Just Picture It

Nowadays estimates suggest that over one trillion photos are taken a year, and that is a conservative estimate. 1 billion smartphones, three pictures each a day, you do the math. All these “important” images need to be stored. Enough, that matters little. Other than the investment implications for the likes of Amazon (storage), Apple (phones and storage), Alphabet (the same), Facebook (Instagram too), Twitter, Microsoft, and I guess a whole host of others.”


 

To market to market to buy a fat pig That is bizarre, I had to have a retake. When I looked at the Jozi scoreboard, I saw that in percentage terms it was the same percentage gain as the day prior. This came after the S&P 500 had recorded the first flat day in around 9 years two evenings back. Humans love patterns, as we have discussed many times, which is why looking at graphs to validate something in the future (tells you nothing) is so attractive. This is why we love listening to the weather report. It is not going to change whether you go to work or not, is it? You are not going to cancel your whole afternoon if there is a 50 percent chance of rain now, is there? I mean, the weather just happens, work around it.

At this time of the year there is plenty of reflection. Reflection on a year that was, for many, not exactly the most exciting notch on the calendar post marking system. The same one that is next to your kids heights at a certain age. Our kids are going to ask and I am sadly going to say that I was extremely lazy in chalking up those notches on the door frames, humblest apologies my taller minions. What they will have is tons of photos (online and in the cloud), I only have a few grainy photos of when I was a kid. Mind you, my eldest aunt who lives in Paris sent me pictures of the ancestors that date back from two centuries back, they were a serious bunch.

So photos have been around for nearly 200 years, the earliest surviving photo is from the mid 1820’s – View from the Window at Le Gras. So whilst your selfie is a dime a dozen, think carefully and be grateful to the pioneers of the “science”, Wedgwood and Niepce. More likely Bryce Bayer, the granddaddy of digital photography.

Nowadays estimates suggest that over one trillion photos are taken a year, and that is a conservative estimate. 1 billion smartphones, three pictures each a day, you do the math. All these “important” images need to be stored. Enough, that matters little. Other than the investment implications for the likes of Amazon (storage), Apple (phones and storage), Alphabet (the same), Facebook (Instagram too), Twitter, Microsoft, and I guess a whole host of others. The NYT suggested in 2015 that the number of photos taken has tripled (Photos, Photos Everywhere) every year since 2010! Keep snapping your photos that we wiz by and “like”. We will get to another astonishing number later with Apple.

Markets, that is where we were, until we got distracted by the “photo” history and present. Stocks in Jozi as a collective closed at their best levels since last September, rising 1.35 percent on the day. Not everything is enjoying a good time of it, the retailers have started this year poorly, Mr. Market is expected and fearing that bad things may emerge from their trading numbers that are likely to be revealed in the coming weeks. If the numbers surprise Mr Market, there may be some scope for these businesses to be viewed in a more favourable light in the very short term. Forget interest rates, whilst those are important, through the cycle investing and following the quality is more important. We wait with bated breath.

The resource stocks have been on fire again, those stock sure are volatile. Which makes for “calling” them (share prices), nigh impossible. Not that it is possible to call a stock at any time, really. There are a whole host of factors that make investing hard at the best of times. One is coming to terms with the fact that you have zero (that is right, absolutely zero) control of a stock price once you own (or have sold) it. Anglo American had another cracking day, up over five percent, BHP rose nearly three and a half percent, Aspen had a cracking day too, up three and one-quarter of a percent. As did Naspers. In the not so good column were the likes of MTN (downgraded to hold at JPM, is what I learnt from Twitter), AngloGold Ashanti and Tiger Brands, as well as Woolies. The trading update that we are still waiting for. It hit the screens this morning, we will chat about it tomorrow. And Richemont. We will talk about that one too.

Talking of serious looking people and photographs, Paul found this nugget and tweeted it, in case you missed it – Johannesburg Stock Exchange Buildings over the Decades. The six homes of the JSE. I have only been in two, the old 17 Diagonal Street building, which had the last “floor” and then the move to Sandton over a decade ago. We used to use the almost empty building over the road to engage in a game of squash, if I am not mistaken, a token for 30 minutes of heavy sweating and running cost 2 Rand.


 

Stocks across the oceans, vast and wide (both the oceans and stocks), were mixed in the middle of the session, they were “lit” by the end of the session. Lit – urban dictionary – “When something is turned up or popping”. Which applies more to the market than some of your dance moves. e.g. Those moves are “lit” bro. Anyhows, I don’t have to worry about such things, someone in deep mealie (corn) farming country once told me I could not dance. True story.

Rhythm is something you practice or have, or perhaps to be more precise, both. The Dow Jones Industrial Average added half a percent (or nearly 100 points), to be flirting with that 20K level again. Perhaps today, although I see that futures are lower again, by around one-quarter of a percent. The broader market S&P 500 and the nerds of NASDAQ gained around half the percentage amount of blue chips, Dow and Jones creation.

Stocks not having a good time of it were the biotech stocks. Whilst the market remembers the “Tweet of Hillary” about pharma companies “gouging”, Trump is getting in on the act. Gouging involves the practice of having hiked prices of drugs that were once cheap by several hundred or thousand percent. It is unethical and downright unscrupulous. It is called capitalism, and when someone else produces a therapy that is wildly cheaper, someone else will be capturing that market. Tweets here and there, we should have an acronym for Tweet of Trump – TOT. Either way, markets are stupidly skittish trying to second guess what is likely to transpire. Shooting first and asking questions later always has a “bad” outcome.


 

Company Corner

Paul sent this through last evening. I struggled with the size and scale of this, it is an absolutely astonishing number crunch from our mate who posts on the Asymco platform. His name is Horace Dediu, and his post from yesterday is titled The First Trillion Dollars is Always the Hardest. As he points out, the collective unit sales of the Apple products, since the iPod touch, totals 1.75 billion. Apple are likely to reach 2 billion some time early next year, depending on their “new form” phone which everyone seems very excited about. A good thing for Apple shareholders.

Horace makes some interesting observations about human behaviour with their smartphones. 600 million Apple iPhones are used daily. Data mining has suggested that people “unlock” their phones 80 times a day, on average. That equals 17.5 trillion sessions each and every year. Think of all the advertising revenue “options” that are available. If Apple can find a way to advertise in the faces of all the people (which I guess would be coming), then you may well find that is the best way for advertisers to start appealing to their users. Either way ….. that is a lot of people using their services business, I use both the Apple streaming service (a family membership costs less than 100 Rand a month) and a monthly storage in the cloud. There are many possible “pending” services that Apple will come up with. We remain proactive and will continue to accumulate the company.


 

Home again, home again, jiggety-jog. A trading update from both Woolies (up a bit after having sold off a lot) and Richemont (up a lot) will be covered tomorrow. Hey, the Hash # is engaging in match 100 in his personal capacity just up the drag. It says 1.7 km from me, as I sit, 22 minutes to walk there. Stocks have started the day a little mixed here to start with.


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

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