Two-year at 8.75%, three-year at 9%, five-year at 10.25%. Rates have been declining since June. Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order  

Presidential Vision for Infrastructure Development: The South African President's recent speech emphasised making the country a hub of construction and infrastructure development. The potential for public-private partnerships and the types of infrastructure that might be developed, including roads, energy transmission, and public buildings. Stocks That Could Benefit: Construction Stocks: A detailed look at various construction-related companies and their potential to benefit from the President's infrastructure plans. PPC: Potential benefits from increased construction activity. Murray & Roberts: Despite historical losses, they have a division in infrastructure and renewable power that might benefit. Stefanutti Stocks: Focus on their claim against Eskom, which is crucial for their future. Wilson Bayly Holmes (WBHO): Expected growth, though a significant portion of their revenue comes from Australia. Raubex: Strong performance and solid management, with significant involvement in road construction through Sanral. Afrimat: Supplier of construction materials, benefiting from Sanral and Transnet orders. Reunert: Involvement in industrial cabling and commercial battery storage, critical for new power facilities. Market Insights: Mr Price* Update: Gaining market share and performing well post-elections and during a late-arriving winter. Sasol Production Update: Management's effective handling of controllable factors and slight improvements in Transnet's performance. Kumba Iron Ore: Confirmation of slight improvements in Transnet, echoing Sasol's observations. JSE Listed Construction Stocks | 1 year return | close 23 July 2024 International Market Movements: CrowdStrike* Incident: A significant security update issue affected numerous systems, impacting the stock but not signalling an end for the company. US Small Cap Stocks: Rotation into small caps like those in the Russell 2000 index, offering a cheaper alternative to large-cap tech stocks. Simon Brown wraps up the episode by emphasizing the importance of infrastructure development for South Africa's economy and reiterates his top stock picks to benefit from potential future construction projects: Raubex, Afrimat, and Reunert. He also touches on the potential 3% GDP growth for 2025 and the broader market implications. Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order

SA GDP Growth Prospects IMF's projection: 0.9% GDP for South Africa this year. Potential factors for growth next year: Reduced load shedding could add 1% to GDP. Two-pot system introduction, expected to inject around 40 billion rand into the economy. Potential rate cuts: half a percent by the end of the year, possibly 1% by mid-next year. Inflation targeting at 4.5%. Optimistic outlook with a 60-70% probability of achieving 3% GDP in 2025. South Africa GDP Delistings and Market Movements Bell and Sasfin delisting announcements. Other potential delisting candidates in the small-cap space. Importance of constructing a portfolio that can benefit from economic growth and potential takeouts. Bell weekly chart Pick n Pay Rights Issue Explanation of the rights issue and its implications. Instructions for shareholders on handling nil paid letters. Simon's perspective on waiting for dust to settle before considering Pick n Pay shares. Today is the last day to trade before Pick n Pay rights issue kicks in. ° If you hold at close tonight you will receive 51.11 rights per 100 PIK shares, code will be PIKN ° You can sell then in market ° Or pay 1596c per each to get a new PIK share ° HAVE to do so by 30 July — Simon Brown (@SimonPB) July 16, 2024   Property Stocks and Income ETFs Analysis of South African property stocks and their recent performance. Attractive yields in local and international income ETFs. Recommendation to explore defensive income stocks and ETFs for potential investments. Find local ETFs here. Interest Rate Outlook MPC and FOMC meetings' impact on interest rates. Simon's forecast on rate cuts in South Africa and the US. Simon Brown * I hold ungeared positions.  

Load Shedding Update Milestone: 100 days of no load shedding by Friday. Factors: New capacity online, Kusile unit 5 (800 MW), upcoming additions from Medupi and Koeberg. Impact: Reduced GDP loss (previously 1.8% of GDP due to load shedding). Positive effect on inflation and economic stability. Winners: Retailers: Shoprite*, Pick n Pay, Spar (less expenditure on diesel). Manufacturers: Invicta, Hudaco (benefit from increased customer stability). Real Estate: REITs with shopping centers, reduced generator use. Interest Rates Jerome Powell's Speech: Potential for a single rate cut in November. Impact on Markets: Minimal immediate impact, with expectations already priced in. Local MPC Meetings: Predictions for rate changes on 19 September and 21 November. Market Insights Mr Price*: Ex-dividend yet the stock price increased, indicating strong sector performance. Tesla Analysis Market Share: Decline in second-quarter sales but maintains a significant market share (~50%). Challenges: Increased competition from other EV manufacturers. Need for cheaper models. Significant share dilution over the years. Stock Performance: Historical highs and current rebound to 231. Future Prospects: Continued relevance in the EV market despite competition. [caption id="attachment_42560" align="aligncenter" width="849"] Tesla weekly chart | 02 July 2024[/caption] SARS Tax-Free Changes Impact: Minor changes affecting pro rata contributions for part-year taxpayers. RSA Retail Savings Bonds Rate Change: Significant drop in 5-year bond rate from 11.5% to 10.5%. Action Required: Reset by the 20th for current holders. The form is here. Simon Brown * I hold ungeared positions. All charts by KoyFin | Get 10% off your order  

Key Takeaways MultiChoice Trading Opportunity: Potential for profit if the Canal+ deal goes through, despite current low stock prices. Futures Trading: Importance of understanding margin, liquidity, and strategy when trading ALSI and ALMI futures. Market Conditions: Current cheap valuation of SA Inc stocks presents opportunities, pending political stability and cabinet announcements. MultiChoice Mis-pricing: Discussion on the 125 Rand mandatory offer from Canal+ for MultiChoice. Current stock trading at 102 Rand due to poor financial results. Analysis of Canal+'s offer document, potential deal completion, and possible trading opportunities. Index Futures - ALSI and ALMI: Detailed overview of trading ALSI (All Share Index) and ALMI (All Share Index Mini) futures. Explanation of points trading, margin requirements, and contract specifics. Tips on trading strategies, including liquidity considerations and handling overnight gaps. Trading as a side hustle, watch the video. Market and Stock Updates: Cabinet Announcement Awaited: Market reactions and fluctuations in the Rand. Individual Stocks: Analysis of Mr. Price*, Foschini Group*, Nedbank, Spur, and CMH*. Banking Sector: Observations on price to book ratios and the overall market valuation of SA Inc stocks. Simon Brown All charts by KoyFin | Get 10% off your order * I hold ungeared positions. dd  

Face-Ripping Rally on the JSE: Surge attributed to the formation of a coalition government involving ANC, DA, and IFP. Top 40 index rose 3.5%, a significant increase not seen since February 2018. The rally, likened to the start of a marathon, suggests potential long-term growth, despite possible volatility. RAND and Resource Stocks: RAND trading under 18, affecting resources positively. Potential for RAND to strengthen further, possibly reaching 17. Coalition Government and Market Impacts: The coalition’s stability is uncertain but critical for long-term market confidence. JP Morgan upgraded South Africa from underweight to overweight, signaling positive outlooks. SA Inc Stocks and ETFs: Retailers like Shoprite*, Mr. Price*, Foschini Group*, and Truworths hitting 52-week highs. ETFs for local investors, focusing on SA Inc.. Recommendations include avoiding heavy Rand Hedge dual-listed miners in a strong RAND environment. RSA Retail Savings Bonds: Interest rates for RSA Retail Savings Bonds to drop in July. Current rates: 11.5% for a 5-year bond, expected to decrease to 10.75%. Opportunity to reset bonds before the rate change on the 20th of the month. Inflation and Interest Rates: Local CPI stable at 5.2%, within the target band but aiming for 4.5%. US FOMC holds rates steady, hinting at a possible future rate cut. Prospects for lower local interest rates and their impact on retail stocks and disposable income. Market Opportunities: Interest in retailers and brokers like Purple Group* and PSG Konsult, considering the potential increase in disposable income and trading volumes. Positive long-term outlook, but caution against immediate full investment. Simon Brown * I hold ungeared positions.  

US Inflation: Core Inflation: Came in at 3.4%, lower than the expected 3.5% and previous 3.6%. Impact: Positive market reaction, with US Treasuries under pressure, Rand strengthening, and Dollar weakening. FOMC Outlook: Potential rate cuts anticipated towards the end of the year, possibly in November and December. Company Results: SPAR: Performance: Results were as expected, market responded positively. Issues: Challenges in Switzerland, discontinued operations in Poland, and ongoing SAP implementation issues. Foschini Group: Performance: Strong results, market reacted favorably. Highlights: Good performance in their online platform Bash and general improvement across brands. Foschini Group and Clothing Retailers: Potential growth areas and resistance levels in stock prices. Interesting Stock: Contemporary Amperex Technology Company Limited (CATL): Sector: Battery technology for EVs and corporate solutions. Market Performance: Positive analyst ratings, promising future prospects. Renergen*: Helium Production: Helium is flowing, but further testing is required. Challenges: Significant delays and ongoing testing phases, but progress is being made. Santova: Stock Movement: Changes in buyer and seller dynamics impacting stock price. Insights: Importance of identifying market movers in stock trading. Political Developments: Coalition Talks: Ongoing with potential for an ANC, DA, IFP coalition. Rand Performance: Strengthening in response to political stability and positive US inflation data. [caption id="attachment_42378" align="aligncenter" width="849"] USDZAR | 12 June 2024[/caption] Simon Brown All charts by KoyFin | Get 10% off your order * I hold ungeared positions.

New Two-Pot Pension System: Details on the implementation and implications for retirement savings. Kicks in 1 September 2024 Can take up to R30k immediately, but this will be taxed. Thereafter 30% of contribution go into a savings pot your can take out, it will be taxed. Only use for an emergency, not holidays. Rainbow's Return to JSE: Analysis of Rainbow's re-listing after 17 years. RCL Foods will be unbundling later in June One Rainbow share for every RCL Foods share But is Rainbow the best chicken stock on the JSE? OPEC+ Impact on Oil Prices: Members agreed to cut voluntary production cuts Oil crashed As did Sasol [caption id="attachment_42315" align="aligncenter" width="849"] Brent oil | weekly | Koyfin Q1 GDP Results: Negative Q1 Q2 should be slightly better thanks to reduced load shedding But election will have worried investors. Santova Stock Analysis:  Buyer at 750c Seller at 760c [caption id="attachment_42316" align="aligncenter" width="849"] Santova daily | 06 May 2024 | Koyfin Coalition Talks: ANC is talking with everybody They seem keen on a governmnt of national unity Rand volatile Recent uploads onto Just One Lap Three new Global ETFs from FNB with low TERs The Power of Commodities with 1nvest: Navigating Trends and Unlocking Portfolio Diversity Simon Brown All charts by KoyFin | Get 10% off your order  

  Election Results Impact on Markets Slow ballot counting with three ballots, 18.7% counted. CSIR prediction at 5%: ANC 42%, DA 22%, EFF 9%, MK 14%, Patrick Alliance 2%. Market concerns about ANC forming a coalition. Rand fluctuations: From 18.34 on Tuesday to 18.61 currently. [caption id="attachment_42259" align="aligncenter" width="849"] Rand | 1pm 30 May 2024[/caption] Pepkor Results: 9.5% revenue growth. 24.5% growth in fintech, now 12% of the business. Pepkor sells 7 out of 10 smartphones in South Africa. Woolies (Woolworths) Update: Earnings down 20% for the year ending June. Challenges in the clothing segment, further deterioration in footfall and discretionary spend. Food segment performing better, but overall market reaction negative. Zeda Results: Revenue growth of 19%, HEPs up 12.5%, return on equity at 28.5%. Surprise 50 cents dividend despite previous year-end dividend expectations. BHP Billiton and Anglo American Merger BHP walked away from the Anglo-American takeover proposal. Speculation about potential offers from Rio Tinto or Glencore. Anglo-American's disinvestment plans for De Beers and Anglo Platinum. Market Insights Discussion on Metrofile's challenges with dividend yield falling and pressure on share price. SAB Cap Investments' exit from Metrofile. South African Reserve Bank MPC rate announcement: No rate changes expected. Upcoming central bank meetings: ECB, FOMC, Bank of England, Swiss National Bank. Potential for future rate cuts in South Africa if inflation targets are met. Commodity webcast with Johann Erasmus available on Just One Lap. Insights into gold, PGMs, and copper. Mention of the cheaper gold ETF from 1nvest compared to Absa GLD. Changes in 10X ETFs: Local Dividend Aristocrat and Smart Beta merging into a Top 50 ETF. * I hold ungeared positions.

Nvidia's Financial Performance Nvidia's Q1 Results: Revenue up 262% year-on-year to $26 billion. Net income up 628% year-on-year to $14.9 billion. Gross margins at 78.9%. Stock Split: 10-for-1 stock split set for 7 June. Market Reaction: Stock traded over $1,000 in the aftermarket. Anglo American and BHP Group BHP's Third Offer: Anglo American rejects BHP’s third offer. Deal Concerns: Issues with the price and risk of the deal. Next Steps: Extended deadline for BHP's offer to 29 May. Richemont's* Results Richemont's Position: Holding steady in a tough luxury market. Earnings Growth: Expected around 10% over the next few years. Preferred Stock: Richemont favored over LVMH for its focused luxury product line. Copper Market Copper Boom: Strong performance but cautious outlook due to potential price pullbacks. Investment Options: Local ETNs and offshore ETFs available for copper investment. Structured Products Educational Video: Power Hour session on structured products by Kevin Swartz from Standard Bank. Features: Capital protection and enhanced upside. Pick n Pay's Plan Sales Update: For 52 weeks ending 25 February, bleak results expected. Market Reaction: Stock closed 4.5% higher on news of a plan. South African Economic Indicators CPI Inflation: 5.2% for April. Primary Surplus: Revenue exceeded expenditure (excluding interest). Vehicle Sector Analysis Companies Covered: Combined Motor Holdings (CMH), WeBuyCars, Motus, and Zeda. WeBuyCars showed strong sales growth. Motus and CMH had high dividend yields. Zeda focuses on car rentals and mobility as a service. CMH preferred for its consistent performance and dividend yield. Home Building Sector Analysis Companies Covered: Calgro M3* and Balwin. Balwin struggling with higher-priced units. Calgro M3's flexible pricing strategy favored in current market conditions. [caption id="attachment_42201" align="aligncenter" width="849"] Calgro M3 vs Balwin[/caption] Santova Directors' Selling Director Sales: Recent director sales not seen as a significant concern. Market Impact: Director selling viewed as a neutral action. Disclaimer JSE Direct is an independent broadcast and is not endorsed or affiliated with JSE Limited. Views expressed are solely those of the presenter. * I hold ungeared positions. All charts by KoyFin | Get 10% off your order  

Anglo-American vs. BHP Group Anglo-American rejects BHP Group's offer, unveils its own restructuring plan. Anglo-American to divest De Beers, Anglo-American Platinum, coking coal in Western Australia, and reduce spending on UK fertilizer businesses. Focus on high-quality iron ore and copper assets. Discusses shareholder likelihood of accepting Anglo-American's plan over BHP Group's offer. Discussion on lab-grown diamonds and potential impacts on the market. Market Insights Tencent's positive results impact Naspers and Prosus. NASDAQ and S&P close at all-time highs. Analysis of South African market trends, influenced by gold stocks, Naspers, Prosus, Richemont, and Rand strength.   [caption id="attachment_42112" align="aligncenter" width="849"] Top40 close 15 May 2024[/caption] Discussion on upcoming elections' market impact. NHI bill signed, causing sell-off in healthcare stocks. US imposing more tariffs on China, strategic implications discussed. Company Highlights Positive financial results from Calgro M3* and Raubex. Calgro M3 reports good numbers, discusses share buybacks and future prospects.   [caption id="attachment_42113" align="aligncenter" width="849"] Clagro M3 close 15 May 2024[/caption] Raubex impresses with strong financial performance, diversification strategies. Preview of forthcoming corporate earnings announcements and economic data releases. Notable events include Richemont*, Palo Alto, Netcare, Astral, Famous Brands, Coronation, UK and US inflation data, FOMC minutes, and Nvidia results. * I hold ungeared positions. Simon Brown

Introduction: Simon Brown kicks off the episode discussing the current state of the Rand, noting its stability leading up to the elections despite fluctuations. Speculation around ANC's momentum in the polls and potential coalition scenarios. The impact of the dollar's weakness on the Rand's performance. Structured Products: Simon delves into the concept of structured products, which offer capital guarantees and enhanced returns through strategic investment mechanisms like options and bonds. Announcement of an upcoming Power Hour with Standard Bank focusing on structured products. Brief overview of actively managed certificates, also at next weeks Standard Bank Power Hour. FNB's New ETNs: FNB's introduction of new Exchange Traded Notes (ETNs), including a variety of indices and US-listed stocks. Explanation of Compo and Quanto variations, tailored to currency impacts. Highlights of recently launched ETNs, such as Nvidia, Booking Holdings, Eli Lilly, and Palo Alto Networks. Amazon.co.za's Arrival: Simon provides insights into Amazon.co.za's debut in South Africa, discussing initial observations and comparisons with local competitors. Discussion on the potential impact of Amazon's entry on brick-and-mortar retailers and existing online platforms. Exploring Small Caps: Simon poses the question of whether local small caps on the JSE offer value or pose as value traps. Definition and implications of value traps in investments, emphasising the importance of dividends and price appreciation. Insights from John Biccard of Investec on potential post-election performance in small caps. Examination of various small cap stocks, analysing dividend yields, price-to-book ratios, and earnings potential. Simon's perspective on the opportunities and challenges presented by small cap investments, urging caution and strategic analysis. * I hold ungeared positions. All charts by KoyFin | Get 10% off your order

Rate Cuts and Economic Outlook Jerome Powell's statement from the FOMC meeting: "Inflation remains too high and the path forward is uncertain." No rate cut was announced at the FOMC meeting. Speculation on upcoming rate cut possibilities and their impact on the economy. Local economic outlook and potential changes due to the upcoming election. BHP Group's Interest in Anglo-American BHP Group's* proposal to buy parts of Anglo-American, leading to market speculation. Complexities of the deal and potential impact on stock prices. Analysis of BHP Group's interest in Anglo-American's assets, particularly in copper Potential effects of the deal on the Johannesburg Stock Exchange (JSE) and overall market sentiment. Historical context of Anglo-American's significance in South Africa's mining industry. Chinese Market and Economic Data Overview of China's economic challenges and recent data indicating resilience. Discussion on Chinese stock market performance and factors influencing consumer sentiment. Oil Market Dynamics Analysis of recent fluctuations in oil prices and underlying supply-demand dynamics. Impact of US oil production and global economic conditions on oil prices. Implications for South African consumers and petrol prices. Retail Bonds and Sygnia ETF Changes Update on retail bond rates for May and potential changes in June. Sygnia's planned changes to ETFs, including the Fourth Industrial Revolution and Fang AI funds. Clicks Results and Market Analysis Review of Clicks' financial results and market response. Analysis of Clicks' performance in the retail sector and future outlook. Discussion on Clicks' valuation and potential investment opportunities. * I hold ungeared positions.  

ff Capitec Results: Simon analyzes Capitec's recent financial results, highlighting strong metrics such as return on equity, active clients, and app usage. However, he notes concerns about the bank's expensive valuation compared to its competitors. SARB Monetary Policy Review: Simon discusses the South African Reserve Bank's recent review, indicating a reluctance for rate cuts in the near future due to inflationary pressures and economic uncertainties. Key takeaway from the bi-annual Monetary Policy Review of the @SAReserveBank: Don’t bet on a domestic interest rate cut this year. https://t.co/mhRS5vKIFQ pic.twitter.com/sc5p9GPcf5 — Adrian Saville (@AdrianSaville) April 24, 2024   Sasol Woes: Simon discusses Sasol's poor performance following a production update, expressing skepticism about its future prospects despite its low stock price. Other Market Updates: Simon touches on Tencent's positive performance, gold and oil price movements, and the potential impact on global markets * I hold ungeared positions.  

UK and Local Inflation: UK inflation surprises at 3.2%, lowest in over two years. US Fed unlikely to cut rates soon, waiting for FOMC meetings. South Africa's CPI data for March at 5.3%, showing a positive trend. Potential for SA rate cuts, depending on US decisions. [caption id="attachment_41866" align="aligncenter" width="849"] SA Inflation 5.3% for March 2024[/caption] China and Commodities: China's GDP surpasses expectations at 5.3%, amid concerns over Fitch downgrade. Export data reflects overstocking, driving prices down. Despite challenges, China's market appears interesting. [caption id="attachment_41867" align="aligncenter" width="849"] Chinese GDP YearONYear per quarter[/caption] PGMs, oil, gold, and other commodities. Gold remains strong, targeting $2500. Recent attack on Israel by Iran affects oil prices. WeBuyCars listing and potential market impact. Transaction Capital analysis and investor considerations. Purple Capital* Results: Purple Capital swings back to profit, surprising the market. Key financial highlights and insights into EasyEquities performance. Exploration of new products and their impact on revenue. Analysis of client cohort growth and its implications. Positive outlook on Purple Capital's performance. Expectations of potential price pullback. Simon Brown * I hold ungeared positions.  

kk Sasol Secunda Reprieve Recap of Sasol's recent developments. Minister's agreement to Sasol's appeal regarding emissions at Secunda. Stock bounce and support level analysis. Target prices discussion and outlook for Sasol. PGM Miners' Performance Analysis of platinum group metal (PGM) miners' performance. Notable increases in stock prices. Consideration of factors affecting the industry, including production cuts and demand for catalytic converters. Exploration of whether the current uptrend indicates the beginning of a bull market. Discussion on supply and demand dynamics in the PGM market. Mention of Sibanye Stillwater's* CEO's forecast. Reflecting on year-to-date performance of PGMs. Insights into the future trajectory of PGM prices and potential risks. [caption id="attachment_41807" align="aligncenter" width="849"] PGM and miner moves for the month of April up to the 9th[/caption] Fitch Cuts China's Outlook to Negative Overview of Fitch's downgrade of China's outlook. Analysis of implications for the Chinese economy. Examination of the performance of Chinese stocks. Commentary on factors contributing to China's economic struggles. Exploration of potential effects on global markets. WeBuyCars Listing Preview of WeBuyCars' upcoming listing. Discussion on the valuation and market cap of WeBuyCars. Comparison with Transaction Capital. Speculation on market demand for second-hand cars and implications for WeBuyCars' growth strategy. Evaluation of WeBuyCars' disruptive potential in the automotive industry. Inflation Targeting Discussion Analysis of the South African Reserve Bank's inflation targeting strategy. Exploration of the history and purpose of inflation targeting. Evaluation of the current inflation target and potential for revision. Discussion on the process and implications of lowering the inflation target. Advocacy for starting the conversation on revising the inflation target to ensure long-term economic stability. Simon Brown Charts by KoyFin, use this link for 10% off your first order. * I hold ungeared positions.  

Commodity Market Analysis Oil prices are on the rise, currently trading around $89 per barrel, indicating both demand and supply factors at play. Factors affecting oil prices include supply disruptions from Russia and Saudi Arabia's production cuts through OPEC+. Concerns about inflation are reflected in the rising price of gold, which is currently trading at all-time highs above $2300 per ounce. Despite uncertainty, inflation is not expected to decrease soon, especially with increasing energy costs Discussion on the delayed rate cuts by the US Federal Reserve and the global outlook on inflation. Implications of Goldfield's Chilean Mine Production Goldfield's Chilean mine is expected to produce gold at significantly reduced costs in the coming years, potentially impacting global gold supply. Analysis of the time taken for new mines to commence production, highlighting the challenge of meeting future demand. Tax Collection Insights from SARS SARS reports an additional R10 billion in tax receipts, contributing to a total of R1.7 trillion in tax collections. While individual tax collections saw an increase of 8.2%, company tax declined by 9%, reflecting challenges faced by various sectors, including retail and mining. Performance Review of ETFs (full list here) Top performing ETFs in the first quarter of 2024 include those focused on international markets, particularly in technology and Japanese sectors. Conversely, local ETFs, especially those tied to South African markets, experienced declines. Analysis of factors influencing the performance of specific ETFs and their compound annual growth rates (CAGRs). Simon Brown  

  Old Mutual Results: Surprisingly strong results from Old Mutual. Despite stagnant GDP growth and population decline, Old Mutual shows strong growth, indicating market share acquisition. Expansion into banking sector questioned due to market saturation. Stock analysis: Trading around 1184, showing potential support at 1150 and resistance at 1240-1280. Considered cheap with PE ratio around 7.7 and dividend yield over 7%. Market consensus predicts an average price target of 14.81. Skepticism remains regarding the bank launch and overall upside potential. MTN Results and Analysis: MTN's earnings affected by Naira devaluation in Nigeria. Earnings per share down 72%, impacted by tax issues and currency devaluation. Stock analysis: Chart showing positive signs, with potential for short-term growth. Market consensus includes three strong sells, five holds, and four buys. Telco sector struggles due to price pressures and constant capital expenditure. Limited upside potential for telco stocks, including MTN. ADvTech* Results and Operational Leverage: ADvTech demonstrates strong operational leverage. Operational margins increase due to improved student occupancy rates. Revenue up 13%, HEPS up 19%, and dividend per share up 45%. Stock analysis: Notably increased in value but still offers potential growth. Expectations for around 15% growth in the future. Simon Brown expresses satisfaction as a long-term shareholder in ADvTech. Monetary Policy Committee (MPC) Meeting Insights: MPC meeting concludes with no change in rates. Governor's hawkish stance indicates possible rate cuts later in the year. Inflationary pressures expected to persist due to global factors. Delayed rate cuts expected due to inflation concerns. SALTA Awards Highlights (full details here): Simon Brown attends the SALTA Awards. Satrix emerges as the big winner with 10 awards. People's Choice Awards highlight popular ETFs, with Satrix Top 40 winning for the seventh consecutive year. Introduction of a new award category for foreign ETFs. Importance of industry events in highlighting the significance of ETFs and listed trackers. Simon Brown * Simon holds ungeared positions.  

Market Updates: Recent news on Markus Jooste's fine and tragic passing prompts reflection on justice and mental health awareness. Telkom's sale of its towers business for R6.75 billion highlights strategic shifts and potential opportunities in the telecom sector. Ongoing rise in oil prices raises concerns about inflationary pressures and global economic impacts. Market Analysis and Insights: Gold's Surge: Gold prices hit new all-time highs above $2200, reflecting investor concerns and market sentiment following Jerome Powell's recent statements on inflation and monetary policy. Gold mining companies show varied responses, with Pan-African, Goldfields, DRD, and Anglogold Ashanti experiencing gains. Interest Rates and Economic Outlook: Powell's announcement of no immediate rate cuts and a projected total of three cuts for the year signals a cautious approach towards inflation. Rising interest rates pose challenges for companies with significant debt burdens, while those with ample cash reserves stand to benefit. Inflation and Monetary Policy: CPI data reflects higher-than-expected inflation rates, prompting speculation about potential rate cuts in South Africa and implications for economic recovery. Abenomics, Japan's economic policy experiment, demonstrates the effectiveness of unconventional monetary measures in stimulating growth and combating deflation. Company Updates and Reflections: Remgro Results: Remgro's net asset value growth raises questions about the effectiveness of its management strategy, despite trading at a significant discount. Remgro has grown its NAV per share by 5% p.a. since 2010. Over the same period, the ALSI TR index has done 12% p.a. If you expect this underperformance to continue (and nothing in their recent capital allocation decisions indicates otherwise), then a fair discount to NAV is… — Piet Viljoen (@pietviljoen) March 19, 2024   Contrasting performance with Sabvest Capital highlights the importance of superior returns and effective capital allocation in investment decisions. Sun International: Strong financial results from Sun International underscore challenges and opportunities in the leisure and hospitality sector, amid shifting consumer behaviors and economic uncertainties.

Retire well, we're chatting with retirees about what they've learnt and any tricks they can pass on. US Inflation Trends: US inflation has remained stagnant at 3.2% since June of the previous year, defying expectations. Despite initial projections, inflation has not reached the anticipated 4% mark, staying just above 3%. Discussion on potential implications for the economy and monetary policy, including the possibility of a mid-year rate cut.   Local Property Market Concerns: Review of recent challenges facing Pick n Pay and its impact on property stocks and landlords. Analysis of Hyprop's trading update and its implications for the broader property sector. Discussion on potential strategies for landlords facing challenges from tenant closures and renegotiations. Quantum Food and Market Speculation: Examination of recent market speculation surrounding Quantum Foods and its stakeholders. Evaluation of market reactions to news events and projections for future stock performance. Get 10% off your first KoyFin order Financial Sector Insights: Analysis of ABSA's poor financial results and the broader challenges facing the banking sector. Comparison of valuation metrics and performance across various banking stocks. Preview of upcoming industry event focusing on financial education and market insights.  

  Shoprite* Results and Market Comparison Discusses the recent Shoprite results, emphasising excellent performance against a high base. Highlights Shoprite's significant CapEx spending, customer savings, and market share gains. Compares market cap of Pick n Pay and Shoprite, pointing out the latter's cash reserves. Reflects on the historical revenue comparison between Shoprite and Pick n Pay over the past 20 years. Shoprite's Competitive Position and Stock Analysis Questions whether Shoprite is always destined to be an expensive stock. Analyzes the current PE ratio, forward PE, and 10-year mean, suggesting that the stock may not be as expensive as perceived. Shares consensus forecasts and target prices for Shoprite, indicating a potential undervaluation. Expresses the belief that Shoprite at ±R270 might not be as expensive as it appears, drawing parallels with the valuation of Nvidia. Shoprite's Success Factors and Pick n Pay's Struggles Explores the factors contributing to Shoprite's success, including central distribution centers and efficiency. Contrasts Shoprite's strategy with Pick n Pay's challenges, noting a decline in consumer satisfaction. Mentions Pick n Pay's recent financial struggles, including a rights issue and debt increase. Gold and Bitcoin at All-Time Highs Addresses the unusual situation of both gold and Bitcoin reaching all-time highs simultaneously. Discusses the fears driving gold prices, such as inflation, interest rates, conflicts, and global elections. Highlights gold's potential target of $2,500 and the positive impact on gold mining profits. Shares the performance of various gold mining stocks over the past three years. Canal+ Offer for MultiChoice Updates listeners on Canal+'s revised offer of R125 per share for MultiChoice, which is currently trading at R113.50. Discusses the time value and risk value of the deal, expressing the view that this might be the final offer. Finance Costs and Corporate South Africa Examines the increase in net finance costs for Sea Harvest, attributed to higher interest rates. Acknowledges the challenges faced by Corporate South Africa, including Eskom issues, logistic challenges, and rising interest rates. Assures listeners that some of these challenges may start to fade away in the future. * Simon holds ungeared positions.

Nikkei 225 reached a new all-time high after 35 years Historical context: peaked in December 1989, 82% drawdown by March 2009. Factors contributing to the 80s crash: Yen protection, low rates, speculative bubble. Current challenges: aging population, economic complexities, recent inflation. Investment options: Sygnia JP (SYGJP) - JSE-traded, and Investec's structured product. Warren Buffett's Annual Letter Warren Buffett's annual letter to shareholders released. AGM scheduled for May 4th, details about screening yet to be announced. Historical and informative; available on BerkshireHathaway.com. City Lodge Results City Lodge results: Revenue up 10%, dividend up 20%, HEPS up 10%. Occupancy at 61%, pricing power at 65%. Challenges in margins due to increased focus on food and beverage. Comparison with other hospitality stocks: Sun International, Southern Sun. MultiChoice Canal+ Offer Canal+ acquires 35.01% of MultiChoice voting rights, triggering a mandatory offer. Takeover Regulation Panel ruling. Speculation on Canal+ offer price, potential sweetening of the deal. Bitcoin and Bitcoin Halving Bitcoin trading around $59,884, near all-time highs. Upcoming Bitcoin halving in April and its potential impact. Local perspective on Bitcoin and its role in the market. Bitcoin in ZAR trading over a million, emphasising its volatility. Discussion on Bitcoin's market cap compared to traditional stocks. Pick n Pay* Update Pick n Pay's disappointing update: debt doubled, sales going backward. Market's negative reaction reflected in the stock price. Potential exit strategy if weekly close falls below 2022. * Simon holds ungeared positions.  

Budget 2024 panel. For the last many years AJM Tax has done a post budget panel which includes Simon Brown and this year was no different. Hosted in Cape Town the panel was; Karyn Maughan, senior legal journalist at News24 Dr Albertus Marias, Director AJM Tax Azhar Varachhia, Managing director Alpha plus Capital Simon Brown, Just one Lap and MonewebNOW Below is the AJM Tax one pager of budget highlights. 

Pick n Pay* Chart Analysis Resistance zone around 26, potential to touch 26.70 Higher highs, higher lows, horizontal resistance Target: 30 bucks to fill the gap Comments on Pick n Pay's potential under Sean Summers No need for a rights issue, potential market spook if it happens Simon's position: Started building, considering more Current status: Down 1.7%, trading at 25.30 Pick n Pay close 13Feb24 (daily) Transaction Capital and WeBuyCars Transaction Capital planning to list WeBuyCars Unbundling process expected in March Valuation: 7.5 billion rand Key information: Founders' put option on Transaction Capital is off the table WeBuyCar's strong performance in January with a record 14,000 cars sold Market Cap of Transaction Capital: R6.5 billion Opportunities and challenges in SA Taxi business Overall assessment: Looking not too bad Current stock level: 850c Expectation of pro rata shares for Transaction Capital holders Timing details expected in the circular Gold Price Movement Gold weaker despite US and UK inflation data Current gold price and chart analysis Simon's position in Anglogold Ashanti* Observations on unexpected weakness in gold price after inflation data Gold daily chart 14Feb24 Canal+ Offer for MultiChoice MultiChoice facing a 105 rand Canal+ offer Market sentiment: Canal+ likely to come back with a better offer Current stock price: 104.63 Speculation on possible offer prices: 120, 135, or even 160 Market confidence in Canal+ making a mandatory offer Global Market Trends and Dollar Strength Dollar strength in global markets DXY trading at 104.87 Money flowing into the US due to fear and concerns Impact on Rand: Trading at 19.07 Market skepticism about inflation concerns DXY (US$ index) 14Feb24 (daily chart) Inflation Analysis Recent US and UK inflation data Market reaction to inflation numbers Central bank concerns about reaching inflation targets Jerome Powell's cautious approach and potential rate cuts Local inflation expectations and potential rate cuts in South Africa The challenge of getting back to the inflation target * I hold ungeared positions.

Disney results: Last week's big story was about tech, starting with Disney, a stock recommended here back in September at ±$80. Key financials: Linear networks revenue up 9%, Direct-to-consumer up 12%, Parks up 16% Direct-to-consumer still incurred a loss of $400 million Consumer products, content sales licensing, and ESPN performance discussed Overall, not a knockout result but not terrible; I remain a satisfied shareholder Big move in streaming sports! ⚾️🏀🏈 Disney, Warner Bros., and Fox are joining forces to create the ultimate sports streaming app, merging ESPN, TNT, and Fox Sports (WSJ). ESPN alone was 18% of Disney's latest quarter revenue.$DIS $FOX $WBD pic.twitter.com/xSPBko0cMO — App Economy Insights (@EconomyApp) February 6, 2024   Meta (formerly Facebook) Earnings: Advertising revenue up 24% year on year to 38.7 billion Other segments discussed, including Reality Labs (MetaQuest) Net profit $14 billion, up 35%; stock surged 20% Mark Zuckerberg's dividend income from the declared 50-cent dividend discussed Positive sentiments about Meta's performance, particularly in comparison to other tech giants Canal+ Offer for MultiChoice: Canal+ made an offer for MultiChoice at 105 Rand per share Market reaction, initial excitement, and stock movement Simon's caution about potential risks and timing of the deal MultiChoice's response: Board concluded the offer significantly undervalues the group Canal+ continued to buy MultiChoice shares, now owning 35.1% Discussion on the mandatory offer threshold and potential scenarios Regulatory considerations: Foreign ownership rules and competition commissions The price of the mandatory offer must be equal to; (i) identical to, or where appropriate, similar to the highest consideration paid by the bidder for those acquisitions and (ii) accompanied by a cash consideration, at not less than the highest cash consideration paid if the shares that carry 5% or more of the voting rights were acquired for cash. Simon's conclusion: Canal+ likely to succeed, potential challenges, and market dynamics Simon Brown

Breaking News: Canal+ Offer for MultiChoice: Canal+, French TV business, offers 105 rand per share for MultiChoice minorities. Synergies between the two businesses. Legal considerations regarding foreign media ownership. MultiChoice closed at 75 rand; market likely to respond positively. Market Updates: Hyprop reports positive festive trading for its tenants. Transaction Capital plans to list WeBuyCars in March; potential value unlock. Evergrande declared bankrupt with over 300 billion dollars in debt. Hong Kong economy expanded 3.2% in 2023. China overtakes Japan as the world's top car exporter. Cristal Challenge Stock Picks: Richemont*: Luxury brand with potential in a recovering economy. [caption id="attachment_41062" align="aligncenter" width="849"] Richemont weekly chart close 31Jan24[/caption] Calgro M3*: Debt under control, potential dividend, well-managed company. [caption id="attachment_41063" align="aligncenter" width="849"] Calgro M3 weekly chart close 31Jan24[/caption] AngloGold Ashanti*: Gold as insurance; geopolitical concerns. [caption id="attachment_41061" align="aligncenter" width="849"] Anglogold Ashanti weekly chart close 31Jan24[/caption] Zeda: New listing, unbundling, potential growth. [caption id="attachment_41065" align="aligncenter" width="849"] Zeda weekly chart close 31Jan24[/caption] Mr. Price*: Positioned well in the retail sector, positive trading update. [caption id="attachment_41064" align="aligncenter" width="849"] Mr Price weekly chart close 31Jan24[/caption] Closing Remarks: Reminder to sign up for email alerts before live sessions. Host: Simon Brown * Simon holds ungeared positions. Host: Simon Brown Date: 1 February 2024

dd Introduction: JSE Direct Episode 571 for January 25, hosted by Simon Brown. Simon introduces the idea of transitioning the podcast to a live format using Riverside, allowing viewers to see charts and interact during recordings. Market Updates: Richemont*: Stock surged 10% on better-than-expected trading update. Identified as an opportunity last year when it pulled back to R2,500. Trading at R2,653 at the time of the recording. AVI: AVI delivered a strong update, but struggling with I&J. AVI focuses on defending margins, willing to lose volumes for profitability. Potential sale or listing of INJ discussed. Woolies*: Mixed trading update. Struggles in Australia, especially with David Jones, while food segment remains strong. Concerns about the performance of the clothing segment. Clicks: Mostly a strong update, struggles in UDP (wholesale drug distribution). Selling price inflation averaged 7.5%, higher than the previous period. Clicks achieved highest-ever daily sales in late December. Economic Updates: December spending records discussed with BankserveAfrica. Expectations for rate announcements from local and European central banks. Hawkish tone expected from local governor; questions about Jerome Powell's stance. Global Market Highlights: All-Time Highs: S&P 500, Nasdaq, Dow Jones hit all-time highs. Russell 2000 still 20% off its highs, considered in bear market territory. India's stock market surpasses Hong Kong, becoming the world's fourth-largest share market. China in trouble, is it over? Should we be worried? Simon reflects on recent data and developments in China. Population decrease and aging population noted. Speculation on a potential $278 billion spending spree to support the market. Concerns about state-directed capitalism and common prosperity policies. Recent crackdowns in gaming, education, and potential implications for healthcare. China's focus on national defense and potential impacts on Taiwan. China's shift towards a more inward-looking and self-focused path. Conclusion: Speculation on the impact of China's changes on global growth, commodity prices, and investments. Simon announces plans to start recording the podcast live, with notifications on social media and newsletters. Acknowledgment of the podcast's longevity (571 episodes) and a request for reviews. Closing: Simon Brown signs off, encourages reviews, and mentions future live recordings. Reminds listeners to take care of themselves and others. * Simon holds ungeared positions.  

In this episode of JSE Direct, Simon Brown discusses various market topics, including the bleak outlook of the Hang Seng Index due to Chinese GDP results. Positive news for Grindrod with the Maputo Port Development Company's impressive performance. The rise in uranium prices driven by increasing demand for nuclear power plants, he found two US listed ETFs benefiing from this trend. [caption id="attachment_40966" align="aligncenter" width="849"] Spot uranium price[/caption] The approval of 11 Bitcoin ETFs by the SEC. When does the JSE get a crypto ETF? Do elections matter for markets? Upcoming elections in 2024 across 70 countries. Simon explores the question of whether elections truly matter for investors, emphasising historical examples where market reactions were short-term and highlighting the importance of focusing on long-term investment strategies amid political volatility.

Now for the eleventh year in a row, we kick off the new year with a prediction show. Marc Ashton, Keith McLachlan and Simon Brown put their heads on the block with three wild and woolly predictions for the markets for 2024 followed by a call on the Top40 and ZAR for the year ahead. Importantly we start each show with a review of the previous year’s predictions and you’ll find the 2023 predictions show here.  

Position your portfolio for 2024. Top local ETFs for 2023. Simon Shares Transaction Capital (JSE code:TCP) results swung into a massive loss, no surprise. SA Taxi loss making but overall H2 was better then H1 in all three divisions. Purple Group* (JSE code: PPE) results also swung into a loss. But as a discretionary consumer business, why is everybody so surprised? Average client has 1.45 products. This seems low, very low. Philippines not yet regulated, but they not giving up. Project delays. Tigerbrands (JSE code: TBS) show a tough environment and RFG (JSE code: RFG) may offer better value. Local Q3 GDP at -0.2%. Gold at all-time highs. Charts by KoyFin. Get 15% off a two-year subscription * I hold ungeared positions. Simon Brown

Share buybacks and stock compensation, the bad and the ugly Share buybacks are good right? The company uses their free cash to buyback shares which reduces the number of remaining shares such that each share has a higher claim over future profits which adds to their value. Further they're tax efficient in that paying dividends results in dividend tax. BUT; Firstly, in cyclical stocks you need to be buying back at lows, not highs and the companies usually have no free cash at lows, so either they don't buy back or they do so at highs when they have the cash. Horrid value destruction. Secondly, some companies are buying back but also issuing new shares to staff, at times at a rate faster or similar to what they're buying back. This is then effectively an underhand salary to staff. This is especially an issue with large tech stocks, see examples below. Thirdly, new share issues are considered non-cash, but ultimately they are cash as you gave somebody real shares that have future claim on profits. Fourthly, often acquisitiosn are done with stock increasing the outstanding shares. Many will see this as a free deal as shares don't cost. But they do cost as they reduce every other shares value and if the company has been buybacks, well then they paid cash for those shares, just indirectly. Locally we do see buybacks, but share issues are relatively small so the impact is less shares and more value per share. Using IFRS accounting diluted HEPS uses the share count of all outstanding shares PLUS all promised shares not yet delivered. These are basically options that could become shares and gives a way better reflection of the profit, even thugh not yet issued they will potentially come to makret and be issued. Apple (Nasdaq code: AAPL) has been buying back shares and as such over the last decade it's outstanding shares is down about 38%. Apple shares outstanding Meta (Nasdaq code: META) has also been buying back, but they also issue shares at such a pace that over the last decade shares outstanding is basically flat. Meta shares outstanding Charts from Koyfin 15% discount for first 2 years Simon Shares US October CPI was 3.2%, down from 3.7% in September (after peaking at 9.1% in June 2022) and markets absolutely loved the data. Expectations for Fed rates is now no more raising and cuts starting maybe as soon as the 19-20 March or 30 April - 1 May meeting. Shoprite* (JSE code: SHP) trading update shows they still knocking it out of the park and taking market share. Woolies* (JSE code: WHL) trading update had more excuses tha a five-year old caught eating all the picnic ice cream. Decent Stor-Age* (JSE code: SSS) results with ±10% yield and discount to NAV of ±25%. The yield is nice, but you can get the same in cash right now. But when rates start coming down the yield is more impressive and lower rates could see higher valuations. A global luxury ETF Simon Brown

The problem with telcos I have long said that telcos such as MTN (JSE code: MTN) and Vodacom (JSE code: VOD) is that they are essentially utilities and should be priced as such. But actually that statement is wrong. Sure voice (who still calls using voice?) and data are utilities like water and electricity. BUT the telcos have a problem, capex. Yes we're using more and more data but prices keep coming down, I recently bought an effective 80 GB for little over R400. And all that while capex is increasing. They're busy rolling out 5G but as soon as that's done it'll be tine for 6G. It's a never ending tread mill. Simon Shares Brent oil is weak and telling us a story about global growth Clicks (JSE code: CLS) vs. Dis-Chem (JSE code: DCP) results contrats. REITs unloved and cheap, time to buy? Simon Brown

Updating minister Gordhan's portfolio Public Enterprises Minister Pravin Gordhan has declared his holdings, we reviewed his portfolio last time in April and there are some interesting changes, he is fairly active in buying and selling. Most notable is the total value is up almost R2million? Simon Shares Purple Group* (JSE code: PPE) have introduce a platform fee. Certain behaviours will see the fee waived and I speak to Charles Savage on my MoneywebNOW show Thursday morning. Renergen* (JSE code: REN) results show a loss, LNG output for phase 1 ±40% and helium on stream by year end. Phase 2 has been split into two parts and the conditions of the $750million is not a Nasdaq listing but rather a capital raise with a listing for part two of phase 2. MTBPS was bleak as expected and we could see some tax hikes in February. Gold almost had its highest ever monthly close for October. * I hold ungeared positions.

Living small, an update Back in 2017 Simon and his wife down scaled into a small (relative) apartment and also got rid of one of their cars again. As they now move again Simon updates in their experience of living small. Simon Shares Famous Brands (JSE code: FBR) results. Revenue up and HEPS lower. TigerBrands (JSE code: TBS) loses their CEO and posts a decent trading update. Jamie Dimon said central banks’ forecasts have been “100% dead wrong”. Sasol (JSE code: SOL) trading update, lots of movingp arts, but the market not trusting management? That said stock is cheap and we're seeing some upward movement on price.

hh Renergen* (JSE code: REN), now what? Late September the price started breaking down and end September a Tweeter started posting about them. I'm not going to defend every point raised, that's the job of the company and after an initial poor response, Monday saw a more detailed SENS. Paid research. Ultimately all research is paid for. Sometimes it is paid for by the company and here the issue is disclosure. I think the bigger issue is a complete lack of disclosure in our industry. By FinTwit or the fancy analysts, albeit assume the latter is always talking their book, which is fair. Perhaps the biggest point from this last few weeks is; Know your stock. Like really know it. When I buy a new holding I put together a lis of 3-5 things I like and 3-5 risks. I may be wrong on any of them, but it makes me do the digging and at least have a decent view of both sides of the story. Careful of "new" news. It may be accurate (or it may not), but it also often lacks detail which maters. This was mostly the case with the Twitter news on the stock. Now what for Renergen Results next Friday. LNG is flowing. Helium is not, but company has said they expect the leak repaired this month. In short they are in the same place as they were before all this started. BUT. They need to do a US capital raise and list in the Nasdaq. A low share price makes this much more dilutive. How this will play out I have no idea. I hold and continue to hold Renergen*. It was never going to be smooth sailing and the risks are real. Yes they have the gas and helium in the ground, phase one is half working but phase two is large, complex and expensive with real risks. Simon Shares Middle East war could get really bad for inflation and rates if oil prices rise markedly. Decent Calgro M3* (JSE code: CGR) results. Horror Pick n Pay (JSE code: PIK) results. Local ETF total returns over the last five years. * I hold ungeared positions.

There are bold traders. here are old traders. There are no bold and old traders.Bold traders What is a bold trader and why do they die out? Wild swings for the fence No position size management Stop loss for losers Enter outside of system and process Simon Shares Famous Brands (JSE code: FBR) trading update, Spur (JSE code: SUR) really has taken the mantel of best QSR/restaurant business on the JSE. Very strong US jobs and upward revisions from previous month. But wage inflation only 0.2%. So market was confused but ended happy. Tuesday also saw US 10-year yields moving lower which excited everybody. But I am sceptical, this is only one data point and I think the FOMC hikes at their 31 Oct/01 Nov FOMC meeting. Water crisis. This is going to hurt and it not going away any tine soon. Which businesses get hurt most? We found a US government bond ETF paying monthly.

US 10-year yields highest since 2007 Bad news all round (unless you buying). Almost 40% of US government debt expires in the next four years and will be re-issued at markedly higher rates, 9x higher in some cases. Money flowing into US bonds for yield. This sees less money entering the stock market Sees a stronger US$ (check DXY strength, all currncies weaker against US$) Hits valuations lower as higher rates makes cash worth less in the future, but so far the market has ignored this fact. Simon Shares The Top40 closed negative for the year on Tuesday. This after being almost +12% in late January and trading at all-time highs. Top40 close 26 September 2023, negative YTD Fed and SARB hold rates steady - but very hawkish. StatsSA "South African hotels recorded an occupancy rate of 47.3% in July 2023, up from 45.8% in June and 45.5% in May.". But still below the ±50% pre-pandemic occupancy levels.

Simon Shares Shoprite* (JSE code: SHP) results "2023 was extraordinary". Chart by Koyfin 15% discount for first 2 years Richemont (JSE code: CFR) getting interesting, let's see if support holds. [caption id="attachment_40005" align="aligncenter" width="849"] Richemont weekly ~ 07Sep23[/caption]Nampak (JSE code: NPK) nil paid letters are trading, code NPKN. Remember either sell them or take up the rights. Calgro M3* (JSE code: CGR) trading statement, HEPS +20% for the first six months ending August. The latest PMIs out of Europe all quite weak, not only declining from the previous month, but lower than the preliminary numbers from the middle of last month Profit from the Longevity Boom with Healthcare ETFs The tax ABCs of buying a property Simon Brown * I hold ungeared positions.  

Simon Shares Bidcorp - excellent AvdTech* - really good, stock at all-time highs Stadio - good student growth Motus - poor HEPS, good dividend Woolies* - not bad, but wow only got R1.1billion for David Jones Sasol - impairments galore Adcock Ingram - capacity utilisation is weak Aspen - good second half KAP - tough out there Super Group - strong numbers * I hold ungeared positions.

dd Spur and Calgro M3, two stocks I have been watching and both have seen their prices break higher. Calgro M3 (JSE code: CGR) builds lower income housing and after a few troube years os back on track. Latest results were for year ending February 2023. PE ±2.5% Cash on hand ±R172million, market cap is ±R440million NAV 951c (including unused land valued at ±30% of NAV) while share price 365c Spur (JSE code: SUR) sells fast casual food and the pandemc hurt. Latest results have some base effect as they are for six months ending June 2023. Forward PE ±5x Dividend yield ±14% Spur remains their key brand. Simon Shares Thungela (JSE code: TGA) results saw HEPS down 67% which is the same as the price of coal over the last year. UBS cuts China's GDP growth forecast for 2023 from 5.2% to 4.8% CoreShares ETFs name change to 10X. Local inflation for July was 4.7%, a really strong number and better then the market expected, this even as administrative prices kicked in during July. Transport was negative for the period. Charts by Koyfin 15% discount for first 2 years

  China in trouble as economic data keeps on disappointing? Chinese data keeps disappointing, every since the -7.5% export data from April. Expected was a strong rebound after they lifted zero-covid restrictions. But not happening. Just this week; Among 70 Chinese cities, 49 saw a fall in new home prices month-on-month in July from 38 cities the previous month. China suspends youth unemployment data after record high. Over the last decade they’ve halved the number of indicators they publish. Retail sales lower Industrial production lower fixed asset investments lower Simon Shares  MTN (JSE code: MTN) results had an interesting update on their fintech business. reports were they would list it, but for now Mastercard has taken a stake valuing the business at ±R100billion while MTN market cap is ±R250billion. Satrix is shutting down three of the ETFs they got from Absa. They are the Volatility Managed ETFs. They two small and not core to teh Satrix startegy. If you hold them on close 29 September you'll be paid out the NAV. The three are; STXMEQ STXDEQ STXGEQ Buying the Nasdaq local or offshore? Which is better? Every time is actually different How to double your retirement fund Koyfin 15% discount for first 2 years

  Aspen looking cheap? Aspen (JSE code: APN) announces a acquisition in Latin America for US$290m on a price/sales of ±3x and PE of ±5x. This is a classic Stephen Saad sort of deal. Strong cash generation to pay down the debt. After having gone quiet when the balance sheet case under serious pressure (with debt of ±R50billion) Aspen is back? Chart looking good for a break higher. Forward PE of ±12x is below 1 standard deviation over last twenty years and looking cheap. Charts by KoyFin, click here for 15% off a two year subscription. Simon Shares FOMC raised 0.25% as expected last week. In the press conference Powell suggested no recession coming and with inflation for June at 3% has the fed successfully threaded the inflation needle without any serious repercussions (so far)? MTN (JSE code: MTN) trading update, 169c cost for 'currency moves' likely the Nigerian Naira devaluation. Prosus (JSE code: PRX) agrees to sell part of PayU to Rapyd for $610m. They’ll keep the Indian market part of the business. How is your crypto taxed? Nominal vs effective interest rate, know the difference.

  Central bakers have very few tools to achieve their mandates around inflation (and in some cases also protecting a currency and aiding GDP growth). Interest rates have a blunt lagged effect and their only other tool is what they say and we need to understand this central banker speak. Last week it was the South African Reserve Bank MPC rate announcement that left prime unchanged for the first time since November 2021. The vote was close and the governor spent a lot of time saying they had not finished hiking, this was just a pause. The Federal Reserve FOMC has been saying the same about pausing before more hikes. But any hikes will surely be data dependent which is what they always say. So the threat of more hikes is central bak speak for don't get too excited. Simon Shares Shoprite* (JSE code: SHP) trading update shows just why they are the best food retailer in South Africa, even probably the world. This as they had to spend R1.1billion on diesel for the 52 weeks. This will hurt margins, but they're still profitable. The Rand is on a tear, and this time it is not US$ weakness nor commodities booming. It's just good old fashioned people buying our Rand. Global luxury ETF, better than buying the watch Reducing tax on interest earned * I hold ungeared positions.

As expected Local CPI for June came in at 5.4%, lowest in twenty months and well within the 3%-6% target range from the South African Reserve Bank. Yes base effect as June last year was the first +7% inflation print of this cycle.  When do we start talking rate cuts? Truthfully not yet, a pause would be nice eve as the gov always targets 4.5% not the range. Simon Shares MPC is Thursday, I expect no raise and can we start talking about rate cuts yet? USDZAR currency forecasts from Goldman Sachs: End 2024: 16.00 End 2025: 15.00 End 2026: 14.00 Decent UK inflation as it dropped to 7.9% for June vs. expected 8.2%. But still highest in Europe. Italy 6.9%, Germany 6.4%, Netherlands 5.7%, Euro area 5.5%, France 4.5% & Spain 1.9%. Pick n Pay (JSE code: PIK) very poor update. "SA sales declined 0.3% (0.0% like-for-like)" while "internal selling price inflation" was 9.5%, so they went backwards at a fairly alarming rate ArcelorMittal South Africa (JSE code: ACL). Monday CFO quit after just two weeks and then Tuesday a horror update. Transnet selects a private port operator to run the container terminal in Durban. Koyfin 15% discount for first 2 years The Indian Nifty 50 at all time highs and we have an ETF for that.

Simon Shares US inflation for June was 3.0%, expected was 3.1% and previous 4.0%. Next FOMC meeting is 25/26 July. I think they still do a 0.25% rate hike, but then maybe pause for good, well until cuts start next year. Nasdaq100 special rebalance to cut the 'Magnificent Seven' to "address over concentration in the index by redistributing the weights." Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla are the magnificent seven. They account for 55% of the index. Effective close 21 July Done twice previously; December 1998 and May 2011. The combined weight of the five stocks with the largest market caps will be set to 38.5%, currently it is 46.7%. Nasdaq100 is a modified market capitalisation index. So market capitalisation is not the only consideration, albeit is the biggest contributor. Overall this has already seen some selling in the big five, and buying in those that are expected to be weighted higher. Final weightings will be announced after close in Friday 14 July. The Four Horsemen of Big Tech A phrase coined in the late 1990s for Microsoft, Intel, Cisco Systems and Dell Computer as they stormed higher in the dot com craze. All had horrid collapses and took o a decade plus to recover their dot com levels and Cisco and Intel have been modest investments at best with Dell delisting. Are we seeing the same with the magnificent seven? Yes, no, maybe. It is different this time, they all have real tech and make real profits. But have they gone wild on the AI bonanza? Absolutely. Now sure, AI will only get better and all seven have a real chance of be the real leaders in the space (in different ways). But valuations are stretched and this current earnings season is important as are the next few as well. Simon Brown

Two-pot system is confirmed, here all the details Starts 1 March 2024 All future reg28 and pension contributions will be split into two pots One third savings Two thirds investments You can withdraw the savings component before retirement Tax still payable Existing funds will convert automatically into the new two-pot system Of existing funds R25,000 will be transferred into the savings pot Concerns about everybody taking out their R25,000 and crashing the market are over done. Simon Shares Top ETFs so far in 2023, so +50% returns in just six months. New-vehicle sales in SA +14% for June. But last year June Toyota Durban was still closed after flooding. But still a decent number. Pep (owned by Pepkor) has started offering credit to customers, they own Capfin so have experience in lending. China will control exports of some metals used in the semiconductor industry. Gallium and germanium are considered “minor metals.” They're not rare but costly to produce and China supplies ±80% SARB says fight to tame inflation monster is paying off. First time he has even hinted that maybe inflation is coming down. Simon Brown  

SA Inc watch list. Building a list of stocks that are cheap, very cheap, and could give good return n the next year or three. Criteria; Must be profitable, so positive PE ratio Must be cheap, so PE below 8x Small as in market cap under R8billion No REITs Using Koyfin I get 46 stocks including REITs and detail them in the podcast. I'll create a watchlist on Google docs and share that link in time. What about just the mid cap ETF from FNB? FNBMID. Sixty stocks but problem is the top holdings are; Sibanye-Stillwater*, Discovery*, Nedbank, Bidvest and Remgro. That's already ±25% of the ETF and none really for my requirements as above. Simon Shares Local crypto exchange, Revix, suspends trade or withdrawals on 24% of client crypto assets as their South Korean partner has issues with a provider. Naspers (JSE code: NPN) & Prosus (JSE code: PRX) plan to remove the complex web of cross holdings to a simple structure whereby Naspers owns 47% of Prosus who owns the stake in Tencent (Hong Kong code: 700). Good Invicta (JSE code: IVT) results. Rand all over the place. Brent weak, surely suggesting the global economy is weak. But so far the promised 2023 recession has not arrived, remember the hard vs. soft landing debate of late 2022?   * I hold ungeared positions. Simon Brown  

dd Disappearing dividends Just this week Spar (JSE code: SPP), MultiChoice (JSE code: MCG) and Telkom (JSE code:TKG) have all cut dividend to zero. We had big dividend payer Coronation (JSE code: CML) drop theirs to provision for the SARS fine and historically good dividend payer Pick n Pay (JSE code: PIK) reduce theirs. This shows the pain that companies are experiencing, not all, but certainly some, It perhaps also shows quality, for example Shoprite* (JSE code: SHP) increased their dividend. The problem is we love dividends for cash flow and they tend to grow ahead of inflation, sometimes well ahead of inflation. They're also taxed better than traditional income from bonds or cash (albeit not as low as CGT). But the downside is that any dividend can disappear at any time. For investors such as myself, reduced dividend is not a big problem. I like the cash flow but don't need the income for expenses. For those living on dividends the pain is real. If the income is required you need a good amount of bond and cash investments and REITs that aside from the pandemic pay consistently, albeit REITs reduced over the last 5 or 6 years. Another option is something like dividend aristocrats (we have a local and offshore ETF for these). Here we have companies with decade long track record of paying dividends, but remember Steinhoff (JSE code: SNH) was in the local dividend aristocrat ETF, so even this is not guaranteed. But a basket or ETF works well. Simon Shares US CPI for May 4.0%, lowest since March 2021. Latest IEA global oil market outlook: peak oil combustion by 2028? Petrol demand to peak this year Road transport oil demand peak 2025 All transport by 2026 Overall oil for combustion peak 2028 ZAR 18.33 Massive moves expected in Richemont (JSE code: CFR) on Thursday 15 June as the index rebalances. Could see ±R4billion of selling. * I hold ungeared positions. Simon Brown

Simon Shares SEC sues Binance and CEO for U.S. securities violations. SEC Charges Coinbase for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency. First quarter GDP was 0.4% and we avoid a technical recession. Pepkor (JSE code: PPH) price slide. Tigerbrands (JSE code: TBS) horror results. Oceana (JSE code: OCE) results knock it out the park. Sun City visit. Excellent resort, but very quiet which many commentators suggest is because it's a random weekend in June? I sent this past weekend at Sun City, vacation club. Some thoughts. The resort is world class, well maintained with a ton to do for kids and adults. 1/n pic.twitter.com/29yaV2GP8b — Simon Brown (@SimonPB) June 5, 2023   Buying SA Inc. Not yet but building a watch list with the plan being to buy 10-15 stocks over the months ahead. Why? Inflation comes down Rates decrease Load shedding ends (Renewable Energy Grid Survey points to 66 GW development pipeline in South Africa). Government finds a way out of the ICC Putin arrest warrant mess. Rand improves (already 100c better than the R20/US$ of last week) I hold ungeared positions. Simon Brown

Simon Shares MPC raised rates by 0.5% makes prime 11.75%, highest since 2009. The aim I suspect was to protect the rand, and that totally did not work as the currency hit its worst ever levels. Where will the rand go next? Does it ever strengthen again? RSA Retail Bond rates reset this morning and I expect the 5-year fixed to potentially increase by a full 15% and the CPI linked also reset and I also expect an increase there.. Will have update on the website. Tsogo Sun Gaming (JSE code: TSG) announced in their results last week they had acquired a ±10% stake in City Lodge (JSE code: CLH). Why? Also those were good results, much cheaper than other in the space. Zeda (JSE code: ZDD) results were poor. I was looking for FY 400c of HEPS, that's now seems a long shot. Debt is large, no dividend and short-term vehicle rentals is only a little above a quarter of pre-pandemic levels. I was holding and have sold. TigerBrands (JSE code: TBS) results were a shocker but not unsurprising? Volumes flat while revenue was +16%, hello inflation. Got some debt, but totally manageable. Load shedding hurting, consumer broken and inflation all over. But the stock trades at ±1.5x book value (see chart here), last tine this happened was 1998 when prime hit 26%. Spar (JSE code: SPP) trading update, ouch. Is Shoprite* (JSE code: SHP) eating everybody's lunch? Don't forget to action your Purple Group* (JSE code: PPE) rights issue. You have until Tuesday to either sell the rights or take them up. Meta (Nasdaq code: META) fined Euro1.2billion by the EU, but stock rises on the day. These fines, even large ones, are just a cost of doing business for the mega large cap tech stocks? Nvidia (Nasdaq code: NVDA) gets all the AI hype and love to a trillion dollars. * I hold ungeared positions.

Simon Shares Bond ETFs yielding ±10%. That's chunky and they can go in a tax-free account. New INCOME ETF from CoreShares. Purple Group* (JSE code: PPE) rights issue. If you held the share yesterday at close on Tuesday 23 May you will see PPEN in your account. 10.20567 for every 100 Purple shares you held. Each PPEN (letter of allocation or LOC as some are calling it) entitles you to buy 1 new Purple share at 81c. You can take up that right and buy, or You can sell them in the market If you do NOTHING by 6 June they disappear with ZERO value Sanlam will take their R45m and of the R105m public offer they will take up to ±R76m of the R105m if nobody else does. Existing large shareholders have promised to take up their rights at ±R28m. So at the end of the day they will get the R105m. Simon Brown * I hold ungeared positions.

Simon Shares I have been talking about a cracking (broken?) consumer for a few months now. Two recent surveys show exactly this data. BankservAfrica’s five-year review of Take-home Pay and Private Pensions in South Africa for February 2018 – February 2023 "The average nominal salary Take-home Pay Index, increased from R12,573 to R15,438, +22.8%." But CPI was 26.6% and take home pay had kept track until last year. Debt Busters Debt Index | Q1 2023 survey "Nominal incomes were 2% higher than 2016 levels, however when cumulative inflation growth of 40% is factored in for the same seven-year period, consumers’ purchasing power diminished by 38% over this period.". Rand trades at worst level ever on Friday, R19.5169/US$. Transaction Capital (JSE code: TCP), last week I sad the worst may be behind them. Well with the ZAR collapsing equalling more inflaiton and rates and petrok increases. Maybe not for SA Taxi or WeBuyCar. Purple Group* (JSE code: PPE) rights issue. Full details on 18 May. It will be R105m from Purple Shareholders and R45m from Sanlam at Easy Equities level. Total R150m Local PGM production down 14% in Q1. Calgro M3 (JSE code: CGR) results saw HEPS just above 150c while the stock trades at ±300x. Value or value trap? Sold my Sun International (JSE code: SUI) as price go backwards and I protecting profits. Excluding dividends ±70% return since November 2021. OpenAI Sam Altman goes before US Congress to propose licenses for AI. Pulling the ladder up behind you to stop others. I have been using ChatGPT via Bing and Google Bard. For investors they mostly useless. Octodec (JSE code: OCT) results. Large discount to NAV and DY ±14%. Investing in mega trends * I hold ungeared positions. Simon Brown  

Simon Shares Transaction Capital (JSE code: TCP) results where pretty much as expected. Management have essentially thrown the kitchen sink at everything. H2 will be tough but likely a little better. FY24 a clean slate. But market does not agree with me. Nutun doing good WeBuyCars under pressure, no surprise, consumer cracking SA Taxi real ugly, but as detailed in trading update US unemployment 3.4%. April CPI 4.9%. The end of the US$ Bretton Woods essentially created teh US$ as a reserve currency Now all commodities trade in US$ The end of the US$ is as old as time, really kicked off with the advent of the Euro in 1999. But who take over? China, no? BRICS, that’s only China. Euro, but they don’t want a strong Euro and the world doesn't want the Euro either. That said, the US$ will lose influence over time. It has been and will continue to do so. One day it may well be over, but we're a very long way from that.  

Simon Shares Implats (JSE code: IMP) trading update saw production down and costs up. That's squeezing margins and going to hurt. Kumba (JSE code: KIO) nice boost in production, but iron ore prices are falling. Will hurt Afrimat (JSE code: AFT) as well. Combined Motor Holdings* (JSE code: CMH) results sees them on a PE of under 5x and DY of ±13%. But return will be mostly from dividends, ±650c over next thirteen months = ±22%. Renergen* (JSE code: REN) results. Smaller loss, but no profit as they ramp up Phase 1. A deal with Timelink for LNG and contracts with Consol & Italtile most of Phase 1 LNG (±50 tons a day) is under contracted sale. MTN (JSE code: MTN) update from Ghana and Nigeria look good. On PE ±11x, stock is cheap, albeit not without risks (always for MTN). All my index trades have been stopped out. * I hold ungeared positions. Simon Brown

Simon Shares Coronation* (JSE code: CML) trading update, aside from the massive SARS judgement (and hence no dividend), not bad. But not yet time for buying as sellers persist. Purple Group* (JSE code: PPE) results saw a loss for the six months ending February 2022. But lots of extra one off expenses (expected for a growth business) and a tough market and they still have excellent growth potential. I continue to hold. * I hold ungeared positions. Simon Brown  

Simon Shares Local CPI 7.1% for March up from 7.0% in February. Expected was 6.9%. Core inflation 5.2% vs expectations of 5.1%. Rates higher for longer. Reviewing Minister Pravin Gordhan's portfolio. Too many stocks, why not more ETFs? Platinum at all-time highs in rands. This as it trades at more than 50% off the all-time US$ highs from 2008. Still long all my index trades. Time to sell Capitec* (JSE code: CPI) as results show them as ex-growth? Return in Equity (RoE) 26% Cost-to-income (CTI) 39%. Impairments +80% and worrying the market But my worry is it is priced +2x valuations of the other four big banks and it is now largely a mature bank. Sure low cost base, but I do not think it deserves that high valuation so am likely exiting after holding since 2009. * I hold ungeared positions.

Simon Shares Combined Motor Holdings* (JSE code: CMH) strong trading update puts the stock on a PE of under 5x and a dividend yield of ±15%. A great well run company, but what will get the price moving higher or do we just live off dividends? * I hold ungeared positions. Strong first quarter returns Q1 2023 return[/caption] Top40 stocks, top and bottom performers pic.twitter.com/zwZlJkRpwX — Simon Brown (@SimonPB) April 3, 2023    

Simon Shares Federal Reserve FOMC raises 0.25% and the market drops as Fed says almost at the top. Local CPI comes in slightly higher at 7.0%. MPC meets next week, hold on rates or another +0.25%? Credit Suisse 'sold' to UBS. Steinhoff (JSE code: SNH) votes against the debt deal, now what? Bankruptcy surely? Transaction Capital (JSE codeL TCP) bounces, where's the value?

Simon Shares Silicon Valley Bank collapse, does this put a pause on US rate increases? FOMC next Tuesday/Wednesday. "Moody's cuts outlook on U.S. banking system to negative, citing 'rapidly deteriorating operating environment'" Miss expectations and get slammed Transaction Capital Absa MTN Multichoice Hold winners, ditch laggers. Sun International (JSE code: SUI) vs. City Lodge (JSE code: CLH). ff * I hold ungeared positions.

Simon Shares The local Q4 GDP came in at -1.3%, worse than expected -0.4% and shows the real pain of load shedding and Transnet issues. Q1 2023 not expected to be any better. Every set of results mentions load shedding and retailers are spending ±R1billion a year on diesel. Rand is looking weak, very weak. Grindrod (JSE code: GND) had good results and are clearly benefiting from the failure of Transnet ports. Bank results are looking good with Firstrand (JSE code: FSR) very strong and Nedbank (JSE code: NED) good and doing a R5billion share buy back.

Simon Shares Budget 2023 show, audio is fixed Solar as a service Retail Savings Bonds five-year fixed now at 10.5% Satrix takes over most Absa ETFs City Lodge* (JSE code: CLH) results Stale bulls Dividend of 5c Occupancies at 57% Debt gone Cater for business, who are Zooming more Overall a bit light Spur (JSE code: SUR) results vs. Famous Brands (JSE code: FBR). * I hold ungeared positions.

Budget 2023 Pieter Janse van Rensburg ~ AJM Tax Tony Leon ~ former leader of the opposition & ambassador Lesego Majatladi ~ Stay Latatude Simon Brown Great insights into the budget, who should be our finance minister and even the Coronation* (JSE code: CML) Con Court appeal against the SARS judgement.

Simon Shares Sasol (JSE code: SOL) update was all about troubles with power, ports and rail. In other words SA infrastreucture. Pick n Pay (JSE code: PIK), they spending R60million a month on diesel. US unemployment is the lowest since 1969 at 3.4%. Grey listing for South Africa. The Financial Action Task Force will announce their decision at their 24 February meeting. A paradigm shift is happening AI has suddenly landed and it's going to be wild. I rate it with some other major technological paradigm shifts; The personal computer in 1974 The internet in 1990 (yes we had dial up bulletin boards before then, but that wasn't internet). Smart phones with the iPhone in 2007 All were horrid when they launched. But now they drive humanity. Facebook getting their ads working AI after Apple locked them out. Search is changing and will Google be the new winner. We use Dali-E for images on JOL Chat GPT is great, but it is not accurate. That is actually a design feature, but this is only version 3.5 and already lots of people are using it for real world practical examples. How is it going to change investing and trading? I don't know but I know many, myself included, are trying things to see what works and what actually adds value.  

Quick update, I buying Coronation (JSE code:CML) at ±3750c. View my portfolio ==>> www.SimonBrown.co.za

Simon Shares Renergen* (JSE code: REN) finally gets phase 1 helium flowing. ArcelorMittal (JSE code: ACL) update, everything they warned about went wrong. MPC Thursday (26 January) and FOMC Wednesday (1 February). Raising 0.25% each. Stocks making money from load shedding Reunert (JSE code: RLO). High voltage cables and circuit breakers. Mustek (JSE code: MST). Green energy division. Famous Brands (JSE code: FBR). Lights out need food. Mahube Infrastructure (JSE code: MHB). Wind and solar operations paying a dividend (DY ±13.5%) and trading below NAV. Kibo Energy (JSE code: KBO). Are they a going concern? They issued shares to pay a £19,635.44 invoice. This is well worth a listen, some important data points from @StefMarani that help understands the road ahead .. https://t.co/6CGNRd6QUe — Simon Brown (@SimonPB) January 24, 2023   @simonbrown_za ArcelorMittal SA horror update as the second half was loss making #investing #share #jse ♬ original sound - SimonBrown   * I hold ungeared positions.  

Simon Shares Top40 is all about China. Economic data from China for 2022 released this week was weak, but better than expected. Which food retailer offers the best value? Food inflation is still high, 12.7% YonY for December. But likely peaked (good rains, diesel lower and reducing input costs) Preferred food retailer? Always Shoprite* (JSE code: SHP). But expensive, forward PE 19.5x Pick n Pay (JSE code: PIK). Forward PE 20.5x and not as good as Shoprite. Woolies* (JSE code: WHL). Exited disaster that is Australia. Forward PE 15x and if they can also fix clothing, real winner. Spar (JSE code: SPP). CEO and chair exiting after bad press recently. Poland issues but forward PE 10x. * I hold ungeared positions.  

Now for the tenth year in a row, we kick off the new year with a prediction show. Marc Ashton, Keith McLachlan and Simon Brown put their heads on the block with three wild and woolly predictions for the markets for 2023 followed by a call on the Top40 and ZAR for the year ahead. Importantly we start each show with a review of the previous year’s predictions and you’ll find the 2022 predictions show here.  

I've been buying some Zeda on the JSE. - Here's why - A bit about the business - Risks - Possible target price

  Oil below US$ 80, the first time this year. OPEC+ made no production changes. EU price cap on Russian oil. Done via insurance, but will it work and if it does will oil not move higher? Simon Shares Nampak (JSE code: NPK) results and book build. Worth a speculative punt after the rights issue is done? Solid Sygnia (JSE code: SYG) results and strong dividend. RMI becomes Outsurance on the JSE, code OUT. China zero-covid. Local GDP, better than expected. Worst ETFs of 2022 Position your portfolio for 2023  

Simon Shares MPC upped rates 0.75% with more expected in the new year. Solid City Lodge* (JSE code: CLH) update with November occupancies at 60%. Rand below R17/US$ and more strength expected. Top40 sneaks green for the year after a rough ride. This is why we hold And don't panic Markets recover Chinese covid-19 cases hitting new records, by a long way. This has real implications (bad ones) for the global economy as the second largest is going to be struggling in 2023.   Chinese covid cases since the start of the pandemic * I hold ungeared positions.

Binance buys FTX. No, they walk away. FTX goes bust. Keep your coins in a hardware wallet, not on the blockchain unless you trading it. I use a Ledger Nano S Plus. What's the future for crypto with another exchange hitting the wall? Simon Shares Results wrap; Purple Group* (JSE code: PPE) Stor-Age* (JSE code: SSS) Ninety One (JSE code: N91) Transaction Capital (JSE code: TCP) * I hold ungeared positions.  

So you bought a stock and it's done good and you're making money, maybe even lots of it. Now what? First, why did you buy it? That'll often help you decide when to sell. Second, is it still going up? Have a line in the sand, using charts, at which you sell. Third, is the news still all good? Bad news means to sell. Simon Shares US inflation due Thursday, expected is 7.9%. Binance buys FTX Time for gold? Murray & Roberts (JSE code: MUR) sell Clough for very little but get rid of a lot of inter-company debt. Leisure stocks looking good, especially the Sun International* (JSE code: SUI) chart. "However, due to the immense interest from the public, as well as international investors to date, we decided to extend the period by 2 more weeks. This will allow for the investors that missed the deadline, to be part of this amazing opportunity to own shares in Cilo Cybin Holdings.". Not a good sign. Elon Musk sells Tesla (Nasdaq code: TSLA) shares worth US$4billion after saying in April he would sell no more. But this should be enough to keep Twitter afloat for the next year. Meta (Nasdaq code: META) to fire 11,000 workers, about 13% of the workforce. * I hold ungeared positions.

After the results, are any FAANGs worth buying? FAANGs, a mixed bag with Meta (NASDAQ code: META) the biggest loser. Is it worth buying or what of the other FAANGs? Apple (NASDAQ share code: AAPL) and Amazon (NASDAQ code: AMZN) would be my picks. Why buy the losers? Simon Shares RMI, I got confused between RMI and RMH last week. Former is becoming Outsurance. Capital & Counties (JSE code: CCO) trading update shows strong leasing activity at Covenant Garden. Octodec (JSE code: OCT) results, discout to NAV +50%, dividend yield ±14%. Sasol (JSE code: SOL) convertible bond issue essential a back door right issue. Bonds expire in five years and convert into Sasol shares at US$20.3863. RSA Retail Savings bonds now offer 11.5% fixed for five years.

fff Go where the money is The Fini15 (JSE code: STXFIN*) is the only green index so far in 2022 and the strongest bank YTD? Absa (JSE code: ABG). Simon takes us through the journey of finding the strongest sectors and then the strongest shares to find a trade where the money is. Simon Shares Niche JSE listed property stocks, there are a bunch of them and they're mostly looking good. Famous Brands (JSE code: FBR) results are back at pre-pandemic levels. MTBPS Buy triggers on Nasdaq and S&P500 My lazy system has triggered buys on both S&P500 and Nasdaq. A close above last night's close and I'll be long pic.twitter.com/8HAisLdPZr — Simon Brown (@SimonPB) October 26, 2022   * I hold ungeared positions.

Murray & Roberts (JSE code: MUR) horror update. "working capital requirements are especially acute" "financial results for the six months period ending 31 December 2022, to be at least 100% down" This is not South Africa at all, it's Australia and the US. We've seen Wilson Bayly (JSE code: WBO) walk away from their Australian operations. Low margins and bankers not keen on bonding projects are going to crunch this industry globally. I would suggest Aveng (JSE code: AEG) is not immune either. The only time this industry really made money was in the run-up to the world cup, and they were colluding to get operating margins of +5%. So really this is a bust industry. That all said, decent results from Calgro M3 (JSE code: CGR) while we wait for Balwin (JSE code: BWN). Simon Shares MTN (JSE code: MTN) ditches Telkom (JSE code: TKG) over their Rain talks. Pick n Pay (JSE code: PIK) results. Not bad but the market hated selling the stock down 9.3%. Is the issue valuation? Forward PE is ±29c vs. Shoprite* (JSE code: SHP) is on ±21x. Combined Motor Holdings* (JSE code: CMH) has great results driven by car rentals surging. But it going to be tough going from here. UK inflation returns to a 40-year high of 10.1%.

Simon Shares Remgro (JSE code: REM) plans to unbundle its stake in Grindrod (JSE code: GND). There were ideas that maybe Remgro would take out Grindrod, but the unbundling is going in a different direction and Remgro unbundles shares they don't want. Remember also that after the unbundling expect weakness in the Grindrod share price for a few weeks. They've held them since 2011 and hold a 24.81% stake For every 100 Remgro you'll receive 30.70841 Grindrod shares. Last day to trade (LDT) is 11 October 2022. You'll receive them with a base cost that Remgro paid, that value is still to be determined. Barloworld (JSE code: BAW) trading update is not bad. The big news is that they plan to list Avis by year-end. Tiger Brands (JSE code: TBS) trading update was solid off a low base. The chart looks bullish as it rose +10% on Monday after the update. Chart looking decent and a potential delisting target? The UK is an absolute mess. Here the UK 5, 10 & 30 year bonds for September .(with correct carts) . Just September pic.twitter.com/hMj5yP65bC — Simon Brown (@SimonPB) September 28, 2022   Rampant Dollar The US$ Index (code: DXY) is at twenty-year highs and within a few percent taking out the highs from the early 2000s and heading back to levels last seen in the mid-1980s. The reasons are simple and two-fold; The world is scared and fear sees investors rushing to the safety of the US$. Rising rates in the US now see the US ten-year treasury bills trading around 4%, the highest level in over a decade. So investors can flee to the US$ and buy 10-year bills for a ±4% return. Importantly this is hitting every currency in the world. Has earnings implications for US companies selling products offshore as those profits are now lower due to US strength. When does the strength stop? In the short-term a pullback is likely. But as long as fears remain the strength will continue and could continue well into next year. What to do? Don't panic. Consider some JSE listed currency ETFs. Continue with your offshoring strategy. The tables have turned. Emerging markets are much more resilient against the US Dollar than the rest of the G10. Year-to-date, the Dollar has risen a stunning 15% against the G10 (black), but only 5% against emerging markets (blue). EM is the new standard bearer for stability... pic.twitter.com/ToaQvQB9DS — Robin Brooks (@RobinBrooksIIF) September 27, 2022  

hh Simon Shares FedEx (NYSE code: FDX) spooks the market by withdrawing guidance and saying demand is collapsing. Thungela Resources (JSE code TGA) went ex-dividend to 6000c. Wilson Bayly (JSE code: WBO) is letting their Australian operations go bust, not giving any more financial assistance. Has inflation peaked? Local inflation down at 7.6% for August from 7.8%. US August inflation at 8.3% from 8.5%. UK August 9.9% from 10.1%. EU 10.1% up from 9.8%. Europe and UK still have a winter of energy crisis to contend with. US and local looks to have topped, but energy/petrol still needs watching. Food inflation remains high and remains a risk. A recession will dampen demand and help inflation lower. Transport costs are down. BUT, what of interest rates? The problem is getting back to target. Locally 3%-6% US 2% Rate increases still coming, likely into the new year before pausing. Then the long wait for inflation to get to target (or near) before rates start coming down. In the US this is at best 2024 but probably 2025. Locally rates may start moving lower in early 2024.

