iTrillion

“There were a couple of cool tweets around related to the market cap of Apple, Byron re-tweeted Eddy’s tweet, this part is important: ‘The magic number is $191.79 to become the first trillion dollar company’ “


 

To market to market to buy a fat pig Stocks in Jozi, Jozi gained a smidgen yesterday, nearly one quarter of a percent to the good on the day. Industrials added nearly one-third of a percent, financials tacked on nearly a percent, and led the charge. Resources as a collective ended the day down nearly nine-tenths of a percent. Feel for Adcorp shareholders, the stock was pulverised, down over 17 percent on the day. Why? The company released a trading update late on Friday, which was of course (as you can tell) poorly received. Earnings, through some pretty awful circumstances, are likely to be around 74 to 77 percent lower than the corresponding period. The share price is now at 11 Rand a share, down from nearly 40 Rand a share back in December of 2007. Yikes! Allan Gray are the biggest shareholder there, with nearly one quarter of shares outstanding. Richard Pike, the CEO has been around a long, long time, he would have seen all these things.

At the other end of the sad spectrum was Naspers, the biggest company by market capitalisation (home grown) reaching an all time high. Over ten years, astonishingly, the stock is up 1368 percent. Resource stocks in the red by market close included Anglo, AngloGold Ashanti (which released a trading update) and Amplats, as well as Shoprite and Sasol. More winners, they were Investec and Intu, as well as MTN and Barclays Africa. had a double take when I saw that the Barclays Africa share price was down nearly 7 percent over a FIVE YEAR period. The company of course has paid decent …. no, let me rephrase, very good dividends over that time, it still feels bad. At the same time, the Rand is a little over one-third weaker to the Pound Sterling, for the parent company, Barclays Plc., this has been a poor investment in Pounds. Sigh.


 

A 25 year low for the volatility index tells you something, at some level. That is where VIX closed last evening in the US, down over 7 and a half percent and below 10. Volatility has halved in five years. More importantly however, Apple inc. reached 800 billion Dollars in market capitalisation, trading at an all time high intraday of 153.70 Dollars a share. Not bad for a company struggling in China, the main reason that Carl Icahn sold his share. Jeepers, with an ego of that size, this must be busting his chops badly. His thesis in the short term was right, the outcome and what happens next …. he was completely wrong about that I am afraid. Apple trades at just less than 18 times earnings and is on a 1.65 percent yield. That is about equal to the rest of the market, and by that I mean the S&P 500, which printed another all time closing high. Up a little (really little, 0.09 points or 0.00 percent).

There were a couple of cool tweets around related to the market cap of Apple, Byron re-tweeted Eddy’s tweet, this part is important: “The magic number is $191.79 to become the first trillion dollar company.” Of course there may be fewer shares in issue as a result of the buybacks, which then means that it is likely to be higher. I remember at one stage, with the number of shares outstanding being higher, that Apple had to reach somewhere in the mid 170’s Dollar price in order to reach 1 trillion Dollars in market capitalisation. The power of earnings long term are sometimes driven by far fewer shares in issue. If you are a committed and long term shareholder, you should not worry when the company does buybacks.

Another interesting point worth making, Paul pointed it out on Twitter, is that a Drexel Hamilton analyst, a fellow by the name of Brian J White, put a 202 Dollar share price target on the stock. Meaning that for whatever it is worth, he is the first publicly to say that he thinks that the share price is worth 1 trillion Dollars. Which is a ton of Rand. According to TipRanks, which rates analysts on their “right” calls, old Brian has a success rate of 64 percent and a average return of 10.6 percent. Yes …. there is a rating thing for all of this – Brian White’s Stock Coverage. So whilst I am dead against forecasts of any kind, they are too prone to volatility, Brian is right a lot more than most. And in fact, Brian is rated 157th out of 4567 analysts in total. By TipRanks that is. You go Brian!

The Dow Jones Industrial Average and the nerds of NASDAQ outstripped the broader market, rising 0.03 percent apiece on the day. It was …… a giant snooze fest and something that is relatively uncommon in all my years of watching markets. Coach announced that they were buying fellow soft luxury brand Kate Spade, good for Kate and Andy, the Spade couple that founded the brand back in 1993. Although Neiman Marcus did buy them out in 1999 and 2006 respectively. And then Neiman Marcus sold to Liz Claiborne, which became Fifth & Pacific.

Fifth & Pacific changed their name to Kate Spade and has been listed since way back when (great share code KATE). The stock, notwithstanding the buyout, has done poorly since listing back in 2003, even after the buyout premium, it is down 40 percent. So whilst you may think that Kate and Andy could have done better, it seems like they did just OK. In 2006 the share price was double what it is now. Ever heard of David Spade, the actor (from Just Shoot Me)? That is Andy’s brother. Lovely …..


 

There was another whole lot of Charlie and Warren on CNBC, they were joined by Bill Gates in a long interview done by CNBC’s Becky Quick. Of course, this was post the Berkshire Hathaway AGM and basically a morning after with epic minds. I like Becky’s style, she doesn’t interrupt and gets all spilling their guts on matters that really do matter to ordinary people. Things like, what does Charlie Munger think of Medical Coverage in the US. And what does Warren Buffett think about taxes and the break that he will get if the current legislation is passed. And what Bill Gates thinks about extinguishing polio, which could happen in the next three years. They are all amazing. They all have fabulous insight into all topics.

Warren Buffett and Charlie Munger share their best advice for young people is the CNBC link to follow. There is some very important advice to young folks. Warren had words of advice: “When you go out in the world, look for the job you would take if you didn’t need the money. You really want to think about, what will make you feel good, when you get older, about your life, and you at least generally want to keep going in that direction.” Now …. that is easy to say if you live at home or have “stuff” paid for already, I certainly get what Warren says however, if you can do something that makes you really happy, it won’t feel like work at all. Sage advice for youngsters.


 

Linkfest, lap it up

If you add on to the Buffet theory of just being happy, then you should definitely take some time to skim through this paper that deals with health behaviours, morbidity, and mortality – Intelligence and personality as predictors of illness and death. The Buffett advice seems about right. Remember that uncovering nuggets and buying businesses makes him extremely happy.

Wow. This is a lot of responsibility for the company Google, as a storage of many files on behalf of the users – Google Drive Passes 2 Trillion Files Stored. Google is an amazing business, we continue to remain long on a “forever” basis.

Amazing new generation of prosthetic limbs, this one is closer and closer to a “real” hand, – Hand that sees offers new hope to amputees. Once again, science at an academic level turns into real inventions that have amazing commercial applications. Robotics is going to become increasingly important in the future.

WhatsApp have seen such huge demand from their users to make calls, that they updated the App on Android to make it simpler to use. 55 million video calls daily on the platform! Wow. Users Embraced Video Calls, So the Button Is Now Easier to Access. We continue to stay long Facebook, they certainly continue to innovate across all platforms.


 

Home again, home again, jiggety-jog. Stocks across Asia are mixed to lower. The Aussie budget looked a little strained, hey, who isn’t under pressure? Stocks on balance have opened higher here, thanks to good results from JD (JD.com Posts First Profit as Chinese Online Shopping Surges), which Tencent owns a stake in, which Naspers owns a stake in. See?


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

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