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Valeant Pharma stock continued their torrid time of it lately, the stock since the beginning of August is down 43 percent. And that included a ten and a half percent fall last evening. Why? Since the gouging tweet from Hilary Clinton back early August, the company has been subpoenaed by US prosecutors who are looking for more information with regards to the way the company prices and distributes their products.”


To market to market to buy a fat pig. Another mixed day across global markets, locally we recovered off our worst levels during the course of the afternoon, ending the day on the Jozi all share down 0.57 percent. I saw an announcement from Murray & Roberts, I must commend them for being proactive in the face of an awful event for the families of the deceased as well as those injured in the collapse of the structure next to the Grayson offramp on the M1.

I saw the one line in the statement read “The Board recognises that this is a tragic event with severe reputational consequences for the Company” and I nodded in agreement. Some intel from an engineer friend of mine suggests that some of the folks working on the project could be found criminally liable and could see jail time. I guess we will have to wait and see. The stock dipped below 10 Rand a share at the start of trade, managing to end the day at 10.51 ZAR, up nearly five percent. The damage is done, we will have to wait for this to drag out and see if my mate is right.

Most of the local stocks were lower across the ALSI 40, there was a smattering of green, Glencore leading the charge, up one and three quarters of a percent. Glencore has been listed for less than two years on the local bourse, the stock in that time is down nearly 57 percent, notwithstanding the recent 35 odd percent bounce off the lows. Shoprite was near the bottom of the pile again, down over one and a half percent, still some soul searching to be done there, I agree with Christo Wiese and the rest of the management team (how much longer has Whitey Basson got left there in charge?), in the medium term the company is well placed.

Basson is 69 years old, in terms of the Berkshire board average age, he would comfortably be under that. Perhaps as long as he feels fit and wants the job (and the rest of the board want him), he is going to stay. He (Basson) does in his personal capacity own something like 10.7 million Shoprite shares. That is about one-eighth of what Wiese owns, who by himself owns around 15.7 percent of the company, and is the biggest shareholder. Those two ain’t leaving, perhaps in a “bit”. Perhaps the big bang exit is to tie the group together with Steinhoff in order to form this giant global retailer. Thinking out loud here.

Over the seas and far away from here, in New York, New York, stocks closed lower on the session, down a smidgen on the Dow Industrials, a little more (-0.14%) on the broader S&P 500, whilst the nerds of NASDAQ lost half a percent. The company formally known as Google (It is now Alphabet) was near the top of the losers list, down around two and a half percent. Amazon also sank over two percent, perhaps some posturing ahead of results shortly.

Valeant Pharma stock continued their torrid time of it lately, the stock since the beginning of August is down 43 percent. And that included a ten and a half percent fall last evening. Why? Since the gouging tweet from Hilary Clinton back early August, the company has been subpoenaed by US prosecutors who are looking for more information with regards to the way the company prices and distributes their products. One analyst suggested that whilst this remains an election issue, almost anything could happen to the stock. The stock trades forward on a 16 multiple, less in the current year, with the current year lower than that, leading the community to believe that their pricing is going to have to come under pressure in the face of scrutiny from officials.

Barron’s has an interview which Paul emailed this morning, if you can read it for free, it is worth a read. It is an interview with a chap by the name of Andy Acker, he runs a fund named the Janus Global Life Sciences fund. Here goes: 6 Health-Care Stock Picks in the Wake of the Selloff. It includes one of our newer purchases in the area, Amgen.

What the heck happened to Tesla shares? The stock went into reverse last evening, some are referring to a consumer report on the car which saw customer satisfaction drop to 97 percent of people saying that they will buy the car again as all the reason. The stock has a hunger from the shorts, who love to bash the company. Perhaps with a giant market cap, a lack of profits, a high priced car, new on the block, it is kind of warranted to display this much skepticism to a young company.

They are however run by a modern day Thomas Edison (Elon Musk) with an eye for detail, and even as the company mass produces vehicles (including the Tesla X and a cheaper model), the same quality has to be maintained. Charger issues, issues with the sun roof, noises that are not supposed to be there. I suppose if you are building a wow product (with a wow price tag), you have to wow all of the customers all of the time. Whilst the stock rallied off the lowest point of the day, the share price still ended the day down 6.6 percent at 213.03 Dollars.


Linkfest, lap it up

Today is the day, Back to the Future Day, part II. Remember, when Marty McFly travels into the future to see how bad things are for him. He travelled to today. Quartz has an interesting bit on how many things the movie got right, pretty interesting: What ‘Back to the Future II’ got right about tech in 2015.

Is this the new way evolution will work? We find the genes that allow us to be resistant to a certain disease and then mimic them so that people who don’t have them, can have the benefits. Taking it further we will then make sure that people born going forward have the gene incorporated in their DNA – The genes behind malaria resistance may reveal an intriguing evolutionary history. In any case, being able to cut the number of deaths from Malaria is a good thing for many poor communities.

The advantage of having computers detect if people are depressed is that they are not biased – Machines That Can See Depression on a Person’s Face. It would seem depressed people use different muscles to smile with and their smiles are shorter in length.

You many not be able to afford a Ferrari but now you can own a stake of the company. Personally I would rather own the car and given how old, well looked after Ferrari’s have shot up in price, the car might be a better investment for the long run – Ferrari IPO prices at $52/share, within range. Only 10% of the company will be up for trading, so expect some limited liquidity and most likely a pop in the share price when it does trade.

I think this is more a gimmick than a true investment strategy. Basing an ETF on how many times a stock is mentioned on Twitter is probably a great way to set up a “momentum trading” strategy – Hey Finance Twitter, You Are About to Become an ETF


Home again, home again, jiggety-jog. Japanese stocks are up sharply, Chinese stocks are down, that includes Hong Kong. US futures are pointing higher, it is an important few days for earnings. Boeing, General Motors and Kimberly Clark may not be your favourite stocks, they do all give some useful insight into the US and global economy. Earnings, friends. That is what it all boils down to in the end, not the Fed, not China, not whatever you think is important, earnings set the level of stock prices in the long run. As Benjamin Graham said, in the short term the market is a voting machine but the long run, it is a weighing machine.


Sent to you by Sasha and Michael on behalf of team Vestact.

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