Simon Shares Trading Trading in the Zone – Mark Douglas (detailed review) Trend Following – Michael Covel (detailed review) Reminiscences of a Stock Operator – Edwin Lefevre Market Wizards - Jack Schwager The Complete Turtle Trader: How 23 Novice Investors Became Overnight Millionaires - Michael Covel Investing The Little Book of Common Sense Investing - John C. Bogle One up on Wall Street – Peter Lynch (detailed review) Common Stocks and Uncommon Profits – Phil Fisher (detailed review) Effective Investor – Franco Busetti The Little Book that Beats the Market - Joel Greenblatt General Thinking, Fast and Slow - Daniel Kahneman Fooled by Randomness - Nassim Taleb

Simon Shares Anthony Clark on small caps Purity baby powder products were recalled by TigerBrands (JSE code: TBS) due to traces of asbestos. PSG (JSE code: PSG) unbundling effective at close on Tuesday. Holders at the close will receive 3.87 PSG Konsult (JSE code: KST) 1.82 Curro (JSE code: COH) 0.12 Kaap Agri (JSE code: KAL) 1.04 CA Sales (JSE code: CAA) 1.02 Stadio (JSE code: SDO) The bear and bull case for investing in Shoprite Shoprite* (JSE code: SHP) results saw the stock down 7.5%. Let's dig into what the market maybe didn't like. Only 10% earnings growth? With one week less and the 2021 riots in the numbers, decent albeit not knock the lights out. Only 600c dividend for the full year? Very much in line with the average. Expensive on PE of over 20x? Always is, but mid-range is about 15% lower. So yes, maybe a little more than usual? Opening 275 new stores? Cost and are they cannibalising their other stores? RSA operating margin 6.8%? The top end of the long-term range, worries that it may move lower? But Shoprite remains one of the best food retailers globally and a core holding in my portfolio. I have bids in the market at around R170 which would put it on a PE closer to the mid-range from the last decade. Sixty60 grew 150% and remains the absolute market leader in the grocery delivery space. Checkers Xtra Savings has 24.7m members and it turning into a bank account. * I hold ungeared positions. Sold my Murray & Roberts (JSE code: MUR) Murray & Roberts weekly chart Not a lekker chart, I've held for a while, but am now out #JSE pic.twitter.com/BKKP4HOLhr — Simon Brown (@SimonPB) September 4, 2022    

Simon Shares Save R500k with a deposit. ETF closing prices are an absolute mess. Cashbuild (JSE code: CSB) results see them coming back to earth after a pandemic boost. Education stocks all published results. ADvTECH* (JSE code: ADH) is my pick, but all showing student growth and cash generation. Shoprite* (JSE code: SHP) gets permission to turn their money market account into a bank account. Grindrod (JSE code: GND) currently runs the service for Shoprite and African Bank is buying Grindrod Bank. Walmart (NYSE code: WMT) is set to make an offer to the Massmart (JSE code: MSM) minorities for the remaining 47% at 6800c. Netflix (Nasdaq code: NFLX) plans to price its ad-supported plan at $7-to-$9 per month with about 4 minutes of adverts per hour. Purple Group* (JSE code: PPE) back at 203c, always be very careful of casing a news story (the Asia deal announced last week with very few details). Tsogo Sun Hotels (JSE code: TGO) changes its name on 7 September. They will become Southern Sun Limited (JSE code: SSU). UK inflation, Goldman Sachs now saying 22% is possible next year. Sun International* (JSE code: SUI) strong results. Consumers under pressure shouldn't hurt too much as they mostly target higher LSMs and they paid the first dividend (88c) since 2016. Currently, ±3200c is resistance. Greylisting Financial Action Task Force (FATF) Cracking down on money laundering and funding terrorism. Greylisting can reduce a country's capital flows by as much as 7.6%, according to an IMF working paper. Cabinet has approved a raft of new amendment bills but leaving it late, very late. Our deadline is September/October after being put on the watch list last year. The important questions; Will we get greylisted? What happens if we do? If greylisted, how do we get off the list? * I hold ungeared positions.

Simon Shares Nasdaq (650 points), S&P500 (80 points) & Euro Stoxx50 (22 points) trades all closed. FTSE100 still going currently +100 points. Old Mutual BEE deal, will go into details, but it only closes in late October so no rush. Spur (JSE code: SUR) looking very good. PE ±15x and DY ±5% From the Spur earnings call "And we know that only 18% of the South African adult population represents 80% of economically viable consumer segment." Revenue at record with space to get margins back to pre-pandemic levels. Net income margin was ±5%, historically over 20%. [caption id="attachment_36416" align="aligncenter" width="849"] Spur; revenue, net income, NI margin[/caption]Afrimat (JSE code: AFT) Gravenhage manganese mine deal failing due to the Water Use License being materially different. They raised ±R650million last month. Purple Group* (JSE code: PPE) does a deal in Asia. Kap Industrials (JSE code: KAP) good results and great insights into other industries. Citi now says UK inflation to hit 18% early next year (last week they said 15%). Sasol (JSE code: SOL) pays a dividend, 1470c. Sasol: To answer a separate Q: The EBIT profit split is: •Energy: 58% •Chemicals: 42% (Despite the high chemicals contribution, it is amazing to see how closely Sasol’s profit still conforms to the old back-of-a-matchbox calc of 5% of the Rand oil price.) — Karin Richards (@Richards_Karin) August 23, 2022 * I hold ungeared positions.

Simon Shares BHP Group* (JSE code: BHG) results, have we peaked? Absa (JSE code: ABG) results, but maybe the ore important point of the results is their expectation that prime will hit 11% early in 2023. Chip shortage seems to be easing. Nasdaq is in a bull market, +20% off mid-June lows. Brent oil falling. Current petrol price reduction is 260c for September. UK inflation is 10.1% for July. Charles Savage tells us his fav ETFs Rochelle Writes, pay down debt or save more with high rates. Thungela resources (JSE code: TGA) still a buy? R60 dividend, 40% forward DY HEPS 6723c, forward PE 2.5x Mis-priced at listing, unbundling often cause this to happen. Ukraine's war gave it new legs. Risks Coal price Rand strength Ukraine war Transnet * I hold ungeared positions.  

Simon Shares Renergen* (JSE code: REN) the Central Energy Fund has successfully completed their due diligence on the R1billion, final approval is still required. Mpact (JSE code: MPT) results. US jobs data and unemployment continue to belie the recession talk. US inflation for July was 8.5%, a good number. A gallon of gas has fallen below $4 in the U.S. for the first time since March. Credit Suisse has lowered its 2023 UK GDP forecast to -0.6% from 0.5%; expects the UK to enter a recession from Q4 2022 until Q3 2023. Elon Musk sold $6.9-billion (R14.5-billion) of his shares in Tesla (Nasdaq code: TSLA) – his largest sale yet – saying he may need the cash if he has to buy Twitter (NYSE code: TWTR). Embrace the risk Investing is about risk Without risk, there is no reward Without risk, you are saving But the risk needs to be reasonable and the returns realistic * I hold ungeared positions.  

Simon Shares Massmart (JSE code: MSM) update, retail margins are being squeezed, the exception is clothing retail. Thungela Resources (JSE code: TGA) very strong trading update. JSE (JSE code: JSE) results, strong. Nancy Pelosi lands in Taiwan and markets don't really care and China will complain - but this is not leading to war. Uber (NYSE code: UBER) finally hits cash flow positive. OPEC+ 100,000 b/d output hike, expectations (hopes?) were for 4-5x that and the second smallest increase since 1986. Earn 11% with Retail Savings Bonds What's the only thing we control in markets The price we pay Everything else is beyond our control So use your one power carefully  

Simon Shares New energy rules for South Africa. Who wins? Silverleaf Investments on Easy Equities. Know what you're buying. Food retailer updates, Shoprite* (JSE code: SHP) winning. Pick n Pay (JSE code: PIK) bounding back and Woolies* (JSE code: WHL) struggling. Cashbuild (JSE code: CSB) and Mr Price (JSE code: MRP) updates show consumers under pressure IMF upgrades SA GDP growth for 2022 to 2.3% up from 1.9% they expected in April. Results from Kumba Iron Ore (JSE code: KIO) and Anglo Platinum (JSE code: AMS) US data Wednesday and Thursday. Omnia (JSE code: OMN) was ex-div 800c on Wednesday and is now back in the longer-term channel. If you've been waiting to buy, now's your chance. * I hold ungeared positions.  

Simon Shares Local June inflation, 7.4%, MPC tomorrow. BHP Group* (JSE code: BHG) update, they are worried. ArcelorMittal South Africa (JSE code: ACL) trading update says global growth and recessions fears "present challenges for the outlook of commodities and steel demand in the next 12 to 18 months.". China's holdings of U.S. debt fell below $1 trillion for the first time since 2010 Alviva (JSE code: AVV) delisting at 2500c. Brent oil trade keeps on trucking, buy below $100 exit $113. Brent oil Nasdaq, triggered a buy, waiting for confirmation which is a close above 12,250 while 7 EMA remains above 21 EMA. Building resilient portfolios for tough markets Lithium & Battery Tech ETF Stats and data on 95 years of bear markets. How much longer? How much lower? * I hold ungeared positions.  

Simon Shares US June inflation 9.1%, and core inflation was also up a 5.7%! Still stage 4. Rand continues to weaken. Back backs between 4 July 2022 & 8 July 2022 Naspers JSE code: NPN) bought 659,095 shares at an average price of R2 648.3315/share for R1.745 billion (US$104.73 million). Prosus (JSE code: PRX) bought 6,240,339 PRX shares at an average price of €67.1361/share for €418.95 million (US$428.59 million). SARB now considers cryptocurrencies as a financial asset and will create regulations around them. This means cryptocurrencies can be listed on SA exchange platforms but the process will take 12-18 months. Dividends, love them but be careful. But we also need to remember a few important things about dividends. They can disappear as we saw in 2020. Even the most stable dividend payer can stop paying. REITs which have to pay them by law being a REIT structure) stopped paying because payment would see them fail their solvency tests. They are backwards-looking. A high dividend yield is certainly attractive, but is it because the price has been falling? Could this be a warning of a dividend cut? Cyclical stocks (think commodity stocks) pay massive dividends sometimes, then nothing for years. Boards can change the cover ratio. This is the percentage of HEPS they pay as dividends. In tough times they can cut them. As the company matures they pay more. Progressive dividends are the worst. The idea is that every year the dividend goes up a set percentage regardless of profits. A few local stocks have tried the idea, all have abandoned the idea. Cash dividend vs. script dividend. I'll usually take the script. Reg28, proposed a two-pot system Sam Beckbessinger: My fav ETFs

Simon Shares Still stage 6. Rand continues to weaken. Naspers (JSE code: NPN) and Prosus (JSE code: PRX) both are holding well after the hard run the previous Monday on results and buy-back news. Resources under pressure, all of them. Supply chains adjusting Just in time is now just in case Higher inventories Higher costs More localisation Upcoming events; 13 July ~ To short or not to short with Markets.com 14 July ~ JSE Power Hour: Building a resilient portfolio for tough markets

Simon Shares Episode #500. Huge thanks to all, I go into some background about the show. Where and how it started, lessons learnt and more. Stage 6, the Rand lost 30c. Sun International* (JSE code: SUI) update for five months to 31 May 2022 shows they are nearly back at pre-pandemic revenue and this while we still had some restrictions and fewer international travellers. Naspers (JSE code: NPN) / Prosus (JSE code: PRX) results. Tencent (Hong Kong code: 700) is 125% of profits. The other businesses are all loss-making and in tough markets. They plan to sell down Tencent and buy back Prosus shares, but the discount to NAV remains around 50%, even after a massive move on the announcement. Grindrod (JSE code: GND) good update and share has been flying. This remains a very cyclical business and right now the cycle is paying off. Invicta (JSE code: IVT) saw strong results albeit some accounting points improved them a bunch. JSE (JSE code: JSE) trading update is surprisingly strong with HEPS expected +24%-32% for six months ending June. * I hold ungeared positions.  

Simon Shares Thungela (JSE code: TGA). Coal prices doing great, production is good but rail is the problem but HEPS is expected at 5800c. If we double for the full year we can expect ±R116 and a dividend of ±R100? Stor-Age* (JSE code: SSS) results are not exciting but steady. Omnia (JSE code: OMN) results were really strong, another special dividend and good future prospects. Orion Minerals (JSE code: ORN) raises money to get their Prieska up and running. Expected to take some 19 months. Amazon prime coming to South Africa next year. It will seriously challenge Takealot, owned by Naspers (JSE code: NPN)). City Lodge* (JSE code: CLH) trading update show them cash flow positive with occupancies back in profit. * I hold ungeared positions. Crypto in trouble Not an inflation hedge nor a store of value. Just another risk asset. The problem is as QE ends and rates rise, will it still see a strong inflow of money? I think not. It's not the end crypto, but new highs could be some way off.  

Simon Shares US May inflation, 8.6%. Federal Reserve announced rates last night and surely it was 0.75% for the first time in 28 years? Either we have continued high inflation or a recession, maybe even both? Time for a Paul Volcker and do a 1% raise? It's ugly, Nasdaq and S&P500 both closed at lows for 2022 and are both are now in a bear market. S&P500 draw down at close 13Jun22 And failing a real test or liquidity and exchanges halt withdrawals.

Simon Shares Sygnia (JSE code: SYG) results and a forward dividend of maybe as high as 10%. Local GDP at 1.9% for Q1 2022. The economy has now recovered to its pre-pandemic levels. Consumer cracking? I interviewed Evan Walker 36One Asset Management. Inverse ETFs that go up as the market falls. * I hold ungeared positions. Upcoming events; [events_list limit="3"] ddd Are Robinhood's troubles Purple concerns? [caption id="attachment_34522" align="aligncenter" width="761"] Robinhood since listing vs. Purple Group[/caption] Robindhood Purple Group (Nasdaq code: HOOD) Purple Group* (JSE code: PPE); Listed July 2021 at $38, hit $85 and now under $10 (-75%) July 2021 145c, high since 350c and now 260c (+81%). Makes most of their revenue from selling the deal flow and Gold accounts. Revenue is from transactions. The majority of transactions are in options or crypto. The majority of transactions are in equity, but crypto, EC10, is growing. Needed a quick $billion to settle meme stock trades. The balance sheet is fine. Huge repetitional damage when they halted trade in some meme stocks.   Value traded by clients has been falling since Q1 2021. Value traded by clients fell in the last set of results. Not yet profitable. Profitable, PE ±50x. Users declined in 2022. Users grew in last results to +1million active accounts. Market cap per user = $478 (ZAR7,400) Market cap per user = ZAR3,263 Revenue per user (2021) = $80 (ZAR1,250) Revenue per user = R109

Simon Shares The good news is the US had a green week last week, for the first time in 8 weeks Goldfields (JSE code: GFI) is down on news it paying a chunky 33.8% premium to acquire Canadian Yamana Gold in an all-share deal We finally got the petrol price increase and the 150c fuel levy reduction remains in force, for now. German inflation hits 7.9% for May. Highest since the 1950s. EU inflation for May 8.1%, the highest ever. EU agrees on a partial ban on Russian oil imports Monthly dividends in a JSE equity portfolio Offshore ETFs paying monthly dividends   Demand destruction in commodities There comes a point at which a commodities price is simply too high and the price itself reduces demand. Depending on the commodity high prices often need to be high for protracted periods of time.

Simon Shares Results are pouring in, food producers are struggling. Coronation (JSE code: CML) results with DY of over 10% and PE ±9X. Snap Inc (NYSE code: SNAP) profit warning. It now trades at half its listing price. Current under recovery in petrol price is 236c, + the 150c fuel levy suspension means we could see a 386c increase in June to over R25 a litre! What’s your fav ETF? We ask our readers, Rochelle is first up and likes an offshore ETF with a monthly dividend payment of almost 1%. Hello Eskom, best budget power banks. Slightly better than average is enough Investors and traders love big winners. That 10 bagger that happens in a matter of months or maybe a few years. But by consistently hunting for those big winners we're taking larger risks. We're better off aiming for the modest winners. Beating your benchmark by 2% a year sees you with almost 50% more after twenty years. A recent Planet Money Podcast, Investing in mediocrity, talks about a fund manager who only ever aimed to be in the top third of all funds. After a decade of succeeding at that, they were the top fund over ten years.  

Simon Shares 10X Investments buying CoreShares. MPC, 0.5% expected. Balwin (JSE code: BWN) results vs. Calgro M3 (JSE code: CGR). Pick n Pay (JSE code: PIK) results vs. Shoprite* (JSE code: SHP). * I hold ungeared positions.

Simon Shares US April CPI 8.3%; Core CPI 6.2% (month-on-month core was +0.6%) FOMC Sibanye-Stillwater* (JSE code: SSW) update the market hated. Kaap Agri (JSE code: KAL) results Wandile Sihlobo on agri in SA. New Satrix global healthcare ETF. Thungela Resources (JSE code: TGA) could pay an R100 dividend this year, putting them on a +40% DY. US Tech selloff continues 1-year FAANG returns ° Meta ° Apple ° Amazon ° Netflix ° Alphabet pic.twitter.com/VybsCoWDfh — Simon Brown (@SimonPB) May 9, 2022 * I hold ungeared positions.

Simon Shares Combined Motor Holdings* (JSE code: CMH) results, Best ever. Renergen* (JSE code: REN) cold commissioning of phase 1 going well. New global healthcare ETF coming from Satrix. Currently in IPO and listing 26 May. EU unveils a proposal to ban Russian oil imports within 6 months, all refined oil products by the end of the year. OPEC+ Sees Production From Non-Opec Participants in OPEC+ at 18.2 mln Bpd in May, 600,000 Bpd Lower Than Last Forecast Lyft (Nasdaq code: LYFT) shares fall 26% on disappointing forecast (earnings 75% below expectations) as they say they'll pay drivers more. Intel says chip storage till 2024 at least. Stagflation "Stagflation is most commonly referred to as the simultaneous experience of three separate negative economic phenomena: rising inflation, rising unemployment, and the declining demand for goods and services." The best defence is generally commodities. * I hold ungeared positions.  

The world's oldest exchanges starting in India all the way through to Amsterdam.

Staring in Kimberly in 1881 through to the present Simon details the history of stock exchanges in South Africa.

Simon Shares US inflation 8.5%, UK 7.0% Capitec* (JSE code: CPI) results and a special dividend. Dave Segall asking about "Looming food and fertiliser shortages" and impact on local agriculture stocks. Purple Group* (JSE code: PPE) trading update (here are my previous expectations). * I hold ungeared positions.  

Simon Shares I have closed my Nasdaq long position. Still long FTSE100. Purple Group* (JSE code: PPE) trading update. Looks a little better than I expected. MTN (JSE code: MTN) more Nigerian woes. Reports that Woolies* (JSE code: WHL) may be selling David Jones. Elon Musk buys 9.2% of Twitter (NYSE code: TWTR). Moodys upgrades sovereign and banks from negative to stable. Deutsche Bank says: US recession in 2023 and stocks to fall 20% by summer 2023 * I hold ungeared positions. The Rouble is almost back at pre-war levels against the US$. 20% interest rates, capital controls, no foreign selling on the Moscow Exchange, selling oil & gas in Roubles (maybe), reports of paying interest on debt with Roubles and of course traders in for a buck.  

Simon Shares Just One Lap is 11 years old :) FOMC, as expected. Local MPC tomorrow. Nasdaq, time to buy? Also FTSE100. Both a technical buy, not taking a view on the fundamentals.   Brent almost back at US$120. China opened up already, well Foxcon at least. Tencent results, flat-lining. The end of an era! So says Tencent as revenue grows in single digits, the lowest quarterly number since listing back in 2004. Tencent’s declaration is resignation that any expansion will be cautious and controlled. Prosus down 8.2%, Naspers down 8.4%. Prices still look vulnerable — David Shapiro (@davidshapiro61) March 23, 2022   Thungela Resources (JSE code: TGA) results and 1800c dividend. "developments in terms of new thermal coal projects which have been hampered by financing opportunities, given ESG pressures on carbon fuels" * I hold ungeared positions.

Simon Shares Big banks now all have released results, mostly good albeit off low base. Covid cases in China surge, new lockdowns. Hello, more supply chain mess. People asking if I updated my view on Purple Group* (JSE code: PPE). Nope, volatility likely helping the revenue, but I need new data (results) first. Commodities weak, brent oil now in a technical bear market. China makes peace with tech Prosus (JSE code: PRX) and Naspers (JSE code: NPN) now flying (+20% n Wednesday). Discount still +50%. Reports of WeChat being hit with a massive fine for money laundering?money laundering China's state council has in one move just: *Pledged to keep capital markets stable *Vowed to support overseas stock listings *Said dialogue with US re ADRs is 'good' *Promised to handle risks for property developers *Clarified regulation of Big Tech will end 'soon' *BOOM pic.twitter.com/xHYgcbchCo — Sofia Horta e Costa (@SofiaHCBBG) March 16, 2022   * I hold ungeared positions.  

Simon Shares Shoprite* (JSE code: SHP) results, it's all about innovation. Strong un International* (JSE code: SUI) update. War in Europe, commodities still the story. Very volatile, that's expected. But I expect more upside and I am happy to hold. Upcoming events; 17 March ~ JSE Power Hour: Geopolitics, inflation and markets Prosus (JSE code PRX) / Naspers (JSE code: NPN) / Tencent (Hong Kong code: 700) Tencent has been under pressure Naspers and Prosus have been hit even harder Live Prosus discount to net asset value (NAV) is now some 55% after hitting 60%.  VK (old mail.ru) has been written down to zero. Generally unlisted is worth a lot less than stated? Buy / Sell / Hold? VIE structure China has not taken sides in the war, so far Tax on profits if they sell Tencent More Chinese crackdowns? Prosus has been wasting money from the sale of 2% stake in Tencent? Buying back shares Buying Delivery Hero (Frankfurt code: DHER) * I hold ungeared positions.

Simon Shares City Lodge* (JSE code: CLH) results, fair valuation around 800c? BHP Group* (JSE code: BHG) will see a significant reduction in its weighting in Top40 and Resi10 indices. PSG (JSE code: PSG) exiting the JSE. Wilson Bayly Holmes (JSE code: WBO) has lost investor confidence. Murray & Roberts* (JSE code: MUR) results. HEPS at 29c a little light, but back in profit. War in Europe Inflation is the biggest economic issue. Energy, PGMs and agriculture. Will central banks stick to their rate rising trend? People want to buy the Russian ETF, why? Even if peace happens today, sanctions will be in place for some time to come. Buy Satrix Resi10 ETF* (JSE code: STXRES). The Oil ETN (JSE code: SBOIL). Local stocks impacted Barloworld (JSE code: BAW) about 20% of revenue. Mondi (JSE code: MND) about 12% of revenue. * I hold ungeared positions. Upcoming events; 07 March ~ JSE Power Hour: Geopolitics, inflation and markets

Wednesday was budget day and our tax experts, AJM Tax, hosted a live panel discussion covering the budget; highlights and low lights. We've included the recording for this week's episode. The panellists were; Divan Botha – moderator Dr Albertus Marais ~ Director at AJM Tax Laila Razack ~ CFO of Equites Property Fund Simon Brown ~ Founder Just One Lap and host MoneywebNOW

Simon Shares Strong Nedbank (JSE code NED) trading update. If you held Steinhoff (JSE code: SNH) when it all went wrong in 2017 you have until 15 May to submit a claim. Oceana (JSE code: OCE), now the CEO quits? * I hold ungeared positions. Upcoming events; 22 April ~ Introducing the CoreShares Total World ETF 06 March ~ JSE Power Hour: Finding income in JSE listings What's down with Purple Group* (JSE code: PPE), owners of EasyEquities? After a high of 349c a month ago it's now 261c. Firstly it's more sellers than buyers. The hype of the pandemic trading is fading and easy returns are fading. So less trading, slower new accounts (albeit reports that they still have great new account rates). Vacation is wild. For the year ending August 2021 737k active accounts (up 45.7%). Each account makes R69 profit. But as accounts age profits per account increase. What can we expect to see for the year ending August 2022? (NOTE, the interim results to end February will be out early April). 1million accounts? That's 263k new accounts and growth of 35%. Profit per account R76 (10% growth, older account more profitable BUT less market volatility means less transactions). = R76million profit (I ignore GT247 and Emperor Asset Management) With 1.2billion shares in issue that's HEPS of 6.3c = forward PE of ±40x That seems fair, but there are risks. The assumptions above could be wrong GT247 could lose money New projects cost money Dilution with new share issues I am only using EasyEquities, ignoring other business units. There are of course potential upside surprises as well The assumptions above could be wrong Growth is better GT247 makes money and EasyProperties kicks in strongly I sold 35% of my holding at 315c-345c on the way up, this was because it simply became too large within my portfolio (was the biggest holding after buying at 50c less than 2 years ago). But I am happy to continue holding.

Simon Shares Great Sappi (JSE code: SAP) results. Strong Hudaco (JSE code: HDC) results. Top40 is trading at all-time highs, as is Resi10 and MidCap is almost there. Kastle back to work barometer shows office attendance in the US is still not back to levels from before the most recent pandemic wave and around 33% (on average) of pre-pandemic levels. Back in November, the average was just over 38%. IPO process explained. Ashburton ETFs have moved over to FNB. Meta Platforms (Nasdaq code: FB); Facebook, Instagram and WhatsApp Down 25% on the day of the results. Fell further and now off 43% from September 2021 highs and back at May 2020 levels. Market cap below US$600billion, that happens to be the number House legislators picked as the threshold for a “covered platform” in a package of competition bills aimed at Big Tech. Active users declined $10billion lost revenue due to new iOS privacy rules $10billion on metaverse. Regulatory issues. Meta threatens to shut down Facebook and Instagram in Europe over proposed regulations. The EU says, 'please do'. All said this is just one quarter, the next few quarters will tell us the true story. Upcoming events; 17 February ~ JSE Power Hour: Tax-free investing

Simon Shares PGMs are on the move, most notably palladium and rhodium. But the miners are not. Combined Motor Holdings* (JSE code: CMH) strong trading update. MTN (JSE code: MTN) vs. Vodacom (JSE code: VOD) updates. Who's winning? Strong Astral (JSE code: ARL) update, but for the half ending March - so off low base. Ascendis (JSE code: ASC) looking to sell three businesses, but that won't leave much behind. OPEC+ agrees to a 400k barrel/day increase from March, this was the initial plan from last year. The local CPI basket is changing. Satrix is listing an India ETF, currently in IPO. The local prime interest rate increased 0.25% last week. This adds R152 per R1million of a bond. Not a lot, but this is the second one already and we have many more coming. The ARK Innovation ETF (NYSE code: ARKK) has had a tough year and at a point, in January, it was behind the Nasdaq over the life of the fund and it is trailing the Nasdaq over one and three years. That all said, they publish all their research and released their Big Ideas 2022 report which is well worth the read. * I hold ungeared positions. Upcoming events; 9 February ~ Wealth Creation through Trading and Investing with ThinkMarkets 17 February ~ JSE Power Hour: Tax-free investing

Simon Shares PGMs are on the move, most notably palladium and rhodium. Oil also still moving, remember the ETN for that. Cashbuild (JSE code: CSB) update shows the pandemic home improvement boom is over. ArcelorMittal South Africa (JSE code: ACL) update sees them into profit and on a PE of under 2x. Steinhoff (JSE code: SNH) settlement approved, but still lots of debt. Markets are spooked Lots to be spooked by; FOMC, it's all happening in March Asset purchases are also to end in March, but what of the US$9trillion of bonds the Fed holds? Valuations are high. Rates are rising. Inflation is at decade highs. Value winning over growth for the first time in an age. Upcoming events; 09 February ~ Wealth Creation through Trading and Investing with ThinkMarkets

Simon Shares BHP Group* (JSE code: BHP) is unifying its dual-listed company (DLC) corporate structure effective close 28 January. This will count as a CGT event for shareholders who will have been deemed to have sold their shares and bought the new ones. Microsoft (Nasdaq code: MSFT) is buying Activision-Blizzard for $69 billion, but who's the largest gaming company in the world? Tencent (Hong Kong code: 700). German 10-year back above 0%. [caption id="attachment_31941" align="aligncenter" width="888"] German 10-year yield[/caption] Oil at 7-year highs. There's an ETN for that. * I hold ungeared positions.

Now for the tenth year in a row, we kick off the new year with a predictions show. Marc Ashton, Keith McLachlan and Simon Brown put their heads on the block with three wild and woolly predictions for the markets for 2022 followed by a call on the Top40 and ZAR for the year ahead. Importantly we start each show with a review of the previous year’s predictions and you’ll find the 2021 predictions show here.

Holiday show Back in 2010 the world watched as Greece plunged further and further into a debt crisis with many expecting the EU to not survive. But Angela Merkel saved Greece and the day. [caption id="attachment_31826" align="aligncenter" width="888"] Greek 10Y bond rates[/caption] Greek debt to GDP (%) source: tradingeconomics.com

On the 20th September 2021 Chinese property developer missed interest payments on some US$300billion of debt and this spooked markets into a selloff. But three months later nobody cares. What's the background sorry and why does nobody care?

After clogging up the Suez Canal for six days back in March 2021 and halting much of the worlds shipping trade, what happened to Ever Given?

Offshore / Strong year of returns globally, CAC40 (France) top index / US inflation, not transitory / US unemployment looking decent / China crackdown / Commodities mostly a soft year, the exception is oil / Supply chain chaos Local / Good year for local markets / Delisitng galore / GDP / Rand

Simon has a look back at the winners and losers from the JSE for 2021, year-to-date returns. There certainly are some losers, but mostly it is about winners as the Top40 did 21.5% so far and the top major global index was the Cac40 which returned 29.9%. Find the top ETFs here.

Offshore / US Labor Nov Nonfarm Payrolls +210K; Consensus +573K, unemployment improved to 4.2%. Fed's target for 'maximum employment' is for unemployment rate of 4.5%. / Didi leaving NYSE / Google will no longer require workers to return to the office on Jan. 10, delaying the return indefinitely. / Dorsey leaves Twitter / OPEC+ agrees to January production hikes Local / Implats comes for RBPlats / Capital Appreciation results / Tharisa results / Bidcorp updates / Murray & Roberts update

Simon Shares Bidcorp (JSE code: BID). Strong update, they're coming out of this pandemic much stronger. Aspen (JSE code: APN) announces manufacturing deal with Johnson & Johnson (NYSE code: JNJ). Implats (JSE code: IMP) wants RBPlats (JSE code: RBP), sorry Northam Platinum (JSE code NPH). Powell, Fed chair, says inflation is not transitory. Oil under severe pressure, OPEC+ meeting was pushed back to Wednesday. New variant, I bought City Lodge* (JSE code: CLH) and Sun International* (JSE code: SUI) on Friday. I did buy somme leisure on Friday, CLH at 400c and SUI at 2100c .. will see shortly if that was a good idea or not ..#JSE https://t.co/aHKZOIxLbu — Simon Brown (@SimonPB) November 29, 2021   * I hold ungeared positions.

Offshore / Powell second term as Fed chair / Fed's Bostic says he remains open to faster taper and one or two rate hikes in 2022 / Online Black Friday sales in the US fell according to data from Adobe Analytics ($8.9bn vs. $9bn) / Opec+ meeting this week, production likely to remain unchanged / Turkish lira losses 20% Local / New variant crashes markets and leisure stocks (everything) / Good Invicta results, but no dividend / Good PPC results / Brait apital raise via convertiable bond / Hospital stock results; Life Healthcare & Netcare / Banking stocks

Simon Shares Coronation* (JSE code: CML) grows assets, fees and dividends. PPC (JSE code: PPC) results look good. Purple Group* (JSE code: PPE) price action looking weak. PGMs fading again. Hospital group stocks; Life Healthcare JSE code: LHC) and Netcare (JSE code: NTC) both had fair results as they get better at managing the pandemic. Shoprite* (JSE code: SHP) launched their banking account, under pinned by Grindrod Bank (JSE code: GND) who also stand to benefit from the MTBPS last week whereby the minister said they'd allow independent traffic on the Transnet rail network by end of 2022. Turkish lira collapse. This is what happens when your central bank is not independent. Two stocks that made a real difference to my portfolio over the last two decades, Capitec* (JSE code: CPI) and Shoprite* (JSE code: SHP). * I hold ungeared positions. Twenty years of food retailers on the #JSE pic.twitter.com/BDKeOPU11t — Simon Brown (@SimonPB) November 23, 2021   Twenty years of local banks .. only really one bank in it as the other 4 battle along the bottom as Capitec does 46% CAGR over the two decades ..#JSE pic.twitter.com/yMx0NSDYrV — Simon Brown (@SimonPB) November 24, 2021  

Simon Shares Iron ore below US$100. Kumba (JSE code: KIO) halved since July highs. And still falling. But Q3 sales were at US$180 / tonne and even at current lows likely they get US$150 / tonne for the second half. Mid-year cost per tonne was US$26 and sale price US$165 / tonne. So the share is pricing in horror stories which likely aren't true fr the full year ending December. BUT next year will be different and you don't try to catch falling knives, wait for a confirmed reversal. Woolies* (JSE code: WHL) trading update, really weak. Shoprite* (JSE code: SHP) trading update, really strong. Strong PPC (JSE code: PPC) update. Local inflation came in at 5%, the fourth month we're below US inflation and likely we'll see no change at MPC on Thursday. * I hold ungeared positions. [caption id="attachment_31691" align="aligncenter" width="888"] Top40 daily[/caption] Upcoming events; 18 November ~ JSE Power Hour: Opportunities in local and global property 25 November ~ The inflation threat, is it becoming structural? 02 December ~ JSE Power Hour: Position your portfolio for 2022 09 December ~ Portfolio construction with Keith McLachlan

Offshore / US inflation, 6.2%. Core inflation highest since 1991. / Johnson & Johnson announced plans to split its company into two, separating its consumer health division from its pharmaceutical and healthcare businesses. / Elon Musk selling Tesla shares, some planned n September. Rest thanks to the Twitter poll. / Singles day in China, muted (+8.5%) but still huge, Alibaba $84.5billion / Tencent results. Slowing in all areas. Common prosperity is visible in the results. Local / MTBPS, not much happening - as expected. / Vodacom buying Vodafone Egypt, nice deal and adds a strong growth region. / Purple Group results, really top class and much better than I expected. 737k funded accounts. / Sappi results, doing well as dissolving pulp prices boom. But energy costs hurting. / Raubex results strong with a really good pipeline and well positioned for infrastructure / Northam scopes Implats and buys 33% of RBPlats

Simon Shares Iron ore below US$100. Kumba (JSE code: KIO) halved since July highs. Tencent (Hong Kong code: 700) results. Northam (JSE code: NPH) buys stake in RBPlats (JSE code: RBP). Telkom (JSE code: TKG) results. Purple Group* (JSE code: PPE) results.   [caption id="attachment_31661" align="aligncenter" width="888"] Purple Group daily chart[/caption] * I hold ungeared positions.

Offshore / US tapering begins / Strong US jobs data / US passes $1trillion infrastructure bill / Bank of England leaves rates unchanged / Strong Pfizer results / Elon Musk asks Twitter if he should sell 10% of his Tesla shares, and pay tax Local / Mini budget this week / Renergen reserves / Dis-Chem results / MTN update / Purple Group update / Petrol increase

Simon Shares Federal Reserve FOMC press conference Wednesday evening after a two-day meeting. Avis (NYSE code: CAR) up 50x from March 2020 lows after results. Pfizer (NYSE code: PFE) results. Ascendis (JSE code: ASC) shareholder activists now control 30% of the votes. Renergen* (JSE code: REN) announce a six-fold increase in helium reserves. Still need to raise UAS$800m or R12.3billion to get phase 2 up and running. [caption id="attachment_31627" align="aligncenter" width="888"] Renergen weekly chart[/caption] US$8.5billion from France, Germany, the UK and the US governments, as well as the EU, to support a just transition to a low carbon economy. * I hold ungeared positions.

Simon Shares Tesla (NYSE code: TSLA) becomes the worlds 7th trillion-dollar company. Excellent Santova (JSE code: SNV) results. My bad pandemic crash sale. Decent Famous Brands* (JSE code: SSW) results. Implats (JsE code: IMP) wants to buy Royal Bafokeng Platinum (JSE code: RBP). Sibanye-Stillwater* (JSE code: SSW) buys two Brazilian mines for US$1billion and 19.99% investment in New Century Resources for US$46million. * I hold ungeared positions. Upcoming events; 04 November ~ JSE Power Hour: Bold predictions from SA's top broker 11 November ~ Investment Valuation with Keith McLachlan From the last week Satrix launches All Share ETF CoreShares dividend tax

Offshore / Evergrande has its suspension lifted and makes an interest payment / Oil remaining stubbornly high / Inflation fears, time for gold? / Paypal maybe buying Pinterest for US$45billion / Netflix results, still growing albeit north America very slowly / Facebook getting a new name as the future is the metaverse Local / Local CPI 5% for September / Pick n Pay results / Excellent results from Combined Motor Holdings / Clicks results / New Satrix All Share ETF listing in November / Renergen launches a helium token

Simon Shares South Africa inflation rose to 5% in September. Food inflation is 7%, electricity 14%, and fuel almost 20%, with a large petrol price increase expected in November. These increases are partially offset by clothing inflation at 1.6%, appliances -0.4%, and housing rentals around 1% — kevin lings (@lingskevin) October 20, 2021   Wesizwe Platinum (JSE code: WEZ) went crazy after releasing a competent person report. Calgro M3 (JSE code: CGR). Balwin Properties (JSE code: BWN). US lists its first Bitcoin ETF, ProShares Bitcoin Strategy ETF (NYSE code: BITO). It doesn't hold actual Bitcoin, rather it uses futures to track gains. losses. Everything Rally My positions for the everything rally. * I hold ungeared positions. Upcoming events; 21 October ~ JSE Power Hour: Small cap investing with Anthony Clark 27 October ~ FX and Commodity prices and their effects on investments 04 November ~ JSE Power Hour: Bold predictions from SA's top broker 11 November ~ Investment Valuation with Keith McLachlan

Offshore / September, the CPI increased 5.4% after advancing 5.3% on a year-on-year basis in August. / China Q3 GDP at 4.9% / Biden announced that the Port of Los Angeles would start operating around the clock, following the Port of Long Beach's lead, to ease congestion / $2.7 Trillion in Crisis Savings Stay Hoarded by Wary Consumers / Microsoft shuts down LinkedIN in China / MTNs IHS Towers lists in NY, MTN stake worth R22bn Local / Government cracking down on imported cement, but not with tariffs. / IMF bumps local GDP to 5% for 2021 / Murray & Roberts expands in the US / Long4Life results and offer on the table / Tharisa gets their Chrome plant cold commissioned / Alaris & CSG both have delisting offers.

Simon Shares Murray & Roberts* (JSE code: MUR) expands in the US. The government says they'll only use locally produced cement in projects. PPC (JSE code: PPC) and Sephaku (JSE code: SEP both fly higher. But is the market right about this? We're off the UK red list, good for local hotels? Aveng (JSE code: AEG) have announced plans for a 1:500 share consolidation in December. This usually sees prices weakness after the consolidation. * I hold ungeared positions. Upcoming events; 14 October ~ Investment Fundamentals with Keith McLachlan 21 October ~ JSE Power Hour: Small cap investing with Anthony Clark 27 October ~ FX and Commodity prices and their effects on investments

Offshore / US jobs disappoints, but unemployment 4.8%. / 15% global tax rate approved. / Oil continues to run higher / Reports that Malaysia is getting back on track with chip packaging sees PGMs run hard as it could be good news for vehicle production / Last Tuesday was tenth commemoration of the death of Steve Jobs. A legend and the iPhone one of the best products ever? / All facebook properties down on Monday for 6 hours. Local / EOH update shows it’ll make an operating profit / Invicta buys Dartcom, moving into communications and renewable energy / Zeder results, still waiting on value unlock / Sanlam Investment Holdings buying Absa investment businesses. / Home loans worth +R56.6 billion were granted in Q2 2021, +40% compared to the same period in 2019.

Simon Shares Facebook (Nasdaq code: FB), Instagram and WhatsApp all down on Monday. Evergrande is suspended. Last week it was a fat finger Purple Group* (JSE code: PPE) taking the stock down to 125c. This week it hits 225c. Murray and Robert* (JSE code; MUR) starting to move higher. Brent oil is now around $82. PGMs remains under pressure. EOH (JSE code: EOH) makes an operational profit, but the debt pile remains. * I hold ungeared positions. Upcoming events; 14 October ~ Investment Fundamentals with Keith McLachlan 21 October ~ JSE Power Hour: Small cap investing with Anthony Clark  

Offshore / China & Europe power shortages / Brent oil trading around $80 / Merck Covid-19 pill, expected to produce 1.7 million courses for the U.S. government for $1.2B / Tesla delivered record 241,300 vehicles in the third quarter / Work-from-home forever: PwC offers US employees full-time remote work Local / Level 1 & SA expected to be removed UK red list, will tourists return? / Capitec results / Bidcorp results / PPC debt restructuring / Purple Group tie up with Discovery Bank

Simon Shares FOMC and MPC both keep rates unchanged, No surprise. Evergrande is not a threat to the global financial system. Fat finger on Purple Group* (JSE code: PPE).    * I hold ungeared positions. Upcoming events; 30 September ~ Power Hour - JSE traded ETNs on Tesla, Apple, clean energy and more 14 October ~ Investment Fundamentals with Keith McLachlan

Offshore / FOMC leaves rates unchanged and no tapering just yet. / Evergrande a worry but not a global threat / China bans crypto, again. / Britain has a shortage of lorry drivers, and so a petrol shortage. / Nike cut its 2022 revenue outlook because of the temporary bottlenecks plaguing supply chains. Local / MPC no change / Telkom to spin out towers (Swiftnet) worth about R13billion. Openserve will happen afterwards. / PGM prices remain under pressure as vehicle production the world over in under pressure due to chip shortages. / Spur results / Exxaro has announced the development of a 70 MW solar project as part of the groups “overall renewable energy strategy”. / Grindrod sells remaining stake in Grindrod Shipping for R370million

Simon Shares Clicks (JSE code: CLS) revised trading update, previous EPS growth was 8%-13%. Now revised to 0%-3%. Afrocentric (JSE code: ACT). Great little stock. Not a bad update from Famous Brands* (JSE code: FBR) US inflation for August was 5.3%. US poverty levels went down in 2020, during the pandemic. AB Inbev (JSE code: ANH) just keeps on falling, why? PGMs getting crushed. Platinum down at US$934, palladium around US$2,000 and rhodium US$13,300. What's happening? When does it reverse? * I hold ungeared positions.  

Offshore / PayPal announced plans to buy Japanese "Buy Now, Pay Later" BNPL company Paidy Inc. for $2.7B / US judge rule against Apple and in Epic Games favour in antitrust lawsuit; judge says Apple's conduct in enforcing anti-steering restrictions is anticompetitive / China Evergrande Group default risk ($300bn) / U.S. Senate Democrats float stock buyback tax as part of $3.5 trillion bill / The World’s Shippers Are Earning The Most Money Since 2008 Local / Local Q2 GDP, we’re 1.4% below pre-pandemic levels / SARB governor Lesetja Kganyago suggests we work towards a 3% inflation target, with a 2-4% tolerance range / FSCA fines Viceroy R50m / Result; Shoprite / Results; Momentum / Results; Bidvest

Simon Shares Shoprite* (JSE code: SHP) results. Christo Wiese gets R342m in dividends. 21million consumers using their Xtra Savings and 1.5million downloads of the Sixty60 app. The market did not much like the Murray & Roberts* (JSE code: MUR) results. Old Mutual updates 2021 GDP forecast to 5.5%. This is after Stats SA released GDP for Q2 QonQ at 1.2% (YonY 19.3%) and better than expected. The economy remains 1.4% below pre-covid levels. FSCA fines Viceroy R50million. They won't pay. SARB governor Kganyago Lesetja suggests we work towards a 3% inflation target, with a 2-4% tolerance range. New infrastructure ETF from Satrix. * I hold ungeared positions. Upcoming events; 30 September ~ Power Hour - JSE traded ETNs on Tesla, Apple, clean energy and more 14 October ~ Investment Fundamentals with Keith McLachlan

Offshore / US jobs data slows. Likely means tapering not just yet even as ECB starts talking tapering. / New China restriction, kids gaming limited to one hour a day on Friday, weekend days and public holidays / Pfizer has recognized over $10 billion in profits from the COVID-19 vaccine alone, making it the best drug introduction in history. / After hurricane Ida oil recovery begins with ports and refineries restarting but most production in the Gulf of Mexico is still shut. / Chip shortage holds back German car sales in August Local / SA trade surplus at R37bn July vs R55bn June. YTD R290bn. / Mediclinic plans to go green in R2.2bn renewable energy deal / Results; Murray & Roberts / Results; Discovery / Results; Implats / Results; Aspen

Simon Shares Jackson Hole Bonang Mohale and his Serialong trust converts a Purple Group* (JSE code: PPE) loan into 11.46% shares in the group ADvTECH* (JSE code: ADH) Stadio (JSE code: SDO) Cashbuild (JSE code: CSB) Sun International (JSE code: SUI) MAS Real Estate (JSE code: MSP) Motus (JSE code: MTH) Woolies* (JSE code: WHL) Is this Woolworths’ attempt at Athleisure ? Yikes! 😬 Crop Top : R249.99 Leggings : R299.99 I am flattered they think I,their customer, is a 20 year old Instagram Fitness star 🤣🤣 pic.twitter.com/B4xsTJ36ho — Moms 💖 investing (@mommy_moneyza) September 1, 2021   * I hold ungeared positions. Upcoming events; 02 September ~ JSE Power Hour: Picking the next winning stock 14 October ~ Investment Fundamentals with Keith McLachlan

Offshore / Jackson Hole. Powell says nothing new. / TSMC, the world's largest maker of semiconductor chips, says it's raising its prices by about 20% / Hurricane Ida heading for the Gulf of Mexico, shutting down oil production. / China reportedly weighs ban on U.S. IPOs from domestic tech companies with sensitive data Local / Bonang Mohale and his Serialong trust converts a Purple Group loan into 11.46% shares in the group / Unemployment 34.4% / South African GDP rebased. The economy is 11% larger than previously measured. It is still the second-largest economy in Africa, after Nigeria. / National treasury says KZN July violence will take 0.7%-0.9% off 2021 GDP. / Sibanye Stillwater results / Woolies results

Simon Shares Jackson Hole South African GDP rebased. The economy is 11% larger than previously measured. It is still the second-largest economy in Africa, after Nigeria. South Africa unemployment 34.4%. National treasury says KZN July violence will take 0.7%-0.9% off 2021 GDP. New oil & copper ETNs Upcoming events; 02 September ~ JSE Power Hour: Picking the next winning stock 14 October ~ Investment Fundamentals with Keith McLachlan

Offshore / New Zealand going into lockdown, the world is getting vaccinated but the pandemic is far from over. / Pfizer expected to get full FDA approval for its covid vaccine this week. A whole new business (covid jabs & mRNA possibilities). / Tesla wants to build an AI robot / Jackson Hole this week / China securities regulator signals willingness to work with the US on audits Local / South Africa inflation lower at 4.6% in July 2021. / Sasol results / Shoprite / Massmart deal / ARB Holdings results / Metair results

Simon Shares JSE is broken. 100 MW gazetted. Renergen* (JSE code: REN) update. South Africa inflation lower at 4.6% in July 2021. Tencent (Hong Kong code: 700) results. Resource stocks ex-div. But still lots of pain. Super BHP Group* (JSE code: BHP) results. New Clean energy and water ETNs listed. * I hold ungeared positions. Upcoming events; 19 August ~ JSE Power Hour: BEE shares and the JSE 02 September ~ JSE Power Hour: Picking the next winning stock 14 October ~ Investment Fundamentals with Keith McLachlan  

Offshore / US inflation comes in as expected / Britain's GDP grew by 4.8% in the second quarter of this year, leaving the economy just 2.2% below its pre-pandemic level / Google employees who work from home could lose money / US infrastructure bill moving forward / India to unveil US$1.35trillion infrastructure bill Local / 100mw power generation laws gazetted / Naspers / Prosus swap is unconditional / Strong Merafe results / MTN results and Sanlam tie up / Nedbank results / Exxaro and Thungela results

Offshore / US GDP 6.5% , below expectations but the economy now larger than pre-pandemic / US moving forward with an infrastructure bill / The U.S. debt ceiling officially became operative again on Sunday after a two-year suspension / Amazon results see stock down 7% / Alphabet results & $50bn buyback / Microsoft results, LinkedIn does +$10bn Local / Tencent woes hit JSE (but all-time closing high on Thursday) / Results; Anglo Platinum, Kumba Iron Ore and Anglo American / Liberty2Degrees results / ArcelorMittal South Africa results / Treasury considering access to retirement savings

Simon Shares Wild week for Naspers (JSE code: NPN), Prosus (JSE code: PRX) as Tencent (Hong Kong code: 700) got slapped down by the Chinese government. We're back at level 3, adjusted. Alcohol sales are allowed and Distell (JSE code: DGH) put out another great trading update. No doubt better if no alcohol bans, but the argument that your industry is under threat wears thin after such an update. President Ramaphosa also announced the return of the pandemic grant to the unemployed at R350 a month until March 2022. This pays to some 9.5million South African and means just over R3billion a month into the economy. How do we pay for it? Dividend tax on these super dividends. Apple $21.7billion in profits, almost doubling the previous year. Alphabet nearly tripled its profits to $18.5billion as advertising revenue grew 69%. Microsoft profits hit $19.1B, up 42% from the previous year. The market capitalization of Amazon, Apple, Facebook, Alphabet, and Microsoft is now over 30% of the entire S&P 500 index and over 40% for the Nasdaq100. Tigerbrands (JSE code: TBS) are recalling 20million tins. Two new ETFs coming to market. Global healthcare from Sygnia and a diverse and inclusive ETF from Satrix. Upcoming events; 19 August ~ JSE Power Hour: BEE shares and the JSE Forget super cycle, hello super dividends Anglo Platinum (JSE code: AMS) paid an R175.00 total dividend. Kumba Iron Ore (JSE code: KIO) paid a 7270c. In both cases, this amounted to a dividend yield (DY) of around 10% at the interim stage. No share buybacks as Anglo American (JSE code: AGL) own a significant majority of the shares and likely want the dividend back at home. The question is will other miners be as generous or will they do some share buybacks as well? If commodity prices stay where they are, we'll see the same again in six months and into 2022? If prices remain the same to the end of 2022 (big if?) we'll get a 40% return from just dividends? This is what super profits look like.  

Offshore / New closing highs for S&P500 & Nasdaq. But Russel2000 is lagging. / Apple delays back to the office to October / Twitter and Snap - good results / China regulator bars Tencent from exclusive rights in online music / Big results due this week; Apple & Amazon. So far reported results have been very strong. Local / Rioting impact, retail about 8% of store space impacted. REITs bigger concern. / Local inflation drops / Anglo Americana and BHP production updates / City lodge sells East African assets / Cashbuild update / Distell update

Simon Shares We now have updates from listed retailers as to the damage caused by last weeks rioting. Chantal Marx ran the data and says we saw almost 1,700 stores looted or closed due to the rioting and this is about 8% of the retailers' local footprint and some 5% of global footprint. This is a significant number, but considering many are open for trade again, with many opening last weekend already. The impact on earnings is likely to be very modest, if at all. PwC expects last weeks riots to take about 0.4% off local GDP for 2021. They already had a low expectation of under 3%, but that drop of 0.4% does illustrate how listed retailers may be okay, the real pain is in the unlisted and especially the small one-off store. Local CPI dropped a little in June to 4.9% (5.2% in May). The population of South Africa was estimated to be 60.14million at mid-year 2021, an increase of about 604,281 (1.01%) since mid-year 2020. Stellar production updates from Anglo American (JSE code: AGL) and BHP* (JSE code: BHP). They are both firing on all cylinders, even if there have been some issues (iron ore rail line for example). But they're largely debt-free, no massive projects or M&A activity and Greg Katzenellenbogen says the worlds top miners will make almost US$120billion profit this year, double from last year. So massive dividends? Sygnia did not steal your dividend. * I hold ungeared positions. Upcoming events; 22 July ~ JSE Power Hour: Power of savings 19 August ~ JSE Power Hour: BEE shares and the JSE Risk is good I got an email from a listener asking about risk free investments on the JSE. Thing is, there is no risk free on the JSE - and that's a good thing. Without risk there would be no reward. When I am looking for investments, I always look for the good things about the business. Margins, growth, product and the like. But I also dig into the risks, competition, input inflation and the like. The thing is, I like to see risk, I just want risk that I think the company can manage and ultimately maybe even turn into a benefit. For example, new product is absolutely a risk. But what if they disrupt themselves and create a new product that hits sales of their existing product, but creates an entire new category. Apple did this with the iPhone, killing off the iPod. When researching into long-term 'til death do us part' investments I create a short list of the three main features I like in a stock. But I also create a list of the three main risks and I keep a close eye on both lists.

Offshore / US inflation, again above expectations / Delta airline results show travel returning / US bank earnings as previsions put back into the income statement / Netflix looking into gaming / QoQ China's GDP increased 1.3% in Q2, 7.9% YoY Local / Rioting impacts as listed companies report details / South African Special Risks Insurance Association (Sasria) will cover claims / Standard Bank taking out Liberty Holdings / Very strong Richemont update / Tongaat results / Steinhoff increases settlement offer

Simon Shares I'm recording Wednesday afternoon and the violence of the past week seems to be abating, certainly in Gauteng. It has been a horror week for our country and most importantly; look after yourself if you can somebody else as well and above all else, be kind. US CPI YoY 5.4%. Core YoY 4.5%. Both ahead of expectations. A very strong production update from Pan African (JSE code: PAN) and their 15ha blueberry farm. OPEC+ seems to have reached a compromise between Saudi Arabia and UAE that should see an OPEC+ deal possible. US earnings season has kicked off and is expected to be the best ever - and it needs to be with S&P500 and Nasdaq100 at all-time highs. Gold US$1,825. Lost in all the rioting is another two weeks of level 4 adjusted lockdown, albeit restaurants can seat customers. Upcoming events; 22 July ~ JSE Power Hour: Power of savings We're starting to see SENS announcements about the impact of the rioting. The worst-hit so far seems to be Cashbuild (JSE code: CSB), they have 36 stores directly impacted by rioting and looting and a further 33 stores closed as a precautionary measure. Ethekwini Region, according to its mayor, Mxolisi Kaunda. R1billion loss of stock has been affected & R15billion rand of damage to property and equipment. Fuel refinery Sapref declares force majeure and shuts the plant. Large parts of N3 remain closed and Durban harbour has thirteen ships waiting for entry (according to VesselFinder.com). To my memory of living in KZN and counting the ships waiting whenever I could, that's about as many as I've ever seen. These will resolve as the rioting quietens down, and evidence is that it peaked on Monday. Longer-term the impact is hard to tell. Certainly, thousands of small businesses are gone and with them jobs. The Rand has fallen to 14.66 after hitting 14.76 early on Wednesday after it was trading at 14.20 on Friday. The JSE is actually up some 3% so far for the week. Riot insurance So the answer here is fairly simple, South Africa has an SOE that covers riot insurance - South African Special Risks Insurance Association (Sasria). They repeatedly have clean audits (financials are here). Assets under management is a little over R8billion. But they have reinsurance. Pretty much any property insurance you have will include a line item for Sasria and it is very cheap. For corporates, it is a larger cost every month and the question is are corporates 10% insured or have they done some self insuring.

Offshore / US ten year back at 1.36% after peaking at +1.72% in March / Jeff Bezos has stepped down as Amazon CEO / OPEC+ couldn’t reach an agreement / Fed minutes tell us nothing new, except inflation is higher/faster than they expected / US extends the economic blacklist of Chinese companies / China wants pre-IPO review of all new listings that have large user data Local / Imperial delisting offer at 6600c / Sibanye Stillwater bearish on palladium, bullish on platinum & rhodium / MultiChoice hit with R63billion tax bill in Nigeria / Nedbank WFH policy, 60% in office ie: 2 days WFH each week / Prosus shareholders approve share swap

Markets are as quiet as the street of Jozi, so this week a list of my favourite podcasts, the focus is offshore. I'll return and look at local in a few weeks. Upcoming events; 13 July ~ How to use ThinkMarkets Tools 22 July ~ JSE Power Hour: Power of savings Favourite podcasts; Planet Money Motley Fool Money Disciplined Investor Odd Lots Freakonomics Radio Michael Covel’s Trend Following Radio

Offshore / US The unemployment rate edged up to 5.9% in June / US home prices rose by 14.6% in April, the largest gain in 30 year / S&P 500 closes green 7 days in a row, record is 8 days (US markets closed Monday) / RobinHood proposed listing ~ $40bn valuation / Didi Chuxing lists on NYSE, market cap $69bn & Chinese regulator blocks new accounts Local / Modest Q2 for JSE, TOP0 -1.2% (+11% YTD), Fini15 +6.8% in Q2 / SARB turned 100 last Wednesday / May saw another +R50billion trade surplus tax receipts / Invicta results / AdaptIT shareholders vote for 700c Volaris delisting offer / Etion results. The story is they selling LAWTrust business for R245million when the market cap of the entire company is R22million. CEO says plans to return value and delist

Simon Shares Level 4 lockdown. Remember the podcast of last week when I delved into the various leisure socks. Argent (JSE code: ART) results. Long a stock not worth covering or owning, but they've changed things up the last few years. Invicta (JSE code: IVT) another successful turnaround and really good results. JSE (JSE code: JSE) trading update, no surprise earnings under pressure. Nike (NYSE code: NKE) results absolutely crushed it last week. Revenue +96%. Anchor Capital published a note showing that the US had increased the number of US$ in circulation (M3) has gone up 33% over the course of the pandemic. Absa’s Q2 2021 manufacturing survey shows very positive manufacturer confidence. EOH (JSE code: EOH) new board suing founder Asher Bohbot for R1.6billion. A US judge kicks out the Federal Trade Commission's (FTC) antitrust case against Facebook. It was requesting that Facebook sell their Whatsapp and Instagram businesses. They can bring the case back again, but the bigger issue is antitrust cases against big tech in the US and EU. SAB Zenzele Kabili (JSE code: SZK) has been coming down, now around R120. Still, double far value. Thungela Resources (JSE code: TGA) trading at almost 4000c. Coal may be dirty and coal may be dead in time. But so far it's been a great investment, but this is probably fair value. South African Reserve Bank (SARB) turned 100 years old on Wednesday 30 June. Euro Zone inflation slipped to 1.9% for June. Popia is live from today. SA recorded another trade surplus in May of R54.6billion. This is the 3rd month in a row that the surplus has been above R50billion. Watch ~ Rand, stronger for longer

Offshore / Gold a flat week after the previous weeks sell-off / S&P500 and Nasdaq back at all-time highs after the previous week's aggressive sell-off / Global shipping remains under severe pressure as Chinese port shut after a covid-19 outbreak / US gets an infrastructure bill, but maybe not. It’s messy Local / Omnia results paid special dividend and SARS dispute / Growthpoint trading update / Old Mutual to spin off third of their Nedbank holding / May CPI 5.2% with core inflation at 3.1% / +50s can register for vaccines from Thursday / Absa’s Q2 2021 Manufacturing Survey shows rising manufacturer confidence

Simon Shares The announcement by the president that business will be able to build up to 100 megawatts of power without constraints is huge. Aside from the fact that the current limit is 1 megawatt, it will have three direct impacts; Estimates are that at least 4,000 megawatts can be built in 18-24 months. That is level 4 load shedding. So bye-bye load shedding. Tens of billions in spend aiding the construction and allied industries. Savings when using your own power. Goldfields (JSE Code: GFI) is building a 40 megawatt supply for South Deep that they estimate will save them R120million a year. Annual consumer price inflation hit a 30-month high in May, rising to 5.2% from 4.4% in April. Core inflation 3.1% and at the bottom end of the range. Renergen* (JSE code: REN) has spooked the market as they announce a capital raise "raising the proceeds for the completion of the Phase 2 studies of the Virginia Gas Project". Details by the end of the week, but this isn't a massive surprise. Startup miners always need more cash, even for studies never mind the actual building of the facilities. * I hold ungeared positions. Upcoming events; 24 June ~ JSE Power Hour: Rand ~ stronger for longer Deep dive hospitality stocks The third wave of the pandemic in South Africa is so are very much a Gauteng issue as it records higher daily new cases above the peaks from the first and second waves. This is no surprise to anybody. But what was notable is that lockdown restrictions remain very relaxed (albeit rumours that we'll see tougher restrictions soon). I had expected a harder lockdown for the third wave. Expecting a harder lockdown I was very cautious on local hospitality stocks. The Yoco small business turnover index shows activity at 78% of the levels pre-lockdown after hitting 128% at the end of May 2021. So even without harder lockdowns, we are being more cautious but this is still well ahead of the 40% odd we saw during the end of the second waves lockdown. We also have some Stats SA data on occupancy in tourist accommodation. Here we're back at around 30% for the end of April and that's back where we were before the second wave arrived. Hotels in South Africa recorded an occupancy rate of 26,8% in April 2021, up from 23,2% in March and 17,9% in February. Read more here: https://t.co/Pzft0bs8oi#StatsSA pic.twitter.com/rcjbJcUHdV — Stats SA (@StatsSA) June 21, 2021   Airports Company SA (ACSA) data shows domestic travel picking up to around 60% of pre-pandemic levels. International is at around 15%-20% and regional around 25%-30%. So in short this new wave is still early days and is hurting, but so far not as bad as I had feared (occupancy data is a month out of date). Certainly ahead of the third wave we were seeing improved tourist activity even if still below the pre-pandemic levels. So what stocks to look at? I am not rushing in, but they're on a watch list for when we're past this third (and hopefully final) wave. Spur (JSE code: SUR). Sit down dining hurts under lockdown and restaurants are the real spreader risk. But as we pass through this third wave and assuming no significant fourth wave (vaccines rates should be moving higher by then) Spur looks good. Famous Brands* (JSE code: FBR) I like their takeaway as it's more resilient than sit down. But they still have debt issues that will take another two years to fix. So speculative. City Lodge (JSE code: CLH). Their break-even occupancy is around 35% which is a little below the Stats SA data, but that was for tourist data, City Lodge has mostly been business travel. So they need more improvements to start a profit. They also have the sale of East African assets, which if it happens will be a boost. Of course, if that is cancelled, that'll be bad news. Tsogo Sun Gaming (JSE code: TSG) has been running and here consumer spare cash and the third wave are a threat to that run so I'd stay away for now. Tsogo Sun Hotels (JSE code: TGO) has also been running and again I'm not convinced the market is totally right on this one. Sun International (JSE code: SUI) ran hard but then has come under pressure and looks interesting on more weakness.  

Offshore / Markets spooked by FOMC statement / Gold under pressure / Brent crude slips but holding above $70 / TikTok owner ByteDance reports $2.1bn loss / Krispy Kreme returning to market with IPO / Adobe results Local / Rand under pressure / Capitec expects half-year earnings to rise 292% / Sephaku update and PPC results / Mediclinic to produce own power / Alexander Forbes results, retrenchments almost back to ‘normal’ levels / Stricter lockdown

Simon Shares SAB Zenzele Kabili trading at R180, at least 3x fair value? Local GDP for the first quarter was 1.1% QoQ. Kinda middling. Stor-Age* (JSE code: SSS) results. Thungela Resources (JSE code: TGA) lists. AdaptIT (JSE code: ADI) gets an improved offer from Volaris - 700c. Life Healthcare (JSE code: LHC) bouncing again because of the Alzheimer drug. But it a very long road. Sirius Real Estate (JSE code: SRE) results were excellent. * I hold ungeared positions. Upcoming events; 24 June ~ JSE Power Hour: Rand ~ stronger for longer Options, futures and CFDs Options (warrants on the JSE) Complicated Risk is only 100%. Right to buy or sell. Not much offered in SA. Long or short, depending on if call or put. Can trade on Safex, but institutional size trades only. Futures Exchange-traded Equity, indices, commodities, currencies & agriculture. Long or short. Interest charge and dividends built into the price. Require a Safex broker. You can lose more than you started with. Contract for Difference (CFDs) Over the counter (OTC) traded. Counterparty risk. Issued on anything. Long or short. Interest paid/earned daily. No expiry. You can lose more than you started with.

Offshore / U.S. economy added 559K jobs in May and unemployment fell to 5.8% / G7 nations set the minimum global corporate tax rate at 15% / AMC issues shares above the current share price / Biden expands blacklist to 59 Chinese companies / Apple staff back to work 3 days a week, starting September Local / Volaris ups offer to AdaptIT to 700c / Sibayne Stillwater to buy back 5% of shares / SARB selling their stake in African Bank / Famous Brands results / Prosus to buy Stack Overflow of US$1.8billion / Mark Barnes sells up to half his Purple Group shares

Simon Shares Sibanye Stillwater* (JSE code: SSW) announced they'll buy back 5% of their shares. Shoprite* (JSE code: SHP) exits Nigeria. AdaptIT (JSE code: ADI) gets an upgraded offer from Huge (JSE code: HUG) but still likes the 650c cash from Volaris, even as that is below the independent board's fair value of 700c - 909c. Barloworld (JSE code: BAW) completes R1billion sale of motor retail unit and will also, in time, sell its Avis car rental and leasing business. Brent oil is above US$70 for the first time since early 2019. OPEC+ says it will maintain its policy of gradually increasing supply. A very strong trading update from Standard Bank (JSE code: SBK). Banks locally have risks, but look cheap, I have a position in the Satrix Fini ETF* JSE code: STXFIN).* I hold ungeared positions. [caption id="attachment_29849" align="aligncenter" width="888"] Fini15 ~ weekly[/caption] A new ETF to rule them all Manage your money like a rock star Upcoming events; 24 June ~ JSE Power Hour: Why the Rand will be stronger for longer

Simon Shares Somebody buying Metrofile (JSE code: MFL). Started late on Tuesday, sending it almost 13% on the day and holding Wednesday. Mediclinic (JSE code: MEI) paid £432m for 29.9% of Spire Healthcare (LSE code: SPI) in 2015. They're now supporting a buyout from a third party valuing that stake at £287.8m. Healthcare stocks earnings remain under pressure as elective surgery remains limited. Afrimat (JSE code: AFT) to acquire R650m manganese mining rights. Gold above US$1,900 and even with Rand strength (currently 13.85) we're finally seeing gold in ZAR moving a little higher. No change to the repo rate at last weeks MPC meeting. All the excitement was that the next move will be up, but we knew that. Of more interest is that the govoner talks bout 4.5% rather than the 3%-6% range. He always has but it seems MPC will based rate decisions on that 4.5%. * I hold ungeared positions. Upcoming events; 27 May ~ JSE Power Hour: Manage your money like a rock star! 01 June ~ ThinkMarkets: Key points to investing 24 June ~ JSE Power Hour: Rand ~ stronger for longer Sygnia iTrix 4th Industrial Revolution ETF Cache This: Smartphones on a budget ~ Nafisa Akabor SAB Zenzele Kabili Listing on the BEE board of the JSE on 28 May. No IPO process ahead of that. R40 listing price. But trades subject to supply / demand. I would expect it to boom initially then settle around R40. No lock-in period, so you can buy / sell as you wish. This is very much a long-term investment. Will be ownership of global AB Inbev (JSE code: ANH) shares worth R5.4billion. AB Inbev market cap is around R1.8trillion. So a small slice of the entire group of less than 1%. Important, you are not just getting SAB, it is the entire global group. There is debt included, geared about 55% at 70% of prime payable over ten years. Another reason to view it as long-term. 75% of dividends will be used to settle the debt. This is a long-term investment option and NOT a get rich quick scheme. We have also seen some BEE schemes fail spectacularly. Not all stockbrokers are enabling trading in the shares. SAB have a trading desk, call them on 0861 900 903. Only BEE qualifying investors can buy the shares.

Simon Shares Santova (JSE code: SNV) were very solid and they are now truly a global logistics business. Distell (JSE code: DGH) announced that Heineken wants a 'majority' stake in the company. Details are scant with major shareholders being PIC and Remgro (JSE code: REM) both just over 31%. But does the majority mean they want the cider business or +50% of the shares which would trigger a mandatory offer to minorities? This of course after Heineken threatened to take their beer and go home last year during the alcohol ban. hmmm, wasn't it just last year Heineken was hating on us so much they was canceling projects and threatening to take their beer and go home .. — Simon Brown (@SimonPB) May 18, 2021   Balwin (JSE code: BWN) & Calgro M3 (JSE code: CGR) results both showed a tough year. But I like this space. Calgro offering its units at the R500k price point (R4,000 monthly bond costs) while Balwin starts at a little under R1million to around R2million. So different markets. Redefine (JSE code: RDF) results saw loan-to-value (LTV) improving but what struck me is that they value properties twice a year. Most doing it over a rolling three years. Local CPI hit a 14-month high in April, mainly driven by rising transport and food prices. The rate was 4.4%, up from 3.2% in March. Thursday is the MPC rate decision, no change expected. Eurozone April CPI +0.6% on Month, +1.6% on Year. Core CPI +0.5% on Month; +0.7% on Year Crypto crashing, entire crypto market cap is off 20% today on news China is cracking down (again). * I hold ungeared positions. Upcoming events; 27 May ~ JSE Power Hour: Manage your money like a rock star! jjjjj What's with the 'special' shares? Special shares usually with high voting rights and often with limited or zero economic rights. They enable insiders to retain voting control even while they may not actually control the company. The most well known are the Naspers~N (JSE code: NPN) A shares that give control to a few parties. Shoprite* (JSE code: SHP) has the same for Christo Wiese which he tried to sell back to the company. But they have zero economic rights and only are votable by Wiese More recently it surprised many that while Remgro (JSE code: REM) owns a little over 31% of Distell (JSE code: DGH) they ave a pile of B shares that gives them 56% voting control. In the older days, companies used pyramid structures, but those have long since largely left the JSE and no new ones can be listed. The challenge is how to know about them? The annual report will detail them. Generally, they don't matter massively, until they do. And then they matter. Wiese failed to receive the required number of votes to get back onto the Shoprite board in 2018, but then he used his special shares to basically override shareholders. Subscribe to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Offshore / US inflation / Disney results / US pipeline shut down due to ransomware attack / UK rejects (softly) Bidens plan for global corporate tax rate / Chinese industrial production and retail sales due Monday Local / Naspers / Prosus share swap / Raubex results / Ascendis swaps debt for assets / Clicks buys Pick n Pay pharamacy business / Cape Town airport has best month since lockdown, still 40% down from 2019 / Long4Life results and NAV discount

Simon Shares Raubex (JSE code: RBX) results saw the second half record HEPS of some 110c after a loss in the first half. The previous full-year, 2020, HEPS was only 161.7c, so the business is looking good. That said, lots of debt and the expanding order book needs to be converted into profit. Transaction Capital (JSE code: TCP) results see the dividend returning. A super-strong trading update from Lewis (JSE code: LEW) with HEPS more than doubling. At the time of their interim results, they paid a dividend of 133c when the stock was around 2400c. If they can do a 250c dividend (should be easy?) the forward dividend yield sits at around 8%. US inflation data spooked higher than expected, even considering the April base effect. April Consumer Prices +4.2% and Core CPI +3%, highest since 2009. Used cars (stimulus cheques?) were +10% and made up a third of the core CPI increase. Fed will do nothing. Ascendis (JSE code: ASC) has announced they've reached a deal with debt holders. Basically, they're swapping the crown jewels (Remedica) for their large debt pile. The debt cost was R280million for the last six month period ending December and this will improve solvency and keep Ascendis alive. But are the remaining assets attractive enough for investors? Upcoming events; 27 May ~ JSE Power Hour: Manage your money like a rockstar Subscribe to our feed here Subscribe or review us in iTunes More Naspers shuffles Naspers (JSE code: NPN) and Prosus (JSE code: PRX) have announced another deal to try and close the discount between themselves and their holding in Tencent (Hong Kong code: 700). Prosus will acquire up to 45.4% of Naspers shares via a share swap whereby holders of Naspers can get 2.27 new Prosus shares for every one Naspers share. This will increase Prosus liquidity (in theory) and markedly reduce Naspers weighting in the Top40 and Swix indices. The latter argument makes sense and is likely a part of the reason for the discount that Naspers experiences. The problem is that with the weighting above 20% most funds are not allowed to hold over a certain percentage (lower than the Naspers weighting), so they can not go overweight, or even match index weight, for Naspers and this reduces potential buyers of the stock. Will it work? Maybe. They have tried many other tricks, unbundling Prosus and earlier MultiChoice (JSE code: MCG) and that hasn't worked. But the weighing in the indices is a real problem. Of course, the very easy fix here is to simple unbundle the Tencent holding - but that's not going to happen any time (aside from some sales every three years as we saw recently). JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Offshore / US jobless claims below 500k, lowest since pandemic started. But overall employment slips to 6.1%, up from 6% in March. / Janet Yellen says rates will need to rise / ECB Official Calls for Accepting Inflation Overshoot / Saudi Aramco Q1 profits +30% / Gold +$1,800 Local / Moodys skips reviewing SA credit rating / MTN update / Sibanye Stillwater update / Kaap Agri results / Karooooo results / Anglo American gets coal demerger shareholder approval

Simon Shares Purple Group* (JSE code: PPE) now has 1million clients across all platform. A wowzer number. What an incredible milestone achieved today. Across all platforms & partners we've reached 1 million registrations. @CapitecBankSA @SATRIX_SA @BidvestBankSA @EasyEquities hard to describe how grateful I am to all you #invstr legends that challenge us to rise each day. 🙏🙏🙏 — Charles H Savage (@CharlesHSavage) May 5, 2021   Combined Motor Holdings (JSE code: CMH) full year results. Second half saw decent cash flow, back to profit and dividends. Metrofile* (JSE code: MFL) are cancelling 4.18628% of their treasury shares. MTN (JSE code: MTN) first-quarter update, good numbers with group EBITDA +21.3%. Forward PE of around 11x is decent as it's being priced as a utility, albeit was even better back at 6000c when forward PE was c8x. Revego (JSE code: RVG) cancelled the listing. Tax Tuesday: Tax obligations for global citizens * I hold ungeared positions. Upcoming events; 06 March ~ JSE Power Hour: Finding income in JSE listings Subscribe to our feed here Subscribe or review us in iTunes PGMs Flying, miners not so much Palladium above US$3,000 (all-time high) [caption id="attachment_26363" align="aligncenter" width="888"] Palladium weekly chart[/caption] Platinum above US$1,200 (six-year high) [caption id="attachment_26365" align="aligncenter" width="888"] Platinum weekly chart[/caption] Rhodium above US$29,000 (all-time high) PGMs are considered a 'green' metal in that they help reduce CO2 emissions. Demand remains above supply. But production will increase. Scrap is increasing (especially with iron ore at records) Rand is strengthening and will likely continue to do so But the listed miners are languishing nowhere, why? ===== JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Offshore / April a green month for US indices / Palladium almost $3k and copper almost $10k / Knock out results; Microsoft, Apple, Alphabet & Amazon / US Q1 GDP +6.4% / Biden 100 days Local / Resi10 the main local index green in April (midCap & Property did well) / Gilbertson quits Gemfields / Tongaat update, just misses debt reduction targets / Steinhoff to list Pepco in Warsaw / Astral update / AdaptIT needs another week to decide on the two offers

Simon Shares Revego* (JSE code: RVG) was supposed to list today but has delayed their listing. I applied for allocation as I like the business model of renewable energy with guaranteed inflation-linked off-take agreements. They invest into operational renewable asset and are targeting a 8%-10% dividend yield, based off the 1000c listing price. * I hold ungeared positions. Total world ETF from CoreShares Cache This: Gadget insurance Upcoming events; 06 March ~ JSE Power Hour: Finding income in JSE listings Subscribe to our feed here Subscribe or review us in iTunes JSE protections With the Revego listing delayed the money I put into the book build last Thursday has not been seen since. The company was supposed to issue a SENS on Monday and list on Thursday, but we heard nothing until Thursday morning. It has been delayed by a few days. What struck me was that I was not worried about the chunk of money that I had put into the book build and which I have not see or heard from in a week now. The reason for my lack of concern is the protections the JSE exchange offers. Extra regulation around the companies act. Stockbroker regulations. Investor fund. FSP insurance. This of course does not stop crookery from executive teams nor does it stop businesses from going bust. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares South African inflation was 3.2% in March 2021. Pick n Pay (JSE code: PIK) results show it was all liquor and tobacco that was the pain as it was off 31%. Karooooo (JSE code: KRO) has returned after exiting as Cartrack. The market seemed confused as it opened at 6500c, it is now trading R480. Still well off the adjusted highs f over R900 as everybody got all excited about the Nasdaq listing. Long4Life (JSE code: L4L) hints at possible unbundling as it looks to unlock shareholder value. I'm confused, they were just consolidating by buying up businesses? I held them but sold early in the pandemic as they were so small in my portfolio and weren't doing much with their cash. Absa (JSE code: ABG) loses their CEO. Cell C reports R5.5billion full-year loss. Horror story and I never understood what Blue Label (JSE code: BLU) saw in the business. PSG results without Capitec* (JSE code: CPI) and they're buying back their preference shares. * I hold ungeared positions. Upcoming events; 22 April ~ Introducing the CoreShares Total World ETF 06 March ~ JSE Power Hour: Finding income in JSE listings Subscribe to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Offshore / Coinbase lists / China Q1 GDP 18.3% / Reports Jack Ma will divest from Ant Group / Gold looking strong, but miners lagging (Rand strength?) / Just more than half of U.S. adults have gotten at least one COVID-19 vaccine dose ~ CDC Local / Rand strength / Karoooo lists on Wednesday / Capitec results / EOH looking better / Sasol goes green / Local CPI later this week

Simon Shares New Global ESG ETF from Sygnia. Anglo American (JSE code: AGL) to list their coal assets, Thungela Resources. Comair has finally been delisting from the JSE and shareholders will receive 4.26c per share. * I hold ungeared positions. Upcoming events; 15 April ~ Everything ETFs and tax-free investing Subscribe to our feed here Subscribe or review us in iTunes Capitec and Purple Group (EasyEquities) results Two stocks that I own; Purple Group* (JSE code: PPE) and Capitec* (JSE code: CPI). Both with really good results and I'll go into the numbers in detail. Capitec monthly chart since listing Purple Group monthly chart since listing JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / New highs for S&P500 & Nasdaq / Yellen wants global minimum corporate tax rate / Semi conducter chip shortage continues to hurt production / China slaps Alibaba with $2.8 billion fine in anti-monopoly probe / Goolge pushes back on WFT, wants staff back in the office from September Local / Prosus sells another 2% of Tencent / Purple results / IMF says local GDP 3.1% in 2021 and 2% in 2022 / Anglo exits SA coal by setting up a new JSE-listed miner / 650c Cash offer for AdaptIT / Pick n Pay update

Simon Shares Prosus (JSE code: PRX) selling another 2% of Tencent. Purple* (JSE code PPE) trading update for six months ending February. HEPS of about 0.85c. They did 1.54c HEPS for full-year ending August after a loss in the first half last year. So this period showing slower growth. Growthpoint (JSE code: GRT) announced that their healthcare fund tops R3.2bn with Cintocare Hospital acquisition. The JSE is investigating PPC (JSE code: PPC) trades amid insider trading suspicions as the share moved ahead of the announcement last week. The IMF now says SA’s economy will grow faster at 3.1% in 2021 and 2% in 2022, but it will take over two years to recover from the 7% collapse we saw last year. Janet Yellen wants all countries to have a minimum corporate tax rate. * I hold ungeared positions. Upcoming events; 15 April ~ Everything ETFs and tax-free investing Subscribe to our feed here Subscribe or review us in iTunes Selling to early This is a problem for both traders and investors. Part of the problem is the thrill of a winner, we've made money and we want to lock in that profit so the thrill doesn't go away, and we sell - but we sell way early. The bigger issue is what are you trying to achieve? As always know your strategy and know why you entered a position. Be real about taking profits, that is why we're in the market. But balance that with giving winners space to win even more. Analysis of previous winners you exited early. Why did you do exit and what could you have done to stay in longer? What about some you exited at the right profit point? JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares PPC (JSE code: PPC) have made a deal with their DRC lenders. They potentially owed US$175million but now are only on the hook for US$16.5million. This stock was 60c in November and is now around 240c. Renergen* (JSE code: REN) says helium concentration is +3%. But reference the US has the current best concentration level at 0.35%. Sabvest (JSE code: SBP) results show a discount to net asset value (NAV) of some 50%. Add to this PSG (JSE code: PSG), Remgro (JSE code: REM), Naspers (JSE code; NPN) and Prosus (JSE code: PRX) discounts all in the order of 40% or more. The market is clearly hating on holding companies? Back in the day, a 30% discount was a lot, 15% about the average, and at times PSG has been at a premium to NAV. Ever Given is free, but shipping rates remain elevated as they were before Ever Given got stuck. MPC no change to rates, but changes to Q1 GDP and the vote. Goldman analysts say go long on Russia, South Africa stocks. Bank of America Securities conference on investing in SA had record offshore attendance with Clicks (JSE code: CLS) and Shoprite* (JSE code: SHP) topping the list of interest. * I hold ungeared positions. Upcoming events; 15 April ~ Everything ETFs and tax-free investing Subscribe to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / S&P500 closes at all-time high, Nasdaq still 6% off highs / US Personal Spending fell 1.0% in February, slightly more than expected, but January spending was revised upward by a full percentage point to 3.4%. / Ever Given remains stuck in Suez Canal / Intel to build new silicon chip fab plants for $20bn / Tencent results / WeWork to go public, via a Spac, with $9bn valuation Local / CPI 2.9% for Feb and MPC no change / Magda Wierzycka quits as Sygnia CEO / AdvTech results / Old Mutual results / Remgro results overshadowed by 40% discount to NAV / Goldman analysts say go long on Russia, South Africa stocks

