Market keeping you humble

 

“We experience a certain euphoria for seeing a take down of arrogance and pride, true story. In a way it is reverse envy of sorts. I don’t have any beef against Bill Ackman, I just know that in the same way that Benjamin Graham said in the short term the market is a voting machine, in the long term the market is a weighing machine, the market can humble in a heartbeat. You aren’t bigger than the collective.”


 

To market to market to buy a fat pig Friday was an age ago, at least for me. A long weekend always throws you out a little. Having said that, I was watching a program called “Brain Games” with my kids and of the seven deadly sins, the one that is supposed to help you the most is actually sloth. Downtime for your brain and body is supposed to get your body going again, or so the experiments suggest. Perhaps for Bill Ackman this is exactly what he needs.

Apparently envy, and in particular seeing the downfall of those in high positions makes us happy, in a strange way. It is exactly what often happens with bystanders in markets. i.e. People who are not in specific positions have a smug feeling about having avoided it, and little pity for gloaters who are in specific positions. For instance Bill Ackman and Pershing Square. I remember his defence of the JC Penney position and his take down of Andrew Ross Sorkin on live TV, that was squirm worthy.

We experience a certain euphoria for seeing a take down of arrogance and pride, true story. In a way it is reverse envy of sorts. I don’t have any beef against Bill Ackman, I just know that in the same way that Benjamin Graham said in the short term the market is a voting machine, in the long term the market is a weighing machine, the market can humble in a heartbeat. You aren’t bigger than the collective.

Stocks in New York, New York rallied a smidgen last evening, the broader market S&P 500 closed the session up one-tenth of a percent, the Dow Jones Industrial Average was marginally better than that on the day, the nerds of NASDAQ rose a little more, up just over one-quarter of a percent by the close of business. Stocks were actually lower by over one-third in the first half of the day, what this move upwards does is solidify the year to date gains for the broader market S&P 500. A marginal gain is better than no gain at all.


 

Back home here in Jozi, Jozi on Friday, stocks had an absolute ripper, up nearly 1.2 percent on the day, and if I am not mistaken, having reached the best point for the year. We are now a little below 54 thousand points on the Jozi all share index. The Rand has firmed up nicely, from an inflationary point of view, this is really good news. For now we are also in the sweet spot, if the Fed are not going to raise rates, that should attract some inflows to South Africa. Notwithstanding the politics at the fringes, which the chattering classes are getting anxious about. Politics might feel very important in the moment, you can always get caught up on it.


 

Company corner

The worst kept secret in technology was revealed by Tim Cook yesterday, a smaller screen iPhone was introduced. Or reintroduced, which ever way you look at it, remember that whilst the company does not flesh out the iPhone numbers themselves, the iPhone 5c has not really been a resounding success. This may well be. Check out the iPhone SE, with a 12 megapixel camera, as quick a chip as the iPhone 6. What is pretty cool is that it is cheaper, 399 Dollars for the phone. For instance, the iPhone 6s costs 649 Dollars, that is why the new smaller phone is attractive.

There is also a new iPad pro, a smaller screened one. I did have the opportunity not so long ago to fiddle with one at the iStore in Sandton a few weeks back, it seems very impressive. I am still of the view that the iPad has tons of business applications, in particular for businesses that have vast surface areas. We maintain our buy rating on the stock, we certainly think that it has been oversold in the very short run.

The stock hardly reacted to the announcement, after-hours the stock added a single cent. After losing a single cent in ordinary trade. What has happened however is strangely (without almost nothing changing), the market is starting to warm to the idea that Apple is still a growth business, with amazing opportunities. And their products are pretty amazing too, unparalleled in my view, I have recently checked out the Oculus (with the Samsung phone), it is pretty impressive. I am sure that Apple are working on a virtual reality product, and I am sure that it will be cool.


 

Linkfest, lap it up

It is mind boggling, the scale at which we are able to build. The next phase in global LNG has arrived after 7 years of construction and US 54 billion spent, the LNG terminal off the West coast of Australia is operational – First Gorgon LNG shipment leaves Barrow Isl.

Here are a few snippets of Buffett explaining bubbles in 2010 to the US Congress – Buffett Explains Bubbles. It is very interesting to see how Buffett very simply breaks down human and market psychology.

Twitter turned 10 over the weekend, here is a comparison with Facebook at the same age. Twitter wins on the revenue per user front but loses on every other metric – How 10-Year-Old Twitter Compares to 10-Year-Old Facebook

Infographic: How 10-Year-Old Twitter Compares to 10-Year-Old Facebook | Statista

You will find more statistics at Statista

The Dash of insight blog points out that it is irrelevant to investors if this is A Bear Market Rally? or just a continuation of the bull market. The stocks that you own and their prospects is all that matters in the long run.


 

Home again, home again, jiggety-jog. We are running late today, sorry, there are two important stories to cover tomorrow, Nike results and the Steinhoff announcement from late Friday. We will cover both of those tomorrow. Stocks are lower here today, the Cuban American relationship thing is pretty big, showing that all bridges can ultimately be fixed and crossed. I am guessing that the lead into the Easter weekend, it may be a little quiet on the local front. Mr. Market is pausing here after a huge up day Friday.


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

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