Simon Shares AdvTech* (JSE code: ADH) solid results in a tough market. Vivo Energy (JSE code: VVO) issued an update on Moroccan industry review and seems it's back to square one. Resilient (JSE code: RES) results not the horror show expected. Aveng (JSE code: AEG) wants to do another rights issue, again at 1.5c and raise R100m. Tencent solid results. Ever Given gets stuck in the Suez Canal. February local CPI at 2.9%. * I hold ungeared positions. Upcoming events; 15 April ~ Everything ETFs and tax-free investing Subscribe to our feed here Subscribe or review us in iTunes Why all the panic? A small rise in US ten-year treasury yields and a little inflation and suddenly it is the end fo the world for markets. Inflation is likely to move higher in the US as the stimulus money gets spent. This is different from the stimulus after 2008/9, which went to banks who hoarded it and stuck it into markets. This time money goes directly to consumers who'll send the money. But the Federal Reserve is happy that structural inflation is not returning and a little inflation in the system isn't the end of the world. But to listen to many experts here comes hyperinflation and the end of the world as high inflation = high rates and as such money moves into income funds rather than equity. Further if one digs into Modern Monetary Theory (MMT) government spending is not the end of the world, certainly for the US government. Here's a fun one, to deal with inflation, raise taxes? In fact have an automatic process that removes congress, if inflation heads above say 3%, taxes go up 4%. Above 5% taxes increase 8% and so on. But back to the panic, stop. Markets never go in a straight line and suddenly getting all bearish because of some selling is going to make sleeping ever again impossible. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Shoprite* (JSE code: SHP) delivered really strong results for the six months ending December. Shoprite daily chart[/caption]Purple* (JSE code: PPE) is up some 20% in the last ten days. A buyer has arrived and thanks to low liquidity they're moving the price. Good update from AdVTech* (JSE code: ADH) and results fro Stadio (JSE code: SDO) while Curro (JSE code: COH) was modest. Seems tertiary education was the winner and schools are under pressure but longer-term a sector I like. Astral (JSE code: ARL) update. TSA travel numbers are hitting their highest levels since lockdown started. Still only about half what they were before lockdown but the US is vaccinating and opening up. This while Europe looks to be starting the third wave and locally nobody will give/sell us any vaccines. So globally this re-opening is going to be very lumpy with the US and UK seemingly winners in the vaccine front (ironic after they were losers on the pandemic front).  Sun International (JSE code: SUI) nothing to write home about. Lots of chatter about the re-opening trade with City Lodge (JSE code: CLH) up about a third in March. But with at least one more (and maybe even two more) Covid-19 surges and resultant lockdown restrictions I am staying cautious for now. The March 16-17 FOMC statement comes out between my recording and you listening. No rate change so it's all about the language. Even in the face of a strong economy are they still prepared to do whatever it takes and leave rates low into 2023? * I hold ungeared positions. Upcoming events; 15 April ~ Everything ETFs and tax-free investing Subscribe to our feed here Subscribe or review us in iTunes Small caps for the win MidCap index is up about 10% so far in 2021, nice and pretty much exactly what thee Top40 has done. Of course, the Resi10 has done almost 20%, but the winner, small caps up some 20%. The property index has returned single digits in 2021 so far, but technically it is looking ready to break higher. We also now have all the large bank results and they were okay. The index is up some 5% and looking tired. There is value here but not sure there is any need to rush. Property index, daily chart[/caption] JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / $1.9trillion stimulus bill signed by Biden and on route / Tencent on notice as China cracks down on fintech players / The tech-heavy Nasdaq has underperformed the Dow for four straight weeks — a first since 2016 / Friday 1,357,111 people were screened at U.S. airports, marking the highest number of travellers since the pandemic began. / U.S. 10 Year Treasury hits 1.625 / Huawei listed anew as a threat to US national security Local / GDP for 2020 -7% / SA records first annual surplus in 2020 (last was 2002) / Woolies sells Elizabeth Street Property / MTN results (dividend cancelled) and Ambition 2025 / AfroCentric results / Aspen results see more debt slashed

Simon Shares Ascendis (JSE code: ASC) lenders are flexing their muscle. Back in February L1 Health, Blantyre bought enough debt to be able to block any asset sales and with over R7billion in debt Ascendis desperately needs to sell their European crown jewels. There is now a forbearance agreement in place until the end of April by when the company needs to have sorted out their debt. A rights issue is not an option at current prices so a debt for asset swap with the lenders? This will maybe resolve the debt issue, but then what does that leave Ascendis? Renergen* (JSE code: REN) find a bunch more gas they did not expect to find. Subscribe to our feed here Subscribe or review us in iTunes Growthpoint (JSE code: GRT) office vacancies at 18%. Lots of concern about malls as we're over traded and online shopping. The latter is a very long-term issue, the former will see some die. But office is the real concern. Solid AfroCentric (JSE code: ACT) results. Everybody (well many) love Discovery* (JSE code: DSY) yet here is a pure health stock with great potential, cheap valuation and they consider NHI to actually be something that would further benefit the company. Very good Metrofile* (JSE code: MFL) results. Debt is going faster than expected, business is solid and the anon bidder has exited the building leaving only the one stuck in Australia. They should be able to easily do 30c HEPS for the full year putting then on a forward PE of under 10x. This set of results they only paid out half of HEPS as a dividend, but this should increase from next financial year as debt becomes way smaller. MTN (JSE code: MTN) finally pricing as a utility. * I hold ungeared positions. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / NFP added 379k jobs (large beat) and US unemployment 6.2% (at this pace it’ll take until April 2023 to get back to where we were in February 2020) / $1.9trillion stimulus bill approved by Senate / China sets 6% 2021 GDP target / Germany charges Steinhoff execs / UK taxes going up to highest in 50 years / Nasdaq is red year-to-date Local / One year of Covid, ZAR 40c weaker, Top40 +20% (both from Jan20 levels) / Harmony out of Top40 and Resi10, replaced by Glencore / Rhodes Food update “..sales started recovering in January and February 2021…” after TigerBrands said January was poor? / Firstrand results / Spur results / Treasury expected to be another R30billion ahead on tax collections

Simon Shares A great research report on Blue Gem covering Renergen (JSE code: REN). What I really like about the report is that Keith shows you all his workings so you can make your own call on his working and decide. Spur (JSE code: SUR) were a horror show, no surprise it was the six months to end December with all the various lockdown levels. Two things struck me. They're positioning themselves well for the post-pandemic dining life, dark kitchens, exploring drive-through were feasible. But the biggie was how the company has changed in the last decade or so. It used to be Spur with a little pizza and sushi. But it really is now a collection of brands across different eating experiences and price points. My concern in the short term is a third and fourth wave. We can see as lockdown and alcohol bans get stricter their traffic decreases markedly and I am pretty sure that the rest of 2021 will see at least another two waves of the pandemic with the resulting harder lockdowns. Two awesome points from Nerina Visser in an interview I did with her yesterday on MoneywebNOW. Firstly she comments about the saving of dividend tax within a tax-free account. I have run the numbers and over a very long-term that saving is actually more than what one saves on capital gains tax. Secondly, what if you don't have the R36k lump sum to invest? Well, do you have some discretionary ETFs? If yes, sell them, move them into your tax-free account and then continue buying the ETF outside of the tax-free every month for the rest of the year. You get the tax-free benefit from day one. Upcoming events; Weekly, Wednesday at 5.30pm ~ Follow the Trader 04 March ~ Things I wish I knew: the beginner trader Subscribe to our feed here Subscribe or review us in iTunes It's a bull market [caption id="attachment_24772" align="aligncenter" width="888"] Top40 weekly chart[/caption] I was chatting with some friends from around the world about markets. I say it's a bull market, especially locally. They all had a dozen different, and solid, reasons why I was wrong. But they miss one very important point - price. The simple truth is that markets the world over are at all-time highs and heading higher. We can kick and scream all we want, but price is the truth and the price is heading higher. Deciding that it is all crazy and heading to cash, or worse taking short positions is a fool's game. Sure one day the market will peak and somebody will have that Tweet where they called it. But that's not because they're super smart, but because if you call something often enough eventually you'll be right. Bull markets never feel 100% comfortable, that's the nature of the best. There is always a reason to be sceptical, that's the nature of the beast. But stop stressing and enjoy the ride, that's what bulls are for. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / US Durable Goods Orders Surge In January To Pre-COVID Highs / FB to pay Australian media / Latest Warren Buffet letter / Warren Buffett's $10 billion mistake: Precision Castparts / House passes $1.9 trillion Covid relief bill, sends it to Senate / Opec+ meets on Thursday Local / Budget / Sasol results (no rights issue) / TymeBank gets R1.6bn / Goldfields gets go-ahead to build 40MW solar plant at South Deep Mine / Implats results and dividend / Woolies results

Budget 2021 with AJM Tax I was again invited to moderate the AJM Tax post-budget panel with three excellent guests; Pieter Janse van Rensburg – AJM Tax Daniel Silke - Political Futures Consulting Adriaan Giessing – Seed Investments You can download the AJM Rax budget highlight booklet here. Subscribe to our feed here Subscribe or review us in iTunes Upcoming events; Weekly, Wednesday at 5.30pm ~ Follow the Trader 04 March ~ Things I wish I knew: the beginner trader JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Australia fight with Google and Facebook / Uber loses appeal in UK, drivers are workers not independent contractors / Former Bank of England Governor Carney joins board of digital payments company Stripe / US return to Paris Agreement / US jobless claims up to four-week high / Gold under pressure as it trades at lowest levels since June Local / Sibanye Stillwater results / Truworths results / BHP results and monster dividend / Rand at 14.50 / Two interesting update titbits; Tigerbrands worried about January sales and Dis-Chem sees connivance malls much better than malls, but malls returning to normal. / Value Group delisting

Simon Shares Interesting titbit from TigerBrands (JSE code: TBS) update "It is too early to conclude whether the lower consumer demand levels evident in the month of January reflect an even more challenging environment than what was experienced over the past year." Upcoming events; Weekly, Wednesday at 5.30pm ~ Follow the Trader 18 February ~ Everything ETFs and tax-free investing 04 March ~ Things I wish I knew: the beginner trader Subscribe to our feed here Subscribe or review us in iTunes BHP* (JSE code: BHP) results were good, the cash flow was excellent with the dividend up 55% and payout ratio 85%. This is the benefit of commodity prices at higher levels but also due to low debt levels an almost zero capex requirements from most commodity miners. This raises three questions; Are we in a commodity supercycle? I think not, sure prices are at best levels in about five years. But that's off a low base rather than a super cycle. sure demand has picked up and global infrastructure spend is rising in response to the pandemic. But we don't have China growing at almost 10% a year sucking in almost all of the world's commodities as we did back in the early 2000s. Last time we ha a commodity supercycle it died the day after a global bank did a 100-page report on how it would last another decade. Will commodity prices go higher? They can but mostly I think they won't. Platinum could hit US$2,000 but for the rest our best bet is they stay around current levels. Oil, who knows. Will the frackers return in mass with higher prices? Demand will certainly continue to increase as we get out of the pandemic, but how long can Opec+ keep their collective foot on the production brake pedal? I think not long as they'll need the money. How long will it last? The elevated prices can probably last 3-5 years at best and this will see cash flows at high levels, especially as debt gets paid own. But the miners need to find new mines to mine or they run out of product to sell (as we're seeing with Pan African Resources* (JSE code: PAN) and their new mines / operations. So at some point, we'll start seeing green and brownfield capex projects coming back and that'll need some cash so dividends will start to drop. My big fear is mega deals. These always destroy value albeit the miners look at them as an easy way to increased supply for themselves. If a stock I hold gets an offer, I'll take the money and run. If a stock I own makes an offer, I'll take the money and run. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Disney results all about Disney+ / Tesla puts $1.5billion into Bitcoin / Janet Yellen warns of ‘explosion of risk’ from cryptocurrency markets / Bumble IPO with 60% gain on the first day / Platinum above $1,200 for first tine in six years / Freeze Sends Gas Soaring to $600 Local / More small-cap updates surprise to upside; Trellidor & Metrofile / Itatile results / ARB Holdings results, solid cash generation / Rand turned sixty yesterday / Cartrack coming back to earth after hitting 9000c / Steinhoff maybe resolving their legal woes / SARS collections ahead by R100billion  

Simon Shares Bitcoin* hits US$48,000 as Tesla declares they put US$1.5billion into the crypto. Platinum finally on the move and above US$1,200 for the first time since 2015. [caption id="attachment_24687" align="aligncenter" width="888"] Platinum weekly chart[/caption] Sibanye Stillwater* (JSE code: SSW) best illustrates the boom in mining profits. In 2019 they made R62million now 2020 they expect almost R30billion and over 1000c HEPS. Could we see a 500c dividend? Metrofile* (JSE code: MFL) very solid update and the stock has recovered from their 2019 wobble. There is still two potential buyers, one stuck in Australia, truthfully, I would rather they remain potential and I will hold the stock. * I hold ungeared positions. Upcoming events; Weekly on Wednesday ~ Follow the Trader 18 February ~ Everything ETFs and tax-free investing 04 March ~ Things I wish I knew: the beginner trader Subscribe to our feed here Subscribe or review us in iTunes Should I sell the bounce? Depends why you bought the stock. A long-term investment? No, then you keep it and focus on fundamentals rather than price. A quick trade to make a few bucks. Then absolutely sell the bounce, you won't get the top price (well maybe you'll get lucky) and as we saw with Telkom (JSE code: TKG) the bounce just keeps on bouncing. So watch and wait and sell on weakness after the bounce That may be immediate or may take a few days or a week. Waiting for the weakness is a skill you'll learn, slowly over time. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Nasdaq & S&P500 close Friday at all-time highs / Alphabet & Amazon results / US unemployment drops to 6.% / Jeff Bezos to step up to the executive chair, no longer CEO / Chinese short video company Kuaishou rose nearly 200% at the open on its debut in Hong Kong. Local / Ford investment of R15.8-billion into SA / Updates; Distell & Motus / Level 3 lite / Sibanye Stillwater update, R62million profit to almost R30billion / Load shedding

Simon Shares GameStop closed at US$90 on Tuesday. Jeff Bezos to step down as Amazon CEO. Apple knockout results. Ford to spend R15.8billion on local plant upgrade. Upcoming events; Weekly (Wednesday at 5.30pm) ~ Follow the Trader 18 February ~ Everything ETFs and tax-free investing Subscribe to our feed here Subscribe or review us in iTunes Booming SA Inc. consumers? We're seeing decent updates from local retailers so far this year, which is odd. Now let's be clear, decent not knock it out the park. Distell (JSE code: DGH) lost 41 days of sales in the second half of 2020 yet expects HEPS to be + 8.6% - +13.6%. Motus (JSE code: MTH) expect HEPS to be 0% - 5% higher, sent the stock up some 20% in two days. A few possible reasons; Lockdown so we have money to spend Working from home saving on transport Social grants increased 36One calculate some R100bn extra from social grants but also people taking money out of pension schemes & retrenchment packages. The risk here is that this is temporary, which is certainly the 36One fear. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / GameStop / Results; Apple & Tesla / Tencent listing Kuaishou (TikTok competitor) this week / US 4th quarter GDP at 4% / Davos online Local / IMF downgrades SA GDP 2021/2 growth forecast / Huge offers script to buyout AdaptIT / Anglo stable of updates (AGL, AMS & KIO) / Clicks update and closing Musica / Solid Sasol update / Johnson & Johnson vaccine, Aspen to produce 300m a year

Upcoming events; 18 February ~ JSE Power Hour: ETFs and tax-free investing GameStop perfect craziness Three things came together to push this stock up +20x in a week; Massive short position Option buying Markets love stories Simon dissects the three explains how it all played out and why it is perfectly legal. [caption id="attachment_24640" align="aligncenter" width="678"] GameStop daily chart[/caption] Subscribe to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Netflix results / Weak IBM results / Tesla results this week / US GDP (4th quarter) / Federal Reserve rate statement on Thursday / Procter & Gamble solid results & increasing buy backs by $2billion to $18billion Local / Chris Griffith Kumba ==> Anglo Plat ==> now Goldfields / BAW selling motor division for R947m / MPC no surprise but vote was 3-2, with 2 for a hike. / Redefine to pass on 2020 dividend / Strong Richemont update

Simon Shares Trading updates from Truworths (JSE code: TRU) and Foschini (JSE code: TFG) both saw sales decrease for the period ending both saw sales down. But not down as much as expected and hence the stocks went wild. Truworths was up some 25% in two days. More than anything this is because expectations were dire. That said I'm not convinced, the lockdown was increased post the period end and as mentioned, sales and HEPS are expected to be down. We'll get more retail updates and over the following two weeks, with Pick n Pay the exception - they don't issues sales trading updates. On Pick n Pay (JSE code: PIK), they announced that after eight-years CEO Richard Brasher will be stepping down after a solid turn around in the company. Local CPI came in at 3.1% for December leaving 2020 at 3.3%, the lowest since 2004 (1.4%) and 1969 (3.0%). The MPC will announce he repo rate Thursday, no change expected and with growth under pressure (load shedding, new lockdowns and late vaccine) I don't any increases in 2021 Subscribe to our feed here Subscribe or review us in iTunes It's all lies All of it. Politicians, corporates, marketers. The whole lot. So we need to be extra cautious whenever we hear anything an ask the questions. Ask why they say that? Ask the likelihood of it being provable and how the lie benefits them? Ask what's missing, and why is it missing? Let's be clear, Trump has emboldened liars like nobody before him. But this is not new. Politicians lie all the time, most promising things that they're unable or worse, unwilling, to actually deliver on. But we've entered a new level whereby when lies are challenged they are deflected not with truth but more lies or the truth is called 'fake news'. For investors, we also have a bunch of lying happening. My favourite trick is that before I read a set of results I head to the previous one or two sets and maybe even an annual report and read their forward-looking statement and review of the period. This quickly gives you a sense of which CEOs are honest and which are just fluffing it until their next bonus. Accounts are themselves not directly lies, but they're also not 100% truth. There are assumptions made at many turns in a set of results. Some like Steinhoff we now know were all lies and I avoided that because of the complexity and that's an important point. Tongaat was a hard one to spot, but the red flag (in hindsight but useful for the future) is when the company gets to 'value' assets. African Bank we could spot because earnings were increasing but dividends were not. So no cash was being made from the higher earnings. Common amongst all three? Very strong CEO who ruled with an iron fist. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Biden starts Wednesday, already has $1.9trillion stimulus plan / Japanese market at 3-decade highs / Chinese GDP +2.3% for 2020 / Rhodium above $20k / US won’t ban investing into Alibaba, Tencent and Baidu / JPMorgan results knock it out of the park Local / Brasher exits Pick n Pay / Murray & Roberts OZ contract / Truworths trading update / J&J vaccine details expected this week, good news for Aspen / Load shedding returns / MPC on Thursday

2021 predictions show Every year Marc Ashton, Keith McLachlan and Simon Brown do a predictions show. Three wild and woolly predictions for the markets followed by a call on the Top40 and ZAR for the year ahead. Importantly we start each show with a review of the previous year's predictions and you’ll find the 2020 predictions show here. Subscribe to our feed here Subscribe or review us in iTunes The 2021 predictions are (listen for reasoning); Marc Ashton Not more than 10% of SA population (6million) vaccinated during 2021 Gold close 2021 +$2k Ford & GM out preform Tesla Top40 ~ green ZAR ~ stronger Keith McLachlan Resi10 in $ will beat Nasdaq US ten year real yield (less inflation) will be negative Eastern Cape house price inflation will beat Gauteng Top40 ~ green ZAR ~ stronger Simon Brown Russel 2000 beats S&P500 Resi10 beats Fini15 & Indi25 No US or ZA rate increases this year Top40 ~ green ZAR ~ stronger JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Offshore / Tech wild year / Oil goes negative / Gold breaks $2,000 / Brexit / Tesla Local / Sasol / Top40 green for the year & just off all-time highs / Even the Rand recovered most of the losses and trades better than 5 years ago / Budget deficit / Lots of business rescue, but less than I expected

Simon Shares Trellidor* (JSE code: TRL), I've been buying. We've seen DIY stocks doing well and small SA Inc shares surprise to the upside and I think this could be one of them. Interim is end December so an update should arrive mid-February. Sygnia (JSE code: SYG) results were really good. This stock was very expensive at listing and above 2400c in 2016 it was crazy. But price came down and earnings increased so now looking fairly priced and very well positioned in the low cost and passive space with even trading contributing around 25% to revenue. I received an email about being charged massive fees for a trade that happened over multiple days. This is not new and is how the JSE charges. Trades on one day, same stock and all buys or sells are bulked together and charged as one trade. But trades in separate days are each charged as a new trade and so the brokerage minimums hit and can hit hard, very hard. The way to avoid is when you get that SMS for first trade to adjust the price to ensure full quantity or do an at market trade. Next show will be 14 January; predictions with Marc Ashton, Keith Mclachlan and myself. We look back at the previous years and make new bold ones. Position your portfolio for 2021 * I hold ungeared positions. Subscribe to our feed here Subscribe or review us in iTunes 2020 finished n klaar I've lived a lot of years but no matter how many, none like this one. What is has done is force us to reflect on things. Frankly to reflect on pretty all things as everything got turned upside-down. As an example, I 'had' to live in Johannesburg because of my TV work. Well, now we know that isn't the case as I have been doing weekly TV shows from my lounge since March. In the future, I continue doing TV work from my lounge, and that the lounge could be anywhere with high-speed Internet. I also remember hard lockdown surrounded by all my 'things'. They did not make my life beautiful, I missed people and experiences. I also remember my portfolio crashing and not even checking how bad it was. Markets recover, sure this recovery was swifter than anything I have seen before and made no sense. But markets often don't make sense and fighting them is fruitless. It also gave us a real-time chance to measure a number of important investment considerations. How robust were the stocks you held? How diverse was your portfolio? Did you react accordingly? I sold some much-loved stocks that I thought would be in serious trouble and even bought a gold miner for the first time ever. Did you panic? I did not get everything right, that truthfully is never the aim. But I also did not sit stuck like a deer in the headlights. Point being, 2020 has been wild and we should reflect, reflect lots on our lives and or portfolios. If we do that right then we'll be stronger in the future. Lastly, watch out for the push back. Lots of incentives to return to how it was, but is that what you want? Did you like the old way or do you see a new improved way or a blend? Decide and then make it happen. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / US$908billion stimulus plan proposed for the US / US markets at new highs / Salesforce buying Slack for US$27.7billion / Pfizer vaccine starts being administered this week in the UK / Oil moving higher / Gold bounces need to get above US$1,860 Local / Sasol update, likely rights issue will be smaller / Locusts in NC, WC & FS and returning rains / Barloworld results (and price surge) / Vukile benefiting from non-metro malls / Top40 closes Friday at third-highest level ever / Comair returns to the skies but not the market

Simon Shares Really strong November for stocks. France and Italy had their best months ever, S&P500 +11% and JSE +10%. The Pfizer / BioNTech vaccine has been approved for use in the UK starting next week. Limited supplies so front line workers and old people first. But this is good news and suggests that the news for 2021 will be more about rolling out of the vaccine albeit probably also lots of second and third waves. But there is a light at the end of the tunnel and it's not a train. Upcoming events; 03 December ~ JSE Power Hour: Position your portfolio for 2021 Subscribe to our feed here Subscribe or review us in iTunes Bytes UK (JSE code: BYI) JSE listing is confirmed for next Thursday. Purple Group* (JSE code: PPE) very strong results for the year ending August 2020. Sygnia (JSE code: SYG) issue a strong trading update, HEPS expected 62%-67% stronger, results due on Tuesday. ASISA report record inflows into CIS in SA in Q3 while Q2 saw R88billion added as markets were collapsing. Peeps are smart. Decent bounce in gold, but still looking weak even as it moves above the 200-day MA. I hold Pan African* (JSE code: PAN) and continue to hold. The position is small and really is insurance for just in case. 2020 has been wild and I not placing bets in 2021 just yet. Aveng (JSE code: AEG) doing rights issue at 1.5c that will double the number of shares to 40billion! They'll then do a consolidation and always be short a consolidation.  Sasol (JSE code: SOL) seems to have cleaned up much of the mess and old enough assets to make a rights issue below the upper US$2billion level. Coupled with oil looking like it may go higher is good news for the share. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / U.K. economy is forecast to contract by 11.3% this year, "the largest fall in output for 300 years," Chancellor Rishi Sunak tells MPs / Musk now the worlds second richest person / Janet Yellen tipped for Biden cabinet as Treasury Secretary / China imposing tariffs on Australia, especially their wine. / Down Jones trades above 30,000 for the first time. / Black Friday 2020 online shopping surges 22% to record $9 billion, Adobe says Local / Huge $5billion share buy-back from Prosus and Naspers / Firstrand update "the earnings trend for the four months from 1 July 2020 to 31 October 2020 is reflecting a better than anticipated rebound." / EOH CEO, Steven van Collier testifies at the Zondo Commission / Lewis results and dividend results on a dividend yield of +11% / Acquisition and baby range expand Mr Price’s markets / Gold under serious pressure

Simon Says Another week another vaccine. U.K. economy is forecast to contract by 11.3% this year, "the largest fall in output for 300 years," Chancellor Rishi Sunak tells MPs. US Jobless Claims +30K To 778K In Nov-21 Week, secondly weekly rise. Continuing Claims -299K to 6,071,000 for Nov-14 week. Dow Jones trades above 30,000 for the first time on Tuesday & S&P500 closed at a new all-time high. Dow 20,000 was 25 January 2017 and 10,000 29 March 1999 (12,000 was September 2007). Lewis (JSE code: LEW) results with a 133c interim dividend. Double that for the full year makes for a yield fo some 11.9%. Stor-Age* (JSE code: SSS) offering their dividend as cash or new shares issued at 1240c. People asking what I'm doing? Taking the shares. Adcorp (JSE code: ADR), stock was 130c on 15 October ahead of their trading udate. Results in Wednesday saw it trading at 600c [caption id="attachment_24206" align="aligncenter" width="888"] Adcorp Daily[/caption] * I hold ungeared positions. Upcoming events; 03 December ~ JSE Power Hour: Position your portfolio for 2021 Subscribe to our feed here Subscribe or review us in iTunes Bitcoin is tiny, even at highs Disclaimer upfront, I have been buying Bitcoin because I like to own things that are going up, my average entry price is R204k. This is a trade, so I will take my money at some point. Looks certain to make new all-time highs and US$20k surely sooner rather than later. Not a bubble this time, as it was in 2017. That doesn't mean can't collapse or can't become a bubble. Interestingly the narrative has changed, the talk of Bitcoin for payments, something I said was a long long way off, is no longer the biggie. Now it really positioning itself as an alternative asset. Remember how blockchain would save the world? But here's what was really interesting to me, the market cap of Bitcoin. ±US$400billion! Less than Tesla, in fact very tiny. Consider how many exchanges, blogs, shows and chatter about this one asset that is so very small. The size also restricts large institutions getting involved. For comparison, gold is about US$9trillion, NYSE about US$30trillion and total US debt US$27trillion. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Another Monday another vaccine ~ Moderna / 12 million Americans are on track to lose unemployment benefits in December if Congress doesn't extend key programs that were part of the CARES Act passed in March. / JPMorgan forecasts negative GDP in the first quarter, the first Wall St. bank to begin forecasting a negative reading. JPM expects the economy to bounce back in / Amazon moving into the pharmacy business / Boeing 737 Max is back / Bitcoin heading for new highs & FSCA proposes making cryptocurrencies an asset class. Local / Moody’s & Fitch downgrade SA further into junk. / Somebody wants City Lodge East Africa hotels / Results; Stor-Age*, Astral Spar

Simon Shares Another week, another vaccine. This time from Moderna and also using the Messenger RNA as does the Pfizer / BioNTech vaccine. Stor-Age* (JSE code: SSS) results very solid. Wilson Bayly Holmes (JSE code: WBO) results not great as Australia hurts, again. Raubex (JSE code: RBX) announces an R2.87billion contract win from Sanral. Strong Spar (JSE code: SPP) results. Boeing 737 MAX 8 returns to skies as FAA lifts grounding order. Brait (JSE code: BAT) net asset value 771c (based on 9x EV/EBITDA), share price 388c.   [caption id="attachment_24160" align="aligncenter" width="888"] Brait monthly chart[/caption] * I hold ungeared positions. ETF: Low fees double your investment* Upcoming events; 05 November ~ JSE Power Hour: Searching for income 19 November ~ JSE Power Hour: Twenty years of ETFs Subscribe to our feed here Subscribe or review us in iTunes Owning unlisted shares In the last few years, we've seen a bunch of stocks being delisted from the JSE and in pretty much all cases existing shareholders get paid out and no longer hold the stock. Anchor (JSE code; ACG) are now proposing a delisting at 425c, but with an option to remain invested in an unlisted Anchor. I have never held an unlisted share outside of companies I have founded or worked for a few simple reasons; No JSE oversight Lack of communications to minority shareholders Majority shareholders acting as if it is their private company Zero liquidity to buy and sell Zero price discovery In short, being screwed over. That said Anchor will very much still be in the public eye and this is not usually the case when a stock delists. That will help act as a guard rail (not that they need it) so maybe it will be fairer to minority shareholders. Certainly, I think the 425c offering is very cheeky and I still don't want to hold unlisted stocks, for many this time may be the exception. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Pfizer/BioNTech vaccine news / U.K. economy expands by 15.5% in the third quarter, the most on record yet adds another Sterling150billion in stimulus / Disney reports first loss in 40 years, but Disney+ hits 73m subs / Emirates eyes return to profitability in 2022 only / Deutsche Bank proposes a 5% tax for people still working from home after the pandemic / DoorDash files IPO plans, NYSE listing Local / Lockdown level 1 lite? / Growth Point raises R4.3billion / SA’s unemployment rate 30.8% in Q3 / Sun International update gives great insight into leisure locally. / Telkom results / MultiChoice results

Simon Shares US elections, everybody nows who won except the orange one and the GOP. Vaccine news from Pfizer and BioNTech has changed market behaviour. Banks and consumer stocks now the rage while tech and gold is falling. Locally banks are flying. Fini15 daily chart Interesting to see the JSE All Share up circa 14.4% over the last 6. months yet its biggest constituent Naspers only up 3.71% over the same period. A lot of underlying and broad strength. @SimonPB @CAPITALSIGMAza @smalltalkdaily — Mark Tobin (@mtobinwex) November 11, 2020   Searching for income Upcoming events; 05 November ~ JSE Power Hour: Searching for income 19 November ~ JSE Power Hour: Twenty years of ETFs Subscribe to our feed here Subscribe or review us in iTunes Bombastic billionaires* Somebody strikes it big in one field, and now they think they're the smartest person in any field. A CEO of a successful company leaves to start a new company, they just assume it'll work and investors believe them. We see this all the time. The successful business person thinks they know how to run the government. Heck, we see it during this pandemic when suddenly every second person was (and often still thinks they are) an epidemiologist. There are some exceptions; Elon Musk and Steve Jobs two who come to mind. The successful person also readily ignores the role of luck in their success. Fooled by Randomness by Nassim Nicholas Taleb. The answer is simple. Just because somebody is great in one area, do not assume that they have any skills in any other area. * Phrase stolen from Anton Harber JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / US elections over / US unemployment rate 6.9% / Ant IPO cancelled / BoE no change & QE increased by £150 billion to £895 billion / Berkshire Hathaway bought back a record $9 billion in stock in the third quarter Local / Rand strength / Results; Dis-Chem, Richemont & Foschini / Aspen vaccine JV with J&J

Simon Shares US Election results pretty much playing as expected. Trump doing well in early counting but some important states still to come but he has declared victory and is heading for the courts. Upcoming events; 05 November ~ JSE Power Hour: Searching for income 19 November ~ Twenty years of ETFs Subscribe to our feed here Subscribe or review us in iTunes Finding infrastructure stocks Globally one of the key responses to the pandemic is and will be, infrastructure spend. Who are the potential winners? PPC (JSE code: PPC) Sephaku (JSE code: SEP) Reunert (JSE code: RLO) Consolidated Infrastructure Group (JSE code: CIL) WBHO (JSE code: WBO) Murray and Roberts (JSE code: MUR) Aveng (JSE code: AEG) Raubex (JSE code: RBX) Afrimat (JSE code: AFT) Brikor (JSE code: BIK) Stefanuti Stocks (JSE code: SSK) Kumba (JSE code: KIO) ArcelorMittal SA (JSE code: ACL) JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Distell Group (JSE code: DHG) issued a solid update albeit short on numbers with one exception. They reduced net debt by some R1.7billion which is a massive number. Pick n Pay (JSE code: PIK) is heading into Nigeria and the market is worried as Nigeria is littered with the bodies of corporate South Africa. But they are doing so in smaller regional malls and not going big, so if it fails it won't be costly. The Standard Bank (JSE code: SBK) update fits in with news out of a press conference of last week. 90%-95% of loans that took payment holidays are back and paying. A sold number, but it does show lenders are not yet out of the woods. Absa changing their distribution policy for the NFGOVI (tracking the top 10 bonds issued by the South African Government). Instead of reinvesting they will now payout distributions. Very strong update from Cashbuild (JSE code: CSB) with Q1 revenue up 22% and stock is up some 9% in the news. Upcoming events; 05 November ~ JSE Power Hour: Searching for income Subscribe to our feed here Subscribe or review us in iTunes A robust strategy The US election is some twelve days away and while the pundits have Biden as the clear favourite to become president and the democrats maybe even taking control of the senate. How much should one start adjusting ones portfolio? Lot's of talking heads are spinning one story or the other as to how to position accordingly, of course, that's if the results go as they expect. And sure, a Biden win will likely see changes to taxes in the US, a large stimulus come February and maybe a more social friendly budget (such as the Affordable Care Act from Obama). But these talking heads are firstly short-term traders and really as a trader one should be responding to price action, not trying to predict legislation and the impact? For a long-term investor chopping and changing every time there is a new president in the White House (or any other house) surely means you're strategy is not robust enough? What I mean here is that politicians, political parties, polices and the like come and go. Sometimes quickly sometimes slowly. But our long-term portfolio needs to be able to manage all of these changes without having to consistently adjust things. I always invest with one core long-term theme in mind that guides my investing. A globally growing middle class as people move into the cities and their quality of life and wealth improves. From here yes tax rates and the like will have an impact. Bu not so significant that I'll have to switch stocks never mind strategy. As a long-term investor make sure you have a simple and hence robust strategy that is largely immune to the noise emanating from politicians. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares PPC (JSE code: PPC) results. The $150million debt in the DRC is the problem. If they solve that they'll do a rights issue. If not they're bankrupt. The president's speech on Thursday should give them some hope as he likely promises lots of energy and infrastructure spending. Balwin (JSE code: BWN) results. Not bad considering, they paid a dividend and I like them at current prices. Coronation* (JSE code: CML) issued a good trading update. With Purple Group* (JSE code: PPE) they are my two preferred financial stocks for the post-pandemic bounce (actually making money during the pandemic. Keillen Ndlovu on local and offshore listed property. * I hold ungeared positions. Subscribe to our feed here Sign up for email alerts as a new show goes live Bankrupt There are a number of listed stocks in business rescue and I am getting asked all the time about when they start trading again. Intu Comair Basil Read Phumelela Others I forget about Short answer, they won't start trading again and you'll get very little or no money back. First SARS gets paid, then staff and debt holders and if anything is left shareholders will receive a few cents. Now here's the thing. The company may survive and start trading again. Certainly, Comair and Phumelela look set to continue operations, but with new shareholders. This is very much part of the business rescue process, the rescue part is about turning debt in equity and also new capital taking new equity. Existing shareholders get left carrying nothing. Now, sure this sounds way harsh, but this is how investing works. We buy a business and we get all the rewards, reward that is unlimited in how big is can be. But if things hit the wall, we're last in line. So our downside is limited at 100% loss, but the upside is unlimited. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / The Congressional Budget Office estimates that, for the 2020 fiscal year, the U.S. deficit will be $3.13 trillion (15.2% of GDP). This number would cause the total U.S. national debt to come in at 102% of GDP in 2020, the first time since 1946 that the U.S. debt has been larger than its economy. / A new stimulus package on or off the table? / The U.K. economy grew by 2.1% in August, less than half the pace anticipated / JPMorgan says U.S. Capital Gains Tax hike (proposed by Biden) may briefly hit stocks / Robinhood says some customer accounts may have become the target of hackers / New iPhones expected on Tuesday, with 5G Local / President Cyril Ramaphosa will address both houses of parliament on Thursday to unveil the long-awaited economic recovery plan for the country. / PPC results / Canal+ buys 6.5% in Multichoice / Spur update, strong recovery but early days. / FNB lists 20 ETNs over US-listed stocks. / Balwin results and the scuffle around Mooikloof

Simon Shares How to fix the JSE, some great ideas by Keith McLachlan. SARB buys R39.4billion of local government bonds in the secondary market in September. French Canal+ takes 6.5% stake in Multichoice (JSE code: MCG). Shoprite* (JSE code: SHP) says their loyalty program is a huge part of them gaining R4billion in market share? Launched a year ago it has over 5million members. Pick n Pay (JSE code: PIK) date saw "core retail sales - including food, groceries and general merchandise, but excluding liquor, clothing and tobacco - grew 8.7% year-on-year (6.4% like-for-like)." Sasol (JSE code: SOL) sells some LCCP for US$2billion, reduces debt burden to $8billion. Zeder (JSE code: ZED) keeps dividend and says conditions are improving. But no news on the new strategy. AdaptIT (JSE code: ADI) results after I recorded last Wednesday. The stock was at 120c and HEPS expected at +65c. The stock now 250c. The market gets it wrong sometimes, especially in the small-cap space. Fed chair Powell commenting Wednesday evening that more needs to be done and that the risk is not in doing too much stimulus, it is in doing too little. Trump has said no stimulus until after the election. The risk here is he loses and couldn't be bothered to do anything, so then we wait till late January to start talks again. * I hold ungeared positions. Upcoming events; 08 October ~ JSE Power Hour: Investing in local and global listed property Subscribe to our feed here Subscribe or review us in iTunes Where's the cash? Cash is always king. Not only is it why we invest, to make cash. But cash is easy to see in the form of dividends and very hard to fake (albeit we have seen businesses take debt to pay a dividend, and if you do see this - run). I've spoken before about the flood of rights issues hitting the market and we've seen about R50billion so far this year. But now we're hitting the crunch. Early in the lockdown I warned that investors should have a good hard look at their companies asking if they'd need to raise capital and if the announced capital raise would be enough. Key for me is that tough times are often tougher in year two. I remember this very clearly from the 2008/9 crisis albeit offset a bit by the world cup in 2010. But for example, Standard Bank retrenched staff in late 2010, some 18 months after markets had bottomed. The other key point is that this pandemic crisis is far from over. Not only risks of seconds waves (France second wave is way worse than the first and Paris is shutting bars again). Delayed stimulus in the US will hurt the worlds largest economy which is very much experiencing a K shaped recovery. So take a hard look at a stock cash flow, sure dividends are down or even cancelled. But is there positive cash flow? Is it likely to be increasing or decreasing? How will a tough 2021 impact the cash flows? In short, will the company survive without a rights issue? Is yes, then it's worth having a look at but they can still mostly expect another 1-2 years of tough trading conditions. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Trump Covid-19 with elections 4 weeks away. / US unemployment 7.9% / Disney to lay off 28,000, American Airlines 19,000 & 12,000 United Airlines / Palantir lists with direct listing / Airbnb listing progressing with $20billion valuation Local / Unemployment numbers / August CPI 3.1% / Capitec results / Alviva results / Ascendis Health results (issued, cancelled and re-issued) / Remgro results, discount to NAV at 40% (lots of deep discounts to NAV) / Sasol sells 50% for $2billion

Simon Shares Day 188 of lockdown. August CPI 3.1%. Everybody now suddenly knows about the expanded unemployment rate? Capitec* (JSE code: CPI) results were as always solid. Hit hard by the pandemic, but resilient. Valuations are rich, as always. Alviva (JSE code: AVV). Remember old Pinnacle, once a darling and then hit by claims of dodge tenders. They bought Datacentrix changed their name to Alviva and issued decent results. Everybody asking me about Ascendis Health (JSE code: ASC). To me it is binary, either they sell Remedica for a good price and they can bumble along, or they go bust. Debt is huge and risks are massive, sure some potential reward but why rush it? Remgro (JSE code: REM) results, +40% discount to net asset value (NAV). Either you view this as a cheap entry into some listed businesses inside Remgro. Or your view is that holding structures are value destroyers. PSG also at a massive discount to NAV. Typically discount used to be around 15%, but now we're seeing 40% discounts. Now the trade could be a closing of that discount, or just a cheap entry. Headline from CNBC "Disney to lay off 28,000 employees as coronavirus slams its theme park business". The pandemic is not over and some companies are still struggling to manage it. * I hold ungeared positions. Upcoming events; 08 October ~ JSE Power Hour: Investing in local and global listed property Subscribe to our feed here Subscribe or review us in iTunes Presidential markets Less than five weeks until the US votes and then who knows how long to count the votes and get Trump out of the White House. The first debate on Tuesday shows what a mess the next few weeks will be. After the debate, US futures markets were down some 0.75%, was it the debate or just markets? Maybe a bit of both. Here's the thing. Some white man will win and be installed in January 2021. Market pundits will tell you it matters which. Remember the fear about a Clinton win and what it would do for markets back in 2016? Sure it became moot as Clinton lost, but the idea that one or the other will be better or worse for markets has scant evidence Mostly it is trolling by one side or the other. The idea that one is anti markets is nonsense, both are ardent capitalists and sure Biden will keep the Affordable Healthcare Act, as an example, but after almost a decade in place, it has not broken markets. Biden may also want some minimum wages etc. Radical ideas for hardened capitalists, but there are minimum wages in many states - and non are bust as a result. Raising taxes? Not on corporates, that boat has sailed and can't be recalled. On individuals, they can go up and while the rich will moan, what the NYT showed us on the weekend is that the rich don't pay tax anyway. So how does one position a portfolio head of the election? Carry on carrying on. Ignore the noise. Buy quality when you like the price. Elections are noise and best ignored and sure they may create volatility - but volatility creates opportunity. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Day 181 of lockdown. The Tongaat (JSE code: TON) deal to sell their starch unit to Barloworld for R5.35billion is happening and the Tongaat share price loved the news. We're seeing a strong bounce locally while the US markets are also having a better run, risk back on (for now). But what was odd was gold. It didn't run as stocks were selling off and has actually weakened. The point is that if fears were of a longer sell off gold should do better, except for two things. Firstly nothing is linear and secondly when there is real fear as we saw back in March everything is correlated at 1 and everything sells off. The UK back into lockdown, not the hard lockdown of March / April. But lockdown that the government is saying may last six months. This pandemic is not over. Property stock results are coming thick and fast and frankly, most are not as bad as I expected. Make no mistake, they're ugly. But I had expected worse and while distributions are being delayed and valuations were written down they're mostly staying within their debt covenants which is hugely important. That said it remains a long road back to the glory days. Value Capital Partners (VCP) has bought a 5.28% stake in Cashbuild (JSE code: CSB). VCP has a reputation of not being quiet silent shareholders, but also have an excellent record of fixing broken companies. Now Cashbuild is not broken, but worth watching. Under the hood of the SYG4IR ETF. Upcoming events; 08 October ~ JSE Power Hour: Investing in local and global listed property Subscribe to our feed here Subscribe or review us in iTunes Missing the bus How often do we not buy a stock only to watch it move higher and regret not buying as we think we missed the bus. Then it just continues moving higher and higher? The mistake we make is that we think there is a limit to the upside of what stocks can do. But consider for example Capitec* (JSE code: CPI), 2000c during the last crisis and it eventually it some R1,500. There are plenty of other examples, most recently gold miners. The problem is that while we want a ten-bagger stock we truthfully struggle with the concept of such huge gains. Further, as I have mentioned before a ten-bagger first has to be a one-bagger and as such buying when it's on the move reduces risk markedly. So we need to double down on our work. What makes this an excellent stock, no the best stock, to own. What are the real fundamentals and growth prospects and will the rest of the market catch on? Lastly, use a PEG ratio. Is the expected HEPS growth higher than the PE ratio? This is far from a perfect science, but don't abandon the bus just because you missed the first one. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / BoE, Fed and BOJ all left rates unchanged, BoE ‘explores’ negative rates. / TikTok deal with Oracle (and Walmart) confirmed. / Wechat ban from midnight, 3.3million users in America and China threatens to expand its “unreliable entities list”. But “TRUMP'S PROHIBITION ON WECHAT IN U.S. IS PUT ON HOLD BY JUDGE” / OECD ups global 2020 gdp, but drops ours / Snowflake IPO price of $120 and it opened $245. / Apple has lost 22.6% from its intraday record high of $137.98 on 2 September, losing around $532 billion in market value. Local / MPC no change and next move expected to be up, late 2021. / Level 1 and open borders / Comair rescue plans approved and will delist from the JSE, will resume flying in December / Eskom takes 139 farms from Municipality of Matjhabeng as security against R3.4bn debt. / Results; Pan African Resources, Woolies and Discovery.

Simon Shares Day 174 of lockdown. Level 1? The Foschini Group (JSE code: TFG) trading update spooked the market, but it was the six months to end September. In other words, all lockdown. African Rainbow Capital (JSE code: AIL) results including an R750million non-renounceable rights issue. Trading at some 75% discount to the net asset value (NAV). Sure some decent assets, but the market has hated this one since listing. Super Group (JSE code: SPG) results were tough, especially as they have vehicle dealerships locally and in the UK. Pan African Resources* (JSE code: PAN) results saw debt halve and profits and cash flow essentially doubling. Remains the best gold miner on the JSE. Very solid Metrofile* (JSE code: MFL) results and I would think the delisting at 330c remains on track. Brexit deals seem stuck again over the hard border. * I hold ungeared positions. Two new ESG ETFs from Satrix. Upcoming events; 08 October ~ JSE Power Hour: Investing in local and global listed property Subscribe to our feed here Subscribe or review us in iTunes Buying after the lockdown South Africa is through the peak of the pandemic. The Lancet Covid-19 Commission classifies 1 case per 100k population as low levels of transmission and WHO says 5 per 100K. The former equates to around 600 new cases per day and the latter 3,000 and we under 1,000. A second wave remains a real threat, but we're in level 2 with rumours that we'll move to level 1 as the president is speaking Wednesday evening. That'll surely mean borders opening (with restrictions) and maybe some lifting on large event restrictions. So, should we be rushing out to buy SA Inc. shares? Certainly, they ran hard last week but have come back a bit since then. Probably we should, but cautiously. Have a shopping list but also have a list of what you want to see; Debt levels. Sure business is returning but high levels of debt remain a risk. So high cash generation is important. Quality. Businesses struggling before the pandemic are best left to their struggles. Valuations still matter. Some sectors will be slower to recover. Leisure will have an initial boom, but what levels will it drop back to? Don't ignore the pandemic winners just because they won already. Some will still have room for more good growth. Also, think about the underlying companies. For example Airbus over airlines. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / US markets remain volatile as Nasdaq has worst week since March / LVMH Tiffany deal is off/delayed / Brexit talks going all messy / UK economy grew 6.6% in July as gradual recovery continues / Opec turns 60 Local / Q2 GDP -51%, or -16.4% / Firstrand results / Shoprite results / Aspen sale & results / Zeder CEO quits and the company is looking for a new strategy / White & yellow maize above R3k a ton

Simon Shares Day 167 of lockdown. Local Q2 GDP -16.4% (-51% if you annualise it). Makes us one of the worst-hit economies for Q2, not surprising as we did very hard lockdown. Now to get out of the hole and that's going to be the hard part. Of our three main political parties, the honest answer is none of them really have a workable economic policy that we need right now. Serious buying of SA inc shares the last two days. Jeez peeps are buying SA Inc Top movers in Top40 and MidCap pic.twitter.com/6zgQO5DmHS — Simon Brown (@SimonPB) September 9, 2020   Shoprite* (JSE code: SHP) results knocked it out the park. Their Sixty60 app is killing it. My local Checkers has a bunch of full-time staff packing and scores of motorcycles outside. Right now they are well ahead of the local competition and even ahead of Amazon Fresh in the US. Aspen (JSE code: APN) sells commercial rights and intellectual property for the thrombosis business in Europe for R12.6billion. They'll still manufacture & supply the product and will retain the EM part of the business. Good deal and reduces debt significantly. On Bruce Whitfield's show Stephen Saad also commented that they'd never issued new shares, all deals paid for themselves. Sure it got wobbly the last few years, but that remains a significant truth. AstraZeneca (LSE code: AZN) shares drop 6% after the company announces ‘routine’ safety pause in a coronavirus vaccine trial. Basically somebody got sick from the vaccine. Happens often but does show the problem with rushing the vaccine. Surely we either do it safely or quickly? * I hold ungeared positions. Subscribe to our feed here Subscribe or review us in iTunes Surprises to the upside We're seeing lots of really bad results now that companies results include the second quarter. But the market is expecting this and in many instances not even selling the stock down much if at all as the bad results roll in. The flip side is that when we see some decent results the market loves that news and sends the stock soaring higher. This is because right now our expectation is for bad results so good is a pleasant surprise. I have often spoken about the fact that results or other announcements are often not about the actual numbers, rather it is about the expectations relative to those numbers. What we are seeing is in part a two-part market. Remembering back in hard lockdown when the question was if the rebound would be V-shaped? Or perhaps W, U with some even suggesting L shaped. Well, Old Mutual says actually it is K shaped. This makes sense. In the US the upper leg of the K is big tech socks with the rest being the lower leg of the K. Locally miners are the upper leg and financials the lower leg. So now we can put this together, K shaped recover and the market-loving positive surprises. Hunt out those top quality companies in the lower leg as they're cheap and if they're quality they'll not only recover but will do so quickly and with great profits. This is where we'll find stocks that still have great upside potential. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / US unemployment 8.4% (Temporary Census work (+238,000 jobs) accounted for around one-sixth of the August gain of 1.4 million jobs) / Thursday sell-off with Friday red, but less bad. Monday closed for labour day. / India bans another 188 Chinese apps / Carnival Corporation's Costa Cruises to Restart Cruise Operations This Weekend out of Italy. / Tesla does not go into the S&P500. Instead Etsy, Teradyne and Catalent added. IN order to get into the S&P500 “Companies must be U.S. based, and listed on either the NYSE, the Nasdaq or the Cboe. They also must have a market cap of more than $8.2 billion, and report four straight quarters of profit as determined by U.S. generally accepted accounting principles (GAAP).” Local / Prosus has now gone into the Euro Stoxx 50 and EUR2bn passive inflows should support the share price. / Local GDP on Tuesday / Results; Truworths, Northam & Implats, Libstar and ADvTech / Spur execs leaving (four going by year-end including CEO & COO). / Icasa delays spectrum auction to March 2021

Simon Shares Day 160 of lockdown. Northam (JSE code: NHM) results had two comments that caught my attention. They are aggressively buying back their Zambezi pref shares (JSE code: ZPLP). The second was that the amount of rhodium used in a single catalytic converter was 0.3g in 2015 and will be 0.45g in 2025. A 50% increase that supports the price increase. Hammerson (JSE code: HMN) have consolidated their shares 5:1 ahead of a massive rights issue which either you follow or exit because if you don't follow you'll be diluted out of existence. Upcoming events; 03 September ~ JSE Power Hour: Under the hood of a passive robo advisor Subscribe to our feed here Subscribe or review us in iTunes Level 2 winners? We're now able to travel between provinces, visit friends and family, go out for dinner and even back to the office. Leisure is back, but is it investable yet? So who are the first winners as we ease out of hard lockdown? On the one hand, pent up demand is real. I was at a bush lodge over the weekend and it was full and trying to find somewhere for the September long weekend is proving tricky. So people are out spending. Reports from restaurants in late August are they were packed but then I was at dinner on a wet and cold Tuesday evening and things were quiet. So the current surge is likely very much just pent up demand and money saved. But what's important is how long this pent up demand lasts and what's real? Easy wins are the prepared food space, quick service and sit down dining. But we're off a very low base and I think we'll start seeing discounting as the initial surge dies out and increased costs in terms of PPE and social distancing reducing capacity. Hotels are harder, especially those that cater to conferences and business travel. Personally, the idea of a hotel still doesn't sit easily with me. Whereas an Airbnb is something I am happy to do. Banks are cheap and the three reported so far all expressed cautious confidence about the second half. But I am less certain, payment holidays will start expiring and the broader economy is hurting. That said asset managers and stockbrokers are going to report record results. My preferred is Coronation* (JSE code: CML), Purple* (JSE code: PPE) and Sygnia (JSE code: SYG). Miners are certainly in a sweet spot. Pan African Resources* (JSE code: PAN) trading update for the year ending June 2020 had average R15.67 exchange rate and the average gold price was US$1,574. So lots more upside in the current period if the levels hold where they are now. Food retail should be doing fine with lower LSM the easy winner as people shop down. Food producers are under pressure with increased PPE costs and maize price increases hurting margins in those sectors in which maize is an input. Homebuilders, we're seeing massive demand in lower-priced units under R1.5million in large part due to low rates and to a smaller degree in work-from-home. Balwin (JSE code: BWN) is well placed but it a long road home even as they sit with solid land banks and low debt. Infrastructure spending is all the rage globally and here we have one clear stand out - Afrimat (JSE code: AFT). DIY gets real interesting and Cashbuiild (JSE code: CSB) noted in their results that "group revenue for the six weeks after year-end has increased by 22% on the comparable six week period.". We've seen this in the US with Home Depot and Lowes both having knock out results. Pharma, preferred over hospital groups but I do think likely the later has seen the worst of bed nights and should start seeing that increase. Property, no thanks. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Tesla and Apple stock split today / Changes to the dow Jones; Salesforce.com will replace Exxon Mobil, Amgen will replace Pfizer and Honeywell International will replace Raytheon Technologies / Reports that Walmart and Microsoft liked up to buy TicTok / ADP Employment Report on Wednesday / New Zealand exchange closes three times last week after cyber attacks / CNBC reports that U.S. tech stocks are now worth more than the entire European stock market Local / Discovery updated update spooks markets / Famous Brands sells Tashas back to founder / Nedbank results (we now have 3 of the big 4) / Italtile results (still spending R800m on capex a year) / Northam results, great albeit 60% of their PGM basket is platinum. Buying back Zambezi pref shares. / Murray and Roberts results. Was a tough year but doing alright before the pandemic hit in March.

Simon Shares Day 153 of lockdown and Covid-19. Pro-active passive management Investec USD SP500 Autocall Upcoming events; 03 September ~ JSE Power Hour: Under the hood of a passive robo advisor Subscribe to our feed here Sign up for email alerts as a new show goes live Master Drilling (JSE code: MDI), strong and monster cash generation which shows the cash output when they're not spending on new rigs. Absa (JSE code: ABG) profits disappeared and bad debts hit 2.77%, but they say they expect bad debt levels to improve in the second half. Itatile (JSE code: ITE) everything down around 20% and they're still spending on capex at R600million a year. Adcock Ingram (JSE code: AIP), very solid. But does the lack of a flu season hurt thier over the counter drugs? Bidcorp (JSE code: BID) negative operational leverage (Revenue R121,1 billion, down 6,3%; Trading Profit R4,2 billion, down 37,6%; HEPS 741,3 cents, down 48,6%) Nedbank (JSE code: NED) HEPS down 69.2% and bad debts at 1.9%. Forecasting in the current environment is complex and estimates are subject to a much higher level of forecast risk than usual. Lewis (JSE code: LEW) bad debts and closures mean HEPS off 30.8% but they're buying back up to 10% of their shares. Imperial (JSE code: IPL) shocker but logistics is a GDP play and there is no GDP. ARB Holdings (JSE code: ARH) great little business with R151.9million in cash but comment "the board believes that it will take at least two to three years to revert to the level of activity prior to the lockdown". Stadio (JSE code: SDO) good numbers and good cash, which they need for the new campuses. So likely a rights issue not on the cards. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / New highs for the S&P500 (and Nasdaq) / Between the market high on Feb. 19 and new high on Aug. 18, 38% of stocks in the index made gains while the remaining 62% posted losses / Apple hits US$2trillion and gets into a fight with Fortnight / Ryanair cuts September, October capacity by 20% on weak bookings / Japan’s economy shrank by nearly 28% in the second quarter & consumer spending declined 8.2% in the period / Gold struggling to hold onto $2,000 Local / Standard Bank kicks off banking earning season / Afrimat buys Coza iron ore for R300m / Tigerbrands sells value-added meat products business 7 HEPS 35%-40% lower. / Curro results & ADvTech update / PSG unbundles Capitec at close on Tuesday. 14 for every 100 PSG shares. / Goldfields HEPS up 4x as Nick Holland quits as CEO.

Simon Shares Day 146 of lockdown and Covid-19, new cases definitely on the decline and hence we're now in level 2. S&P500 closed Tuesday at all-time highs. Sasol (JSE code: SOL) after liking the update the market does not like the results. Truworths (JSE code: TRU) has now written down GBP231million of the GBP256million they paid for Office in 2015. Afrimat (JSE code: AFT) buys Coza iron ore for R300m. Tigerbrands (JSE code: TBS) sells value-added meat products business. PSG shareholders holding the share at the close on Tuesday will receive 14 Capitec* (JSE code: CPI) shares for every 100 PSG shares. City Lodge (JSE code: CLH) rights have ceased trading and the share is off almost 30% as many sell their new shares they paid 212c for via the rights issue. Curro (JSE code: COH) results were okay but Keith McLachlan notes that their older schools are losing students at an alarming rate. Curro puts out tough results.. The real worry? Have a look at the massive outflows of students from their mature schools. This does not imply wondrous things in the future for the newer schools... pic.twitter.com/uZSaL2VXtw — Keith McLachlan (@keithmclachlan) August 19, 2020   Anthony Clark then tweeted this which to my mind is damming. Sure 50/50, but that's a long way from 100/0. @smalltalkdaily has been a shareholder in $JSECOH since day 1. It has consistently been a core holding & I've followed EVERY rights issue This current one at 807 cents & having seen H1 results & listened to presentation (frankly) I'm 50 : 50 if I'm putting another cent into #COH pic.twitter.com/t0roIL9a0G — Smalltalkdaily Research (@smalltalkdaily) August 19, 2020   FSCA has warned against Mirror Trading International concluding "We recommend that clients request refunds into their own accounts as soon as possible.". * I hold ungeared positions. Upcoming events; 20 August ~ JSE Power Hour: Pro-active passive management 25 August ~ Investec USD S&P 500 Autocall Subscribe to our feed here Subscribe or review us in iTunes Buy the rumour, sell the fact Last week all the talk was about a move down to level 2 lockdown and a lifting of the ban on alcohol and tobacco. There was an NCC meeting on Wednesday, the state of disaster expired on Saturday and the roar against the alcohol ban was deafening. Against this backdrop, we saw the leisure and alcohol stocks running last week. Then on Saturday night, the president made the announcement, level 2. We can travel between provinces, buy alcohol and tobacco and visit friends and family. Yet Monday saw the stocks that had run hard all start giving back their gains and most are back at where they started last week. This is not surprising, a common saying in the market is "buy the rumour, sell the fact". This applies to results, mergers, takeovers and now also lockdown restrictions. The logic is that everybody thinks they're clever having spotted the potential news before anybody else and positioning themselves ahead of the news. But they're to the only ones spotting it as the price action tells us. Then when the news happens the reality is that it's actually a long road and those early buyers take their profits. For traders, the lesson is careful buying as the news breaks. Sure often the news will send a stock price still higher, but watch the price action and if the news starts to see weakness in the price, take your money and run. The other lesson is that to be early often pays, but careful of how early. Buying weeks or months ago on an eventual lifting of the ban will make a profit, but being that early means your profit is still some way off. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore US Retail sales disappoint - rise 1.2% in July vs 7.5% gain in June But new unemployment claims finally drops below 1million, the first time in 21 weeks UK GDP horror Chinese retail sales dropped 1.1% YoY, for the 7th seventh month US stimulus (trump EOs) Tesla 5:1 split via a special dividend Airbnb is filing for IPO this month with plans to go public by the end of the year. Local Sasol results (before open on Monday) Level 2 here we come? Capital Counties results City Lodge new shares start trading, they need about 35% occupancy to break even. Richemont ‘loyalty dividend’ a three-year warrant.

“This week’s episode of JSE Direct is courtesy of IG, our preferred supplier in trading products.” Simon Shares Day 139 of lockdown and Covid-19, new cases definitely on the decline. Clicks (JSE code: CLS) trading update again shows that this company is a machine. Revenue +10% for the 49 weeks to 9 August 2020. Residential property, at the lower end, doing really well. Gold $2,044 last week, hit $2,080, then $1,860. Now $1,935. US WeChat ban. Tencent (Hong Kong share code: 0700) beats expectations. Revenue up 29% YoY. Profit surges as growth hits the fastest pace in two years. Tesla (Nasdaq share code: TSLA) 5:1 split via a special dividend. Upcoming events; 20 August ~ JSE Power Hour: Pro-active passive management Subscribe to our feed here Subscribe or review us in iTunes When bad news is good news The Sasol (JSE code: SOL) trading update reports write-downs of R112billion while the market cap was R95billion and a loss per share (EPS) of around R140 while the share price was R155. Yet the stock rushed up over 4% by the close. The important point is that data is relative to expectations. It may look like a horror show, it may even be a horror show. But if it better or worse than the market expected? If worse stock will fall and if better then it will rise. Same applies to really good data, how was it relative to expectations? In the case of Sasol they're writing down assets all over and this is a non-cash issue as they write it down. Now, of course, it was paid for with cash when they did the deal or built the project - but that cash is now gone. Writing down is essentially saying that you paid to much and it is now worth less than the cost. The reason for the write-down is that it sits on your balance sheet as an asset and it will impact ratios such as Return on Equity (RoE). Buying writing down the asset to a lower price you depress the asset side of the balance sheet and at the same time the equity within the balance sheet (equity = assets - liabilities). So now a lower equity value and now your return relative to the equity looks better. Sasol still has a ton of debt and a potential rights issue and results on Monday will hopefully resolve these outstanding issues, for better or worse. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

“This week’s episode of JSE Direct is courtesy of Outvest, our preferred supplier in retirement products.” Simon Shares Day 132 of lockdown and Covid-19, new cases definitely on the decline. Pick 'n Pay (JSE code: PIK) update was somewhat of a horror show, but I'm not sure what the market was expecting. It is for the period of lockdown and includes a voluntary retrenchment that cost the company. The Shoprite* (JSE code: SHP) on the other hand was for a full year to end June, so only three months of lockdown. Solid update and they're exiting Nigeria. Subscribe to our feed here Subscribe or review us in iTunes Gold $2,044. Goldfields (JSE code: GFI) update says HEPS will almost double and this is for the six months ending June when gold was under $1,800. Cashbuild (JSE code: CSB) buying TBC from some R1.1billion. Looks like a decent price and while they could write a cheque they'll use debt. So the question is can management execute on the merger? Intu (JSE code: ITU) will be delisted from the JSE Intu has been suspended already as the company is in bankruptcy so the suspension of the listing is just a technicality. City Lodge (JSE code: CLH) rights started trading yesterday. The stock lost 75% on perhaps the most dilutive rights issue I have ever seen, 13 new shares at 212c for every one held. Everybody asking me if the should take up their rights? Truthfully you have to or be diluted out of existence. Alternatively, sell the shares and the rights and walk away. The company has a solid balance sheet, aside from the BEE deal. But the lockdown is hurting and the question is if they'll need more money? City Lodge market cap this morning cR600m, add in R1.2bn from rights issue, take out R800m for costs and BBE deal = R1billion (very rough numbers) .. 'Property͕ plant and equipment' (excluding furniture/equipment) = R2.4billion less R660m debt = R1.74billion — Simon Brown (@SimonPB) August 5, 2020   The US CARES act and specifically, the $600 payments has ended. Congress is in talks to extend but so far the two sides seem part apart. One wants to extend the $600 the other to reduce it to $200. SAB, Consol Glass and Heineken all responding to the liquor ban by cancelling projects. But are the cancelled or delayed? Are they opex or capex? Is this just a ploy to put pressure on the government? Or is this perhaps a bigger concern about stricter liquor laws post lockdown / pandemic? Upcoming events; 20 August ~ JSE Power Hour: Pro-active passive management * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / US earnings season / Q2 GDP data is coming in at about -10% / US jobless claims remain stuck at around 1.4million and CARES has ended, albeit congress is in talks / Alphabet says WFH until summer 2021 & Zuckerberg says there’s ‘no end in sight’ for Facebook employees WFH / Big tech results (Amazon, FB, Alphabet & Apple) knock it out the park / Big tech breakup congressional hearings Local / Steinhoff wants to settle claims / Europa Metals booms 16,000%, except it didn’t (500:1 consolidation) / ANG ceo quits / Vivo Energy results as fuel sales decline / GLD closes July at an all-time high / City Lodge rights issue 13:1

Simon Shares Day 126 of lockdown and Covid-19, cases may be moderating? Sasol (JSE code: SOL) sells some assets for R8.5billion and the stock is up over 12%. The sale is SA gas operations at Secunda. A sale and leaseback as Sasol only customer. But gets Sasol cash to pay down debt so good news short term, less so long-term. Korean websites also reporting on a possible 50% sale of US Ethane Cracking Center for US$3.3billion, which cost +US$12billion to build (for the other bits as well). Trading update due next week will give more details about the LCCP right downs which will surely be massive, but as importantly also maybe on the possible rights issue? Gold above US$1,900 and looking strong, albeit as I say that it'll now surely collapse in a heap as even I now own gold stocks? South Africa gets a US$4.289billion loan from the IMF. It's a very small amount and at great terms of around a 1% interest rate, albeit currency risk has to be hedged out. Upcoming events; 20 August ~ JSE Power Hour: Pro-active passive management Subscribe to our feed here Sign up for email alerts as a new show goes live Script lending EasyEquities users got all heated last week on Twitter as EE put T&Cs about script lending into their new mandate. I not commenting on the EE offer as they've withdrawn it. But many have asked about script lending as a concept. If I want to go short (make money from a falling stock) I need to sell shares and naked shorting is not allowed by the JSE (or most exchanges). So I need to borrow stock from somebody. Usually, you borrow from a large institutional investor who has plenty, you pay a fee and will also be liable to pay the lender any entitlements such as dividends. This process happens in the background when you're shorting via derivatives and why some shares are not sortable, no script to borrow. The script lender earns a fee, but there is risk so default. Whoever you lent the script to may not be able to return the script. Maybe they're just a crook? Maybe they can't afford to close out the position. remember they sold to buy back lower, but what if an offer arrives and the stock jumps say 50%? It certainly can and some income to a portfolio but the risk needs to be managed and the income is fairly modest. That said I've never lent out my script but I have borrowed script in recent years for some shorting (Aveng and Lonmin). JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / 1.42 million Americans applied for unemployment benefits in the week ending July 18, up from 1.3 million a week earlier / Gold through $1,900 / EU leaders have agreed to a €750b ($857b) stimulus package (US is in talks for their next round of support) / Tesla into sp500 / Results; Microsoft msft & Intel intc Local / MPC rate cut / IMF loan to be announced tonight, R70billion / MTN update Vodacom / Datatec update / Sasol update

Simon Shares Day 119 of lockdown and Covid-19, cases may be moderating? Monday is 4 months of lockdown. Quantum Foods (JSE code: QFH) is coming back to earth after 1157c last Friday. Tech stocks in the US are flying. Expensive? yes, but. They have solid earnings, a moat and lots of new products they can roll out. Very solid Datatec (JSE code: DTC) update. From @keithmclachlan on Datatec valuations Westcon at $600m x R16.50 = R9bn + Logicalis x 10 PE x R16.50 = R5bn = R14bn.. Less 10% head office = R12.6bn equity value against R5bn current market cap.. Listen ==>> https://t.co/HeaMQxTCYK@Moneyweb #MoneywebNOW — Simon Brown (@SimonPB) July 22, 2020   Long4Life* (JSE code: L4L) buying back 40million shares at 275c which is less than 50% of the last stated net asset value. The PSG (JSE code:PSG) AGM talks about PSG 3.0. The Zeder (JSE code: ZED) AGM was a mess as directors didn't take all the question that were asked via the virtual system Best execution rule is coming to South Africa and this is a biggie in many ways. * I hold ungeared positions. Subscribe to our feed here Sign up for email alerts as a new show goes live Gold gets its wings on I have never been a gold bull, in fact, the phrase I most used for gold stocks was that the only time you buy a gold stock was when you closed a short. But golds time has arrived and the miners are going wild even with a vaccine at some point this trend is likely to continue. The stimulus in the US and EU is massive and while stock markets are doing great, and maybe they can be propped up forever (certainly it worked post 2008/9 crisis) the underlying economies are not doing so great. Gold ETFs are an easy way to get exposure but they have no leverage, so less risk and less reward. Gold miners offer that leverage so will do way better, but also bring a bunch of risk. The Rand also brings risk as it strengthens. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / US jobless claims remain at around 1.3million / Netflix drops 9% on weak Q3 guidance. / Jamie Dimon’s warning for the U.S. economy — nobody knows what comes next / Amazon stock had its worst week since February / Fiscal Cliffs Threaten Fragile U.S. Recovery as stimulus expires late July / Qantas has removed all of its international flights until March of 2021 Local / Tsogo Sun Hotels sells Maia resort for wild price / CPI May 2.1%, lowest since Sep2004 / astral enters the quantum fray and price still flying / Diamond sales collapse and Richemont update / Rights issues announced, TFG R3.95 billion (40 per 100 shares, 40% discount), SUI R1.2billion (93 per 100 shares, 25% discount) / Spur CEO resigns

Simon Shares Day 112 of lockdown and Covid-19 cases are still spiking in South Africa and no drink again. Load shedding. An economy on its knees now without power. Quantum Foods (JSE code: QFH) still booming as Astral (JSE code: ARL) buys a 6.42% stake to protect their broiler supply. Bell Equipment (JSE code: BEL) trading update says HEPS to least 80% lower. CPI for May 2.1%, (3.0% in April and 4.1% in March) below the target range albeit helped a lot by petrol that has since increased. The Foschini Group (JSE code: TFG) buys Jet for R480million. Tsogo Sun Hotels (JSE code: TSG) sells its 50% interest in Seychelles Resort for $27.8million. The UK economy shrinks 19% in three months to May. The US CARES act expires on 25 July. Currently, this gives extra support ($600/week) to unemployed Americans. If it is not extended past the 25 July deadline when the last cheques will be sent, then things will get real bad real quick. Currently, the average US households get over 6% of their household income from unemployment benefits. Pre-Covid19 this was around 0.2%. So either the CARES Act is extended or there will be a massive hit. We've also seen in the results of Citi, JP Morgan and Wells Fargo make a significant increase in provisions for bad debts. From a collective total of some $4billon six months ago, it is now almost $30billion. The problem is that the actions put in place back in March assumed a much better scenario in July then the US is currently seeing with 40 states still reporting increasing Covid-19 cases. Upcoming events; 16 July ~ JSE Power Hour: How to manage your portfolio during a pandemic Subscribe to our feed here Subscribe or review us in iTunes The pie price wars I lived in Pietermaritzburg in 1994/5 and it was the time of the great pie wars as the price for pies kept on falling. It was great for me as a pie eater, but a horror for the pie makers, of which there were many. The many in part why there were pie price wars, everybody dropping prices to try and push others out. In the end, I suppose it worked for some, but at the time of dropping prices, profit was out the window. The point is that if your only edge is the price, you're in trouble because somebody will just make it cheaper. Now sure, quality matters as does the ability to supply. Cheap pies in Pietermaritzburg didn't help people living in Durban never mind Johannesburg. We've seen this in construction when back in the 70s/80s ability was really important. I remember the firm my father worked for hiring a German engineer to help with a project and it was a big deal to have the skills be brought to the business. Finding him and getting hin to South Africa was a challenge. But now that sort of skill is a click away on LinkedIn so what is your edge? If it is the price you're in deep trouble. Hence we've seen a number of construction companies locally and globally move away from traditional construction while the specialist construction companies (think roads) are under pressure as everybody becomes a road builder. So when investing always be considering what is the edge and is it defendable? JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Germany saves. Total retail deposits rose by €22.4bn in Apr and hit fresh All-time high at €2.46tn. The volume of retail bank deposits has doubled within 18 years. / German production and export data disappoints as they have nobody to sell to in a lockdown world. / Warren Buffett’s Berkshire buys Dominion Energy natural gas assets in $10 billion deal / Uber buying Postmates / Tesla still storming higher (as is Nasdaq) / Gold strong Local / SARB bought only R5.1billion bonds in June / Load shedding is back / Everybody wants Quantum Foods / Omnia results / Updates from Liberty 2 degrees and Growthpoint / Steinhoff sells Conforama / TFG buying JET for R480m and is looking to raise R3.95 billion in a rights offer.

“This week’s episode of JSE Direct is courtesy of IG.com, our preferred supplier in trading products.” Simon Shares Day 105 of lockdown and Covid-19 cases are still spiking in South Africa. Omnia (JSE code: OMN) results. Suddenly everybody wants to own cyclical Quantum Foods (JSE code: QFH). Standard Bank ETNs are expiring next month. Gold stocks are flying and everybody is asking me if they've missed the boat? Likely not, especially as this pandemic is not just a 2020 event. Dis-Chem (JSE code: DCP) fined R1.2m for its ‘exploitative’ behaviour. They will appeal. Steinhoff JSE code: SNH) is selling its Conforama France for a nominal sum and some property for Euro70million. They paid Euro1.2billion for the business back in 2009. The Reserve Bank bought only R5.1billion of local government bonds in the secondary market in June. This after R10billion in May and R20billion in April. MultiChoice (JSE code: MCG) has launched a new streaming service, Showmax Pro, with live sport, music and news channels. Not yet in South Africa, it is likely to cost around R300 a month and will launch locally later in 2020. Taste (JSE code: TAS) has announced a name change to Luxe holdings and a 100:1 consolidation. Always be short a consolidation, or at the very least don't be long. Upcoming events; 15 July ~ Trading 101: Managing risk 16 July ~ JSE Power Hour: How to manage your portfolio during a pandemic Subscribe to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / US unemployment 11.1% / Tesla now largest motor company in the world / Advertisers bailing on facebook / Goldman Lowers U.S. GDP Forecast, Sees 4.6% Contraction in 2020 (was 4.2%) / Fitch has downgraded a record number of sovereign ratings due to the coronavirus. 33 downgrades, 40 negative watch / Brexit talks started up again Local / Q1 GDP at -2% / Barloworld results / Capitec update / 1Nvest ETNs expiring 11 August (gold, silver, platinum & palladium) / Redefine sells R7.7billion of assets to reduce LTV / Steinhoff still muddling along and publishing results

Simon Shares “This week’s episode of JSE Direct is courtesy of OUTvest, our preferred supplier in retirement products.” Day 98 of lockdown and Covid-19 cases are spiking in South Africa. Local GDP for the first quarter came in at -2%, helped by agriculture +27.8% For the first time since July 2019, PMI respondents expect conditions to improve in six months’ time. The index tracking expected business conditions rose to 51.2 in June. Overall PMI for June was 53.9 but remember this index records monthly changes in expectations so it is expected to improve as lockdown levels improve. Barloworld (JSE code: BAW) results were a horror even as they were for the period ending March. The stock lost 11.5% on Tuesday and the headline news was Tweeted by Hilton Tarrant; Avis and Budget Rent a Car Southern Africa (owned by Barloworld): 🚗 Will retrench 50-60% of staff. 🚗 Close at least 26 of its 90 branches (1 in 3). Already down from 150. 🚗 Rental fleet already cut from 27,000 to 22,000. Will remove another 10,000 vehicles by February. — Hilton Tarrant (@hiltontarrant) July 1, 2020   New Exchange Traded Fund (ETF) coming from Satrix and it covers China. It'll be the first China ETF for the JSE (there was a Deutsche Bank ETN that closed in January). The TER is pricy (0.63%), but that's often the case with an ETF like this and it is in IPO until 14 July and thereafter will trade on the JSE and will be eligible for tax-free accounts. An update from the JSE (JSE code: JSE) was maybe a little lighter than I would have thought. But it is seeing improved revenue due to increased trade on the market and this does mostly drop to the bottom line, except for some increases in executive pay that took off some of the shine. Intu (JSE code: ITU) finally it the wall as they couldn't get a standstill on debt last Friday. The stock is suspended with a market cap under R400million and some R100billion of debt. Shareholders are likely to get nothing from the ruins. ADP was a slight miss, 2,369million new jobs vs expected 3million. Crunching the data, the US has lost 14million jobs during the pandemic and only 27% of the March-April job losses have returned. This translates to an unemployment rate of around 13%. Upcoming events; 01 July ~ The world after Covid-19 08 July ~ Know your derivatives: Long, short or hedge? 15 July ~ Trading 101: Managing risk 16 July ~ JSE Power Hour: How to manage your portfolio during a pandemic Subscribe to our feed here Subscribe or review us in iTunes Listed property, watch the V Redefine (JSE code: RDF) has sold assets worth R7.7billion to pay down debt. This improves their LTV (loan-to-value) to around 40.6%, but the risk remains as the V part of LTV is also a moving target and will likely be moving lower when their yearend comes around in August. LTV is a very important data point in listed property and bank loan covenants will be based on this figure. Listed property revalues their assets on a rolling three-year review. Every year a third of properties have a full revaluation. Somebody checks the lifts etc. Also important is occupancy levels and rental payment rates and increases in rentals. The other two-thirds of the properties are adjusted in the year they're not having a hard revaluation. Helping is that lower rates will boost valuations and debt may also in part be floating. But we can expect valuations to be 10%-20% lower and this will spike the LTV levels really hurting the LTVs. That said, bankers are not likely to be calling in the loans as they don't want to be landlords but remember my podcast of earlier in the year about maintaining REIT status, this is a sector under serious pressure. https://justonelap.com/podcast-property-losing-reit-status/ Lastly, adding to the woes is that the debt is often debt notes that will need to be rolled, who's going to be buying listed property debt in this market? JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / US existing home sales fell 9.7% the lowest level since October 2010. US jobless claims dropped to 1.48m / Wirecard into bankruptcy. EY never checked the bank account of the missing cash for 3 years. / HS Markit’s Eurozone PMI Composite Output Index rose to 47.5 in June, / Microsoft permanently shutting retail stores / Nike reports unexpected loss as sales tumble 38% / Boeing 737 MAX certification flight tests to begin today Local / Supplementary budget & GDP tomorrow / Capital raises; City Lodge, Sun International, Pepkor, Harmony / Stor-Age* results / Telkom results, dividend cancelled to fund spectrum / Intu is not able to make a deal with lenders. Stock suspended on the JSE / Solid JSE trading update as volumes soared during the period

Simon Shares Tencent hit a new all-time high on Tuesday and again on Wednesday pushing Naspers (JSE code: NPN) and Prosus (JSE code: PRX) higher and helping the JSE overall. Gold seems to be breaking up out of the consolidation zone it has spent the last few months trading in. Good German PMI data, still under 50, but only just again suggests that April was likely the worst month. Albeit the route back to normal is going to be long and rocky. Mboweni budget; No changes to taxes, but a rough budget. Some key points; The South African economy is now expected to contract by 7.2% in 2020. This is the largest contraction in nearly 90 years. Global GDP -5.2%, broadest collapse in per capita income since 1870 "A post‐lockdown future will require that we build high‐quality physical bridges, roads, railways, ports and other infrastructures.". Some changes in the R200bn Covid loan scheme. Removed the R300m turnover limit. South Africa will "shortly" fall into a sovereign debt crisis if it does not act urgently. The ASHGEQ* ETF is changing and needs your vote. Kristia writes about it here, but, in short, we'll have a cheaper TER after the process.  The delayed April CPI came in at 3%, lowest for 15 years and right at the bottom of the SARB inflation target range. How likely are you to win the lotto? Video: Investing globally, locally. Upcoming events; 01 July ~ The world after Covid-19 08 July ~ Know your derivatives: Long, short or hedge? 15 July ~ Trading 101: Managing risk Subscribe to our feed here Subscribe or review us in iTunes Send money The JSE is currently awash with capital raising. Some just because it makes sense to make their balance sheet stronger, others because they're in real trouble if they don't. The problem is that issuing new shares gives a permanent right to profits, loans are better, but right now bankers are not lending with abandon. Some have been via a quick bookbuild Stor-Age* (JSE code: SSS) ~ R250million Transaction Capital JSE code: TCP) ~ R559.7million Pepkor (JSE code: PPH) ~ R1.9billion Many others will be via a traditional rights issue; Curro (JSE code: COH) R1.5billon (non-renounceable) City Lodge (JSE code: CLH) ~ R1.2billion Sun International (JSE code: SUI) ~ R1.2billion Sasol (JSE code: SOL) ~ not confirmed Mr Price (JSE code: MRP) ~ R3.6billion (idea floated but not confirmed) The Foschini Group (JSE code: TFG) ~ up to R3.95billion This raises a real issue for many shareholders, do you send cash and follow your rights? If you don't you'll be severely diluted, especially with the bigger issues. So you need to decide which you'll follow, but also keep in mind that some of these raising capital may well be back again in the months ahead for more money, and then maybe even again. If you're worried about repeated capital raises, then exiting early may be better than not. I would also add that we will most certainly see a lot more capital raises coming, heck the property stocks haven't even started aside from Stor-Age. So the requests for money will keep on coming and at the end of the day, it's going to be a lot of money requested. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

/ Wirecard and the missing $2.1bn / Hertz decides NOT to issue shares while under chapter 11 / Reports on Sunday that British Finance Minister Sunak plans emergency cut in value-added tax / Index rebalancing in the Russell indices sees nearly half of the stocks being promoted to the Russell 1000 from the Russell 2000 will be healthcare names. / Apple will close 11 stores across Florida (2), North Carolina (2), South Carolina (2) and Arizona (6). This after re-opening 100 in May. / Fed Chair Jerome Powell warned millions of people will likely still be unemployed even as the economy is on the path of recovery. / The Federal Reserve started buying corporate bonds Tuesday as part of a $250 billion program funded by the CARES Act Local / New level 3.something opens leisure and beauty (to a degree) / Marriott Group closing three hotels (Mount Grace, Protea Hotel by Marriott Hazyview and Protea Hotel by Marriott Durban Edward). The hotels are owned by Hospitality Property Fund. / Sasol update, lots of news but not on LCCP partial sale or rights issue. / Capital raising galore (COH, TCP, TFG, SUI, SOL, MRP) / Zero based national budget on Wednesday / New kinda wonder drug / Aspen Ascendis (latter Tanzania only) / Discovery putting aside R3.3billion for Covid-19 claims. ===

Simon Shares Here's a gem from the Herenya Capital Advisors Twitter account, albeit Remedica is up for sale and we've had lots of early hype on drugs that quickly fizzled out. Ascendis Healths subsidiary Remedica manufactures Dexamethasone which apparently helps combat severe cases and is being approved by the NHS. pic.twitter.com/XUw9VPHwdg — Herenya Capital Advisors (@HerenyaCapital) June 17, 2020   That said, Aspen (JSE code: APN) issued a SENS stating "It is confirmed that Aspen owns rights to this product and distributes both injectables and/or tablets containing dexamethasone in a number of countries." But most importantly, is it really a new wonder drug to treat Covid-19 (dexamethasone). Because ouch, you need to already be in ICU and then if you're on a ventilator it saves 1:8 (12.5%) and of those needing oxygen, it saves 1:25 (4%). Aren't those very modest numbers? On MoneywebNOW yesterday I chatted with Easy Equities CEO, Charles Savage and he dropped some amazing stats. They're opening 1,500-2,000 new accounts a day against 12,000 in all of February. R1billion client money into Sasol at an average of 5500c and if half of those investors still hold Sasol they're sitting on almost R1billion profit! Subscribe to our feed here Subscribe or review us in iTunes Massmart (JSE code: MSM) trading update is as bleak as expected. They secured an R4billion inter-company loan from Walmart to keep them going and expect HEPS to be at least 50% lower. Missed liquor sales for the months of April and May are estimated to be approximately R2.3 billion lower compared to the previous year. Discovery* (JSE code: DSY) puts aside R3.3billion for Covid-19 hoping that it is enough money. Hits HEPS hard but they'll still make some R5.5billion of normalised HEPS. Chinese Ping An Health is, however, having a good Covid-19 as sales increase and the bank is doing well enough as it continues to grow clients and accounts. MultiChoice (JSE code: MCG) came out as I was recording last week and they were solid. They paid their first dividend and announced a tie-up with Netflix and Amazon streaming. But long-term challenges persist and they still buy content in hard currency and sell in soft. Very good results from Value Group that place the stock on a PE of around 5x and a dividend yield of just over 9% while they hold cash of almost 150c a share or over 35% of the share price. Zeder (JSE code: ZED) sold its shares in Quantum Foods (JSE code: QFH) for over R300million. So now what for Zeder? They have just over 80c cash per share, some 30% of the share price? A PSG delisting? A buying spree, dividends or a share-buy-back? Next Wednesday, 24 June, we get a revised budget from Minister Mboweni. The US is considering doing a US$1trillion infrastructure package. * I hold ungeared positions. Cash Club: Is TymeBank still right for me? Upcoming events; 18 June ~ What it means to Invest Globally, Locally 01 July ~ The world after Covid-19 08 July ~ Know your derivatives: Long, short or hedge? 15 July ~ Trading 101: Managing risk JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / China's PPI down 3.7% in May and factory output rises less than expected, retail sales continued to contract in May. / Fed kept interest rates flat and cautioned they expect conditions to remain tough into 2022. GDP 5% in 2021 and unemployment 5.5% in 2022 o S&P500 dropped -4.8% last week but remains +8.1% this month, o Nasdaq dropped -2.3% last week but remains +6.4% this month, o FTSE 100 dropped -5.9% last week but remains +5.3% this month, o JSE Top 40 Index dropped -1.9% last week but remains +5.8% this month, / We’re starting to see the second Covid-19 wave in both the USA and China and this spooked markets. Detroit, Michigan is seeing new all-time case highs / Mnuchin says ‘we can’t shut down the economy again’ / UK economy contracted by 20.4% in April, the largest monthly fall on record / Justeat-takeaway buys GrubHub Local / The Rand hit 16.33 overnight on Wednesday but then came under serious pressure at 17.20 on Friday. / Solid Multichoice results and first dividend payment as sports starts to resume. / Tsogo Sun Gaming results show debt of over R11billion. Casino industry wants to re-open ASAP / Solid Sygnia results / Sasol Draws Multiple Bids for Stake in U.S. Chemical Site / Hyprop update shows good recovery after the hard lockdown of April. Still opens below 100%, but looking better Hyde Park Corner 67% Rosebank Mall 76% Canal Walk 85% The Glen 85% Woodlands Mall 85% Clearwater Mall 88% Capegate 89% Somerset Mall 92% Atterbury Value Mart 97% Foot count at Hyprop’s malls: March 2020 Down 24% April 2020 Down 71% May 2020 Down 39% June 2020 (seven days) Down 24% / JSE Index balancing this Friday, Redefine is exiting both the Top40 and Fini15 to be replaced by Exxaro and Quilter respectively. ====== British Airways is auctioning off art worth millions as pandemic weighs on earnings

Simon Shares Bankruptcy stocks are the new excitement in the US. Hertz in chapter 11 saw its stock price back at the levels from when it announced Chapter 11. Tsogo Sun Gaming (JSE code: TSG) results to end-March show debt at R11.2billion, more than double the market cap. EOH (JSE code: EOH) update says debt is being paid off quicker than planned. But it remains a long road for the company. British American Tobacco (JSE code: BTI) update sows solid DM demand but reduced EM demand. Hyprop JSE code: HYP) update details foot traffic and open rates with their malls between 67% (Hyde Park Corner) and 97% (Atterbury Value Mart). In large part, the number depends on the number of sit down restaurants. Foot traffic was down 71% in April and in the first seven days of June is now only down 24%. Again this shows that April was very likely the worst point and that things are improving, but the last stretch of improvement is going to be the hardest. China's PPI down 3.7% in May. China is opening but exports are struggling as much of the rest of the world remains in lockdown with reduced demand. Upcoming events; 17 June ~ Trading 101: A traders plan 18 June ~ What it means to Invest Globally, Locally 01 July ~ The world after Covid-19 Subscribe to our feed here Subscribe or review us in iTunes The US goes back to work with 13.3% unemployment US unemployment came in at 13.3% (from 14.7% in April) as the US added jobs in pretty much all sectors. The expectation had been for further job losses and an unemployment rate closer to 19%. Perhaps the biggest miss ever. Now sure some funnies in the number, but they existed n the April numbers as well so net-net the miss would have happened. But what is important is that it shows the US economy opening up and bouncing back strongly, but perspective is still needed. Current US unemployment remains the worst numbers since the great depression with the 2008/9 financial crisis peaked at 10%. It is a long way back to single-digit unemployment and even longer to the sub 4% from the beginning of the year. The driver here will remain the pandemic and what we need to watch remains the rate of infections in the US with 14 states still reporting growing numbers. This could slow or even reverse the positive jobs data we saw. My thinking is that we will likely see the US unemployment rate improve further over the next few months with 10% possible by the end of their summer (August / September). My logic here is that lockdown saw millions at home and the lifting of lockdown saw many return to work. But what we don't know is how many businesses are still in business because a bankrupt business doesn't employ anybody. So while 10% is very possible getting below that number may be a lot harder and could take years. That all said the key point is that while nobody truly expected an improving US job situation this quickly it did happen and there is no point denying it. Instead, we adjust our expectations as expected data reveals itself. As important is to remember that while this was a massive positive number, it stills remains a massive number that shows an economy under severe pressure. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Global / US May unemployment rate seriously strong at 13.3% / PMI bounces from April lows but still below 50 / China May exports slip back into contraction, imports worst in four years / Opec extend cuts by another month / AstraZeneca Approaches Gilead About Potential Merger local / Apple mobility and Yoco transaction data shows about 65% economic activity in week 1 of level 3 / JSE allows share issues without shareholder approval / Rand below 17 as foreigners buy our bonds and equity / Reserve Bank takes up R10.2bn in government bonds in May / More banking updates / Bidvest update gives insight to Comair and Adcock Ingram / Capital Appreciation solid results and increased dividend as they operate in payment terminals and cloud services (there are always some winner) ==== Levi opening stores and they say “everybody has a new size, a larger size”

Upcoming events; 09 June ~ South China Seas structured product Q&A 10 June ~ Margin, gearing & exposure explained 17 June ~ Trading 101: A traders plan 18 June ~ What it means to Invest Globally, Locally Simon Shares Day 70 of lockdown, week 1 of level 3 and I got drink (still no smokes) but court locks down lockdown? Markets are surging, taken off flying and chasing the stars. Overall value is decent but not spectacular. Coupled with the ZAR at 17 we likely have a risk on trade and some epic sort squeezes. The general view for the currency is at least 16 in the short-term maybe stronger but as always, be careful because this can turn on a dime. Of course, my crash puts are getting slaughtered in this run, but that's the plan. if my cash puts are losing then my portfolio is winning. WTI and Brent both having a good week with the latter back above US$40. Sasol (JSE code: SOL) the easy winner here, likely based on higher oil and short squeezes. Will it close the gap at R160? Certainly, the possible rights issue is much less likely with Brent oil back above US$40. Subscribe to our feed here Subscribe or review us in iTunes The Bidvest (JSE code: BVT) saw them write down their Comiar (JSE code: COM) stake to zero as the business is in business rescue. But they had good things to say about Adcock Ingram (JSE code: AIP) and that boost Adcock, but caution as they sell a lot of over the counter drugs that may struggle under a stressed consumer. Last week I was dissing MTI on Twitter, they've reached out to me asking why. I sent them a list of questions on Tuesday and will publish the answers when I receive them. Key point apart from paying referral fees is an absolute lack of compliance process and no FSCA registration. Locally and globally PMI data bounced back in May compared to the horror April numbers. This is in part statistical, but also that April was hard lockdown in much of the world and importantly aside from China all PMI numbers were still below 50 and hence contracting. Speaking of China, they're cracking down on Hong Kong coupled with Trump blaming them for their COVID-19 response and let us not forget we still have the trade wars on-going. Make no mistake they are using the cover of a pandemic and Trumps increasing isolation as a world leader to flex their muscle and increase their influence. This is not surprising but will lead to even greater tensions between the US and China and this must leave Tencent in somewhat of a bind and at risk of sanctions aimed either directly at them or China more generally? That, of course, could then play out to Naspers (JSE code: NPN) and Prosus (JSE code; PRX). But for now, they both doing alright, remember they are still some 20% of the Top40. Remgro (JSE code: REM) has spun out their holding in RMH and PSG have announced the terms of their Capitec* (JSE code: CPI) unbundling, 14 Capitec shares per 100 PSG shares leaving PSG with some 4%. My view is unbundling already listed shares makes absolute sense. There is no point in me essentially buying a holding company if all they own is listed. Now if the held unlisted shares then t's a different story, so maybe we'll see more in the months and years ahead? * I hold ungeared positions. Video: Pandemic investment scenarios (with risk matrix) Video: South China Seas structured product Video: Managing risk as a trader with Garth McKenzie JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Global / US past 40million initial claims and Q1 GDP updated to -5.0% from -4.8% / Personal saving rate 33% in April / Germany’s Business Climate Index rose to 79.5 in May as the country reopens / Reuters ~ China's May factory activity returns to growth but demand remains weak / China US tensions increasing / Bill Ackman's Pershing Square Capital Management announced it had sold off its entire stake in Berkshire Hathaway. BH has $133.3 billion hoards of cash vs S450 market cap (third of assets are lazy and not been deployed). Local / PSG announced CPI unbundling details (14 CPI for every 100 PSG) / Woolies update, spending AU$100million on Australia / TigerBrands results as branded goods come under further pressure. / Famous Brands very pessimistic on casual dining recovery / Stats SA delayed April CPI by a month due to difficulty collecting data / PIC talking about converting Eskom debt to equity

Simon Shares Day 63 of lockdown, level 3 on Monday. As I record we're still waiting for details as to what is allowed under level 3, but it seems that rather than saying what we can do, the regulations will tell us what we can't do and that list will be short. We will be able to exercise, retail is open but restaurants and bars not. Alcohol will be sold, but not tobacco products. Personally I will pretty much stay in lockdown (aside from my daily radio show), but now with a drink. NYSE trading pit opened again on Tuesday. A throwback to the days before technology but always fun to watch, not that I have been to the NYSE. I did see the JSE in the mid 80's on a trip to Johannesburg. It was wild and made no sense to me but it was energetic and I wanted to be a part of it all. Famous Brands* (JSE code: FBR) results presentation made two comments “restaurant landscape will be irrevocably transformed” because of Covid-19. The market recovery in the casual dining segment will be “slow and unforgiving”. Woolies (JSE code: WHL) trading date shows food doing well but clothing and Australia doing very poorly. They're talking to bankers in Australia about debt covenants and Australia may need a AU$100million cash injection. Solid Coronation* (JSE code: CML) results with HEPS and dividend both up 8%. But risks remain, will private investors pull money or slow/stop deposits? Also as companies reduce head retirement money flows into their funds ever month. Tuesday in parliament Minister Dlamini-Zuma said unemployment may hit 50% and the Absa (JSE code: ABG) said they expect local 2020 GDP to be -10%. Pepkor (JSE code: PPH) saw R5.5billion in lost revenue due to COVID-19 already so far. R476million to end March and another R5billion in April. May has seen a spike in shopping so they'll get some back, but likely not all. FAANG annualised returns since the lows of March is averaging 970%. Wowzer, but as I said last week; don't fight the Fed. * I hold ungeared positions. Video: Solvency and liquidity in the time of COVID-19 Wealthy Maths: Drop a tax bracket Upcoming events; 28 May ~ Managing risk as a trader with Garth McKenzie 03 June ~ Pandemic investment scenarios 10 June ~ Margin, gearing & exposure explained 17 June ~ Trading 101: A traders plan 18 June ~ What it means to Invest Globally, Locally Subscribe to our feed here Subscribe or review us in iTunes Understanding warrants TOPSBZ is a put warrant that trades on the #JSE and can be bought in any normal stock broker account .. @SBGTraderZA clients buying in a warrant account pay flat R50 brokerage taxes etc. https://t.co/LX0mZmplYo — Simon Brown (@SimonPB) May 23, 2020   Warrants were the first derivative I traded, starting in October 1997 as they were launched in South Africa. SAWarrants was also my first successful website that launched me into the financial services industry. Recently I've been trading some warrants again as have a few traders I know and a tweetstorm I did over the weekend got a lot of question about trading warrants. The short answer is don't. They're derivatives and hence risky If you're an ETF buyer or even just a straight equity buy and holder, stay away. If you're successfully trading other derivatives then they're worth a look. Certainly, they have some benefits over traditional derivatives, but also lots of complexity. A warrant is really an option that gives the holder the right to buy or sell an underlying asset. Call goes up as does the underlying asset. Last letter of the warrant code will be A-0. Put goes up as the underlying asset falls. Last letter of the warrant code will be P-Z. The fact that it is a right, not an obligation, means your loss is capped at what you paid. Warrants trade on the JSE just like any other share or ETF with six-letter codes. First 3 letters denote the underlying asset. 4th letter is the issuer, 5th letter the style (B for normal, I for instalment and K for knockout - be very careful of knockout warrants). The last letter is as above denoting call or put. But a lot of greeks that can trip you up that are outputted by the Black-Scholes formula (this formula won the writers a Nobel prize). Gearing ~ amplification of the move. For example, 4x gearing means for every 1% move of the underlying your warrant will move 4%. You don't want to gear much more than 5x, 8x on indices. Theta ~ time decay. A warrant decays every day, every week, even if the asset moves in your direction it will lose some value. This reduces the warrant price and is very aggressive in the last third of the warrants life. Be very careful of tie decay. Expiry ~ unlike CFDs, warrants expire and if you hold at expiry you'll be paid out. If it has value. Make sure you have lots of time, at least 3 months, ideally 6 months. Time decay becomes very aggressive in the last few months. Value is price above strike prce at expiry (for calls). For puts price below strike. Strike is the price at which you can buy / sell the asset. You want the current price to ideally be 10% - 15% of the strike price. Delta ~ many things but more or less the likelihood the warrant will expire with value. One major benefit is that with warrants you can only lose hat you paid, unlike with CFDs or futures you can lose more than you deposited. The warrant issuers will also ensure there is a market maker buying and selling at fair value at all times. They will use a pricing matrix that can be found online. If you trade warrants within a Standard Online Share Trading warrant account you pay flat brokerage of R50 +taxes. And Standard Bank have a good website at warrants.co.za And I will end where I started. Be very careful and do not jump into warrants unless you're a successful trader already, otherwise, the greeks will get you. The big challenge is that you may get the direction of the trade right (call or put) but pick the wrong warrant and lose money. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Offshore / Hertz bankruptcy / US initial jobless claims now over 38million (160m labour force), UK ver 10million (35million labour force) / This on the back of German Q1 GDP released this morning coming in at -2.2% / Moderna vaccine excitement, and then they raise capital on share price spike / Commodities having another good week. / Apple mobility data shows Europeana and US economy opening. Local / 0.5% rate cut / Stor-age raises R250m in bookbuild. / Grand Parade Burger King sale being repriced? / Liberty 2 Degrees update, nice insights. / Nedbank update also offering solid insights. / Richemont raises Euro2billion debt as they strengthen their balance sheet / Online sales surging

Upcoming events; 21 May ~ Solvency and liquidity in the time of COVID-19 28 May ~ Managing risk as a trader with Garth McKenzie 03 June ~ Pandemic investment scenarios 10 June ~ Margin, gearing & exposure explained 18 June ~ What it means to Invest Globally, Locally Day 56 of lockdown Simon Shares Don't fight the Fed (The Federal Reserve). Markets are in full rally mode and the forward PE of the S&P5- makes it the most expensive in the last decade. During a pandemic and worst US unemployment since the great recession? Bu the point is simple, if the Fed is buying with guns blazing, don't stand in the way, markets will rally higher even if everybody I speak to is bearish. With that in mind, I have bought some TOPSBZ as insurance against another market collapse. It is a put warrant over the Top40, expiry is December and strike is 41,000. So a decent amount of time and about 18% out-the-money. Richemont (JSE code: CFR) raises Euro2billion of cheap debt to go with their almost Euro2.4billion of cash on hand. Now they've always been a conservative company, but they are storing up that balance sheet like crazy. Dischem (JSE code: DCP) results disappoint and buys Baby City for R430million. Solid Santova (JSE code: SNV) results, but to end February. Oil is moving higher as production cus finally start taking effect. Commodities remain strong. Makes no sense unless one assumes a massive post-COVID-19 infrastructure spending boom, and that does make sense. I've been watching countries lifting their lockdowns, gentle but certainly lifting. Germany started lifting in late April (some stores open again) and then more broadly in early May. So far new cases continue to trend down, albeit the early May stats would only start coming in now. But early evidence is that an initial hard lockdown works and then slowly lifting restrictions seems to do the trick. Very early days, but the data is hopefully. Importantly, this is not about removing restrictions, just reducing them. Liberty 2 degrees (JSE code: L2D) update gives great insights into the property sector. April & May saw rental collections around 40%, most malls are now operating at 60% - 70% GLA and foot traffic at 60% pre lockdown levels. All stats are improving during level 4. ZAR at 18 as I record. Video: Getting started in trading Subscribe to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

**Global** / UK two-year government bonds traded negative last week as UK GDP -2% for Q1, -5.8% for March & retail sales fall 19% year on year. Biggest in 25 years / Tencent’s Q1:20 results showed a +19% jump in gaming subscriptions, overall Group revenue grew +26% and, on almost all metrics, the Group beat analyst estimates. / US, jobless claims came out as another nasty number today, now totally around 36m (the worst number since the Great Depression) while April retail sales collapsed -16.4% m/m. **Local** / Barloworld is attempting to back out of its deal to buy Tongaat Hulett’s Starch business due to COVID-19 likely negatively impacting the business’s EBITDA and triggering a “Material Adverse Clause”.  / Dis-Chem announced the acquisition of 100% of Baby City / Richemont released FY 20 results showing revenue flat but profits collapsing by two-thirds. and are proposing a possible warrant instead of a dividend / Strong Aspen update while Life healthcare says EPS for full year likely 20% lower after mid year was +12%. / Knockout Sibanye Stillwater results that saw debt down 40%. / Impala Platinum Mine has temporarily suspended operations at its Marula Platinum mine in Limpopo. This follows the detection of six more COVID-19 cases among workers at the plant. =====  

Simon Shares Day 49 of lockdown Pick 'n Pay (JSE code: PIK) results were slightly down, but no dividend as they conserve cash. Sibanye Stillwater* (JSE code: SSW) first quarter results knock it out of the park, strong cash flow and debt down 40%. Tongaat (JSE code: TON) sale of their starch business to Barloworld (JSE code: BAW) has collapsed with the buyer claiming "material adverse change" due to COVID-19. UK two-year government bonds traded negative this week. UK GDP was -2.0% for the first quarter (QonQ) with March saw a 5.8% contraction. Retail sales fall 19% year on year. Biggest drop in 25 years as 'excess deaths' top 50,000 but look to maybe have peaked, for now. Norway oil fund exits Anglo American (JSE code: AGL), Glencore (JSE code: GLN) & Sasol (JSE code: SOL) as they "derive at least 30% of their income from thermal coal, base at least 30% of their operations on thermal coal, extract more than 20 million tons of thermal coal per year, or have a coal power capacity of more than 10,000 megawatts from thermal coal.". Naspers (JSE code: NPN) and Prosus (JSE code: PRX) have both hit new all-time highs over the last week ahead of Tencent earnings that came out ahead of expectations. Upcoming events; 13 May ~ Know your derivatives: CFDs, indices and FX 20 May ~ Trading 101: Getting started in trading 21 May ~ Solvency and liquidity in the time of COVID-19 28 May – Managing risk as a trader with Garth McKenzie 03 June ~ Pandemic investment scenarios * I hold ungeared positions. ffff Download the audio file here Subscribe to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes The post COVID-19 reality is starting to emerge It's very early days but an announcement from Twitter shows how things may look as the company says it will "allow its employees to work from home forever". Hello new world. This is surely going to be a large part of our post COVID-19 reality and has serious implications across many sectors. A recent IBM survey during April of 25,000 US adults found; 54% of Americans say they want to work from home primarily 75% say occasionally Commercial property in this example will simple need less office space. This will hit not just office rentals, but for example also car an Uber usage as we travel less to work reducing fuel and car needs hurting the respective industries. Then of course lower insurance rates as less driving means less risk, and so the all rolls. The flip side of course is that less travel time means more money and free time for an individual and how will we spend that? Reading? Eating out? Family? Taking the Twitter example a step further, working from home means more virtual meetings (such as Zoom) and then it is a small step to less corporate travel as meetings or events that may required travel are now done virtually. It'll be a long time before we get to the new post COVID-19 reality, but it's not going to be a new normal, it'l be way more. A new reality and importantly we get to define what this new reality will look like. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Global / Worst US unemployment since the depression, but lagging indicator. Likely 25% by end May / Last weeks PMI, local and global mostly setting records for worst ever / Nasdaq is up year-to-date / IMF warning that their 2020 GDP forecasts may be too low? Local / Comair business rescue / Phumelela Gaming business rescue / Our bonds are strong, 10 year at 9.3%, shorter dated below 8% / Anheuser-Busch InBev QoQ volumes down 9.3% / Property stocks and risk of losing REIT status

This week’s episode of JSE Direct is courtesy of OUTvest, our preferred supplier in retirement products. Simon Shares April was the best month for equity markets since 1987! Local ten year bonds are on a tear, just a week after we exited the World Government Bond Index the yields are back at pre-junk levels and even better as they trade below 8%. This is the search for yield playing out. If their mandate allows investors want yield, the rest they don't care about. This has also seen the Government Retail Bonds locally drop their April rate of 11.5% to 10% for May and likely will fall further in June. PMI shocker. The headline number was fine but that was due to some oddities. The real kicker was the business activity index that collapsed to an all-time low of 5.1 index points in April. During the 2008/9 crisis the lowest levels were low 30s. Oil bouncing higher, albeit at US$30 Brent is still over 50% off the January levels. Comair (JSE code: COM) went into business rescue less than a week after an update detailed no flying until October / November. They hope to be able to restructure and come back by then, but the airline industry globally is in melt down and locally we have three airlines in some form of bankruptcy (SAA and SA Express the other two). Metrofile* (JSE code: MFL) updated the market on their proposed 330c delisting and the short answer is that it is still on but is delayed indefinitely. Pratically trying to raise capital and get all the Is doted and Ts crossed is largely not practical under lockdown. But the buyer also wants to get a better understanding of the business post lockdown. I hold the stock and am happy to continue holding as I'd rather it not be delisted. But price had dropped to 220c on the news, currently 250c. Lockdown does hurt the company a little, most work in contractual. But the issue is how many clients don't survive and of those who do will they require less boxes? In very tough times for REITs Equites (JSE code: EQU) results really shone. Debt is low, distributions solid and they have very few clients not able to pay rentals as they state "since 29 February 2020, we have collected 92.8% and 100% of the contractual rental due in terms of our lease agreements in SA and the UK, respectively". This is largely as they are in the business of fancy logistics. No retail, no offices and many online customers, especially in the UK which os some 25% of their business. Upcoming events; 13 May ~ Know your derivatives: CFDs, indices and FX 20 May ~ Trading 101: Getting started in trading 21 May ~ Solvency and liquidity in the time of COVID-19 28 May – Managing risk as a trader with Garth McKenzie Subscribe to our feed here Subscribe or review us in iTunes Property losing REIT Status A REIT ~ Real Estate Investment Trust is essentially a special purpose vehicle for listed property stocks. In South Africa the most notable requirement is that 75% of 'distributable income' is paid to shareholders as a taxable dividend. This absolves the REIT of tax liability but that dividend received by shareholders is taxed as income, not the 20% dividend withholding tax (DWT). So depending on your marginal tax rate, it cold be higher or lower than DWT. With this in mind I asked Redefine CEO Andrew Konig about this on my show on Tuesday. The company had some 33c per unit of distributable income due to investors but did not declare it rather saying they'd decide at yearend in August 2020. This is perfectly legal as this was an interim distribution and they only need to be paid annually. Now that 75% rule is a SARS issue as it regards taxation, it is not a IFRS concept and as such it is a murky issue. So the REIT industry is engaging SARS in case some REITs can't pay the distribution. There could be lots of options such as delaying the payment and maybe spreading it our over a number of years. But if they lose REIT status frankly the property companies would unravel as the tax advantage from that status is huge and how they operate. As such I expect industry and SARS to come to some sort of agreement. But what Andrew Konig said was that liquidity issues were of more a concern for REITs. Frankly their ability to actually pay anything and liquidity is a part of the companies act so is more immovable than the SARS REIT definition and allowances. This is the bind property stocks find themselves in. Debt that needs to be paid, income (rentals under pressure) and legal requirements to pay distributable income. There is going to have to be lots of clever thinking to get through this crisis. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Moneyweb NOW, starting Monday. Live stream at 6.30am and podcast from 7am - both on Moneyweb.co.za or their app. Day 35 of lockdown, and last day of level 5, for now. S&P500 trading back at August 2019 levels and Top40 at January 2019 levels. So basically saying COVID-19 is no worry? Everything is going to be alright? Sure the US has thrown over US$2trillion at the problem, but some 13% of the US workforce has lost a job in the last month and it easy to fire, but will surely be a lot slower to rehire? This is why I am at best a W recovery person not a V shaped. We have another leg lower, no idea how much lower, but lower. Locally a Stats SA survey of 707 VAT-registered companies shows that 20% have already laid off staff and 30% have decreased working hours. We also see IMF forecasting a local GDP of -5.8% and an unemployment rate of 35.3% for 2020. Then 34.1% unemployment in 2021. These are horror numbers and if they're wrong, they be wrong on the light side with reality potentially worse. Certainly that -5.8% for GDP is the lowest I am currently seeing with even the SARB and national treasury expecting -6.4% for 2020, a number I still think will ultimately be on the low side. On lockdown level 4. It not very different with tobacco products allowed to be sold (maybe) and restaurants allowed to do food deliveries (maybe) and some industry allowed to get back to work. Restaurants will be a biggie, people do not normally cook their own dinner every night, heck I know some of even ordering in for breakfast and lunch. So demand should be wild and it will get cash back into this sector, but managing demand is going to be tricky. My thought is that we should be able to book cooking times. For example, I book the 7pm slot at my fav and they have limited number of slots available at each time slot as per their capacity. This is much like a lot of the food stores were doing and it manages expectations and delays. At the end of the day level 4 lockdown is expected to see about 1.5million returning back to work. But the flip side is Edcon reportedly filing for voluntary business rescue as it burns through its cash. We're going to see a lot more large and small businesses not surviving, hence my feeling that the projected GDP and unemployment numbers are likely to be on the light side. Subscribe to our feed here Subscribe or review us in iTunes WTI still trading weak and frankly why not negative again just ahead of close out for the June delivery contract? Storage is now even tighter as demand remains collapsed and the supply taps remain turned on. Eventually supply has to decrease because demand is a long way from booming again, but nobody wants to be the first to blink and exit so instead each is hoping somebody else blinks and markedly cuts production first. Biggest loser locally in this oil war (aside from Sasol (JSE code: SOL) which is now over 8000c and which I am still not buying) is MTN (JSE code: MTN). Their biggest market is Nigeria and Nigeria is an oil economy that is being nailed by both COVID-19 and collapsing oil price. The latter means less government and oil industry money and that'll lead to lay offs and less income generally. All this means poorer people who have less to spend on data and voice. PSG (JSE code: PSG) are giving "serious consideration" to unbundling their Capitec* (JSE code: CPI) holding. This makes sense, the Capitec stake is worth more than the PSG market cap essentially valuing their other assets at a negative value. This defeats the point of being listed which is largely capital raising which one would never do at such a discount. In fact PSG are fairly smart at issuing new shares when they trade at a premium to their holdings. Further, the Capitec dividend flow has been very useful for PSG over the years, but with that dividend now cancelled for at least two or more years, now's a good time to do the transaction. PSG also states that "new legislation may potentially deem PSG (as a material shareholder in Capitec) to be a financial conglomerate" and that would increase compliance costs for PSG. Lastly depending ow much they unbundle it may well leave Capitec without a reference shareholder which is very useful in times of stress, but most of our big four are in the same boat so no train smash. Staying with Capitec, Michiel le Roux, one of the founding directors, has donated R99million to three efforts to fight COVID-19 in South Africa. Well done gent. Then a fascinating report on how Morgan Stanley is tracking the industrial recovery in China. They're measuring air quality and if it is returning to normal seasonal levels. Lastly, we fall out of world government bond index today (delayed from end March) as we're now full junk. This means we'll see selling pressure on our bonds and likely also our Rand. How much pressure? No idea and as I record on Wednesday afternoon, the Rand is stronger at 18.53 and about US$10-15billion needs to be sold, remember SARB is also a buyer in the secondary bond market. But bottom line this is hardly the end of the world and won't crash either the rand or our bonds - just some pressure that we'll move on from quick enough as investors like our +10% yields in a negative interest rate world. Upcoming events; 6 May ~ The economic data so far, what’s it telling us? 13 May ~ Know your derivatives: CFDs, indices and FX 20 May ~ Trading 101: Getting started in trading 21 May ~ Solvency and liquidity in the time of COVID-19 28 May – Garth McKenzie * I hold ungeared positions. Track your favourite ETF with the JSE JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Day 28 of lockdown. Oil, negative pricing? I thought I'd seen it all when interest rates went negative, but no ~ oil says "hold my beer". I Tweeted about it. Short version, don't now suddenly decide you are an oil trader. Overnight WTI Oil (West Texas Intermediate) traded at a negative $40. Yip -$40, traders were paying you to take their oil off their hands. Totally wild and now everybody wants to be an oil trader. But some caution before you jump in. 1/ — Simon Brown (@SimonPB) April 21, 2020   Bye-bye SAA. Staff have essentially been given termination letters for end April by the business rescue practitioner, payment subject to the sale of assets and this is the worst time ever to be selling airline assets. But public enterprises minister, Pravin Gordhan, has other ideas, a new “financially viable airline”. This in the middle of a pandemic when US airlines got US$25billion, and they want more? But here's the fun part, while the minister and government is insisting no new money, the business rescue practitioner actually has less power than usual. This is because the Public Finance Management Act applies and this gives the minister a final say on major decisions and the sale of assets or a liquidation would certainly be considered a major decision? Standard Bank (JSE code: SBK) gives gives us a first quarter 2020 update. "In 1Q20 earnings attributable to ordinary shareholders were 27% lower". While providing for bad debts on a forward looking basis, they specifically said " virus related stress had to a large extent not emerged yet and bad debt provision raised were based on best estimates.". ETF: Same index, different price? Upcoming events; 6 May ~ The economic data so far, what's it telling us? 13 May ~ Know your derivatives: CFDs, indices and FX 20 May ~ Trading 101: Getting started in trading 21 May ~ Solvency and liquidity in the time of COVID-19 28 May - Garth McKenzie Subscribe to our feed here Subscribe or review us in iTunes Going BIG R500billion announced by the president on Tuesday evening. We await details from the finance minister, but some highlights. 10% of GDP and some 25% of the February budget total spend. But it not all real money, some of it is soft loans, others tax relief in delayed payments. R130billion ~ budget reprioritisation R40billion ~ UIF, they have R42billion excess reserves. R70billion ~ tax breaks, relief and deferrals. The monies will still need to be repaid, but it helps cash flow over the next few months. R200billion ~ loan guarantees Banks issue the loans with state under writing them. This is an easy and quick win directly into mid size and smaller businesses and banks have the processes already in place with just a few tweaks needed. R60billon left over and actual new spending is some R100billion. The R60billon we can cover that from the IMF easy enough. BUT for example tax breaks hurt SARS cash flow, so more fluid then just R60billion needed. The biggie is the increase of social grants, child grants ultimately an extra R500 a month and all others +R250 while a new unemployed grant at R350. This is to run till end October, in theory - but we'll still be in the midst of a COVID-19 pandemic then, so it will have to be extended. Basically we have implemented a basic income grant (BIG) and it will be impossible to take that away any time. How do you say to poor hungry people, no more? Even when the pandemic has passed? Simple you can't and you don't. For those who think a BIG is communist or evil, go check the research. There is lots starting from the 1970s in the USA and Canada, they work and they are cost effective. How do you help a poor person? Give them money. How do you help a homeless person? Give them a home. Surely there is nothing anti-capitalist about caring about the deeply less fortunate and having a little less of our luxurious lifestyles to help them? And the concerns that they will 'waste or drink' the money is simple not true. Every research shows the incidence of waste is actually lower in groups receiving state aid. As for the theory that women get pregnant in order to receive the child grant, again research has disproved that every single time. There is zero evidence to support that theory. Lastly on social grants, we have a world class system that is also one of the largest in the world and it works. Further theft is pretty much impossible as the recipient knows what they due and if it not there, hell to pay. Now sure as we saw with Cash Paymaster Services, charges and 'extras' can get messy. But not the actual hard process. It won't be enough, we'll have to do many more. Likely this will take us into the third quarter at best (note the extra grants end in October and COVID-19 is expected to peak around September for South Africa). But eventually we'll need well in excess of R1trillion, I think maybe some R2trillion to take us into the end of 2021. For reference the US did US$2trillion and have now passing another bill. Now sure, we're not the US and we don't have their balance sheet nor is the ZAR the worlds reserve currency. But we're trying to save a country here. How do we pay for the R500billion? Well as per above, majority of this is not real money. But short answer is we borrow and print money, especially for the next rounds we'll have to do later in the year. US$4billion is available for South Africa from the IMF (via the rapid financing instrument, here are the T&Cs of those loans) with pretty much no strings attached, that's almost R100billion. Is that all a risk to the currency and inflation, indeed it is. But firstly if all countries are doing the same, we're all in the same boat and it becomes moot? Also understand inflation, it means every Rand a person has is worth a little less in terms of what it can buy. Now the rich have the most Rands so end up paying the most, and why not pay up a little to help save the country? Certainly I happy with that as one of the rich. The president also promised 'structural reforms' and 'radical economic transformation' which is trying to work both sides of the fence. We'll see which side he really ends up on in the end, but don't forget Minister Mboweni, he not going quietly into any night. He did speak a bit on essentially a new way of doing things, on that he's right. Post COVID-19 the world will be a different place and we as individuals need to give serious thought as to how we want this new world to look. Then we need to start making it happen otherwise before we know it, we'll all be back to the same old same old. A concern is about the actual process and fears of looting of the monies. Not unfounded considering our recent past. But thoughts on this. We have a new administration, this is not the Zuma government, sure still the ANC - but markedly different. Close your eyes for a second and imagine COVID-19 in South Africa under President Zuma. Secondly, what's the alternative? Let people starve? Thirdly, as per above grants are pretty much corruption free, except for the actual process now managed by the Post Office. Lastly, there is actually little hard cash, some billons to municipalities for water, but not that much in real Randelas. One questions is does this 10% of GDP offset the expected 10% or so drop in GDP? The answer is no, it means maybe we only drop by the expected 6%-10%, not more. As a last aside, the president said that the 2% repo rate cut adds R80billion into the economy in lower debt repayments. This is massive and helps middle to upper LSMs with their prime linked debt. Unsecured debt of the lower LSMs is not linked to prime, rather it regulated by the usury act, but that's why the increased social grants. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Lockdown day 25 22million unemployment claims in US in 4 weeks (entire 2008 saw only 8.8million) opening economy China GDP fell by 6.8% YoY in Q1 (first fall since 1992) Wall Street gained 15% in the past two weeks, its strongest fortnight in 80 years. Oil price .. crude oil getting smashed as global storage fills up Earnigs season kicks off in US this week, includes March so some sense of impact but not entirely Goldman Sachs cuts Apple to sell & cut its price target to $233 from $250 as it sees revenue dropping a third Amazon trading at all time highs Big cabinet meeting today (Monday) End of the road for SAA (US airlines getting $25bn, and that not enough) Another 1% repo rate cut, but still SARB expects SA to contract by 6.1% this year Treasury looking to borrow $60bn, potentially from IMF

Lockdowns being extend everywhere (Spain +15 days, Italy +2 weeks, US wait and see, but likely end April) ZAR blowing out US jobless claims 6.6m this week Unemployment at 4.4%, non-farm payroll down 701k jobs (first down in a decade), -100k expected Numbers don’t add up, latter is only to mid March Lots of lagging data, two issues here, one is data coming out at record worst, and even just a 1 month delay makes data largely useless Woolies update Famous Brands bails on GBK Spur suspends franchise fees amid Covid-19 closures Nampak gets their R1.5billion for selling glass biz Anchor reports record demand for fixed-income assets British American Tobacco working on COVID-19 vaccine

Simon Shares New weekly podcast in the RSS feed every Monday late morning. BUT only in the RSS feed, not on the website. So subscribe to the feed, it is here. Upcoming events; 09 April ~ JSE Power Hour: Trader’s game plan Lockdown, day six as I record (seven as you listen). COVID-19 numbers globally continue to rise, but I'm watching Italy. They're now at three weeks of lockdown and are seeing daily new cases decline, but still at 4,000 a day. I am also seeing reports that they'll extend lockdown to after Easter, which is bad news for us. Our new cases are minimal, but still likely to spike higher and come the end of three weeks surely we'll be winning but not wanting to let the virus back in the front door, so lockdown extended? My thinking is extended to first weekend in May. It's after the two public holidays and means we'd have been in lockdown for 5 weeks. Longer term we're waiting for a vaccine, and that's 2021 at best, so even if lockdown gets lifted, heavy restrictions will be the norm and new lockdown periods very likely if the virus starts to spread with speed. Remember all data is two weeks old due to a 14 day incubation period. Overall I agree with our governments response and think the president and health minister are doing a great job under unimaginable conditions. Hardest hit is without doubt small business. Closing for even just 21 days with zero revenue can kill a business, even a strong one. SaySiyaBonga.co.za We also have extreme inequality in South Africa that makes lockdown frankly just not impossible for most South Africans. It's easy in Bryanston, but impossible in Alex and add in poverty we have an entire extra layer of impossible. First quarter moves; Top40 - 19.8% Indi25 -6.7% Fini15 -40.2% Resi10 -25.9% SA Property - 48.9% ZAR/USD -28.2% S&P500 - 20.0% FTSE 100 -24.8% Nikkei225 - 20.0% Gold +4.2% Brent oil - 61.4% Questions is if the worst is behind us and the honest answer is that nobody knows. We've seen a massive rally in the last ten days, but that is more about liquidity as governments (especially the US) pump cash into the system. Certainly rallies of around 15% in a bear market are totally normal, we saw about half a dozen during the 2008/9 crisis. I also don't think the market is going to be able to ignore the horror data that will be coming out over the next many months. The other issue is that markets try and price in the future, but our forward view is limited to days, maybe weeks. Markets want to price in the next 12-18 months and we have zero visibility that far out. The data for the rest of 2020 will be bad, very bad. But we have no real idea or reference as to just how bad. We're going to see a number of bankruptcies, large and small, local and global. Some are easy to spot; airlines, high debt companies, cruise companies. But a lot will surprise us. I continue to only buy ETFs (ASHGEQ my preferred). Subscribe to our feed here Subscribe or review us in iTunes Hello junk And now we're junk. Full junk status, or in the lingo ~ non investment grade. The outlook was negative and this is significant, means we can go further into junk status at the next review in October. Ideally we don't want to slip too far down that status because it makes coming back that very much harder. The immediate response was the local market green, Rand weaker at R17.95/USD and bonds about 1.5% higher yields. The yields are what matters. We issue new bonds every week to cover costs, so far his weeks auction was over subscribed and that's what I expect. We're not actually at risk of default so the +11% yield is very attractive. Also with SARB buying in the secondary market we've got lots of liquidity. But overall, it was pretty much priced in, now government needs to get us out. Practically we're now also out of the Citi World Government Bond Index (WGBI) at the end of April. This will see selling in our bonds, also a lot of mandates don't allow junk bonds, so more selling. The flip side is a lot of mandates only want junk bonds (for yield albeit at higher risk). So in a way we've gone from a tiny fish in a giant pond to a large one in a large pond. Nice, but still not want any country wants. We'll also see the local banks downgraded to junk, when the sovereign is junk so go the banks. But it will potentially increase their borrowing costs and that will be passed onto consumers. Question from Njabulo Nsibande What happens if all REITs or the top ten REITs (as they make up about 50% in the case of CoreShares income property fund) in an ETF all go bankrupt. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Moodys junk (negative outlook) SARB bond buying Moboweni, world bank & IMF Motsepe R1bn US worst US jobless claims - EVER US $2.2trillion bail out Edcon CEO, they can’t pay suppliers TFG wants delay on rent Dividends being delayed

Upcoming events; 09 April ~ JSE Power Hour: Trader’s game plan New weekly podcast in the RSS feed every Monday late morning. BUT only in the RSS feed, not on the website. So subscribe to the feed, it is here. Subscribe to our feed here Sign up for email alerts as a new show goes live Lockdown T-1 day Will lockdown hurt the economy? Yes it absolutely will. Exactly how much we have no idea, but our economy is largely shutting down for three weeks (at a minimum). The impact too GDP, business (small and large but especially small) will be huge and right now is not quantifiable. How do we pay for it? We print money and take on state debt. Is this bad? Sure, under normal conditions. This is not normal conditions. This is a global emergency and it requires drastic measure. The extra and more expensive debt and more cash printed is all bad, but right now saving people and the country and its people takes priority over the economy. I know a broken economy is going to hurt, but no country or no people would make an economy moot. One point is that if we print money and run our debt higher, we're not doing it alone as a country, so the impact may be muted as all countries end up with way worse debt to GDP levels and weaker currencies making it all moot. Will Moodys downgrade us on Friday? Probably, maybe? But at this point nobody cares. Really, nobody does. The entire global economy is at risk of junk status. Also the local market and government bonds are way worse off than what a downgrade would have caused. Will lockdown be only three weeks? Initially sure. But most health experts say that after the initial lockdown the economy opens again, the virus returns and we go into another lockdown and this process continues for months if not the rest of 2020. Losers? Pretty much everybody. Especially those with debt and high fixed costs. Tourism and entertainment industries extra especially. Winners? No real winners but food retailers and to a degree food producers will remain operational but likely with higher costs from their implementing COVID-19 restrictions and protective measures. And we'll be shopping less and spending less. Example; Shoprite to pay shop floor and distribution staff R102 million 'appreciation' bonus.  Commodity prices are flying as mines move onto care and maintenance. As such miners are also have a great few days. But if they don't get back to mining soon, they're only selling stock piles and that eventually runs out. Have we hit bottom yet? I do not think so. Price action is moderately suggesting we have. But I suspect the markets will get solidly spooked when we start seeing the economic data. We'll get data that will be the worst every recorded, it'll take a strong market to not freak about that. Further the market seems to be thinking COVID-19 will be over in the next month or so. I think COVID-19 will potentially remain a problem well into 2021, we'll just be better at managing it. What's happening to dividends? We've seen a number of companies delay their dividends by up to six months. They're protecting cash in very uncertain times. At this point it has only been delays in payment, but at some point we may start seeing already declared dividends being cancelled. I have no idea how that process works, I assume the board has the right to reverse a decision they took early about dividend payment? Further we're seeing results coming out and dividends being passed as boards protect their cash. I am happy with this, but I don't need the dividend income, many do. What am I buying? ETFs, ASHGEQ. Sure lots is cheap, price wise. But is it offering value? We can not know as we simple do not know how this plays out. I have made two purchases so far in March, doubling my usual monthly spend (excluding tax-free). But I am not going in boots and all. There will be lots of time for buying stocks. We won't wake up one morning and suddenly everything is back to pre-crash levels. It'll be slow and volatile with a recovery to the peaks maybe as long as 4 years, potentially as short as two. We've got lots of time to buy, don't panic buy. Is US$2trillion a lot? Nope, US Federal national deb in 2019 was some US$22trillion. Staggering numbers, but the proposed US 'package', while large is not that seriously big in total terms. Any good news? Our government is doing this right. Not all countries are, some are doing a horror job. We're not. Load shedding is gone for now. With the economy shut down demand for electricity has collapsed and as such Eskom can cope with the reduced demand. Will local interest rates drop further? Yes. Further SARB has announced “As a further measure to add liquidity to the market, the SARB will commence a programme of purchasing government securities in the secondary market.”. The R186 is already 1.5% lower on this news. The SARB is essentially creating liquidity for those who want to exit their government bonds and receive the cash. How do they pay for this? They print money, that weakens the ZAR, but everybody is printing so that moot. It may spike inflation, but ain't nobody shopping, so maybe that also moot. Perhaps the best time ever to print money? Crisis of leadership A number of political leaders being exposed. But also in business. We essentially had eight days of warning about the lockdown, and anybody looking at what was happening in Italy, China and the like should have seen lockdown coming a mile off. But now leaders are stuck in the headlights, no plan, no idea, putting staff at risk. Should the JSE close down? No. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Sasol (JSE code: SOL) is now talking a rights issue of some US$2billion, more than the current market cap. They hope to be able to avoid this by selling assets, finding a partner for Lake Charles and cutting costs. But the first two will be near impossible in the current climate, so expect the rights issue with a +50% dilution. In other words, a horror rights issue. Price will be weaker until those details and issuing of the rights. I am NOT buying, that may change when the rights issue hits. But not before. Brent oil is under US$27.00 a barrel. Big ouch for Sasol. Good news for petrol prices. I am seeing a flood of people wanting to get into the market, because it has fallen. On the one side, this is commendable. Yes cheap is best tine to get in. But this volatility is the worst time to try and start trading. If you want to start trading we have two series for traders, Boot Camp and Master Class. But frankly as always, ETFs the best place to start, especially in troubled times. Everybody asking about gold, yes it is going down. When crisis hits everything goes down. Gold is great when one is worried about the future, but when that worrisome future arrives people want cash so gold gets sold like everything else. MPC rate cut announcement this afternoon. No more 0.25%, surely? I think 2% - 2.5% is possible and the best response. Certainly nothing less than 1%. Upcoming events; 09 April ~ JSE Power Hour: Trader’s game plan Subscriber to our feed here Subscribe or review us in iTunes COVID-19, my presentation of just two weeks ago warning on the virus and resulting market melt down, is already totally over taken by the reality on the ground. Read this take from the Imperial College COVID-19 Response Team. It has flaws, but also has golden nuggets. If we manage this crisis well I still think the worst will be behind us by Q1 2021. But the worst is going to be worse than I had thought, and if we do this well, well then it is a horror show of epic scale. It has solidly landed in South Arica and while still early days the confirmed case numbers are growing at the expected 33%, every day. So far government is doing a decent job lead by the NICD, President Ramaphosa the cabinet and especially the health department. But what matters more than anything is to #flattenthecurve. No large events, social distancing, washing hands, working from home if possible and limiting trips outside. All of this will eventually slow the growth, but we'll still end up with hundreds of thousands sick and many thousands dead ~ as a best case scenario. Yip it sounds wild, but that is the only way to slow the spread and stop it completely overwhelming our health services. This of course means a massive hit to our economy and individual peoples financial well being, find our series on managing debt here. If you have debt and are worried about repaying, or if you're in default already - this is a must read. Our market, and in fact all global markets, remain under severe pressure and extreme volatility not seen since 1929. I's not getting better any time soon. The global economy is grinding to a halt and there is no quick fix. Best estimates suggest twelve months of COBID-19 before as a planet we're truly on top of it. So Q1 2021, at best. For investors, we continue to tread cautiously and I continue to buy my monthly ETF allocation and will double the monthly purchase amount. But I am not whole sale buying stocks, because cheaper is very likely. Traders, as I have said before. Reduce position size, widen stops and be disciplined. And of course, obey your stops 100%. From a personal perspective, start planing for the long haul, I don't expect this to all be resolved in a month when schools are due to go back. As example, I've downloaded online monopoly to play with my niece and nephew in Durban and have proposed every few days or so one of us will present (via zoom.us) on a topic that interests us. It's going to be a very long school break house bound. Lastly, let me know if we can help. I have no idea what or how, not money or food or handshakes. But if you got ideas how Just One Lap or I can help you or the broader community, let me know. Maybe it just something as simple as helping to set up Zoom.us or a weekly bookclub session on Zoom. Send ideas. And very lastly, stay safe. Social distance and wash your hands. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares The Sasol (JSE code: SOL) share price has collapsed this week for three key reasons. Saudi Arabia has declared oil price war on Russia and sent Brent down to the low $30's as they try and get Russia to agree to production cuts. Sasol has not hedge the oil price. They usually hedge about a third pf production, but currently they only have ethane and ZAR hedges in place. Massive debt burden of some R150billion, now some 3x more than their market cap. This is spooking the market worried about a potential rights issue at current levels. I'd add that a right down on Lake Charles is surely a given and in time Sasolburg as well. All in this is a total mess and coupled with poor management the market is not happy. I fully expect Sasol to survive, but in what form or price have no idea and I would NOT be buying. Subscriber to our feed here Subscribe or review us in iTunes COVID-19 continues to create havoc with Italy shutting down the entire country of 60million people as deaths exceed 600 and confirmed cases over 10k. But that still means some 20k cases they do not as yet know about. (Watch: COVID-9, markets in trouble) Recession is fast becoming a certainty as regions (and entire countries) shut down, people stop going to work or out at all so no spending and no production. A huge concern is the USA who are not testing very well as South Korea did and may have tens of thousands of cases they don't know about. South Africa has 13 confirmed cases and so far it is being handled very well. Identify the confirmed case and works backwards with who they contacted putting people into isolation. Testing is key as South Korea shows. But while we're very good at this sort of thing (remember listeriosis) it can very quickly overwhelm a struggling medical establishment. Global there are simple not enough ICU beds and we're likely far behind the global average. Bottom line is that this is getting worse and will continue to do so for a while (no idea how long that while is). No surprise markets are panicking and extremely volatile and my view is they'll go still lower. Some quick good news; yellow and white maize levels in South Africa are looking very good which is good news for food inflation and producers, especially Astral Foods (JSE code: ARL). Offer for Assore (JSE code: ASR) at R320 which may provide some opportunity. There are no dates yet and lots of T&Cs. But if I see some weakness to say around R255-R270 (15%-20% below offer price) I'll pick some up for the R320 take out. Upcoming events; 26 March ~ Small money changes that make a big difference 09 April ~ JSE Power Hour: Trader’s game plan JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Recession, surely nobody surprised? Growth lower for longer. The budget is certainly designed to help, but the R160billion cut from pubic sector wage bill is not going to be easy. Likely we'll also now get at least 2 rate cuts this year, each 0.25% minimum. Last week of February was the worst week for global markets since 2008. It was violent and it's not going away. COVID-19 marches on. Of note, 94k sick but 3.4k dead. With mortality of 1% it should be 300k sick and at 2% mortality it should be 160k sick. Are markets ready for the spike in sick? We'll find out but the Fed is not waiting. Negative US rates in my life time as the Fed panics and cuts by 0.5%. Thing is COVID-19 is a supply issue, not a demand side. Fed can influence demand with rates, but that does nothing to the supply side. This after a G7 meeting, but only the Fed has responded so far and US markets sold off some 3% after the rate cut. At the post rate cut press conference; "the risks to the U.S. outlook have changed materially" -- Powell "The virus and measures taken to contain it will surely weigh on the economy ... for some time." -- Powell Shoprite* (JSE code: SHP) very solid results with rest of Africa back into profit (albeit small), great cash flow and local margins holding as they gain market share. Upcoming events; 5 March ~ JSE Power Hour: COVID-19, markets in trouble 26 March ~ Small money changes that make a big difference 09 April ~ JSE Power Hour: Trader's game plan * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

I chaired a panel discussion on the 2020 budget by Minister Mboweni and have included the audio from that panel. The biggie, which is not mentioned is that the annual tax-free allocation has been increased to R36k a year effective 2 March 2020. On the panel with me was; Elizabeth Fick ~ Tax and Fiduciary at Investec Jacques Conradie ~ Managing Director at Peregrine Capital Theunis (TJ) Strydom ~ Financial journalist and author Albertus Marais ~ Director at AJM Tax Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares I bought Sibanye Stillwater* (new JSE code: SSW) last week, average price 3950c. You want to own single commodity miners when price has already boomed and underlying commodities are flying. We have both here and if prices hold they'll print money for the rest of this financial year ending June. I'll add on the fifteen day EMA and hold for as long as it runs. Metrofile* (JSE code: MFL) got nailed on Monday down at 230c while there's still a delisting on the table at 330c plus mid year dividend (likely to be at least 5c judging from last trading update). So is the deal off? Officially it is not and it seemed to me to be a fairly low risk deal. So a panicked seller who needed cash? No idea. But current offer is 280c and assuming the deal happens that's a potential 55c profit by mid year when I would expect the deal to conclude. Coronavirus (COVID-19) continues to spread with over 75,000 confirmed cases and over 2,000 dead. But it still remains very much contained to China with 750million people on some sort of travel restriction. Apple has also announced production issues out of China albeit the rumoured low cost iPhone is apparently still on track for March. More reports coming about a good maize crop locally this year, even after late rains and hence planting. But prices not as low as one would expect, seemingly Zimbabwe shortage is seeing them buying our maize and keeping it higher. That said, Astral (JSE code: ARL) still looks very cheap to me with better maize prices compared to previous years. Upcoming events; 20 February ~ A new Tax-free year starts 05 March ~ Investing in a low growth economy * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Does COVID-19 just delay spending? One of the issues surrounding the Coronavirus is lost revenue and hence lower profits. Apple is reporting supply constraints, Starbucks has closed the majority of their Chinese stores and so the list goes on. But here's the question. Which purchases are simple deferred and which never happen? Supposedly large ticket items such as an iPhone or white appliance will simple be bought later. So lost sales now come up later. But this is 100% true. Say your phone was lost. You need a new one now, not in a month so maybe instead of Apple you get a Samsung, or a cheaper Apple that is in stock. With consumables the story is very different. If I don't have that coffee or lunch today, it doesn't get held over till tomorrow. That sale is lost. So Starbucks suffers more than Apple. Another point is for example the Mobile World Conference in Barcelona has been cancelled and this is not deferred. The event supposedly brings in some Euro500million in spending over the three days. That money is gone, it'll be spent at home, so the city loses out. But if you don't buy your consumable today and have left over lunch at home, where does the 'saved' money go? Do we still see a surge later, but maybe in big ticket items if we've saved enough from deferred lunch dates an coffees? Or does it get properly saved into a bank account? What about hourly paid workers? No work = no pay. They will be hurt, albeit company will benefit as lower expenses while closed. Point is, the money to be spent will surely be spent. Maybe different timing and maybe different product or location. But that money doesn't disappear. So absent of the Coronavirus becoming a lot lot worse, any hit is merely short term and could be followed by an equally short burst of spending? Sure some spending will be lost, but not much? JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Ecsponent (JSE code: ECS) have announced they will default on their March preference share dividends. This is a mess and preference shareholders are in a real bind. If you hold any, contact your lawyer. AngloGold Ashanti (JSE code: ANG) confirms the sale of their Mponeng to Harmony (JSE code: HAR) for US$300million meaning it'll no longer operate in SA from June. Coronavirus (COVID-19) continues to spread with almost 45,000 confirmed cases and over 1,100 dead. But it remains very much contained to China. Reports are it will already take 0.2% - 1% off global 2020 GDP. Upcoming events; 20 February ~ A new Tax-free year starts Subscriber to our feed here Subscribe or review us in iTunes Don't shoot the messenger Gina Schoeman, South Africa economist for the Citibank Global Economics team. I attended a S&P Dow Jones Global event on Tuesday where Gina delivered the keynote and here are my notes on what she said. Any errors are mine, not hers. Gauteng is 35% of SA GDP. Service delivery protests show strength of democracy. People are leaving small towns due to lack of services and this erodes tax base, making service delivery even harder. SONA watch list; Cosatu Eskom bailout plan. SAA business rescue. Public sector wage bill. Reforms. Cabinet reshuffle. Watch the World Bank Ease of doing Business survey as good metric for Ramaphosa. We're 84th but where under 50 when Zuma took over. SA union rate is 24% and dropping and will drop further. Members are aging and youth are unemployed. Secret strike ballot. Manufacturing is very productive, second only to financial services and this offers an opportunity. Household debt is 75%, down from 84% in 2010. But the nuance is in the data. SA population growth is 1.5%. GDP growth has to exceed this for people to be getting richer. Lack of rental inflation is a big driver of low inflation overall. No VAT increase in the 2020 budget. Moody downgrade is very likely, but don't worry about that. Worry about Fitch and Standard & Poor dropping us lower because it is now about the recovery. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Tesla (Nasdaq code: TSLA), epic short squeeze. Steinhoff (JSE code: SNH), epic short squeeze. Coronavirus continues to spread, fast, with almost 25,000 confirmed cases. People are recovering and we now have two deaths outside China. Tongaat (JSE code: TON) results are out and the suspension has been lifted. The results were a horror show with debt of some R13billion and negative equity of almost R4billion. They need a rights issue of at least R4billion and the share lost over 50% when it resumed trading, currently at 488c after being suspended at 1321c. No Sasol* (JSE code: SOL) that was not "a satisfactory set of operational results for the six months". Both financially and operationally the last six months (six years?) has been a horror show. I hold Sasol since 1994 and haven't added since the 2009 lows, but will be exiting. Upcoming events; 20 February ~ A new Tax-free year starts * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Law of large numbers In a financial context, the law of large numbers indicates that a large entity which is growing rapidly cannot maintain that growth pace forever. Simple that the bigger you get the harder it is to grow and ultimately the growth slows to modest inflation or GDP adjustments. We see many companies fearing this rush out and make bad acquisitions - but that's another story. I want to focus on how this law can at times be broken when the underlying market fundamentally changes and the example is Microsoft (Nasdaq code: MSFT). On a PE of 30x it is expensive, but this US$1.37trillion company grew EPS by 40% making it cheap using a simple PEG ratio. It is up six fold in the last decade and in the decade before is was red. How is a trillion dollar company able to grow earnings 40%? Broadly software as a service and cloud computing but the story is bigger, edge computing. Certainly the story is no longer Windows. Edge computing is the vast number of small devices that are invading our homes, offices and lives. Examples are; streaming music and movies, smart bulbs, security systems and virtual assistants. This is just a few examples, but they're fundamentally changing our lives and the demands on processes and data storage and importantly the data is close to the device to ensure speed, requiring data centers everywhere. Add to this the amount of data we create and need to store. For the first time in my life I have data that only exists in the cloud, simple because I have so much data. Now I am paranoid, so I keep it on two clouds, and wildy encrypted. Data storage or cloud computing was hardly even an idea a decade ago. All the talk was of slim clients with all processing and data in the cloud. Back then Google (Nasdaq code: GOOGL) was the leader, but it has exploded and Google now trails in third position and we never really got to slim clients (Chromebooks the exception and services like Stadio newly trying). This has changed companies such as Amazon (Nasdaq code: AMZN) and Microsoft (Google oddly lags in cloud) who are the leaders in cloud computing. The thing is one could have made a solid argument that even under new management Microsoft was largely ex-growth and a mature company. But then business models came along, they grabbed them with both hands and now they're growing faster then they have in over two decades. This growth changes the game for Microsoft, Amazon and others. I have no idea where it ends but this trend can go on for a lot longer and they can grow revenue by a bunch more and then, hello two trillion dollar company. What is noticeable that this is a tech issue and that traditional brick and mortar companies, miners and the like do not have this potential. They do hit the law of large numbers, but computing and the internet has changed the rules for tech stocks. Of course eventually the law of large numbers will come into play again and growth will slow. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Correction, last week I said Naspers got some R100billion from selling Prosus shares. It was more like R22billion. Apple (NYSE code: AAPL) results knocked it out the park, again. Profits up 11% to US$22.2billion, EPS up 19% to US$4.99 and revenues up 9% to US$91.8billion (US$1billion revenue for each trading day in the quarter.). All above expectations and even iPhone sales grew 8%. Coronavirus. Is this the end of the world, half an end or nothing much? Likely not much but at this point we truthfully don't know. It is spreading and it is lethal, but part of the increase in numbers is due to health officials being on the alert. Also most deaths are aged people and those already susceptible to an infection, how bad is it for healthy people? Do we convincingly know of somebody who got the virus and has been clear for 14 days? Reports are of over 100 being 'cured'. Lots of questions and thus far very few answers. Certainly global markets have been jittery, but no real panic as yet. That said, there will be pain, Starbucks has closed 1,000 stores in China. Even if just for a week, that'll hurt a little. Longer could hurt a lot. Short answer, we know little and this will play out over a few weeks at least. PGM demand, will vehicle manufacturers switch from palladium to platinum? Nasen Nair from Sasfin Securities commented to me that maybe the savings aren't enough to justify the switch? About $100 PGM goes into a catalytic converter so switching saves maybe $50 (albeit switching pushes up demand and hence prices). And on a car costing +$10k that's small change? CellC has defaulted on a loan and that sent Blue Label (JSE code: BLU) down some 12%. The reason is simple, while they have written CellC to zero, the market hopes they get something, but this default makes it look less likely. After destroying the company and its value, Brait (JSE code: BAT) executives will get a R200million golden handshake after the rights issue in place to save the company and move control to Ethos. You can't make this stuff up. Upcoming events; 20 February ~ A new Tax-free year starts Subscriber to our feed here Subscribe or review us in iTunes Restructuring my portfolio Over the last few years I have been slowly increasing my ETF portion of my portfolio from 50% with the ultimately goal of getting it to around 65%. This is going to take some 5 years and the logic is to reduce risk (risk that I buy dogs) and make my life easier. So far this is on track but also has impacts in other parts of my portfolio as the current split is 30% in 'til death do us part long-term stocks. Then 10% in second tier small and mid caps and the final 10% for trading. So what gives if I squeeze my ETF holding to 65%. The easy answer is that each of the other three drops their weighting by 5%. The hit on the long-term is fairly modest but very pronounced on the second tier and trading portions of the overall portfolio as they drop from 10% to 5%. The second tier I will cheat and buy some ASHMID ETFs that tracks the local midcap and this will be part of my 65% into ETFs. So easy solution. Till death do us part will get a large pile of cash as my Metrofile* (JSE code: MFL) get bought out at 330c later this year. This is currently my largest holding after I was a large buyer between Christmas and New Year as some seller got aggressive in the market knocking the price down to 265c (my lowest purchase was 272c). Most of this cash will go into ETFs when it arrives (likely around mid year) and this will boost my ETF holding to over 60% and easily on track for the 65% target. Then the biggie is my trading portfolio, essentially I'll be halving it's size so either I trade smaller size or I remove one of the two strategies. Current trading strategies are; The lazy trading ETFs Trading ALSI futures pre-open every morning. My plan here is to discontinue the lazy ETF trading. It's a small percentage of my overall portfolio and it will then free my ALSI trading to carry on carrying on. The question then is what of the weekly lazy update I send every Sunday. In short it will expire in time, but send me thoughts. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Deutsche Bank has redeemed three of their ETNs. DBCHIN, DBEMER & DBAFRI. As ETNs they would have expired anyway, but that was due to happen next June. Holders of these ETNs last week will receive cash at net asset value (NAV) for the ETNs and it lso means Deutsche Bank is no longer active in the listed passive space on the JSE. Richemont* (JSE code: CFR) trading update was strong, but with one concern - online. Single digit growth is very pedestrian for online even if they had issues with flooding at one of their warehouses. Strong Shoprite* (JSE code: SHP) trading update. Revenue +7%. Rest of the continent is still struggling, home local was lekker. Wednesday saw Naspers (JSE code: NPN) sold 22million (1.4%) or their Prosus (JSE code: PRX) holding at a price of about R1,080. Naspers claims this is due to demand for the shares from investors. Prosus was off some 3% at just over R1,100. The logic here was that many would buy their new Prosus and sell straight away into the market, netting a small but easy profit in about half an hour. Prosus price will rebound, Naspers was trading up almost 2% as this sale happened. Nasper has said they'll use the Euro1.5billion (about R100billion) for a share buy-back in another attempt to close the discount that exists. But as Piet Viljoen of RE:CM points out in the Tweets below, it's not likely to work. Thank you for asking, I had hoped someone would. We are in a similar (albeit much, MUCH smaller) situation, so we have thought about it. A lot. Here follows a thread. https://t.co/DkyYmX9zAo — Piet Viljoen (@pietviljoen) January 22, 2020   How to start saving (Cash Club) Three secret ETF fees OUTvest ONEfee RA at 0.2% Upcoming events; 20 February ~ A new Tax-free year starts * I hold ungeared positions. fff Download the audio file here Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

2020 predictions show Every year Marc Ashton, Keith McLachlan and Simon Brown do a predictions show. Three wild and wooly predictions for the markets followed by a call on the Top40 and ZAR for the year ahead. Importantly we start each show with a review of the previous years predictions and you’ll find the 2019 predictions show here. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

FTSE 100 structured product In the last show for 2019 Simon chats to Viv Govender and Gary Booysen from Rand Swiss on their latest structured product. This time it is an auto call over the FTSE100 in US$. We also chat a bit about Brexit and what it actually means; good, bad or ugly. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Len Jordaan, Index and Structured Solutions, Absa CIB Simon and Len delve into understanding risk and how it applies to your Exchange Traded Fund (ETF) selection, both as a basket of different ETFs you put together but also as to which individual ETF you may be buying for a tax-free or discretionary portfolio. Some links we refer to; Managed volatility JSE Direct interview. Managed volatility ETF blog. MAPPS Protect. MAPPS Growth. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Upcoming events; 05 December ~ Position your portfolio for 2020 Subscriber to our feed here Subscribe or review us in iTunes Simon Shares Third quarter GDP came in at -0.6% making the fourth negative GDP in the last seven quarters (since Jan 2018). Our economy is dying. Important the economy is not the market, but it is still dying. Sygnia will not be charging you 0.34% to exit their Itrix ETFs. But man the communication around this was a horror show that a final tweet seems to suggest it only if you're directly exiting via the ManCo. So moot for us ordinary investors. Tongaat (JSE code: TON) report is out and it another horror show. They're going after previous executives, including the previous CEO and CFO. But are refusing to release the full report. Talking of reports, Steinhoff (JSE code: SNH) is being sued by the PIC for their full PWC report. They only released a short version of the +3,000 page report claiming it was confidential. But if shareholders are going to sue, and they are. Then this report is an important part of the case against Steinhoff and the former executives. Purple Capital (JSE code: PPE) owners of Easy Equities results show much improvement in terms of number of clients, revenue and ultimately a reducing loss. Their path to break even seems easy enough now, likely two - three years. That said the share still has some large sellers now at 33c/34c, above the 30c they camped at for some eighteen months. A thought on the trade wars which Trump is heating up rather than winning 'easy'. We(the world)has always assumed that Trump was largely in control and could end them at any point. But I think that narrative may be totally wrong. Firstly China wants any phase one to include going back to zero tariffs and Trump is saying no. But I also think that frankly China may just did in their heels and wait out the next 1-5 years Trump is in power. They're not happy with him signing the Hong Kong bill and they can manage the crisis way better than he can. A side note; bail out to farmers is now larger than the vehicle manufacturer bailout of 2008 and still farmer bankruptcies is up 24% this year. SAA. I have flown SAA every flight I could for 20 years. But no more and it is frankly time to let the airline go to the wall. Rumours are that's exactly what Moboweni wants, but Gordhan is digging in his heels, incorrectly at this point. Lots of hysteria about the CompCom declaring mobile operators must reduce data fees by 30%-50%. Firstly read the actual report, this is a recommendation for ICASA to deal with if the telcos don't respond within two months. Secondly, remember when ICASA enforced reduced interconnect rates? According to the telcos this was the end of the world. Funny how they still make massive profits. The short version is the telcos price gouge because they can and they won't willing stop. Here's an example; "(MTNs) 2nd most expensive pricing is in Rwanda where a GB of MTN data costs almost half of what it costs in its home market". "Only in the DRC ($8) does Vodacom charge its customers more, on average, for a gigabyte of data than in South Africa ($7.83)." Grand Parade (JSE code: GPL) cautioned they are in negotiations about the "disposal of a material interest in Burger King SA". So after exiting Sun Slots what would they have left? And who is the potential buyer? JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Woolies* (JSE code: WHL) update is same old same old. Local food doing great, fashion okay and Australia still under pressure with the refurbishments due to end March 2020. Brait (JSE code: BAT) announces a large recapitalisation with a cR5.5billion rights issue at a 27% discount to the share price and about 60% new shares. This is also a massive discount to net asset value (NAV) which is now 3800c and a share price at decade lows. Christo Wiese will not take up his rights, rather Ethos Capital (JSE code: EPE) will and they'll become about a c15% shareholder. Transaction Capital (JSE code: TCP) monster results. Very strong, double digit everything. This was one of the stocks Petri Redelinghuys picked on my Small Cap Portfolio show recently (along with Jubilee Metals (JSE code: JBL)). British American Tobacco (JSE code: BTI) update was good in all areas and margins are growing. They do however warn that e-cigarette sales growth to hit low end of target. Charles Schwab is taking over TD Ameritrade. Not surprising after Schwad cut brokerage to zero, and everybody else was forced to follow suit. It's now a game of size. More clients, more cross selling, more interest turn etc. Bigger is way the way forward for now. Understanding the Krugerrand Custodial Certificate Creating returns in a low growth world Upcoming events; 05 December ~ Position your portfolio for 2020 * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes It's not ok to just be your best “It’s not ok to not be the best trader you can be.....it’s NOT OK” Mike Bellafiore You have to be better than your best. You have to continually be getting better. There is no rest for traders. We have to be always improving. Trading is largely a zero sum game, you have to better than the others. 've often stated that any trader who thinks they have arrived as a trader will swiftly be shown the door by the market. It is a continual process of improvement and caution against believing our own hype. So, what do you do in order to always be improving? The easy answer is a trading journal that you keep and a constant reviewing of your trades. The journal would include trade details, but also what happened post exit. Your perfect trade score and how the trade felt. It would also include the entry and exit which you'll be able to review. Did you jump too soon? Is this a frequent problem? If so what are you doing about it? Are exits a problem? Taking profits too soon? Ignoring stops? If so what are you doing about it? For me personally I have a journal and track my perfect trades. But as I also only trade for about 10-15 minutes after the 8.30am futures open, I'll often record my screen while trading and I review these videos. The review is not only checking to see if my entries were good (exits are either at target or stop so automated and not important for this process). Did I get in timeously? Or late or early? Am I missing information? I am watching the bids/offers and last trades, so not a lot of data. But I can miss data as I move between screens (trade, orders, chart, depth, etc.).What I find at time is that I take a long trade, for example. And it was right, but as I was entering the trade it switches to neutral or even short and I miss that change. It's almost as if I am rushing, scared of missing out (or paying a higher price). So now I have a process. I set the trade screen. But as I go to click 'trade' I run my eyes over the bids/offers a last time to make sure I am on the right side of the trade. My other problem is I flip between the different screens too much. I really only need to watch the depth and last trade screen (which is same block for my platform). But while waiting I get restless so I am flipping around for no real purpose. The solution here is easy. Close all the tabs/browsers and also get rid of all other data on my trade screen, except what I need - depth and last trades. Point is alway be improving. Alway be checking in on yourself. Always be striving to be better every day. My last point is to always remember that trading is like a high wire trapeze artists without a net or safety harness. We get no second chances. We can do 99 perfect trades and then 1 horrid trade gives it all back. As a trader we need to be 100% all the time. Not 100% in terms of profitable trades. 100% in terms of perfect execution every time. Because one slip and our money pile is back at the beginning, or as a trapeze artist, we a pile of broken bones on the floor. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Upcoming events; 21 November ~ Creating a portfolio at the market highs 05 December ~ Position your portfolio for 2020 Ironman your trading This is an hour long recording of a live event I presented in Cape Town on Tuesday. The PDF is here. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares SAA retrenchments, a test for the bigger Eskom process? Telkom (JSE code; TKG) to buy CellC? R1 would seem a fair price and would benefit both Blue Label (JSE code: BLU) and Telkom. Rumours that MTN (JSE code: MTN) is also in the running to buy CellC, but I can't see the competition commission allowing that. Of note is that Blue Label have not issued a SENS (Telkom has, but not naming CellC). The reason is that with CellC being written down to zero the deal is not material. Aspen (JSE code: APN) sells Asian operations for Euro400million. This should take the groups debt down to just a little over R30billion and will within debt covenants and manageable. Rebosis (JSE code: REB) failed to declare a dividend in the latest results yet as a REIT it is required to do so by law otherwise they have to pay tax n the profits. The protests in Hong Kong continue on and are getting more violent as the authorities dig in their heels. This is hurting the economy in Hong Kong but I don't see the authorities giving in any time soon. Also remember that after the 1997 handover Hong Kong operates as a "One country, two systems" with China. This expires in 2047 and truthfully nobody knows exactly what that means. But likely China will want Hong Kong to move closer to it and so is not going to back down on the current protests. Good results from Spar (JSE code: SPP) continuing the results trend from Pick n Pay (JSE code: PIK) and Shoprite* (JSE code: SHP) trading update. An update from Steinhoff (JSE code: SNH) saying they're still considering listing Pep Europe. But the biggie is they may also do a rights issue to help pay legal fees? Really? Not sure many shareholders would be happy to partake in that waste of money. An yes I still think Steinhoff is heading for zero. Brexit, election on 12 December. Likely Conservatives win, but not guaranteed and will they have a majority or not? Upcoming events; 7 November ~ Millennials navigating markets and the investment landscape 21 November ~ Creating a portfolio at the market highs 05 December ~ Position your portfolio for 2020 * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Short squeeze (or a long squeeze) A short squeeze is when a stock surges, usually on some good news - but the surge seems disproportionate to the news. The theory is that a lot of people were short (had sold the stock to profit from the downside), then the good news sends them all heading for the exits. In order to exit they have to by so you have the positive buyers sending prices higher but you also have the short sellers who're sending the price higher. This is potentially what we saw on Blue Label on Tuesday when rumours started circulating that they had two potential buyers for CellC. This is one of the real risks of shorting stocks, you're downside in a short position is unlimited as a stock can go forever. With options your risk is always only 100% as it is the right wheres other derivatives are the obligation. One could also see a long squeeze, but this is a phrase I have never heard mentioned before. This would be when bad news sends a stock crashing as holders of the stock all head for the exits at once, think Steinhoff. The difference is that short sellers are also short-term in nature. Sure that may be months or even years, but it's never forever whereas as holders could be looking to hold forever. Also short sellers profit or loss is paid daily whereas long holders losses are only on paper. Real but always a hope of recovery. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares October was a decent month for the Top40, adding almost 3% and now 9.5% year-to-date excluding dividends. Moodys makes us negative but not junk and the ZAR soars. Finance minister, Tito Mboweni, says government 'not considering' the idea of prescribed assets. https://www.businesslive.co.za/bd/national/2019-11-05-treasury-not-considering-prescribed-assets-mboweni-says/ The Shoprite* (JSE code: SHP) update what was way more interesting for the fact that Christo Wiese got voted off the board, until he used his zero economic but voting shares that he tried to sell to Shoprite for some R3billion. The actual update shows SA doing well and importantly we're seeing some inflation while the rest of Africa continues to struggle and the new Xtra Savings Rewards Programme got 1million sign ups in the first week. Afrimat (JSE code: AFT) results knocked it our of the park with their iron ore business (Demaneng) is paying for itself in double quick time. Famous Brands* (JSE code; FBR) results show things still tough, especially in the UK as operating margins get killed. They used to be over 20% and are now hanging onto 11% by a thread. Uber lost another $1billion in one quarter, again due to interest, depreciation and stock based compensation costs. Last quarter they blamed listing costs this time they point out Uber taxi is profitable if it weren't for the costs above and Ubereats lost almost $400million. How does food delivery lose money? What are the costs? At listing Uber aid they may never be profitable, and maybe they were right? ETF blog ~ New CoreShares property ETF (CSPROP). VIDEO: Live trading ALMI price action for 300 points. Upcoming events; 7 November ~ Millennials navigating markets and the investment landscape 21 November ~ Creating a portfolio at the market highs 05 December ~ Position your portfolio for 2020 * I hold ungeared positions. ddd Download the audio file here Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes Goals, processes and habits Goals need process and process becomes habit and achieves goals In my trading presentations I always talk about goals and the problem of having a single giant size goal that while desirable is frankly overwhelming. My advice is always to break goals down in small bite size pieces, with one example of those bites always being doing a single perfect trade, followed by another perfect trade, and another and another. This idea applies to everything we want to achieve in life. Truthfully we have the ability to do almost anything. Almost because doing a marathon in under 2 hours is going to be out of our reach - by an hour. But the goal of doing a first marathon is easy enough, if we break it down. First couch-to-5km, then 10km and so on. Buy breaking a large goal down into small pieces we're able to achieve as we go along and hence we also make it 100% achievable. Then as we're going along achieving our smaller goals via processes they fast become habits and soon our goals are done. I started swimming just over a year ago, my goal was a Midmar Mile which I did back in February in a horror time of 44 minutes. But back then my target time was 48 minutes, so I was chuffed. Now my goal for the 2020 Midmar Mile is under 30 minutes. Hard, very hard. But it breaks down into 4 pool sessions a week and every pool session has it's own goal. Distance or speed or technique. So 4 times a week I wake up eager to try and hit my goal and most weeks I end the week having hit at least 3 sometimes all 4 of my goals. And slowly I am moving forward. Important is that I really look forward to and enjoy my training sessions, something that 18 months ago seemed like a crazy idea. Most important is that is that I structure my process to fit within me. So I do not do early morning training, I train mid morning because that works better for me and hence is easier for me to do. If I was also trying to wake up at 5 to be at the pool by 6, it would be way harder. So we need to move this into our trading and investing. What's the goal? Large dividend paying portfolio? FIRE? Trading for income? It can be anything but then it has to be broken down into small processes that enable that goal. Example, invest enough to live off investments within ten years? Get family onboard. Cut living expenses. Live small and cheap. Max out tax-free. Buy ETFs. None of these are hard, but all will require effort and work. Want to be successful trader living off trading income. How much capital do I need? Do I have enough? How do I get enough? Pause, do I even know how to trade? Learn technical analysis and price action. Practise ~ place 1,000 stop losses. Practise ~ enter 1,000 trades. Practise ~ exit 1,000 trades. What would make a perfect trade? Now do one, and another and another.You now have goals that can be broken down into processes. You'll also notice that none of this results in overnight success because overnight success takes years. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Yield focused ETF from CoreShares CoreShares has merged their PTXSPY EF into PTXTEN and now converted it into a new CSPROP. CSPROP is a new property ETF that has yield as 75% of the weighting adding both diversity and yield to the ETF. Simon chats to Chris Rule about the new ETF, why the changes and the details. Find more here. Subscriber to our feed here Subscribe or review us in iTunes Up coming events; 31 October ~ Live Fat Wallet Show recording 7 November ~ Millennials navigating markets and the investment landscape JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Crowd1 ~ I been digging into it. Scam, a multi level marketing gimmick with no actual product apart from getting other friends, family and fools involved. Ascendis Health (JSE code: ASC) trading updates illustrates the risks of relying too much on net asset value (NAV). They are writing down R4.2billion of "goodwill, intangible assets and property, plant and equipment". In other words everything. But the company has a market cap of only R2.2billion and that R4.2billion equates to some 850c per share totally destroying the reported NAV of 1435c. Calgo M3 (JSE code: CGR) and Balwin (JSE code: BWN) results were both under pressure form a stretched consumer with Balwin having less issues and producing the better results and profits. Both are well positioned for when the economy improves with Balwin in the slightly higher LSM market and Calgo with their burial operations. I sold Calgo a way back and would look to be buying one or both, but not just yet. Buying property requires confidence so they will turn later than say food, big box and white appliance retailers as these are cheaper products and hence bought earlier in the up turn. Rumours of an offer for Capital and Counties (JSE code: CCO). UK property assets are cheap, most trading well below NAV and sure Brexit is real risk and will hurt. Many, such as Capital and Counties, are great assets and will survive. Speaking of Brexit. One week to go. Tic. Toc. Rand R14.65/USD. Never write off the Rand. Over the long-term it is a one way bet at a few percentage points a year. But short term is really is all about flows in and out of South Africa and what drives those flows is not as simple as load shedding and the like. Sasol (JSE code: SOL) taking pain again on Tuesday, off over 7% on a Cadiz report suggesting the dividend may be cut. For the past 10-15 years the Sasol dividend yield has averaged just under 4%, chunky. Right now the historic is almost 5% but a slashing of dividend by 50% will still see 2.5%. So maybe an even greater slash of the dividend? I think that's pretty certain as they need to pay down debt aggressively. This share has been a horror show. Prosus (JSE code: PRX) is making a takeover bid for Just Eats, which has been rejected by the board but time will tell. More interestingly is the Prosus theory which is that eating at home is going to largely disappear. Much like we mostly made our own cloths in the 1800s but today nobody does. They say cooking at home will be the same, in time nobody will cook at home. Interesting idea, especially in terms of home design - saving space in the kitchen and money on appliances. But then spending that money on delivery. Rhodium, almost 700% in three years. I am doing an ALMI trading demonstration webcast on 28 October at 8.15am Book here. Up coming events; 31 October ~ Live Fat Wallet Show recording 7 November ~ Millennials navigating markets and the investment landscape * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Operating margins Pick n Pay (JSE code: PIK) results were good, but the increase in operating margin was outstanding and this had a serious boost to profits. Operating margin is the profit after the costs of sales, such as salaries, rentals and products, but before paying interest or tax. Hence a 'clean' profit margin as opposed to net margin that will also have interest, tax and other costs deducted first. It is especially important for retailers but not banks or miners for example. For those sectors we need other metrics such as impairments, cost-to-income and head grade etc. Every since Richard Brasher took over at Pick n Pay I have been moaning about their operating margin. He's been getting much right but the operating margin was stuck at 2%. Then in the last set of results tey crept a little higher and now are solid 2.8% up from 2.5%. This too me suggests the turn around at Pick n Pay is now complete. Of note is that Shoprite* (JSE code: SHP) has an operating margin of over 5% and even the recent earnings collapse saw it stay above 4%, so they earn about double from every 100c spent at their tills. The question is how high can the Pick n Pay operating margin go? Shoprite benefits form higher margins in the rest of Africa, Pick n Pay doesn't. So 5% may be too far for Pick n Pay, but can they get to 4%? A last point. Pick n Pay Tuesday results saw most retailers rally on the back of hope that the result wee not only a good performance from Pick n Pay but maybe also an improvement in consumer confidence and spending. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares A late and short show this week, discussing the chart below showing return so far for 2019 (to close 17 October 2019). Surprisingly, all positive and some real good returns. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares #WhatsAppStokvel This is a scam, of course it is. You're only asking because you know it is and you're hoping somebody will give you 'permission' to go ahead anyway. Anything that requires you to recruit others in order for you to profit is always 100% a scam. Long4Life* (JSE code: L4L) upping their stake in Spur (JSE code: SUR) to over 10%. Is it a pure valuation play or does Joffe have something bigger in mind? Brexit, tic toc. Three weeks to go. Clicks (JSE code: CLS) issued an improved and updated trading update that sent the share to new all-time highs. One can argue about valuations here, but not the quality. Clicks is best of breed. 4Sight (JSE code: 4SI) was a stock i warned against since day one. Far too much jargon and hype that have not turned into profits. But go read the resignation letter of Geoffrey Carter from 7 October. Man is he maximum unhappy. I am doing an ALMI trading demonstration webcast on 28 October at 8.15am Book here. Will Trump juice the markets? A few people pointed out that maybe China will not want to do an agreement to hurt Trump and maybe get a democratic party winner in 2020. certainly possible. Understanding your statement. Understanding momentum ETFs. Up coming events; 10 October ~ Is it time to buy listed property? 31 October ~ Live Fat Wallet Show recording 7 November ~ Millennials navigating markets and the investment landscape * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Commodity miners catch 22 Implats (JSE code: IMP) is buying a Canadian palladium miner for some R11.5billion. Now the deal looks decent, 3m ounces producing about 220k a year with an all in sustainable cost of some $820 and making EBITDA of some R1.6billion a year, so PE of 7x. But those numbers are all grand with palladium just off all-time highs of $1,700. What happens when palladium falls? This is the challenge of single commodity miners. You can't buy at the bottom because you have no money, but buying at the top screams a 'hail mary' pass. The catch 22 is how else do miners grow? Every day the mine they lose some value as they mine reserves. Maybe the smallish size of this deal is what saves it? JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Up coming events; 10 October ~ Is it time to buy listed property? 31 October ~ Live Fat Wallet Show recording 10x South African Retirement Reality Report 2019 Simon chats with 10x Investments founder and CEO about their second Retirement Reality Report and a 1million give away into a retirement annuity. You can find the full report here. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Blue Label (JSE code: BLU) shares flying after writing down CellC to zero. Up some 30%. I guess the market is relived CellC is only going to zero. WeWork gets a new CEO as founder Adam Neumann steps aside. Makes sense, aside from a lot of crazed decisions he's made. Founders are a different type of person from a CEO. The new top end iPhone is on sale for pre-order locally. At almost R33k, yip a full years tax-free. Even if buying on contract, that's an insane amount fo money for a phone that doesn't even make coffee. Peter Moyo again refused entry to work at Old Mutual (JSE code: OMU). This is beyond messy. Banking strike, with way more horror stories than actual facts. Facts are the union is not happy about retrenchments. But the many many messages I have received about cash running out and online banking not working I suspect are bogus. I suspect I am one of the few left who still use cash anyway? JUUL CEO Kevin Burns has just announced he is quitting. Wealthy Maths: Calculating dividends Up coming events; 10 October ~ Is it time to buy listed property? 31 October ~ Live Fat Wallet Show recording Subscriber to our feed here Subscribe or review us in iTunes Can Trump juice the markets? More than anything he wants a second term and the election is in November next year (still over 13 months away). Now he has a lot of troubles, including a possible impeachment attempt being announced Wednesday afternoon. But Bigger is the trade wars impact on global economies and hence stock markets. We're seeing real evidence that they are hurting with Germany at risk of a recession and some horrid data out of Asia on Monday. Point is winning a second term with a weak / tanking economy and stock market is hard, very hard. So he needs to juice the economy and the market and he can do that easy. Announce full and real trade peace with China, spinning it however required. This will set the market alight and help a struggling global economy and if he times it right, winning him a second term The trick is when does he do this? Thirteen months out from the election may be too soon. But waiting for April or so may be too late. In fact it all may be too late. But I expect him to try. Of course ultimately this would be sticking a band aid on a severed limb, but if all that is wanted is enough juice for a second term, it may work. Eventually we'll get the recession and global markets will slide, and very likely this has already started. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Local inflation came in at 4.3% in August from previous of 4.0%. This a little higher than expected with food one of the main drivers. Maybe we're finally seeing food inflation that will help the retailers. MPC rate announcement on Thursday, 20 out of 25 economists say no change. If they'e right then I think a November cut is certain. Prosus (JSE code: PRX) remains in the Top40 and Indi25 indices that it went into when spun out of Naspers (JSE code: NPN). I haven't been able to confirm weightings but the big question is does the two of them exceed what Naspers was weighted? For capped indices this gets real messy, say Naspers was capped at 10%, it'll still be 10%, but will now also include Prosus. Flavoured vaping, flavoured cigarettes next? Two states and President Trump are hitting out against flavoured vaping with a ban the likely outcome. I have spoken about this before, the tobacco industry went full tilt into vaping as a new gateway into getting new smokers and it's working. Except now regulators are pushing back and the question is if menthol cigarettes will be next? If it is then the industry is dead in the US market. Breaking news is that "India's cabinet approves ban on e-cigarette sales and production". Saudi Arabia oil production is coming back, majority this week 100% within 2-3 weeks. Currently we have over supply (before the attacks) so oil will revert back lower. Sasfin (JSE code: SFN) results show a book value of around 5000c yet the share has, for years now, traded well below book value. Otherwise not bad results, but they cut the dividend cover from 40% of HEPS to only 20%? Comair (JSE code: COM) results boomed on the back of the payment from SAA (ie: us). But otherwise it seems that the market is ignoring their non airline businesses that are now some 40% of group profits. They also seem to be benefiting from SAA reducing their flights early last year and the grew air traffic. Up coming events; 10 October ~ Is it time to buy listed property? 31 October ~ Live Fat Wallet Show recording Subscriber to our feed here Subscribe or review us in iTunes The Netflix Challengers Apple has launched Apple TV+ for $5 or free for a year if you buy a device. Disney+ also launches in November for $5.99 or $12.99 if you also take Hulu and ESPN+. We also have HBO, Peacock (coming next year), Amazon Prime (essentially free in the US) and a bunch of others. Locally we only have Netflix, Amazon and Showmax. But don't forget YouTube, I mostly watch YouTube, but I am a very light TV watcher, maybe 5 hours a week at most. YouTube is of course free, or you can pay to make the ads go away. So now things get real for Netflix. At last results they had 151.6million globally with some 55million in the US. A recent price increase saw 130k US subscribers exit, but at an extra $1 per month that still added over US$600million to annual revenue. But here's the Netflix problem; They're spending some US$15billion on content which is US$100 per subscriber who is paying around US$150 on average in the IS and lower in the rest of the world. So the numbers add up. But that content bill will continue to grow and competition has got real in the last year. Disney has an advantage of a serious back catalogue whereas Netflix has a much shorter and weaker back catalogue and has lost a lot to Disney, Stars etc. who have pulled their content for their own services. The idea was that cutting the cable and moving to streaming would markedly cut the bill. But now with all these services it ends up the same or even more. Users are going to start to be icky abut what and when they subscribe. For example, subscribing to HBO when GoT is on, then pausing. Netflix is not dead, but for the first time competition is real and investors need to watch subscriber numbers and content spend. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Hello Prosus (JSE code: PRX). Spun out of Nasper (JSE code: NPN) and trading on JSE and Amsterdam Euronext. I expect Prosus to be the better deal as Amsterdam is a larger market for those wanting access to Tencent and the other assets. And the local fun damager saying that Prosus will do well as local fun damagers don't understand tech should hang his head in shame. The issue was simple weighting, one couldn't have Naspers at full weight in a fund, never mind over weight. So they had to decide how under weight they wanted to be and as such a large discount happened. As I record value unlock is some 3% with Prosus at R1,204 and Napsers off R1,100 adding R104 of value. Bottom line for me is that I expect Prosus to be the better asset due to the Amsterdam listing. And the awkward moment was the JSE not reflecting the indices right as they hadn't included Prosus in the indices that Naspers was in. So everything looked real ugly for a while. They fixed it. For next day or two Prosus will live in same index as Naspers, then JSE will rebalance either kicking Prosus out or keeping it in and kicking out the smallest. Subscriber to our feed here Subscribe or review us in iTunes Intu (JSE code: ITU) flies on reports of a possible bid for the company by Orion Capital Managers. The problem is that the first two bidders both walked away, but I guess at some price the deal works? Labat (JSE code: LAB) is buying into cannabis, well kinda. A very small deal and we'll see. But I for one would not being buying the shares. Labat do not have the best track record on anything and sure cannabis is becoming legal all over. But that doesn't mean the profits flow, where I come from we don't call it cannabis we call it weed, because it grows like a weed. Famous Brands* (JSE code: FBR) trading update mostly as expected. GBK doing better after last years restructuring while local brands doing modest after inflation and new stores removed. The new issue is manufacturing where Lamberts Bay Foods is down 39% after losing one client? Talk about concentration risk. Moody's says no junk status for 12-18 months. So no need for immediate panic and first they need to drop us to negative outlook anyway. Jack Ma steeping down at chair of Alibaba. He stepped down as CEO in 2015 and is an amazing individual. He's 55 and got his first computer at age 33 starting Alibaba in 1999 and the company is now worth some US$460billion. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Local Q2 GDP came in at 3.1%, higher then expected but what struck me was the comment from Stats SA ~ "spurred on by a build-up of inventories and increased household expenditure". Now we have seen Woolies* (JSE code: WHL) and Shoprite* (JSE code: SHP) both comment that the second half to end June was stronger than the first, and this statement would suggest it was the second quarter. But who are these people? Or is it maybe base effect? An Eskom briefing on Wednesday seems to show that the utility has been stabilised with issues such as not enough coal largely fixed. But important point is stabilised, not yet improving. A start I suppose. Group5 (JSE code: GRF) is leaving the JSE as it exits business rescue. Shareholders can expect to get zero back. This is the risk of investing, we get the upside, but if it goes wrong we can lose it all. Discovery* (JSE code: DSY) results were pretty much in line with the first half and they continue to spend a lot of the new businesses. Price is, as always, slightly ahead of embedded value and PE is now a little under 15x. David Shapiro Tweeted; — David Shapiro (@davidshapiro61) September 4, 2019   Ring fencing tax losses Upcoming events; 05 September ~ JSE Power Hour: Benefits of offshore investing * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes US recession US ISM came in at 49.1 which is contraction. This is now another recession warning adding to the inverted yield curve. It is frankly looking more and more likely the US will have a recession in 2020 or maybe early 2021. Technical recession is two consecutive quarters of negative quarter-on-quarter GDP growth. OECD data shows 6 US recessions since 1970, about one a decade which is frankly not very many. But what it also shows is that when the US hits a recession so does most of the rest of the world. No surprise there, either because they lead everybody down or because they only enter recession when globally things are real bad. So what to do? In short nothing. Just carry on carrying on. Firstly, maybe the US won't enter a recession any time soon, or maybe not for an age. Secondly, maybe the recession is only in 2021 and the market rallies first than collapses back to levels above the current levels. Remember Trump has an election next year and he can juice the stock market (and US economy) like crazy by making real trade peace with China and what does he want more; a second term or better trading terms with China? Thirdly, it may be a mild recession. Still not fun, but not earth shattering. Fourth, maybe locally we don't get hit too hard by it? I know that sounds crazy, but say Eskom debt gets fixed and consumer confidence and growth start returning? May sound unlikely, but not impossible. Point is there are simple too many variables and as such, we just carry on carrying on. Buy your ETFs, keep a well stocked emergency fund and if you're nearing retirement, recession or not, be in the process of de-risking your short-term cash needs. If you're really scared, and you should not be, have a look at the target volatility ETFs from Absa. Here's an interview I did and a blog post from Kristia here. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares An economic proposal out of National Treasury. Good looking document, but as always implementation is what matters. Adrian Gore, CEO of Discovery* writes a great piece for the World Economic Forum "Things are bad and getting worse for South Africa. Or are they?". Full of actual facts rather than emotions that typically cloud the debate. Naspers (JSE code: NPN) shareholders have agreed to the Prosus unbundling and it will be effective at the open on 11 September. I expect Prosus to trade around R950 and it we do see some value unlock, and I expect that we will, this could add some 4% to the Top40. Not on the day but over the week or so of the unbundling. Exxero (JSE code: EXX) results had a special dividend and growing profits. But what strikes me is a PE of 4x? The market is pricing it as if coal as an energy source will be dead within 4 years? Wealthy Maths: How to calculate future value Managed volatility ETFs explained Upcoming events; 05 September ~JSE Power Hour: Benefits of offshore investing * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Prescribed asses A lot of people are worryingly asking me about the ANC governments idea for prescribed assets. In other words a law requiring asset managers to invest in a certain way, expected that this would require buying of SOE debt or maybe even equity, albeit I think equity is almost certainly not on the table, just debt and frankly Eskom debt. Now first off, personally I am in two minds about prescribed assets. The capitalist in me thinks they are a terrible idea. Investor should be able to invest where they want, even in 6% fee offshore funds if that rocks their returns. But we live in a developmental state with extreme inequality and as such I certainly think that prescribed assets do have a place in our economy, and we already have them in the form of reg 28 and nobody died from that. So I think the issue is balance and reg 28 strikes the right line of balance. Let's quickly touch on regulation 28 of the Pension Fund Act. Before 1994 the NP government had prescribed assets and when the ANC came to power they scrapped that, but did put in place limits on how pension fund managers had to invest in terms of assets classes and offshore vs. local. The 2018 budget increased reg 28 rules to allow 30% offshore with a further 5% invested into the rest of Africa. A maximum of 75% into equities (with a cap of 15% in a +R20billion share and 5% cap on shares under R2billion). Property is capped at 25%, commodities at 10% and alternative investments capped at 15%. So we have prescribed assets and yes people grumble about the reg 28 limits, but in no way has it been the end of the world. Any change too prescribed assets would likely happen within the reg 28 environment but when asked in parliament last week President Ramaphosa was very vague on exactly what the government means. But I have some thoughts. Magda Wierzycka, CEO of Sygnia (JSE code: SYG) had an excellent idea she put forward on Bruce Whitfields show. The PIC issues a zero coupon R200billion ten year bond to Eskom. This removes half their interest payments and gives them ten years to fix their balance sheet. If they succeed, boom. If not then we are right were we are now. Nothing ventured nothign gained. The risk of course is to the PIC returns, but as a defined benefit pension fund tax payers would be on the hook for any shortfalls to the Government Employees Pension Fund (GEPF), and right now tax payers are anyway on the hook for Eskom. Further the GEPF is currently funded at 108%, so not anywhere close to falling over. So maybe prescribed assets is actually just for Government Employees Pension Fund (GEPF) assets? And I like this idea very much, gives Eskom wiggle room and a decade while not killing our treasury in the mean time. Now many of you are spitting into your coffee at the thought of this. But let's be realistic. Eskom is way over debted and sure it is the result of state capture. But we can't roll back the clock, all we can do now s try and fix it. Another fun fact is that SOE debt has not been defaulted on, and this is unlikely to change. So actually the great yields offered by, for example, Eskom bonds, is actually a great return. As long as they don't default and frankly they are either directly or implicitly under written by government so default is not going to happen. As evidence of this is Future Growth invests into SOE debt and has great returns to boot. But at he end of the day - we await full details from government which will probably arrive with a plan to save Eskom as they're the reason we're even talking about this and Minister Gordhan has promised details in early September. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Shoprite* (JSE code: SHP) results a show of many parts. Locally second half much better after the disaster of the first half. Rest of Africa swings into a R265million loss after making R1.6billion in 2016 FY. Dischem (JSE code: DCP) below 2000c. Was always way over valued but still on a PE of over 20x so not yet cheap. AdvTech* (JSE code: ADH) decent trading update. Lots of moving parts, but stripping that all out leaves HEPS +5% - +9% up and on a PE of under 15x much cheaper than Curro (JSE code: COH) and Curro no longer has the tertiary segment which is doing better than schools right now. Trump has delayed the new China tariffs because this could hurt the US consumer in the yearend shopping season. But in the same breath he says China is paying the tariffs? The man is a nut job. Local CPI came in at 4%, below previous of 4.5% and expected at 4.3%. Simply there is no inflation in the system right now and another rate cut from the MPC is surely assured as we move even lower below the 4.5% mid point of the range? Top40 is still green for the year. Off the +11% from earlier, but it's still +5.1% excluding dividends. But it fells like we're down 100%. That all said, over the last year Top40 is 8.8% excluding dividends. ETFs for investing and retirement. Dividend ETFs. * I hold ungeared positions. Subscriber to our feed here Sign up for email alerts as a new show goes live Is an IMF bailout really imminent? "The IMF's primary mission is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries and their citizens to transact with each other." (source) Upon the founding of the IMF, its three primary functions were: to oversee the fixed exchange rate arrangements between countries, thus helping national governments manage their exchange rates and allowing these governments to prioritize economic growth, and to provide short-term capital to aid the balance of payments. (source) Lots of hype (hysteria?) about an IMF bailout for South Africa with all sorts of talking heads weighting in suggesting it is a certainty. But an IMF bailout is not happening any time soon, the facts are simple and we're a long way off even entering talks about a bailout. Now sure our economy and stock market are both under pressure but the IMF cares nothing about the latter and the former is struggling but it is a long way from a death spiral. Our government debt is +/-90% in Rands, so currency weakness does not kill our debt burden, whereas foreign currency debt kills when the currency weakens. Tis is a big reason for most bailouts and it is simple not a risk for us. Our Balance of Payments (BoP) is fine at some 4-5 months. Now sure more would be better, but that is not anywhere near a crisis. When Pakistan got their recent bailout BoP was down to a few days. Our currency is fairly stable, certainly it is not crashing Bottom line, we're not seeing capital flight so no IMF bailout waiting in the wings. So why are we seeing all sorts of hysteria headlines saying an IMF bailout is practically a certainty when it patently is not? Also, why the fear from market friendly economists and the like? All these economists who criticise government for not being market friendly enough would surely love the IMF market friendly conditions for a bailout? Or are they practising double speak? Both the in country IMF head (Montfort Mlachila) and our own SARB governor (Lesetja Kganyago) state that it is not currently on the table. Now sure, 'currently not on the table' can change. But which of the above will trigger the change? What else could trigger the change? Short answer is Eskom, but there are plenty of balance sheet / debt options for Eskom and minister Mboweni says we'll have details soon. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Brought Index and Structured Solutions, Absa CIB Simon Shares US yield curves have inverted across the range. Shorter term rates are higher then longer-term rates. Now every recession has been proceeded by a yield curve inversion. But not every yield curve inversion has been followed by a recession. So maybe it's warning us or maybe it's not. In short, we'll see lots of hysteria and end of world doom sayers out in force, but as always just carry on carrying on. Upcoming events; 15 August ~ JSE Power Hour: ETFs for investing and retirement Subscriber to our feed here Subscribe or review us in iTunes Managed volatility ETFs with Len Jordaan Index and Structured Solutions, Absa CIB Three Exchange Traded Funds (ETFs) issued by Absa earlier in the year. NFEHGE NFEMOD NFEDEF Download the managed volatility product brochure Absa Volatility Managed SA Equity Indices. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Trade wars are back, but this time 'only' 10% on US$300billion of goods. No surprises? China is responding by allowing their currency to weaken to decade lows. Fed cuts 0.25%. Trump says that's not enough, but he is priming an excuse. He has an election next year and if the market / economy is weak - he'll blame the Federal reserve. Iron ore futures lost 10% last week and are currently around US$92, I been warning of this and Vale is producing again so the shortage is disappearing. Now sure Kumba Iron Ore (JSE code: KIO) has high quality lumpy iron ore which attracts a higher price. But the US$108 / tonne they got in the last results will not be repeated. Delta (JSE code: DLT) and Rebosis (JSE code: REB) talking about a possible merger? In many ways it makes sense, but the issue is debt on the Rebosis CEO is quoted as saying they need to fix their debt levels, not sure that does this. Nedbank (JSE code: NED) results show the quality of our banks. They're growing (yes very modestly at low single digits) but in an economy that is not growing. That takes skill. Curro (JSE code: COH) trading update was bleak. HEPS growth of 3% - 9% after one offs are stripped out on a stock on a PE of around 35x (after 13% sell off on Tuesday). Stock back at 2013 levels and some c70% off the highs of late 2015. The lesson here is simple, all business models mature in time, growth slows and one needs to be very careful about what price we pay. On a PE of over 100x with slowing growth was madness. Upcoming events; 15 August ~ JSE Power Hour: ETFs for investing and retirement * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes How lucky are your investments? Delphine Govender tweeted a great comment from Daniel Crosby about the role of luck in investing, or trading. Never a truer word by @danielcrosby. The role of luck; market sentiment leads us as investors & our clients to think we were right because of the outcome; when being right in investing is about basis for the investment decision turning out correct (more than less). pic.twitter.com/qESB66vBqL — Delphine Govender (@Delphine_DG) August 4, 2019   Truth is when luck strikes we claim it as skill, when it really was just pure good luck. Now don't get me wrong, when luck strikes - grab it with both hands. But the problem is that by claiming luck as skill we skew out actual ability claiming credit where it's not due and as such we think we're better than we actually are and the problem here is glaring. So in short when we're dissecting an investment we need to ask the question about how much of the return was luck vs. how much was skill. Now sure this isn't easy, but if we're honest with ourselves we certainly can spot luck and we need to admit as such. Personally I know I had two very lucky trades. My first purchase in October 1987 (DiData) and Capitec* (JSE code: CPI). The former I was actually trying to buy another stock and the latter was more a purchase in anger as I had missed my preferred entry price and it just kept on moving higher. These two transform my portfolio returns, without them I still beat the market - but by a lot less. So how did we spot that luck? Did something significant happen you never expected? Major competitor going bust? New market proving way more profitable? Serious shift in the landscape they operate in? Legislation changes that favour their products? Finding what they weren't looking for (gold miner finding PGMs)? A serious expected risk suddenly disappears? Did the stock valuation far and away exceed any realistic expected valuation? None of this is rocket science to spot, you had reasons for buying. You list them (you do write down your research?) and then something comes out of left field to boost profits? The flip side of course is bad luck, and sure that happens as well. So we also need to dissect bad luck. How much did it hurt but also do we keep on experiencing bad luck? If yes, maybe it's less about bad luck and more about lack of skill which we're blaming on bad luck because that's easier? Maybe we're just not very good at figuring out the risks? I have long stated that the only book by Nassim Nicholas Taleb worth reading is Fooled by Randomness as it goes deep into the role of luck in investing, trading and life. Read it. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Shoprite* (JSE code: SHP) trading update sees full year profits down. But the real point is that the second half of the year was way better than the first half as they fixed DC and IT issues and had no further strike action. But it is still tough with lots of products in deflation which is squeezing margins. Massmart (JSE code: MSM) update was a shocker with Game bleeding like crazy. Not a surprise, but as Nic Norma-Smith said on Twitter "Wal-Mart paid $2.3bn for 52% of Massmart in 2010. Today the stake is worth $370m.". Ouch. NFEMOM*, the ABSA momentum ETF has been flying and is almost +20% year-to-date and just behind the S&P500 and best over last year (of indices, local and sub, that I track). I always like momentum and when ABSA changed the methodology of this ETF I switched my personal momentum portfolio into the ETF. Just as I did this everybody claimed momentum was dead, and the ETF struggled. But momentum never dies, even when (if?) value ever comes back, those value stocks will gain momentum and so momentum traders will profit. Loser indices so far year-to-date are the banks and mid caps, both slightly negative (excluding dividends). The resource index is doing well enough, but the industrial has actually beaten it - likely driven by Richemont* (JSE code: CFR) and Naspers (JSE code: NPN). ASX finally breaches the pre crisis levels and makes a new all-time-high, 12 years later. Nicky Newton-King is resigning as CEO of the JSE. She's been a great CEO transforming the technical side of the JSE during a period when values traded have been falling off a cliff. On that note, September sees the Naspers (JSE code: NPN) listing their non-SA assets in Amsterdam and while that could in itself see a bump of some 4% to the Top40 - it's going to hurt value traded even further with maybe as much as R1-R2billion of daily trade leaving to trade on Amsterdam instead. We think our local property space is having a tough time. But check the Intu (JSE code: ITU) results. A horror show with like-for-like net rental income down 7.7% and guidance for rental growth of -4% to -6%. Capco (JSE code: CCO) a little better and they're splitting out Covent Gardens (their prize asset) but it still tough and the share price remains under pressure while Intu share seems to be racing to the bottom. Fall out from Boris Johnson win and insists on a hard Brexit is not so much in the markets, but the currency as Sterling continues to slide to the lowest levels since 2017. This helps much of the FTSE100 as foreign earnings dominate. If you get the pamphlet about investing in 72 tonnes or either; iron ore, coal or magnesium. Throw it away, it's a scam, especially the part about holding for 18 months. That will be one massive warehouse bill. Another week and platinum continues to edge higher now around US$880. The final report of the presidential advisory panel on land reform and agriculture (aka #EWC) was released over the weekend and frankly it is exactly as expected. Sober and sensible. Yes lots of hysteria, there will always be, ignore it, it's mostly ill informed or just based on fear or hate. Understanding the SYGEU. Money Hacks: Bring down insurance premiums. Upcoming events; 14 August ~ JSE Power Hour: ETFs for investing and retirement * I hold ungeared positions. Subscriber to our feed here Sign up for email alerts as a new show goes live JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Kumba (JSE code: KIO) results saw production down, but with the average selling price up 57% at US$108 / tonne - they shot the lights out. But this is surely the top here? Rumours are that Vale has iron ore on the water heading for China and slower Chinese GDP may hit demand, sending iron ore back to a more sensible price around US$70 / tonne? Platinum continues to edge higher. Remember S12J? You could invest in a funds that invested into startups (within certain rules). Then whatever you invested would be deducted from your taxable income (on condition you held for 5 years) and tax would only be CGT, albeit on a zero cost basis. Government is now proposing a limit of R2.5million per person per year. Frankly for the vast majority, this is a non event as that's serious money. Alexander Boris de Pfeffel Johnson is the new Prime Minister of England. What one may think of him, markets don't care and for traders / investors that's what matters. That said, hard Brexit remains a stupid idea. IMF cutting global GDP growth, including our own. Now they're not always right, in terms of exact numbers they are seldom spot on. But the trend from the IMF has been edging lower for a while now, and on the trend they usually are right. I have a new show on BusinessDay TV - The Small Cap Portfolio. Monday live at 6.30pm and repeated during the week or on YouTube. I get one guest and we talk about two stocks of their choosing. We're not talking results, we're talking the profit drivers, risks and so on. Theo Botha points out on Twitter that; Pick 'n Pay Lead independent non-executive director Hugh Herman (75). Appointed to the board in 1976. How can this director still maintain his independence after 43 years on the board? Pick n Pay Lead independent non-executive director Hugh Herman (75) Appointed to the board in 1976 How can this director still maintain his independence after 43 years on the board? — Theo Botha (@tjbbotha) July 24, 2019   From an intra-day high of 42% in 2012, Greek 10-Year yields have moved all the way down to 1.99%, their lowest level ever. US 10 Year Bond Yield: 2.07%. Never say never. Tax-free as you age Understanding the MAPPS Protect ETF Invest offshore with the JSE How many shares to buy? Two emails in the last week asked about how many shares to buy in any given stock. The problem is that this does not account for the cost of the shares. For example 10k shares in a R10 stock is very different from 10k shares in a R125 stock. As an aside when I started trading warrants in the late 90's this was exactly how I traded. I bought 50k warrants regardless the price. So some times was R10k other times closers to R50k and my risk was all over the place. The answer of course is simple, invest based on ZAR amount, not quantity. I structure my portfolio with the core satellite approach; The core is around 55% in ETFs (tax-free maxed out every year) 30% in 'til death do us part' top quality stocks 8% in second tier small and mid caps 7% for trading ALSI futures and ETFs. The til death do us part is some 10 stocks so when I am buying, I buy at around 3% of total portfolio. Of course as they moves the weightings get our of sync, I manage that by adding new money to other stocks or in some cases selling down when the weighting gets wildly out of sync. But quantity of shares is not important. A last point because I get this question all the time. People want a 'penny' stock below 100c because then it can double in price. Any stock, regardless of price can double in price and cheap does not make it easier. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares S&P500 above 3,000 and Dow Jones above 27,000. EOH (JSE code: EOH) have found R1.2billion of bad deals over 4 years, 2013-2017. A new dawn, I think so, but I would add a very slow dawn. Platinum starting to look decent? We have higher lows and two higher highs. A close above US$910 (still a way off) and things looking real strong. If you're long PGM miners. If not an entry on pull backs looks smart. Woolworths* (JSE code: WHL) trading update excited the market and shows a much improved second half, especially in food (expected) and clothing (not expected). Australia remains under pressure but overall good and the real question is if it's a new trend or a one off? Anheuser-Busch InBev (JSE code: ANH) has suspended the listing of their Asia-Pacific business that would have seen almost US$10billion being raised. The reason given is tough market conditions but the bigger issue is they wanted the cash to pay off part of the massive debt bill from buying SABMiller - so for now they remain with too much debt. FIRE at any age Property investment is better together Upcoming events; 18 July ~ JSE Power Hour: How to invest offshore with the JSE 14 August ~ JSE Power Hour: Live Fat Wallet Show Subscriber to our feed here Subscribe or review us in iTunes Where are the sellers? There seems to be bad news every which way you turn, or is there? Trade wars, Iranian war, US tax receipts collapsing and so the list goes on. Yet markets remain in full bull mode albeit with two wobbles recently. Late 2018 and May this year. The question is why, this is an old bull. In fact this is the longest bull ever and second best in terms of returns, one would think it would be frail and fragile - but no it remains strong. I suspect part of the reason is that low interest rates and QE in Europe continue to drive buyers who are flush with cash and keen to park it somewhere, anywhere for a return that is positive. We also have record low bond rates (even negative in many parts of the world worth some US$12trillion) so if you're looking for returns then you have to be invested in stocks to make any real returns. German bonds issued at -0.75% and over subscribed but likely the ECB bought most of them? But this closes many investors out of the bond market if you want/need positive returns. A last reason is likely FOMO. Those holding stocks are terrified of missing out so they're simple not selling and any weakness sees them buying and buying. This will change eventually. Markets will fall and those buyers will turn into sellers. But for now don't stand in front of a raging bull and tell him to stop. He'll just run you over on route to new highs. The trigger is more likely to be higher rates and we seem to be a million miles from that. This does of course feed into a bigger issue, all the new debt. Now sure central banks are buying much of the debt, but low rates mean more debt generally and how does it all get paid off? Long-term does the planet need a debt forgiveness plan to survive? How does that work and how does it not crash the entire system we have? JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares CSEW40* change confirmed for next Wednesday, it'll now be SMART. Trade peace, kinda ~ for now. In classic Trump style, lots of huffing, puffing and threatening the blow the house down. Until a 'deal' is reached. Afrimat (JSE code: AFT) walks away from the Universal Coal deal. No details, but likely they didn't like what they saw? Respect, far too many deals get deal mania and concluded no matter what. PricewaterhouseCoopers has resigned as auditors of Group5 (JSE code: GRF). Now this is moot as Group5 is in business rescue with no chance of surviving and PWC cites heightened risks due to resignations of many senior execs. But one wonders if they'd had quit in the older auditing days? Upcoming events; 18 July ~ JSE Power Hour: How to invest offshore with the JSE * I hold ungeared positions. fff Download the audio file here Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes Longest economic expansion ever The current US economic expansion is now officially the longest ever at 121 months edging out the 1991-2001 120 month economic expansion and also the longest bull market at 122 months with the return still behind the 1990-2001 dotcom rally. But this raises two issues. Where's our rally? Nov17-Oct18 saw out market off more than 20% meaning the end of any bull and we're only up some 10% since the highs of Jun14, five years for 10% and we're +12% so far in 2019. Horror stats albeit we're up almost 400% from the 2009 lows while the S&P500 is up just over 400%. Both great returns (one naturally better than the other), and this does remind us to always think long-term and worry less about the immediate when investing because 400% is a great return over a decade. Second issue is when does the US collapse? Short answer is no idea. But records are made for being broken and while the US economy doesn't look as strong as it has over many of the past 121 months, there's not yet any wildly flashing signs of concern. Naturally a black swan is a potential risk, but then it always is. But here's my question. The Fed looks like it may start reducing rates, all good. But then what happens when things go pear shaped and they have no space for further rate reductions? Negative rates in the Europe or US? Currently there is some US$12trillion of corporate and government debt with negative rates which is just insane and shows that while markets have run (some markets), we're still feeling the impact of the 2008/9 crisis. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares The Top40 is up almost 20% since the lows of November and over 12% year-to-date. But instead it feels all gloom and doom. Wescoal (JSE code: WSL) results look horrid, but they had strike issues when they employed a new contractor and that hit production and the leverage impact seriously hit HEPS. But they remain a high quality junior coal miner. Omnia (JSE code: OMN) results were ugly, but not as ugly as the market expected. Apparently during the results presentation they blamed the media for their 23 April SENS stating no rights issue, which they then changed their mind on earlier this month? Gold is running and the perma gold bulls are thrilled - albeit surprisingly quiet? However, a number of people are asking if they should buy gold and the answer is usually no, buy a gold miner and benefit from the leverage impact. Bitcoin* is also going wild, now above $12,000. Here the perma BTC bulls are all over my time line. Question is how high will it go? Answer is no idea, in a perfect world it needs to make a new all time high above $20,000. But as with gold, don't sell too quickly, but do have an exit strategy that gets you out in time. Unless of course you're a hodler. Surviving the trade wars, G20 meeting is Friday / Saturday. My first investment Upcoming events; 20 June ~ JSE Power Hour: Trade the trade wars 18 July ~ JSE Power Hour: How to invest offshore with the JSE * I hold geared and ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Naspers or Prosus? This deal has been delayed due to a bungling of documents and the Annual General Meeting (AGM) will now be in late August with the unbundling happening in September. Holders of Naspers have two options; Keep you Naspers shares and get an extra 0.36986 Naspers shares at zero cost. This will reduce your overall cost per share as the new ones are 'free' and will have a tax impact when you sell. The default is to receive new Prosus shares in exchange for each Naspers share you have. This will trigger an immediate tax as your Naspers will be deemed to have been sold. Remember that Naspers will hold some 73% of Prosus with the latter holding all non SA assets and being inward listed on the JSE. The idea is that this will unlock value as local asset managers are unable to hold Naspers at full weighting, or even close to full weighting. So with Prosus being listed in Amsterdam we'll see more buying and hence the price will move higher and Naspers should also track higher but Prosus may move more and we may see a discount open between Prosus and Naspers, much as we see with TenCent and Naspers. Which will do better? In a perfect market they'll largely track each other, but the current +20% weighting of Naspers has limited asset managers to how much they can buy. So Naspers may close that discount gap. But the flip side is being listed on Amsterdam would see the gap stay wide with Porsus doing better. Net-net the value of the two should increase. As a side note, if the net increase of the two is say 20% that could add as much as 4% to the Top40. Prosus will immediately go into the same indices as Naspers and if the market cap is enough, will stay in the indices. JSE – The JSE is a registered trademark of the JSE Limited. JSE Direct is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Old Mutual (JSE code: OMU) has fired suspended CEO Peter Moyo and detailed what went wrong. The short version is that the company Moyo founded (NMT group), was CEO of and chair since taking up CEO at Old Mutual paid two dividends when they should in the first instance paid Old Mutual as a preference shareholder a dividend and in the second instance they paid when they should have first paid off the preference shareholder - Old Mutual. Moyo has fired back with a lawyers letter stating that Old Mutual is wrong and in fact their representative on the board voted in favour of both dividends. Who's right? I have no idea and ultimately the courts will decide, or more likely the parties will settle. So for now it is about money and how much Moyo gets. The good news for Old Mutual shareholders is that this is not an operational issue, but they do now need a new CEO. Metrofile* (JSE code: MFL) have restructured their debt that cost two CFOs their jobs. The new debt will see the tax rate revert back to the normal 28% instead of the crazy 40% in the last results. The new debt is at about the same rate, but this will decrease in time as the debt reduces. The impact won't be felt much in the current results due for end June, but the full impact for FY 2020 could boost HEPS by as much as 15%. Facebook launches their stablecoin ~ Libra. Lots of excitement as the theory is that it'll remove fees for money transactions. But it won't, sure it may reduce them but Facebook is doing this because they want a slice of the global multi-billion dollar movement of money, especially remittances home. San Francisco has become the first city to ban e-cigarettes, and nobody should be surprised. The tobacco industry was losing ground in the major developed markets, regulators were happy and the industry was content as they upped prices (and hence margins) and moved demand eastwards to less regulated markets. But then e-cigarettes arrived and the industry thought they have their savior and jumped on the bus and right into the regulators hands. Smoking started to increase, especially amongst teens and now the regulators are coming for big tobacco again. Banning e-cigarettes, likely banning flavoured cigarettes (such as the biggest seller, menthol). In short the tobacco industry has shot themselves in the foot and should have kept their head down instead they now in trouble again. A last point here is not about whether e-cigarettes are safer or not. They are a tobacco delivery system and a potential gateway to normal cigarettes and regulators want neither of these. USA ETFs Upcoming events; 20 June ~ JSE Power Hour: Trade the trade wars 18 July ~ JSE Power Hour: How to invest offshore with the JSE * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes The Rand blame game I have a watch list of EM currencies, and they move. They move a lot. Some times in sync with each other, at other times just crazy all over the place. But you will notice every time the Rand weakens the local politicians get blamed. Well what about when it strengthens? Tuesday saw it as the best preforming EM currency as it gained some 2% to 1450c. The truth is politicians have a lot less influence on the currency than they like to believe and then we give them credit for. The Rand moves and is also the preferred EM currency to trade due to its liquidity. Sure when Ace Magashule talks about 'quantity easing' that's easy to pin the sudden Rand weakness on him. But for the vast majority of the time nobody actually has a clue and blaming the general grouping of politicians is easy - but lazy. Especially if we're not offering credit to them when it strengthens. I also wonder about our countries obsession with the currency. I do think it's fair enough as it is, over the longer-term, a kind of vote on the country in that it tells us if money is flowing in or out. It also directly hits our pocket in the form of the petrol price. But do other EM countries have the same level of obsession? Anybody have any experience from traveling abroad? But most often when the Rand moves nobody really has any idea as to why. So I asked Twitter and the range of responses shows that really nobody knows. ZAR had a stormer of a day, gaining almost 2% at 14.51. Who do we credit for this strength?#JSE — Simon Brown (@SimonPB) June 18, 2019   JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Solid Stor-Age (JSE code: SSS) results from a stock I have largely ignored and been wrong about. Interesting TymeBank presentation from African Rainbow Capital (JSE code: AIL).  Lonmin (JSE code: LON) is gone, taken over by Sibanye Gold (JSE code: SGL). Lonmin has a consolidation adjusted all time high of over R33,000, exiting at 1480c. They also had a US$10billion offer in August 2008 that they rejected. Market cap now, R4billion or about US$265million. Unpacking the Satrix property ETF ~ STXPRO Retire: Playing catch-up Upcoming events; 20 June ~ JSE Power Hour: Trade the trade wars 18 July ~ JSE Power Hour: How to invest offshore with the JSE Suspended Tongaat (JSE code: TON) suspended. Choppies (JSE code: CHP) suspended. Group5 (JSE code: GRF) suspended. Rockwell Diamonds (JSE code: RDI) suspended. Basil Read (JSE code: BSR) suspended. Esor (JSE code: ESR) suspended. Firestone Energy (JSE code: FSE) suspended. Freedom Property Fund (JSE code: FDP) suspended. I'll stop there because you get the picture, I want to talk of the warnings signs, why they get suspended and what hope is there for the future. The why? Business rescue Breach f JSE listing rules, such as late results Request from the company Sensitive information leaked into the market Now what? Depends on the why, many do eventually come back but battered and bruised. For now you're unable to sell (or buy) any shares and will have to wait for the listing to resume. How long? Usually way longer than management promise. If it's business rescue then it's probably forever. late results eventually they get it together, but it takes time, lots of it. Sensitive information is usually fairly quick to return to the market. How to avoid holding a suspended share? Watch for those late results. The JSE gives three months but then always gives an extra month, so effectively four. If a stock can't publish results within four months then why do you own it? What about derivative traders with open positions? You're in a heap of pain. Either long or short you now can't get out and the best advice is to avoid trading stocks due to single event risk such as a share being suspended. Steinhoff? Why isn't Steinhoff (JSE code: SNH) suspended? Because they also trade on the German exchange and they have seriously lax rules, so they don't suspend. Suspending Steinhoff locally when it still trades in Europe would prejudice local shareholders. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares US Fed has now promised a rate cut. This boomed markets but under lying the statement is the acceptance that trade wars are hurting the US economy. Horror Q1 GDP number at -3.2%. We knew it would be bad, thanks to aggressive load shedding during the period. But nobody expected this bad. The good news (sorta) is that no load shedding in Q2 should help boost that number. Also Agriculture was down 13.2% and is lumpy and should bounce back helping. But GDP for the year is going to struggle to get above 1%, and we're now almost certain to get a rate cut next month when the MPC meets. ANC / Ace wants "quantity easing". Assuming he means quantitive easing, I still don't understand what the plan is? So we print extra money to boost inflation (not that our inflation is low enough to be a problem) and then I suppose we use that money to buy local government debt, maybe Eskom debt. Then what? Do the lights now magically stay on? Also if we look at QE in the US, who benefitted the most? The rich, not the poor, not the students and it did not reduce inequality. As for the statements around the SARB and their mandate. Currently it is price stability, but adding growth is not a bad thing. Tongaat (JSE code: TON). It just keeps on getting uglier and that's not going to change any time soon. Best advice, stay away. Shoprite* (JSE code: SHP) says 15% of shareholders wrote to them apposing the Wiese deal, so it's not happening and that's a good thing. As a shareholder, why should I be bailing him out? Remember if his normal equity stake drops below 10% the special voting shares lapse, so his problem is he can't sell many more shares to raise cash. Again I ask, how's that my problem? Hard Questions. Better Answers. Upcoming events; 20 June ~ JSE Power Hour: Trade the trade wars 18 July ~ JSE Power Hour: How to invest offshore with the JSE * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Rough month. We're ending May (well Wednesday mid morning, so 2.5 trading days still to go) up 3.5% for the year, but we started May up 11.8%. No don't quote me rhymes. Astral Foods (JSE code: ARL) issued a SENS detailing issues with municipal water and the cost to the group. They've also spoken about issues with electricity supply. The question is, are they the only ones being impacted? The answer must be no, but they are the only ones being very vocal about the issues. I wonder who else is experiencing same? Famous Bands* (JSE code: FBR) results are decent if you remove the UK indigestion. The second half was tougher than the first but really that UK deal is busy undoing a lot of otherwise great effort by the company, that said the second half was better (and still better post yearend) for GBK but it still losses money. Signature brands are struggling and this isn't a huge surprise as they're more expensive sit down experiences. They're also exiting the Coega Concentrate tomato paste plant, I remember all the excitement when they bought the business, saving jobs etc. Except maybe not. But we did get a dividend, only 100c, but the first since mid 2017 when they went offshore. Naspers (JSE code: NPN) has confirmed their intention to list their non SA assets in Amsterdam and are now seeking shareholder approval. The theory is this will unlock value opening the group to more shareholders in Europe who will only get exposure to their global tech brands. Aspen (JSE code: APN) has confirmed the sale of the Nutritionals Business is happening this Friday and they'll get the Eur740million ASAP and be able to pay down debt. The Rand has been getting killed, out at 14.88 as I speak. Many are saying it's because DD is going to be deputy president. But that's lazy, real lazy, thinking. Nobody actually expected otherwise, he is ANC deputy president and except for a short period when Mbeki fired Zuma the AND DP is always the government DP. Sure there was a Twitter storm of hope when he postponed his swearing in as an MP, but current ZAR weakness is in line with most emerging market currency weakness. Latest maize crop forecast from the Crop Estimate Committee was again revised upwards. Good news for food producers and more supply should equal lower prices, but it could still go wrong; early frost, storm damage etc. Understanding the DCCUSD Upcoming events; 30 May ~ JSE Power hour: Hard question. Better Answers 20 June ~ JSE Power Hour: Trade the trade wars 18 July ~ JSE Power Hour: How to invest offshore with the JSE * I hold ungeared positions. Boiler room scams I'm getting the calls again, two different scams but same as they're trying to rob you of your hard earned money. The first is local offering you super smart trading software for a crazy high price that'll generate amazing returns (usually 30%-50% every six months). The software also comes with great training, but if it's so great why isn't the call center agent trading up a storm instead of cold calling me? Importantly, software is often free or very cheap from your online stock broker. Or buy AmiBroker.com and get your data from InvestorData.co.za Education is no longer something we should be paying for, there is a ton of high quality for free on the Internet, starting with Just One Lap, your stock broker, YouTube and so the list goes on. The second is a call from offshore - you can tell immediately because of the lag when they speak. Here they have a great stock for you to buy, an opportunity to get in early and reap huge returns. Sometimes the scam here is to get you to open an account with some fly-by-night bucket shop that will disappear over night, taking your cash with them. Mostly this scam is that have excess stock they need to off load. Maybe they under wrote a rights issue and ended up having to take a bunch. Or the stock is so illiquid they can't sell it in the market so they need to boiler room sell it. Either way the question to ask is simple. If this is such a great deal why do they need to cold call half way across the world to sell it? Surely such a great opportunity should have people queuing up outside their boiler room keen to buy? In both cases, just put the phone down and move on. There is no money to be made here. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Says Upcoming events; 23 May ~ JSE Power Hour: Mastering stop losses with Trader Petri 30 May ~ JSE Power hour: Hard question. Better Answers 20 June ~ JSE Power Hour: Trade the trade wars Coronation* (JSE code; CML) results about as expected and it looks like they're already moving up off the bottom of the down trend. I hold and like. People asking if passive doesn't kill Coronation and the answer is no. We're a very long way from passive being larger than active in South Africa, and even when that happens the real threat is initially the smaller asset managers. In time small active will be the winner, but we're talking a long time into the future. A few people asked me why I don't like Balwin (JSE code: BWN) and Calgro M3 (JSE code: CGR). They great operations but they sell houses and right now the housing market is depressed (or distressed, your pick). Costs are not going down but prices are also not holding so a squeeze. Calgro M3 has an advantage in that they can build at vastly different price points, but then they have other issues. Both will be great investments in time, just not right now. Barloworld* (JSE code: BAW) results were solid, very solid and I continue to like and hold this stock. Here's the value video I did earlier in the year that offered Barloworld as the best buy on the JSE. Khula Sizwe: innovative and promising. Choppies (JSE code: CHP) was always an opportunistic listing that frankly never impressed me. Their results for June 2018 are still outstanding and the share has been suspended since November 2018 and now they've suspended their CEO. Richemont* (JSE code: CFR) results were boosted by their new online retail which operates at lower margins but is now a significant profit center. The risk for them is trade wars and a slower GDP growth out of China. The issue is how many of the new rich in China get hurt by GDP slowing? Short answer is not sure, but I certainly suspect many will, you're suddenly rich so you buy a fancy watch then a bump comes along and you're no longer rich so no more fancy watches. Pioneer Food Group (JSE code: JSE) results show the pressure on branded food products. We've seen this trend with TigerBrands and AVI and it is likely to continue. The question is for how long? Consumers are shopping down to store brands and while they're often made by these same companies, the margins are much lower. Buffett (at the Berkshire Hathaway AGM) was commenting that this tension between retailer and producer is always in force and right now the retailer is winning. He says that the trend will reverse in time. But when and will it fully reverse or do some customers stay in the cheaper store brand product? I think they do and as such companies like Pioneer and co. will have a lower rating. Sasol* (JSE code: SOL), more cost over runs on their Lake Charles project. CoreShares changing their two property ETFs, PTXTEN* and PTXSPY. An again the 'market' (or at least some Twitterers) are moaning. Both ETFs are from 2010 when the SAPY index couldn't even get 20 stocks and was dominated by the two large stocks being over 50%. The equal weight then made perfect sense for an investor. But the SAPY index is messy with Nepi Rockcastle (JSE code: NRP) included while Capco (JSE code: CCO) and Intu (JSE code: ITU) are not. The JSE did an index review recently but rather than change the index they added new indices. CoreShares are hence merging their two property ETFs and changing the methodology. New methodology will be 75% focused on three years of yield history and 25% on market cap with an initial liquidity filter to determine potential stocks for inclusion. Result is more stocks in the ETF (26) with 24 of them driving returns, so great balance. Also a better yield as this is one of the key reasons for buying property. There will be a ballot for existing holders. 25% need to vote and majority wins, if vote is below 25% a second vote is held with no minimum turnout required. I will vote in favour. * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Long4Life* (JSE code: L4L) results. Good and lots of cash to spend. Calgro M3 (JSE code: CGR) results. Horror show. Upcoming events; 23 May ~ JSE Power Hour: Mastering stop losses with Trader Petri 30 May ~ JSE Power hour: Hard question. Better Answers  * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Trade wars Can we call it? Trades wars are here and nobody wins. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Steinhoff (JSE code: SNH) results for September 2017 are out and they're a mess. All they really have is a c70% stake in Pepkor. Trade wars have again spooked the market with the orange trumpet going on a Twitter rampage on Sunday, but as I record US markets are green again. Upcoming events; 23 May ~ JSE Power Hour: Mastering stop losses with Trader Petri Subscriber to our feed here Subscribe or review us in iTunes Elections and markets Recording this on Wednesday afternoon, so voting is still on-going and I have no idea what the results will be. But some thoughts. As a country fairly new to democracy we're really good at it and this is something to be very proud of, many countries (including supposed developed ones) are not nearly as good at democracy as we are. The IEC is world class and we accept the results. The majority party loses provinces, metros and the world doesn't end, we all just carry on. Sure there will be some messes in some places, but pretty much our voting is reflective of the will of the people. On this point, if your party loses you don't get to call the winner voters idiots. People vote how they do for their own reasons. We don't all vote the same. That's democracy, if you don't like it there are plenty countries without democracy. I am already seeing some Tweets calling out voters of one or another party idiots. This smacks of immaturity and doesn't sit within democracy. Polls leading up the election have mostly been in the same theme with the exception being the recent IRR polling data which has the ANC definitely losing Gauteng and likely losing nationally. But we fail to understand polling. Voter turn out is very important in polling for an election as is the methodology of the sample you're polling. Pollsters do a lot of post polling 'tweaking' so the potential for bias becomes very real. But being wrong doesn't make the pollster and idiot or a fraud. Polling is not an exact science and in a two horse race the margin of error is usually at least 3.5% and the victory margin is generally less. So even the polls for Brexit and Trump were within that margin of error. Markets have already run hard locally since the late 2018 lows but will likely like the results. Not as to who wins, more that we're good at democracy. The argument that a strong victory for the ANC will be good for markets is bogus and cooked up by people who simple do not understand the ANC process or constitution. Removing Ramaphosa before the next ANC elective conference in 2022 certainly is possible but it is exceedingly difficult and not likely to happen. Importantly the losers in an election always work against the winners, always. Nothing special there. So markets will like the result, pretty much regardless how much the ANC wins by. But will they go much higher? We're already up almost 11% year-to-date and sure we can end the year higher. Heck much higher. But turning around South Africa, jailing corruption, getting GDP going again. This will all take time, it can happen. It is already happening and has been since 14 February 2018. The best place to be will be SA Inc. stocks, they'll benefit most from an improving economy locally. Offshore and US$ stocks will find it tougher as Rand strength is likely over the next few years. My election stocks would be the likes of City Lodge* (JSE code: CLH), Coronation* (JSE code: CML), retailers (my pick is Shoprite* (JSE code: SHP)). Heck about half the JSE is local and been killed over the last five years. Be careful with the truly beaten down, they will take longer to recover. They will eventually, but the market likes easy money so will initially move into those already responding. As always, buy the quality at good prices - nothing clever here. The Exchange Traded Fund (ETF) is probably the MidCap ETF from Ashburton, ASHMID. The index is only +4.7% year-to-date and full of SA Inc. The chart looks ugly, but it will start to recover in time. Of course the wheels fall off if the wheels fall off globally. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares By this time net week we'll know the results of the 2019 elections. It's been a quieter election season than I'd expected - which is great. Coronation* (JSE code: CML) update. Assets under management (AUM) flat and spot on what I expected but average AUM was 8% lower for the period. HEPS 20%-30% lower worse than the 15%-20% down I expected on the back of average AUM being 8% lower even though it was flat start to finish. I hold and am happy with some cheeky bids in lower if anybody wants to sell to me at discount? I have been buying some Barloworld* (JSE code: BAW) in this pull back as per my Graham value webcast from a few weeks ago after missing my initial entry when it ran to +R130. Still have some bids in lower down. Up coming events; * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Shares or cash for dividends? A great question in my inbox, why do some companies issues shares instead of cash for dividends and which should we take? The why is simple enough, the company wants to pay the dividend but also wants to hang onto cash, usually because they have debt to pay off or a large deal pending. Pay the dividend with shares keeps some cash while still 'paying' a dividend. This is a potential warning sign worth digging into. Why the shares rather than cash? Is liquidity dying, do they have debt problems? Maybe not, but dig around anyway just in case. The trick is that these shares now have a perpetual right on all future profits, so they are more 'expensive' than cash which is why they're firstly not a great idea for the company and why I will usually take them as it's not just this dividend I get, but all future dividends as well. Further if not every share holder takes the shares, then your economic interest in the company increases. Example, you own 20 of 100 shares = 20%. They issue a 5% dividend, that's 5 shares dividend in total, 1 goes to you, 3 to others and 1 shareholder takes cash, only 4 new shares issued. Now you have 21 of 104 shares = 20.2%. We also save on brokerage if we take shares and typically they'll be issued at a slight discount (around 5%) to the share price. As a rule I will take the shares unless I think the share price is way over priced, but the important consideration is the future dividends so I pretty much always take the shares. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares So Christo Wiese wants to sell his non economic but voting Shoprite* (JSE code: SHP) shares back to the company for some R3.6billion? I thinks not, albeit seems I am in a minority here. Afrimat (JSE code: AFT) has made a non-binding offer to buy a Universal Coal (an Australian company mining in SA). The deal is about half their market cap and at a price some 10% better than the next best offer that I knew about. They really are the masters of deals, paying a good price and making them work. But this one is a biggie and risks are much higher than the other smaller deals the've done. The latest SPIVA for South Africa is out and always it makes for bleak reading.  * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Unlisted shares Unlisted shares, those not listed and trading on a recognised exchange such as the JSE. There two ways we get unlisted shares; We buy them hoping they will eventually list and become the next Uber (albeit Uber may be a bad example longer-term). We hold a listed share that delists and we keep ownership. Now if you're buying ahead of a possible listing you're most likely some form of venture or angel funding - fun, but the majority end in tears and even fewer actually ever get to list. If you've held onto a delisted share it's likely because you think it's a great stock with great potential and this may well be true. Most stocks that are delisted are because they offer such great value that somebody ants to own the entire company not just a slice if it. However unlisted bings its own problems; You have no JSE over sight. All are covered by the companies act but the JSE adds an extra layer of protection. For example director dealings, results within three months etc. Without this you're on your own, and sure you have rights as a shareholder and these rights are enshrined in the Companies Act, Act no. 71 of 2008 (well worth a read). But you'll have to enforce those rights yourself if required and lawyers will likely have to get involved. Often times communications is scant, late or frankly in some cases - never. Again you have rights, but now you need to enforce your rights at a cost. Serious lack of liquidity and price discovery. A lack of an exchange means how do you value the shares and how do you find a buyer when you want to sell them? This lack of liquidity generally means lower valuations as well. Very little or no media exposure and expert opinions on the stock and its prospects. Personally I have never owned an unlisted company (except my own) and I never would. Sure there is potential for great profits, but the truth is most often what you end up with is hassles, legal fees and ultimately losses. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares The Power Hour from last week by Nerina Visser on ETF fees is awesome and online. What's the net asset value? Net asset value (NAV) is from the balance sheet and is asset less liabilities. The break up value of the company. A share will typically trade above this value as we're buying future profits, not break up value. Tangible NAV (TNAV) is better as this excludes things such as goodwill, so is a real number of actual assets. Goodwill is when you buy a business and pay more than the NAV for the business, rest is goodwill. When things are going well and booming goodwill is not an issue. But when things turn, well it is messy and we've seen lots of goodwill write downs in years past. EOH (JSE code: EOH) states NAV of some R4.5billion. But R3.3billion is goodwill and so not really an asset and with EOH struggling for goodwill right now not really anything to write home about. So TNAV of some R1.1billion meaning EOH trading at more than double NAV while AdaptIT (JSE code: ADI) is trading below TNAV. So all the talk of EOH being below NAV and hence a great value is bogus. Most recently Woolies* (JSE code: WHL) wrote off a third of the cost of the David Jones acquisition. Now when goodwill is written down it hurts profits but the company will tell you this is not an issue as it is a non-cash charge. Correct, but of course it was cash (or script) when you paid for it. As a rule, buying at or even below NAV (or even better TNAV) is a great strategy - except it is fraught with issues. I was all over The Don Group as they traded below TNAV and that TNAV was buildings they owned in places like Sandton and Rosebank. But by the time they were done the TNAV had collapsed. This is a critical point of any for of NAV. How real is it? Who and when was it last valued and can the value be realised? What is the market saying about this TNAV? A stock below TNAV is often the market saying TNAV is under threat, especially if it is cash. ELB Group saw their TNAV collapse even as it was mostly cash, but a disaster of a contract saw them burn cash and now cash has gone and TNAV has collapsed as has the share price. NAV, and especially TNAV is important, but it is not written in stone. So as with all numbers, we need to be careful of it. Discount to NAV/TNAV is not a buying reason. In fact no single metric is ever a reason for buying. We need a preponderance of evidence. https://justonelap.com/finding-long-term-investment-winners/ * I hold ungeared positions. dd Download the audio file here Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares A strong start to the year and so far it seems to be continuing (even as the Rand trdes belw R14) - long may it last. Important to remember that Rand strength is not always the end of the world for our market as it signals foreign buying. S&P500 ETFs. Up coming events; 11 April ~ JSE Power Hour: Know your fees with Nerina Visser Fear and loathing on the JSE We're seeing a new trend on the JSE whereby stock prices are slaughtered after poor (or even just modest) results. Sure bad results have always hurt a share price, but it used to be that a 10% down day was a wildly bad day. Now however 10% is hardly even warming up with many stocks being hit way harder (think 30% down on Aspen results). I think there are a bunch reasons for this new trend. Firstly; the Steinhoff (JSE code: SNH) fear. After Steinhoff there is real fear in the market. Fear that a 'great' company may actually be smoke and mirrors and investors have no idea which is the next Steinhoff. So rather then be caught out they just sell, and sell. This fear is real. Steinhoff was generally considered to be a top quality company that we now know to be built on fraud and if an investor missed this - then what else could they miss. Of course many where not convinced by Steinhoff, but the majority who where are truthfully not doubting their own ability so selling is the easy option. This will in time fade. The next bull market will help make investors gunho again believing they can spot the fakes (which history assured us is harder than they think). The second issue is the US effect. For a long time in the US a small miss on results, and I stress the small miss. Not an epic miss, sees stocks getting sold off aggressively and we're now seeing this locally. This is in large part to speed of news distribution coupled with the ease and cheapness of transacting. This trend is likely to remain into the future. A third issue is the understand that few stocks are truly legendary and investor are less forgiving when the business model starts to unravel or dirt starts to show. Here fo example is EOH. It started with some rumours that the company quickly managed but investor where not convinced and just kept on selling. The news got worse and investors carried on selling and the stock is now off almost 90% from its highs of over R180. As investors we need to get used to this trend. Be good sellers (see last weeks podcast) and expect that even quality will disappoint the market at times and that disappointment will hurt. We need to be smart about when the issue is real or when it is just a knee jerk and short-term reaction. But the bottom line is, expect the ride to be bumpier than usual. We need to remember that investing is for the long-term and that long-term is never in a straight line. We also need to remember that any stock can turn out to be trash and if it does we need to sell it regardless of how we feel about it, the loss or the potential. Trash is best trashed. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Up coming events; 11 April ~ JSE Power Hour: Know your fees with Nerina Visser Selling like a pro We tend to focus on the buying, enteries and selling at profit. But what of selling at a loss? Far to often i hear people state it has fallen too much and so there's no point in selling - this is false. Ignore the loss you already have and focus on the loss ahead of you. A stock that has fallen 90 can fall another 90% and when people ask where's the bottom? The answer is zero, until then it can always fall more. A good sell is as good as a good entry. I exited most of my Calgro M3 (JSE code: CGR) at around 2100c but kept some only to watch it fall to under 1000c. I then finally sold the balance and now it's under 600c. It is never too late to sell and we need to become as good at selling as we are at buying. Sell the dogs (sorry dogs) Know when to panic Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares No Brexit deal with 8 days to go. A mess of epic proportions. Load shedding is in full force (well only force 4 with more stages to go) and it's bad. Seems we can expect a 'stable' electrical grid sometime towards the end of the year, albeit stable may still include stage 1 load shedding according to experts I have spoken to. The reasons we know and frankly don't matter. It also doesn't matter who wins on 8 May, this is not a problem that goes away over night. For us individually it s a hassle, a real hassle. For business it is a major issue. Our expected modest GDP growth for 2019 is going to be even more modest while Moodys eyes us for junk status. Most exposed will be retail (extra costs) and property(lost sales and extra costs) while mining has largely managed to get off grid. Metrofile* (JSE code: MFL) results were a horror show with the tax rate hitting 40%, up from 24%. Seems the two now fired CFOs messed up the Kenyan deal so that interest was not deductible as an expense. They out, new CFO will be able to fix and get the tax rate back to normal. Debt should be easy enough to pay off in 5-7 years. That all said it is currently my worst performing share in my portfolio and I continue to hold. Sure the pain has been plentiful, but the business model still stands, some issues (re tax rate) should be easy to fix and I wonder if a take over may not be on the cards? Up coming events; 11 April ~ JSE Power Hour: Know your fees with Nerina Visser  * I hold ungeared positions. Avoiding the next Steinhoff Up front let me state you're unlikely to be an investor in individual stocks and over a life time of investing never invest in what turns out to be a fraud. So far I have been lucky in that my only fraud was way back in the mid 90's (I can't even remember the name of the company) when the CEO suddenly rushed off to Australia and my loss was fairly modest (as I was poor), albeit I did make the horrid mistake of doubling up when the price had halved. Back to Steinhoff, the PWC report is finally out. Three thousand pages and four thousand attachments, albeit we only got a ten page summary that detailed over R100billion in fraud over the 2009-2017 period. Profits for this period were only some R60billion and while the fraud number may include some double counting, it basically means Steinhoff (JSE code: SNH) was a ponzi from day one. So how do we avoid being suckered into a ponzi scheme? Avoid the cult of the personality. Far too many people said that they didn't fully understand the business, but were happy to follow (and trust) Markus Jooste. Big mistake. I remember somebody on twitter saying if accounting was an olympic sport Markus Jooste would be a gold medal winner every time. To which I responded that hopefully he wasn't a drug cheat - turns out he was. I am not saying that every great person is a crook, but being great is not an investment case. Sure management is important, but we need more. Other red flags on the cult of personality is when they attack critics. Sell reports on Steinhoff were meet with rage from Markus Jooste and demands that they be retracted and the person involved be fired. Remember the recent Investec report on the Tongaat (JSE code: TON) CEO that got the company all upset and complaining to the Investec bosses? That was in June 2018, the share was over 8000c, now under 2000c. Avoid complexity. As humans we believe in complexity. We think complex is great, complex is best. It's not. In large part we believe in complexity because it is easier to do so. It helps explain why our portfolio growth is modest, why we're not hitting it out of the park with our trading. Truth is luck plays more of a role than complexity (read Fooled by Randomness by Nassim Taleb). The other issue with complexity is that it is easy to hide the fraud and diss naysayers. The reason I avoided Steinhoff is because I couldn't get the balance sheet to balance nor the debt to reconcile to the balance sheet. I am no CA nor a rocket scientist, so I go for the easy and these two should be easy. But I couldn't get them working so I just walked away. (Disclaimer, I did trade Steinhoff a few times, mostly in my momentum portfolio and can't remember if I made money or not). As an aside, I hold a complex stock ~ Discovery (JSE code: DSY) and when Viceroy was threatening to come after a second JSE stock last year, I ran my eye down my list of stocks and figured Discovery was a potential candidate. Point is I hold the stock knowing it is complex. Knowing its accounts are beyond my ability. Knowing that maybe it'll all collapse one day. I have built this understanding into my risk tolerance in that to is the only complex stock I hold and I cap the percentage weighting. Debt, always watch debt especially when paying top dollar for assets, such as the 100% premium offered for Mattress Firm. As Buffett said, debt is like Russian roulette. It's fine until it's not and then it is fatal. Know the debt ratios, watch them and compare to previous periods and their peers. Watch governance. Independent execs, are they really independent? Do we have a strongman CEO who has been there forever? Again a double edge sword, some such as Gore and Saad are important to the business. But so was Asher Bohbot to EOH, and now he's gone. They're great till they're not. What we then need is a strong, diverse and truly independent board. Can a non-exec really be independent after ten years on the board? Denial is another issue that we should largely ignore. We've had two execs at parliament saying, no not us. Yet both are named in the report. Ask yourself, how many guilty people confess when first accused? How many ever confess even when finally convicted? Remember the chairman, Christo Wiese on the radio flatly denying concerns. Now he claims he didn't know (and he is not named in the report), but then why the flat denial? Another aside. Why did the so smart Wiese sell his Pepkor holdings into the ponzi scheme in return for Steinhoff shares? Maybe as a rushed and easy way to offshore his money? Avoid falling darlings. We have lots of examples locally of once high flying darling stocks under severe price pressure. We missed them on the way up but now that they're lower we're buying, but they keep on falling. EOH R180 to under 2000c. Aspen (JSE code: APN) was over R400 now under R100. This is tough because sometimes the sell off does offer a great entry, but we need to be extra sure that the sell off is not the start of a collapse. Best way to do this is on a valuation and full understanding of the business. Aspen is maturing so the +30 PE levels were not reasonable and the price needed to come down while EOH was always built on using script as currency and that uravels as the price falls. So what next? Well Steinhoff is bust, 100% bust. Sue they have some assets (such as c70% in Pepkor and Conforama and bankrupt Mattress Firm in the US) but the claims against the company are in excess of R200billion and current shareholders are last in line. The process will take a while, maybe a decade, and by the end there is nothing left for shareholders. If you're holding or buying Steinhoff, understand you're trading because you can't invest in a share that's going to zero. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Group5 (JSE code: GRF) goes into business rescue with "a slim chance for any realisation of value.". It seems the construction of a power station in Ghana was the final nail. Remember the +R1billion they were offered to their Eastern European toll operations? But in the end a lack of liquidity killed them. Be very careful of holding Aveng (JSE code: AEG), if nothing else check the bid/offer, price is heading to 1c. No Brexit deal with 15 days to go. A mess of epic proportions. Back in November 2017 I wrote in FinWeek that we'd get zero fee ETFs and eventually negative fee ETFs (they'll pay you to hold them). It has happened. MoneyWeb is reporting on a US ETF offering to pay investors to buy their ETF. Locally our much smaller market and hence much smaller ETFs means we're a long way from free, but I do think in time it'll happen locally and Satrix40* (JSE CODE: STX40) would probably the one able to do it. Aspen (JSE code: APN) taught us some important important lessons. Debt is fine until it's not and then it can be fatal. Buffett talks about this in his latest shareholders letter. Secondly the market has become a lot more skittish and punishing since Steinhoff (JSE code: SNH). This is not likely to go away any time soon. The answer is simple, watch a companies debt and hold quality, real quality, only. Lastly, all growth stocks mature and that process of maturing is often painful. 5 ways minimalism helps your finances Searching for value the Benjamin Graham Way * I hold ungeared positions. Investment lessons from Boeing We live in wild times made possible by the internet and powerful computers in our pockets. Much of it is good with a fair amount of bad as well (think Twitter trolls), but for large old school companies it can be especially bad. Think Momentum refusing to pay out the life policy. They were correct as per the law and policy wording, but they showed a complete lack of compassion and eventually backed down. Think Vodacom trying to scam us on the ICASA rules for rolling over data with crazy fees. They backed down and from a business profit motive they may have been right but they were a million miles away from the spirit of the law and ICASA may have blocked their fees anyways. Think TigerBrands and their total lack of empathy as they responded with legal speak while South Africans were dying from listeriosis originating at their production facilities. Think Boeing, standing firm after another of their new Boeing 737 Max8 crashed shortly after take off. In the olden pre Internet days Boeing would have been able to control the message with ease and insisted everything was fine, hoping like hell another plane didn't crash and quickly rolling out a software 'update' that may or may not fix the issue (from what I have read the issue is training, not software, here's a long NYT read on it). Boeing have failed to understand the new rules in which businesses operate. Firstly those rules are a lot more ethical. Consumers want to be treated fairly. Hey we always did, but we never really had any power. And that's the second and very important point, consumers now have power. That power comes via the Internet and very quickly a raging anger can over whelm any attempt to manage the message. Now sure often the raging anger is actually just a lynch mob and this is very much the dark downside of the Internet. But the upside is that consumers have power and they'll exercise that power. Sometimes for good and sometimes for bad. A business needs to understand this. I remember attending a presentation on generational theory a decade back where the message was that millennials wanted ethical companies and would pay more to these companies. The flip is that they'll boycott a business they consider to be unethical. Now this is way more than just millennials, the issue is that millennials were given the power to firstly know a companies ethics and secondly do something about it. Companies that are going to survive and thrive in this new world will have fairness and ethics at their core, and that's hard. It's easy to put that into a mission statement, but living it is something else entirely and often a company messes up. For example the news that a company will phase out plastic straws by 2022. Nice, but why so long? Simple because they're trying to protect profits. Fair enough but the ethical demanding consumer doesn't care about your corporate greed, they care about the planet. The even harder issue is how do we manage this as an investor? Truth is we need a crisis to see how a business manages it and that is late in the process. But we can see glimmers of it via other means, such as the plastic straw example mentioned earlier. If a company is not putting the customer and ethics front and center they will eventually be in trouble. Lastly as investor we need to not chase profits at any cost. We need to invest ethically as well, this means fair fees we're charged by providers. It also means exiting dodge companies even if we think there is money to be made. We also need to focus on ESG (environmental, social and governance) issues. A very last point. Will Boeing survive? Of course. Will this hurt? Absolutely. Will it be a great investment going forward? No chance. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Greenest start to a year since the 1960's, Top40 is 6.9% up year-to-date. MultiChoice (JSE code: MCG) has unbundled out of Naspers (JSE code: NPN) with MultiChoice closing at R106 and Naspers off R125 on the back of Tencent weakness over night in Hong Kong. So no value unlock and with fair values for MutliChoice being between 8500c - R150. Most people I speak to say at current prices if you received MultiChoice shares you should hold them at this price. Also MultiChoice will remain in the Top40 index with Truworths (JSE code: TRU) exits Top40 Friday morning. Those saying MultiChoice is dead, well maybe in time. But nothing is that linear and be careful of taking a dislike for DStv pricing out on the share - they're different beasts. They could get bought by a telco (we're seeing that in the US), they could get the subscriber growth they're targeting in the rest of Africa, Showmax could take off of they could muddle along or they could go broke. Lots of options. Below are the index changes effective at open 1 March 2019. Top40; MCG stays TRU exits Indi25; MCG stays MTH exits Findi30; MCG stays NTC exits Shoprite* (JSE code: SHP) results were not as bad as I expected with operating margin down 1% at 4.4% but much better than I expected and still about twice that of Pick n Pay (JSE code: PIK). Lots went wrong, probably half managements fault (strikes and IT upgrade issues) and half just what happens some times (Angolan hyper inflation and zero food inflation). At current prices the stock is attractive. Interesting is that Wiesse wants to sell his voting control shares that have no economic rights but some 32.3% votes. They've been valued at some R4billion when Star listed but they're hard to value and I'll wait and see what the plan is here. Tomorrow, Friday 1 March, the annual tax-free limit resets. Find the JSE Power Hour video we did here. Great comparison between the locally listed global property ETFs from Sygnia and Core Shares. Up coming events; 7 March ~ JSE Power Hour: Finding value the Benjamin Graham way  * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Making the CSEW40 SMART The CoreShares Equal Weight Top40 ETF (JSE code: CSEW40) has long been a favourite of mine, but now CoreShares want to change the ETF to a multi factor ETF under the code SMART. Those factors are; Value (portfolios of cheap shares outperform portfolios of expensive shares) Momentum (portfolios of recent share winners continue to win in the near term) Size (portfolios of small companies outperform portfolios of large companies) e.g. Equal weight Quality (portfolios high quality shares outperform poor quality shares) Low Volatility (portfolios of low risk shares outperform high risk shares) I chatted to Chris Rule of CoreShares asking why the changes? What will the new methodology be and what's its attraction? Lastly how will the process work - including voting by existing holders of the ETF. I initially was too thrilled with the changes as I like the equal weight methodology. But one of the key points for me is how many stocks I effectively get exposure to and this is illustrated by the chart below. with a generic Top40 ETF 12 stocks drive returns. In an equal weight Top40 all 40 stocks drive returns. The new SMART ETF will see 41 out of the 52 stock driving the returns. So I end up with a wide diverse ETF which is exactly what I want. Kristia also wrote a blog post on the changes here. Contact Core Shares; [email protected] CoreShares.co.za Twitter.com/CoreShares eee Download the audio file here Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Eskom is "technically insolvent" and load shedding is back, why are we surprised? This was promised us when we had some in December. Bottom line it's a mess, costly to the economy and fixing Eskom is critical and very difficult. Watch the budget next week. EOH woes continue as the stock lost over 20% on Tuesday on the news that Microsoft had cancelled their partnership agreement. In a late SENS the company stated the revenue was not material, but investors have three questions they're asking themselves. 1// Can we trust EOH management ?? 2// How do you get a Microsoft partnership agreement cancelled ?? 3// Why is EOH management always so slow on shareholder communications ?? Curro (JSE code: COH) results are not bad, albeit HEPS +23% with a PE of some 40x is light and the stock is expensive. We are starting to see operational leverage as revenue is +19% and HEPS +23% and a 12c dividend. However debt has jumped almost 20%, but still manageable. Learner numbers increased 12% while Meridian has halved their losses. Woolies* (JSE code: WHL) lose two non-exec board members with immediate effect. Pushed or jumped? Likely the latter. Wilson Bayly (JSE code: WBO) has been one of the very few construction stocks holding it together, until now. A trading update suggests profits 80%-100% lower after making a mess of an Australian contract. Wild and tax-free. Upcoming events; Tax-free investing review, who ate the returns? * I hold ungeared positions. Managed funds Managed funds are when you hand over your hard earned money to a third party to invest or trade on your behalf, supposedly with great returns in offer. Sure it works with the right processes in place, but it mostly carries huge risk. Firstly let me state up front I have never heard of a FX or crypto managed fund making money. They've all been scams with the first indication is that you find them on Facebook offering huge returns. They have zero verifiable track record and zero regulation or audit processes. Most trading managed fund accounts also end in tears. So how do we find a managed fund? Well firstly a unit trust, hedge fund or ETF is a managed fund of sorts with tons or regulations protecting the investor. Why not use these? The issue is usually that we want a managed fund with grand returns, don't we all? But seriously, some questions to ask; Who are you registered with? FSCA as an absolute first port of call. Audited track record. Compliance and dispute process? Fees. Here things get tricky as there is likely a managed fund fee and performance fees. But also transaction fees that can be excessively high. Mandate. What are they transacting in and what are they trying to achieve? Income, growth, derivatives? Withdrawal process. The short answer is that if you want a managed fund, buy a collective investment scheme. No you won't get rich in a hurry, but you'll also likely not get ripped off either. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares A green January with financials the winners but 2019 is going to be a wild ride, especially in the lead up to the elections expected in May. Tax-free year end is end February, don't leave it for the last minute if you want money in this tax year ending 28 February. Budget on 20 February we'll see if we get any changes to the annual limits. Clover (JSE code: CLR) is delisting at 2500c. A great price considering it was around 1500c last year. I held this stock for a number fo years as I considered it to have great promise, but it never delivered on that promised so I exited. I have had some questions around two stocks I own, Santova* (JSE code: SNV) and Metro File (JSE code: MFL). Both are under share price pressure and both finding growth hard (latest results were OK, nothing special). The share price decline is a factor of liquidity and small stock sentiment. Right now if I was two sell my holdings in each the share price would fall about 10%, that is not normal. Add to that some large sellers (certainly in Metro File) and prices are under pressure. I am holding. Not selling as I happy with the companies nor buying because I don't see the prices rerating higher any time soon, if anything likely lower. More in the main body of the show. Wild and tax-free. Upcoming events Tax-free investing review, who ate the returns? * I hold ungeared positions. Where's the liquidity? In the past week I have seen three reports that all point to a drying up of liquidity on the JSE. Now sure some has likely moved to A2X, but not any significant amount. Bottom line liquidity has fallen fairly markedly and this has impacts, most notable on share price movements. So where has it gone? Simple, investors are scared. Scared of elections. Sacred of EWC. Scared of an under pressure consumer. Scared of trades wars. Scared of no returns. Sacred of their shadow? So they are buying less leaving us with fewer buyers and sellers have mostly exited sitting on the sidelines with their cash. This whole vanishing liquidity is markedly more acute in the mid and small cap space and it is hurting the stock prices. Even us small private investors hurt the stock as we exit and many are throwing in the towel and selling, pushing prices lower causing more to throw in the towel and sell. This is typical in late stage bear markets (late stage bull markets see extreme high levels of liquidity). So what do we do? Well we double our research and make sure we really do like the stock, and if we do - we hold. You can buy more but I think we're a long way from the end of the liquidity squeeze on the small and mid cap stocks. If you're wanting to buy into this low liquidity, be careful. Place bids in the market and wait to be hit, even cheeky bids lower down will potentially be hit. But don't expect liquidity to return tomorrow, it may - but it may take a while longer. Further bad news for holders of small stocks is that when liquidity returns it'll come into the large cap Top40 stocks first, then eventually filter down to the mid and small. Point is it will return one day, we just don't know which day. As an aside, this impacts JSE earnings as they make money from data, listings and trades. less trades is less income with a fair fixed cost base. Last important point. Liquidity is NOT an issue with Exchange Traded Funds (ETFs) as they have a market maker. The market maker is (supposed) to be consistently in the market either side of fair value with their bids and offers. So we can always get what we want at close to fair value. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Retailers, woe is worrid. Aside from Foschini (JSE code; TFG) and Lewis (JSE code: LEW) they have ranged from horrid to truly astoundingly horrid. Shoprite* (JSE code: SHP) has also put out a trading update to follow on from the so-so sales update and aside from some internal issues and Angolan hyperinflation the margins are also crumbling. EOH caught in a SENS from Eskom late on Monday, but took them until Wednesday morning to respond - simple too slow as the stock fell almost 15% on Tuesday. Ellies (JSE code: ELI) was a stock I was watching after they made almost 8c HEPS in the year ending April 2018. But now it seems they swung into a loss for the six months ending October and have a board that is falling apart. Taste (JSE code: TAS) announce they need some R580million and +5 years to at best reach break even? Minimalism: Can you eat it? The perks of being exactly average. Upcoming events Tax-free investing review, who ate the returns? * I hold ungeared positions. Where's Safcoin? So Safcoin finally started trading in December and I thought I'd send a series of follow up questions to the founder, NeilFerreira about how it's all going, promises he'd made and some odd things I was seeing on their trading platform. I sent the questions early Monday asking for reply by Wednesday 10am, and he hasn't responded? Find the questions I was asking this time here. They threatened to sue me here. They answered my first set of questions from August 2018 here. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares The rule of 72 (how long until your money doubles in value). Upcoming events Tax-free investing review, who ate the returns? Know your S12J Simon chats with Dino Zuccollo & Jonti Osher from Westbrooke Alternative Asset Management to really get to understand S12J.  The rules, risks, benefits, what to look out for and more. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Learn to love a lazy market Upcoming events Tax-free investing review, who ate the returns? 2019 predictions show Every year March Ashton, Keith McLachlan and Simon Brown do a predictions show. Three wild and wooly predictions for the markets followed by a call on the Top40 and ZAR. Every show starts with a review of the previous years predictions and you'll find them here. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares Somebody capitulated on Metrofile* (JSE code: MFL) this morning. The stocks hit 160c, then 239c and is now 1c up at 220c and I picked up a few on a DY of over 10%. Over R4million has traded so far, so decent volume for this stock. SENS just out is that Sabvest (JSE codes: SBV & SVN) picked up just under half of the volume at 200c - 235c. They already own just over 10%. Ascendis Health (JSE code: ASC) continues to plummet as directors continue to be forced sellers. Just messy. Position your portfolio for 2019. Next show, 17 January 2019. * I hold ungeared positions. End of year portfolio review What was the returns of your different portfolios for 2018? Across the different strategies (trading, equity, ETF etc.). Did you beat your benchmark over 1, 3 and 5 years? Here's how to work out your returns by unitising your portfolios. https://justonelap.com/tracking-performance-unitise-your-portfolio/ This is hugely important because if we're consistently losing against the benchmark frankly we should quit and just buy the benchmark. That said under performing over a year doesn't worry me, it's the three and five years that would worry me deeply. I haven't run my numbers yet, but pretty sure I am red for the year, not sure if I am below Top40 total return (my benchmark). But I have a good run in recent years beating the benchmark thanks to a diverse portfolio and 2018 has been a tough, very tough year. My ETF portfolio doesn't stress me, it only holds broad based ETFs (no niche or sub index ETFs) so it'll do just fine over the long-term. I also use his year end period to do a deep review of the stocks I hold. Naturally I am keeping on eye on results and news during the year. But year end I revisit my research and reasons for buying and check they're still in force and the stocks are the quality I'd hope they'd be when I bought them. This review is not about price so much, if the stock is quality in time the price will follow. What I also do is revisit my entry methodology for price. As I often mention the only thing we as investors really can control is the price we buy at, so we need to exercise that control. I use the 7 year average PE buying when forward PE is below. It is far from perfect but has served me well and kept me from buying over priced stocks, sometimes literally waiting for years and years before I will add a stock. Then of course sometimes it has me buying a stock that just keeps on falling (yes looking at you Woolies* and Famous Brands*). But mostly it keeps me out of over inflated stocks.  Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares Load shedding is back and reports are it's going to be around until maybe 2025 as Eskom needs R200billion. This hurts, we got our of recession yesterday with QonQ GDP growth at 2.2%, but we're going to struggle to grow without electricity. Importantly remember that the majority of the Top40 earnings are from outside of South Africa. So don't confuse the Top40 with the local economy. I missed the return of Pembury (JSE code: PEM) to trading on the JSE. A number of people have asked my view on the stock and it's a simple one. Avoid at all costs. They listed via attempted hype and management have only covered themselves in rubbish since then. Ideas are great but execution is what maters and this team can't execute (heck they can't even get results out in time). NaspersN (JSE code: NPN) results show Multi Choice is not the dead duck everybody claims. Sure some pressure on premium but they are growing subscribers across the continent and the listing next year will offer investors a great niche sector - buying of course is valuation dependent. Important lesson here is ignore the loud mouths on Twitter. Unpacking the Satrix INDI25 ETF, a monster long-term performer. Upcoming events 06 December ~ Position your portfolio for 2019 Everything is falling Over the weekend it looked like we may get trade peace in our time - but the market called Trumps bluff and sold off aggressively on Tuesday evening and we followed on Wednesday. US 10 year T-Bills, which is what I have been watching, also sold off to trade down at 2.92%. This confuses as I was watching this for the bear to start, but only at 3.5%. But it seems it couldn't wait. The trade war with China is hurting and while Trump is saying lots, the evidence on the ground does not support his Tweets and so markets are pricing in worsening trade wars. This will hurt the two largest global economies (USA and China) and the rest of us will suffer as a result. EMs may escape the worst of it, but we're not immune. At the end of the day I do expect some sort of trade peace. This is Trumps style, bully and berate before finally finding a deal (we saw this with NAFTA and Canada / Mexico). But it gets real messy until the final deal. So I expect weaker US markets into the new year, and frankly I expect the major indices to hit bear turf (20% off the highs). This is not a train smash and once the bear has been tagged markets will likely rally, helped with some trade peace. Locally we will not escape the turmoil but our market is much closer to bear turf having tagged it 24 October at 43,822 (Top40). S&P500 is bear at 2,352 (latest close 2,700) and Nasdaq 6,152 (latest close 6,795). So about another 10% down from here. FAANGs are already in bear market as I mentioned last week. This is not the end of the world, market go up and they go down. This sell off is not driven by a financial crisis as we saw in 2008/9, it is being driven by a bullying president and US markets that have gone without a bear in almost ten years (since lows of March 2009). Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares Taste (JSE code: TAS), nasty results and they're running out of money and still not profitable. I think a delisting is likely. Another Viceroy research report just landed, this time targeting NEPI Rockcastle (JSE code: NRP). The sock is off 14%. Most are decrying Viceroy, but Cy Jacobs, boss at 36One, Tweeted in support of the report. We are still in the process of analyzing the Viceroy Report on Nepi. Our initial view is that the report is compelling as the conclusions drawn appear to be justified. The report echos the concerns we had and continue to have about the entire Resilient Group. — Cy Jacobs (@Cy36ONE) November 28, 2018   Coronation (JSE code: CML) results assets under management (AUM) and hence profits and dividend slip slightly. But on a yield of some 9% and priced cheaper then in a decade relative to AUM - it looks cheap. Pepkor (JSE code: PPH) results. Actually forget the results. The company has been fined R5million (largest JSE fine ever) as they did not disclose in the listing docs that the company had essentially under written the directors share scheme that ended up costing shareholders some R500million. Microsoft (Nasdaq code: MSFT) briefly over takes Apple (Nasdaq code: AAPL) as worlds largest company but neither is trillion US$ as all the FAANG stocks are now in bear market - off 20% from highs. Apple now US$826billion. Upcoming events 06 December ~ Position your portfolio for 2019 Smashed coin Bitcoin / BTC is now trading around US$4,000 and the bubble I was calling it a year ago has popped, spectacularly. Last year I was attacked from all directions when I was calling BTC a bubble, most of it hate filled bile. But here's the thing, I may not be the expert in BTC, but I do know markets and have been around them for a while and seen many a bubble. BTC is just another thing being traded. No different from tulips, stocks or anything else. They ultimately all behave the same. Also being 80% off the highs doesn't mean it doesn't have more downside. I am short (since US$6,400-US$6,700) along side the two I hold in cold storage, and I am not closing my short. BTC and other crypto can go lower, a lot lower. It looks like, for now, it'll settle around the US$4,000 level, but my thinking is next leg will eventually be down. Many are telling me BTC can't go below US$1,000. Maybe, but I wouldn't bet on that. This was a massive bubble that expanded in double quick time and the deflating will takes ages and even ages more to recover. The Nasdaq took some 15 years to get back to the 2000 highs. I am also wondering if the whole idea of the blockchain being so awesome is perhaps a weak idea. We have no large scale real world examples of blockchain being used and the technology is now a decade old. The future for both is blurry at beast. I see the theory on Twitter now is that BTCers must knuckle down, develop technology (what tech I am not sure) and it'll be the next Amazon? And sure you can now pay company taxes in Ohio with BTC. Until, like many others who accepted BTC for a while, that idea gets pulled. BTC was always too volatile to be a used effectively as a method of payment, now even more so. The knuckle down and develop also makes no sense, most dot bomb stocks are no longer in existence. Being a first round technology is great, but that doesn't ensure survival. In fact most often first round tech dies as the future generations of the tech solve the problems that existed in the first generation. For BTC be very careful if buying - there is no rush and any bottom could be a way off. Whatever you do as always only use money you can afford to lose. If you're trading pick your platform very carefully as some may not survive. Haters can email me here or sub tweet me here. I also note that while Safcoin was supposed to launch last week Tuesday with an international (whatever that means) launch this weekend. After asking on Twitter why they haven't launched, they have replaced the entire website with a single page saying now the launch will be 13 December. Frankly even aside from my very strong misgivings I would not want to be launching a crypto currency in this environment. I also note that they're still adding tokens to the system, eight days after the supposed launch and the reason for the delay has been presented as they wanted a better withdrawal system. Colour me skeptical. My view on this crypto remains as it always has. Stay away. Subscriber to our feed here Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Invicta (JSE code: IVT) HEPS at 2c with the SARS fine costing 187c in HEPS. Wescoal (JSE code: WSL) results knocking it out of the park with a PE and DY both around 4. Yet market hates small caps, so great quality and amazing price- but when / why will it move higher? Start building your list of small caps you like and want to own. But don't start buying just yet, this may take years. The Fat Wallet five concepts that'll make you rich Unpacking the preference share ETF )PREFTX) Upcoming events 06 December ~ Position your portfolio for 2019 Subscriber to our feed here Subscribe or review us in iTunes Structured product ~ Euro Stoxx 50 Gary Booysen & Viv Govender - RandSwiss JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares Mid terms, Democrats sweep Congress while Republicans keep the Senate and now things get interesting. Markets will likely ignore this, remember the immediate sell off after Brexit and Trump victories and then the rally. But this removes Trump and the Republicans free hand on taxes etc. while also making it almost impossible to pass big laws as the two sides hate each other. Also Democrats in Congress are going to start digging into Trump from every direction. That said, markets will get over it as the US economy remains strong and profits continue higher. Importantly after the Smoot-Hawley Tariff Act** of the late 1920's trade was removed from Congress and given to the president. (**1928 the tariffs started on wool and sugar and ended up on over 800 products and was mentioned in the movie Ferris Bueller day off) The Fat Wallet Car edition Unpacking the Africa Palladium ETF OUTStanding money with Outvest: Dividends explained Upcoming events 08 November ~ Master Technical Analysis with Moxima Gama 06 December ~ Position your portfolio for 2019 Subscriber to our feed here Subscribe or review us in iTunes The art of losing money If you haven't yet experienced a truly massive loss in the market you're either exclusively in Exchange Traded Funds (ETFs), a newbie or lucky. Because one day it will, and I have spoken about panicking quick and selling dogs. This week the five stages of grief. But first the pain of losing is twice the joy of making. Compare being scammed out of ten bucks vs. finding ten rand on the pavement. You'll remember the former for days, ages afterwards. the latter you'll have forgotten before you even spend the money. The Kübler-Ross model of the five stages of grief. Yes this is around death, but it can work for any loss and so I am using it in terms of a large loss on the markets - typically in one stock (lots of recent examples here). The 5 stages are; denial, anger, bargaining, depression and acceptance. Denial. It's not happening. All will be fine. Fake news. Rotten governments. Nasty passive providers. Over reaction. The diagnosis is mistaken, and we cling to a false, preferable reality. Simple we put our head in the sand and pretend it's not happening. Anger. It seems real and now you're angry. A pile of your hard earned money is gone and somebody needs to be blamed. Never yourself, somebody else. Your broker, that expert on TV, the CEO, a politician. It's not fair. Stomp, stomp, stomp. Bargaining. Still trying to not blame yourself, you start to excuse your actions. How could you know? It will recover, the market has over reacted and things will improve. Everybody got duped. You're trying to excuse your actions, not so much the buying, but the not selling immediately the bad news broke. The news isn't really that bad and it'll recover eventually. Depression. This is bad, real bad and now you hate markets and are never watching BusinessDay TV ever again. Everything is corrupt and rotten. This 'thing' is rigged against the small guy. Acceptance. We all end up here eventually. Things happen, often bad things but this is a natural part of investing. At times we get it wrong, fraud happens, shares collapse. Now we can start looking at ways to prevent this happening again. What price do we pay (the only thing in investing we have control over). A diverse portfolio with lots of passive to reduce the impact of a single stock collapse. Recognise what stage you're at and importantly what can you control. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares Calgro M3* (JSE code: CGR) results a horror. Sure some is due to the new IFRS, but a lot else hurting them right now and I am selling my last remaining shares having sold the bulk in December 2015 at over 2000c. Santova* (JSE code: SNV) results show stronger Rand hurting, but also very tough trading condition locally. I am not selling here. Horror update from Shoprite* (JSE code: SHP). Some due to negative inflation on products, they say "11,607 items in September remaining cheaper than they were a year ago". That hurts as costs rising. But they also had issues in their Gauteng distribution centre that made for stock issues in stores. Famous Brands* (JSE code: FBR) are a two part story. GBK in the UK remains an absolute mess and they're trying to get reductions on leases, an I assume they tried to sell it and failed. Locally they doing alright considering very tough trading conditions. But that UK deal remains a disaster. Naspers (JSE code NPN) closed Tuesday at R2,370 and is now trading Wednesday up almost 8% at R2,555.00. This is in part thanks to Trump saying maybe they could be friends with China and that boosted Tencent. Also MSCI deciding to not make any major changes to index weighting’s with the plan being to reduce weight of stocks with low voting shares, such as Naspers share we trade on the JSE. Vivo (JSE code: VVO) trading update confirms that the Engen deal is done, albeit without the Democratic Republic of Congo assets. This expands them into eight new countries and adds 225 service stations. But Morocco remains an issue as we await the Kings announcement on regulating the fuel price. That are seeing margin pressure here and it is the biggest market for the company - so it's important and while I like the business I want this sorted first. IG CFD conversations; exposure and leverage explained  Understanding the NewFunds Momentum Equity ETF* OUTStanding money with Outvest: What you get when you save Upcoming events 01 November ~ JSE Power Hour: When does the bear market arrive?  08 November ~ Master Technical Analysis with Moxima Gama * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares More delistings. I write about this for next weeks FinWeek. But it is expected and does indicate we're at (or near) a bottom with quality at really cheap valuations. Top40 just holding above 45,000 making us literally a few hundred points away from an official bear market locally. El Niño likelihood now at 70%, bad for food producers and consumers. I have found a website that tracks the likelihood, it Australian but weather don't care for borders.  Saudi Arabia oil chief says OPEC in ‘produce as much as you can’ mode and Brent drops to $76 after peaking at $84 recently. Bad news for Sasol* (JSE code: SOL) but coupled with ZAR at R14.40 potentially good news for consumers. Long4Life* (JSE code: L4L) results, they have cash and cash equivalents of R1.05bn, about 115c a share. Still mostly the old Holdsport business at 60% of revenue and 64% trading profit. Nu-World (JSE code: NWL) results show HEPS +11.5% and dividend +11.9%. Really good results in a very tough economy (helped by a swing in currency translation gains of some R46million). One concern is a bank overdraft of R133million, up from R59million and I always ask why an overdraft and not a formal loan structure? The stock is on a PE of under 5x and a dividend yield of over 6%, staggeringly cheap, but this has always been the case with this stock and the question is what will trigger a rerating higher? MTBPS R27.4bn revenue shortfall for 2018, and a R85bn shortfall in revenue over the next three years. Treasury revised down its growth projection for 2018 from 1.5% to 0.7%, rising to 2.3% in 2021. Debt as a percentage of GDP will continue rising, reaching 59% at the end of 2022, from 50.7% in 2016/17. Three items – white bread flour, cake flour and sanitary pads will be zero VAT rated from next year. "Demolish the walls between public and private sectors." Privatisation? IG CFD conversations Investing in listed property Upcoming events 01 November ~ JSE Power Hour: When does the bear market arrive?  08 November ~ Master Technical Analysis with Moxima Gama * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Correlation is not causation Correlation is when two things are seemingly linked but more important is causation when they really are linked and one leads to another. As humans we live by the mantra of 'what causes what' and this remains very important to our species, but we get it wrong far to often. Some are simple and correct, increasing earnings from a company will in time result in a higher share price. But in the short term all sorts of issues are driving price that most often have nothing to do with the state of the company underlying that share price. Hence stocks get cheap and expensive creating opportunity for investors. But we need to be very careful of linking events that while they seem linked are not linked. A great website Spurious Correlations has many correlations that have no bearing on each other. One example is “people who drowned after falling out of a fishing boat” correlates 95.24% with “marriage rates in Kentucky”. Now nobody really believes that in this example one causes the other. We're constantly being bombarded with data and trying to figure out what drives that data and what impact it'll have. Part of the problem here is the 24 hour instant news agenda. Markets move and news needs a reason beyond buyers vs. sellers. So we find a reason, one that seems to fit but may very likely not be true. The point here is two fold; Understand our desire as humans to link one event to another (think of the things we 'see' in the clouds). More often then not the links that we take for granted are weak at best and more likely Spurious. Be very skeptical about supposedly causation. Interrogate the logic and confirm it for yourself, don't just trust what seems right. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. Simon Shares NO show next week (18 Oct 18), I am holidaying. Remember the chart of the Top40 I posted a few weeks back, showing the trading range? We broken the range again, but this time to the downside and we're not almost 15% off the November 2015 highs. Not the end of the world, yet. We do however need to bounce back into that range ASAP. There are now only 5 stocks with YTD gains within Top40: SOL 26%, AGL, 25%, BIL 23%, MND 11%, INL 5% — Andrew Todd (@andrewbtodd) October 10, 2018   Upcoming events 11 October ~ JSE Power Hour: Investing in listed property 18 October ~ JSE Power Hour: Maximising your tax-free investing  01 November ~ JSE Power Hour: When does the bear market arrive?  08 November ~ Mastering technical analysis  Subscriber to our feed here Subscribe or review us in iTunes Too small to matter Portfolio construction is way more than just deciding which stocks to buy or sell. It's also valuations, about asset classes and position sizes. The first question is how much of my portfolio should be passive, how much active (your own DIY investing or an active manager) and how much for trading? I always state that passive should be a minimum of 50%, this protects us from the follies of trying to beat the market either ourselves or with a supposed expert. The more we put towards passive the more certainty that we will at least match market return. Now sure we want to get rich quickly so we want to beat the market, trounce it. But the truth is that this is hard with the professional active industry seeing only some 15% of active managers beating our market. Once we know how much (if any) we're putting into active we need to decide how this will work? An active fund manger or DIY or combination of both? How will we select the active manager or fund and how will we measure (and potentially fire) them? What about trading? Geared, ungeared? Equity or indices or FX? Then we need to start deciding what shares we want to own. This process is slow, not only in the selection, but then also in the waiting for the prices that we want to buy at. What is also very important here is how much of the share we should be buying. Any share needs to have a chunky enough size to be material but not so large that it could be catastrophic. I hold 10-12 individual shares within the 40% of my portfolio that is set side for my own active management making each share around 4% of the overall portfolio. With growth some shares may in time become more chunky and then I stop buying and in time may even have to sell down the position to avoid being over exposed. I also need to monitor what's in my passive investments. For example Naspers (JSE code: NPN) is very large in Top40 ETF (except the equal weight ETF from CoreShares) so adding some active Naspers makes you likely over exposed to the stock. But there is another issue, position sizes so small as to be meaningless. I often see a stock sitting at under 1% of a portfolio. Now even if this stock doubles in value it'll only add 1% to the overall portfolio. Yet it is taking as much effort to select, research, read results, valuing and transact as a full size position. So same work but for less reward. These small positions are sometimes dogs that have collapsed and investor is unwilling to sell in the misguided belief that one day it will return to its glory (spoiler alert - it won't, Sell the dogs). But at other times they because of a lack of conviction. You want to own the stock, it seems hot and everybody is talking about it and you're afraid of missing out but you're also afraid of the risks. So you take a small insignificant stake to serve both fears. But investing is about conviction. Either like a stock and give it full weighting or don't buy it. No half measures. Another potential reason for the small fry is legacy. Every portfolio starts small and when starting out we often buy stocks that in years to come we'll look back and wonder why we ever bought them. Yet there they sit, small and insignificant. In all cases small fry must be dealt with. Either increase the position to a meaningful size (waiting for the right valuations) or sell it. Don't keep a stock that has no significance in your portfolio. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider. September was such a rough month that the best performing full equity fund in South Africa returned -0.4% for the month. Not a single full local equity fund was positive. Upcoming events 11 October ~ JSE Power Hour: Investing in listed property 18 October ~ JSE Power Hour: Maximising your tax-free investing  01 November ~ JSE Power Hour: When does the bear market arrive?  Small cap pain Small caps, we love them because when they get going - they go. Really go. Ten baggers are a dime a dozen when things are hot and markets are running. But right now - not so much (see chart below) and here's why. Subscriber to our feed here Subscribe or review us in iTunes Firstly small caps are typically very SA Inc focused due to their smallness. Now this is not 100% true as there are stocks with offshore exposure, but generally the statement holds. That being said the economy is struggling, recession, VAT increases, petrol prices etc. are all putting the kosh on the economy and hence SA Inc and smaller stocks. The bad news is that I don't expect this to change any time soon. Make no mistake there are a bunch of high quality small caps at very attractive valuations. Companies that are not going to go bust and in many cases continue to make profits even in these tough times. The problem is that the same can be said of the large Top40 stocks. Sure some dogs in this index, but equally some really great companies at attractive valuations. Forward PE on the Top40 is 13x, cheapest I have seen it in a decade. Yet the selling continues. Further before small caps start to run I'd expect the larger Top40 stocks to run hard, become expensive and then investors start hunting down the list and buying the small cap stocks. So with the large stocks not running we have little chance that small caps will start to run. I hold a few small (and mid) cap stocks, and I continue to hold but I am not running in and buying, even at these levels. I have enough and I don't see them recovering any time soon. [caption id="attachment_8634" align="aligncenter" width="1080"] MidCap weekly close 03Oct18[/caption] JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.    

Simon Shares This JSE Direct is proudly brought to you by IG, the specialists in CFD trading and a registered financial services provider.’ Alexander Forbes (JSE code: AFH) fires their CEO with zero f***s given. Nigeria making nice to MTN (JSE code: MTN) and Standard Bank (JSE code: SBK). Choppies (JSE code: CHP) snuck a late Friday SENS into the market stating that results would be late (again) and profits at least 20% lower (but no hard details as how much). No surprises that the market did not like and the stock got punished when we opened on Tuesday trading down at 25c. I never liked the stock and have repeatedly suggested investors stay away. Capitec* (JSE code: CPI) results were once again stellar with HEPS +20% and cost-to-income at 38%. The cost-to-income is edging higher, as expected, and was 36% last year. Likely will settle in the mid 40s. Active clients is now 10.5million. Top Broker awards were held on Tuesday evening. In the main category the winner was Standard Bank followed by Rand Swiss and ABSA. All the results will be in this weeks Financial Mail supplement, Investors Monthly. Friday is month and quarter end, so we may see some stock price ramping to make returns look prettier. But it has been a tough quarter for local investors. Wealthy Maths: Calculating cost per use OUTStanding money with Outvest: Long-term saving goals. Upcoming events 11 October ~ JSE Power Hour: Investing in listed property 18 October ~ JSE Power Hour: Maximising your tax-free investing  01 November ~ JSE Power Hour: When does the bear market arrive?  * I hold ungeared positions. Subscriber to our feed here Subscribe or review us in iTunes Are you buying? I post a lot on Twitter, probably too much. Much of it is not opinion, they're just interesting charts or stats, especially of collapsing stocks (not many flying to the moon these days). Almost every time I Tweet about a collapsing stock somebody asks "are you buying?". And the answer is pretty much always no. The one theory is that at the right price any stock is attractive - so a collapsing price may well make an unloved stock worth buying. But I do not agree with that sentiment at all. I only want to own quality, no dogs in my portfolio. So for me it doesn't matter what the price is - I want nothing to do with the stock, in fact I want nothing to do with the vast majority of stocks on the JSE for one reason or another. There are of course exceptions. The few stocks that I do love and will buy more of if the price were to collapse, but that list is small - around twelve at most. There is another point here, FOMO, I have covered this before. The belief is often that a 'great' collapsing stock will rebound with vigour and those 'lucky' enough to have bough at the bottom will find themselves instantly rich. But this seldom happens. Most collapsed stocks remain collapsed for a long time - if not forever. So follow me on Twitter, enjoy the charts and other stuff I post. But don't ask me if I am buying. Likely if I am, I will mention it in the Tweet or you can check my portfolio here. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares CPI 4.9% vs 5.2%, rates on hold? Naspers (JSE code: NPN) unbundling Multichoice. About R5.5billion profit so market cap some R55billion on 10x PE. That puts them into the Top40. The theory that Multichoice is dead is very misplaced. Aspen (JSE code: APN) gives another update to the market trying to help investors make sense of their results, and the stock is off +9% at just over R170. JSE is looking for feedback "In response to a range of corporate scandals, speculation and innuendo that have characterised South African financial markets over the past year". Details here  Cash Club: Start where you are Upcoming events 11 October ~ JSE Power Hour: Investing in listed property  Subscriber to our feed here Subscribe or review us in iTunes Managing fallen angels Those once unstoppable high flying stocks that have come back to earth with a thud, now what? We have a lot in our market right now; Aspen (JSE code: APN), Steinhoff (JSE code: SNH), MTN (JSE code: MTN), EOH (JSE code: EOH) and many more. Firstly understand the difference between cyclical and non-cyclical stocks. The former is resources, construction - those sectors that will always experience boom and bust and here we should really be long-term trading them rather then bottom draw investing in them. Secondly is to be careful when buying our high flying, unstoppable non-cyclical stocks. I may love a stock but if it's above my idea of a fair rice I simple won't pay the price. I wait, sometimes waiting years, for prices to be at my levels and then I'll buy. Sometimes like with Richemont* (JSE code: CFR) this works well when I was buying in the 80's some two years back. Other times like Woolies* (JSE code: CFR) I was buying from around 8850c all the way down to 6250c odd and then I stopped as I had full weighting and yet the stock went still lower. So manage the price you pay, you do not want to be the person who paid +R440 for Aspen and if you were ideally you want that to be one of many price points you paid with an overall much lower average price. But that all said these unstoppable angels do sometimes fall from grace, so lets delve into that. The first question is if this is naked fraud or horrid business that we (the market) had missed. With Steinhoff the answer was an easy yes to fraud. With MTN the answer is more complicated but my view at the time of the first Nigerian issues was that this was a massive failure on the part of management and that markedly changed the investment case - so I exited. Woolies the issue is over paying for David Jones and again messing up on women's fashion. Both repairable and not likely to be terminally damaging, albeit most definitely expensive. But what of Aspen? I think that the stock had got well ahead of itself with a PE of almost 40x just two years ago, wildly expensive but supposedly justified by HEPS growth that was around 30% a year. However nothing grows at 30% a year and this is the error I think the market has made. Aspen is maturing, all successful companies mature and when they do they rerate in terms of valuations (PE) but with Aspen the market seems to have been caught by surprise. So in short; Cyclical stocks are for trading. Buying price is very important. Don't overpay and ultimately stagger buying over many years (decades) to ensure a decent average price. Also stagger buying across many stocks, you don't want all your investment concentrated in a few stocks or sectors. Ask if this is as a result of a management error that is not terminal? If yes stay the course and maybe use the sell off to pick up some more - but again be carefull of being way over weight a single stock. Ask yourself if the fall off just a rerating / maturing of the business or as a result of real damage to the company (fraud, horrid management, etc.). Go back and check you initial notes from when you first bought the stock. What's changed and does that change make for a better (albeit different) investment or worse? Lastly, never just shrug and say "how much worse can it get?". It can get a lot worse, Steinhoff offered a +2000c exit last December when the news broke. Now it sub 300c. Last last point. Within a diverse portfolio not everything is always going up - unless it's a stonking bull market. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Metrofile* (JSE code: MFL) results were a mixed bag with the reduced dividend expected but they are essentially going to almost halve the cover ratio over two years and that is more aggressive than expected. Growth was modest, but the results commentary was even ore modest. Two analysts I know spoke to management and both came away very confident of the stock and its prospects. A lot of talk is about the move to digital and the cloud and firstly Metrofile is well positioned there and secondly I have been hearing about paperless office for over 30 years. ADvTech* (JSE code: ADH) purchase of Monash University looks great but expensive. On a PE of around 39x that is chunky. However will be able to remove a fair bit of costs plugging central services into existing infrastructure the company has. It also gives them degree levels offerings which is a great step and so while not cheap I like the deal. * I hold ungeared positions. Practical trading setups and rules with Petri Redelinghuys Understanding MAPPS growth ETF Moving your RA Subscriber to our feed here Subscribe or review us in iTunes Shares or cash for dividend? Often a company will offer you shares instead of receiving a cash dividend. Assuming you still like the stock (if you don't, then why haven't you sold it?) I always take the shares. The exception could be if I think valuations are crazy and there are other stocks with much better valuations to buy. Then I'll take the cash. By taking shares you save on brokerage, likely very saving but further often times a dividend is not enough to actually reinvest economically. My brokers minimum of R100 brokerage for a trade at 0.5% means that I need to do a R20k trade to get an effective 0.5% brokerage. Sure I can save up the dividends or add them to other cash I may have in the account - but taking the shares is easy and brokerage free. For tax purposes the free shares reduces your base cost price as the new shares come in at zero cost, so you have same total base cost but extra shares effectively meaning average purchase price is now lower. When you sell this new lower base cost will be used for tax purposes. However you'll save a little on tax as DWT is 20% (this is what you would have paid on the dividend) and maximin CGT is 18%. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares MTN (JSE code: MTN). Woe is MTN, another $2billion for tax evasion. Is it a shake down? Maybe, maybe not. Truthfully we have no idea and it does cover the same period (2007-2015) of their previous Nigerian fine. I long ago sold my MTN shares and no interest in buying more. Steinhoff (JSE code: SNH) ex directors Jooste and La Grange have now both appeared before parliament and both blame everybody but themselves. Nice break out last week on the Top40, and then the retest and now we're back inside the range of 49-52k trading at 51,000 with ZAR at 15.46. Sure some if this is general EM issues but GDP data from Tuesday showing us in a recession is weighting heavy on markets. Where to next? Well let's see if 49k holds. Lots of talk about another drought locally in 2019, experts saying about 60% chance. Going to be rough, especially on food producer stocks (growing and makers). Practical trading setups and rules Tax Tuesday: Medical aid tax deductions OUTstanding money: The inflation monster Upcoming events 06 September ~ JSE Power Hour: Structuring your investment portfolio Subscriber to our feed here Subscribe or review us in iTunes NAV, value or trap? A listener asked about net asset value (NAV). Often when watching I hear a lot of market analyst talk about discounts to Assets, sometimes they say its bad sometimes they say its good. What does it actually mean when they say a share is trading at a discount to its assets or NAV, how is it calculated and is it good or bad? NAV is the break up value of a company. If all assets were turned into cash and all liabilities paid off, what's left? Divided by the number of shares is NAV per share and sometimes called book value. We then relate the NAV or book to the share price and get a ratio between price and NAV often called the price to book (P/B) ratio. Also note the difference between tangible NAV which excludes intangible assets such as brand value and good will. I prefer tangible NAV. As a rule a share trades at a premium to NAV as you're not buying the break up value of a company but the future earnings and cash flow. Different industries will have different premium, banks typically max out at around 2x while retailers at times 3-4x and miners anywhere from below 1 to 10x. A valuation strategy is to consider stocks cheap when their NAV premium is lower than typical for that particular stock and lower than industry peers. Sasfin (JSE code: SFN) is a case in point. NAV is around 4400c and the longer term average is some 1.5x, so seems like a steal. Except the stock has now fallen to around 3400c! Another strategy is to buy below NAV, essentially you're getting future earnings and cash flow for free. But is this value or value trap? Argent (JSE code: ART) has traded at around 50% below NAV forever and a day while The Don Group (now delisted) was at a chunky discount to NAV but that NAV kept melting away and the stock price kept on falling. So a useful indicator but as always needs to be more than just one piece of data when buying a stock. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

The SAFcoin saga continues (my initial stay story here and the follow up with legal threats here), I hope this will be the last. Neil Ferreira finally offered to answer my concerns and I sent him a list of 43 questions Sunday afternoon and he returned them on Wednesday, you can find the questions and answers here. The tl;dr version; While SAFcoin did answer a lot of my questions and clear up some issues the key issues remain. So I continue to warn people to stay away. PTXTEN, been a rough, very rough, period for this ETF. Upcoming events 30 August ~ JSE Power Hour: Practical trading setups and rules 06 September ~ JSE Power Hour: Structuring your investment portfolio Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Safcoin finally responded to my caution around their ‘coin’ with a lawyer’s letter. You can read our response and see the letter here. One possible correction is the source of the coins. I stated that Neil Ferreira had created them via cryptocoincreator.com and he Tweeted me a link to Etherscan.io for Safcoin. Not sure if that means it wasn’t created by cryptocoincreator.com but the new information does suggest there are NOT 222billion coins in supply. The Etherscan.io link shows 10million coins total supply rather than the 5million the website has been promoting, but I see Neil Ferreira updated his white paper on the day of my initial podcast to reflect this new 10million coins in supply (as well as a number of other changes to the white paper). @SimonPB Here is a link for further assurance that we are deploying all token transactions to the Ethereum block and by the time of launch all token purchases will correspond to the token tracker https://t.co/Kg2mRKFOYz— SAFCOIN (@SAFCOIN1) August 3, 2018 Shoprite* (JSE code: SHP) results show a very tough environment hurt by a number of issues. One of these issues is low or negative product which hurts as base costs rise faster than products squeezing margins. But on that point the operating margin remained at 5.5%. The market is hating the CellC and Blue Label (JSE code: BLU) results and the stock is off 8% on Tuesday and another 10% today (Wednesday). Many are saying that it is over done with some 120c of core HEPS making for a PE of around 5x. Maybe it is a bargain but we have also seen bargains become even more so and eventually go bust and CellC certainly wants lots more cash. For me, I do not like telco’s so am not interested either way. Is Famous Brands* (JSE code: FBR) looking to exit their Gourmet Burger Kitchen misadventure in the UK? A SENS last week certainly seemed to indicate it and after promising to turn things around a trading update last week suggests it is still losing some R1.5millon a week. Exiting a bad investment is certainly something I support, but I also support people taking responsibility and the current CEO could claim he wasn’t he boss when this was done – but he was still a senior exec as COO. So any heads to roll? Truth is it is tricky because then a company may lose one or more high quality senior execs if we roll heads every time something goes wrong. But are they quality if they can err this large? Are there surely not other of equal quality who can replace them? Or is this a one off and something we should forgive them for? Truthfully it is a tricky question, but it needs to be transparently dealt with, not just swept under the carpet. S&P500 has hit it’s longest bull market ever. 3,453 days without a 20% correction (since March 9 2009). Understanding the SYGWD – a locally listed ETF making serious returns as apposed to our market. Upcoming events 23 August ~ JSE Power Hour: Three Ramaphosa Rally Recovery Stocks 30 August ~ JSE Power Hour: Practical trading setups and rules 06 September ~ JSE Power Hour: Structuring your investment portfolio * I hold ungeared positions. Alternative investments We’re getting a lot of questions about the Fed Group impact farming offering as well as buying cows as alternative forms of investments. The questions are always if this is a good idea and my answer is generally – why? I think there perhaps are two main reasons. Firstly, novelty. Who doesn’t want to own a hive of bees or a slice of a cow (not to be confused with a steak – that you eat). Second is that the local market has delivered zero returns over the last many years so we seek out other ways to generate returns. Now sure, but the real point is where do these sort of investments fit because make no mistake they are alternative investments, or as Kristia would say on The Fat Wallet Show, stuff you buy with your FU money. Alternative investments is that small section of your portfolio (5%? maybe 10% if you wanna be wild) that are outside of traditional investments such as we buy on stock exchanges. In the olden days you’d by gold, carpets, art or wine. Heck for a while in the 80’s it was all about buying shipping containers. These days it seems to all be about crypto currencies and now bees. The theory here is that as alternative investments they are not correlated to normal investments so may survive crashes better. But in truth they often crash as much (if not more) as a crash reduces liquidity so the alternatives get sold as people need cash and alternatives being typically less liquid can crash harder. It is also important to understand the risks here. The biggest risk is the newness. These may be backed by real institutions but this is totally new territory for everybody and we’re simple not sure how they end up turning out. Further we get all sorts of regulatory protection from listed assets and lastly we are simple not experts on these alternative investments so we have to rely on other ‘experts’ for guidance. As a last point the issuers of these alternative investments make reference to potential returns, but as always there are no guarantees on the returns at all. What happens if somebody else eats your cow or the bees fly away? Personally I have no alternative investments. I don’t see how they’ll improve my portfolio and they add risks I am not an expert on. Arrested Development is starting a Bee business. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares ZAR almost 15.50 early Monday morning on Lira rout. Improve to around 14.10 but now back at 14.60. Chart of the Top40 shows our market been moving sideways since February between 49,000 and 52,000. fairly small range that has made ALSI futures trend trading hard, very hard. [caption id="attachment_8270" align="aligncenter" width="1080"] Top40 going nowhere for last six months[/caption]Tencent (Hong Kong code: 0700) results saw revenue growing ahead of expectations up 39% but profit only up 25% (YoY figures for half year) and Naspers (JSE code: NPN) is off 6.5% (after being down some 10%) and Top40 -2.7%.  Esor (JSE code: ESR) goes into business rescue, so now we have two construction stocks in business rescue (Basil Read the other) with some looking very vulnerable and a number of others already gone. This sector remains a horror story. Pembury (JSE code: PEM) finally issue a trading update, months late, and it is a horror show. Stay away, well when it is unsuspended, stay away. Upcoming events 23 August ~ JSE Power Hour: Three Ramaphosa Rally Recovery Stocks 30 August ~ JSE Power Hour: Practical trading setups and rules 06 September ~ JSE Power Hour: Structuring your investment portfolio When to buy more What are some triggers to buy more of a stock? And how often? I am finding this hard especially once a stock has run a bit. — Daniele Ferreira (@daniele_xyz) August 9, 2018   I run a few portfolios. ETF only, I buy monthly and every March I full up my tax-free and buy in one block. No timing considered. Lazy ETF, weekly charts trading ETFs using technical analysis. Sign up here. Long-term till death do us part portfolio. I use historic PE over last seven years buying when forward PE is below seven year average PE. Details here. Second tier portfolio. This is designed for small and mid cap stocks and this is where I want to focus today. Firstly I find the stock. Quality is important as is growth prospects and I am not looking for 'hot' stocks or sectors. Boring with great potential and low current valuations with a potential holding period of a year to a decade. Using Santova* (JSE code: SNV) as my example. Non-asset based logistics company with their own software based in Durban. Always been very well run as witnessed by results and strong steady growth, both organic and by acquisition. When I fist found it the stock was trading on a PE of around 5x with HEPS for the latest financial year being around 18c (price was 90c) and dividend of 2.5c. I ask myself how easy to double that HEPS in 3-5 years? That requires growth in HEPS of some 15%-25% growth a year. For Santova, very easy. Then I ask what a fair PE should be for this sort of stock? In the case of a logistics company I feel around 13x is fair with wild being 20x. So if HEPS doubles (share price doubles) and PE moves to 13x from current 5x share price goes up another 160%. This takes a 90c stock to around 335c in 3-5 years. Maths all adds up and I buy and wait. Often a very long wait hence I like a dividend to pay me while waiting. HEPS growth comes in and slowly the PE starts to improve and HEPS is 44c for 2018 financial year while PE is now 9.7x and share price is 435c. Do I add more? Well I do the same math again. Can earnings double in next 3-5 years (I think it can, meaning HEPS of 90c). Has PE got space to expand? Yes I still think a 13x PE is fair which targets a share price of some 1170c. Now a few extra thoughts. Firstly a fair PE here is 13x, but a wildly crazy PE is possible and could be 20x (50% of fair target PE). That would add another 50% potential price growth (share then 1755c). But I would only be adding to the position with the current PE well below the fair target (13x) in this case, ideally current PE at least a third below my fair PE, so around 9x. As important is the question about the actual business. Has it delivered? Does it continue to offer great promise? In other words, does the story from when I initially entered remain in force? As the story and price continue to keep playing out I keep on holding and adding. A last point. What will trigger the stock to move and rerate higher? Sure HEPS increases helps but the PE can stay stuck forever and I need both HEPS and PE to increase. hence I especially like stocks that pay a dividend as this pays me while holding and waiting. * I hold ungeared positions. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares Fidelity in the US is no offering two of its index funds at zero fee. They do this partly perhaps as a loss leader but also they can generate revenue via script lending. I think we'll see negative fee funds (they'll pay you to hold) in time and even locally in South Africa zero fee funds are possible in time. Local July tractor sales came in at 525 units vs. 508 in July 2017. MTN (JSE code: MTN) results looked bleak. Even if you add all the 'one off issues' back into HEPS it's only 280c. As Ian Stiglingh pointed out on Twitter, we knew it would be a large miss as expectations (consensus) was for a large increase in HEPS and anything above 20% requires a trading update. So no update meant a miss. Apple (NYSE code: AAPL) is now worth $1trillion having listed in 1980 with a $1billion valuation and since then done almost 20% a year annualised return excluding dividends. On a PE of some 18x it is not even expensive compared to others such as Amazon on a PE some 5 times higher. I know Apples and Amazons, not really comparable and Apple has had it's ups and downs along the way. Wealth for three generations in one tax-free account 23 August ~ JSE Power Hour: Three Ramaphosa Rally Recovery Stocks 30 August ~ JSE Power Hour: Practical trading setups and rules 06 September ~ JSE Power Hour: Structuring your investment portfolio Is it a buy? No it is not. I have been asking and been asked this question for twenty-three years. Way back in the late 90's whenever somebody mentioned a stock on IRC or the email / user groups I belonged to I would ask if it was a buy. Mostly the answer was no, but even when it was yes - I never bought. So I totally understand the question. These days when I Tweet about a stock I get the question and my answer is at best no. Even if it is a stock I am buying my answer would be "I am buying" (and my portfolio is online here). But that does not mean anybody else should be buying. Here's why even shares I am buying are not always for anybody else. What's my risk profile compared to yours? What's my overall portfolio construct compared to yours? Our respective ages and so the list goes on. What's my expectation and valuation compared to yours? But I understand where the question comes from, heck I have asked it often enough of people. The market is frankly large, scary and unknown for everybody, especially a newbie. As a newbie we want some certainty and the 'experts' can in theory give us that certainty. Unless of course it is all those experts telling you to buy Steinhoff before the fraud news broke out into the open, and even then many rated it a buy stating that the assets were worth at least 2500c a share. An important point here, just because a stock has fallen does not mean it is a buy. Again witness Steinhoff. But even with MTN. I don't like the sector or the stock regardless of price, so for me it is never a buy. Of course I could be wrong about the sector and the stock - that's what makes a market, different views. Of course even if the 'expert' says yes buy it, one doesn't rush out and buy because we discover that that does not reduce the fear, the fear of losing money. So here's how to get in as a newbie. Firstly get your tax-free account going. Buy some Exchange Traded Funds (ETFs) and forget about them. Then get some free cash for buying individual shares. Decide on sectors you think will be good investments and start digging around the shares in those sectors. Then when somebody says a stock is great (be it David Shapiro on BusinessDay TV, me on Twitter or whoever), you don't buy, but rather you use this as a trigger to do deeper research into that stock. You're still not buying, but you're learning and you're also building a list of shares worth keeping an eye on. You're tracking their prices and their results - all the while your tax-free portfolio is working away in the background. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares Jacques Magliolo and Business Consultants International (BCI). Two people have recently emailed me about this gent and his company specifically about the FSB warning against him and the company in September 2017. One emailer has already lost money the other wanted to know if he should worry about this as he wanted to invest money. Simple answer is always do a Google search before invest and if you find a FSB (or FSCA as they're now called), be very worried and run away.  Last week I warned to stay away from Safcoin and offered them the right to reply. I have heard nothing back from them so I assume they happy with what I said? Further Twitter has dug up a lot more making the whole Safcoin even more dodge. Lots of panic about the Tuesday evening statement from President Ramaphosa regarding land restitution without compensation. My advice (and this always holds true). Before checking the screaming Twitter and media headlines read the actual statement and while you're at it also read the ANC statement from the 2017 elective conference at Nasrec. I am getting a lot of questions about impact farming from, specifically the offering from the Fed Group. A few questions in return. Counter party risk is likely very low here, the Fed Group are legit but that doesn't mean the impact can't go bust - just that Fed Group unlikely to run away with your money. Bigger question is why do you want to start investing in alternative investments? The returns are more or less in line with long term JSE returns, but they have to be at a higher risk (less over sight, niche, new etc.). At best this really is for your FU money that you would otherwise use to invest into Whisky and then drink one dark night. Ellies (JSE code: ELI) results show HEPS of some 8c while price is 32c - a historic PE of 4x. They looking good but aren't totally out of the woods and this is a risky punt. Wealthy Maths: How to calculate VAT The Fat Wallet Show - How to buy a house Upcoming events 23 August ~ JSE Power Hour: Three Ramaphosa Rally Recovery Stocks 30 August ~ JSE Power Hour: Practical trading setups and rules Keep winners. Sell losers From time to time people ask me about their portfolio. In all cases they wanted to sell their winners and keep the losers. I've been there. In the late 90's I was off on a holiday and needing some money figured I'd sell one of the two warrants I held. One was a winner and the other a loser, so I sold the winner. The emotional reason was simple. Sell the winner to lock in the emotional thrill of a winner and keep the loser in the hope it'll become a winner and I won't have to have the emotional hit of a loser. Of course this logic was kinda like marrying your ex. The wining position is what we should be keeping. It is winning which means we're on the right track and the loser is showing us we're wrong and we should get off that track. My trick for selling losers is simple. Sell it, delete it off your watch list and never look at it again. Go so far that if I am talking about it here, jump ahead. If BusinessDay TV talks about it, mute the sound for a few minutes. Just get it out of your life. This we we have no FOMO. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares Steinhoff (JSE code: SNH) almost 400c then under 200c. If you're in SNH understand you are trading it, this is not a recovery story. Nothing wrong with trading but rule 1 is stop loss and rule 2 is profit. Don't forget either. Blue Label (JSE code: BLU) back below 900c. I have no idea what the story is here regarding the collapsed share price and neither does anybody I speak to. Results due late August and a trading update in the next week or two. Best is to wait for clarity from the results. Kumba (JSE code: KIO) results show what happens when everything comes together for a single commodity stock - cash flow galore and dividends. They're paying 1451c for the first six months. Sabvest N (JSE code: SVN) is doing a book build for two of their larger investors who want to exit. They are a holding company and the price is a discount to net asset value (NAV) of about 36% when a typical discount would be 15%-20%. This book build should improve liquidity and ideally help close the discount gap, but first have a look at their underlying companies they hold because while a steep discount is nice, they holdings are ultimately what you are buying. OUTStanding Money: Why do I want money? Investing in BBBEE schemes. Upcoming events 23 August ~ JSE Power Hour: Three Ramaphosa Rally Recovery Stocks  30 August ~ JSE Power Hour: Practical trading setups and rules  Safcoin - stay away I first saw them on my Google news feed, a promoted story on IOL. Safcoin, not illegal but going to end in tears. That I guarantee. They're pre-selling 500,000 in an ICO at R70, then there are another 5million. In short the market will be flooded with these coins that have no use and sellers will drive the price to zero. Stay away. Read their white paper and then compare it to the white paper for Ripple or Ethereum. This white paper is just marketing material. Where does the money from the ICO go? A white paper should detail expenses etc. With Safcoin we can only assume that the R35million (500k coins at R70) goes to the founder (Neil Ferreira). What of the other 5million coins? Who holds them? Again I assume Neil Ferreira. What I also don't know is are the initial 500k ICO coins included in the 5million or added on top? How do I mine them? Who is the team behind Safcoin? On Twitter Neil Ferreira said they had a team of 12, but no mention of who this team is and typically one trumpets your team for their expertise. Who are the auditors? On Twitter Neil Ferreira said they were SmartDec Moscow Russia but we have no confirmation of this, have asked them on Twitter, as yet no reply. Coin limit is apparently 5.5million, but when you check the website he used to create them (yip not their own code even though they claim 12 people involved) it says 222billion coins. That's about US$1trillion! Heck out government should start a coin and clear our national debt. Ask you self what problem does this new coin solve? If it is not solving a problem then why will anybody want to buy it? No buyers equals over supply and price crash. Consider the fact that over half of new ICOs fail, and this is a conservative estimate. I have seen stats that suggest less than 10% of ICOs ever get to market. Scams, Scoundrels And Multimillion-Dollar Frauds: How To Check An ICO Isn't A Con They mention they will list on local exchanges. Which? Smarter people then me asked on twitter (with no answers); What mining algorithm does your blockchain use? What is the consensus algorithm used by the project and how was it picked? Where do the tokens fall on the Howey Test? You get paid a 5% referral fee if you send people. Referrals always bother me, they smack of pyramid schemes. As I said up front, not illegal. But before you rush off with your hard earned money, do some homework and 5 minutes on this coins offering and it is not going to make anybody a single cent - except for Neil Ferreira. On listing Neil Ferreira could use his income from ICO sales to be an active buyer pushing the price higher, but this never works for long as eventually one runs out of money and real demand reverts to what it really is - and here it likely is zero. I could go on and on with the issues about this new coin. Short version remains - stay away. Another local crypto scam, this time called Safcoin / 500k offered at R70 = R35m (nice work if you can get it) / After ICO 5m will flood market / No details on how I can mine / Paying referrals (always dodge) / Lots of paid copy (such as link below)https://t.co/PqoZyHyIsq — Simon Brown (@SimonPB) July 24, 2018   JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares I was at the Mandela Lecture on Tuesday at which Barack Obama spoke. A special day. A truly talented orator and a speech well worth watching. Famous Brands* (JSE code: FBR) CFO quits. Now directors are always quitting, but the CFO when you have indigestion from a over priced UK burger? JSE (JSE code: JSE) trading update is strong. HEPS to be 30%-40% higher. In part thanks to a tax credit, retrenchments from last year kicking in the savings but also they say increased revenue. Rand slowly moving stronger. According to the big mac index, it should be R5.63/US$!  A listener asked abut Group 5 (JSE code: GRF). A nasty chart and this after a R1.6bn offer by Greenbay (JSE code: GRP) for their European Toll assets they now have a market cap of some R120million. This suggests the rest of the group is totally bankrupt, which it may be and while it appears to offer great value, this is a globally tough sector I continue to stay well away from. Platinum around $820, lowest price since the post bubble crash in 2008 and before that 2004. Wayne McCurrie says on Twitter there is also the biggest net short position since 1999. This is a horror for the miners and another sector to stay well away from until we see some decent upside price action. Not just a few $ higher, a real sustained looking rally. Cash Club: Forget about the Joneses Make habits not goals We tend to focus on goals. I want to be a millionaire, a billionaire. I want to be a successful trader. I want to invest like Buffett and so on. But we do it wrong forgetting the steps to reaching the goal. These steps are the habits that ensure success. If your goal is to run a marathon, you don't start off one cold morning at the start line for a 42.2km run. You start with getting off your couch and trying a small walk to the other couch. Then maybe a short jog to the bottle store for supplies and so on until one day you do complete a full marathon. The large scary goals are seldom achieved because they are mono focused and overly large. So large in fact that we forget that a goal is actually a series of small steps that taken together get us through the journey. So instead of large scary goals, focus on forming habits. Winning habits that will help us reach the end. Habits that in time will become second nature to us. Focus on the small steps. Improve them. Review your trading and investing, where are you make mistakes? How do you improve and stop the mistakes? Focus on single issues that are holding you back and find ways for you to do them better. Focus on one or two small things until you're a master, then move onto the next one or two areas. You'll never run out of things to improve and you'll always be getting better. Do perfect trades. Become ruthless with stop losses. Only buy quality. And so on. Identify your problems and work to fix them. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited

Download the audio file here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes Simon Shares JSE Direct is ten years old. Started 8 July 2008 on Classic FM. Aton out smartens Aveng (JSE code: AEG) and Murray and Roberts (JSE code: MUR) with a 25.4% in Aveng that can effectively block any special resolutions such as a take over. Alternative if the deal between MUR and AEG goes ahead, Aton will get MUR shares as a AEG shareholder which should ensure they end up with 50% +1 and in complete control at MUR. Torre (JSE code: TOR) is maybe delisting. There will be a shareholder vote and if it passes you'll either get the money or remain a shareholder but in an unlisted company. The later is a horrid idea as liquidity and price discovery is typically zero. I Also think we'll likely see more small cap stocks delisting. What can you do? Vote. There will be a vote by shareholders and you have every right to vote against it and as a delisting requires a special resolution 75% +1 is the required minimum to pass. Organise. Find other small shareholders (easier said than done) and get them to vote against. Talk to management and large shareholders. You may be a small shareholder but you have your rights and potential influence. Fight against interested parties voting. Using above also try and get the price raised. At the end of the day, if you're in the minority you lose. That's how voting works. OUTstanding money: Saving tax-free Upcoming events; Investing in BEE Inside Easy Equity users Easy Equity recently did a user survey with over 6,000 responses and I sat down with Charles Savage (CEO of Purple Group & Easy Equities) to chat around he main findings. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited

Subscriber to our feed here Subscribe or review us in iTunes Simon Shares Steinhoff (JSE code: SNH) results = nasty. Aveng (JSE code: AEG) get their money and price falls to 9c. Top40 vs. Rafi. The most tax efficient entities Upcoming events; Investing in BEE Inside the robo advisor Robo advisors are all the rage these days but I wanted to know what's inside the robo so I sat down with Grant Locke, head of OutVest for a geeky understanding about how it all works. SE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited

Subscriber to our feed here Subscribe or review us in iTunes. Simon Shares Markets have been falling, and the world has not been ending. Long4Life* (JSE code: L4L) has announced a purchase of Rage for R3.915billion with EBITDA of R360million. That's expensive and as they're issuing new shares for much of the payment also a chunky dilution. Management say the deal is not yet a done deal. Steinhoff (JSE code: SNH) results are due on Friday. They may not arrive and if they do they're going to create all sorts of excitement. But don't get sucked in, SNH remains a trading stock and nothing more. Reports I am hearing from VBE is that they consider the company bankrupt, and that's before the billions VBE hope to secure for shareholders. The Tekkie Town sellers continue their fight with Steinhoff Retail Africa (JSE code: SRR) and it's messy and it also suggests that maybe Markus Jooste wasn't the only problem at Steinhoff? BusinessDay is reporting that Christo Wiese has sold another chunk of his Shoprite* (JSE code: SHP) shares. This time via a book build to institutions, not via open market and leaving him with about 14% of the company. OUTstanding money: Getting rich takes time, not money Year-to-date going nowhere Debt in high-income households When to sell long-term investments Upcoming events; Investing in BEE * I hold ungeared positions. Pricing power Some industries have zero pricing power such as the mining industry who are price takers - a horrid space to be as your costs rise and you have zero control over income. Sure you can increase production to try manage income, but that often impacts supply driving prices lower as we see in the platinum industry. Construction also has very little pricing power when building something is now pretty much just a commodity with stiff competition all competing for the same contract with price being the only key difference. Telcos have little real pricing power as data is data so they are trying to make it all about the added extras. I like to invest in industries that can determine their own prices to varying degrees. Luxury cars are priced more on what the market will bear rather then actual cost of manufacturing. This is great for margins and profits but tough to sustain. Luxury jewelry is the same, price is more about status and looks then cost to produce. Burgers for example have pricing power but it is limited by two factors. What the customer can pay and what the other burger seller is charging. But you do have a fair degree of power ~ just be careful of UK gourmet burgers:). Retail also has fair pricing power albeit to different degrees. Luxury certainly has more power than consumer staples, but the later has power in that they are staples. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited

Subscriber to our feed here Subscribe or review us in iTunes. Simon Shares Basil Read (JSE code: BSR) has filed for business rescue and nobody should be surprised. Blaming government and labour is also weak, construction is a weak industry and only really boomed in the lead up to the world cup in 2010 (not forgetting the price fixing). Of concern was that the stock was not suspended until Monday lunch time and it turns out it a settlement issue. Apparently "Someone bought BSR at 1c in on Friday now it turns out the seller does not have the stock. JSE trying to reverse." Liberty (JSE code: LBH) got hacked. Exact details are scarce as I record, the company is saying it was "largely emails and possible attachments" and that no clients have lost money. Well maybe not yet. But you email all sorts of personally stuff to a long-term insurer; bank details, residential address, medical, etc. That frankly puts clients at risk. Bigger picture is that our future unfortunately includes us being hacked sooner or later. PPC (JSE code: PPC) results were not exciting and they have challenges. Local is weak, DRC is having issues already. Not a stock I would want to be holding. I honestly am not sure what the deal is with trade wars. Not in the sense of if Trump is serious or when they'll happen nor to who or what. But if they do happen they are bad - end of story. The Rand is under all sorts of pressure and the hysteria is out in force. So to clear some of it. We're not at risk of an emergency rate hike. This is not because of local protests, land expropriation, it is a general Emerging Market (EM) rout right now. But it is looking ugly for EMs with currencies and markets under pressure as investors flee. Will this get worse, a little or a lot? No idea. So as always here's what we do; as a trader - obey your stops. As an investor - don't panic and buy quality and great prices, but no rush. A question on investment club tax OUTstanding money: What is investing? Tech ETFs by a tech guru Upcoming events; JSE Power Hour: When to sell long-term investments The smart money myth I hear it all the time - the smart money which typically seems to translate into somebody with lots of money. A big trade goes through the market and everybody is talking about smart money? There is no smart money. Money does not talk and having lots of it doesn't make somebody smarter than anybody with less. So why did Christo Wieses money warn him? Also witness Steinhoff (JSE code: SNH). Including preference shares total value was some R300billion now a few million and the smart money all owned it up at the lofty levels. When the story broke Coronation (JSE code: CML) wrote a long letter saying they were holding on as all will be fine. Yet news last week is that they have bailed. They did the same with African Bank (JSE code: bankrupt) Read Fooled by Randomness by Nassim Taleb. We ascribe behaviours to money and people with lots of it that is simple seldom true. There is no smart money, just money. You can of course make smart money decisions and that would include not blindly following anybody. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited

Simon Shares Stor-age (JSE code: SSS) results were totally solid and in a very niche property space that is doing very well. When they listed a few people recommended them to me and I wasn't convinced. Well I was wrong. Sasol* (JSE code: SOL) was one of the first stocks I ever bought and my longest holding in my 'til death do us part' portfolio having first bought it around 1994. A few years ago I gave serious thought to exiting, but held on albeit deciding not to add any more to my portfolio. But I have been thinking and digging and frankly it is a change company and looking good. The Lake Charles project has been a mess in terms of cost over runs, but it is now nearing completion and that means two important points. Firstly, no more spend on the development and secondly in a few years the profits will start to flow from the project (even if they're not as great as promised). So I am starting to buy again, however my usual pricing methodology doesn't work here for two reasons. Massively cyclical always breaks my method and Lake Charles changes things. So asking around the view seems to be that HEPS of some R60 is possible for 2021 and if we apply the average PE of 9.3 that equals a price of R558, so that's my fair value and I am happy to buy at the current R488. Help, I've lost money! OUTstanding Money: Types of savings * I hold ungeared positions. I don't own offshore In the last few weeks a number of people have asked me about what offshore shares I own. The answer is simple, none. I do own a small holding in VOO which I bought in 2002 with some offshore money I earned, but that's it. Here's the thing, I know a lot about the local market and a little about even the smallest shares on the JSE. I have spent literally decades investing and trading on the JSE and hence decades building my knowledge of our market. Further it certainly helps that it is a small market, so it makes life easier and let's not forget that watching and studying the JSE is in part my job. But as soon as I step offshore the size and complexity of the market is frankly over whelming. The NYSE has three times more ETFs then the JSE has stocks. Globally there are some 100,000 stocks. How does one select which are the best of the best? This is more than a full time job, this is a full time job for a full sized team. Chatting to somebody recently they mentioned they wanted to buy Honda. I have no idea if it is a good stock or not. But what of the other US motor companies (Fiat Chrysler, Ford, General Motors, Tesla, Toyota) and then what of those listed in Europe where there are even more listed? Does Japan have any listed? Suddenly you have to be an expert on dozens of motor stocks to decide if the one you want is the out and out global winner. Now I know the response. In the above example we don't have a single motor company we can invest in. Our Tech stocks are frankly wildly boring and disappointing, Naspers (JSE code: NPN) the exception, a lucky exception. Our market is small in more than just number of stocks, it is also small in terms of industries. But we can buy a tech ETF, and yes we can't buy a motor company ETF. But I am comfortable with that because frankly the risk is I buy the wrong motor company anyway. Am I being lazy? Maybe. Or maybe I am being realistic abut my abilities and time available to become an expert. These days I get offshore exposure via dual listed and global companies and locally listed offshore ETFs, keeping it nice and simple. Another issue with offshore is costs, it is a lot cheaper investing offshore then it has ever been for South Africans. But it is still not cheap and with offshore assets you now also need a second will in the country in which those assets are held. More costs and more complexity. Here's a random stat to show how little we know. Google (Alphabet) and Dominos Pizza both listed in 2004. Which has a better return since listing? Two revolutionary companies went public in the summer of 2004. These are their returns... Google (Alphabet): +2,020% Domino's Pizza: +3,607% pic.twitter.com/SOtqOHjM4a — Charlie Bilello (@charliebilello) May 29, 2018    

123 Download the audio file here Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. Simon Shares Wildest story of the year. Imbalie (JSE code: ILE) is ditching beauty to become a miner via a reverse listing! Local GDP for Q1 2018 was a shocker at -2.2%. Expected was -0.5% and the number is usually shifted higher over time, but wowzer. That all said, this was mostly driven by agriculture and frankly turning a country around is a slow process. Delta Properties (JSE code: DLT) has me perplexed. On a dividend yield of around 15% and trading at around 30% discount to net asset value (NAV) it seems a screaming buy - but that assumes the market is wrong and I never want to be the one telling the market that. They mostly have government as a tenant and a lot of their leases are on a month-to-month basis. But government isn't going to suddenly move out but they may put pressure on rent increases. The company says there is a process recently put in place by government to start signing leases and this should reduce the month-to-month leases and lower lending costs. Am I missing a trick or is the market, as always, right? Anthony Clark was at the Curro (JSE code: COH) annual general meeting (AGM) and tweeted that the company said with utilisation of 90% from the current +/-53% HEPS would be around 201c. So we have a marker for future earnings albeit no time line. That said even at 201c HEPS and a current price of 3000c that would put the stock on a PE of around 15x which to my mind is a fair valuation. Curro AGM; titbit. At 53% current capacity utilisation COH made 49cps in FY17. With NO NEW SPEND CEO says if it was at 90% utilisation FY17 earnings would have been 201cps showing how growing into latent built capacity can now power Curro's earnings growth ahead — Small Talk Daily (@SmallTalkDaily) June 4, 2018   OUTstanding money: Choosing between saving and investing Upcoming events; JSE Power Hour: When to sell long-term investments  Stale bulls In a recent Fat Wallet podcast Kristia commented again how her investments have done pretty much nothing over the last few years. Now there is only one reason we buy any share, ETF or even derivative - too make money. But what happens if we don't make money or worse the price falls and we're losing money. Now it depends in part what we bought. A derivative trader will stop out and indidiual share buyer may hold as they consider it quality and in time it will start moving while an ETF should in theory not worry about the short term and just continue holding. That's the theory. But we get a phenomenon called stake bulls, especially with individual shares. Lets take Aspen (JSE code: APN) as an example. It hit a price of almost R450 in January 2015 after trading at R100 for the first time just three years earlier and 1000c was hit for the first time in 2003. If you missed the initial run from 2003 you'd have felt aggrieved at missing out and you may have jumped in at R100. But many would have said no they'll wait for the pull back, a pull back that never really happened. Then after a price of almost R450 there is a serious pull back to almost R250 and many jumped in during that pull back. That was followed by another rally but only to R350 and now we're back at R250. So having watched Aspen be one of the best stocks on the JSE you're now holding it and your price is under water. You're not happy and frankly you want shot of the share - but ideally at as small a loss as possible - you're a stale bull. So now every time it rallies the stale bulls are ready to sell essentially capping the price. We see this with a number of local shares and to a lesser degree with ETFs (lesser here as we're too small to really influence an entire index). So what do we do? Firstly, recognise yourself as a stale bull if you are one, set your exit price and act accordingly. The new bulls are not your problem. Secondly, understand that if you are a new bull to a stock there may well be a lot of stake bulls lurking and this will make the rise higher a slow drawn out affair. That's fine, investing is about the long-term and if you hold quality it will in time preform. If you're trading the share understand the going may be slow and sticky as stale bulls keep exiting. Lastly if you're holding ETFs don't stress it. Sure over the last 3-5 years money in the bank has potentially beaten your ETF return. But again this is a long-term game and given time you'll make handsome profits. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. OUTstanding money: Saving and investing are not the same How to be financially independent with Patrick McKay Finding dividend superstars Upcoming events; JSE Power Hour: How to identify quality stocks How to choose a stock broker First off understand the difference between a stock broker and an FSP. The former is an exchange member and gets protection and regulations from the exchange. An FSP is regulated by the FSCA (formerly the FSB) interview with Charles Savage on how this works.  It is very important that they are registered with a regulatory body. Even an offshore regulatory body is fine, but only if it is in a country in which you trust the laws. Avoid fly-by-nights registered in some second rate dodge country. Also understand potential fees. Brokerage. What you pay when you transact, also check if there is a minimum brokerage rate. Admin fee charged monthly, quarterly or annually. Some brokers will waive this fee if certain number or value of trades is meet. Live prices / charts. Some brokers give limited live prices and above that you'll pay. Charting package. Many will have a 'lite' version included in admin fee with more advanced at additional cost. Then what services do you want from your broker (using broker as generic term)? No or very few frills. Just buying and selling functionality. No; stop loss facility, live prices, data, detailed research etc. Should be cheapest. Frills for which you will incur higher fees (transaction and admin). Here's you'll likely get limited live prices, limit and @market orders, online charting, event invites, research and share data. This is the space most online brokers sit and the range of fees is wide so shop around. Trading broker. Offering derivatives (CFD, futures & FX), live charts (at an extra fee). These are often stand along brokers but in some cases coupled with traditional online brokers. Full service. This will include 'help' from the broker as to what you're buying selling. Here they'll usually want a large portfolio to make it worth their time. Managed portfolio which the broker manages your portfolio within the mandate you set for them. They have full discretion as to what to buy or sell and again they'll want a large portfolio to make it worth their time. Collective investment such as ETF or unit trust. You buy into the fund and they manage the money within the mandate, active (with different methodologies) or passive (again with different methodologies). Do your research. Google the broker for reviews, check online forums and social media for complaints or praise. Ask others who they use and what they like / dislike about the broker. Take a trail to check out the user interface (if offered). And before you all ask me, I use Standard OST and have done for almost 15 years. Not the cheapest but they meet all my needs. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Subscriber to our feed here Subscribe or review us in iTunes. Simon Shares I am traveling again this week so recording on Monday. Consolidated Infrastructure Group (JSE code: CIL) seems to have a life line albeit existing shareholders will be diluted by some 50%. With the issue at 400c and the share below that price no need to follow your rights, just buy in the open market if you want. Upcoming events; JSE Power Hour: How to profit from SA mining JSE Power Hour: How to identify quality stocks Make trading asymmetrical I have spoken often before about how one of the huge benefits of investing is that a diversified portfolio is asymmetrical. You may have held some horrid share and lost 100% of its value. But 100% is the most you can lose and your winners can exceed 100%. In fact a true long-term portfolio will most definitely have many +100% winners so if you do get caught in a 100% loser - you're fine. The important point is that you need to be diverse and have more than one share and ideally a core of ETFs surrounded by a selection of 10-12 quality shares. Now as a trader of leveraged products such as FX, CFDs or futures your potential loss in any trade can exceed 100%. The warning that loses can exceed your deposits is absolutely true and as such trading is symmetrical. Your winners can be offset by losers and you can end up going nowhere, or truthfully you end up losing money. But a trading portfolio can be asymmetrical, if we have a strict stop loss we adhere to every time. EVERY time. Couple that with the 2% risk rule (never lose more than 2% of your capital in any one trade) and bingo - you have asymmetry in your trading portfolio as well. This is the whole point of trading. We'll have a random dispersement of small losers and winners. A lot of break even trades with the occasional large winner but also the occasional large loser. Without the silent killers of; spread, slippage and costs, that portfolio would go sideways. All we have to do is ensure we NEVER have a large loser and boom, we're making money. This points to the tree critical aspects of trading. Position size (2% rule), stop loss and capital. Capital is important because if you have only a few thousand rands to trade with you cannot do proper position size hence ensuring you'll go broke. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. Would you buy it again? Would you buy that share today if you didn't already own it? If not, why not? I'm talking about those dog shares again because we all have them. This week I pose a simple question to solve the problem. Sometimes tech fails. This was one of those weeks, so a short show. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. Simon Shares So a friend has a business that has been beset by fraud and is now bankrupt and is trying to find some new investors. They have no financial statements to show you and no real idea how bankrupt the company is or how bad the fraud was. Do you invest? So why scramble for busted JSE stocks? Thanks to Kristia van Heerden for the analogy. Libstar (JSE code: LBR) has listed on the JSE. The listing price was right at the bottom of the range at 1250c and opening trade was around 1200c and expensive. Historic PE is apparently around 26x and sub 20x is the maximum to pay, so 900c - 950c. Personally I am not looking to buy. Long4Life* (JSE code: L4L) publish their first results and pay a dividend. The dividend is odd as they on a buying spree so why pay out cash? R1,7bn cash = about third market cap, HEPS 30c so on non cash market cap = PE of some 12x which is fair (compared to some it frankly deeply cheap). Decent Santova* (JSE code: SNV) trading update, especially considering stronger Rand hurting with majority of earnings from offshore. Back in March Naspers (JSE code NPN) sold US$9.8billion worth on Tencent shares and has now sold its Flipcart stake for US$2.2billion. That's a US$12billion (R150billion) pile of cash. Trader1137 on Twitter suggests maybe they'll use it to buy back some shares, would be about 10% of market cap. The Berkshire Hathaway AGM was on Saturday and the audio is here.  Upcoming events; Fat Wallet 100th celebration  JSE Power Hour: How to profit from SA mining  JSE Power Hour: How to identify quality stocks  * I hold ungeared positions. Fight the FOMO Fear of missing out. Man this used to kill me when I started out in markets. It's a true killer as it makes us do irrational things. Pause for a moment, we have say 400 stocks listed on the JSE, your odds of picking the top performer over the next ten years is 0.25%. You're pretty much guaranteed to miss out. Globally 100,000 stocks so 0.001% chance. Thing is hype and higher prices make us scared. Scared we picked the wrong stock. Scared we're missing out of becoming fabulously wealthy. We need the courage of our convictions and perhaps more importantly the courage to be wrong, often. FOMO will make us do stupid things. We'll jump in with no real research. We'll jump in with no exit plan. We'll jump in at far to rich valuations. Forgot about the flyers and focus on your plan. What are you investing for and how long is your investment horizon. Find quality stocks at good prices that meet your requirements. And if you find yourself suffering from FOMO remove yourself from the market (like over a weekend or on a internet free holiday) do solid research on the stock. Find the nay sayers and see what the counter argument is and try construct a real evidence based plan and a price you think is a fair one to pay. There is another angle of FOMO I want to touch on as well. When you're in the stock (or crypto or whatever) and now feel you need to convince everybody else that they're missing out. Sure they may be, but truthfully they may have done their own research and decided it is not for them and you could both be right (different strokes for different folks). Not everything is for everybody. But more importantly is that assets need people to be missing out, that's how they go higher. For example Buffett was very late to Apple (Nasdaq code: AAPL) only building a stake in the last 18 months, a stake that is now over 5% of the company. If he'd bought back in say 2008 or 1998 he would not have been a large buyer over the last 18 months and make no mistake, his large buying, and the news of his stake, has sent the price higher. You need late comers. If everybody is in on day one then who pushes the price higher on day two? Taking it a step further, the market needs disagreement otherwise nothing would happen. So don't hate on people who don't love your investments. See them as potential future price drivers. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

  Simon Shares Apple (Nasdaq code: AAPL) results show a maturing company as iPhone sales have decidedly slow. But they're far from down and out with app store sales, accessories etc. doing great and they still have a monster cash pile. Rand under serious pressure trading out at R12.60/US$ after R11.50/US$ in late February. This is in large part due to US$ strength and it does not make me panic and change my long-term view of Rand strength. Steinhoff (JSE code: SNH) below 200c. In the 6 years to 2018, Barclays (LSE code: BARC) paid out £35.6billion for litigation, misconduct charges, bank levies, losses from asset sales etc. This is £1billion more than operating profit during the period! Pembury (JSE code: PEM) has been suspended for late results as they struggle with some IFRS issues. I like the retirement idea, but the rush to list as a schools company was concerning and the share has been under pressure. Further the inability to publish what must be fairly simple results is more concern. Let them prove themselves before even bothering with the stock. The Mouton family has just bought some R90million of PSG shares, I mentioned in my SA Inc video that they are the best indicator of value in the stock. Six questions to ask before buying an ETF. Foreign dividends. Responsibility of knowledge Knowledge is power but only if you share it. Every year since 2007 I have been a speaker at the annual JSE Schools challenge prize giving in October and a key theme has always been - the responsibility of knowledge. This talk is aimed at school kids but it occurred to me that actually this part of the speech is actually relevant to everybody. Actually all the parts are but they're another podcast for another time. As investors or traders or even if only a novice our knowledge on markets and investing is way more than the vast majority of people and that puts a responsibility on us - we need to share this knowledge. This is less about hot tips, in fact leave the hot tips out of the equation. it is more about helping other people understand the market, ETFs and how it really can create wealth with no rocket science required. Remember the average South African knows nothing about the market and is generally fearful of it and we can help change that and help create smarter and ultimately richer South Africans. Tell them about tax-free. About ETFs, about fees killing returns. Tell them. And even if you think you have no knowledge to share as you're still learning - wrong. You have way more than the average person. So get talking. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. Simon Shares Libstar listing is proceeding and I am not taking part. I do think the market will love it but Google the private equity sellers (Abraaj) lots bad happening their and the company has declared a R800million pre listing dividend - while raising R1.5billion? Consol has pulled their JSE listing citing "challenging market conditions". Have the market conditions really changed that much in the last few weeks or was the market just not excited by the listing? Auditing - it's complicated The local auditing profession is having a tough time of it with the Auditor General (Thembekile Makwetu) commenting on The Money Show with Bruce Whitfield he said that that the professions reputation was "in the gutter". I wanted to understand what we as investor really can expect from an auditor? Are they to blame for Steinhoff (JSE code: SNH) and other recent collapses or is that beyond their scope? Keith McLachlan, fund manager at Alpha Wealth, studied as an auditor and is now a fund manager so decided to have a short chat with him to get some perspective. The short chat ended up being a long chat and I suspect we missed a number of angles but one thing did stand out for me, the word "material". JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

“Brought to you by Absa ETFs” Simon Shares EOH (JSE code: EOH) under pressure again trading at 5 year lows. The company claims it is because of false allegations published on some news website. CPI in March was 3.8%, a great number but April has both VAT and petrol tax increases so we may have seen a low in CPI for a while. Pallinghurst (JSE code: PGL) issue audited results but they use an auditor not accredited by the JSE so they don't count. Mediclinic (JSE code: MEI) issued a solid trading update and the share is responding (they also got upgraded by Barclays over the weekend). I now expect the usual flurry of emails abut how I am missing out by not investing in healthcare stocks. I am indeed, but I am also missing out on the other 450 stocks I do not own. The stock market is no place for FOMO - it'll kill you. Finding winning SA Inc. stocks. Tax-free and saving for your child. Price leads narrative I heard this on a podcast I listen to, or maybe somebody tweeted it. Hugely important. Those commenting on price action (myself included) are always doing so after the fact and most times trying to find a narrative that fits the price move. As humans we believe in order and we have an expectation that things happen for a reason. Now sure prices move for a reason, but there is every chance we're not privy to the reason. The short answer is that prices go up when there are more buyers than sellers, anything beyond that is trying to fit a narrative to a move. As a trader we frankly don't care why they move. We simple wait for our entry and obey our stops. As an investor price only matters when we're buying as this is all we control. Other than that it is results that matter. So the narrative around price is fun, but it is not very useful. We Get Mail Brian Is there a way I can find the names of ETFs that hold Santam? Reino You state that one can open an TFIA account for anybody from day one of birth, but only with an FSP. This TFIA you speak of will it be just an normal account at the bank like a cheque/savings account or will I be able to open one to trade ETF's through for my children? Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

“Brought to you by Absa ETFs” Simon Shares SARS announces tax must be paid on Bitcoin profits - why is anybody surprised? Sagarmatha (JSE code: SGT) listing on Friday, if they tick all the boxes. Some saying they should not be allowed to list but this fails to understand the role the JSE plays. They are regulatory gate keepers, not quality of profitability gate keepers. Steinhoff (JSE code: SNH) now under 300c at 226c, well below late 1998 listing - all-time-low and the bad news just continues to drip out. ETFs and the cost of the spread. Living vs guaranteed annuities. Upcoming events; JSE Power Hour: Investing in the best of SA Inc. Liquidity risk Homechoice (JSE code: HIL) keeps on putting out great results and cash generation but has almost zero liquidity (30 trades since 6 March and currently no offers to sell on market with last trade at 4700c and buyers at 1226c! This makes it uninvestable in my world as we'd essentially be buying into a quasi private equity arrangement as exiting would be almost (absolutely) impossible. But they did announce in the latest results they plan to improve liquidity and I'll keep an eye on this. In the excitement of finding a great share we'll often over look the liquidity issue but I remember getting very badly caught in an illiquid stock way back in the day and while I could have held on I panicked and exited at a nasty loss. Liquidity is not just the spread, which is a cost. But also the amount of volume being traded and we also have to remember that liquidity can disappear very quickly. So two things to look for. What size spread are you having to cross to buy. A 1100c / 1500c is 400c and over 30%. I want spreads as tight as possible and certainly not more than 5% at worse. I want average daily value traded to be at least 30x the size I am buying so even if it dries up I can still get out without too much pain. For traders liquidity even more important an I want spreads less than 1% and value traded 100x my trade size. This is because I want to have no impact when buying or selling (or as small as possible because there is never no impact) and I need the liquidity for very quick and efficient exits. Last important point. Liquidity in terms of volume is not an issue for ETFs as the market maker ensures that they will have a bid and offer either side of fair value at all times. So while the ETF may not be trading it has the capacity to trade in larger volumes if required. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

If you secretly hate us but haven’t been able to find a different source of financial information, I have some great news! I found a Freakonomics Radio episode that summed up exactly the principles we champion on this show. In this episode, Simon and I take the financial literacy survey. It’s only three questions, but understanding their answers will enable you to make great financial decisions. If this sounds vaguely familiar, you might be thinking of this podcast we did last year. Here are the questions: Suppose you have R100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow? More than R102 Exactly R102 Less than R102 Imagine that the interest rate on your savings account was 5% per year and inflation was 6% per year. After one year, how much would you be able to buy with the money in this account? More than today. Exactly the same as today. Less than today. Do you think the following statement is true or false: buying a single company stock usually provides a safer return than a collective investment scheme like an ETF or unit trust. Win of the week: Rob has been coming to our events for ages. He has some ETF investments, but he’s been wanting to trade since the day I met him. This week, he sent this email: Yes I have done my first trade and  bought my first bunch of shares (7 shares in total - some bits and bobs) (as oppose to ETFs) I am not sure how I am supposed to feel! Its bit like sex for the first time - did not know what to expect! Frederick My world has been turned upside down! I started listening to your podcast a week or so ago, and fok... my google is broken!! From googling sport all day I now spend endless nights and have sleepless nights on where to put my money and avoid tax as much as possible! I use to think money is money and my RA is perfect and that life is sorted! I was wrong! I have an RA (diversified wealth builder) with Sanlam. Any thoughts here please? My FEES (to my knowledge) is 0.65%. It says “management fee at benchmark %”. I put some money in monthly with a 10% annual increase. By retirement I should be paid out R11,5m. Let’s say you live another lifetime after your working life, how much will you need? It’s possible to retire at 60 and live to 100. https://justonelap.com/podcast-much-money-need/ Frank is trading Simon's Lazy system and wants to know if he can park his money somewhere while he waits for entries. He’s not earning interest on the money that he’s allocated for this trade. Shamona wants to know if timeshare is worth it. What are the pros and cons? What should I look out for when buying? Entries to win Manage Your Money Like a Fucking Grownup. We want you to share the financial fact that blew your mind. We’ll be running this competition for one more week. I asked author Sam Beckbessinger hers and she said on R10k per month, you’ll earn R19m in your  working life. Mine is that a low cost of living is basically the answer to all your problems. Lesigisha wrote back after we sent him a shout-out last week. Thank you so much for the great affirmation I received from the submission of my email, it really really went a long way in validating what I’m doing. It’s hard to start on this journey, but after doing it for a while one does sometimes get despondent and wonder if this is worth it. Your affirmation has helped reinvigorate me and I go back to it every time someone says they’re waiting until they have a bigger shoe size before they can start making “real money decisions”. Khuliso’s mind-blowing fact is that you don’t need huge amounts of money to invest. As a result of his mail I spent a lot of time thinking about kotas this morning. The most mind-blowing fact was finding out that if I can afford to buy a kota (R23.00) or street wise 2 I can afford to invest in the JSE and create wealth. Even though it's little money, over the long term it makes a difference. In my case the problem was lack of information rather than a lack of money to invest. I am now very conscious about my spending habits. Whenever I buy takeaways in the back of my mind I keep on thinking of ETFs that I could be buying. When I look back, I see missed opportunities where I could have invested and build wealth. Subscribe to our RSS feed here. Subscribe or rate us in iTunes. Sign up here to receive an email every time a new show goes live.

“Brought to you by Absa ETFs” Simon Shares I mentioned last week it had been a negative first quarter for the Top40 and it just continues weaker with the current theory being trade wars. Looking at the charts of the main indices it looks ugly and we're now some 15% off the all-time highs of November. A proper correction that may still go lower and my sense is we're close to the end of the sell off. I also asked last week how we could select winning fund managers. The answer I got back was mostly that you can't. A few gave very detailed answers mostly revolving around finding the best managers - but scant details on how we spotted these quality managers. Total return ETFs and CGT. Complicated. Win a book with The Fat Wallet Show. Upcoming events; JSE Power Hour: Investing in the best of SA Inc.  Spot the losers Steinhoff (JSE code: SNH) announces that their property portfolio is only worth half what they thought. Boom there goes another R16billion. I cautioned when this story broke that bad news would be dripping out for a while, and so it continues with the immediate question being hat about their other property assets? Grand Parade (JSE code: GPL) CEO has quit exiting immediately. Ms. Tasneem Karriem joined the company in 2015 and was made CEO last June. This is not good news and the stock is off 4% and trading at 2010 levels. Nampak (JSE code: NPK) is selling their glass business after spending R938m to buy the 50% of the glass business it did not own. It has also spent billions on capital expenditure and now we wait to see what price it sells for. But an absolute disaster for the company and the share is back at 2010 levels. NetCare (JSE code: NTC) is to exiting its UK operations after twelve years of absolute disaster and the share is trading at 2010 levels. Ascendis Health (JSE code: ASC) is trading below its 2013 listing price and just off all-time lows at 938c. You spot the problem? Middling quality companies expanding and the wheels come off. Now sure there are likely many examples of other companies that did not lose their wheels. But as investors we have to make sure we own the right ones. It is also worth noting that as a small investor we can place a core of ETFs (+50%) for diversification and then we need only own 10-12 individual stocks in the 'til death do us part' portfolio. This gives us a huge edge on fund managers who typically need to own 30-50 stocks. We can focus like a laser on quality and spend most of our time finding reasons NOT to invest in a stock. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

“Brought to you by Absa ETFs” Simon Shares Back from holiday and with lots of ideas around what you do and don't like for JSE Direct. That said main comment was not to really change except maybe some experts occasionally on broad topics. Markets falling and Top40 is down some 8% for the year so far. End of the world? Not likely. As always, traders know and obey your stops. Investors know your stocks and entry points. Naspers (JSE code: NPN) is under R3k and off some 30% since the November highs and is in large part why our market is under water as it's the largest stock by a mile in the indices. MPC cut repo rate by 0.25%, 4 members voted for the cut and three for no change. No discussion of a 0.5% cut. Interestingly the VAT increase effective on Sunday is expected to temporarily add 0.6% to inflation. Moodys kept us out of junk and improved our outlook to stable from negative. Anchor group (JSE code: ACG) results were bleak but seemingly the bad news is now behind them and the share is responding well, up some 50% since the lows of January and this is a stock pick from Anthony Clark.  How to start an investment club. Save interest on your home loan. I was on The Money Show with Bruce Whitfield earlier this week talking about money and selling everything. The interview is here. Upcoming events; JSE Power Hour: Investing in the best of SA Inc.  Can you pick a winning fund? The latest SPIVA for SA is out and it is bleak reading for active managers in South Africa. Around 75% are beaten by the benchmark over one, three and five years. Benchmark is Domestic Shareholder Weighted (DSW) capped or normal. This means you have a 1 in 4 chance of picking an out preforming fund - very bleak odds. So here's the question, and it is a real question. How does one pick the winning manager going forward? There most definitely will be those who out preform, some even consistently, but how do we spot them in advance? They themselves will tell you that past performance is no guarantee of future performance, and this is 100% true for a bunch of reasons. Changes in personal. A winning manager leaves, is the replacement as good? They had a few lucky calls or managed to avoid some disaster that beset the market. Skill or luck? As they get larger it becomes harder as your investable universe shrinks. I remember a Morningstar report from a few years ago looking at the US market that said the only reliable predictor of future returns was fees. The lower the fee the more likely the fund will out preform. This makes sense, but it is still not a full proof method. I also know a number of people who chart unit trusts with fairly good success. Either just normal technical analysis or relative performance. Of course tax is an issue here. If you have a method for picking winning funds let us know. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

“Brought to you by Absa ETFs” 300 shows, I haven't been making a fuss because it just feels old, very old. Add to that almost three years as a live radio show on Classic FM, starting from 8 July 2008. It's almost ten years of a weekly (albeit changing) show. We started life focusing outside the Top40 as the other shows seldom ever did anything in the small and mid cap space - then everybody did. So we have evolved over time. The question is where to next? Another ten years (truthfully that scares me). Send me your ideas on what we should or should not be doing. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

“Brought to you by Absa ETFs” Simon Shares 2017 GDP was 1.3%, better than the expected 1% and hopefully means that the treasury 2020 GDP expectation of 2.1% is wildly low. Bleak trading update from Sasfin (JSE code: SFN). But still trading at tangible net asset value (TNAV) levels. MMI drop their dividend in favour of share buy backs and drops cover from 1.5x-1.7x to 2.5x. Considering the dividend yield was some 6% and a good reason to hold this is a major change. Now sure a share buy back is in theory share holder value enhancing and tax efficient but it is also not hard cash in ones hand. Making sense of CGT tax. New Stanlib tech ETF. Upcoming events; ABSA NewFunds ETF seminars (JHB and webcast) JSE Power Hour: Small cap stock picks with Anthony Clark  Fallen angels (devils?) When a share is hit by scandal it can take ages to recovery as investors shy away from the stock. Some like Steinhoff (JSE code: SNH) will never recover due to the seemingly rampant fraud hat happened. Others like EOH may but will stay under 'caution' for a while as will the Resilient (JSE code: RES) stable of stocks. Others such as Capitec* (JSE code: CPI) will also struggle for a while but should shrug it off in time. Tiger Brands (JSE code: TBS) has held up fairly well since the Listeriosis story broke on the weekend and is only back to November levels. But it could get real bad with almost 200 dead people, but markets seem to not be so concerned with these sort of issues. I remember Pioneer (JSE code: PFG) righting the bread fixing claims, eventually paying a R1billion fine and the share rocketed. In part it is the known vs. unknown. PFG struggled until the fine was agreed on, and TBS could well see its share price struggle until some sort of finality is reached - and that cold be years. The concern is perception and some potential investors will stay away while existing holders may head for the hills and this means less buyers for the stock so less/slower upside. Your strategy needs to ask if the scandal is terminal, long-term or merely a passing fad? Then remember if it is time to panic, panic quick. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

“Brought to you by Absa ETFs” Simon Shares The new cabinet is of course a compromise, that's the nature of our political system. But the important departments are markedly better hands (SOEs, treasury & mining). New tax-free year kicks off today. R33,000 per year and transfer are now also possible. Up coming events; ABSA NewFunds ETF seminars (DBN, CPT, JHB and webcast) Leverage your investment portfolio Borrowing money to increase your portfolio is something most investors ponder at some point, but two questions come up. How and what are the risks? The theory is easy, over the long-term equity markets do better than the cost of borrowing, but there is more to leverage then just that. So here are some options, with the risks involved. Derivatives such as CFDs; Easy enough. But costs and margin calls are real issues. Keep it small. Home loan Clean and simple if you can afford the repayments remembering that when markets collapse interest rates typically rise. Make sure you can make the repayments with higher interest rates and what if your income drops? Personal loan Banks don't like lending against shares and again can you afford the repayments? Also unsecured loans typically attract higher interest rates meaning the numbers no longer add up. Margin Some brokers will lend against a portfolio with the amounts varying depending on the shares being used as collateral. The risk here is that loan amounts may be adjusted and you may be squeezed out. Personally I have leveraged my portfolio once. In 2008 I maxed out my bond to add to my portfolio. It worked and I slept well enough but I have no plans to do so again. On page 10 of his latest annual letter Warren Buffett writes "This table offers the strongest argument I can muster against ever using borrowed money to own stocks. There is simply no telling how far stocks can fall in a short period. Even if your borrowings are small and your positions aren’t immediately threatened by the plunging market, your mind may well become rattled by scary headlines and breathless commentary. And an unsettled mind will not make good decisions."  Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

“Brought to you by Absa ETFs”  Simon Shares Discovery* (JSE code: DSY) results were top notch and complicated as they always are. I own this stock as the business model really works, but as I have mentioned before the complexity adds risk. Risk I am happy with as most stocks I own have real simple business models. JSE (JSE code: JSE) results show HEPS down 6%. But look at value being traded these days. R25billion a day has become a regular feature, last year average was around R15billion. That equals lots of extra revenue in this financial year. Mining charter back to the drawing board. Good for local miners (of which we have very few). January CPI dropped to 4.4%, interest cuts coming to a prime rate near you? But budget may add to inflation (fuel being the one, not directly but will increase transport costs so food inflation). Up coming events; ABSA NewFunds ETF seminars (DBN, CPT, JHB and webcast) * I Hold ungeared positions #Budget2018 Firstly I think Cyril Ramaphosa may have played it real smart by letting Malusi Gigaba deliver the budget. He can now spend the next year claiming it was not his budget but a Zuma legacy budget. Overall not the train smash expected but still lots of tax increases with R36billion of extra tax. Lots of cuts to spending, R86billion over three years and which has to actually happen. VAT increased to 15% (first change since 1993), with 19 basic food items being zero-rated. Cue everybody suddenly caring about how this will hurt the poor. “Wealthiest 30% of household contribute 85% of VAT revenue”.  "The Old age, disability and care dependency grants will increase on 1 April 2018 from the existing R1600 by R90 to R1690 and by a further R10 to R1700 on 1st October 2018." GDP growth 1.5% in 2018 and rising to 2.1% in 2020. I hope they are very wrong on this. No changes to; Dividend withholding tax (DWT) CGT (40% inclusion rate with first R40k exempt) Tax-free limits (annual or life time) No Nuclear. Retirement funds will be allowed to invest up to 40% outside of SA - 30% "offshore" and another 10% elsewhere in Africa. JSE added 1.25% during the speech, USDZAR 8c and government bonds back at 8%, bond levels last seen three years ago. For our investments. Consumers being taxed, no surprise. But with inflation dropping leading to prime rate likely heading lower I still like the SA Inc. investment thesis. Overall - a good balancing act albeit still a tough budget. But could have been much worse and I think Moodys will not downgrade us on the back of it. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Market continues to wait for president Zuma to go. It is taking time but ejecting a leader usually does take time and markets are patient and way more interested in what is happen in the US with inflation data out after I have recorded this podcast. This will likely be the driver for now. When Zuma eventually goes, and he will go, then market can move on that info. It is messy (as politics usually is) but it just a matter of when, not if. Oceana (JSE code: OCE) CEO quits to buy their boats? Resilient, Nepi Rockcastle, ForstressB & Greenbay (JSE codes: RES, NRP, FFB & GRB) continue to flounder after 36One report surfaces. Was it leaked? Does that matter? Resilient have responded via SENS and a conference call and a FAQ - now the market gets to vote. http://resilient.co.za/faq.htm New African property ETF. RA, pension or provident fund by Carina Jooste. Up-coming events JSE Power Hour: Kick off 2018 with ETFs and tax-free investing Avoid the big losers or risk your portfolio A -60% return requires a +150% to beak even. A -80% return requires +400% to break even. Think about that. Saving that last 20% on the downside is worth a 250% smaller return on the upside. — Ari Paul (@AriDavidPaul) February 13, 2018   Trading is really probability and all we have to do as traders is enter on time and then ensure no large losses. If we avoid the large losses those small profits and losses will cancel each other out and the occasional large winner will make all the profits. But we have to cut the large losers or else we go bust. So why do we hang onto our losers? Fear of the pain - we want the thrill of winner because then we're winners. Fear of being wrong - measure by what you control (perfect trade challenge). Fear of the money being gone - trade smaller size. We Get Mail Ruan I am new to CFD trading and I see that with CFDs you qualify for dividends. How does it works? Manoj I am considering investing in the new CoreShares Global Dividend Aristocratic ETF that will launch on 22 February. However, I would obviously want to make sure that I am buying the share at fair value or at a discount. How would one ascertain whether the price is at fair value or a discount? Normally, one can use the P/E ratio to ascertain value. But, in the case of an EFT, this ratio is not available. Additionally, I am nervous about committing to purchase the ETF during the book build that ends on 15 February because I don't know the launch price. It this nervousness justified? Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Dual CEOs at Investec (JSE codes: INL / INP)? Market sells off and rebounds (a bit) and we're in correction territory (down 10%). The falling property stocks of Resilient, Nepi Rockcastle, ForstressB & Greenbay (JSE codes: RES, NRP, FFB & GRB) continue to trade down at the low levels they hit when Viceroy concerns initially hit the market in early January. Capitec* still under fire from Viceroy and share likely to be subdued for a while. Brimstone (JSE code: BRN) has sold down their stakes in both Tiger Brands (JSE code: TBS) and Life Healthcare (JSE code: LHC). Now what will they do with the R750million cash? Stress free tax year Up-coming events * I hold ungeared positions. Section 12J (S12J) Introduced in 2009 this enables a tax payer to invest into a startup (via the S12J fund, Section 12J Venture Capital Companies (VCC)) and claim it as a deduction on their tax return effectively reducing ones income by the amount invested. An important point is that the investment has to be held for 5 years or income becomes taxable. In theory nice but with some buts; Firstly investing in startups is high risk - of course it is. That said you can invest in lower risk and more mature companies, know what you're investing into. Exiting at the end of five years may be a challenge. How does one sell a stake in a startup? They could list but if not liquidity is going to be a potential problem. Check how the fund plans to manage this and how it has worked in the past. Check the numbers very carefully. I've seen a lot S12J companies working the returns off R550k when you made a R1million investment. The theory is that they include the R450k tax saving into the return. Sure, but where did the R450k go? Know what you're investing into. This is much harder then listed investments as they're startups and we have limited information and hence valuations are hard. Get to grips with all the fees, all of them, in lots of detail. Quality and track record of the VCC managers. Bottom line is that there are good and bad in S12J. Make very sure you know which you're getting into. Lastly, saving tax is never a good enough reason on its own for an investment. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Viceroy charges into Capitec* I think we're missing a point with this latest Viceroy report on Capitec. Sure we're proud of the business and if you're a shareholder you've made amazing returns. But we seem to be circling the wagons and shooting the messenger rather then actually discussing the merits of the report. Two important thoughts to ponder. What if Viceroy had published their Steinhoff report before Steinhoff admitted to their fraud, would we have believed them? Simple answer is no and we would have looked stupid when the company admitted the fraud. A fund manager does their research in a company, decides it's a great sock. They buy it and then they go out into the world promoting the stock - talking it up in the media and notes to clients. How is this different from what Viceroy is doing (aside from Viceroy shorting rather then buying)? Here are some others who have been asking questions about Capitec. Benguela Fund Managers wrote to Capitec on 19 January 2018 asking questions. Summit Financial Partners has court action on-going against Capitec. Moyagabo Maake and Rob Rose wrote on the same issues on 19 May 2016. Former FNB CEO Michael Jordaan commented that “It is too early to draw any conclusions".  *I sold half my Capitec shares at R911.00 yesterday. A last point is that with Capitec exposed as the Viceroy target suddenly the other contenders (Resilient stable, Aspen, etc) are now all forgiven. But hold on, when we were unsure who was next the market sold these stocks off aggressively - this tells us something important. It tells us the market is not confident about these stocks and we should take that warning seriously. Here's a Periscope video I did just after the news broke. Here's the Hebalife video. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Global Dividend Aristocrats ETF This week Simon chats to Chris Rule from CoreShares on their soon to be listed Global Dividend Aristocrats ETF. It uses dividends as a quality metric rather then searching for yield and much like the MSCI World ETFs we have locally it is concentrated in the US at 53% with Europe making up another 22% but it is light on tech. You can book for the events here. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Aspen (JSE code: APN) being vice squeezed. Woolies* (JSE code: WHL) trading update, "impact of a potential re-assessment of the carrying value of the David Jones assets". Watch out for the "goodwill write downs are not cash", true but they were paid for with cash. Shoprite* (JSE code: SHP) update seemed lighter then I had expected, good but not awesome. That said market liked it and stock is up over 6% since the SENS. * I hold ungeared positions. New year resolutions for investors "Everybody has a plan until they get punched in the face" Mike Tyson Stop watching the prices. These are long term investments, check them every so often if you must but certainly not even weekly never mind intra-day. Only own stocks that you have at least three strong reasons for owning and revisit these reasons at least once a year. Sell the dogs in your portfolio, sell them now (I'll wait). Sell anything that is not the best management and be very careful about what qualifies as best management (think Steinhoff). Careful of complexity (again Steinhoff). Miners and other cyclical stocks are never long term investments. ETFs are best and easiest way to create wealth, always have a core of at least 50% ETFs in your portfolio. Your first R33k invested every year must go into a low cost ETF tax-free account. If you not regularly beating the market over a 1 and 3 year period. Stop trying and just buy ETFs. Cost are a big killer. Keep it simple. Keep it diverse. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Every year the first JSE Direct of the year is our annual predictions show. Marc Ashton, Keith McLachlan, Small/Midcap fund manager at Alpha Wealth and Just One Lap founder Simon Brown review their predictions from the previous year and make their top three predictions for 2018. They then also make a call on the Top40 and ZAR/US$ for the year. You can find the 2017 edition here. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares EOH (JSE code: EOH), so the collapse was because of directors margin calls that forced them to sell? This is an epic disaster, if it was my board I would fire them. A share price collapse has real consequences, especially for a company like EOH that uses their shares for acquisitions. Steinhoff (JSE code: SNH) mess continues but an interesting meme occurring in an attempt to make sure the asset managers take no blame. The same happened after African Bank, Enron and other notable corporate collapses. I not saying we should be jailing the asset managers but we should be asking hard questions and having the debate. I am seeing more and more analysis on the fact that SNH was not quality, sure it is in some (but not all) cases after the fact but enough people are speaking out. Yet this low quality stock was valued at around R300billion at its peak and suggesting that it was impossible to tell is an outright lie as proved by many people being short and querying the numbers. Surely as an industry it is important to understand how this happened? Now some managers hunt out low quality as an investment theme, but they are the minority. Pretty much every asset manager will say they buy quality at a good price - but then I ask again, how did this low quality stock end up worth over R300billion? As an industry we are the custodian of peoples retirements, savings and ultimately their dreams - we need to take this seriously and surely, at a minimum, the honest response when we get it spectacularly wrong is to reflect how we get it wrong? Instead I see all sorts of head in sand or finger pointing? Why? Too busy keeping the fees and buying luxury German sedans and Cape Town holiday homes? Likely this is the final JSE Direct for 2017. I have many more ideas but need to take a break. We'll be back with our predictions show in January with Marc Ashton and Keith Mclachlan and as always we'll start by scoring our 2017 predictions (find our 2017 predictions here) Position your portfolio for 2018 is online (video, audio and PDF). Asymmetry of investing The asymmetrical nature of investing is a huge boom to investors. A share we own can go to zero with a 100% loss, but the flip side is that it can up go up multiples of 100%. So even the occasional loser doesn't derail a diverse quality investment portfolio. The two key points, diverse and quality. If you have only one stock you're at massive risk and if you have a basket of dogs then you're still in serious trouble. But a collection of quality stocks can survive the occasional blow out as they others run and we only needs a few real winners to make it all work and market beating. Now in an ideal world we'll never see a 100% blow out because when it's time to panic we'll panic quick, right? A last word on the asymmetry of trading (as apposed to investing). We have no real floor on loses as we also have no real floor on gains. So it is not asymmetrical and so we have to make it so by being ruthless with stop losses. I have long said my trading success is due to my always taking the stop immediately no questions asked. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Our signature yearend JSE Power Hour presented by Just One Lap founder, Simon Brown. Simon looks at what he predicted last year before embarking on his 2018 predictions that include; Steinhoff (JSE code: SNH) Naspers (JSE code: NPN) Bitcoin (BTC) The December ANC elective conference, who'll win and how will this impact our market Junk status The R50billion tax hole looming in the February budget Interest rates The Rand International markets Commodities His preferred stocks and ETFs for 2018. The PDF of the presentation is here and video here.

Simon Shares Twitter poll for tonight's JSE Power Hour presentation ~ What's your expectation for the Top40 in 2018? Time for my annual poll .. What's your expectation for the Top40 in 2018 ?#JSE — Simon Brown (@SimonPB) December 4, 2017   Steinhoff, where there's smoke Markus Jooste has also quit Stenihoff (JSE code: SNH), Star (JSE code: SRR), PSG (JSE code: PSG) and Phumelela Gaming (JSE code: PHM) boards. Steinhoff CFO and Star CEO Ben la Grange has quit as CEO of Star, but seemingly stays on at Steinhoff, for now. It's an oldie but it always true. Where there's smoke theirs fire and locally that is Steinhoff. Forever people have been in one of two camps on this stock. They either loved it or didn't understand the financials and stayed well away. I have always been in the latter camp and recently the warnings have gotten dire and now the CEO is out, results delayed and an investigation by PwC to try and understand exactly what's happen. Now hindsight is easy, but there has been a lot of smoke around Steinhoff for ages, enough to scare away any investor one would think. I warned as recently as a month ago about this. For traders the lesson is simple. Don't try and catch falling knives. Sure sometimes it works but when it doesn't you blow up. Wiese took some R122million SSF exposure in early November at 6146c. This is why we largely ignore director buying. The company did a share buy back also in early November for about R4,8billion, now worth R1.2billion. Also a lot of hating on ETFs as Steinhoff was 2.35% of the Swix (which is a truly horrid index) and 1.88% of the Top40. Frankly active fun damagers who liked the company probably had a lot more. The 7th largest stock in the South African SWIX index is currently down 61% amidst accounting irregularities and resignation of the CEO. pic.twitter.com/NEqwrsBGwo — Delphine Govender (@Delphine_DG) December 6, 2017   Of course everybody now wants to know if it is time to buy? The answer is no because we simple know nothing except that what we thought we knew is not true. Never blindly buy something where everything is simple unknown. Some saying they have 2500c odd value in Star, PSG & Kap, but then they also have debt that is likely about the same. Viceroy Research has published their report in Steinhoff and it makes for scary reading. Lastly, what to do if you hold Steinhoff? Sell. The 'it can't get worse' trope is a lie. It can get worse, it can go to zero.

Simon Shares More downgrades as S&P Globals makes our local debt junk as well to go with Fitch. Moody's gave us 90 days which takes us to just after the February budget and if they drop us then we full on 100% junk, AKA Brazilian. The Rand is powering ahead trading in the R13.60's against US$. My call for a stronger Rand remains in force. Slowly but surely. The latest Long4Life* (JSE code: L4L) deal is a perfect fit with the Gauteng based contract bottler they are also buying. I like the share at these lower prices. Yearend portfolio clean up is coming up and the one I eyeing is Calgro M3* (JSE code: CGR) in my second tier portfolio. I sold most back when Nene was fired keeping a few and they have pretty much halved since then. Checking my notes from when I sold my plan was to monitor and sell if I saw weakness. Well we got the weakness, but I didn't sell. Now I could hold them on a prayer - but I'd rather just bin them. I've been writing my yearend columns for FinWeek looking into 2018 events and stocks. They'll be out Next Friday and I'll share some in the podcast in the weeks ahead. Sygnia Itrix 4th Industrial Revolution Global Equity ETF (SYG4IR) lists next week. ETF winners for the year, what's RHO? Up coming events; Position your portfolio for 2018 * I hold ungeared positions. Trading buddies Trading is often very lonely, sure there's the people on Twitter or WhatsApp group you chat to - but mostly that's wild and wooly and not really any support. Your friends and partner are likely not much help either as frankly they don't truly get what you do or the pressures involved. So we need a trading buddy, not just to keep us sane - but also to keep us honest and help us when we need it. we can use them to vent as required but even more importantly we give them access to our trading account for two reasons. Firstly they check our trades and make sure we're trading as we say we do. Keeping to the system and staying honest. Secondly they can get us into or out of trades when we're not able to. The real hard part is finding this trading buddy. Check around your circle of friends, try Twitter and other forums and be very selective when choosing. We Get Mail Anne Why when I look at the daily chart of an ETF does it jump all over the place? Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares I am traveling this week so recording on Monday and hence no thoughts. Naspers (JSE code: NPN) hits R4,000.00. Survey results are out. Up coming events; Position your portfolio for 2018 * I hold ungeared positions. Stop faffing, start trading I want to aim this mostly at the newbie traders. Those who've been flirting with the idea of trading for ages. Maybe you've tried your hand at it but failed or perhaps you haven't dipped your toe into the water as yet. Trading is not hard, the psychology is hard, but there are ways to deal with that. First find a strategy you think makes sense, then start working on it. Test it with hundreds of back tested paper trades. Tweak as required and test again, rinse and repeat until you have something that seems to have a profitable edge. This may take you weeks of manual work - that's fine. Then when you have something that seems to work, start with a small amount of money. Small as this will help reduce the stress. Set the rules and risk management and get trading. Track your performance, your perfect trades and keep a journal. Importantly change NOTHING about the system. Ideally you should trade the exact same system for the entire 2018. If it is losing money badly, then your testing was bad. But by the end of 2018 you'll ideally have a working trading strategy and you can start increasing the portfolio size. Point is start and have modest expectations. Aim to break even in year one - that's winning. Online resources; Boot Camp Master Class Traders Life We Get Mail Ivor Why do so many large cap companies not make it into the Top40? (Glencore, South32, Amplats, Hammerson, NEPI, Kumba, Resillent & Capco).  

Simon Shares Zimbabwean coup, or not coup or whatever. People are all asking me what's the best investment thesis here. There isn't one, a coup is not great for an economy. A democratic functioning state is what is good for investments. My comments last week about large M&A activity seldom working promoted a number of responses about successful deals - but all were private (not listed). This makes sense, no hype, no over paying. Just good old fashioned due diligence and right price paid. Consolidated Infrastructure Group (JSE code; CIL) update and delayed results is a massive mess. Third update and this one says we simple don't know how bad things will be nor if previous results are sound. Major management failure both to communicate to market and to manage the company. Spar (JSE code: SPP) results show revenue up 5.4% while operating costs increased 19.2%. Not good at all. Switzerland seems to be coming right, Ireland not and South Africa is tough. Netcare (JSE code: NTC) trading update is all about their UK BMI Healthcare business and it's all bad news. Another large offshore deal gone all frot? South African bond issue on Tuesday at largest ever (R3,3bn vs. R2.75bn) and over subscribed 3x. But at 0.75% higher rates and maturing between 2031 and 2048. Compound that cost to our economy. Survey results are out. Up coming events; Position your portfolio for 2018 * I hold ungeared positions. When it's time to panic My grandfather introduced me to markets in the 80's and one of his key sayings was "when it's time to panic, panic fast". When bad news breaks (yes we looking at you CIL) and a stock crashes the immediate response is that it's too late to do anything. Maybe, but often times the will be continued weakness because news and response is not instant. It takes time for everybody to respond. The bigger issue is if the news markedly changes a view and saying the damage is done is not an answer. This is especially true if the issue is management related and also in cyclical and small/mid cap stocks. Importantly I am not talking about panicking when the market crashes. This is about exiting a stock forever and moving on until it proves its bonafides again. Selling crashes is nice in theory but never works. Stocks are different because they can go to zero worse case or spend years, decades, forever languishing around little or nothing. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares More highs locally and global for markets. And of course that makes everybody worried and certain we're about to crash. Well we will most definitely crash, just nobody (and I mean nobody) knows when. So as always ignore the doomsayers. Tencent buys a 10% stake in Snap, a clever deal as it gets them into the US market. It also means we now all own some Snap via any Top40 ETF we have with Naspers (JSE code: NPN) in it. Purple Group (JSE code: PPE) results were rough. Ignoring a write down of Real People, GT24/7 made a sliver of profit, Emperor is losing AUM hand over fist while EasyEquities continues loses. With almost 60k users the burn rate for EasyEquities is about R3m a month with revenue of some R800k a month. That's a large gap that needs a lot more customers to close. They do however have the money from Sanlam that tides them over for the next 3 years while they try turn the low cost idea into profits. Steinhoff (JSE code SNH) is back in the bad news on reports that it hid US1billion worth of related party deals. This company has a lot of smoke around for an innocent company. Sasfin (JSE code: SFN) has a price-to-book (PB) of around 1x and that is always a buy signal for the stock. Ungeared and hold until PB is 1.4x or higher, about 12-18 months typically. You'll get NAV uplift, dividends and the price gain above NAV. I have sold my Tongaat (JSE code: TON) shares. The latest update showed that even with returning rain we're not seeing the profits from sugar, so my thesis was right (rain) but with no profit to show for it I bailed. Help us help you, do our six minute user survey. 4 New ETFs from Sygnia. Up coming events; High probability derivative trading Position your portfolio for 2018 * I hold ungeared positions. Too big to work (AKA big deals suck) Brait (JSE code: BAT) has valued their UK New Look business at zero. They paid R37billion just under two years ago. Woolies* (JSE code: WHL) and Famous Brands* (JSE code: FBR) both struggling with big deals and now Firstrand (JSE code: FSR) spending some R20billion buying Aldermore. How many big deal really work? Sure they work eventually, but at what cost and never as management promised. I suspect it has two key problem. Firstly they buyer typically over pays in their eagerness to get the assets, this is especially true when the target is listed and the premium has to be agreed on by shareholders and is hence usually 20%-30% or more. Secondly merging two business is never easy. Some easy wins such as centralised costs like HR can be lowered, but actually extracting value a lot harder. The third of course is the ego of management. Who wants to be boss of some regional business when you can be a global titan over seeing a vast network of losses? My memory says very few ever work very well. Have you got some examples of large deals working? SABMiller worked, BHPBilliton* (JSE code: BIL) worked. Any others? We Get Mail Peter I see that some of the Satrix products are offered as either ETFs or unit trusts. What would compel me to purchase via a unit trust rather than an ETF for something basically the same? Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Famous Brands* (JSE code: FBR) results were nasty. Local was weak but the real issue is the UK GBP purchase that cost a bunch and is not performing. Long4Life (JSE code: L4L) is now 510c as I record. Nice price and a lesson that we must never chase stocks. Sasfin (JSE code: SFN) has a price-to-book (PB) of around 1x and that is always a buy signal for the stock. Ungeared and hold until PB is 1.4x or higher, about 12-18 months typically. You'll get NAV uplift, dividends and the price gain above NAV. Clicks (JSE code: CLS) are a master class in how a set of results should look if the company really is firing on all cylinders. Revenue +10.9%, HEPS +14.5% and the dividend +18.4%. The Traders Life three part series with IG is online. Up coming events; High probability derivative trading Position your portfolio for 2018 * I hold ungeared positions. How important is your trading system? Your trading system is one of the least important parts of a successful traders arsenal. Yes you need one and yes it need to be profitable. But it is not what is going to make you the money. That will be your discipline, your money and risk management - this is your trading edge. So stop trying to find the best system in the world. Stop tweaking your system every tine it loses some money and stop jumping from one system to another. Find a system that makes money, test it and learn to trust it. Become the absolute pro at the system and then trade it; unemotionally and with discipline. We Get Mail Ron I want to buy Tech stocks (eg Alphabet, Amazon, FB, Apple, Tesla ...) and get a little Biotech exposure using an off-shore account. I'd prefer an ETF than individual stocks. ========= Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Books Trading Trading in the Zone – Mark Douglas (detailed review) Trend Following – Michael Covel (detail review) Reminiscences of a Stock Operator – Edwin Lefevre Investing One up on Wall Street – Peter Lynch (detailed review) Common Stocks and Uncommon Profits – Phil Fisher (detailed review) Effective Investor – Franco Busetti Intelligent Investor – Benjamin Graham 123 Download the audio file here Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Local markets have been making new all time highs and right now the sellers look shell shocked and unable to exert any real downside pressure. Taste (JSE code: TAS) results were just a shocker and they need money fast, real fast. Pick 'n Pay (JSE code: PIK) results were uninspiring. Like for like sales after inflation went down as they continue to lose market share and operating margins remains very weak at 1.6%. Calgro M3* (JSE code: CGR) not bad is we strip out the funnies. Memorial parks coming along and Western Cape drought hurting a bit as is the weak economy. I reduced exposure at the the time of three finance ministers in 4 days in December 2015 and am not upping my exposure for now. Long4Life (JSE code: L4L) at 550c starts to get interesting and offers an important lesson - careful of chasing hype. Up coming events; FX – Wealth Creator or Poverty stamp The Traders Life: The tools High probability derivative trading Position your portfolio for 2018 * I hold ungeared positions. Managing the dreaded drawdown Every trader will at some point have a drawdown when a string of losing trades sees your once lovely equity curve head south. Or worse an ugly equity curve get even worse. Typically the gut response is to either; change system, tweak the system, reduce trade size or just panic. None are a good idea. August saw me have a horror week with four large loses (within system expectations, but not expected all at once). My immediate response was some Amazon shopping but then I got into my drawdown mode. First I check every trade to make sure I did everything right. Now every trade I do is marked for a 'perfect trade' but I double check. I also go back to my initial system checking and see if this was expected. I use the Mark Douglas method of system testing and this process is very important. Firstly it gives an expectation of what the system can deliver, tests if it works and also shows what sort of drawdown you can expect. The point is drawdowns are a part of trading and veery trader will have many of them over a life time of trading. We need to expect them, manage them and not have a knee jerk response to them. I was interviewed by Duncan McLeod from TechCentral on local and offshore tech stock, interview below or here. Content hosted by iono.fm Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Just two weeks ago I was moaning about a sideways market going nowhere, now we have eight green days in a row with local markets joining much of the world at all time highs. Famous Brands* (JSE code: FBR) trading update was bleak, very bleak. Interest costs we expected, they suggest SA doing well enough. But UK losing money after paying some R2billion is a shocker. PPC (JSE code: PPC) has doubled in price, remember I said wait for doubling and then buy. So heres your entry.  Santova* (JSE code: SNV) comes out with very good trading update considering ZAR strength during the period. List of all listed ETFs ranked by their TERs. A great list from Kristia. Up coming events; FX – Wealth Creator or Poverty stamp The Traders Life: The tools  * I hold ungeared positions. When to short shares A recent flurry of emails from people shorting stocks and getting burnt. In particular shorts on Capitec*, Naspers and Kumba. A side note that emailing me is a form of confirmation bias as the emailers wanted me to essentially confirm they were right and the market was wrong. First rule is don't. Second rule is don't short on fundamentals. Short on price action, if you want coupled with fundamentals. But don't just decide a share is expensive so now it must go down, it can get way more expensive. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Market going nowhere, I take a week off and it literally goes sideways in tight range. Capitec* (JSE code: CPI) results saw HEPS up 17% (trading statement said 15%-18%, they always come in near top of range). Lots of wow numbers; 9.2million active clients and cost-to-income ratio at 36%. The disputed arrears coverage ratio is back at 237% after concerns about it decreasing a year ago. Discovery* (JSE code: DSY) results solid with lost of spending on the future. Still my favourite share I own in terms of potential and I happy to add below R156. Richemont* (JSE code: CFR) trading update shows they turned the corner re nasty watch sales that resulted in them having to buy back watches. Stock trading up at all time highs above R120. My buy price is R118. Santova* (JSE code: SNV) nice clean deal buying out a 25% silent partner from their Australian operation at decent price. Gives immediate extra AUD earnings. New Ashburton World ETF Up coming events; The Traders Life: The money with IG and Simon Brown Buying when the Markets are at all-time Highs  FX vs Shares – Wealth Creator or Poverty stamp * I hold ungeared positions. Trading time frames The first question no new trader asks is which time frame should they be trading in. Typically one starts looking at daily charts but quickly drops to shorter time frames because we want the rush that comes from each trade and we get more at shorter time frames. Yes trades happen in all time frames, but it's our ability to manage and profit from them. But truthfully can most people manage an intra-day time frame unless this is all they do? Markets is pretty much my life and an hourly chart is still tricky for me as I miss some entries (stops are automated so that no problem). Shorter time frames; Are also more noisy, Require quicker responses Means shorter trade duration, smaller profit per trade but same costs Forget about getting a rush from trading and find a time frame that works for you and potentially use multiple time frames. Start with a weekly chart, if you get a tigger wait for it to confirm in the daily chart. Now if you not using technicals but more about price then tie frames become less of an issue, but you're then having to watch the market consistently hence no other day job or trade at night. We Get Mail I started buying ETF’s about 4 months ago. I purchase through on line trading. It appears however that prices are manipulated to keep them within a band. I have been seeing signs of this across all ETF’s – some more than others. Last traded prices are impossible to buy at due to the artificial bid volume/price. What makes it even more obvious is often the identical bid / offer volumes. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Metrofile* (JSE code: MFL) results very modest as they reduce dividend for H2 but keep it flat for the year. Clover (JSE code: CLR) results were ouch, very ouch. They call it a perfect storm, I call it over priced branded milk. Spur (JSE code: SUR) were also very bleak and give us some insights to the Famous Brands* (JSE code: FBR) due at the end of October. Now Famous Brands has a way better business model and management, but expect very tough results from them. JPMorgan's Dimon said that Bitcoin 'is a fraud'. Right or wrong the price collapsed again and expect a lot more attacks from 'traditional' financial institutions, attacks that Bitcoin fans will say prices its value as it shakes up the establishment. No to tax, yes to fees? Up coming events; The Traders Life: The money with IG and Simon Brown FX vs Shares - Wealth Creator or Poverty stamp  * I hold ungeared positions. Everything is at all time highs Why does everybody hate highs? If we're an investor highs are a great thing as it means we're richer then before? I once had a trading system that one of the rules buy new twelve month highs, and it made money. We get mail Leonard I was a client of Saambou back in the day, and I’m concerned about possible risks of holding everything through a single financial institution. Would there be any risk associated with putting all my eggs into one basket? Hoosain Just read about Patrice Motsepe's ARC investments going public on the JSE yesterday. The headline on moneyweb says "Patrice Motsepe lists his Berkshire Hathaway". Alarms bells rang off in my head when I saw this. Your thoughts about the company and its potential to be South Africa's Berkshire Hathaway? Chris Could u please explain the implications of the STAR spinoff? I currently hold Steinhoff and Shoprite. If I want to hold on to my exposure to PEP, ACKERMANS etc., do I now need to go and buy STAR? Or does Steinhoff still own STAR and thus I can just hold on to my Steinhoff shares? Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Capitec* (JSE code: CPI) trading update is looking for HEPS to be 15%-18% higher. Modest for a 27x PE stock with consensus being 18.7%. The DB x-tracker ETFs will see their name change on Monday 18 September as Sygnia completes the purchase process. The new name is Sygnia Itrix and the ETF codes will see DBX replaced with SYG.Rhodes Food Group (JSE code: RFG) got hit after a trading update that saw decent local operations but declining offshore sales further hurt by the stronger Rand. ARC Investments (JSE code: ARC) lists today (7 September) after an over subscribed placement at 850c. They have an interesting set of assets, mostly unlisted with net asset value (NAV) also 850c and an investment holding company should trade at a 10%-20% discount to the NAV. So we should see some weakness which give an entry to those wanting stock. Star lists later this month and after the Shoprite* (JSE code: SHP) vote on Tuesday to buy the shares back from previous CEO they now have total control of SHP. Reading the star listing docs, they are most certainly coming for my SHP shares and I am not a keen seller. A Periscope viewer asked my views on the Easy Equities launch of US listed stocks. Short answer is I like but with some cautions such as cost and paper work to transfer money and what to buy. Up coming events; JSE Power Hour: Disruptions or Innovation The Traders Life: The money with IG and Simon Brown * I hold ungeared positions. Ignore the fear Remember Greece? I don't mean as a holiday destination, I mean as the country who's debt levels caused years of panic that were going to crash the global economy? This peaked in 2015 with elections in January 2015 and then in July a referendum saw voters reject the European Union proposed bailout leading to new elections in September 2015. Yet two years later Greece is pretty much never spoken of? The debt had not magically disappeared, rather it is being 'managed'. The struggle remains real for ordinary Greeks and no doubt the politicians continue to do whatever politicians do. The point is the word is full of one crisis or another and the media will always make the crisis seem way bigger then it often is. If it bleeds it leads is the old newspaper adage and a financial crisis in an EU economy is always going to lead with plenty hysteria thrown in for good measure.The truth is the Greek debt crisis never really mattered to the rest of the world and I did a JSE Power Hour on this in June 2012. Now don't get me wrong, we will have another global financial crisis - of that I am certain. But what will trigger it and when it will happen I have no idea. So as long-term investors and short-term traders we ignore all the hype and fear mongering. We focus on what we know and can control. For investors that means buying quality at prices we like. For traders - trade the price and ignore the noise. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Telkom (JSE code: TKG) has confirmed government wants to sell their 39% stake in the company, likely to bail out SAA. Classic rookie error, exiting good trade to keep bad trades. Amazingly good results from Home Choice (JSE code: HIL), but with zero liquidity in the stock the results are merely of passing interest. Decent results form AdaptIT (JSE code: ADI) albeit some margin pressure in the education and financial services segments albeit with the latter doing decent revenue growth. All considered around 900c price is a fair value. I mentioned last week I was digging more into ADvTech* (JSE code: ADH) to determine a price to buy at and have now started buying with my fair value (so price below which I am happy to buy) being 1970c. The Harvey storm has hit land again, this time at Louisiana and this is just next to Lake Charles where Sasol* (JSE code: SOL) is building their Ethan Cracker plant. So far Lake Charles has been spared the worst of the wind and rain but we have a few more days of rain to come. The Sasol project will almost certainly be delayed by some amount (and hence costs) but as yet management have said nothing. Understanding the Krugerrand Custodial Certificate. Up coming events; The Traders Life: The process with IG and Simon Brown JSE Power Hour: Disruptions or Innovation * I hold ungeared positions. Where's your stop loss? The #ALSI gives us a free lesson in stop hunting pic.twitter.com/EkqvebhUkV — Trader1137 (@Trader1137) August 30, 2017   As a trader your stop loss is your most important decision as it protects your capital from destruction. Sure it is hard emotionally cutting losing trades, but that's a lot harder then going bust - so every good trader is ruthless with their stop losses. But where to place it is hard. Point is - don't be obvious when placing a stop loss. Don't make it too tight or place it where everybody else would place their stops. Other traders will go stop loss hunting and will shake you out. If you find yourself being stopped out only for the trade to reverse and go in your initial direction - widen your stops. That said careful your stop loss isn't so wide that your system starts to lose money. Yes stop losses are hard. Hard emotionally as we're losing money and even harder to know where to place them. But without a stop loss process as part of every trading system you will go bust. So spend the time working on your stop loss placement within your trading system. We Get Mail Hawu I kindly would like to know, what is meant by a company when its raising funds on book-build? Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Shoprite* (JSE code: SHP) results were stellar, the best food retailer anywhere on this planet? Operating margin from 5.6% last year to 5.76% in the 2017 (more than double that of Pick n Pay), market share growing, rest of Africa rocking (albeit some currency pains). ADvTech (JSE code: ADH) results show tertiary booming but schools under a bit of pressure that they partly blame on "rise in the number of families emigrating"? I like the stock, am doing some more digging and working out my preferred pricing. Will update my portfolio page as and when, certainly cheaper and better positioned than Curro (JSE code: COH). Implats (JSE code: IMP) wins the award for stupidest thing in a SENS announcement "The major reason for the decline in HEPS from the comparative period is that the prior year gross profit declined to a gross loss in the current year." BHP Billiton* (JSE code: BIL) results show them back on track. Reducing debt, paying dividends and not going crazy on capex. I have been holding for ages but not buying, I have updated the buy price and it comes out at R168, so a long way off.  Naspers (JSE code: NPN) hit R3,001.00 and it still valued at less than its passive stake in TenCent. The video from Trader Petri is online - things he does well as a trader. Understanding the Satrix MSCI World ETF. Up coming events; The Traders Life: The process with IG and Simon Brown JSE Power Hour: Disruptions or Innovation * I hold ungeared positions. Scam alert Recently I have been getting a ton of scam phone calls around trading and investing that follow two themes. The first is offering me some training and software that will make me a fortune, usually 40% in six months! It won't. If it was so awesome why's this person stuck in a call center cold calling me? The second is offering to get me on the ground floor on some stock (such as Space-X, Uber or the like) or alternatively they've got a hot tip for me. If it all so hot, why are they cold calling me? Surely people would be queuing up to buy? These are scams, disconnect the call and if you can block the number and warn your friends. Certainly do not start sending money offshore to some random voice on the phone regardless who they say they are. Nor pay top money for software and training when much is free or cheap on the internet. We Get Mail Babsy What is the importance of having ETF in ones portfolio? why cant one just invest in shares only as this ETF also generate their income in shares. In a nutshell what is the importance of ETF in ones portfolio? Steven I invested in the DBXWD last week, me and a partner got into a discussion about what happens to my portfolio if I die? Subscriber to our feed here Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Curro (JSE code: COH) were mixed but mostly good. The lower priced schools struggled and the tertiary are still getting off the ground and will be unbundled in September. But for a stock on a PE of some 100x HEPS growth of just 22% is way to low. Anchor Group (JSE code: ACG) results were as expected from their trading update - a massive disappointment. Last March I was expecting HEPS of 100c for this financial year and they just did 22c (down 39%) and will be hard pressed to do 50c HEPS for the year. That said, 50c HEPS puts them on a forward PE of around 10x, not bad but frankly Coronation (JSE code: CML) with a dividend yield of some 6.5% looking much more attractive. PPC (JSE code: PPC) woes continue as the share trades at 1999 levels. Yip zero price profit this century if you've been holding the stock. This after a high of 5300c in 2007. So now everybody wants to buy, but there's no rush (if at all). Wait for a doubling of price before considering an entry. Famous Brands* (JSE code: FBR) update shows very modest like for like growth but this statement worries me "To date, certain of the new UK stores opened since acquisition have not met sales projections.". Up coming events; JSE Power Hour: Getting trading right with Trader Petri The Traders Life: The process with IG and Simon Brown JSE Power Hour: Disruptions or Innovation * I hold ungeared positions. Back to Bitcoin I did a Bitcoin (code: BTC) podcast in March and nobody cared . Another in June and interest was still modest. Now it booming and everybody wants in? Is it too late? No idea. Is it going to crash? No idea. How high will it go? No idea. What is Bitcoin? It is not a currency, it is if anything a commodity. It pays no dividends and can buy things but remember sea shells have been used to buy things in the past. For those wanting to buy Bitcoin, Magda Wierzycka )CEO of Sygnia) recommends using Luno locally (albeit it internal so only market within SA and hence price not always reflective of other exchange prices). Or use an offshore exchange (using your annual R10million offshore allowance) via Kraken or Xapo. Here's a trick, there is no central exchange for Bitcoin, so what's the price? Also no regulator and we have seen exchanges crash, be hacked and go bust. So this is fairly wild west out there. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares New all time highs locally for the All Share Index, Indi25, Top40 and ALSI futures as latter traded one contract at 50,000 for first time ever. I love all time highs. Upcoming events; JSE Power Hour: Getting trading right with Trader Petri JSE Power Hour: Disruptions or Innovation We Get Mail Johan If everyone is making money from trading, who are they making the money off? The answer is of course that everyone can’t be winners and there has to be losers. The ones that lose more than they win, give up and stop trading. Therefore you need a constant flow of newbies that will fail so that the winners can keep winning. Does this not seem like some sort of great pyramid-type scheme? Or is the general justification “survival of the fittest”? Your take on this? Wouter One question from a new investor. Would you stick to your current ETFs you have in your tax-free savings account or add new ones as markets change. Regards from China. Eric I have R50 000 that I want to passively invest in Satrix for 3-5yrs and I was thinking about taking 7 Satrix products and divide the money equally. Tim Could we not just be another Japan, everyone says the market may go up but Japan is the elephant in the room? Or am I mistaken? Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares British American Tobacco (JSE code: BTI) is in trouble on two fronts. Firstly the US is looking at requiring nicotine be reduce to non-addictive levels. Then the UK is investigating the company bribing African governments to get favourable smoking legislation. I suspect many had though the legal issues for these companies were behind them. Bank results are showing surprisingly low dab debt levels. Barclays Africa (JSE code: BGA) at 0.96% and Nedbank (JSE code: NED) at 0.47%. Good news, but cost-to-income levels remain high with Nedbank blowing it out at 59.3% and Barclays 56.4%. These high cost bases are a problem and are not coming down. MTN (JSE code: MTN) update was bleak. It finally gave us real numbers and shows it is down by about two thirds compared to 2015, which is pre-Nigeria. Local markets toying with all-time highs but unable to break higher. Understanding ETF TER ratios. Upcoming events; JSE Power Hour: Getting trading right with Trader Petri Investor or trader? Or both? I got an email about how a long-term investor had a 15% trailing stop loss on their share and asked it this was the right stop loss level. The question was moot as the writer seems confused as to whether they were a trader or an investor. The easiest measure is how long you plan to hold a position. If less than three years than you are a trader as SARS says holding less than three years is income and hence taxed at your marginal rate. So derivative or not short-term under three years is trading. But there is another issue which is technical vs. fundamental. Traders generally use charts as price action trumps all else and plays out in the short term regardless of valuations. Long-term investors use fundamentals as they will play out over the long term. So a long-term investor would have a stop loss but it would be fundamental based, not price based. Lastly, you can be both. Certainly I am both short-term trader and a long-term investor. Importantly use separate accounts, even if with the same broker. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares PPC (JSE code: PPC) announced departure of CEO and share tanks. This company in serious board room trouble. Kumba (JSE code: KIO) results were decent, dividend was wild (ahead of actual HEPS) as they compensated shareholders for missed dividends! This is odd and asks the question about dividends going forward. Concern is average cash break-even price of US$43/tonne was up from US$29/tonne in the previous period. Long4Life (JSE code: L4L) runs to 838c then announces confirmed deal for Holdsport (JSE code: HSP) at slightly higher ratio (was 10.44 L4L for every HSP, now 12.1) and share down to 600c. Starts to get interesting another 50c lower. Upcoming events Moneyweb Expo – Structure your pay cheque The market vs. the economy On Tuesday the Top40 was trading at the high for 2017 (and again on Wednesday) and when I tweeted the fact the replies were mostly about how the market is wrong. Look at unemployment, Guptas, recession, down grades etc. they all shouted. None of the is wrong, but is it relevant? Firstly we've had a three year +/-30% correction in time. But as importantly the market is not the local economy with listed companies earning a lot beyond our boarders and mostly the better stocks in the index as loser are tossed out. Lastly and perhaps most importantly the market looks head 12-18 months. With rates coming down, Zuma out in the new year and his preferred choice struggling 2018 looks way better for South Africa than many a recent year. So if we're looking to the seed half of 2018 then the future s brighter, and sure this may be relative, but brighter surely means higher for the market? Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Finally, 5 weeks after moving my FTTH has been installed so I am going to Periscope each recording as it happens which is typically Wednesday afternoon. https://www.pscp.tv/SimonPB/ Retail trading updates coming in and as expected they are mostly bleak, but we are seeing the impact of the rains mostly returning. Netflix is a monster, over 100million customers world wide. Long4Life is buying; Holdsport and Sorbet. Steinhoff (JSE code: SNH) raises R12bn (Euro800million) in Europe with a 7.5 year bond at 1.875%. Upcoming events JSE Power Hour: Recession proof stocks Moneyweb Expo - Structure your pay cheque  Is the fees battle over? Last week I spoke about the price war in ETFs. But do fees still matter? For the passive market fees are surely at point where they almost don't matter. Sure they can go lower but we're talking most local ETFs now nicely below a 0.5% TER ratio while the offshore are slightly above 0.5%. Don't get me wrong, every 0.1% makes a difference, but on R100k that's R100. Not nothing but not the difference between retiring or not. I still look at VOO with a TER of 0.04%, but we're never going to get that low (they're a mutual company and owned by the fund holders and have massive scale we'll never see in South Africa). Admin fees, once a silent killer have also disappeared at some brokers where a simple ETF or tax-free account has zero admin fees. Transaction fees are still a bug bear at some places with minimums that mean you need to trade some R18k-R30k per hit to get the effective rate. We Get Mail Georges I would like to find out how/when do ETFs collect their TER? Is this set off against distributions quarterly or “baked” into the price? Helen What will happen to my preference shares with Basil III? Will I loose them? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Finally, 5 weeks after moving my FTTH has been installed so I am going to Periscope each recording as it happens which is typically Wednesday afternoon.  Calgro M3* (JSE code: CGR) update on their missing SENS. Feeling is that the impact is marginal and will hardly hurt earnings? Time will tell, I still don't like asymmetrical information. Oakbay (JSE code: ORL) is delisting from the JSE as they can't find a sponsor. No surprises but real bad for any shareholders. Sygnia (JSE code: SYG) announced the details of the rights offer and it is at 900c but only for R160million as apposed to the expected R320million. So much less dilution, albeit also much lower price. Pubic Protector not fighting the SARB objection of her attempt to change its mandate. New emerging market ETF from Satrix Upcoming events JSE Power Hour: Recession proof stocks * I hold ungeared positions. ETF price wars With the new issue of ETFs from Satrix and Sygnia taking over the DB x-trackers (to be branded Itrax) we're seeing some price wars forming. Very good news for consumers, but some buts. Read the small print. Don't rush. Much of this is targeted TERs and the incumbents may also adjust their TERs downwards. Switching into a same but cheaper ETF may not be economical Tax, costs and spread adds up. My strategy will be where I buy an ETF that now has a cheaper alternative I will start buying the cheaper immediately. Switching will take longer. We Get Mail Everybody is asking Are you buying the new emerging market ETF from Satrix? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares New Satrix ETFs; S&P500, MSCI World Index and MSCI Emerging Markets Investable Markets and at low 'target' TERs. A price war in the local ETF offerings? Wednesday was exactly ten years since the UK had an interest rate increase from the BoE? Calgro M3* (JSE code: CGR) issued a press release stating that they're cutting back on 'wet work' in the Western Cape due to drought. But no SENS? ANC policy conference has proposed that the SA Reserve Bank be nationalised. Aside from my (so far failed) attempt to buy shares in it, so what? Shareholders have no say in the running of the bank and almost every other central bank is state owned. What percentage ETFs in a portfolio? Upcoming events JSE Power Hour: Recession proof stocks * I hold ungeared positions. New listings in hot sectors We've seen two small stock listing recently that were trying to attach themselves onto the hype of a hot sector. Gold Brands in the quick service restaurant (QSR) space and Pembury in education. Both have failed and both teach us an important lesson in the new stars that are worth investing in. It is about quality, it always is. Sure a raging bull market will lift all stocks as we saw way back in 2005-8 listing boom. But in a more subdued market, a more skeptical market, quality matters. Cash matters, brands matter, management matters. It all really matters. It is not enough to just be in the right space. Subscriber to our feed here Sign up for email alerts as a new show goes live Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Taste (JSE code: TAS) couldn't get the public to take up all of the 120million new shares, but a new shareholder of note did and it good news for the company. Naspers (JSE code: NPN) results talk of core HEPS. Now sure they tell us what 'core' means but as always I very skeptical of anything that is not IFRS. Wescoal (JSE code: WSL) results in part really hit it out the park with production up 82% while IFRS HEPS was 11.3c vs. 27.1c (company HEPS excluding BEE deal costs). Lafferty Group’s 2017 Global Bank Quality Benchmarking study is out, it ranks 100 major quoted banks across 32 countries and Capitec* (JSE code: CPI) comes out tops as the only bank to get five stars. Upcoming eents JSE Power Hour: Recession proof stocks * I hold ungeared positions. The problem with buy and hold is not the math, which proves it works. The problem is with the evidence, which proves investors can't do it. — Bob Brinker (@BobBrinker) June 27, 2017   How long is long-term? A recent question asked about some investing ideas and concluded with the comment that "I'm looking at long-term say 5 years.". Wow. For me five years is short term while long-term is decades (yes with a 's' at the end). I am not falling into the trap of saying things are faster these days with always on smart phones with taxis at our beck an call and online derivative trading. But the tweet below highlights that while we know long-term buy and hold works excellently, especially with ETFs, the average investor finds it hard. Stats continually show that average holding periods for stocks has been rapidly reducing. On the NYSE it is now months whereas it used to be years and years. I'm not sure if it's fear, impatience, indecision or just a greed to be rich quickly. But wealth creation takes time and sure it is no fun when over the last three years most local portfolios have returned nothing, only beating money under the bed. What I do know is that thinking of a few years as long-term is bad. We Get Mail Dale I understand the logic behind an equally weighted ETF, and why it *should* be a good thing, but I can’t help wonder if it’s not a case of “in theory, but not in practise". If I compare the performance of the CSEW40 to the plain Satrix 40, without exception over an almost 10 years period, the Satrix 40 outperforms the equally weighted 40 – sometimes really significantly (thanks etfSA for the data). JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Woolies* (JSE code: WHL) share price is under pressure hitting 12 month lows on Monday. Recession is hurting them as high LSM consumers shop down and even Australia is struggling economically. The winner here will be Shoprite* (JSE code: SHP) as they cater for mid/low LSM consumers and will pick up Woolies shoppers. Index changes effective Monday 19th. Only changes from the main four indices is Capitec* (JSE code: CPI) into the Top40 and Implats (JSE code: IMP) exits. * I hold ungeared positions. What do you trade? Why? When I ask people this question I generally get a surprised look as if it is a stupid question and the answer is generally CFDs. The follow up question is always - why do you trade them? Here the answers get garbled because there is seldom a good reason. We need to be strategic about what we trade. There are differences between; shares, indices and FX. Different funding, risks, costs, spreads and more. We need to understand what they are and trade those that best suits trading in general and our trading specifically. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Finally moving so at the pointy end of going small. Move date is next Wednesday which is also my recording day, so frankly not sure what the plan is re JSE Direct for next week. Will try make a plan, maybe a rebroadcast. PPC (JSE code: PPC), HEPS down 93% at 7c but this is all about the rest of Africa and a possible merger with AfriSam. Steinhoff (JSE code: SNH) results not bad, but so many moving parts it's hard to keep up. Bond and pref share ETFs for income. Upcoming events; JSE Power Hour: Ways that management can mislead investors JSE Power Hour: Trading for a living Now for the recession It was a surprise to most economists but thats moot as the economy and consumer is under severe pressure recession or not. Importantly this was for Q1 2017, so before the shuffle and downgrade. I think this is not going to be short and sharp, it's going to hurt as we have little to counter it. Government; cut interest rates, cut tax and increase spending. Personal; cut debt and spending. Investing; quality offshore bias, be careful of mid & small caps. We now really are Brazil. We Get Mail Ryno I think Buffett is actually a income investor. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Famous Brands* (JSE code: FBR) results were decent enough with the UK acquisition only adding a small bit to the bottom line. I have been buying in the low R130's. An article on Moneyweb that strips out the top five expensive and heavy weighted stocks in the Top40 shows a historic PE of around 12.5x. In other words offering value and adding to my bullish thesis.  Spar (JSE code: SPP) results show an operating margin squeeze down from 3% a year ago to 2.5% in these results. In part the offshore acquisitions but not a great sign. Sygnia (JSE code: SYG) results were flat. I expected at least some growth in HEPS but it was spent on new staff (via an acquisition) and marketing. We are still waiting for the details of the rights issue to fund the DB x-trackers purchase. For now I like the company but still think it is expensive. Property ETFs for dividends and the tax on the dividends explained. The JSE Power Hour video on investing while junk. Upcoming events; JSE Power Hour: Ways that management can mislead investors * I hold ungeared positions. When the best time to go offshore? All the time. We can worry about the Rand and we can worry about valuations, but we'll never get it right. I buy locally listed offshore ETFs every month (buying DBXWD) and move money into USD every six months on schedule. We Get Mail Everybody Suddenly Bitcoin ramps higher and everybody wants to know if they should buy it? Or maybe Ethereum or heck why not Dogecoin. I covered Bitcoin in a recent episode, more importantly is we only get excited when the price runs?  John Please can you explain some of the JSE specific rules on market cap indexing - i.e. how/why does AB Inbev get removed from the Top 40, will/how can it ever be included?   Subscriber to our feed here Subscribe or review us in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Unconscious Competence Maslow's theory of how we progress and ultimately become Unconscious Competent traders. Unconscious Incompetence Conscious Incompetence Conscious Competence Unconscious Competence JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Blitz round of result comments; Richemont* (JSE code: CFR) Calgro M3* (JSE code: CGR) Lonmin (JSE code: LON) Astral (JSE code: ARL) Vodacom (JSE code: VOD) Balwin (JSE code: BWN) * I hold ungeared positions. Upcoming events; CoreShares investment disciplines & transactional website JSE Power Hour: Investing while junk JSE Power Hour: Ways that management can mislead investors CoreShares transactional website and some investing core principles We're running a promo with CoreShares this month including an event in Durban next Wednesday 24 May at the Riverside hotel (email [email protected] for info or to book). This week Simon chats to Gareth Stobie about their new website that enables transacting in their ETFs and their three investment disciplines when saving for or already in retirement. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Shoprite* (JSE code: SHP) announced that former CEO Basson would be exercising a put option to company forcing it to buy back some R1.8billion of Shoprite shares. No problem, except did we know about this put structure? They say it was part of his December 2003 employment contract, but the annual reports of 2003/4/5 make no mention of it? Adcorp (JSE code: ADR), horror update. They are really struggling. Metrofile* (JSE code: MFL). Everybody wants to know if I am selling, why would I be selling? Just because the price is down? Rational Intuitive, what type of investor are you?  * I hold ungeared positions. Upcoming events; JSE Power Hour: Investing while junk JSE Power Hour: Ways that management can mislead investors How to trust your trading system Time and discipline is the best way to trust. My lazy system is now some 12 years old, so I know to trust it. But how do you get to trust a new system? I like the approach suggested by Mark Douglas in his book, Trading in the Zone. Back test (eye ball) at least twenty past trades. Paper trade twenty at least trades. Do twenty live trades with small capital amount. Now you have a system with sixty 'trades' and you know if it works and can trust it. We Get Mail Andy NFEMOM*, I know you hold it, was just interested in your thoughts on the costs. Expensive, no? Annualised TER 0.37% Transaction Cost 1.20% Effective Annual Cost (EAC) 1.57%. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares You know Apple results were truly average when even the fan boys say it was just okay. But that pile of cash, over a quarter trillion US$! MTN update looks decent for South Africa and Nigeria. Still tough in both but at least revenue is improving. Locally April vehicle sales and PMI data both fell off a cliff. But with Easter in March last year we're not comparing apples with apples, so May will give us a clearer picture. Upcoming events; JSE Power Hour: Investing while junk JSE Power Hour: Ways that management can mislead investors How much cash do we need to start? Trading or investing requires capital. As an investor one can start very small with just a couple hundred rand, but a trader requires a lot more in order to properly manage risk. So we look at the different options (CFDs, FX, ALSI and ALMI) and how much is required to start. We Get Mail Jing-Woei In a recent Finweek (30th March) magazine issue, I read about your view on the NFEMOM fund. I was wondering if you have also had a look at the SATRIX Momentum Index Fund? Terence 2% difference between ASHT40 and SATRIX40 closing prices, how come? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Purple (JSE code: PPE) who own Easy Equities had a very rough set results and as they comment in the commentary they need a capital injection. What does tihs mean for the business and clients? @csavagegt247 @Richards_Karin @Caro1Graham @gary_dyk @EasyEquities Some more comforting news regarding EE's nominee First World Trader Nominees (FTW). Taken from their T&C's. pic.twitter.com/oXSELq2QDZ — Johann Biermann (@JohannBiermann1) April 25, 2017 " src= "data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" alt="" width="20" height="20" data-wp-preserve= "%3Cscript%20async%20src%3D%22%2F%2Fplatform.twitter.com%2Fwidgets.js%22%20charset%3D%22utf-8%22%3E%3C%2Fscript%3E" data-mce-placeholder="1" /> Listed property or buy-to-let Power Hour was great, packed wth tons of details and the spreadsheet so you can crunch your own numbers. Kering results showed very strong growth for their luxury brands in Asia Pacific and this has spurred Richemont* (JSE code: CFR) higher. Details; Gucci +48% vs consensus +21%, Bottega Veneta +2% vs consensus -4%, Saint Laurent +33% vs consensus +19%. Steinhoff (JSE code: SNH) is loving the French election first round results. Upcoming events JSE Power Hour: Investing while junk * I hold ungeared positions. Trading multiple systems How to manage trading different systems? I trade three system with ALSI futures and I manage it by having a primary system that takes precedence over the other two, otherwise I could end up short and long at the same time. Alternatively trade different products (add FX to the mix and trade different crosses). Another option is one trading system but different products or markets. Engulfing candles system video Gap close system video JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares UK snap election for 8 June and French first round presidential elections this Sunday. Pick n Pay (JSE code: PIK) results looking decent but stock remains expensive. Combined Motor Holdings (JSE code: CMH), amazing results in a tough space. Top management and solid balance sheet. World Bank cuts our 2017 growth target from their original 1.1% to 0.6%, after cabinet reshuffle and subsequent downgrades. How we hurt our trading Message from a trading friend; "I think the true art of trading is learning to be completely satisfied with your own objectives. Rather than constantly worrying about what could have been if ..." Trading is simple. Buy when the chart says buy, sell when it says sell and sit on your hands in-between. But we over think it, we believe in complexity and this hurts us. I did not go short over the long weekend because, well politicians. I decide that I needed a new rule about 4 day weekends, do not hold over them? In truth I have been trading my ALSI systems all through recent recalls and shuffles and it had one of it's best runs on recent years for March with a very good April thus far. So why the sudden decision to change rules re long weekends? And what about three day weekends, will they in time also be bad? Normal two day weekends and eventually overnight holding? We Get Mail Jan-Albert I would like to pick your brain about the big "nationalising" of banks and mines. If nationalisation is on the cards we all lose? Or do we? Or is it hot air? You would also be out of a job? Or would you? Questions everywhere and I have no answers. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Our banks are now being downgraded by S&P and Fitch, this is to be expected. Tongaat*, I have been buying and now have full allocation. Still my preferred second tier portfolio pick. Taste selling jewelry and doubling down on international food brands with another rights issue coming. Japan, worth investing in? Upcoming events JSE Power Hour: Listed property instead or buy-to-let * I hold ungeared positions. Capitec* - should we worry? Lots of concern abut rising bad debts and how this will impact Capitec. They identify three risks; market, credit & business. Rescheduling is a risk that concerns many but Capitec defends it in being better business and they have over 200% provisions on arrears and they are well ahead of Basel 3 2019 requirements. Further when they reschedule a loan they increase provisions against non payment. They have been declining more loans and have been tightening credit granting criteria since April 2015 and now 92% of the value of a loan is provided for when three instalments are missed. In short they are obsessive about managing risk. That said tougher economic conditions, credit card and longer term loans do add to risk and they will likely see bad debts increasing. But they are not going to do an African Bank. Longer term they're earning more from non interest but this will take a long time to become significant against loan profits. The annual report is due later this month and will be online here. I had an aggressive R720 buy price, but that was before shuffles and downgrades and with growth likely to be hit post all the noise R620 is my safer buy price. We Get Mail Mkululi The question is in February the end/beginning of government year. The money I contributed which was pulled on the night of 28Feb2017, which financial year does it belong to? last year/this year. Jonathon I just watched the "lazy trading system explained" video and I had one question. In the risk management section you, Simon, talk about initial and secondary entry points to invest your 25% in 12.5% blocks however I was unclear as what qualifies as a secondary entry. Is the secondary entry point the next time both the primary and secondary triggers occur following the first investment? Alexander I am giving my nephew an investment account with a lump sum of R1000 for his 16th. I am leaning towards an ETF. Could you possibly suggest one that would be a good long term investment? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Down we go Standard and Poors downgraded our offshore foreign debt, not ZAR debt. This is about 10% of total SA debt. Technically we're not junk as that requires two agencies to rate us junk. But all said this is bad and expected and our portfolios should have been ready and waiting. It took countries like Uruguay, Croatia, Ireland etc. on average 7 years to regain their investment grade status after falling to junk! Columbia took 12 years and over the last 19 years, S&P has downgraded 23 countries to junk status, of those only 6 recovered, shortest recovery time was 5 years. How does it hurt? Debt costs for the country go up, so higher taxes and less government spending. Interest rates higher and rand weaker putting pressure on the middle class. Poor will be hurt with real damage is done to the middle class. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon Shares Capitec* (JSE code: CPI) through results got everybody talking about the "arrears coverage ratio" dropping to 208% vs. 223% previously and vs. 196% in 2015. This got all the attention last time as well, I not concerned and my 'aggressive' buy price is now around R719. I have some USD expenses due in the next week or so and have taken a hedge using NEWUSD* just in case. Anchor Capital results showed a serious slowing of growth but still a stock with a great looking future and at around 600c very attractive. I have bene trying to add to my very very small Sea Harvest* holding but I don't want to chase the stock as I think we may see some weakness in the weeks ahead. 1275c would be my ideal entry. It traded 1270c last week, but I wasn't paying attention and missed them. UK has triggered Brexit and now Scotland wants out of the UK. A really excellent post by Kristia on bond ETFs. Upcoming events JSE Power Hour: Listed property instead or buy-to-let * I hold ungeared positions. Protecting yourself from the Rand With the Rand getting all hot and bothered again after a protracted run stronger I thought a quick look at how we can manage our portfolio against a weaker currency. We have the easy things like offshore stocks that are locally listed, offshore earning stocks, locally listed offshore ETFs and the NEWUSD mentioned above. There is also a pure offshore bank or brokerage account or heavily invested into commodity stocks. But the bigger issue is that political squabbles are part and parcel of being a South African investor and Rand weakness is also our future, even if at times we have strength. So we need to build a resilient portfolio that survives these events. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Capitec* (JSE code: CPI) through R800. This is why I don't try time exits on long-term investments. Things can get crazy. Pembury is listing their schools division and it will likely do well on listing but I am not convinced and am not applying for allocation. Has the Trump rally hit a wall? Most of the cash for my Sea Harvest allocation has reappeared in my brokerage account, suggesting I got 3.8% allocation. We'll see how it trades as to whether I buy more in open market sell and run. I would like to hold in my second tier portfolio, but only if the numbers work and if it spikes madly on day one I will more likely sell into the spike and wait for things to settle. * I hold ungeared positions. Buying Bitoin (Code: BTC) Started in October 2008 with zero value as the first crypto currency it now trades around US$1,100 and has an ardent fan base. The questions are if it is the future of money? CoinMarketCap lists over 750 crypto currencies with a total market cap of over USD24billion. That said Bitcoin has a market cap of almost US$18billion with Ethereum on a market cap of almost US$4billion (up almost 50% in the last week) leaving very little for the other 750 crypto currencies. But they are very volatile and a commodity rather than a currency, but should we be investing or trading in them? We Get Mail George If people want interest, they want the most interest. My question is simple. Why are there so many options? Govi, Ilbi, or a call account with my bank? Which do I pick and why do I pick it? Stephen If I am looking for somewhere to park cash (i.e. protection of capital and quick access are key), other putting the money in a bank what would be the more suitable options? Also in this respect would there been any advantage in investing in an inflation linked bond ETF as opposed to directly in a bond? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Anchor Capital (JSE code: ACG) been getting pounded, after almost 2000c in late 2015 now around 600c. HomeChoice International (JSE code: HIL) is an online machine at making money, but liquidity is zero. Four trades this months and a spread of 1400c / 3540c. So just avoid. Oil under pressure, good for fishing companies and motorists. Sasol* (JSE code: SOL) has some hedges at around $47 and is looking good for a buy at around R360. Last week I commented was looking to pick up more Tongaat* (JSE code: TON) around R123.50 then then the drought update and stock has flown, now R133. I have updated most of the prices to be paid for my death till us part stocks here. Standard & Poors still rattling around pondering a downgrade for SA. Next release in June and then December by when they have to either downgrade us or remove the negative outlook. Choppies (JSE code: CHP) results tough as they try and take on the big guns on their back yard. Blue Label (JSE code: BLU) about to buy Cell C, I not impressed with buying the their operator in a tight market. Some saying they are next Capitec* (JSE code: CPI), can't see how or why. Foresight Solar Fund listing, looks interesting as a dividend / Sterling play. Upcoming events JSE Power Hour: Anthony Clark 2017 small cap picks * I hold ungeared positions. We Get Mail Anon I hold a small penny stock I bought years ago and it is now down about 95%. What do I do now? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Metrofile* (JSE code: MFL) results were modest but the dividend was up 18% at 13c and core operations also increased 18%. You can now buy shares in the South African Reserve Bank! But should you? Sea Harvest (JSE code: SHG) will be listing later this month. I will apply for allocation. Tongaat* (JSE code: TON) is coming under some selling pressure down to around R123.50. Upcoming events JSE Power Hour: Finding that perfect share JSE Power Hour: Anthony Clark 2017 small cap picks * I hold ungeared positions. Is Buffett a value investor? @JustOneLap @SimonPB Please also make mention of Buffett's 180 degree flip and new love affair with 'cheap' airlines — Wes Hellyar (@WesHellyar) March 7, 2017 " src= "data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" alt="" width="20" height="20" data-wp-preserve= "%3Cscript%20async%20src%3D%22%2F%2Fplatform.twitter.com%2Fwidgets.js%22%20charset%3D%22utf-8%22%3E%3C%2Fscript%3E" data-mce-placeholder="1" /> It is well known that Warren Buffett learnt investing from the father of value investing - Benjamin Graham and many still consider Buffett to be the worlds greatest value investor. But while he may be the worlds greatest investor he is not a value investor having abandoned that strategy way back. If anything he is 'growth at reasonable price' investor. The book Common Stocks and Uncommon Profits by Phil Fisher really explains his current investing methodology. We Get Mail Glen I am wondering which one of these 2 would be best: ABSA Newfunds TRACI 3-M or SBK tax free call account? LH But what do you do when your ETF of choice halves in value?! Boitumelo Basically I want to know if switching is worth the tax free incentive. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares New tax year and I have already loaded another R33k into my tax-free account and will be buying as per our high risk model portfolio. The annual Buffett letter was published last weekend. Always good reading, I especially like his comments on buying assets with shares (and hence paying a fortune). He also updates on his bet on the VOO vs. hedge funds (spoiler, VOO wining by a mile). The AGM will be webcast here on 6 May. We update the momentum portfolio stocks for 2017/8. Last years return was -5.2% after all costs and behind the benchmark so disappointing. I am NOT re-entering the portfolio this year for two reasons. Too much stuff and the ABSA NFEMOM ETF now uses my methodology and is more tax efficient. Upcoming events JSE Power Hour: Finding that perfect share JSE Power Hour: Anthony Clark 2017 small cap picks Becoming a trader The most frequent question Simon gets is about becoming a trader and his first answer is always the same, it will take time. Lots of time. In this weeks podcast he goes into details about the skills needed, capital, tools and more. Some resource; I hate my life, teach me to trade Boot Camp on trading skills Master Class on trading systems JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

The budget and your investments Simon Shares Murray & Roberts (JSE code: MUR) mystery buyer is out, ATM Holding, Munich with now almost 25% stake in MUR. So now what, surely they don't want just 25%? Shoprite* (JSE code: SHP) merger is off and their results were excellent. I am a double happy shareholder. Adcock Ingram (JSE code: AIP) results show turn around happening but share price seems to be pricing this in already on PE of over 20x. Mediclinic (JSE code: MEI), Al Noor a less than rosy acquisition for the company. Why do these big deals always seem to go wrong? Upcoming events Momentum portfolio stock picks for 2017/8 JSE Power Hour: Finding that perfect share JSE Power Hour: Anthony Clark 2017 small cap picks * I hold ungeared positions. Budget 2017 and your investments Key highlights and how they'll impact various investments; Tax-free - annual limit increased to R33,000 a year. Effective 1 March 2017, NOT this tax year. Dividend Withholding Tax (DWT) up from 15% to 20%. Capital gains tax (CGT), company tax & VAT - no change. New top tax bracket at 45% for those earning over R1.5million. Sugar - still on the cards. Petrol - +39c. Relief will be provided in the threshold above which transfer duty is paid from R750 000 to R900 000. Social grants; The old age grant will increase R1600 for pensioners over the age of 60, and R1620 for those over 75. The disability and care grants increase to R1600. Foster care grants increase to R920.The child support grant increases R380. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares ZAR X and 4AX exchanges are coming. But do they have any listings we care about and are we able to trade them with our current brokers. Kumba Iron Ore (JSE code: KIO) very impressive and cost per tonne is well down from over $40 to $29, but no dividend. Brait* (JSE code: BAT) shows what a mess New Look as they slice R10billion of the NAV to R8.7billion, and the UK just released best unemployment rate in 11 years but wages under pressure. Rand heading for R13/US$, no surprises as it one of my predictions for 2017. Question is how much stronger and as important any strengthening will not be in a straight line. Full list of ETFs that can be used in a tax-free account. Upcoming events Momentum portfolio stock picks for 2017/8 JSE Power Hour: Finding that perfect share JSE Power Hour: Anthony Clark 2017 small cap picks * Simon holds ungeared positions. Trading tax-free accounts In last weeks JSE Power Hour on tax-free investing Simon mentioned trading a tax-free account. This got many excited thinking about derivatives and shares, but no. The restrictions for tax-free accounts remain but Simon has ways we can still trade without gearing and enhance returns (or losses). We Get Mail Eric Honestly, it's never been easier or this cheap to bulletproof your Rand wealth through diversified products covering the globe. Janus I'm heavily invested in STXIND. Obviously not happy with the performance at the moment. I would like to stay with Satrix but was thinking of selling all STXIND and buy STXRES. Good or bad plan? Perhaps go 50/50? Many people I want to buy an unlisted share, is it a good idea? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Now Sea Harvest coming to market mid March hot on the heels of Premier Fishing. Spar (JSE code: SPP) another weak retailer trading update, BuildIt very weak, local weak, Ireland alright but hurt but currency and Switzerland also poor. MTN (JSE code: MTN) reports they will have a headline loss for FY2016 after a 1204c HEPS in FY2015. Lots of reasons, mostly Nigeria. Two new Satrix ETFs coming. One property (capped at 10% per stock) and a government inflation-linked bond ETF. Understanding the DCCUSD ETF that tracks US Treasury Bonds. Upcoming events JSE Power Hour: Tax-free investing Momentum portfolio stock picks for 2017/8 JSE Power Hour: Finding that perfect share JSE Power Hour: Anthony Clark 2017 small cap picks Jean Pierre Verster Portfolio Manager - Fairtree Capital Chatting market fears and opportunities specifically; Hudaco (JSE code: HDC), Naspers (JSE code: NPN), MTN and Invicta (JSE code: IVT). We Get Mail Anton Do you know why I am paying double the share price to purchase a share at my broker? Is it brokerage fee? Hendrik At which point do we have to outsource the investment club to protect the alliance. Each member's share is now quite substantial. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares African Phoenix (JSE code: AXL) is back and trading around 55c after a trading update suggesting around 3c HEPS for the first half. With a potential for maybe 8c-10c HEPS for the FY17 that's a PE of around 5x. Local markets gained 4.8% in January, this time last year after a horrid January everybody was saying 'as goes January so goes the year". Well they was wrong and what January does is only what January does, not the rest of the year. Upcoming events JSE Power Hour: Tax-free investing Momentum portfolio stock picks for 2017/8 JSE Power Hour: Finding that perfect share JSE Power Hour: Anthony Clark 2017 small cap picks Investment clubs A few requests on investment clubs; how to set them up, manage them, regulations etc. So here's my views, ideas and suggestion for getting your own investment club off the ground. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Abils back Simon Shares African Bank (Abil) returns to the JSE on Wednesday as African Phoenix Investments (JSE code: AXL). I never expected that, a busted bank survives, albeit this is not the banking assets, just insurance. Top40 index at highs for the year, ya I know it early days and as Stuart reminded me on Twitter the Springboks are also unbeaten for the year. Huge trading update from Kumba Iron Ore (JSE code: KIO) as iron prices were markedly higher. Too much stuff, sell everything. Wow a huge response and all positive except for two people who said I would miss the garden and everybody wants my books. Also a lot of requests that I keep people in the loop as to process etc. No comments on my potential portfolio restructuring. Up coming events; Four events loaded, find them here. We Get Mail Lucky Hi Simon, want to start TFSA acc ,is there a way to add RSA Retail bonds into the TFSA? Michael Would you recommend setting up a tax-free savings account through FNB? Charmaine Tax saving in ABSA momentum ETF (NFEMOM) what does this mean. Hoosain I just want to get your take on buying shares that are already in your unit trusts or ETFs. Do you think its advisable to buy the same shares that are in those products? Franz What is the procedure for opening an offshore account? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Too much stuff, sell it all Simon Shares Local retail sales updates thus far are poor. Standouts; Mr Price (JSE code: MRP) still getting their lunch handed to them, Shoprite* (JSE code: SHP) is a retail monster with rest of Africa booming. * I hold ungeared positions. Too much stuff I'm calling it life style creep when you wake up one morning and my large house is no longer big enough. We're surely doing it wrong? So my lovely wife an I are pushing back, down scaling into a small apartment and getting rid of 95% of our stuff. Pretty much everything except essential furniture, share portfolio (some portfolios are potentially under the hammer) and art. We simple have too much stuff and a simpler life with less stuff is in order. Bigger picture is to become a digital nomad living in AirBNB apartments; watching whales from Stillbaai in August / September and so on. But it starts with less stuff.

The 2017 predictions show Every year the first JSE Direct of the year is our annual predictions show. Marc Ashton, GM at Moneyweb, Keith McLachlan, Small/Midcap fund manager at Alpha Wealth and Just One Lap founder Simon Brown review their predictions from the previous year and make their top three predictions for 2017. They then also make a call on the Top40 and ZAR/US$ for the year. You can find the 2016 edition here.   JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Position your portfolio for 2017 with Simon Brown Every year we conclude the JSE Power Hour series with a presentation by Just One Lap founder, Simon Brown. He gives his insights for the year ahead and how to position your portfolio accordingly. Last year the presentation was just days before then Minister Nene was fired and this year’s event will be just days after the Standard and Poor’s announcement regarding South Africa’s credit status. Simon will review his predictions from last year and look at what the year ahead holds and how we can best position our investment portfolio. Issues that to be covered will include; Junk status The Rand Interest rates Offshore investments Impact of the looming Brexit Our local economy and its growth potential A selection of preferred stocks for the year ahead including for your ETF portfolio   The PDF of the presentation is here.

Reviewing my portfolio for 2016 Simon Shares Standard & Poor's left offshore debt as is (one notch above junk) and dropped the ZAR debt to two notches above junk and on a negative outlook. Standard & Poor's have to decide on junk or not by end 2017 or change the negative outlook to stable, so another anxious 2017 awaits us. Reviewing Simon's portfolio for 2016 Some great returns, some middling and one very nasty. Portfolio is published here and returns (ex dividends for the 12 months to close 3 December 2016) as below. Simon's portfolio returns for 2016 We Get Mail @luckysibiya74 Hi Simon, do you think it's a good idea to borrow money to buy shares and is there a type of loan that's purely for buying shares? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Metrofile* (JSE code: MFL) seller in market, use it to pick up some at great price / yield. Sygnia (JSE code: SYG) results see diluted HEPS at 54.16c (vs. 60.40 previous year) and dividend at 52c. I like the business but it is very expensive for a low margin operation without performance fees. Moody's not so moody. Fitch full of surprises and Standard and Poor's lurking. * I hold ungeared positions. We got Marc Ashton, MD at Moneyweb, giving us his preferred ETF list. Up coming events; Trading Master Class: Tuesday 6th at 6.00pm - Lazy trading indices and FX. JSE Power Hour: Thursday 8th at 5.30pm - Position your portfolio for 2017. We Get Mail Charles Would you pay for a guaranteed stop loss? Hermanus Trade In your video "A complete CFD share trading system" you stated that the system is based on the top 40 stocks, for the liquidity behind it. I was wondering, to what point would you consider a stock to be liquid enough to trade on a 15 or 30min chart (average daily volume)? Franz What is the procedure for opening an offshore account? Anon I bought Anglogold Ashanti 300 shares at R241.03 each now the shares price dropped with more than 35%. Should I sell them or hold on? Anon Current situation I find myself over a total of R176 438.67 in debt. Dominic What I don't understand is what drives the price on that index and how does it change 24/7? What am i buying and who buys what I sell. Also what indicators drive this price, type of events. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Are we Brazilian? Are we Brazilian? Simon Shares Metrofile* (JSE code: MFL) 1million shares on offer at 500c. Subtle? Dis-Chem (JSE code: DCP), like everybody else I did not get in the private placement and I am not looking to buy in the open market. Santova* (JSE code: SNV) getting hit. I hold and continue to hold, not buying any more as I have plenty. Twelve month low is 320c on 25 November 2015, looks like we could get back to that level soon enough. Woolies* (JSE code: WHL) saw massive volume on Tuesday, R1.3billion which is 2x - 3x normal value traded. Tongaat* (JSE code: TON) up at R130, nice but I hadn't finished buy below R120. Not buying up at R130 at the moment, albeit target is likely R150-R180 over next 6-12 months. Let's see if we get some weakness. I been digging into Stor-Age Property (JSE code: SSS) as a possible investment. Thus far not excited by what I see. * I hold ungeared positions. Up coming events; Trading Master Class: Tuesday 6th at 6.00pm - Lazy trading indices and FX. JSE Power Hour: Thursday 8th at 5.30pm - Position your portfolio for 2017 Are we the next Brazil? Since their first junk downgrade in September 2015 the Brasil Sao Paulo Stock Exchange Index (IBOV) is up some 50% while the Brazilian Real has strengthened about 20% against the USD. Could we follow the same after a downgrade to junk? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Trump wins, now what? Trump wins, now what? (Image from Business Insider) Simon Shares Astoria (JSE code: ARA) backs down from its incentive scheme that could have seen up to 25% of new shares issued to directors. Shoprite (JSE code: SHP) = very good. Spar (JSE code: SPP) update = good. Massmart (JSE code: MSM) = poor. Truworths (JSE code: TRU) = horrid. Food doing alright, clothing really struggling. The downgrade and your ETF portfolio. Up coming events; JSE Power Hour: Thursday 10th at 5.30pm - TraderPetri on becoming a better trader. Now what? Brexit, Trump. What's next? Trump wins, pollsters and social media are amazed. But is it our fault? I tweeted The problem with SM is that we follow our own echo chamber .. all sides are here in equal measure, yet we only follow the side we agree with — Simon Brown (@SimonPB) November 9, 2016 " src= "data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" alt="" width="20" height="20" data-wp-preserve= "%3Cscript%20async%20src%3D%22%2F%2Fplatform.twitter.com%2Fwidgets.js%22%20charset%3D%22utf-8%22%3E%3C%2Fscript%3E" data-mce-placeholder="1" /> We believe our own BS. I said way back in February that Trump could win, I wasn't predicting anything but rather understanding that our ability to see into the future is zero and as always we need resilient portfolios that withstand the surprises. If your portfolio is all gold because of the end of the world you're having a good day but a really bad decade. iI your portfolio is all US stocks because SA is toast you have a good run post the crisis, but now? We need a broad, robust thoughtful portfolio that can withstand downgrades, Brexits and Trump victories. Uncertainty is the only certainty. Recession in the US within a year? No idea. USD weaker, who really knows? Republicans are good for stock markets say the pundits, what of Clinton 1994-2001 and Obama 2008-present? Don't fall into the stereo types. Bottom line. Don't panic. Predictions about the immediate future are like predicting election results. Are we seeing a swing globally to the right, what you think politically about that doesn't matter, what matters is how this impacts the global economy and it will be about barriers. Barriers to free trade, barriers to immigration, barriers to the flow of money, ideas and ultimately capitalism. No capitalism is not dead but we may need to rethink our broad investment ideas. There's no rush, if this is a swing to the right it's playing out over the next couple of decades. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

I hate my life, teach me to trade I hate my life, teach me to tarde Simon Shares Dis-Chem, I will likely apply and stag them on listing. Whitey Basson quitting as Shoprite (JSE code: SHP) CEO at end of year. Buying Tongaat (JSE code: TON). Finance minister Gordhan charges dropped, good for junk threat? Trading Master Class - Trend lines video is online. Up coming events; JSE Power Hour: Thursday 3rd at 5.30pm - offshore investing. The how. JSE Power Hour: Thursday 10th at 5.30pm - TraderPetri on becoming a better trader We Get Mail All I have xxx of debt. I hate my job. I hate my life. Please teach me how to trade? All How many years experience one must acquire to be profitable in trading? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

A letter for when you're dead Simon Shares Still on holiday. Up coming events; IG Trading Master Class: Tuesday at 6pm - Trend lines, break outs and Turtle trading. JSE Power Hour: Thursday at 5.30pm - Offshore investing. The how. A letter for when you're dead When we die hopefully we have a will that'll deal with our estate. But if we've been the one managing investments what happens to them? Sure they go to your heirs, but do they know what to do with them, the strategy and plans? We ned to write a letter to those surviving us explaining it all. Does you partner / family have a full understanding of how you've put together your investments and finances? What do you own and with who? What's the strategy? Keep each strategy in a separate account. Who can manage your investment portfolio now that you're dead? What to watch out for. How to change / adapt the strategy. Who to appoint to manage this. Where is the emergency fund and how is it accessed? Your speculative / derivative positions need to be closed ASAP as your estate could take ages to finalise. What policies do you have in your name and in other names? Where did you hide the Kruger millions? Not money related but; passwords, subscriptions, social media etc.? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Pick n Pay (JSE code: PIK) results. Everybody loves them but I am not wowed. Operating margin of 1.5% up from 1.3% is tiny. By comparison Shoprite (JSE code: SHP) is 5.6% and Spar (JSE code: SPP) is 2.8%. Like for like constant currency turnover grew 3.8% against selling price inflation of 5.5%, so still losing market share? New offshore ETFs from CoreShares. A S&P500 tracker and a Global Property fund. I have applied for the later. Up coming events; JSE Power Hour: 20th at 5.30pm - New offshore ETFs from CoreShares. Keith McLachlan fund manager at Alpha Wealth Chatting Calgro M3 results, memorial parks, new CEO and their residential Reit. We also touch on the Dischem listing and Cell C results that we got a first look at due to the Blue Label 45% stake in the business. 123 Download the audio file here or subscribe to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Hello junk Simon Shares Fees feedback. Seems some active managers are getting serious about fees. But still not 100% in favour of client who pays the fees and some have done odd things. But nobody came back and said my ideas of last week were truly horrid, nor eve slightly horrid. Just last week I was commenting that my odds of a downgrade to junk were retreating. Still above 50%, but only just. Then Gordhan arrest and odds increase again, I think chance of a downgrade to junk is now around 61%. Important dates; 26 October - Mid Term Budget Policy Statement (MTBPS) 2 November - Gordhan to appear in court on fraud charges 24 November MPC rate decision 2 December - SP announce SA credit rating 6 December - GDP for Q3 2016 Calgro M3 (JSE code: CGR) disappointed, I am not selling but waiting for results to see details. Taste Holdings (JSE code: TAS) results have lots of moving parts, but they're burning cash at a rapid rate and need to get profitable otherwise they run out. Potentially a good business, but first we need to see the profits kicking I and food (even at core level) needs to start turning real profits wit the new brands. Up coming events; JSE Power Hour: 13th at 5,30 - Investing in listed property JSE Power Hour: 20th at 5.30pm - New offshore ETFs from CoreShares Trading Master Class, mastering binary options with a follow up webcast on Tuesday at 4pm. Brexit Time line, late 2018 / early 2019 Sterling? Weaker for longer? Trade, surely they will get good tarde deals with major partners? Movement of people, this is going to be a problem? City of London, does it move elsewhere? But where? Europe has language barriers so New York? Economy? Surely weak for a while? Longer term = probably do fine, no shooting the lights out. Bottom line is that free movement of people and goods is good for capitalism. The UK is moving away from free movement, that's not good. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Still hating active fees Simon Shares With SABMiller exiting the JSE new weightings in the indices with Naspers (JSE code: NPN) now 19% in the Top40 and 31% in the Indi25. Rating downgrade to junk, still on the cards? Deutsche Bank and the deal on their ETFs and ETNs. Live followup reversal patterns video is online. Two events next week; Trading Master Class on Tuesday covering binary options. JSE Power Hour on Thursday on listed property. Still hating active fees Is the benchmark being used a total return index (TRI) that includes dividends? If not the active manager wins because they get dividends that immediately put them ahead of the benchmark by a few percent. Are performance fees paid back when the fund manager under performs? If not the manager and clients are not aligned as performance is paid when they do well but not returned when they do poorly. We Get Mail George I have a CFD acc on the JSE, it has buy and sell options, but I want to short shares when they go down, must I buy it and then sell or do I sell something and later buy it back. Myron Difference between book and intrinsic value? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Thursday 29 September is the last day for SABMiller (JSE code: SAB). Shareholders approved the take over and it will be suspended and delisted from close on 29th. It has been listed on the JSE since 1897 Index changes; IMP into Top40, AVI into Indi25 & FFA/B into Findi. There is a chart floating around of Lehman Brothers just before they hit the wall and one of Deutsche Bank over laid on each other. Nice to look at but in no way telling us anything worth being told. Deutsche Bank is the largest German bank, fourth largest European bank, and 11th largest bank in the world with assets of over $1.9 trillion – equal to half the size of the German economy. (source Sparkfin.com) Remgro (JSE code: REM) is doing another rights issue at R192.50, a decent discount to the current price of some R240. That said the book value of Remgro in the most recent results was R153.17 (intrinsic value was R306.44). MTN, more woes in Nigerian. I remain a happy ex-shareholder. What happens to bonds and bond ETFs if we get downgraded? Can we trust Capitec? Capitec (JSE code: CPI) results were decent enough albeit Keith McLachlan pointed out on Twitter "Quick calc: If Capitec had kept Arrears Coverage Ratio flat at 239% (not dropping it to 229%), Basic Earnings would've been R1504m =only +2%" Capitec defines Arrears Coverage Ratio as "The provision/arrears coverage ratio expresses the provision for doubtful debts as a percentage of the loans in arrears. The ratio is therefore affected by the arrears performance of the month in which it is measured, while the impairment model is used to determine the provision for doubtful debts over the loan period. The ratio should therefore not be considered in isolation." We Get Mail Samuel If you own CSEW40 do you get invited to the different companies AGM? Who makes decisions for all the investors shares? Alec Points out the very marked difference between saving and investing. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Reviewing small cap results with Keith McLachlan Reviewing small cap results with Keith McLachlan Simon Shares Wells Fargo is the sort of stock that if I owned it, I would sell it as management totally failed and refuse to accept any blame. There is a theory that equal weight ETFs have higher costs because they have to rebalance every stock every quarter. But checking the STXIND over the last four quarters. Twice every stock changed weight and twice only two stocks did not change weightings. Harmony (JSE code: HAR) buys the half of the Hidden Valley mine in Papua New Guinea for US$1! PPC (JSE code: PPC) rights offer was 92% taken up but with excess allocation requests of another 509%. Some serious big hitters thinking this a great deal. Sasfin (JSE code: SFN) nonperforming loans more than doubled. They operate in the small-and medium-sized enterprises so it is a telling number. The economy is seriously struggling and while I have seen some economists upgrading GDP expectations for 2016, none have us at above 1% for the year. So better but not close enough to good. Moody's says a one third chance of a downgrade but what really matters is Fitch and Standard and Poors as they have us just above junk status. Things are looking a bit better but I still think we're on track for a downgrade to junk. Proptrax SAPY ETF from CoreShares. Trading Master Class, reversal patterns video is online. Follow up webcast (live on the IG platform) is 5th October 1pm (book here). Keith McLachlan small / mid cap fund manager at Alpha Wealth Tough conditions for SA inc. but we've seen some great results from small and mid cap listed companies. Simon chats to Keith about recent results from; Afrocentric (JSE code: ACT) Rolfes (JSE code: RLF) Acendis Health (JSE code: ACS) Master Drilling (JSE code: MDI) We Get Mail Sarel SAB Options. Any strong opinions regarding these two options? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Reviewing results Simon Shares Feedback on making sense of SENS AVI (JSE code: AVI) results show good numbers in a tough market. People tend to look to Pioneer (JSE code: PFG) or TigerBrands (JSE code: TBS) but this is the real gem in the space with a dividend yield of 4%. Holdsport (JSE code: HSP) trading update shows increased comparable sales growth, but after inflation they're going backwards. I never been a fan of this business albeit the share is up some 100% in the last five years, around 15% a year which is nice, but average? But then add a chunky dividend that currently yields 5%, can they hold the dividend or even increase it? I suspect they can but I still not interested. Clover (JSE code: CLR) were good considering the tough times with drought yet they had an over supply of milk? I used to own this stock but they weren't growing and expanding as I had expected so I exited. Sasol (JSE code: SOL) results came in as expected albeit with help from translations gains (FX moving in their favour) and a tax issue in Nigeria together adding almost R2.7billion. Point is they make a profit even at the low point of the cycle, that's impressive. Lake Charles remains their massive deal. I continue to hold Sasol and below R400 it is cheap but I am not buying more until Lake Charles is completed and we see if starting to make money rather than cost money. Richemont (JSE code: CFR) update is ugly, sales down across the board with operating profit for the six months ending September expected to be down 45%! Some of this is restructuring but sales are weak. I hold the stock and continue to hold but it not fun right now. Adding to this is the SENS on the AGM voting, no real disclosure just "all other matters on the agenda were also approved by the shareholders by an overwhelming majority.". Not good enough. Burger King, owned by Grand Parade (JSE code: GPL) saw average monthly sales per store decline 20% to R800k / month. That is a massive drop. They also have the brand rights to Dunkin' Donuts and Baskin-Robbins, neither of which excites me. The leader in this space remains Famous brands and that's the one I own. Last week Wealth Creation 101 video is online. Go watch it. Next Tuesday, 20th, we have our third Trading Master Class with IG focusing on reversal patterns. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Local GDP came in better then expected and importantly positive, so no technical recession. Manufacturing and mining were the strong sectors but we need a lot more very strong quarters to get out of the bad spot we find ourselves in and a down grade is still very much on the cards in December. Discovery (JSE code: DSY) has so many moving parts but for me the key is Vitality is now in 14 markets around the world. I remain a happy shareholder albeit they've done very little over the last year or so. We have a lot of shopping malls in South Africa, b some reports more per capita than any other country. Hyprop (JSE code: HYP) is by far the best of the bunch with regard local malls as they own high traffic top end malls. Mr Price (JSE code: MRP) seems to have lost the mantle. They have now had three reporting seasons over the last year and all disappointed. Is it just bad buying and the weather? I suspect they're seriously struggling under the weight on new competition from the likes of H&M and Cotton On. This is a biggie and if I was a shareholder I would be looking to exit. Capitec (JSE code: CPI) trading update sees HEPS 17%-20% higher. Wth a historic PE of almost 22x a little light but well ahead of consensus that was looking for single digit growth. Does volatility give you indigestion? Kristia reviews the CoreShares LowVoltrax ETF with expert commentary from Warren Ingram. Tonight, going back to basics with wealth creation 101 at the JSE. The Fat Wallet Show did the follow up about buying a house vs. renting. Stock Exchange News Service (SENS) Some listed companies seem to use it as marketing (witness the Sibanye proudly announcing their inclusion into the Top40 later this month and CarTrack announcing 550k subscribers) while other publish the bare bones (Comiar and Master Drilling just giving numbers in previous years). Others like Steinhoff seem to have moved onto Europe forgotten about us and just push links through SENS. I would also like to see a standard applied by the JSE. For example all results have to have the top four points (HEPS, Dividend, revenue & debt) right up front so you can't hide. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Questions, questions, questions Simon Shares Metrofile (JSE code: MFL) results saw HEPS +4.6% (very modest) and the full year dividend 42.9% putting it on a dividend yield of some 6%. Wowness and why I own the stock, for the dividend. PPC nil paid letters (NPLs) started trading yesterday as PPCN. People are asking me what to do with them and I am sticking to my story. Shorter term after they convert we may get a bounce, longer term PPC has real risks and I would not want to be a holder. So short answer is sell. Bidvest (JSE code: BVT) results were weak with single digit HEPS growth of 2.5% while Bidcorp (JSE code: BID) had great HEPS growth. We know the story and why they split, one local one offshore. Nigerian GDP stays negative and country is now in a technical recession. More tough times for local companies operating in that market. I am being asked if I am selling the gold stocks in the momentum portfolio? The answer is no, it is a rules based system and we follow the rules. GIVRES has done an amazing 99.5% in the last year, Kristia reviews the ETF and get expert commentary from Petri Redelinghuys. Next Thursday we have a JSE Power Hour, online or at the JSE in Sandton and we're going back to basics - always a good place to revisit. The topic is wealth creation 101 and is presented by Simon Brown. The second part of the Trading Master Class with IG is online, dealing with an index trading system. We Get Mail George I am 25 years old. I own DBX trackers for EUR, US and JAPAN as well as Ashburton Midcap (thanx to your lazy system). I now have an additional R10k to invest in my TFSA. I know what you would do: DBXWorld and a Top40 ETF. But my thinking is that I already have enough exposure to the world and instead of doing an SA top 40, maybe I should invest in an ETF that generates me dividends/interest for the long haul. This seems like a smart idea to a youngster like me. But being a youngster, my ideas are often not the smartest. I am currently thinking of investing in the Coreshares Preftrax ETF and/or the Proptrax Ten. Is this idea smart? If you were me, what would you do with the 10k? Ernst South Africa's economy is not looking great at the moment, Gordhan, the rand, junk status. I would like to know if one should invest now in Top 40 ETFs or wait it out till these things happen and everything might be cheap (the value of shares ). Not sure how to use my X amount of money in this time. Jing I have had a look at your portfolio and frequently watch your shows. A lot of it seems to be geared towards having offshore exposure and selecting shares with offshore operations. I am currently contemplating investing in developing/emerging economies namely India and China as I feel there is a lot of upside given the size of their economies and high growth rates relative to the rest of the world. I was wondering whether you had any insights on whether this would be a good move at present. Furthermore, are there any funds in South Africa that could give me such exposure to the Indian or Chinese stock exchanges? I know that there are a few shares on the JSE that have interests in China such as Naspers in Tencent holdings, but I am looking at having a broader and more direct exposure to these markets. John Hi again Simon, the Stop Losses I have difficulty with are not in Trading but in Investing which are not the same as far as I'm concerned. Trading is far more hands-on. Have lost heavily with CCO & BAT post Brexit & realise I must be far more ruthless but am still unsure as to where I should have placed my SL's. Marcia I am worried about the Rand and it weakening a whole lot suddenly. How can I protect against this? Sylvester I don't have time to do trading but I want to invest, do I buy and hold ETFs or I look for someone to trade for me. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Role of a Stock Broker in your investment journey Simon Shares More finance minister concerns and more rand weakness. The bigger picture is you have to have a bigger picture investment view otherwise events like this will hurt. In the last of this three part series if you had R300, which ETF would you buy? We ask Warren Ingram and Craig Gradidge for their view. Trading Master Class, an index trading system is online and follow up in on Monday at 1pm. Tonight in Durban we have a JSE Power Hour - 9.97562 Possible Pitfalls in Investment Planning Our home ownership is the new broke podcast is still generating lots of buzz. Kristia has been on leave so we reward a bunch of Fat Wallet Shows, we will revisit the topic Monday week (5 September). Role of a Stock Broker in your investment journey Simon Brown - Founder of JustOneLap.com Ridwaan Moolla - ABSA, Head of Digital Enablement in Wealth and Investments Charles Savage – Purple Group, Group CEO Kevin Algeo – IG, Head of IG Greg Kangleas - Vunani Private Clients, Head of Copy Trade and Portfolio Manager Grant Meintjes - PSG Wealth, Head of PSG Securities JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Where to for the Rand? Simon Shares The Dow Jones, S&P500 and Nasdaq all closed at all time highs for the first time since December 1999. Dog stocks, don't mix price and fundamentals. I been buying PTXTEN after exiting my STXDIV and not being blown away by DIVTRX. If you had R300, which ETF would you buy? We ask Nerina Visser & Keith McLachlan for their view. Trading Master Class, an index trading system is online. Garth MacKenzie TradersCorner.co.za Where too for the rand? We've seen it stronger this year after a blow out late last year and into January. Garth offers a technical view and below is the long term monthly chart of USD/ZAR. Long term monthly USD/ZAR chart We Get Mail Fouche Would there be any merit in the argument that Japan is 20 years ahead of "us" (USA Europe world markets that are applying QE) and we could be looking at similar years of sideways movement? Aaron I have an aunt who wants to start saving R10k p/m for the next 12 months. What can you advise as the most suitable investment option. She asked for my advise but am not sure what to suggest to her as I think 1 year is a short period. Ryno Thanks for the in-depth response to my question. With regulation stopping the building of a Berkshire lookalike wont it be a viable option for a DIY investor to buy say 5 or 6 REITs and use the income out of that as money to buy listed companies? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares US mattresses with Steinhoff (JSE code: SNH)? Paying more than double the last traded price? MTN looks all ugly. Forget the fine, forget over a billion Rands in associated costs. Nigerian and South African markets look weak and I still say they need to transition into being a data utility. That said there's a nice trade from around R122 - R140. SABMiller (JSE code: SAB) leaving the JSE on 11 October (most likely) after listing on the JSE in 1897 (just two years after being founded and a decade after the JSE was founded). SAB has been one of the key drivers of the Indi25 index over the last decade (SAB +472%, All Share +154%). They're going to leave a gapping hole. If you had R300, which ETF would you buy? We ask the Just One Lap team for their picks. The Fat Wallet Show goes where few are brave enough to trend. Renting vs. buying, what does the maths say? Keith McLachlan from Alpha Wealth Finding a local Berkshire Hathaway? Simon answered a listener questions suggesting that maybe Conduit Capital (JSE code: CND) was an option. The trick however is the regulatory environment and Keith McLachlan helps us understand what those Solvency Assessment and Management (SAM) regulations are and how difficult it makes for a company to model themselves on Berkshire Hathaway. We Get Mail Caroline Richemont (JSE code: CFR) has been falling steadily for nearly a year and is down 26.59%. Is it now regarded as a “Dog”???? Or because it is in your Death Do Us Part portfolio has it become a “Puppy”? Question – have you sold or not? My problem is Astoria (JSE code: ARA). I bought for long, long, term and that has fallen about the same. Do I bale and lose a large dollop of my portfolio which I am no longer in a position to recoup, or let it turn around with the Rand exchange rate. Problem is that might not happen in my lifetime!!! Decisions …. decisions Tax feedback Just a point on not being able to offset trading losses against other income, believe you can as long as SARS didn't ring fence the loss and your chances are better if you are not at marginal tax rate,activity not deemed to be a hobby and not more than 3 losses out of last 5 tax years. I can feel for Johan. I used the "Other income" to declare 'trading income' from various sources. I keep these income's to the bare minimum. HOWEVER.... No easy place to claim expenses as a separate entry. Unless You open the can of worms called "Business" income. Jacques Any ideas on how to benefit from current strong rand i.e. which ETFs are good options to take some cash offshore? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Short zombie stocks Simon Shares Did you sell your dogs? Keith McLachlan commented on Conduit Capital and it's not all wannabe Berkshire Hathaway. Second session in the first Trading Master Class with IG was on Tuesday. We're looking at a CFD trading plan and this session went live on the IG platform looking for stocks and three buys popped up; Barclays Africa Group (JSE code: BGA), PSG & Woolies (JSE code: WHL). The Fat Wallet Show goes back to bonds because last time we started complicated which is not what Fat Wallets are about. Small is the new big says Trader Petri and we agree 100%. Short the zombie stocks We Get Mail Johan I would appreciate it very much if you could tell me where one would declare CFD trading outcomes on the SARS form. Have just spent 45 minutes on the phone to SARS help without making any progress. Sarah What about Bitcoin as an investment? Pipcoin is a scam. 123 Download the audio file here or subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Sell the dogs (sorry dogs) Simon Shares Ellies (JSE code: ELI) results were as ugly as expected and the company is being kept alive by their bankers at Standard Bank. Megatron is worthless after buying it for R180million in 2008 and spending some half billion keeping it afloat. A few weeks ago in FinWeek I said sell ELI at around 60c and I would not be a buyer now. Kumba (JSE code: KIO) results were not bad. They have got their cost down to $34/tonne from closer to $55 previously. It does mean less production to get the lower costs and the market is still in massive over supply but they at least now positioned to (likely) survive. SABMiller (JSE code: SAB) got an extra pound with the offering being revised to GBP45 but some minority shareholders are still not happy as the pound has weakened. One can hardly blame SAB or AB Inbev for that but the minority shareholders need 25% to block the deal and that's very unlikely. Kristia looks at ETF costs in her blog this week. The Fat Wallet Show takes Magnus Heystek to task for suggesting all ETFs are evil and have been mis-sold over the years. Anchoring - sell the dog Simon talks about getting rid of those zombie stock in your portfolio; when, why and how. Most importantly they are causing pain and the price you paid for them does not matter. We Get Mail Ryno Why hasn't anybody (in SA) tried to replicate the Berkshire model of buying insurance companies and using money of premiums to make investments in big companies ? Lindiwe What happens if Deutsche Bank goes under and I hold their ETFs? Anon Any hope for Taste (JSE code: TAS)? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Private equity coming to the JSE Simon Shares So Trump is real and is now officially the Republican nomination for the US presidency. The point is he can win it and then the question is what will markets do? Likely pretty much like what happened after Brexit, initial panic and then they will move on. The first IG Master Class kicked off on Tuesday with a complete CFD share trading system. Nice simple and practical with a follow up webcast on 2 August at 1pm. I have added a live link to prices I am prepared to pay for my 'till death do us part portfolio', the link is here. Thursday evening we're at the JSE for a Power Hour, Investors are normal, not rational. Kristia reviews another Top40 ETF, the Ashburton Top40 (JSE code: ASHT40). Stuart MacKenzie (CEO Ethos Pvt Equity) and Peter Hayward-Butt (CEO Ethos Capital) Ethos Capital (JSE code: EPE) will be listing on the JSE in August via a private placement. Ethos is a Private Equity investment vehicle that offers a different investment asset class for patient investors. We Get Mail Michele When trading(lazy) indi, resi, etc, what charting do you use for your ema's and entries? Melissa Why is it that you can buy Satrix ETFs such as STX40, STXDIV & STXRAFI from your stock broker in their online trading platform... And from Satrix directly? What is the difference between where you buy into these? Are you getting less if you don't buy directly from Satrix? Thabang I have a million and need another million. How do I double it?

Simon Shares A lot of people worried abut DBXWD post Brexit, but the issue is it is global so the UK makes up only about 8% while EU is about 13%. I hold the ETF and continue to buy every month. The Just One La team has a monster busy week next week. Join us at; Trading Master Class: Designing a trading system from scratch (Tue 19th) Classic FM making wealth simple  (Wed 20th) JSE Power Hour: Investors are normal, not rational  (Thu 21st) Kristia asks which ETF? Drikus Combrink - Capicraft Investment Partners Locally earnings season has come to an end and markets are at or near all time highs. Are these valuations justified by the earnings we've seen? Good, bad, ugly and any stand outs. Drikus touches on some concerns (SABMiller & Richemont) and suggests really focusing on the core numbers rather than top line numbers that could be skewed by currency moves, mergers or new stores. His major concern remains QE and how that unravels. We Get Mail Ronnie What is the recommended amount to start with investing on any share? Pierre Donna wants short term savings and is using bank account. Why not the pref shares ETF - PREFTXF? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Stock Broker vs. FSP Stock Broker vs. FSP Simon Shares So Brexit is now a thing, or is it? Mostly it is confusion. Money Expo this Friday and Saturday. My 'till death do us part' portfolio webcast in next week Thursday at 8pm. Satrix Indi has been a star ETF with the best returns over 10 years at over 400%. Lazy System is long Indi25 and MidCap. Charles Savage, CEO Purple Capital / Easy Equities What's the difference between a traditional stock broker and a Financial Services provider (FSP)? Is a FSP risky and do I really own the shares? These are popular concerns so we got Charles on the line to address the issues. We also briefly touched on their new baskets they launched last month.   JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon's till death us part portfolio Simon Shares In last weeks show I covered Porter's Five Forces for selecting awesome shares worthy of investing in. This week I delve into my personal 'til death do us part' portfolio explaining why I hold each share. In two weeks (13 July, book here) we'll have a webcast where you can interrogate my selection and also propose shares of your own for inclusion into a 'til death do us part' portfolio. At the time of recording my portfolio is as below (Find my consistently updated portfolio here) BHPBilliton (JSE code: BIL) Capitec (JSE code: CPI) Citylodge (JSE code: CLH) Discovery (JSE code: DSY) Famous Brands (JSE code: FBR) Metrofile (JSE code: MFL) Richemont (JSE code: CFR) Sasol (JSE code: SOL) Shoprite (JSE code: SHP) Woolies (JSE code: WHL) === JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Porter's Five Forces Finding awesome stocks to invest in Simon Shares I am traveling and then on leave, so this week I look at Porter's Five Forces and in next weeks podcast I follow this up by running my 'death do us part' portfolio of stocks through the process. Then two weeks after that (13 July 8pm) we'll do a live webcast whereby you can ask questions about my portfolio and any stocks you may consider worthy of a 'death do us part' portfolio (my portfolio is always published live here). Book for the webcast here. Porter's Five Forces Competitive rivalry within an industry Threat of substitute products Threat of new entrants Bargaining power of customers Bargaining power of suppliers I add; Buy winning stocks in winning sectors Legislative risk You'll find a review of Porter's Five Forces here and I also include it in the Boot Camp video on Fundamentals and Technicals in which I include examples from local stocks. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Hedge funds for everybody Hedge funds for everybody Simon Shares MTN have concluded the Nigerian fine at around a third of the initially proposed fine. A good deal for the company but they should never have found themsleves in the position in the first place an I still do not like management and am not a buyer. Pick n Pay (JSE code: PIK) are finally getting rid of their 35-year pyramid structure that key control of the company in the Ackerman hands even though they only held c26% of the shares. But they are retaining control via special unlisted B shares, so nothing changes and the company remains under the control of a family who frankly have conceded the title of retail to Shoprite (JSE code: SHP). Brexit fears are running wild, ignore it. It's just short term noise. Big picture it matters not one way or the other, it just hysteria right now that will reach deafening levels by the time they vote next Thursday. Jean Pierre Verster portfolio manager Fairtree Capital The hedge fund industry in South Africa is leading the global trend and changing to make itself open to private investors with regulation for the funds themselves. Jean Pierre explains what the attraction of a hedge fund is and what the new regulations are all about. He also warn that like any other fund some may blow up. We Get Mail Robert When I buy ETFs, how do i find out whether it pays out quarterly dividends or re invests them? Jonathan Shares not in your name, rather on Easyequities books? Thoughts?

Simon Shares New logo for JSE Direct to bring it inline with the new Just One Lap branding. S&P is negative but not junk, Fitch says we stable, GDP says we half way to a recession. GIVISA, the cheapest ETF on the JSE. But is it any good? Kristia goes on a nerdy bender digging into the details. Keith McLachlan on building a small cap portfolio. The Just One Lap team is starting to do more Periscope videos; follow us all at; DeeOnMoneyZA TraderPetri KristiaVH SimonPB Zack Bezuidenhout S&P Dow Jones Indices We chat indices, costs, new developments and smart beta. Zack also has a great analogy about the financial services fee structure and the medical industry that really highlights the wrongs in the financial services industry. We Get Mail Lauren What about the Swix index for investing? Rudolph A question, are you still happy with your decision to sell all your BATS shares, after a 40% return the past year? Philip Regarding the debate of investing in the US or worldwide, why not invest in these 2 ETFs – namely, IXUS and ITO? I do not think you are going to find ETFs with lower fees, 0.03 and 0.14. The IXUS seeks to track the investment results of an index composed of large-, mid- and small- cap non-U.S. equities. The ITOT seeks to track the investment results of a broad-based index composed of U.S. equities.

Can DIY investing beat the market? Simon Shares PPC in real trouble. Management have let the company down by not spending up capex locally, not hedging their USD debt and now they need a massive rights issue. Will they survive? Are local markets pricing in a downgrade? Nobody knows either what Standard & Poors will say or what the market is or is not pricing in. We have a new podcast going live every week, The Fat Wallet Show. In it Just One Lap CEO Kristia van Heerden, picks a topic and asks questions until she gets an answer. She kicked off with structured products. Momentum portfolio update for the quarter ending May 2016 is here, life time returns below. Momentum portfolio life time returns We Get Mail Daniel Now if research shows that the percentage of fund managers that outperform the index over a 1, 3, 5+ year period get smaller and smaller then, what chance do we as retail investors have of: A) outperforming a fund manager (with CFA's, CA's, research teams) when stock picking; and B) outperforming the index? Esther Please give details on tax and the trader. Kenny I have a discretionary share portfolio in which I occasionally sell a share after keeping it for less than 3 years. I never withdraw money out of my account, but will keep it in cash and wait for a buying opportunity. Will I be held liable for income tax or does income tax only apply when an investor withdraw money out of his share account? Higgo (via twitter) Would you rather sell Discovery (JSE code: DSY) and buy British American Tobacco (JSE code: BTI) or Investec (JSE code: INP/INL)?  JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

A simple diverse ETF portfolio Simon Shares Balwin (JSE code: BWN) knocked their results out of the park, but my bigger picture concerns remain. Standard & Poors down grade or not is next Friday. I did a Twitter poll that came in split by 1 vote. So nobody knows. Twitter poll on SP downgrade Complexity of costs. Come industry make it simple. Mining: Returning to the mean? Peter Major did an excellent JSE Power Hour for us, the video is here. On the ETF blog this week we look at the Pref shares ETF (JSE code: PREFTX). 2 June at 5.30pm,Keith McLachlan on building a small and mid cap portfolio the right way. Book here. Nerina Visser, director at ETFsa.co.za Which ETF if you buying for; R300 / month (CTOP50) R1000 / month (CTOP50, DBXWD & ASHINF) Large lump sum into a TFSA (CTOP50, DBXWD, ASHINF & PTXTEN) We also chatted about costs, are we missing any ETFs as an industry and how to respond to the potential downgrade from Standard and Poors.  JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Doing risk right A very long show this week (over an hour), but totally worth every second of listening. Last week I reflected on the Sanlam i3 Summit I attend and his week I speak with Roland Rousseau (Head of Barclays Risk Strategy Group) on his presentation at the conference. Roland is looking at this whole idea of asset or fund manager being outdated and suggesting we rather need risk managers. He has great insights and ideas and this wide ranging conversation on risk has got me thinking a lot more about a lot of things. Real learning, I love it. Simon JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

How do we get smarter? Simon Shares Calgro M3 (JSE code: CGR) results were great. We're seeing operational leverage coming through and a lot of projects seem to have only added a modest amount in this year with more coming in the new financial year and the memorial parks look interesting. They did have some issues with Namibia, having to relaunch the retirement development and others. Back in December / January I exited some of my position but am happy to hold the balance. Pipcoin = pyramid scam What's happened to the PIIGS? So Moody's was all nice to us, sure but are we really avoiding the ultimate downgrade to junk? Standard & Poors still the one to watch with June their next update and likely the first to make us junk. On the ETF blog this week we look at the Momentum ETF (JSE code: NFEMOM) as well as find out about total return which involves dividends being automatically reinvested into the ETF. We're doing a webcast of the lazy trading system on the 12th at 8pm and an IG Boot Camp on Tuesday at 6pm. Book here. Sanlam i3 2016 Summit I attended this event last week and have a number of thought from the speakers, in particular Dr Amlan Roy who spoke on demographics (here's a short video interview with him).  My three key learnings; Differences more important than similarities (Eusebius McKaiser) Demographics most important thing we ignore (Dr Amlan Roy) Most of what we think is skill is actually well spent (Roland Rousseau) We Get Mail Samuel Is there a way to position my portfolio to minimize risk when a downgrade of the country`s credit rating is on its way? I believe that the downgrade will happen in this year. Is there a way to gain on this? Everybody Where do I find an offshore broker? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Master class in investing Simon Shares This week we look at a bond ETF, ASHINF. We're doing a webcast of the lazy trading system on the 12th at 8pm. Hlelo Giyose – First Avenue Investment Management Hlelo talks stocks but the conversation goes into much more than just some of his current preferred stocks. He delves into what makes great companies, how to spot them and when to buy them. A master class in investing. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Where to invest offshore? Simon Shares Pick n Pay (JSE code: PIK) results show the turn around is very much working albeit the stock remains very expensive. But the margins are still way to slim at 2% and less than half that of Shoprite (JSE code: SHP). This has to be the focus going forward if they have any hope of justifying the stretched valuation. MTN is getting money out of Iran, reportedly USD1billion and this certainly helps with the Nigerian fine, but once again this comes from third party sources not from the company via SENS. Steinhoff (JSE code: SNH) said it won’t raise its offer for French retailer Darty and this is a good thing because in a bidding war the only winner is the seller. Berkshire Hathaway is webcasting their AGM this weekend, this Saturday 30th April 2016 at 4pm. you can view it here. Kristia van Heerden looks back at a year of erratic ETF buying in our weekly ETF blog. We're doing a webcast of the lazy trading system on the 12th at 8pm. Wehmeyer Ferreira from DB X-Trackers Where to invest offshore? US, EU, UK or Japan? What of China or maybe just the world? We've recently covered two of the more popular ETFs from Deutsche Bank; DBXWD and DBXUS. We Get Mail Samuel Should a home loan be considered as debt? Tshepo What is best index to use for a benchmark?   JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

An investment check list Simon Shares Everybody is freaking out on the Capital&Counties (JSE code: CCO) sell off, some 50% off the highs of January. Really driven by three things; it had been flying, stronger ZAR against Sterling and concerns about Brexit. Long term not an issue, so if you love the stock nows your chance to get more cheaper. Kristia van Heerden (Just One Lap CEO) tweeted some thoughts from last weeks podcast where I spoke about expectations. Her comment was that managing expectations doesn't start with investing. It's also about debt, hating on your job. These need fixing long before investing and certainly no investment will make your job better or the debt suddenly disappear. If you expect your investments to save you from your shitty job or debt or pay for things you can't afford, you're in for disappointment. — Kristia van Heerden (@kristiavh) April 18, 2016   Our ETF this week is DBXUS and it has staggering returns of 223% over five years. New videos galore; Managing volatility with Gary Booysen IG Boot Camp: Trading psychology Added a bunch of new events, find them here. Gary Booysen Portfolio Manager Rand Swiss Gary did a great presentation for the JSE Power Hour last week (find it here). In it he looked at current market conditions, volatility and how to manage a share portfolio in these conditions. In this chat Simon also focuses one of his stock picks (AdaptIT, JSE code: ADI) and his check list. The check list (below) is a simple first filter to find quality stocks worth investigating further. The full video is here. The check list; 3 year total return +20% Increasing revenue over 5 years Increasing earnings over 5 years Increasing dividends Increasing gross margin Increasing ROE Outstanding shares stable or decreasing PE, P/B, P/S, PEG, FPE in range Current ratio, LT-Debt/Equity Management quality We Get Mail Ros Once I've put my annual R30,000 into my TFSA, and I've also reached my tax-deductible limit in terms of my RA contribution, would it still be better to invest within the RA for the tax advantages it provides on withdrawal? Or should I just buy ETFs directly? Brenda My daughter is now in Grade 10. Over the years I have been saving in unit trusts for her university fees. I stopped the monthly debit orders at the beginning of the year when I realised that the performance did not justify the fees. I now have almost R500k in two unit trust. On the one hand I do want some capital protection but also want growth with some income so that she can have funds for a car, deposit for a flat etc. I know that I can do better investing in the market. Should I : Liquidate the unit trust and open a trading account in her name? Start with about five shares - I am considering Coronation, Old Mutual, Steinhoff, Discovery and Mediclinic. ABSA MAPPS PRO ETF NFILBI BBET40 DBXWD DIVTRX  JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Realistic expectations and success Simon Shares The rand is back where it was when then Finance Minster Nene was fired. So everybody who was lamenting that they missed their chance to get money offshore into USD, here's your second chance. The NewFunds ILBI (JSE code: NFILBI) is our focus ETF this week. Tracking inflation linked bonds it sounds perfectly boring but actually looks really interesting for a broad ETF portfolio. Expectations. What are your expectations from your trading and/or investing? Are they reasonable? Are they hurting your ability to create wealth? We Get Mail Terrance I also hold Astoria (JSE code: ARA), I bought @ R15.14- 10% of portfolio already down 6.8% but so also is the rand/dollar, I was wondering on your thoughts regarding its value and comments by Keith Mclachlan as there seems quite a bit of negativity surrounding its value and costs. I bought it for the long term 5-10 years and the purpose 2 fold to invest in other markets and rand hedge. Is this all just hear say and noise? Everybody What about putting your emergency cash into your bond? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Hating on unit trusts Simon Shares SPIVA results for South Africa are out and they track how many active managers fail to beat the index. Truth is that even over 1 year most do NOT beat the index. In short, buy passive or lose money? The PDF of the report is here. Standard & Poors has downgraded SA's expected GDP for 2016 from 1.6% to 0.8% further cementing the likelihood of a downgrade to junk from the rating agency. African Bank has relaunched, but this is not the one you have shares in. The suspended ABIL sold off good assets and is left with a giant pile of debt and those left holding ABIL when it was suspended in August 2014 hold worthless shares. The Satrix Resi (JSE code: STXRES) is our focus ETF this week. We published our bubble graphic of Top40 individual stock returns for Q1 2016. Helena Conradie CEO Satrix Satrix is best known for their Exchange Traded Funds (ETFs) but have in recent years also moved into index tracking unit trusts. The question is why and if unit trusts are still the evil rip off they were back in the day? It is still a case of watch the fees and know what's inside? We Get Mail clintvanhere via Twitter If you withdraw from TFSA, what are the effects on your annual & lifetime limits? Ryno Can I trade your lazy system in a tax free savings account ? http://justonelap.com/lazy-trading-system/ Fathima After attending your seminar for beginners, I invested in ETFs. However yesterday, I watched your video explaining the benefits of TFSA and I need to know if I made a mistake opening an non TFSA account? Should I close that account and open a TFSA, or keep both? I don't want to incur extra costs. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Capitec (JSE code; CPI) results were solid but bad debts are rising. So is their profits but the bad debts are what we're watching at this point in the process. Momentum portfolio doing as it says on the sticker. Good out performance on down days, modest or under performance on up days. But the gold volatility remains wild. ZAR X, the first new stock exchange in South Africa in over a century arrives in September. We review the Swix40 ETF for those wanting an alternative Top40. Jean Pierre Verster 36One Asset Management We last spoke to Jean Pierre in January when all was looking ugly, now everything looks all lovely, but is it? And if this is the year that shorting is as important as going long, is this the testing year for DIY investors? We also touch on inflation, commodities and the US economy. We Get Mail Ryno I was reading about hedge funds and came across Ray Dalio. He adheres to the all weather portfolio. Basically he says that its all in asset allocation. -55% bonds -30% shares -7.5% gold -7.5% commodities. Marion I understand the idea behind an emergency cash fund. But where do I park it? Pieter I have been contemplating opening an offshore account, but have refrained because of our weak currency and my lack of knowledge about international trading. My question is if it is the right time to take money off shore/open an account? Also which ETF's should one be looking at? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

When to sell? Simon Shares Yesterday, 23rd March, Just One lap turned five. It's been an awesome ride which we couldn't have down without the support of our users. So you everybody, thanks. A huge thank you. When to sell? Different answer depending if you are trading or investing. Great video from Anthony Clark on his top 5 small cap stocks for 2016. Divtrx ETF for those wanting dividends. We Get Mail Tebogo I was wondering if it would be advisable to liquidate part of my portfolio held in ETF and use funds to buy ETFs in my TFSA and moving forward fill up my R30k allowance before buying equities in my investment portfolio. Patrick How often should I rebalance my portfolio?   JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Trading in your personal capacity or using a PTY or Trust? Which is better? ETF changes. The MidCap ETF is now ASHMID and BBET40 is transferring to Core Shares from Nedbank. Seriously good interview with Jack Bogle, founder of Vanguard, the issuer of the worlds first indexing mutual fund.  Keith McLachlan Alpha Wealth small/mid cap fund manager AdvTech (JSE code: ADH) results were really good after years of frankly uninspiring results (Revenue +40%, operating profit+75% & HEPS +27%). Tertiary was especially strong, acquisitions doing very well they finally seem to have found their mojo. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Moody's did not downgrade us, but they did put us on review for a downgrade that will put us one notch above junk status. Then we'll have all three rating agencies on the same level with Standard & Poor heading the pack as we're on a negative outlook with them. Local bank results looking good with impairments improving (expect for Barclays Africa). On the surface they look cheap, but not if earnings weaken going forward, and earnings will weaken. Now Old Mutual (JSE code: OML) may split itself up and return back to South Africa. But will (can) it sell Nedbank (JSE code: NED)? We Get Mail AntonK (via Twitter) Simon, why would you call it (AB Inbev, JSE code ANB) ex growth as the two brewers together have roughly 30% global market share?. CraigNotAlan (via Twitter) Investing lump sum in ETFs in these markets, local & int - immediate or phased over time (& period)? Arin The issue I have is that I don't have any pure property ETFs or unit trusts (except for the odd property companies within my ETFs/unit trusts). I am aware that the ProptraxTen is more of a income yielding portfolio which may be good for the TFSA, where as BBET40 may be more of a growth portfolio if I'm not mistaken. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Clover (JSE code: CLR) has "decided to withdraw from future investments in Nigeria", seems hasty? Barclays exiting Africa selling off their ABSA (JSE code: BGA) stake, more hasty decisions? Nice boring results from Metrofile (JSE code: MFL), exactly as wanted. Big seller seems to now be gone after large transactions on Monday and stock has run hard since. New tax year, you can add another R30k into your TFSA. The Momentum portfolio update, new stocks and methodology is online here. Janine Weilbach Senior Research Analyst Thebe Stock Broking Construction stocks have had a very hard time since the 2010 World Cup in South Africa. With this in mind, how does one look at a construction company in order to make investment decisions? order books seem to be popular but often misleading, large piles of cash seem great but suddenly disappear. We speak to an expert to better understand investing in local construction. We Get Mail Matt C (via twitter) Can you, or someone in the know, please explain Dow Theory to us? Cardiprox (via Twitter) How about the opposite momentum. Taking the bottom 15 top 100 shares and shorting them for the same period? Johan I've started looking at the costs involved in opening an US trading account through my broker, and to a relatively new investor like me, all the costs involved in opening an account is quite difficult to understand. Would you mind maybe giving an overview of the costs involved please?   JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Woolies (JSE code: WHL) offering script of cash for dividend. Default is cash, I'm taking new shares. Standard Bank (JSE code: SBK) trading update looks great, HEPS some 30% higher. But what of the R1,6bn write down for lost aluminium in China the previous year? The stock initially popped 8% higher but traded red by late morning. Budget 2016, Simon's thoughts Budget is R1.46tn vs R1.45tn in the October MTBPS. Deficit R139bn, which we have to borrow and that cost is increasing as R186 government bond is 9.8% from 9.3%. Budget deficit will fall from 3.2% in the 2016/2017 year to 2.4% in 2018/2019 Capital Gains Tax (CGT) gets increased from 33.3% or marginal rate to 40% while the amount of tax free CGT every year goes from R30k to R40k. No change to Dividend Withholding Tax (DWT) or Securities Transfer Tax (STT). Lots of small tax increases and some new ones; Increased; fuel levy, bag levy, sin taxes, transfer duty on +R10m properties, etc. New; sugar tax, globe tax and tyre tax. Social grants on the up, R11.5bn over next three years. Fiscal drag coupled with increased inflation and interest rates going to hurt consumers. 150,000 TFSA accounts opened and R1bn deposited. But no changes to the limits. Was it enough taxing and enough slashing to avoid a downgrade later this year? Bottom line, can he stop the junk status looming over SA? We Get Mail Marcia Are you selling your Woolies after the results? Stef I see the PLD and PLT ETFs have 'partial delisting'. What's this about? Should I worry if I hold them? JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Minister Gordhan delivers his budget speech next Wednesday, what can we expect in terms of new or higher taxes? STT, DWT and CGT? Remember, remember. The end of February is end of the tax year and you have until then to fill in your R30k limit for TFSA. If you already have hit your limit new year starts on 1 March 2016. We have recommended portfolio and my picks here. Anglo America (JSE code: AGL) announced their restructuring. The big, but not unsurprising was the exiting of Kumba Iron Ore (JSE code: KIO). But how? They could just unbundle to shareholders, or try sell it. Latter will not be easy and former would put serious pressure on the KIO share price if the almost 70% AGL holds hit the market. ARB Holdings (JSE code: ARB) remains ungeared with R190,9m net cash on hand. I first discovered this company in about 2008 when they had some R300m. They've been spending it very very cautiously, too cautiously? Discovery (JSE code: DSY) update has spooked the market. We've seen this before. Latest Boot Camp Video, trading the news flow is online and next month we're looking at FX and index trading and again we'll include some trading systems. You can book here. Garth McKenzie TradersCorner.co.za Ketef (via Twitter) asks "Simon from experience-have you made more money trading short term compared to longer term? Any correlation btn timeframe & profits?" The answer is more than just about returns. It is about sleeping well at night, time required to manage the trades and experience in the market. There is no get rich quick here, but a well balanced portfolio of money split between trading and investing can boost returns while we learn and sleep well. === JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Grindrod (JSE code: GND) just hit multi-year lows trading just above 900c with a net asset value (NAV) of over 2200c. Don't fight the trend, especially on cyclical stocks. RBA (JSE code: RBA) went bust on Tuesday. Of the three; RBA, Seakay and Calgro M3 (JSE code: CGR) only Calgro M3 remains. Lesson is simple. Go back five years, Calgro M3 was by far the best of the three, always buy the winners. Volatility, lots of it. Welcome to bear markets, they move fast and trading them is tough, very tough. Eugene Chemaly - Afrifocus Securities Chris asks "how does one protect cash?". Preference shares are debt instruments issued by banks and others that pay set dividends linked to the prime rate. Typically trade at discount to their cash levels and have no market makers meaning capital loss is possible. In an ideal world they would offer no gain or loss, but reality is different. New Basel 3 rules may see preference shares phased out by the issuers (via repurchase) and there is a risk that the budget speech will see an increase in the dividend withholding tax rate (currently 15%). PREFTX is the Exchange Traded Fund (ETF) or individual ones liked by Afrifocus are; Discovery and the three form Investec. We Get Mail Thando Jean Pierre Verster mentions that hedge funds will be available to us mini-me retail investors this year. What was that about? Sandra What will the TFSA be increased for next year? Chris How does one protect cash?  === JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Where's the party? Review: Superforecasting: The Art and Science of Prediction by Philip E. Tetlock & Dan Gardner Great Davos 2016 report back presentation with Nicky Newton-King (JSE CEO) and Bronwyn Nielsen (CNBC Africa). Next week Thursday we have another JSE Power Hour on Tax Free Savings Accounts (TFSA). Clive Butkow GroTech A Venture Capital company one can invest into and receive a tax break thanks to the SARS section 12J clause. They then invest into disruptive internet based companies with the strategy buy, build, flip. ==== JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Markets are volatile, but is the bear dead? I am buying Metrofile (JSE code: MFL). Good solid business that has solid earnings and currently on a dividend yield of just over 4%. Why is low oil causing such concerns on global markets? One would think it is good for consumers and hence good for economies? Davos 2016 report back presentation with Nicky Newton-King (JSE CEO) and Bronwyn Nielsen (CNBC Africa). MPC coming to an interest rate increase ear you. Today is likely to be the first of many, reduce debt. Jean Pierre Verster 36One Asset ManagementWhat's the big picture, world economy soft or markets just jittery? What about China and oil and how is the US and EU economies doing? We Get Mail Casey With the end of the tax year looming I want to make sure my TFSA is in good standing. Can you tell me; Is my 30k limit based on cost (the amount of money I spent buying shares throughout the year) or current share value? If I go over my annual threshold can I simply sell some shares so my balance bought minus sold is worth R30k? Mary-Anne Looking at ETNs I compared the performance of BNPEUR at 47.47 to DBXEU 26.58 in past year, and BNPUSA at 45.61 to DBXUS at 37.46 in past year. What is the downside to these investment? They are not mentioned or recommended. DBXJapan also at 45.59 over the past twelve months, is this likely to perform well in future?

Simon Shares AB Inbev (JSE code: ANB) has arrived on the JSE as the largest stock by a mile. But I am not excited nor am I buying. The market is looking just weak, but this does not smell like 2008. How many people saying that actually were in the markets in 2008? That said more downside likely, under 40,000 on the Top40 seems certain. 35,000 anybody? Drikus Combrinck CapicraftHow much money should we have in an off-shore account? This question was posed on Twitter and we get an expert view as well as other sage advice about investing off-shore (like maybe even bring some money back into Rands?). We Get Mail Sipho The TFSA is R30k a year. Is this calendar year so I can add another R30k now inJanuary? Clayton Is DBX World (JSE code: DBXWD) and Astoria (JSE code: ARA) about as good as having money offshore? Should one monthly add more to these in these circumstances instead of buying more BBET40 and other ETF's? Gerrit Is it really necessary to have stop loss orders with regards to ETF's e.g. DBX-trackers, Satrix Indi etc. Tweet or Facebook us your questions. ==== Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

We’re back! It's 2016, wowzer. This week’s show is our annual predictions show with Marc Ashton, GM at Moneyweb, Keith McLachlan, Small/Midcap fund manager at Alpha Wealth and Simon Brown from JustOneLap. We did our first predictions show in January 2014 and and the second a year later and this is now our third show. Find 2014 here and 2015 here. We promised to revisit our predictions a year later and here we are marking our 2015 predictions and also making our 2016 predictions. Tweet or Facebook us your predictions. ==== Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Every year we end the JSE Power Hour series with a presentation from Simon Brown of Just One Lap in which he looks at his predictions for 2016 and how to position your portfolio accordingly. The video is below but we have included the audio only into this weeks JSEDirect. Included in the presentation is; Reviewing the 2015 predictions Top stock picks for 2016 The South African economy (GDP growth, drought, recession?) State of commodities, mining and when to buy them Elections, unions and Eskom US, EU and China Bloodhound and more The PDF of the presentation is here and if you'd rather watch the video is here. ====== Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Santova (JSE code: SNV) released results that had some dodge workings with the results. Last year they had some abnormal items in their HEPS that they were more than happy to accept. This year they're saying, no take those out to compare against this year as we didn't have the abnormal profits. Well hang on, you can't have it both ways. Either you include and compare or you don't. This is why I always only use diluted HEPS, none of this normalised HEPS nonsense. That all said I hold the stock and am happy. The indices will be adjusting on 21 December with AngloGold Ashanti (JSE code: ANG) exiting the Top40 and that means no gold stocks left in the index for the first time ever. The gold industry is dying locally and has been for a while and this really just confirms that slow death spiral. MTN (JSE code: MTN) has seen their fine reduced to USD3.2billion. A good reduction but still a massive number. The company also announced a series of "new operating structure and senior management changes" to prevent another fine happen. Frankly too late and also not as easy as just shifting some managers, this is about culture and that's deep rooted. I remain a happy non shareholder having sold when the news first broke. We updated the momentum portfolio ad are proposing some changes. Check the video out here and give us your feedback on the changes. Join us on 7 December for the last JSE Power Hour of the year at the JSE. Topic is 'positioning your portfolio for 2016' and being the last function of the year we'll have drinks afterward and we've invited all the speakers from the year so you can mingle and ask questions of them. Year end portfolio review Do your trading systems need tweaking? What have your returns been? What stocks are you keeping or looking to add? Has your portfolio seen any style drift? We Get Mail Derek Please could you let me know which two ETFs you chose for your initial investment and also which online investment platform you used? Eben Please explain how exchange rate fluctuations affect the DBX-Trackers ETFs that I buy/sell on the JSE. ====== Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Astoria (JSE code: ARA) listed yesterday and traded pretty much inline with net asset value (NAV) of USD1.00. I hold and like it very much. But it could be a tough year for the stock if Rand strengthens and US markets slow. Balwin (JSE code: BWN) published their first set of results as a listed company, for the six months ending August. Really strong numbers but one confusing comment from management was that the second half of the year is seasonally stronger than the first. yet this is over the Christmas holidays when builders shut down and surely people are not buying houses while also buying Christmas presents? Pioneer (JSE code: PFG) results were confusing with the company trumpeting adjusted HEPS growth of 23%. But adjusted for what? I always use the simple diluted HEPS which was up 12% and I know exactly what it means. Join us on 7 December for the last JSE Power Hour of the year at the JSE. Topic is 'positioning your portfolio for 2016' and being the last function of the year we'll have drinks afterward and we've invited all the speakers from the year so you can mingle and ask questions of them. Keith Mclachlan fund manager at Alpha Wealth How does one become a fund manager? What are the exams and where does one start? We also sneak in a question on the Balwin results. We Get Mail Matt (via Twitter) Can you please explain 'pre-market moves' and 'after hours trading' in US stock markets? Franz I bought Steinhoff shares about a year ago and they have done really well. However, I am a bit confused now regarding the delisting from the JSE and the listing on the FSE. Does this mean I have to sell my shares? What happens if I don't sell them before they delist from the JSE? I see the deadline is 27 November. Stephan I've had it twice now that I've been offered shares in lieu of a cash dividend (most recently on Steinhoff). Is this a case by case decision or is there a general rule of thumb to follow? If it is case by case, is there a simple analysis process to follow for a decision? ====== Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares MTN (JSE code: MTN) continues to fall as the latest rumour says the fine will not be reduced but that it could be paid off in instalments. However MTN has as it there way not issued any SENS on this so the market remains blind with only rumours to speculate on. I consent to stay away and will continue to do so. Balwin, Stor-Age, Trellidor, M-FiTech (JSE codes: BWN, SSS, TRL & MFI). What's the common link? All recent listings currently trading below listing price. Not a good sign for a listing boom. Join us on 7 December for the last JSE Power Hour of the year at the JSE. Topic is 'positioning your portfolio for 2016' and being the last function of the year we'll have drinks afterward and we've invited all the speakers from the year so you can mingle and ask questions of them. Books Trading Trading in the Zone - Mark Douglas Trend Following - Michael Covel Reminiscences of a Stock Operator - Edwin Lefevre Investing One up on Wall Street - Peter Lynch Common Stocks and Uncommon Profits – Phil Fisher Effective Investor - Franco Busetti Intelligent Investor - Benjamin Graham We Get Mail Vusi What's the difference between issued and authorised shares? I see it all the time with JSE stocks. Heather Can I invest in America with the JSE? I want to buy Apple shares. Via Twitter I don't like MTN (moral thing) but I'd be fool to not buy it long-term Recovery insight? ====== Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Lonmin (JSE code: LON) a disaster of a storey. Back in July 2008 Xstrata offered GBP33 a share valuing he company at around R100billion at the time. It was rejected as under valuing the company. Stock has traded over R600 in 2007, now under 200c and a massive (seriously massive) rights issue at 21.4c. This national drought is getting very real with all sorts of implications for local companies, and none of them good. Bryan Rudd CIO Anchor Capital MaurtriusAstoria is being listed by Anchor Capital and will invest in a portfolio of global equities and private equity businesses. 60% equity 20% niche 20% alternative and private equity fund. USD based and traded on the JSE. We Get Mail Several people asking Am I buying Lonmin? Several people asking Am I buying MTN? Manro (via twitter) What price will SA investors get on JSE for SABMiller (JSE code: SAB) after the £44 offer from AB Inbev? How much of that is cash? Do I hold or sell? ====== Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares MTN (JSE code: MTN) really is making a mess of a bad situation and I have sold my holding as I can no longer trust management. Capitec (JSE code: CPI) has boomed through R600. Nothing can hold this stock back. We Get Mail Arin My question relates to the previous podcast when you mention that you will not be selling your Calgro M3 shares and you say that they are “fairly valued.” You have also mentioned a few podcasts ago that when discovery goes into the 120’s, you buy them. So now as I write this, discovery is around R147. What can I use, or how can I work out whether a stock is “fairly valued” and perhaps you can use Discovery in you example.How to find a share to buy - http://s3.amazonaws.com/OST/StandardOST_Finding_that_perfect_stock.wmv How to determine a price to pay http://s3.amazonaws.com/OST/StandardOST_What_Price_to_pay_Jul2015.wmv Robert My understanding is that SARS will distinguish between amounts invested, on the one hand, and PROFITS MADE as a result of the deposits. Can I therefore withdraw my PROFIT at will, without lowering my lifetime cap? Can I replace my withdrawn profit in the next tax year? If the distinction between PROFIT and deposits are not made, and the withdrawal of ANY amount affects the lifetime limit, then TFSA accounts are only beneficial when the lifetime limit is reached and a single bulk withdrawal is made. Marcus I have bought some shares of a certain company,the fund has grown and i have made a profit. Please advise if its wise to cash out the profit and leave the original investment intact? Do you think it is wise to re-invest the gain on the same stock again once the price goes lower again? July I wish to invest in shares and would like get more information in this regard.i wish to contribute a thousand rand monthly. Robert Should we as part of our budget keep hard cash at home in a safe? If so how much? If one kept say, R 20 000 in a safe, or any significant amount, one would lose money not invested. In this age of debit cards surely that amount of money is better off in a Capitec savings account earning at least 4,50 percent interest. A family member seriously suggested cash in safe in case of a "run on the banks". ====== Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Balwin (JSE code: BWN) listing has been modest very modest as the stock trades around 1020c after listing at 988c and the first trade at 1100c. Lonmin (JSE code: LON) announces a massive rights issue to deal with their debt maturing in the second quarter of 2016. Initially a massive spike (short squeeze) before it settled down. Famous Brands (JSE code: FBR) were not bad. But top line growth did not translate into bottom line growth as margins got squeezed. Patrick Barker - Wealth TapWe chatting current state of the markets and how to position a long-term portfolio in this market.  ====== Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Sygnia (JSE code: SYG), I got 3.85% allocation which was far from thrilling and have sold my holding. Pick n Pay (JSE code: PIK) results looking good. Margins still tight with trading margin 1.3% vs. 1.2% and share still expensive but turn around is happening. Mediclinic (JSE code: MDC) becoming Al Noor via a reverse take over. They will have 73 hospitals with around 10,200 beds and 35 clinics, and nearly 32,000 employees across Middle east, UK and SA. Keith McLachlan Small and Mid Cap fund manager at Alpha WealthBalwin (JSE code: BWN) are listing on the JSE today as a residential development company. We chat to Keith about his views on the stock and whether he thinks it's worth an investment? We Get Mail Sbu I want to keep my SABMiller shares, how do I do that? Helen My broker says I was silly to buy in a TFSA and should rather buy individual shares as they'll do better. Now I am confused. ====== Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Lots of new listings hitting the JSE. Here's my 5 words on each. Sygnia - have applied and will sell Balwin - also applied and will hold Waco - bad sector, stay far away Trellidor - why owners selling if great? Capital Appreciation - SPACS not my investment style Capital and Regional - prefer property via an ETF Platinum stocks are all over the place, Lonmin (JSE Code: LON) has doubled since low of 29 September 2015. Aquarius Platinum (JSE code: AQP) is being bought by Sibanye Gold (JSE code: SGL) and Implats (JSE Code: IMP) has raised their R4billion just below current share price. But sector remains tough. The bounce is in part from very over sold and rumours of more deals. Craig Gradidge, Investment and Retirement Planning Specialist at Gradidge Mahura InvestmentsA question from Sharon (below) asked the question, how much to save for retirement? The immediate answer seems easy, the often touted 15%. But is that true? Surely as we're all different we all need different answers? So Craig helps us unpack it all. We Get Mail Sharon How do I calculate how much money I need to invest monthly in order to retire? Also how to optimise the capital growth of one's ETF portfolio? I have been listening to your webinars since 2011. It has been such a help. In 2011 we had 2 bonds to pay off and a car. Since 2014 we are debt free. By learning from your webinars I find you can focus where your money goes ! and make the necessary sacrifices/changes. My problem is that I am so busy squirrelling the money away that I do not set enough fun money aside for my husband and I to do things we could enjoy doing together. Robert Satrix Divi+ (JSE code: STXDIV). This ETF selling for under R2.00. My ETF time horizon is long term. The price is so low, I want to buy but think there may be something wrong with this ETF. Would you recommend buying? Is this asking price "normal"? George Today I shorted my first ever position based the news that SAB Miller have rejected the AB Inbev offer. When the news about the initial offer broke, there was that sharp increase in the price. So my (fairly inexperienced) expectation was that with this offer falling through, that the share price would drop down to where it was a month or so ago. This however has not happened, what is the factor that I have not considered? I am not saying that the JSE is broken. But right now, that's what it feels like. ======= Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares Capitec (CPI)* results, as a shareholder I liked them a lot, HEPS +25% on PE os 21x. Loan duration and size down that shows their ability to turn the taps on / off at will. Cost to income edges another 1% higher while they continue to grow clients and deposits. Tigerbrands (TBS) CEO steps down. Has not been a happy period for him; Nigeria, Kenya, losing market share at home. Glencore (GLN) Goldman Sachs and Investec both issued reports that their debt levels are too high and shareholder equity could erode down to nothing. Right now being a mining company with debt is bad news, hence Implats (IMP) doing a rights issue and Lonmin (LON) looking very ill with large debt burden due in 2016. "Peak prices in gold and silver are four years old". How much longer can this commodity sell off continue? Likely longer than anybody expects. Jean Pierre Verster - 36One Asset Management China and the impact on commodity prices and what of Chinese consumers and Naspers (NPN) and Richemont (CFR). We also chat VW, how to manage this sort of crisis if one was a shareholder, the long term impact on platinum and finally a quick word on Sygnia as an investment. We Get Mail Albert Say AB Inbev buys SAB and de-lists them from the JSE, what happens to my SAB shares in my Satrix Indi ETF? What if they offer AB Inbev shares for SAB shares and I want to swap them for AB Inbev shares? This seems to be a downside to ETFs/Unit Trusts that I have not experienced until now. Same with rights offers, etc, on shares in ETF indexes. Please advise. ======= Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon shares MPC no change on rates, seems increases will be very gradual. Maybe only 1 or 2 increases in 2016? Taste (TAS) hit 525c on the back of the Starbucks announcement. It now down at 400c, what's happening? Buy on rumour, sell on fact. What to do with your SABMiller (SAB) shares? I would take the money and run. How many shares should one have in a portfolio? We Get Mail Chat forum My Aveng (AEG) position is off 71%, what should I do? Buy more, hold or sell? Tariq When trading the Alsi, what time frame is the best when looking at the charts? is the 1 minute chart just noise? In your experience, which indicator has produced the best results for the Alsi? Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Thoughts from Simon Mark Douglas has passed away, sad day for traders and perhaps an important reminder that there's more to life than just trading and markets? Mr Price (MPC) has been sluggish ever since that nasty trading update, seems maybe it coming alive again? Truworths maybe going into the shoe business in the UK. Tough market, not an exciting acquisition. SABMiller, finally Anheuser-Busch InBev has arrived. Maybe.  Keith McLachlan Small and Mid Cap fund manager at Alpha Wealth We chat the soon to be listed Sygnia, ARB valuation, Santova (SNV) cautionary and the general state of the Mid and Small cap indices. We Get Mail Christo In your podcast two weeks ago you discussed the Proptrax SAPY and the Proptrax Ten. In it you discussed how you prefer the Ten over the SAPY because GrowthPoint is too heavily weighted in the SAPY while in the Ten all companies are equally weighted and you like equal weightings. So my question is why? I can understand how it is bad when one company is too heavily weighted compared to others but surely there is a case to be made for some companies to be weighted a little more heavily than others? Especially if you want to track the index more closely?

Thoughts from Simon Sibanye (SGL) buying Anglo Platinum (AMS) unwanted mines for R4.5bn. This is R1.5bn up front and a further minimum payment of R3bn based on free cash flow generated. Good for AMS but for SGL we'll see. Can Neal Froneman (CEO of SGL) make profits where others couldn't? Certainly that is his reputation but this is not going to be easy. Also SGL shareholders now have a gold/platinum company when they initially bought a gold mining company, will that matter to shareholders? Sasfin (SFN), more great results form them and they're trading on a Price to Book (P/B) of around 1.5x which for them is reasonable. Santova (SNV) have issued a cautionary, no idea what it is about but I would think it is about an off shore deal rather than local. Management have been commenting that off shore if their future and they've recently surpassed half their profits coming from off shore (Hong Kong, Europe, Australia and UK). Q&A with Warren Peacock from TheTradersPlace.co.za Thirty minutes of Q&A with Warren as he answers questions on trading, specifically; What to trade? What time frames to use?  The two different types of volatility. Managing trade and portfolio risk and more. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Thoughts from Simon Markets still wild, I still not concerned. Not because I saying it not going down, but because I love my portfolio. Check out this video we did last week on managing your portfolio in turbulent markets. MrPrice (MPC) has spooked the market sending the stock down 13% n the day. The update was that horrid but when you're a high flying stock you have to do better. Mr price is one of the stocks in our Momentum portfolio that we just updated. You can find all the details and stats (from inception) here. Steven Nathan Founder, Chief Executive 10x Investment With the new Tax Free Savings Accounts (TFSA) there a lot of talk about whee a Retirement Annuity (RA) fits in. So we chat to an expert about RAs, costs and performance. While we're just talking RA's a bunch a really solid investing gems get dropped into the conversation, a must listen interview. We Get Mail Brilliant Say you have reached the lifetime cap of R500 000 through contributions, what would happen to the interest gained that comes with the account? Will SARS continue to tax at 40% penalty rate? Thank you. Tariq When trading the Alsi futures, what time frame is the best when looking at the charts? is the 1 minute chart just noise? 2. In your experience, which indicator has produced the best results for the Alsi futures? Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Thoughts from Simon Wild markets, make sure you're have a SWAN portfolio (Sleep Well At Night) Week lazy system has moved 100% into cash for the first time since the 2008/9 crisis. Johann Erasmus Head of Global Structuring Standard Bank Group Chatting about their commodity Exchange Trades Funds (ETFs) and Exchange Traded Notes (ETNs) as well as the African ETN (SBAEI) and African Commodity ETN (SBAFCI). Mia Kruger Director & Fund Management Kruger International Asset & Wealth Management How to manage these markets and what to do as an investor. We also chat health stocks Aspen / Mediclinic / Discovery and she says stay away from single commodity companies. We Get Mail Heleen How safe is it to invest in the ETFSA tax free ETF savings account as they administer it through Computershare and not through ETFSA. I don't know anything about Computershare? Linda Markets are crazy and I am worried about my investments, should I sell and wait for things to stabilise? Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Viv Govender Senior analyst Lehumo Capital Concerns about China make Kumba Iron Ore (KIO) the stock Viv dislikes while Europe is looking better after another Greek crisis being resolved. To this end Stienhoff (SHF) is the stock Viv does like. Warren Ingram Executive Director, Galileo Capital We chat differences between Exchange Traded Funds (ETF's) and Unit Trusts and also Tax Free Investing vs. Retirement Annuity. We Get Mail Leroma How would I be able to invest in a Vanguard ETF, say Vanguard Telecommunication Services ETF (VOX) from South Africa? Cheryl I am thinking of buying some Brait preferences instead of adding to the Braits in my portfolio. Would this be a good idea or should I rather just add to normal Brait position on a pull back. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Gary McNamara Portfolio Manager Sanlam Private Wealth Like JSE (JSE) Tiger Brands (TBS) Dislike Lonmin (LON) Mark Humphreys Standard Online Share Trading We chat Tax Free Investments. How are they doing, are they real and worth it and what's the Standard Bank offering. We Get Mail Dominic As I know it; we need to pay the required level of Income Tax on profit made from the sale of shares over the R30 000 limit. With that said how is the R30 000 tax free limit calculated? Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Q&A with Satrix CEO, Helena Conradie Questions included; Unit trusts vs. Exchange Traded Funds (ETFs) Costs Platforms Exotic ETFs New products coming Tracking errors and more We Get Mail Aubrey Do u know any ETF/Index that I can buy so that I can get exposure of Facebook? Keith (twitter) Bought Satrix Rafi Feb13 for +-9.49, peaked at +-R12.67 since then, but now +-R11.35.  Would u buy, hold or sell.Thanks

Nerina Visser ETF consultant Chatting property as an investment and using one of the three Exchange Traded Funds (ETFs). She also touched on bond ETFs, the new CoreTop50 and Tax Free Accounts. We get mail Clive Your boot camp was appreciated yesterday however it has raised a query in my mind. I own DSY, which  is 25% owned by RMI which I own, which is owned 30% by REM which I own. On that basis do you think that my focus is too concentrated in terms of correlation? Ridwaan Moolla ABSA Stockbrokers Likes; MTN Taste Dislike; Gold and resource stocks Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Wayne Dennehy Head of ETF’s and Passive Absa Capital Their RAFI Exchange Traded Funds (ETFs) converted to S&P GIVI ETFs. We dig in what GIVI is all about. Chris Botha director Imara Asset Management Like Mondi PLC  EOH Not like Anglo American Sasol We Get Mail Johnny I know that you say this might be different for everyone, but I would like to have some idea of where to start in “deciding” what a price is that I like. An example that you have often used before is Discovery, you mentioned that often or every time the share price drops to ~R120, you would add to your portfolio. My question is, let’s assume that the share price has since moved up to R200 over a year or three, what would be your new buying price? The odds of it dropping to R120 again becomes smaller and smaller every year. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Keith McLachlan Fund manager Alpha Wealth Like Santova (SNV) Master Drilling (MDI) Don't like Rhodes Foods (RFG) Gareth Stobie Head of CoreShares The new CoreShares Top50 ETF (CTOP50). Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Q&A with Gary Booysen RandSwiss.com Talking strategy, exiting, shorting and a while lot more. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Mohammed Nalla Head of Strategic Research Nedbank Capital To help us understand what is happening in Greece, did they default on Tuesday midnight? What's teh referendum all about and is there any easy solution? We Get Mail Sandile What does YOUR trading platform consists of – “hardware-wise”? How I'd love for it to be as simple as the one belonging to the guy in those IG ads; I'm learning to sleep with the fact you probably don't solely use your Mac though. Hoping it also isn't as complex as eight screens in your office. If possible, please enlighten me. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Anthea Gardner Managing Partner Cartesian Capital RMI Naspers (NPN) Tongaat (TON) We get Mail Anon Please help me, is XYZ stock a good buy? Luıs Hi Simon, are there any SA commodities/Res funds that have offshore exposure? Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Drikus Combrinck  Portfolio Manager CapiCraft Investments Masterdrill  (JSE:MDI) Grindrod (JSE:GND) Markel Corporation (NYSE:MKL) We Get Mail Helen Which charting software is best for investing? JC  Just watched your JSE power hour on TFSA accounts on JustOneLap. What service provider are you using as I am using XXX securities and I cannot buy DBX just do it through their funds… I want a little more flexibility. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Hlelo Giyose - First Avenue Investment Management Hlelo talks stocks but the conversation goes into much more than just some of his current preferred stocks. He delves into what makes great companies, how to spot them and when to buy them Clicks (CLS) Discovery (DSY) Mediclinic (MDC) We Get Mail Malibongwe I am looking for best ways to save for my child's tertiary education. I can only afford R500 a month debit orders. Which products can offer me better growth. My child is 3 years old. Are education plans from service providers like Old Mutual, Momentum, Liberty Life, Sanlam, etc good in terms of saving for this purpose?  Charmaine Everybody says cash is best right now Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Nerina Visser on Exchange Traded Funds (ETFs) A a thirty minute Q&A session answering questions and talking about; Tracking errors Inflation linked bonds The new S&P Givi ETFs (Global Intrinsic Value Index)  Active ETFs  And more, much more We get Mail Alwyn Please explain The Foschini Group (TFG) crip or cash dividend option? was that a sneaky rights issue? thanks for the great show. Anees The scenario is I know what share to buy but at present I don't have money for all of them. So I'm building capital as I go along. My dilemma is with the amount of money I have do I get a little now while the share attractive and low and bulk up as the capital becomes available.(my preferred choice) Or do I wait till I have the desired amount of capital and then go in and taking into account by that time the share might have appreciated. I am definitely investing for the long term. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Chris Gilmour Investment Analyst Absa Wealth & Investment Management Stienhoff Rhodes Food Group Famous Brands We Get Mail @JP_Jordaan @SimonPB Please tell me there is going to be a podcast this week Rob I have tried to research what shares are effected in a positive way and which are effected in a negative way when the interest rates rise. can you point me in the right direction or give me some indication on how to get some information on this? Prevan I want to start trading. I know we need software for that, and I would appreciate some recommendations. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Byron Lotter Vestact Asset Management Three strong themes with his stocks picks; health, quality management and globally diversified. Aspen (APN) Discovery (DSY) Brait (BAT) We get mail Jaco I would like to know what course can someone do to better understand the impact/effect of SENS announcements? Should I look into a course in economics or just fundamental analysis? I use technical analysis for my trading decisions, but sometimes company results or a SENS announcement comes out that impacts the share prices. Musa Here is my question we are a group of 5 friends we want to start at stokvel. The contributions will be R1500 per month . What kind of investment would u recommend for our money to grow quicker ?Are there any banks that offers good interest rates. Q&A with Igor Marinkovic (AKA @ALSITrader) Topics covered included; Managing risk Trading time frames FX or ALSI or both Where to start  Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon’s Stocks Selections Every week we chat to an exert and get their preferred stocks and we’ve been getting requests that somebody interview Simon and get his stocks. So here Simon interviews himself on his two stocks; Discovery & Richemont.  We get mail Faure Really enjoyed the trade to trade well mini series! Motivated me to actually take the plunge and start trading. On the podcast you (/Simon) talked about his trading systems that one can use. Are they available to the public? If se where to I find them? Looking forward to doing some eyeball trades. Bing Could you please cover what stocks and/or ETF's to buy that gives the investor easy exposure to India. Aarti Takoordeen CFO JSE The CEO always gets all the attention, but what of the CFO? What do they do, is it just watching the money role in? Surely not? Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Simon is holidaying this week so we include part 2 of his Trade to Trade Well presentation he gave in Cape Town last month. Part one is here. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Ricus Reeders Portfolio Manager at PSG Wealth We're talking Bidvest, boring but dependable especially in uncertain markets. Kap who seem to be on a strong track and Peregrine who are rocking and well worth a look in a hot sector (asset management). We get mail Craig I have a question regarding ETNs, in particular Oil (SBAOIL) that I can find no definitive answer on. If I purchase SBAOIL today for eg. R12.50 and hold it for 2 years in which time the oil price goes up from today's circa $50 per barrel to $100 per barrel and I then sell it, would the value of the ETN have doubled ? Are commodity ETNs a viable long-term investment in this regard ? Johan Can you perhaps tell me where one buy a Tax-free ETF? On etfsa website is a lot of ETF's but no mention of tax-free accounts. Satrix again mention tax-free accounts but the db x-trackers MSCI World Index ETF is not there. Phoning etfsa one are referred to ComputerShares whom only offer combinations of ETF's.   Fatima Essop Mohamed from Standard Bank Webtrader Win $10,000 in the Webtrader challenge Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Q&A with Tshepo Modiba, Head of Equities at Seriti Asset Management Top down vs. bottom up investing Benchmarking Discounted Cash Flow Investment themes Investing into Africa We Get Mail John I share your enthusiasm for ETFs and have noted your liking for the BBET40 fund. I am however puzzled as to why this has performed relatively poorly in comparison to the ALSH, TOPI and SATRIX 40 particularly from the middle of 2012 until late 2014. Can you shed any light as to why this has been the case? Morne I've been reading up on the TFSA accounts and investment possibilities. In the recent Finweek you also comment on the TFSA and your choice of ETF selection being DBXWLD, PROPTRAX10 and BBET40. After consideration I definitely also want to invest in those three but nowhere can I seem to find a provider where I can select those three choices. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Victor von Reiche Senior Investment Manager Cannon Asset Managers (On Twitter @victorvonreiche) Onelogix The share has pulled back from 650c to sub 500c and is looking attractive and having bought a refrigerated logistics company and opened a new facility in KZN. Metair More than just a battery company their international operations really are the future. Consolidated Infrastructure Group Another stock tat has pulled back and is offering value. Results due in a few weeks should indicate how the AES in Angola is doing with the lower oil price. We'll check the results and if we like will be buying. We get mail Matthew Another friend of mine said best is to take all funds out the market and put into cash and quite a bit into commodities like gold. JSE is not doing well and I should be looking to hedge, problem is I'm new to this game and unsure what I should really push for in markets as volatile as this. Andre What could be the effect if; 1.The Chinese Yuan replaces the US $ as the quoted price for oil. 2.The US $ depreciates to half its current value. 3.US interest rates increase by 5 percentage points. Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Graeme Korner Director Korner Perspective picks his Three Stocks Steinhoff (SHF), Anglo American (AGL) and York Timber (YRK). We get mail from Riaan I have been looking at Illovo (code ILV) as a position to invest in for dividends. Right now the spot price is very close to the 12-month low. Technicals look positive, but I have difficulty with the fundamentals. Can you perhaps assist me with some advice? ======================= Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. ======================= JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

A show with a difference this week as Simon is traveling and unable to record any interviews. So we recorded his Trade to Trade Well presentation he did in Cape Town on Tuesday evening and have included the first 40 minutes of that presentation in the podcast. He also has a quick comment on Capitec results and banking stocks in general. ======================= Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Mia Kruger- Director and Equity Analyst & Portfolio Manager Kruger International Asset & Wealth ManagementHealth Care Stocks the theme this week as Mia picks; Aspen, Discovery and Medi Clinic ======================= Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Brown thoughts and portfolio restructuring Selling OML, buying SNV and DSY. the why's and why nots (especially why not GND). Find the portfolio here. Maya Fisher-French - Personal Finance Columnist Author of best selling Maya on Money, implement your money plan. She also runs the website MayaOnMoney.co.za ======================= Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Gerbrand Smit Chief Investment Officer NeFG Fund Management We chat his three preferred stocks to invest in right now; Anglo American, Anglo Platinum and Clover. Q&A with Garth Mackenzie taken from the webcast earlier in the week. Thirty minutes with Garth as he answers questions around trading; returns, portfolio size, stops and more. ======================= Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Nic Norman-Smith Chief Investment Officer Lentus Asset Management Chatting his preferred stocks; IBM (NYSE), Sainsbury (LSE) and Grindrod (JSE).   Alec Abraham Senior Equity Analyst Sasfin Wealth Talking results season, focusing on retail and quick service restaurants. ======================= Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Why commodity and construction stocks are never bottom draw stocks We get sucked in due to their cheapness, we hold them through the cycles. But do they deliver. And what of BHP Billiton? Is it the exception, Simon has for years said it is, but is it? Should he sell it? Bookends with Keith McHalchlan One Up on Wall Street by Peter Lynch ======================= Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes. JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.  

Jean Pierre Verster Analyst 36One Asset Management Coronation Naspers Fortress B Short Net 1 Peter Major Mining specialist Cadiz Corporate Solutions What's the mood at the Cape Town Mining Indaba? How Will Private Equity Impact the Mining Sector?  ======================================= Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes.   JSE – The JSE is a registered trademark of the JSE Limited. JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Nerina Visser ETF strategist at ETFSA.co.zaWe discuss building an Exchange Traded Fund (ETF) portfolio with either; R300 monthly, R1,000 monthly or a larger lump sum. The end of the conversation is also around tax and in particular the R30,000 tax free CGT and how one can make use of it. ETFs and ETNs covered include; BBET40, DBXWD, PTXTEN, RMBINF, STXDIV, DIVTRX, LVLTRX and SBAEI. Q&A with Keith MaCachlan of Alpha Wealth and SmallCaps.co.zaA half session with listener driven questions. We cover different investment models, risk free rate, small cap liquidity risk, management, investing as an art or a science and more. Link for the weekA Dozen Things I’ve Learned from Joel Greenblatt about Value Investing Subscriber to our feed here or sign up for email alerts as a new show goes live or subscribe in iTunes.

Link for the week What Is a "Strong" Balance Sheet? Anthony Clark Analyst Vunani Securities His five small/midcap picks for 2015; Anchor Capital (ACG), Consolidated Infrastructure Group (CIL), Quantum Foods (QFH), Curro (COH) and Torre (TOR).

We’re back! After a six month sabbatical JSEDirect is back and running from JustOneLap coming to you every Thursday. We’re making some changes that we’ll detail in the weeks ahead. This week’s show is our annual predictions show with Marc Ashton, GM at Moneyweb, Keith Mclachlan, Small/Midcap fund manager at Alpha Wealth and Simon Brown from JustOneLap. We did our first predictions show in January 2014 and promised to revisit our predictions a year later (find that show here) and here we are marking our 2014 predictions and also making our 2015 predictions. Subscriber to our feed here.